Money For Nothing

April 3, 2007

Last week, watching the congressional hearing on the alleged misconduct of Lurita Doan, Administrator of the GSA, the level of political incompetence exhibited by Doan was striking.  My impression was that she would make a great PTA mom.  The obvious question, “How in the world did she manage to be appointed to be the Administrator of the GSA?” was answered when Rep. Henry Waxman asked her if she contributed $200,000 to the Republican party and she said ‘yes’.  She went further to boast of how proud she was to be a successful small businesswoman and her priority at GSA was to help minority businesses.

Lurita Doan, GSA Administrator
 

It turns out that Doan’s degree is in Renaissance literature but in 1990, she supposedly set out with $5 in her purse.  She went to her local Kinko's, "ran off some stationary and claimed to be in business," and went searching for government contracts offering to sell information technology services.  According to her bio on the GSA website, “before entering the field of computer technology, Mrs. Doan taught at several colleges in the Washington, DC area”.   Since her Masters is in literature, presumably that’s what she was teaching.    From those meager beginnings, she built a $200 million dollar a year business on government 8(a) contracts.

According to Vasser, she not only sells information technology, she designs systems by integrating technologies:

“The border between the U.S. and Mexico is 1,950 miles long; between the U.S. and Canada, excluding Alaska, 3,990. The woman who's responsible for about 80% of the security and surveillance technology deployed along those borders is a Vassar grad, class of 1979: Lurita Doan, the founder, president and C.E.O. of New Technology Management, Inc. - who, by the way, graduated with honors in English from Vassar and holds an advanced degree in Renaissance lit. What N.T.M.I. apparently does better than just about anybody else isn't inventing new technologies, but integrating existing and new technologies writing programs to make these various technologies communicate and work together.
 

Border surveillance technologies include such components as remote video cameras, unmanned aerial vehicles, digital video recorders at ports of entry, and regional and national databases from various state and federal agencies. N.T.M.I. developed a "smart border," integrating the various types and layers of surveillance. "It's all for the good," said Kenneth Reid, a security industry analyst quoted in the VQ, "because it will take the kind of technology integration her company does in order to prevent something like the next September 11th from happening."

Somebody should tell Bill Gates that we don’t need imported foreign IT workers, all he needs to do is to recruit from the literature departments of universities for those highly skilled IT people. 

Obviously, there is something very wrong with Doan’s story.  People don’t have that kind of stunning success in the IT security business without experience.   So what is her secret?  Government contracts.  Section 8(a) contracts. 

From an article on Washington Technology's website we learn:  

"I didn't know how to act in business, so I brought my daughter with me," she said. "She went with me to Italy, Greece, Germany, all over Europe. I'd set up the playpen in the computer room with me."

Being in the 8(a) program and working with the Small Business Administration and the General Services Administration have been major pluses for the company, Doan said. "The SBA was wonderful, because I was totally clueless," she said.

The 8(a) contracts account for about a third of the company's revenue, and NTMI already is preparing for its graduation in 2003, Doan said.

"We are trying to do more full and open competitions, and we are using the GSA schedule because it offers us a lot of flexibility," she said. "Getting services on the schedule was huge for a company like us."

She also credits GSA's Federal Acquisition Services for Technology program with helping the company grow. Under this program contract, NTMI provides services such as system design and installation, development of integration plans, acquisition of hardware and software, testing and training.

Looking ahead, Doan said she wants to see her company do more work in what she calls exotic technologies, such as the work the company has done with remote sensing and surveillance with the Customs Service.

"We are really deploying some bleeding-edge devices," she said.

Coincidently, as I was researching Intermodal Commerce Zones and the CANAMEX highway, I came across Foreign Trade Zones which led to the discovery of Hubzones.  (Our country is being zoned so that selected businesses inside a zone can succeed while others, outside the zones will fail due to the unfair competitive advantage of residing in the zone.  It's part of the transition to a planned economy).    
 

Section 8(a) contracts are government contracts issued to minority businesses within Hubzones.   When I was researching Hubzones, I found a story of a woman named Payal Tak whose success in the IT business is virtually identical to Lurita Doan.  In an article, USA Today reported that Payal Tak’s business grew 1894% in a three-year timeframe.  Tak’s claim to fame was that she successfully ran a User Acceptance test for an IT project.  While this might sound impressive, it really is a clerical function - not a technical function.  It’s a job that no Programmer ever wants to do.

Nelson Gonzalez

In thinking about the stunning and completely unrealistic successes of Lurita Doan and Payal Tak, I recalled another story I wrote about a similar stunning and completely unrealistic success story that George Bush told during a 2006 speech in Florida (comments in blue are mine): 
 

Nelson Gonzalez and a partner started a business in their garage 10 years ago with $10,000 capital.  First year revenues were $87,000 building “high-performance, custom-designed personal computers”.  Their revenues last year were $192 million so Bush says.   This is a standard ‘prop’ in all of Bush’s speeches on the economy.  Implicit - immigrant makes good on the American Dream.   [I hope the FBI was listening because this business sounds more like a money laundering operation.  The market for custom-designed, high-performance computers is not that large and secondly there isn’t that kind of money in it.  Why do I say that?  Because in every town in this country there are people who can build custom, high-performance machines.  It’s not a specialized or unique business.]

And of course this story wouldn't be complete without mentioning David Grosh.  Grosh was the lifeguard who was "lucky" enough to be Michael Scanlon's neighbor.  During the hearings on how Jack Abramoff defrauded Indian tribes, Grosh testified that he got involved in the mess when Scanlon asked him if he wanted to be a CEO of an international think tank to which he replied, "Sure".  When he asked what he would have to do, the answer he got was "Nothing".   Unfortunately for Grosh, the scheme fell apart before he could become a multi-millionaire by doing nothing but being a front. 

These are not all the players in this story - these are just a few cases to show how business and politics are working in the United States today.  The moral and the "lesson learned" is that the key to success is incompetence.  If you spent a lifetime building expertise in a specialized field of endeavor, you're just a sucker.  You didn't need to do that at all.  All you needed was to be connected to the Republican mafia (which includes some Democrats as well).  Jokes on YOU! 

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