If you’ve ever been foolish enough to think that your vote in a national election actually has a chance of changing anything, at all costs avoid Donald Barlett and James Steele’s “Washington’s $8 Billion Shadow” in the March issue of Vanity Fair. It will put you off voting for good.
Barlett and Steele’s latest is the reason I subscribed late last year to Vanity Fair. Now I’m almost sorry I did—the two best investigative journalists in the US profile the quietest big company you’ve never heard of: Science Applications International Corporation (SAIC).
If you earn less than US$100,000 per year—or, rather, if you pay taxes on less than US$100,000 each year—100% of your taxes go to this corporation in the form of some 9,000 active outsourced government contracts:
“To connect the dots: SAIC was writing the regulations for one government agency, the N.R.C., which would set the permissible limits of radioactive contamination for recycling, even as it partnered with another company, under contract to a different federal agency, the D.O.E., to recycle the radioactive metal for which it was drafting the regulations.”
Two of these contracts are worth more than US$1 billion; more than 100 of them approach US$10 million each. And the company’s seeing a reported return on revenue of 11.9%. Unlike Haliburton and Bechtel who do the heavy lifting associated with outsourced federal contracts, SAIC’s sells mostly information and analysis. Remember David Kay? He was SAIC’s counterterrorism chief from 1993-2002.
The good news is that this company manages to fail at most everything it does (especially as it begins to specialize in outsourced security in our war without end against “terror”). SAIC, for example, got the US$280 million, two-year, contract to build the National Security Agency’s eavesdropping system, called Trailblazer, which was abandoned after four years and more than US$1 billion.
The bad news is that it goes back to the government trough time and again.
Oh, and the voting bit:
“Political change causes scarcely a ripple. As one former SAIC manager observed in a recent blog posting: ‘My observation is that the impact of national elections on the business climate for SAIC has been minimal. The emphasis on where federal spending occurs usually shifts, but total federal spending never decreases. SAIC has always continued to grow despite changes in the political leadership in Washington.’”
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