The American taxpayer is paying $80B a year in federal IT, but isn’t getting $80B of value.
As I’ve written previously in Politico, too much of the annual federal IT budget is spent on large projects that take years to deliver anything, and are often out of date when they launch. The FBI’s scrapped $170 million case management system and the Air Force’s failed $1 billion logistics software deployment are high profile examples, but the problem is much more widespread than a few bad headlines. According to a study by the Standish Group, more than half of large Federal IT projects studied were over budget, behind schedule, or failed to meet user expectations.
Poor IT investments aren’t just inefficient. More fundamentally, they make it harder for agencies to achieve their important and diverse missions. Whether it’s delivering veterans’ care and benefits, protecting our airports, or investing in medical research — the U.S. Government is working to tangibly improve the lives of Americans.
Investor Marc Andreessen has said “Software is eating the world.” That’s true in government too. The U.S. Government needs the best and latest software – which is increasingly being developed by cutting-edge firms backed by venture capital investors. And yet innovative, venture-backed tech firms often find the federal marketplace too confusing or expensive to enter.
That’s why last week, in Washington DC, Insight Venture Partners and Greylock Partners hosted a roundtable on federal software procurement — focused on brainstorming ideas for small but concrete steps the government can take to make it easier to find, try, and buy innovative technology.
During the meeting, participants discussed the real costs of certifications and compliance for young tech firms, and uncovered ideas about how the federal government could reduce barriers and more quickly pilot innovative software. Ideas discussed included the better sharing between agencies of their “Authority to Operate” for a specific software solution, making it easier for agencies to pilot new technologies, and making FedRAMP work better for smaller tech companies.
For the companies in attendance, it was helpful to hear from the federal officials about:
- An emerging pilot to slash the time it takes to get on a GSA schedule and RFI;
- New training for federal contracting officers to understand Digital Service and Agile Procurements; and
- New specialized federal marketplaces — starting with agile development services, but expanding to new product categories in the future.
These promising developments (which should benefit all emerging tech companies, not just the companies in the room) build on the recent playbooks including tech acquisition guidance and CIO / Digital Services best practices.
While the roundtable didn’t discuss or address every procurement issue associated with federal software procurement, it was solid progress, and a chance for federal officials to hear about some of the challenges for software start-ups that are selling into the federal market. A significant voice from the venture-backed tech community will be important if we are to be successful in improving the way the government does business with emerging tech.