Atticle 95. GSA’s 18F Problems

Problems with GSA’s 18F Information Technology Organization

The 18F IT organization exhibits both good characteristics and bad.  On the good side if the software development done by the organization is truly open systems oriented, meaning for example that any proprietary computer such as IBM can be replaced with a Digital Equipment computer then that is a good start.  It should also implement Relational Database Management Systems which allow queries to its databases.  This means that nearly all future major Government software development will follow these rules.  Only very minor tweaking of current obsolete software should be allowed.

On the bad side 18FIT solicits software development from US Government Agencies the danger is that most Agency management are not computer literate and may demand that current systems be revised to fit the needs of the Agency.  This is an open door for 18F to spend years revising obsolete software billing the Agency $millions.  18F has already been cited for incorrect billing.  The danger is that 18F has or will become a “Code and Bill” bureaucratic organization that has no limits in what it can charge taking years to complete a project.

Example State Government IT Recommendations

The Centralization of State Services Reform Model developed by the author
I recommend a State Central Cloud Information Technology Data Center to store all state and county data.  I further recommend the implementation of a new Centralized Relational Database Management System (RDMS) similar to that implemented in Washington State. The RDMS is developed completely separate from the current obsolete Agency computer systems. No funds were wasted on trying to patch the old systems. When the New Centralized Data Center and its systems were up and running the plug was pulled on the old systems.

The State of Virginia wasted nearly a $billion on the VITA Contract with Northrop Grumman.  State leaders funding VITA were naïve computer illiterate politicians who entered into a long term contract with Northrop Grumman to develop an Email system and revise their current State systems.  They could  have had an email system from Google for next to nothing. Most current systems can not be economically brought up to date.  Northrop Grumman as a contractor worked on the state’s systems for years with what I am told was only a partial success.
  
Why didn’t Virginia’s VITA organization come up with the above state recommended solution? The answer is nearly all of the state’s IT personnel associated with the state’s VITA organization have training or some kind of connection to IBM. So what’s the problem with IBM? Simply this, IBM is in business to sell a proprietary system that shuts out competitors and forces the customers to use its proprietary software. The RDMS is an open software system where an IBM computer could be replaced by a competitor’s computer. Computers can then be purchased simply for their competitive computing power and not just because it will work with the software. At least some of the VITA members must have known about the RDMS solution because it has been around for more than twenty years but it is simply not good business for IBM or its friends. For all practical purposes VITA may as well have been on the IBM payroll.

The GSA’s Current Relationship with Its OIG Subsidiary
The GSA’s OIG subsidiary has the power to make recommendations to the GSA’s management and the GSA can chose to follow those recommendations as in the case of 18F’s problems or not to follow recommendations. The OIG as a subsidiary of the GSA Department has little power to implement solutions to problems it identifies.

The GSA’s Recommended Relationship with Its OIG Subsidiary
This is a key part of the recommended US Government reforms.  It solves the problem that Departmental OIGs are not independent organizations and are under control of department heads.  In the new independent OIG organization OIGs will remain in their present departmental physical locations but will be a part of a single OIG organization reporting directly to the OMB.

This reform will require Congressional approval for the creation of a US Office of Inspector General (USOIG) organization.  It will report to the Office of Management and Budget (OMB) headed by the new position of US Inspector General appointed by the President.  Each Departmental OIG organization (about 17) will report directly to the US Inspector General.

The first and primary responsibility of the new Inspector General is to lead the implantation of Federal Government Reforms.  Requiring specialized training for OIG personnel in Right-sizing and Facilitator for the implementation of Enterprise lean.  Current investigative activities may be put on hold until the implementation of reforms have been completed.

After Reforms have been implemented OIG Analysts will return to their normal investigative activities with strengthened oversight powers to manage staffing budgets as well.
 
From Fedscoop
https://www.fedscoop.com/18f-gsa-ig-report-october-2016/
 
David A. Shive is the Chief Information Officer for the U.S. General Services Administration.
Shive oversees GSA IT - formerly known as the Office of the Chief Information Officer (OCIO) - and information technology operations and budget, ensuring its alignment with agency and administration strategic objectives and priorities. Shive began his career at Lockheed Martin Corporation in management and consulting roles overseeing large, customer-centric, IT organizations serving state and local, federal and international government customers.

GSA IG: 18F’s financial projections need a rework
The General Services Administration’s 18F has seen a cumulative net loss of more than $31 million between fiscal year 2014 and the third quarter of fiscal year 2016, a report released Monday from the agency’s inspector general has found.

The inability to recover costs came from “18F’s inaccurate financial projections, increased staffing levels, and the amount of staff time spent on non-billable activities,” the report reads.

