For some of us, there is a moral repugnance at the concept of spending other people's money, taking full advantage of them. I remember one customer I had at a sugar products company in east Los Angeles; he was basically a 1-man IT shop with a junior assistant. He wanted a way to integrate files from his other plants with Oracle's ERP product suite (with which I have considerable experience). Oracle sales was trying to talk him into a $30K licensing deal for their EDI product, not to mention additional money for installation and setups. I was there for other work, I was charging him less than $100 an hour (plus expenses), and I did a concurrent program implementation custom suited for what he really needed in my spare time during a brief stay.
Charlie, in fact, had been my last customer as a consultant for a company that eventually bankrupt in the aftermath of the 2000 Nasdaq meltdown. Charlie had been so impressed with me during my 2-day engagement that he pressed the company to extend my work an additional 2 work days. (I discovered that the company put off my separation to accommodate the extension.) Why did he do so and was willing to pick up from expenses from the Bay Area versus scores of other Oracle Apps DBA's in the Los Angeles area? He told me he had learned more in two days with me than the previous handful of DBA's my employer had sent to him over the past 6 months.
The same mindset went into expenses. Before becoming corporate DBA at Advantest in Santa Clara, I did a long subcontract with them, at the time living in the Chicago suburbs. (I had replaced a DBA whom had given 2 weeks notice, and the Silicon Valley market was so hot at the time, they agreed to pick up my expenses coming from Chicago.) Advantest really didn't specify expense guidelines, but the executive assistant told me I was preapproved to stay at a local hotel which was charging $199/night. I just felt that wasn't right. Even though it meant commuting nearly an hour each way, I took a room at an Extended Stay in Morgan Hill (south of San Jose) which charged about $43/night, bought groceries and billed the customer accordingly (much cheaper than eating out), I rented a subcompact car at under $30/day, and I found an airline out of Midway where I could do a roundtrip reservation with just a day's notice for about $450 (hundreds of dollars less than major carriers, even with 2 weeks notice).
In fact, I felt bad for a recent employer when their travel company couldn't get me into the usual Hampton Inn near their home base, with a corporate rate of about $110, and instead booked me into a chain of upscale suites for about $30 more a night. My supervisor heard me talk about maybe picking up stuff to eat from a nearby Giant supermarket to help make up for the higher rate and then rebuked me, in an exasperated tone, "Ronald, don't deprive yourself!" I did notice, however, other colleagues didn't have the same scruples. I went to a sports bar/restaurant with other trainees, and one of them nudged me as this other guy ordered the ribeye (the most expensive entree on the menu). He told me they had been going there all week, and the guy always ordered the same thing. (Did I order the ribeye? No.)
But let's focus a little more on government spending. I'm sure anyone who has been in academia or in the military or civil service for a career has better examples, but I think two basic (even if somewhat trivial) examples make the point.
The Software Purchase Incident
As a new faculty member at the University of Wisconsin at Milwaukee, I was told I could request whatever personal PC productivity software I wanted (within reasonable constraints, of course). The selected items aren't material to the example; rather, it was the vendor. I could go through an approved vendor and get it, say, the next day. The problem was I could purchase the same software products through a PC Magazine vendor for 15-20% less than what the approved vendor would charge. I thought it was wrong to spend the school's money like that.
I soon learned my lesson. You see, as almost any accountant will tell you, it's not enough that I could demonstrate, in black and white, going through this vendor would save them money. I had, in effect, opened up Pandora's box. Now they had to invite other vendors (including mail-order) to bid on my prospective purchase bundle; who knows--maybe they could find a mail-order vendor to save them 21% vs. 20%.
No good deed ever goes unpunished. I had to do without my software for a semester or so while all this nonsense was going on. Meanwhile, the approved vendors were spouting their self-righteous indignation, because it's only right that they make up the difference on my purchase for all the other deals they lose their shirt on selling things to other faculty. (If anyone seriously buys into that nonsense, I'm sure someone is auctioning off the Brooklyn Bridge on eBay right now.)
What did I learn from that? I get my requests fulfilled faster if I keep my mouth shut and go with the wasteful flow.
The Lunch Reimbursement Battle
My favorite meal story is how one company in 2000 rescinded a job offer to me when the company's accountant remembered me from when I had applied for a management position about 3 years earlier. I was supposed to have a breakfast meeting with one of the managers, whom cancelled out at the last minute. I ate from the breakfast buffet at the hotel before going to a full day of interviews. I later presented the bill for reimbursement from the company, and the accountant rejected it, saying the amount exceeded what they allow their employees breakfast per diem. (I don't recall any advance discussion from the company that if they were a no-show at breakfast, where they would be expected to pick up the check, that I was to abide by some unspecified per diem schedule.) I was ticked off a company that spent some $500 on airfare and hotel was penny-pinching over a breakfast check. Anyway, when the company rescinded its job offer, my attitude was, I was better off knowing about what they were really like sooner than later.
