Linda J. Bilmes, a professor of public policy at Harvard University, was chief financial officer at the Commerce Department from from 1999 to 2001. William M. Daley served as commerce secretary for President Bill Clinton from 1997 to 2000 and White House chief of staff to President Obama from 2011 to 2012.
The plight of the Affordable Care Act Web site has focused attention on a problem that seldom receives it — the absence of good management in the U.S. government. Despite more than three years of lead time and $400 million to $600 million in taxpayer money, the government can’t seem to deliver something that is bread and butter to the average online retailer.
Of course, the task is much more complex with health care, and there are plenty of excuses: poor coordination among technology contractors, shifting goals for the design of HealthCare.gov, the need to coordinate between federal and state governments. But these challenges are hardly unprecedented. Based on our experience in the public and private sectors, we’ve concluded that the core problem is that the federal government lacks many of the basic skills private firms rely on.
Over the past three decades, fierce global competition has forced corporate America to modernize how it manages projects so that they can be delivered as efficiently as possible. The federal government, insulated from market pressures, has fallen badly behind. In government, managerial jobs — such as chief financial officers, technology officers and procurement executives — are considered the least glamorous, a poor second to policymaking and politics.
Civil servants who manage government programs are judged by their ability to expand their departments, in terms of the number of employees and the size of their budgets. Most people who work in government are committed to their mission, so they naturally want their programs to grow bigger and do more. There is seldom much personal benefit, in pay or promotion, for a manager who delivers services at the same quality for lower cost. There are few thank-yous for simplifying Web sites or delivering faster, better service. Managers are actually penalized for being more efficient: If an agency saves money, its budget will most likely be reduced the following year.
And the media pounces on mistakes, but when the government accomplishes something skillfully — such as the smooth launch of the new GI Bill Web site, which provides education benefits to nearly 1 million veterans — few reporters take notice.
The malfunctioning HealthCare.gov is simply the latest in a long series of problems for large, complex government technology projects. The price tag of the Coast Guard’s project to modernize its fleet ballooned from $17 billion to $29 billion because of cost overruns, oversight failures and massive contracting flaws. The Homeland Security Department’s multibillion-dollar initiative to develop an electronic “virtual” fence along the border with Mexico has been halted after software and contractor problems. A four-year effort to integrate service-member files between the Department of Veterans Affairs and the Defense Department has been plagued by delays and dysfunction. And the IRS’s decades-long effort to improve electronic filing of tax returns and issue refunds faster is several years behind schedule and vastly over budget.
Altogether, these failures cost taxpayers tens of billions of dollars. In the end, the problems usually turn out to be not technical but related to procurement, incentive structures, the way objectives are defined, and the management of schedules and costs. Most congressional “oversight” focuses on pinning political blame rather than improving how programs are executed.
More perniciously, repeated failure reinforces a belief — widely promoted by the right wing of the Republican Party — that government cannot do anything right. If we lose faith in the idea that our nation can collectively accomplish great things, talented young people who could be interested in government will take their technical or administrative skills to the private sector, where they will be better appreciated and better paid.
There are three steps the government should take to restore Americans’ confidence in its ability to get things done. First, we need more and better incentives for workers. President Obama has said he wants to make working in government “cool again.” For that to happen, the hot opportunities must be in the managerial ranks, not just in policy positions. We need to train our civil servants how to be managers. And managers and their programs should benefit directly from improvements in efficiency. “Gainsharing,” or letting a department keep a portion of any savings to spend the next fiscal year, is one technique; another is to mimic some U.S. cities that have introduced individual and team bonuses for successful reforms. Managers also need greater flexibility to reallocate resources.
Second, the federal bureaucracy should consolidate programs with similar missions. The Government Accountability Office has provided a blueprint of hundreds of programs that should be considered. For example, there are dozens of programs serving veterans that, in many cases, duplicate efforts and make it harder for states to help men and women who have served.
In a related step, government programs should make performance targets more meaningful. We should understand which of the programs that we fund year in and year out actually work, prune the poor performers and be willing to experiment with new approaches. Right now, objective evaluation succumbs to finger-pointing among different agencies.
Third, the federal government needs to align its systems and processes to work better with state and local governments, which disperse more than a quarter of all federal money. The lack of coordination with state governments has been a particular problem in the launch of the federal health insurance exchange. The success of the ACA will vary considerably from state to state, and states with the fewest insured residents — Texas, for example — are likely to lag behind in providing care for their populations.
More broadly, state governments, most of which must by law balance their budgets every year by July 1, are at the constant mercy of federal budgeting — which, inexplicably, is supposed to be set by Oct. 1. In recent years, budgeting has been especially uncertain as Congress lurched from crisis to crisis, passing only temporary funding measures.
Poor management is undermining public trust in our government. It makes it hard for departments to run programs effectively and for citizens to have faith in our leaders. Starting with Congress, our elected officials need to change the attitude in Washington to one that values and rewards efficient government.