The evaluation started in December 2015, according to a release on the report, “after several senior GSA officials expressed concerns about the management of 18F to the OIG.”

Lawmakers have in the past expressed concerns about 18F’s little-defined role in the federal IT space and called for greater organizational transparency.

[Read more: Lawmakers crave transparency from USDS, 18F digital teams]

The report details how 18F operated at an increasing deficit, where staffing continued to balloon at the organization despite gaining smaller revenues than anticipated.

“18F senior managers have established a pattern of overestimating revenue projections,” according to the release.

An example: Projected annual revenue for fiscal year 2014 was $4.76 million, but the year closed with a grand total of zero revenue billed or collected, according to the report.

The report also found 18F’s billing process was not always accurate and resulted in “a series of inaccurate charges to their clients.”

“If billing discrepancies are left unresolved, GSA could be held accountable for augmenting appropriations for other federal agencies,” the release says.

Breaking even

The report found internal discussions among senior management “that raise doubts about their intent to break even.”

“To be frank, there are some of us that don’t give rip about the losses,” said 18F’s director of operations in February when 18F management was discussing three breakeven scenarios.

And in response, the report notes Regional Administrator for GSA’s Region 9, Andrew McMahon said, “Sure, in the end, I could care less. ASF loses money all over the place. That’s the decision we should reiterate with Denise [GSA Administrator Roth], do you care about losing +$2.5M in order to bring in 100 more great hired [sic] into government?”

The report also details in particular an internal struggle on one approach potentially breaking even more quickly: freezing hiring.

From April 2014 to March 2016, the 18F staff expanded from 33 to 201 full time employees.

Federal Acquisitions Service Commissioner Thomas Sharpe advised Administrator Denise Turner Roth and the former Technology Transformation Service Commissioner at least three times to pause hiring, but the IG found through internal records that 18F management and the administrator’s office did not support it.

Roth wrote to Sharpe in January 2016, “Demand for 18F services continues to be strong, the utilization rate is increasing, and there is other activity in place that justifies staying the course on hiring at this time,” according to the report.

The report says former Executive Director Aaron Snow said “18F continued to hire to meet demand for projects because they did not have the staff in place to accept all project requests. Also, he wanted to ensure 18F had enough staff to mitigate the impact of occasional staff turnover.”

The OIG also found that staff spent little time working on projects billed to federal agencies — less than half of their time.

The report notes 18F’s timekeeping system showed that nonbillable time was spent on activities such as “outreach promoting 18F projects and accomplishments, developing an 18F brand and developing an internal timekeeping system.”

What’s next?

GSA management agreed with the report’s seven recommendations and told the OIG they had intentions to take action.
The report’s seven recommendations were for GSA leadership to:

o  Establish a viable plan to ensure full cost recovery of Acquisition Services Fund monies expended by 18F;
o  Ensure that internal 18F projects have appropriate supervisory review;
o Implement controls over 18F’s reimbursable agreement process to ensure that work is not performed outside of a fully executed agreement;
o  Ensure that GSA CIO reviews and approves, in writing, all 18F IT-related work performed for GSA internal organizations;
o Implement a comprehensive review of 18F’s past work to ensure accuracy of all billings;
o  Establish reliable internal controls to ensure that 18F’s future billings are accurate; and
o Ensure that 18F’s billing records are retained in accordance with GSA records management standards.

In response, 18F’s Dave Zvenyach writes in a blog post that the office has taken numerous steps to correct the issues brought up in the report: “We take these issues seriously and have taken significant steps to strengthen 18F’s operations.”

The blog post states the office has instituted dashboards for real-time management of financial performance and staff utilization, conducted a reconciliation of past agreements to ensure accurate billing and “standardized the relationship between 18F and the CIO by, among other things, having a CIO lead who reviews all internal technology projects for 18F.”

“Our mission requires us to be relentlessly focused on helping our agency partners, and that means we need to ensure that we continuously improve on our controls and processes to meet that mission,” the blog post reads.
Snow recently told FedScoop 18F’s long-term impact is about more than money — particularly in things that are “intangible.”

“The measure of 18F’s value is not just the dollars saved on the projects we’re working on right now with an agency any more than the measure of its value is the number of dollars it makes or loses,” he said then. “The measure of its value is how much we help agencies evolve how they think about the delivery of digital services in government across all of their work.”

“And I don’t think anybody has done a fantastic job yet of measuring the success of the intangibles that we are ultimately after,” he added.

At the time, Snow also said 18F is going to be around for a long time, in spite of a changing administration.

“It seems clear there is support for what we do from all sides, all points on the political spectrum,” he said then. “I don’t think that a change in administration substantially changes what we do, how we do it or the scale of impact we can have.”