Why the Federal GSA Has No Business Competing with the Private Sector

Over the last couple decades, the steady stream of new information technologies and more general innovations has continued to amaze and delight. With these creations and opportunities appearing broadly in the press and the companies behind them heralded as heroes, one should not be surprised that now technology and the opportunities it delivers are part of the fabric of popular culture. And with technology being overtly interwoven into life, many want to be part of the excitement but sometimes in inappropriate ways.

For example, a government program established by the Obama Administration as part of the General Services Administration (GSA) began with premise that government needed to recruit commercial-sector information technology talent to assist federal government agencies with their major technology challenges, moving commercial information technology employees into federal government jobs. Given a trendy name “18F,” after its location at 18th and F Street in Washington, DC, less than three years after its founding, the mission sprawl has begun.

The GSA 18F program is expanding its role by openly and actively soliciting and offering services to state and local governments—including end-to-end state program oversight as a systems integrator, federal procurement assistance and federal agency enablement. But as with most Faustian bargains, there is a catch. This offer is often paired with significant pressure from the federal agencies that are responsible for funding portions of these technology projects to the point where states may feel compelled to work with 18F regardless of whether or not those states feel it is in their best interest to do so.

The GSA should have absolutely no role seeking contract management from states to perform IT responsibilities, using contractors as subcontractors under procedures that reflect nothing near state procurement laws. In addition to 18F’s inexperience performing contract management roles, the full risk of state and local technology contract performance normally placed on a contractor now has been moved to an entity that is exempt from cost or performance risk. When a state or local system doesn’t work ultimately, who is held liable? Are GSA funds expended to fix whatever issues might be created by 18F? Will the federal government leave states holding the bag?

Although there has been no formal explanation given as to why GSA has pushed itself into the states through 18F, significant financial losses that the program has experienced since its inception may be the reason. Failing to convince the federal government to use its own creation, 18F appears to have now moved on to target the states.

The federal GSA has no business competing with the private sector, and certainly not in the states as a way to cover the losses it has racked up over the past few years assisting federal agencies. This is not to say that government itself should not innovate, but it is to say that government should not deem competing with the free market, violating principles of federalism and expanding government as innovation.