I did government contract work for two years. Even spending countless hours learning the ropes, trying to gain an edge I threw in the towel. After becoming extremely efficient I would say doing the jobs that paid the best per hour for me government jobs similar to the private sector took twice as long. As example I make 50 firing pins for a .50 cal rifle for a private customer, they go for $8 each. For simplicity material and tooling cost $50. I found the job here on PM and took 15 minutes to quote it. Took 15 minutes to pack, bill and ship.
Job took 1 hour to program, 1 hour to set-up, job then takes 2 1/2 hours to run out, rinse them off so they are ready to pack. 5 hrs for $350 or so gross profit or whatever you call it.
When I threw in the towel in 2011 you could tell by reading the procurement history the lowest bid was steadily dropping since 2005. The lowest bidder always wins these jobs, every time the job repeats you must be low bidder to get the work. Some people will just undercut the last price paid by 5% and bid. (I did occasional sub contract work for a guy who did this). Repeats are very rare which are a job shops bread and butter. For arguments sake this is also an $8 part to Uncle Sam for 50 pieces Government and private sector prices were about the same but with the government making the $350 went like this.
The 4 1/2 hours to program, set-up, and run are of course identical. Not so for the other 30 minutes. For bidding you hunt through categories by number on the front page you see PIN a part number and quantity of 50. You have to go through up to 10 layers of BS to get to the print. Until you see the print you have no idea
whether this pin is the size of a grain of rice or as big as a telephone pole. You may discover the material and plating requirements are obsolete and the government either never answers the questions or is slow to respond. If you don't know Dupont black #32 (made up example) from 1943 is now 2" round black acetal it is best to close everything out and look at the next one. A lot of prints are photocopies of WWII documents and aren't very legible. For all the reasons above and then some I found myself making a bid for every two hours and I had 4 different CNC machines and 3 manuals.
Now on to packing a lot of overkill here. Each part requires an individual bag and tag, this can really get fun when you make 2,000 screws and they want then individually bagged and labeled. Sometimes they tell you in the instructions what size bag to use, each order has different packing codes. Of course you also know that 50 pieces goes to 3 different installations so we need 3 different boxes, 2 labels outside each (The Fedex or UPS label plus the government one. Also be warned most shipments required RFID tags which take a $2500 printer to produce. All this garbage adds another hour and 15 minutes.
So in summation 15 minutes of quoting averages 2 hours and a 15 minute pack job takes 1 hr 15 minutes. So a 5 hour job takes 7:45 for the same money. A lot of them doubled the time for the same money. The only good thing they paid on time and if you offered them a discount like 2% 10 net 30, they always paid in 10.
When I was doing the government contracting (2009-2011) I always offered to help people get started when I saw people mention wanting to do it. Out of about 10 people who started the process only one finished signing up and he gave up when he saw the quoting process hassles.
Government work probably is only gravy for the big boys with the huge billion dollar contracts, there aren't any $600 toilet seats or $200 hammers where I was at. That and the hourly rates you could bid would drop significantly as quantities increased. If the order for the same part spent only 4 hours on the machine you could get it for a $75 an hour shop rate. If it would run for a week it would go for $30 an hour, you could see this on the procurement history they would show the per piece price by quantity. On most items I was only bidding against US and Canada shops.
