And let's not forget the outcome of those illegally overpriced contracts: https://www.propublica.org/article/how-mckinsey-helped-the-t...
[dead]
Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
321–328 of 328 posts
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#322Earlier quoted context omitted.
McKinsey comes up because they are an elitist consulting firm and HN is somewhat of an elitist forum. I am using elitist in a good way, although there’s certainly elitist attitudes on here. As someone who might join a Big 4 in IT consulting soon it’s nice to see what McKinsey is up to. It’s much nicer to see accountability for one’s actions.
> I am using elitist in a good way, although there’s certainly elitist attitudes on here. Wait, that last time you said elitist, did you also mean it as a good thing?
[deleted]
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#323My favorite McKinsey story: Back in 2005 UBS (big Swiss Bank) brought McKinsey in to figure out how to expand more rapidly in the US. The consultants suggested, "Hey, you have almost no sub-prime exposure. Everyone's trading this stuff! You gotta go in, and in a big way! It will certainly be a pillar of your US strategy." So UBS did... The result was one of the most severe debt writeoffs of the Great Financial Crisis…
Is the point that McKinsey didn't know the Great Recession was coming / it's causes ahead of time?
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#324Earlier quoted context omitted.
Reread the part about the IFF - GSA gets paid a percentage of their contracts. So the bidding process gets corrupted, ignored, anything and everything the staff can do to inflate the contracts so they get more IFF back. That IFF honestly sounds like the cleverest pork barrel hack since all the military contractors got theirs set up...
The part I don't understand is what's keeping competitors like the Boston Consulting Group from listing similar services on the GSA schedule at a better rate. The article talks about the IG finding evidence that the GSA improperly approved cost increases for McKinsey. This makes sense in regards to perverse incentives but I didn't see anything about the GSA shutting out less costly competitors from the schedule of ap…
It's the fact that the affected staff deliberately didn't follow policy, and chose the inflated bids regardless of any others, that drives this.
There's no reason at all why BCG can't submit better rates. But that ensures the corrupted decision making will have the awards go to someone else. No one was preventing other bids, they just had the selection process locked up.
McKinsey wasn't favored in listings, only in the off-the-record selection bias.
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#325Earlier quoted context omitted.
The part I don't understand is what's keeping competitors like the Boston Consulting Group from listing similar services on the GSA schedule at a better rate. The article talks about the IG finding evidence that the GSA improperly approved cost increases for McKinsey. This makes sense in regards to perverse incentives but I didn't see anything about the GSA shutting out less costly competitors from the schedule of ap…
It's the fact that the affected staff deliberately didn't follow policy, and chose the inflated bids regardless of any others, that drives this. There's no reason at all why BCG can't submit better rates. But that ensures the corrupted decision making will have the awards go to someone else. No one was preventing other bids, they just had the selection process locked up. McKinsey wasn't favored in listings, only in t…
I think maybe people are conflating being awarded a contract on a GSA schedule to a purchase order. A GSA contract award is just a listing on the GSA schedule.
The GSA schedule mentioned in the article has 3000+ other vendors offering similar services. They all have been awarded GSA contracts. However, no purchase orders are attributed to those contracts until a government employee looks through that list of thousands of vendors and selects a specific vendor at the contract rate. The GSA doesn't actually select the execution of the contract, they just list the contract as part of the schedule of approved vendors.
It's like listing an app on the Google Play Store that charges 30%. That 30% is like the IFF from the article. Is it unethical if Google allows you to specify a really expensive app price? You could set your app price arbitrarily high like McKinsey but your app price is a moot point if nobody selects your app and instead chooses your competitors. What's interesting is that agencies do select McKinsey, indicated they at least perceive those costs are justified over the competitors listed on the same schedule.
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#326Earlier quoted context omitted.
Here it is: https://nymag.com/intelligencer/2019/02/a-long-talk-with-dem... I originally came across these comments of his when reading the piece written about him in Current Affairs.
The latest article in the NYTimes says he is under an NDA so that may explain it.
He might be under an NDA with respect to his specific involvements at McKinsey, but he would not be stopped from commenting generally.
He really just doesn't have a problem with McKinsey's various immoral practices. That's the simple way to see it.
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#327Earlier quoted context omitted.
This is why consultants hire Ivy League graduates. To create a myth of "Ivy League" "quality" justifying the decisions they are hired to recommend. The other thing management consultants do is industrial espionage -- they go into a company to learn how it work, and then advise other companies on how "industry leaders" operate.
The longer I live, the more I've realized it's a myth. The person/human is significantly more important. After working with duds from top schools, I'm not sure why it happens. How do they get accepted? How do they graduate? How did they get past interviews?
[deleted]
Re: Why Taxpayers Pay McKinsey $3M a Year for a Recent College Graduate Contractor
#328My favorite McKinsey story: Back in 2005 UBS (big Swiss Bank) brought McKinsey in to figure out how to expand more rapidly in the US. The consultants suggested, "Hey, you have almost no sub-prime exposure. Everyone's trading this stuff! You gotta go in, and in a big way! It will certainly be a pillar of your US strategy." So UBS did... The result was one of the most severe debt writeoffs of the Great Financial Crisis…
Is the point that McKinsey didn't know the Great Recession was coming / it's causes ahead of time?
The point is that they suggested a strategy that other big banks were already doing. There was no creativity in their suggestion in this regard.