In a recent speech, U.S. Chief Technology Officer Megan Smith said the government needs the tech community to “show up.” According to Smith, the more tech experts from Silicon Valley join the government, the more the government is likely to begin adopting smarter, more contemporary IT and technology practices. Her theme has been a consistent focus of the administration, and is a large part of the reason that so many federal technology leadership positions are being been filled by Silicon Valley veterans like her.
To be sure, the need is there. Office of Personnel Management data document that among the more than 75,000 IT professionals in government, for every one that is under 30 years of age there are roughly 10 that are over 50. So, Smith, like her predecessor Todd Park, is on to an important issue. But Smith’s call went, or should go, well beyond talent recruitment. After all, even if they reach their planned peak, the cornerstones of the administration’s efforts to bring new talent to government—the Presidential Innovation Fellows program, the Digital Services Corps and GSA’s 18F operation—combined will involve a few hundred coders and developers against a broader need for a range of technical talent that is well into the thousands. That might be enough to make a notable difference, but is not nearly enough to drive and sustain true systemic innovation and change. And given the competitive nature of the market for talent and the government’s standing, or lack thereof, within it, accomplishing that larger goal will require the government to maintain a robust engagement with the entire technology sector.
So, how does her call for tech to show up align with that reality? It doesn’t. In fact, tech has shown up. During the last 20 years, since the advent of the major acquisition reforms of the 1990s, the number of tech companies engaged with the government has skyrocketed. The list includes many of the biggest name tech companies with a Silicon Valley pedigree: Salesforce, Amazon, Palantir, Cisco, Oracle, and notably, Smith’s own former employer, Google. Moreover, those same reforms enabled scores of existing federal contractors to invest in and bring new capabilities to the table and partner with new teammates and subcontractors in the marketplace.
Nonetheless, there remains a large community of tech and other companies that resist entering the government market, either independently or as partners with existing market participants. Yet rather than seeking ways to address the hurdles those companies face, some of the most central tenets of the reforms of the ‘90s are under attack and barriers to entry continue to grow. This has broad implications—both for potential new market entrants as well as for the many existing market players that are investing in new solutions and innovations and/or seeking to partner with nontraditional providers. In other words, while Smith’s call is correct, it ignores the government’s continued self-inflicted wounds, many of which are percolating within her own administration.
At the Defense Department, for example, efforts are underway to roll back some of the core elements of how the government defines a “commercial item or service.” The current statute was probably the single most important reform of the 1990s; it was the principal gateway into the market for many who had long avoided it. Rolling those reforms back will not only work against the administration’s desire for tech to show up. It could cause companies that entered recently to exit or limit their participation in the market. The contemplated changes could severely limit the government’s access to new capabilities and will almost certainly make the government a much less attractive customer. This is the third time in recent years the department has sought changes to the law. Fortunately, Congress has rejected the proposed changes each time before. But what message is the executive branch sending to tech or other companies that are being implored to show up?
At the same time, the General Services Administration, which sees itself as a central player in the drive to bring new tech talent and capability to government, including the launch of its own, in-house startup, is also sending mixed messages. For one major procurement, the agency is giving no credit to bidders for their commercial past performance, prohibiting qualified third party certifications of business systems, and requiring even small businesses to have financial systems certified to the government’s unique cost accounting standards. Not only do those standards bear little relationship to the generally accepted cost principles that govern the entirety of the commercial marketplace, they are among the most significant, costly and highest barriers to entry into the government market.
Indeed, while the administration and DOD leaders have talked a lot about the importance of reducing or eliminating non-value added compliance and reporting requirements, just the reverse is happening. It is now estimated that 25 percent of every contract dollar goes to compliance, much of it for government unique requirements, and the figure is projected to rise to 30 percent when new requirements go into effect.
Then there is the core question of how to deliver real value and innovation. That’s awfully tough to do in an environment dominated by a low price/minimal technically acceptable mind-set. It’s awfully tough to do in an environment where risk aversion is a well-established, even accepted and dominant force. It’s a tough challenge when a Navy command awards engineering services contracts at rates 60 percent below what the Navy itself has determined to be reasonable, or when the NSA is doing the same with analysts. And it doesn’t help when the administration itself advocates capping all contractor compensation at levels that are 30 percent less than my nephew was offered for his first tech job in Silicon Valley—when he graduated from college four years ago.
In short, the administration can’t reasonably expect tech to show up until the government marketplace starts to exhibit the kinds of characteristics that any company seeks in any market: open and quality competition, balanced oversight, support and incentives for innovation and high performance, and a mutual awareness and understanding of risk. Given the innovation and creativity that is available and needed from both existing and new players, these attributes are actually more critical now than ever. Indeed, it’s not just that we need tech to show up. We need everyone to show up.
Stan Soloway is president and CEO of the Professional Services Council.