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Tom Blumer

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May 22, 2014 - 12:02 am
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Remember the good old days when the Pentagon was spending only $640 for a toilet seat and $400 for a hammer?

Yes, I wrote “only.” (And yes, I understand that the problems at the Defense Department had far more to do with bureaucratic bloat than with genuine fraud or abuse.)

It turns out that procurement officers there were, relatively speaking, wise stewards of taxpayer dollars, at least when compared to the Obama administration’s Centers for Medicare and Medicaid Services. CMS has given the American people the $11,500 paper Obamacare application — and that may be a lowball estimate.

On July 1 of last year, the agency contracted with Serco, a company which has before and since built a history of fleecing the British and Australian governments, to process those apps. The potential price tag: $1.25 billion over five years in what the government says is “a Cost-Plus-Fixed-Fee type contract with a 12-month base period and four (4) 12-month option periods.”

If the contract’s profit is really “fixed” in the correct and not corrupt sense of the word, Serco certainly isn’t acting like it. A whistleblowing employee alleges that the company “gets paid for the number of people they employ, so they want us there even if we’re not doing anything.”

Based on the number of employees and former employees who have come forward to tell their stories to St. Louis TV station KMOV, the fact that the vast majority of the workers at the facilities Serco has established to carry out the contract are in fact doing almost nothing productive is beyond dispute.

Here is just a sample of the dozens of outrageous statements contained in the five reports (here, here, here, here, and here) KMOV had posted as of when I submitted this column:

  • “[W]eeks can pass without employees receiving even a single application to process.”
  • Employees “sit at their computers and hit the refresh button every 10 minutes … to hopefully look for an application.”
  • One supervisor allegedly said that “if we process one or two of these a month we have done our job.”
  • “Multiple employees said there were days they did not process even one application, in fact they believe they only averaged seven to nine processed applications per month since the facility opened in October, 2013.”
  • “1,800 people … (try) to get one of 30 applications to pop up.” (Serco originally anticipated hiring “approximately 1,500 staff.”)
  • “They want to hire more people even though we still don’t have work to keep the people that we have busy.”

Additionally, when supervisors knew that CMS officials were going to pay them a visit, employees were told to “dress professionally and act like we were working … (and to) pull our chairs into our cubicles and yes look at the screen as if we were reading things with fingers on the keyboard.” As PJ Media’s Glenn Reynolds has often observed: “It’s Potemkin Villages all the way down.”

One employee astutely observed that “somebody has figured out how to make a lot of money off this deal to do nothing.” That’s why I question the alleged “Cost-Plus-Fixed-Fee” nature of the contract. Based on the company’s described behavior, either Serco is allowed to formally raise its not really fixed fee if its workers put in more hours, or it has figured out how to pad its submitted “costs” to a point well above what they truly are.

Here is how I estimated the per-app cost Serco is incurring:

SercoEstimatedCostPerObamacareApp0514

Scenario 1 uses information relayed to KMOV by a Serco employee in Kentucky, where all paper apps are apparently first received and scanned. This person recounted how the facility got about 1,000 apps one day back in November or December, and how that represented roughly a full day’s work for all locations to fully process. This person estimated that about seven or eight days’ worth of additional work had come in on all other days during what she said was Serco’s eight months of operation.

Top Rated Comments   
You know, I used to feel the same way, but then EPA, IRS, DOJ, state department, DOE, etc., etc., etc.

The federal bureaucracy is becoming the same story as so-called moderate Islam. If the ephemeral moderates / "honest, hardworking" people are so prevalent, why don't we ever hear from them? Why weren't those honest hardworking people shouting from the rooftops about Benghazi, Fast and Furious, the VA scandal, et al.
9 weeks ago
9 weeks ago Link To Comment
As they say (sigh) it has never been about streamlining access to insurance or even anything to do with "health", but only about expanding the scope of government control and, not so incidentally, restricting liberty.

Which is why nobody needed to understand or even read all that ridiculous verbiage known as the ACA before making all those backroom deals with fellow Congresscritters and then changing the rules of passage in the US Senate to require only 50% approval.

