Has the IG doomed 18F?

GSA's inspector general has issued a critical evaluation of 18F, the innovative development shop at GSA. It raises the question of whether the organization can survive the start-up phase and have a lasting impact on how IT systems are developed by the government.

I’ve read with interest the inspector general’s report about 18F, GSA’s IT development and innovation shop.

The group was stood up to operate more quickly and efficiently. It has boasted about getting things done in new and fresh ways. It has been good at small projects, but there have been questions about its lasting impact.

GSA’s IG found several faults in its evaluation. 18F is supposed to cover its costs, but it hasn’t. It has spent more than it has taken in. Its financial projections have been inaccurate. Pretty significantly: Projected revenue for fiscal 2016 was $84.2 million but actuals were $27.8 million.

Meanwhile, staffing has grown from 33 in April 1, 2014, to 201 as of March 24, 2016. 18F and GSA leadership declined to pause hiring earlier this year as a way of breaking even more quickly; demand was too strong for its services.

But while there was demand for services, the IG found that half of the efforts of 18F employees were on marketing, outreach and branding. There also were small projects to create bots – one that paired fellow 18Fers with each other for coffee breaks.

As recently as July, the 18F handbook stated that “Non-billable work is the cultural lifeblood of 18F.”

In their response, the inspector general, 18F and GSA management talked about updating financial plans, improving cost recovering and strengthening internal process. They also make the argument that 18F has proven the value of a “modern approach to delivering technology.” It has worked on 252 projects with 37 agencies.

As I read the IG report, I was struck by one overriding thought – 18F is very much the trendy startup it was modeled to be. It’s lost money. It has plenty of positive spin. It’s suffering real growing pains as more people clamor for what it provides.

The IG report is like the second stage investors coming in and saying, "My god, why are you wasting my money?"

In a twisted way, the IG report validates what 18F was created to do – bring the Silicon Valley start up model to the government market. But 18F can’t remain a start-up and be successful as part of a government agency. It’s not investor dollars, it’s tax payer dollars, so if they want to survive, they have to get their act together.

But time is running out. It is IG reports like this that will only raise skepticism about the long term viability of 18F. I think it can survive the shift to the next administration, but it’ll have to grow up and be something else.

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