Going back to UWM, I went to an academic conference to Las Vegas with other colleagues. (Vegas hates people like me; I once played video poker for an hour, only investing a quarter of my own money and without knowing the rules of poker.) And, of course, I knew about the famous buffet lines with all you care to eat for an absurd amount of money, like under $5. Of course, they make you go past all the gaming tables and slot machines to get there. But it's really hilarious going to Vegas with a bunch of applied statisticians whom start excitedly spouting gibberish over seeing the law of large numbers in action.
The point is, I knew professors whom were hitting the buffet tables and intending to simply file per diem (i.e., no receipts required). Because of their low buffet checks, they were making money off filing per diem.
I had an outgoing flight at something like 2PM and decided to take in a decent lunch before heading for the airport. After filing for expenses, I found my expense report rejected, with the accountants claiming that the airline claimed that they served lunch on the flight and the school's policy was not to reimburse meals when an airline claimed they were serving a meal. (Only an airline would have the audacity to call the snack they served as a "meal." But that's beside the point.)
It was a matter of principal now. I couldn't believe they were putting up a fight over a $3 or $4 lunch. Especially since what I was requesting for reimbursement was LESS THAN the amount I could collect simply by claiming per diem and not providing receipts.
I decided to cut off the argument then and there: "I've decided to file per diem." The accountant's eyes grew wide, and she stammered, "You can't do that!" "Why?" "I've seen your receipts!" "It doesn't matter. I'm entitled to it." I was prepared to name other professors whom had actually made money by claiming per diem. All I was trying to do was get reimbursed for my out-of-pocket costs, which were less than per diem. And they were trying to penny-pinch at my expense, not at the professors whom collected full per diem from the accountants, no problem.
To make a long story short, they finally agreed to reimburse the lunch receipt, probably because they were saving more by my not claiming per diem. But I'm sure to this day some accountant is still losing sleep over reimbursing that lunch check.
Conclusion
The examples I've listed here are not that earthshattering. And it would be wrong to claim it doesn't happen in the private sector. Let me give another example; when I first started studying for my MBA at the University of Houston, I was making a living in the now-defunct APL timesharing industry. A few companies (e.g., STSC, IP Sharp, etc.) created enhanced versions of APL, a cryptic interpretive computer language which IBM itself used to rapidly create large-scale computer applications and sell computer time and programming services.
I had a wheeler-dealer boss whom especially loved the "use-it-or-lose-it" end of fiscal year departments whom were reluctant to return unused budget money for fear of finding next year's budget slashed. So they were willing to do a quid pro quo: say, I had $5K left in my budget, and I really want this inefficient software rewritten to be faster and more powerful. So I agree to let you book the $5K now, and you deliver the fixed system 4 months down the road.
My company had a "dollar-burn" routine: it would essentially run on the customer's account in an endless loop until it burned the agreed-upon amount. So my boss got the $5K in revenue which helped his bonus picture, and we programmer/analysts were the back he wrote his check on. Of course, he had to make do on his promise, which was painful to "what-have-you-done-for-me-lately" Brian. He couldn't put us on new revenue projects if we were still fulfilling his past due obligations. My principal colleague simply gave the program a facelist with his preferred APL programming style.
But the point here is, we often have choices in the private sector over whom gets our business--but we have to pay taxes. Most of us agree certain government functions are necessary, but we hate being forced to pay for inefficient government operations or wasteful spending. Cost-plus or no-compete contracts are examples of arrangements with no inherent incentive to sparingly spend the people's money. Other types of contracts (e.g., flat-bid) are better, but you have to be careful, because price doesn't imply quality. For example, I've done expensive Apps upgrades at fractions of the time of most Oracle Apps DBA's--and with better quality results (fewer technical issues to resolve) at roughly market rates.
Every Presidential candidate (including Obama and McCain) pays lip service to the issue of being tight with the public buck. But look simply at the defense budget--how many times do we hear each community fight for retention of their obsolete, unnecessary military base, or force the Pentagon to accept delivery of weapons or other supplies it doesn't want or need or know where to store. Obama will flinch the first time a union bites him for threatening the jobs at their weapons plant. You have to have really thick skin to make a real difference; a people pleaser like Obama just can't do it.