If half of Americans weren't brain dead, there would be massive outrage in the streets over this travesty.
9 weeks ago
9 weeks ago Link To Comment
And to think: all we had to do was major tort reform and allow insuance to be sold across state lines...

Idiots.
9 weeks ago
9 weeks ago Link To Comment
All Comments   (27)
All Comments   (27)
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No wonder why the insurance workers get all snarky when we say 'no Obamacare please' when looking for new insurance. One awful woman also went so far as to teach us that 'there is no obamacare, it's the aca'. Even the minions are getting weary.
9 weeks ago
9 weeks ago Link To Comment
Hey - Communism works! If you give everybody a government job there's no crime. http://www.youtube.com/watch?v=kQA_AM3EO88

(Do I have to label this as snark?)
9 weeks ago
9 weeks ago Link To Comment
Send A Message Today:
STEP DOWN OBAMA !
9 weeks ago
9 weeks ago Link To Comment
You can either work for a living, or you can work for the government for a living.

It's becoming more and more clear that the latter is more lucrative. The former requires ingenuity and sweat to hit the jackpot. The latter only requires a criminal mentality.

I'm becoming more and more convinced that the American experiment may have succeeded but the people who liked it better the old way figured out how to smash the test tubes and have basically relegated the experiment to the dustbin of history.
9 weeks ago
9 weeks ago Link To Comment
Please don't bash all government employees. Yes, government corruption yields some pretty outrageous criminal acts, and there are always those willing to cheat (or perhaps in this economy, willing to take whatever job they can get) but the vast majority of government employees are honest, hardworking people doing the best they can.
9 weeks ago
9 weeks ago Link To Comment
You know, I used to feel the same way, but then EPA, IRS, DOJ, state department, DOE, etc., etc., etc.

The federal bureaucracy is becoming the same story as so-called moderate Islam. If the ephemeral moderates / "honest, hardworking" people are so prevalent, why don't we ever hear from them? Why weren't those honest hardworking people shouting from the rooftops about Benghazi, Fast and Furious, the VA scandal, et al.
9 weeks ago
9 weeks ago Link To Comment
looks like a thinly veiled form of welfare, with the added "benefits" accruing to the landowners and facility people to give them all a place to hang out whilst they do nothing on our nickel.The nearest thing to "organising" Chicag we've seen outside of that cesspool.

Someone will call for a congressional investigation, more people will be charged wiht contempt for refusing to bring demanded records, and everyone will sigh, sit on their hands, and let it fade into the setting sun.

WHAT will happen when there are more takers than there are makers? Those how are working are now pying over half their income to government, to perpetuate this sort of boondoggle. 58% of those working in my county work for government at some level. The rest of us support them. The tipping point is approaching rapidly, but too many are fussing over a few barnacles on the hull when the ship is nearing the brink of the falls.
9 weeks ago
9 weeks ago Link To Comment
“They want to hire more people even though we still don’t have work to keep the people that we have busy.”

Read: They want to bring more loyal democrat voters into do-nothing government jobs funded by taxpayers.
9 weeks ago
9 weeks ago Link To Comment
And to think: all we had to do was major tort reform and allow insuance to be sold across state lines...

Idiots.
9 weeks ago
9 weeks ago Link To Comment
As they say (sigh) it has never been about streamlining access to insurance or even anything to do with "health", but only about expanding the scope of government control and, not so incidentally, restricting liberty.

Which is why nobody needed to understand or even read all that ridiculous verbiage known as the ACA before making all those backroom deals with fellow Congresscritters and then changing the rules of passage in the US Senate to require only 50% approval.

