The lessons of HealthCare.Gov stretch far beyond Obamacare

October 22, 2013

Clay Johnson is founder and CEO of the Department of Better Technology and the author of an e-book on modernizing the federal government's procurement process. He was also a founder of Blue State Digital, which powered much of the technology behind Barack Obama's 2008 campaign. And he's had some strong words for HealthCare.Gov. We spoke this morning, and an edited transcript of our conversation follows.


(Karen  Bleier/AFP/Getty Images)

Ezra Klein: Your view is that HealthCare.Gov is symptomatic of larger problems in the way government manages IT and procurement. What do you mean by that?

Clay Johnson: Computer World yesterday came out with a report that took the last 10 years worth of IT procurements that are greater than $10 million and showed that 96 percent of them fail. They come in over budget, or vastly too late, or they don't work at all. To me, if you're going to spend a whole bunch of money on a process with a 96 percent failure rate, it pretty much guarantees it won't work out that well. This just isn't something we're very good at. And HealthCare.gov is a symptom of that overall problem.

EK: So why do you think the failure rate for these major IT projects in government is so high?

CJ: Generally in technology, smaller products that iterate into becoming larger after they get in front of customers and get used tend to work better than trying to build something with upfront requirements that may or may not work out.

The second reason is that because of the amount of money involved, government becomes really afraid of failure, which is a bit ironic, as this ends up leading to failure. But that fear of failure leads them to only want to work with known quantities, and known quantities mean contractors who've done this work in the past. That puts them with a group of entrenched vendors who haven't really had to compete in the world of technology.

The other part is that there aren't enough people inside government with the technical knowledge to oversee this stuff. In 1996, Newt Gingrich and the Republican revolution took out this Office of Technology Assessment that was kind of the digital brains of Congress. It was like an internal think tank on technology issues that advised Congress. That got axed. So there isn't a real technical brain inside of Congress because there's no one really advising them, the way lawyers advise them on the law, on technology. And you have some of the same problem in the executive branch. You have people like [CTO] Todd Park but it's not in every agency.

EK: Let's go back to your point about entrenched vendors. I think the image people have of these bidding processes is the government says they'll pay X amount for a service and then every company that thinks it can do the job and wants the money makes a bid. But your view is that the way the process is structured effectively excludes a lot of companies that aren't specialists in making those kinds of bids already. Why is that?

CJ: These purchases are governed by first the federal acquisitions regulations and then each department has its own regulations. Because of that, the people who get awarded the work are the people who understand these regulations the best, not the people who can do the best job. And then people on the inside are afraid to make risky decisions because they don't want the contract protested by the people who didn't win the contract.

EK: What do you meant by "protested"?

After a contract is awarded there's a protest period in which everyone who has lost a bid can protest it. So right now Amazon was awarded a cloud computing contract from the CIA and IBM is protesting the bid. Which means the CIA's cloud services are on hold now while we wait for the GAO to render a judgment. Now, do I think people ought to be able to raise a flag and say this was awarded unfairly? Probably. But should we be in a climate where everything goes to the company with the best lawyers? No, I don't think that's right.

So imagine you're a small business and you're up against CGI Federal. Even if you can outperform them technically and at a lower price , the contracting officer will be afraid to award that to you because they'll be afraid CGI Federal will protest that bid.

EK: A point you make is that one step towards fixing this is for government to write for "people rather than sociopaths." What does that mean?

CJ: If you take a look at a government RFP ..

EK: I'm not sure folks will know what an RFP is.

CJ: Request for Proposal. They tend to be really long and hard to read. They begin with a page of abbreviations and pointers to clauses in the federal regulation. No normal, functional human being would read those clauses and understand them without years of experience and some legal help. This legal language and tone of authority really turns away people who might bid on these contracts. A lot of businesses look at these contracts, decide they can't even understand them, and it makes it unattractive to them.

I want government to decide that part of its responsibility is to get the best people bidding on these projects and the RFP is the government selling to businesses about why they want to work with them and should work with them. And part of that is using great language to decide what it is that they're doing.

EK: So I'm not particularly sympathetic to the current procurement process. But if you had someone more invested in it here they'd say that there are reasons for these regulations, reasons for these rules, and that the rules protecting taxpayer dollars and the public trust are worth having even if they are cumbersome because the possibilities for patronage and abuse are so severe. What's your answer to them?

CJ There's a ton of validity to that. The reason why procurement regulations exist in the first place is usually that there was a some fiasco that created them. 100 years ago we had a patronage system in the U.S. That was a disaster. The political process has been separated from the buying process. But let's be clear. The federal acquisitions regulations say that all systems bought by the government have to be Y2K compliant. It's 2013! So you can't tell me these laws don't need review.

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