Have there been any comprehensive studies done to determine the most monetarily efficient way to execute government contracts? By going in-house, e.g. through UNICOR, the goverment eliminates the overhead of the bidding and accounting process; however, UNICOR does not always provide the cheapest price. Also, by not awarding contracts to non-goverment firms, the feds cannot recoup any taxes that might have been collected from that activity. Some simple math for a simple example contract (warning -- I have never taken an economics class): CU = cost for contract if done by UNICOR CN = cost for contract if done by non-government entity HU = overhead with UNICOR HN = overhead with non-gov. TN = fed tax rate with non-government contract (corporate, worker wages, etc.) PU = rate of profit to penal system (and hence govt.) with UNICOR Statement in question: (PU - 1) * CU - HU >= (TN - 1) * CN - HN This can be transformed numerous ways to visually isolate significant quantities. This 1st order model does not take into account macroscopic differences, like the fact that UNICOR "employees" cannot spend their money very freely outside the prison commisary. I think the question is significant because this issue is germane to other government areas, particularly big-dollar defense contracts. Regards, Sourav Mandal ------------------------------------------------------------ Sourav K. Mandal Massachusetts Institute of Technology Department of Physics http://web.mit.edu/smandal/www/ "In enforcing a truth we need severity rather than efflorescence of language. We must be simple, precise, terse." -- Edgar Allan Poe, "The Poetic Principle"