If half of Americans weren't brain dead, there would be massive outrage in the streets over this travesty.
9 weeks ago
9 weeks ago Link To Comment
Half of America still thinks they're getting something for free out of this. It's not "their" money, or so they think, so who cares about the cost?
9 weeks ago
9 weeks ago Link To Comment
Who knows what the law is when it gets repeatedly changed by the Executive branch in an unconstitutional manner. Last figures I heard were that about 50% of the public says they've felt no impact from the law. Of those who had 17% said they'd benefited and 29% said they'd been hurt by it. If the law ever gets completely implemented I think we'll all be made to care.
9 weeks ago
9 weeks ago Link To Comment
well, I am one who has NOT been affected... yet. Never had insurance, always paid cash for all medical services. Total average cost over a few decades has been about $200 per year. I looked into OhBummerTax, it will cost me more per year than I've paid out my entire life combined, and then there are the co-pays and deductibles when I DO need something. So I closed out the page and never went back. So far it hasn't cost me a thing, but from the look of things, sooner or later that will change..... when they try and fine me, er, squeeze mne, tax me, or when I DO head off to see the doc and his costs have forced him to raise his fees.... yet again. Office visits are now $135, seven years ago same guy was $35. It will not change direction in the forseeable future.
9 weeks ago
9 weeks ago Link To Comment
Jay Rockefeller, one of those institutional Senators who has been there 30 (count 'em) years, has morphed from somewhat stupid younger man to completely stupid older man.

With idiots like Jay sitting for decades as United States Senator, it is no wonder that this country is a mess.

"Democratic Senator: Many People Oppose Obamacare Because They’re Racist"

http://dailycaller.com/2014/05/21/democratic-senator-many-people-oppose-obamacare-because-theyre-racists/
9 weeks ago
9 weeks ago Link To Comment
"With idiots like Jay sitting for decades as United States Senator,..."

That's triple redundancy.
9 weeks ago
9 weeks ago Link To Comment
Or when toilet seats had to be made to secure the poop so that it would get out during high "G" maneuvers typical in military aircraft?

I'm betting you meant to put a "not" in that sentence somewhere ;-)
9 weeks ago
9 weeks ago Link To Comment
Sparky, you just haven't been around government projects enough.......
9 weeks ago
9 weeks ago Link To Comment
Its where the "Blue" in BLU-82 comes from.
9 weeks ago
9 weeks ago Link To Comment
Not I did! :-)

Of course.. it WAS the Air Farce.
9 weeks ago
9 weeks ago Link To Comment
Remember when hammers had to be custom made because Home Depot hammers, by the material they were made from, caused interference with all the electronics aboard the aircraft?

Or when toilet seats had to be made to secure the poop so that it would get out during high "G" maneuvers typical in military aircraft?

Any one want to guess what toilets cost on sedate Boeing 737, 777, etc., aircraft?
9 weeks ago
9 weeks ago Link To Comment
Probably a couple thousand bucks.. BUT, bear in mind these are made specifically for that aircraft, are formed and welded stianless, and have the flush and retention mechanism integral, BUT.. consider that they are used hundreds of times per day, the cost per poop factor is reasonable. Oh, they also have to be lightweight yet strong.
9 weeks ago
9 weeks ago Link To Comment
9 weeks ago
9 weeks ago Link To Comment
It seems obvious that the information presented in Mr. Blumer's article makes you uncomfortable as you try to lead the commentary off into a discussion concerning airliner toilet seats. Tell us why that is?
9 weeks ago
9 weeks ago Link To Comment
Oh, and furthermore, let me guess: My comment makes YOU uncomfortable because you've been barfing back that urban legend about the military costs for decades and now you find out it's real context.

Right?
9 weeks ago
9 weeks ago Link To Comment
Drop the childish playground insults and comment directly upon the information that Mr. Blumer presents. " Triple logical fallacy", "urban legend", and "hokey analysis" is not substantive commentary but meaningless phraseology until supported by fact. And the facts are .... ?
9 weeks ago
9 weeks ago Link To Comment
Well, brickbrain, your "obvious" is wrong.

Why? Because he starts with a triple logical fallacy. His sources might be correct, by his analysis (satire) is hokey.

Now go crawl back under your rock and try to learn a bit more rather than what your handlers spoon-feed you.
9 weeks ago
9 weeks ago Link To Comment
LongrangeSniper, thanks for your comments, though not necessarily your tone.

I gave the audience credit for knowing that military-grade, military use-specific items will cost a lot more than generic-use items at Home Depot. You seem to think that's too big of a leap of faith. I don't.

Even AFTER considering that point, the Pentagon's procurement system certainly was wasteful and full of bureaucratic bloat at the time (and to an extent, probably still is). That bloat added to the cost of items purchased, because vendors had to consider the time, paperwork and hassle factor in their bids.
9 weeks ago
9 weeks ago Link To Comment
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