Tag Archives: costs

The Realities of Contract Work

Posted on by

About three months after the longest government shutdown in history came to an end, leaders of companies and unions representing federal contract workers are speaking out, asking for legislative changes to ensure that their employees are guaranteed back pay if another shutdown occurs. WTOP

The latest Federal Government shutdown lasted thirty-five days and affected eight hundred thousand contractors, everyone from the men and women that empty the trash, to the men and women that write the software that fly the unmanned aircraft used by the military.

I ask that we work together to find a way to enact legislation that will treat the contractor workforce just as their federal workforce counterparts are treated —Leidos CEO Roger Krone.

Mr. Krone’s supposed concern for his employees notwithstanding, this is about the money Leidos and other federal contractors lost during the shutdown. Let me explain how it works. A contractor is a body with a value attached to it. That value is a combination of their salary, their benefits, and a number of other factors at play within the company that is loaning their services to the Federal Government. What is called the loaded rate. That loaded rate would astound you (or perhaps not - that $10,000 toilet seat. That was as much the cost of labour as the cost of materials). If I am employed at an annual salary of $130,000, I would be making about $60/hour. Now, we add to that the overhead costs, etc from the company and I am being sold to them at a rate of $120/hr.

This is about the money, and not the money lost by the contractors.

The argument or at least the parallel is that the Federal Employees got their money, the contractors should too. I am of two minds about this. I can see the argument that the Federal workforce was involuntarily furloughed. In labour law, it is slightly different from being laid-off, but the effects are the same. If Ford had furloughed a line, those employees would not be paid for their time off. Similarly, the contractors would not be paid.

Companies are often left with two choices during a shutdown, he said: pay their employees and go out of business, or withhold pay and see their workforce leave them.

He is correct. Contractors actually live on a very small margin with Federal contracts. And they do have a significant risk that their employees will walk out on them if they are not paid. And that is the risk of contracting in general. You take a job with a contractor knowing that at some point your contract will expire. Some companies recognize this, make allowances for it, and protect their employees, to a certain extent, while others are less concerned. In fairness to Leidos, they tend to protect their employees, but they have lost their margin over the thirty-five days, through no fault of their own because the government (the paymaster) was not doing their job.

How this compensation should be addressed is not a simple issue. Being paid to not work is not going to be successful. And 800,000 federal contractors did not work for thirty-five days. Unlike Federal Employees, contractors had the option of looking for work or taking unemployment, or annual training or leave. I am not sure contractors should expect back pay. But as a former Federal contractor, I can feel their pain. There is no easy solution.

Electric Cars, and the Distance Problem

Posted on by

What automakers aren’t telling you about electric vehicles | WTOP

There are two critical issues in play that are hampering the wide spread adoption of electric cars in the United States. First:

Cold weather can cut range significantly – by even one third…Lithium ion batteries are subject to temperature sensitivity. In California this is not an issue. In polar vortex conditions, these vehicles wouldn’t get far.

Secondly:

It takes nearly 13 hours for the high-voltage battery to get a full-charge when starting at zero percent …We are used to 5 minutes at the pump and going.

The United States is not a small country. When you consider the road network of North America, it is even bigger. Sure, not everyone drives through the hinterland of Pennsylvania every year, but a large number of people do drive more than 200 miles regularly. When you discount the need for temperature issues, you still have the problem of filling the tank. Several cities are starting to install electric charging stations, but they are one or two per jurisdiction, compared to hundreds of gas pumps. Worse, when you consider that the majority of vehicles are driven to and from work, you would expect that some companies would find it in their best interest to install charging stations. Sadly, most companies rent their space, which means that building management needs to install the chargers. And so far, there has not been a hue and cry requesting them, so they are not installed, which means that commuter has to be aware of their distance, their stop and go, and other features, like air conditioning usage, radio, lights, phone charges, etc. All take a toll on the life of the batteries, which means needing more charging.

Electric cars have some advantages, but so far, the negatives outweigh the positives for most people.

Can I have what they’re smoking?

Posted on by

Mick Mulvaney says DHS can’t 'spend money from Mexico' for wall: 'We have to get it from the treasury'

Mulvaney said that through the new agreement, "American workers are going to do better, the government is going to do better, and you could make the argument that Mexico is paying for it in that fashion."

Seriously? This is how the current administration is justifying taking five billion dollars from the US taxpayer for a device to prevent border crossings. A device that the Chinese will tell you did not work as advertised, but did employ a lot of people. Mostly slaves.

I can think of a lot of things that five billion dollars can buy that will do a lot more good for the US economy. And for those playing the home game, five billion is the buy in. Current estimates are north of $20 bn for actual completion. For that the US could make Dominica a State. With cash left over. Or how about 50,000 teachers for a decade? No? 50,000 miles of road repairs. Surely that is just as important, and the follow on spending would boost a number of local economies. How about feed 3.4 million people for a year. We always hear about the homeless, many of whom are veterans in need of more than just food. We could also house some 300k of them.

Clearly preventing a tiny percentage of illegals has a cost (yes, tiny. The Census estimates less than 20 million illegals are in the US. That is the population of the state of Texas or a bit more than 4 times the population of New York City. A drop in the bucket) but the cost of building an ineffective preventative wall is even higher when you consider what can be built with it. (The next aircraft carrier is only $13 bn).

Let's go Congress, show some leadership. Fix immigration.