Federal contracting explained simply

The mayor of a small town in a middle America state had a problem. The old bridge, which was the only way out of town, was in a state of disrepair and needed to be rebuilt.

So he called in three contractors to bid on the job: one from Cincinnati, one from New York, and one from Washington, D.C.

"$3 million," said the man from Cincinnati. "$1.5 million for the supplies. $1.5 million for the labor."

Next, the Mayor met with the New York contractor, and asked him: "How much to build the bridge?"


"$6 million," said the New Yorker. "$3 million for the supplies. $3 million for the labor."

Finally, the Mayor brought in the contractor from Washington D.C., and asked him: "How much to build the bridge?"

"$9 million," said the man from Washington.

"$9 million," the Mayor repeated, aghast. "That's three times more expensive than the lowest bid. How do you break that down?"

"Easy," said the Washingtonian. "$3 million for you. $3 million for me. And $3 million to hire the guy from Cincinnati."