Beltway IT: It Pays to Pay
For tech consultants and other contractors doing business inside the Beltway, the firms that spend the most on lobbying and dole out the biggest campaign contributions are more often than not the ones that get the big contracts.
OK, that's not how it's supposed to work, but the reality has long been that money talks, and contractors that don't have K Street lobby firms on retainer or powerful friends on Capitol Hill might as well pack up their PowerPoint presentations and head home.
Who are the big lobbying spenders among IT consultants and systems integrators? Well, EDS spent $3.9 million in 2006 on lobbying, according to the Center for Responsive Politics (CRP), a non-partisan, non-profit research group based in Washington, D.C. that tracks money in politics, and its effect on elections and public policy. This year, EDS is apparently spending more modestly—$1.8 million to date, according to CRP.
Accenture spent even more, roughly $4 million according to CRP. Bearing Point's lobbying expenditures in 2006 came to $1.2 million while Computer Sciences Corp., paid out a relatively modest $540,000. One of the most active IT consultancies was Science Applications International Corp (SAIC), which used 14 different lobbying firms at a total cost of $3.5 million.
Was this money well spent? Well, it certainly didn't hurt. SAIC, for example, generated $4.4 billion in federal revenue in 2006, according to Washington Technology, a newspaper for government IT systems integrators and resellers. Now, remember SAIC gained some unfavorable notoriety when it was fired by the FBI in 2005 for failing to deliver on a $170 million Virtual Case File application. SAIC claimed the problems largely stemmed from the client (repeated changes in specifications and FBI personnel who didn't have a clue as to how to manage a software project). Even so, the VCF fiasco didn't exactly bolster SAIC's image. Still, the company ranked number 5 on the Washington Technology Top 100 Federal Contractors list, behind giant defense contractors such as Lockheed Martin, Boeing, Northrop Grumman and KBR Inc. (a Halliburton company).
The other tech consulting firms that spent heavily didn't fare so badly either, according to the top 100 listing. EDS comes in at number 10 with $2.4 billion in federal revenue; Computer Sciences Corp. is number 11 with $2.4 billion; Booz. Allen Hamilton ranks 13th with $1.97 billion; BearingPoint is number 24 with $826 million, and Accenture weighs in at number 28 with $742 million.
After some of the recent corruption on K Street (see Abramoff, Jack), the Feds have been talking about initiating reforms such as barring influence peddlers from buying members of Congress meals. That may thin out the luncheon crowds at Duke Zeibert's or some the other restaurants where politicos rub elbows with power brokers, but it's not going to do much to slow the flow of cash to lobbyists.
Laton McCartney is a contributing editor to Baseline. His latest book, The Teapot Dome Scandal: How Big Oil Bought the Harding White House and Tried to Steal the Country, will be available from Random House in February.
Send comments on this column to Laton.McCartney@ziffdavisenterprise.com.