Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor (mattstoller.substack.com)

Article summary

The article discusses how taxpayers pay McKinsey $3M a year for a recent college graduate contractor, highlighting the issue of overpayment due to a flawed incentive structure. The Industrial Funding Fee (IFF) incentivizes the GSA to spend more money, leading to excessive payments to contractors like McKinsey. This system creates problems, including overpayment for mediocre services. The article suggests that the issue is more related to the incentive structure than to McKinsey itself.

Main themes

• Government Inefficiency
• Incentive Structure
• Contracting and Procurement
• Consulting Services
• Accountability and Transparency
• Legislative Reform

What commenters say

• The current incentive structure prioritizes spending over saving, leading to wasteful government contracts.
• Mandatory sunset provisions for legislation could help prevent unintended consequences, but may also cause harm if not implemented carefully.
• The use of flat rates and incentives can lead to optimization and efficiency, but also creates opportunities for exploitation.
• The problem of overpayment to contractors like McKinsey is a symptom of a larger issue of government inefficiency and lack of accountability.
• Some argue that the issue is not corruption, but rather incompetence and a flawed system.
• The value of consulting services like McKinsey's is debated, with some arguing that the high rates are unjustifiable and others seeing value in the expertise and knowledge delivered.
• The GSA's role in enabling excessive payments to contractors is a key part of the problem, and reforming the IFF could help address the issue.
• The discussion highlights the need for more transparency and accountability in government contracting and spending.