What if We’re Doing it Wrong?

Ever since the botched launch of Healthcare.gov, procurement reform has become the rallying cry of the civic technology community.

There is now considerable effort being expended to reimagine the ways that governments obtain technology services from private sector vendors, with an emphasis being placed on new methods that make it easier for governments to engage with firms that offer new ideas and better solutions at lower prices. I’ve worked on some of these new approaches myself.

The biggest danger in all of this is that these efforts will ultimately fail to take hold – that after a few promising prototypes and experiments governments will revert to the time honored approach of issuing bloated RFPs through protracted, expensive processes that crowd out smaller firms with better ideas and smaller price tags.

I worry that this is eventually what will happen because far too much time, energy and attention is focused on the procurement process while other, more fundamental government processes with a more intimate affect on how government agencies behave are being largely ignored. The procurement process is just one piece of the puzzle that needs to be fixed if technology acquisition is to be improved.

Right now, the focus in the world of civic technology is on fixing the procurement process. But what if we’re doing it wrong?

Things Better Left Unsaid

During the eGovernment wave that hit the public sector in the late 90’s to early 2000’s, tax and revenue collection agencies were among the first state agencies to see the potential benefits of putting services online. I had the good fortune to work for a state revenue agency around this time. My experience there, when the revenue department was aggressively moving its processes online and placing the internet at the center of its interactions with citizens, permanently impacted how I view technology innovation in government.

It’s hard for people to appreciate now, but prior to online tax filing state tax agencies would get reams and reams of paper returns from taxpayers that needed to be entered into tax processing systems, often by hand. Standard practice at the time was to bring on seasonal employees to do nothing but data entry – manually entering information from paper returns into the system used to process returns and issue refunds.

The state I worked for at the time had a visionary director that embraced the internet as a game changer in how people would file and pay taxes. Under his direction, the revenue department rolled out innovative programs to fundamentally change the way that taxpayers filed – online filing was implemented for personal and business taxpayers, and the department worked with tax preparers to implement a new system that would generate a 3D bar code on paper returns (allowing an entire tax return and accompanying schedules to be instantly captured using a cheap scanning device).

When these new filing options were in place, the time to issue refunds plummeted from weeks to days, and most personal income taxpayers saw their refunds issued from the state in just a couple of days. By this time, I had moved to the Governor’s office as a technology advisor and was leading an effort to help state departments move more and more services online. I wanted to use the experience of the revenue department to inspire others in state government – to tout the time and cost savings of moving existing paper processes to the internet, making them faster and cheaper.

When I asked the revenue director for some specifics on cost savings that I could share more broadly, his response could not have been further from what I expected.

He told me rather bluntly that he didn’t want to share cost saving estimates from implementing web-based services with me (or anyone else for that matter). Touting costs savings meant an eventual conversation with the state budget office, or questions in front of a legislative committee, about reducing allocations to support tax filing. The logic would go something like this – if the revenue department was reducing costs by using web-based filing and other programs, then the savings could be shifted to other department and policy areas where costs were going up – entitlement programs, contributions to cover the cost of employee pensions, etc.

All too often, agencies that implement innovative new practices that create efficiencies and reduce costs see the savings they generate shifted to other, less efficient areas where costs are on the rise. This is just one aspect of the standard government budgeting process that works against finding new, innovative ways for doing the business of government.

Time to Get Our Hands Dirty

A fairly common observation after the launch of Healthcare.gov is that governments need to think smaller when implementing new technology projects. But at the state and local level, there are actually some fairly practical reasons for technology project advocates to “think big,” and try and get as big a piece of the budget pie as they can.

There is the potential that funding for the next phase of a “small” project might not be there when a prototype is completed and ready for the next step. From a pure self-interest standpoint, there are strong incentives pushing technology project advocates to get as much funding allocated for their project as possible, or run the risk that their request will get crowded out by competing initiatives. Better to get the biggest allocation possible and, ideally, get it encumbered so that there are assurances that the funding is there if things get tight in the next budget cycle.

In addition, there are a number of actors in the budget process at all levels of government (most specifically – legislators) who equate the size of a budget allocation for a project with its importance. This can provide another strong incentive for project advocate to think big – in many cities and states, funding for IT projects is going to compete with things like funding for schools, pension funding, tax relief and a host of other things that will resonate more viscerally with elected officials and the constituencies they serve. This can put a lot of pressure on project advocates to push for as much funding as they can. There’s just too much uncertainty about what will happen in the next budget cycle.

Its for all of these reasons that I think it’s time for advocates of technology innovation in government to get their hands dirty – to roll up our sleeves and work directly with elected officials and legislators to educate them on the realities of technology implementation and how traditional pressures in the budget process can work to stifle innovation. There are some notable examples of legislators that “get it” – but we’ve got yeoman’s work to do to raise the technology IQ of most elected officials.

Procurement reform is one piece of the puzzle, but we’ll never get all the way there unless we address the built in disincentives for government innovation – those that are enforced by the standard way we budget public money for technology projects (and everything else). We’re having conversations in state houses and city halls across the country about the future costs of underfunding pensions, but I don’t think we’re having conversations about the dangers of underfunding technology with the same degree of passion.

Time for us to wade into the morass and come back with a few converts. We’ve got work to do.

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