IT Showdown: Tech Giants Face Off Against 18F

Tech lobbying groups are looking for more transparency from 18F, the group working to increase competition and decrease the costs of high-profile tech projects.

by / July 1, 2016
The United States Capitol building. Flickr/Eric B. Walker

WASHINGTON, D.C. —  Operating like a tech startup with tactics such as agile development and user-centered design has become a hallmark in the quest to modernize federal websites, apps and databases, but now government IT vendors worry 18F, the primary digital service enabling such practices, may jeopardize lucrative contracts.

At a House subcommittee hearing on June 10, lobbyists from the IT Alliance for Public Sector (ITAPS) and the Software & Information Industry Association (SIIA) alleged that 18F is hindering profits by acting as both a procurement policymaker and as a tech competitor inside the General Services Administration (GSA). The two groups assert a conflict of interest, and in testimony, have submitted a list of grievances and recommendations intended to curtail 18F’s authority.

The hearing was conducted jointly by the House Subcommittees of Government Operations and Information Technology to assess the effectiveness of 18F and the U.S. Digital Service (USDS) — a sister tech consultancy within the White House.

“Many of our members continue to share — again because of the opaqueness of the operations — that they’re not entirely sure that [18F] isn’t directly competing with activities they believe they can deliver,” said ITAPS Vice President of Public Sector A.R. “Trey” Hodgkins.

Even so, outsiders might observe industry fears may stem from a shift taking place in government IT, one that emphasizes agility, results and cost effectiveness over established buying procedures — requirements traditional tech firms have invested heavily to meet.

A report from the Government Accountability Office (GAO) noted that in 2015, U.S. agencies spent more than $80 billion on IT expenditures. Out of this sum, about $60 billion — or 75 percent — went to maintain outdated IT systems. Since many of these are supported by established vendors, logic seems to dictate that if modernization continues and groups like 18F increase accessibility to federal contracts, agencies may opt for different vendors. Federal tech procurement processes could see bids from new entrants that not only improve the quantity and diversity of offerings, but also come at lower price points.

18F has propelled such outcomes through tools like a blanket purchasing agreement that enables open source tech companies to compete for contracts, and a micro-purchasing policy that lets agencies freelance small coding jobs to savvy technologists. Further the group has made significant gains in California where it guided state officials to break down a contract related to its state child welfare system, into smaller and what 18F believes will be much faster and more affordable procurements.

Both lobbying groups tout a lengthy list of enterprise technology companies. ITAPS members include longtime government IT vendors like IBM, SAP, Xerox and Microsoft while SIIA’s members include an equally diverse group of IT providers with companies like Cisco Systems, Accenture, Adobe and Deloitte, a company holding dual membership in each.

At the hearing, Rep. Gerry Connolly, D-Va. — who led much of the questioning into 18F and USDS — highlighted some the industry’s heated feelings, saying that since its start in 2014, some in the private sector have bristled, viewing 18F with palpable trepidation. 

“Transparency, coordination and outreach, I know those are concerns in the private sector which looks at 18F, with maybe, a mixed and jaundiced eye,” Connolly said.

In their statements to Congress, ITAPS and SIIA recommended 18F be separated from any significant procurement authority and to firmly commit the organization to a “buy-first” practice of private-sector services. In addition, ITAPS asked Congress for a pause of 18F’s incorporation into GSA’s Technology Transformation Service division (TTS), a newly minted section of the GSA that works to modernize government technology. The pause, ITAPS suggested, should last until 18F’s practices and finances become more transparent.

To clarify 18F’s work and mission, lawmakers questioned TTS Commissioner Phaedra Chrousos, who recently announced she is stepping down from her position — that is also responsible for directing the activities of 18F. Chrousos said at the hearing that while communications could always be improved, the group was not structured to be a competing vendor inside government, nor, by regulation, can 18F consult on an RFP and also provide the requested services.

“We absolutely take a ‘buy-first’ approach,” Chrousos said. “We have one service line that builds out prototypes and light Web services, but that’s done not in competition with the private sector, but as a way to showcase modern methodologies and practices with agencies.”

Chrousos explained that the mission of 18F, now with 185 staff members, is to recruit top private-sector talent — technologists, designers and policy analysts — and to use their expertise to advance government tech and buying habits. As a contracting consultancy, Chrousos said they do not choose agency and department customers that use their services, nor does the agency intend to be, or have the resources for, the tasks typically taken on by large enterprise IT firms.

“GSA recruits cutting-edge technologists and designers from industry and the public sector to help drive efficiency and transparency, deliver cost savings, and help federal agencies buy, build and deploy technology the way the private sector does today,” Chrousos said.

The GAO intends to finalize its official audit of 18F and USDS this month, a report that both subcommittee members and other policymakers will review for next steps.

Check back at Govtech.com for future segments of this developing story.

Editor's Note: An earlier version of this story reported savings linked to California's child welfare system at $400 million when official savings estimates are yet to be determined.

Jason Shueh former staff writer

Jason Shueh is a former staff writer for Government Technology magazine.