8 ms·

I don't care if 18F makes money, and in some cases it may make sense for them not to. In a perfect market, they would be able to sell their services at the sam

by tyre 10y ago

I don't care if 18F makes money, and in some cases it may make sense for them not to. In a perfect market, they would be able to sell their services at the same price as the value of those services. So if they build a system for the Veterans Administration (VA) that saves $1 million, they should get $1 million for it. Their EOY revenue would reflect their value created. But they are actually selling to themselves. They are a part of the federal government, and their customers are other agencies. So the price they should charge is actually (value created - effort to get paid). If they waste $500,000 of man-hours to get that $1m, then the government loses $500k for no reason, other than for 18F to be able to point to $1m in revenue as proof of services provided. The government as a whole also loses out if price is an issue for the buyer, but a net win for the whole organization. If bureaucracy means that a department isn't willing to spend $1m to reap $2m in savings, because maybe the benefits are nebulous or internal politics or any of the other crazy things that people do in big organizations, then it actually benefits the government as a whole for 18F to do it for free. While I like that they focus on revenue to prove the impact they are having, selling products to other agencies shouldn't be profit maximizing. Any inefficiencies, either to the buyer or seller, are taxing to the organization. Side note: $32m is nothing. I'll take that any day over people building GIF hosting and SnapChat.

