[_delirium]

This doesn't really seem like a public/private difference, but an enterprise/non-enterprise difference: Fortune500 firms are no more efficient than government contracting is, really. While it's a lot in other contexts, $33m for a custom enterprise software project, even one that seems like it ought to cost much less, is pretty middle-of-the-road as a price.

[crusso]

Having worked at a company that's top 20 in the Fortune500 and having a good friend who does government contract work... you have absolutely no clue about what you're talking about in terms of the relative amount of waste exercised by government vs corporate entities.

The fundamental reason why there's such a difference in efficiency between private efforts and government ones is this:

Private companies that are horrible at managing efficiency go out of business. People in private companies who are horrible at managing efficiency lose their jobs.

Government agencies that are horrible at managing efficiency get bigger budgets. Government employees who are horrible at managing efficiency rarely lose their jobs. The GSA scandal is the only one in recent history that has received any kind of real attention; and that's only because the idiots at the GSA made videos the went viral.

[Spooky23]

I worked for a successful Fortune 50 company whose products you use every day. I worked out of an office in NYC, and flew to the west coast every two weeks to attend a staff meeting that lasted about 2.5 hours. I literally earned enough frequent travel points that I didnt pay for a vacation from 2003-2009.

If you work for a company like Microsoft or IBM or Bank of America, you work in a bureaucracy at least as dysfunctional and Byzantine as an average US state. The Federal government is a whole other beast unto itself, but there are probably companies as screwy as they are too.

The fact that the private entity purges some folks doesn't make them better.

[_delirium]

Well, you apparently haven't seen much of how enterprise contracting works. Companies can easily blow $100m+ on bespoke software development that produces crappy results and still be in business. Companies like Exxon, BP, etc. could, and do, waste billions and not go out of business. Sometimes they spend tens of millions and get nothing delivered at all, or scrap the result. And the incentives within the megacorp are fairly similar to what you describe: managers who are the worst at managing budgets get their group's budget increased, because they can argue to the relevant VP that they need more money for whatever boondoggle they're currently working on. Not spending your money is more of a problem, because it means you're less important.

I assume it's the same outside of oil as well, but I know the most about that sector. Someone elsewhere in this discussion mentions that the NYTimes paywall cost $40m to implement!

[cjy]

Really, you think this would have cost $33M if a Fortune 500 firm was paying? Enterprises overpay a little because managers are spending shareholders money. Governments overpay a lot because bureaucrats are spending tax payers money. There is a lot less accountability in the latter.

[_delirium]

Yes, I really do think so. It's a nice theory re:accountability, but I don't think it holds up in the real world, where enterprise-contracting costs, for whatever reason, are extremely high. One possibility is that there isn't as much accountability for managers of large companies as you think (there's been a lot written on that problem); another possibility is that there are somehow inherent scale problems with doing bespoke software development for very large organizations.