U.S. weighs tech fixes after health-site woes

Jan. 6, 2014

The Obama administration, stung by the failures of the HealthCare.gov rollout, may loosen hiring rules for technology specialists and create a new federal unit dedicated to big tech projects, officials said.

The steps, some of which President Barack Obama could announce early in the year, are designed to address the lack of concentrated talent in the federal government to manage large technology projects—a shortcoming exposed by October’s disastrous launch of the federal health-insurance site.

The Centers for Medicare and Medicaid Services initially served as its own general contractor on the project, but its lack of technical expertise quickly became apparent. Only after the site’s launch did the White House bring in experts from Silicon Valley as well as a new general contractor.

“We don’t have enough people inside of government to make good sound technology decisions,” said Clay Johnson, a former White House innovation fellow, a program designed to draw top technologists into the government for temporary assignments.

Mr. Obama has said the HealthCare.gov experience shows the need for the government to improve the return on the nearly $77 billion it spends annually on information technology. Until now, details of what his administration might propose haven’t been clear.

The administration is crafting a plan, but several proposals are getting close study. One of those ideas is reversing the innovation-fellows program to have government technology specialists rotate through private-sector companies.

Another idea under consideration, officials said, is expanding federal direct hiring authority so agencies can better compete for software developers and other specialists. Agencies now must rely on the lengthy, often onerous federal hiring process run by the Office of Personnel Management. The process includes requirements such as evaluating multiple candidates for every position, lengthy questionnaires and giving preference to veterans.

In contrast, private-sector companies are able to hire prized tech workers almost immediately, while typically offering higher pay and additional inducements like stock options. With direct hiring authority, agencies would be able to hire on their own where there is a critical need. An administration official said such authority had “changed the game” when it was recently granted to the Department of Homeland Security for cyber security professionals.

The official said another idea is creating an agency or unit within the federal government devoted to big technology projects. Rather than have each agency manage its own projects—as the Department of Health and Human Services did for the health-law rollout—the agency could bring together top federal technology specialists. It could be housed in an agency like the General Services Administration or exist as an independent body.

Such an effort would likely be focused on websites and other projects used by the public rather than large internal IT projects. That is part of a broader shift within the administration toward prioritizing projects that affect the most Americans. The official said the administration would work to whittle the 7,000 federal technology projects down to a list of roughly 50, which would receive extra scrutiny.

“I can definitely narrow that list down to a point where I can actually take a look at it in a much more in-depth way,” the official said, adding that “there is fierce urgency” to tackle the problem.

HealthCare.gov is hardly the first government technology project to fall short of expectations. The Census Bureau spent hundreds of millions of dollars to develop hand-held computers for its 2010 count, only to cancel the program when the devices failed to work as expected. The Federal Bureau of Investigation spent millions last decade on a computer system to track cases, an initiative that ultimately was scrapped.

But the health-insurance program’s high profile has moved the issue of federal technology procurement to the forefront and called into question Mr. Obama’s contention that government can leverage technology to improve services and cut costs.

Longtime observers cite two root causes for poor performance: rigid practices adopted by risk-averse officials and the government’s inability to attract top-notch technology talent.

“The government is lagging well behind the private sector in the competition for skills,” said Alan Chvotkin of the Professional Services Council, which represents government technology contractors.

Agencies have also been slow to adopt private-sector models. When building HealthCare.gov, officials say the Centers for Medicare and Medicaid Services used the traditional “monolithic” or “waterfall” contracting structure in which an agency writes out a set of requirements well in advance and contractors attempt to deliver the full system at once by a final deadline, which can be years out.

Private companies have shifted to a more agile development model where teams are responsible for developing projects in smaller sprints. The official said another element of the federal health-insurance marketplace—the back-office hub for transferring data between government agencies—followed this model and experienced fewer problems.

A CMS spokesman declined to comment, pending an investigation by the Department of Health and Human Services inspector general on the HealthCare.gov problems. Two top officials at the agency, including its chief information officer, have stepped down since the site’s troubles emerged.

Mr. Chvotkin said it was no accident that the most innovative agencies in the government are also the most secret, allowing workers to spend time and money on projects without facing public scrutiny if they fail.

“There are dozens of rules, and lots of people who can say no in that process, and very few risk absorbers: someone willing to stand up and say, ‘Go forth and do well, I’ll take the risk,’ ” he said.

The federal technology workforce skews older: According to the Office of Personnel Management, there are eight times as many federal technology employees over age 50 as the number who are under age 30.

Mr. Chvotkin said recent federal pay freezes and furloughs make it especially difficult to recruit technology specialists who can get higher pay or stock options on Wall Street or in Silicon Valley.

“I don’t believe the present class of [federal chief information officers] are in touch enough with modern technology to know what’s available to them,” said Mr. Johnson, the former White House innovation fellow. “This gap between the public sector and private sector has really affected their knowledge.”

Outside experts said the federal structure puts priority on schedule and cost, rather than a project’s ability to deliver promised functions. The administration official said policy makers might embrace customer-service metrics used by the private sector.

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