Lack of trust costs D.C. $38M
A issue of trust between the D.C. government and its contractor cost the city $38 million, and there's a lesson there for all of us.
Government and industry struggle to agree and work together. This was illustrated by recent cuts in Washington, D.C. that cost the city $38 million in missed traffic enforcement camera revenue in 2014.
According to D.C. Police Assistant Chief Lamar Greene, the issue was dead device batteries. Council Chairman Phil Mendelson explained that the problems started when D.C. police took over camera maintenance from a contractor.
Why did D.C. police bring maintenance in-house?
Assuming the contractor’s price was less than $38 million, D.C. lost significant revenue by cutting this contractor from their budget. If the contractor was underperforming, why weren’t new contractors invited to compete for the necessary work?
D.C.’s decision to bring maintenance in-house demonstrates a misunderstanding of the importance (and perhaps the complexity) of the work being performed. It may also be the result of the gap that exists between government and industry—a gap that cost D.C. $38 million.
Both D.C. and the contactor failed to put an adequate solution in place when the contractor exited. The council needs to understand the reasons for this failure to ensure it doesn’t happen again.
Based on my experience, the core reason D.C. police didn’t renew the contract may be surprising to most outside the industry. I am a member of the APMP Procurement Improvement Committee—committed to helping government and industry come together and improve the procurement process. I do not work for either and my business gives me relatively unbiased insight into both worlds.
There is an obvious lack of communication between government and industry.
There is effort from both sides to bridge this gap but the issue is primarily behavioral not procedural.
Industry and government do not trust each other, and trust is required for genuine collaboration. It is an intrinsic, emotional prerequisite in any partnership.
Improved processes and memorandums alone cannot remove behavioral barriers.
Until we bridge the gap between government and industry, expect many more $38 million missteps.