18F and US Digital Service Get Some Scrutiny

Posted by John Slye on June 27, 2016

Financial Reports

Two of the most recent internal government IT efforts are under the microscope from multiple quarters and it raises questions about their potential long-term viability.

The General Service Administration’s (GSA) 18F and the Office of Management and Budget’s (OMB) U.S. Digital Service (USDS) are recent creations aimed at providing federal agencies with a variety of services to support their information technology (IT) efforts.

According to a recent study by the Government Accountability Administration (GAO), 18F – the GSA’s IT development and consulting services team established in 2014 – has some fiscal issues and OMB’s U.S. Digital Service (USDS), may be at odds with IT management law.

Nextgov initially reported on the 18F’s initial financial results that raise concerns with GAO. Even with its rapid quarterly revenue growth since it began, 18F’s expenses have easily exceeded its income at an average rate of more than $1 million per month more than it recovers from its users. In FY 2016, 18F expects to receive about $33 million for the services it provides, but will spend nearly $48 million, netting a loss of roughly $15 million. 18F is not expected to break even until at least FY 2018, according to the report. (See below.) Nextgov quoted a GSA representative who said, “18F has an agency-approved plan to operate at full cost recovery” and is “on a path to financial sustainability.”

gao 18f operating results

Federal Computer Week also picked up on USDS elements of the report that revealed concerns that OMB and USDS personnel might be running afoul of established federal IT regulations, especially new IT governance provisions in the Federal IT Acquisition Reform Act (FITARA), which includes hard-fought efforts to increase the authorities and accountability of federal CIOs. GAO noted concerns of mis-coordination between USDS personnel and agency CIOs as an example.

Balancing these concerns, GAO noted that their survey results of agency project managers who had engagements with either 18F or USDS were pretty well satisfied with the services they received on those projects.

The report came on the cusp of a House Oversight Committee hearing where these and other issues were raised, including their need for transparency and the fundamental question of whether such teams are needed, economical, or even create a conflict of interest when agencies can issue competitive contracts for such services.

In the report GAO recommends that GSA implement additional measures that center on performance outcomes and cost recovery and that that OMB update USDS policy to better define the relationships between CIOs and digital services teams.

Like so many IT initiatives that are launched with each administration, one question is whether 18F and USDS will have the staying power to thrive in succeeding administrations or be subsumed or passed over when the next set of bright ideas comes along.

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Originally published for Federal Industry Analysis: Analysts Perspectives Blog. Stay ahead of the competition by discovering more about GovWin FIA. Follow me on Twitter @GovWinSlye.

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