ikeboy 10y ago
>In a perfect market, they would be able to sell their services at the same price as the value of those services. Uh nope. A perfect market means the price is equal to their costs, not the value provided. A monopoly is when you can extract the value provided as rent.
- tyre 10y ago
  Sorry, I meant in this case, since they are a monopoly. Good clarification!
  - Pyxl101 10y ago
    I don't think they are a monopoly. Other agencies can pay outside firms as an alternative to using 18F, can't they? I'm not exactly sure how it works so please educate me. I also separately heard that 18F wasn't supposed to bid against outside firms for government contracts. That doesn't really make sense, then, if they're supposed to earn revenue. If they're expected to earn revenue then they should be able to bid for government contracts.
    - madeofpalk 10y ago
      At least Australia's version of 18F (called DTA) has an enforced monopoly The Australian Government has established a moratorium that stops Commonwealth (federal) agencies from investing in new, or duplicating, service delivery capability. The moratorium is an important tool to help government limit the fragmenting of users’ experience across the Australian Government.
- 1123581321 10y ago
  Zero economic profit is greater than costs.
protomyth 10y ago
$32m is not nothing, it would pay for a big chunk of a lot of programs. The federal government could actually pay the amount of educational money promised in the original legislation to the tribal colleges for many years. It would pay our tribal college's general fund for well over a decade.
- mmanfrin 10y ago
  $32mil is 10 cents a person for a year to fund. It's worth it.
  - blowski 10y ago
    Saying "it's an acceptable cost because the $32 million loss is balanced by gains in other areas" is potentially winning argument. Saying "it's nothing" is a losing argument in every town hall meeting that ever takes place. $32 million is a lot of parks, operations, libraries, and whatever else you like. We should focus on the value bought by that money, not on waving it away as "nothing".
    - languagewars 10y ago
      > Saying "it's nothing" is a losing argument in every town hall meeting that ever takes place. $32 million is a lot of parks, operations, libraries, and whatever else you like. You have changed the scale by 2 orders of magnitude to make it something. $100 is a 5th of someone people's yearly salary, so how dare you waste it on entertainment every month?
      - blowski 10y ago
        Compare: $100 is nothing so it doesn't matter what I spend it on. to I spend $100 on entertainment every month because I like watching TV. To clarify, the $32 million spent by 18F sounds like fantastic value for money, and we should emphasise that value.
        10y ago
ramblenode 10y ago
Yep. Revenue really isn't a useful metric for an organization like this. They may save the entire government money even if they are recording losses on their own balance sheet. The opportunity cost of using private contractors vs. doing the work in-house through 18F is what should be emphasized.
ProAm 10y ago
18F is another money grab. A bunch of SV people said to themselves, here is an easy few years to make money and if nothing comes of it we can say "Ah well start up culture...lol". I never had high hopes of this, it's sad that it was touted as a startup. 99% of start ups fail over the course of 5 years....
- wpietri 10y ago
  If it's a money grab, it's a badly designed one. I interviewed with 18F and would have had to take a pay cut even on a cash basis. (Government salaries are strictly limited by law.) They certainly don't give stock, and (gasp) you have to buy your own meals. So financially it's not a good deal at all.
  - jldugger 10y ago
    And they're _still_ not breaking even.
  - em3rgent0rdr 10y ago
    no risk and guaranteed but limited salary...not great incentivization.
    - wpietri 10y ago
      They're looking for people with a different motivation than maximizing personal profit. The people I talked to there were motivated by public service, solving big problems, and getting shit done.
    - NoGravitas 10y ago
      If the hours are likewise limited, that can be a valuable benefit for some people.
mdasen 10y ago
Ultimately, the issue is whether 18F is more effective than other means and accurate accounting is important to that end. Let's say that the VA gets bids to create a new system for something. 18F says they can do it for $900k and ContractorX says they can do it for $1M. 18F gets the contract and produces a system that cost the VA $900k. Let's say the system cost taxpayers an additional $1M that isn't billed to the VA. That means that taxpayers are out $1.9M rather than $1M going with ContractorX. The issue can be that 18F isn't accurately pricing their services and hiding the actual cost to the taxpayer. That isn't to say that I like contractors. I don't. But the point of 18F should be to prove that the government can create its own digital services at a lower cost than contractors. If they're "cheaper" in that they're charging agencies less, but then just taking money from a slush fund to cover the fact that they're not efficient, that's not a good thing. Also, price being "value created - effort to get paid" isn't a good metric. You need to look at alternatives. If a system saves $1M, but you could pay one source $100k for it and another source $900k, you want to go with the $100k source. If we had to pay the value created for things, we'd stop a lot of economic activity. In fact, why would the VA want to do anything at all given that they're going to be charged the full value of any savings? 18F shouldn't be credited with $1M in savings if they spent $900k to achieve it when a contractor could have done it for $100k. The value of 18F is if they can produce digital services better than other methods. Other methods are generally paying some non-governmental company for the services or hiring direct employees for the agency. In order to determine if 18F is a good model, they need to charge agencies enough to cover their costs. Otherwise, it's ridiculous. Someone in Health and Human Services would say, "we could hire people to do this project directly, but then we'd be paying 100% of their cost, but with 18F they'll charge us a fraction of the employees cost. In fact, we'll tell them to hire the dozen people we were going to hire and we'll only pay X% of the salary rather than 100%". Plus, if agencies don't have to pay the full cost, they'll do projects that don't make sense. Let's say that a project for the VA creates $1M in savings. 18F says they'll do it for $900k. The VA green-lights it to save $100k. Great, right? $100k for spending on other things. But 18F actually spends $2M on the project. The VA gets another $100k in their budget, but the government is actually down $1.1M. When people see situations like this, they want to take advantage of it since they're able to basically spend other people's budgets. "If you use 18F, a bunch of the money for your project doesn't come from your budget," is the kind of thing higher-ups dream of. I think 18F will get better at this. Figuring out how much one needs to charge is hard since it's hard to know exactly how much effort a project will take. I'm guessing that 18F is looking to generate good-will with agencies rather than going back to them with cost over-runs. Still, 18F needs to prove that it's a more effective way than alternatives and it can't do that by just under-charging and subsidizing whatever projects they get given. If 18F just offered free services, then every agency would want infinite 18F work (since it isn't coming out of their budget). Then which projects should be worked on? The ones 18F finds interesting? 18F wasn't created to be the arbiter of what the government should do. As such, they need to price accurately based on their costs. They will get better at this. They will likely have to start passing along cost over-runs to agencies. But if they get great, motivated people, they could provide digital services at a lower cost - it just has to actually be a lower cost. Even if you hate contractors, a lot of agencies have tens of thousands of employees. Health and Human Services has ~80,000 employees. The VA has ~313,000 employees. Why shouldn't they just hire an engineering team? Why should they outsource a project to 18F? Agencies that large certainly have enough engineering projects to keep an internal team busy. They're not some restaurant that outsources their website because they don't have enough work to keep a dev busy. Well, maybe 18F can gain efficiencies through hiring better people at higher pay who can create better code and re-use stuff across agencies. Or maybe the overhead of outsourcing outweighs those efficiencies. That's something important to figure out and it's an answer that we can get closer to if 18F accurately charges agencies.
matchagaucho 10y ago
The vets.gov website built by 18F has had "work in progress" and "coming soon" labels on it since inception. I dont care what hourly rate the VA negotiated under the auspices of "savings". If 18F doesnt deliver, then the investment is worthless.
- Raphomet 10y ago
  The USDS is working on vets.gov, not 18F. Apparently this effort involves taking hundreds of microsites that all look and behave differently and combining them into one unified effort. It's not surprising that this would take a long time, and my understanding is that this is one of USDS's top priorities. I think it's easy to underestimate how hard it is to ship something on the scale of vets.gov from the outside. Source: had early talks with the VA to join this project. I didn't, but came away with a lot of respect for the team working on it.
  - fapjacks 10y ago
    Right. I am a veteran that uses government portals for certain services, and you are absolutely right. There are so many moving parts behind the "single" portal the government wants veterans to use for access to services and information. I have been using those services for many years and haven't even seen them all, let alone used them all.
  - matchagaucho 10y ago
    18F is/was most definitely contributing to vets.gov. https://www.vets.gov/playbook/platform/ https://www.vets.gov/playbook/platform/ I'll give vets.gov credit for mobilizing content with responsive design. But as expected, "uber-portal" strategies that re-purpose content from other sites quickly suffer from entropy and information rot. The portal just becomes a cut-n-paste curation exercise.
rmason 10y ago
I smell a hit piece from a mile away. 18F has done a lot of good but in trying to change how government IT does business but they've also made powerful enemies who view them as a threat to their power base.. Find something that can be spun negatively and sell the story to a friendly journalist. That it what appears to have been done here. Next get the head of a budget committee to question 18F spending. It is all done behind the scenes and sadly 18F's strongest supporters are all leaving government.
- barney54 10y ago
  The story is reporting on a report from GSA's Inspector General. It's straight reporting. Not a hit piece.
  - jrockway 10y ago
    The author comments that he doesn't like their new logo.
    - yummyfajitas 10y ago
      The greater point is that 727 hours of staff time were spent on it.
      - jrockway 10y ago
        Is that a lot of time for a logo redesign? I've spent more time brushing my teeth than that.
        striking 10y ago
        If you're younger than 29.88 years old: no, you haven't. https://www.wolframalpha.com/input/?i=(727+hours+%2F+(4+minutes+per+day)+)+in+years https://www.wolframalpha.com/input/?i=(727+hours+%2F+(4+minu... This is assuming you've brushed your teeth for two minutes, twice a day, since the day you came out of the womb.
epynonymous 10y ago
tax dollars, down the drain, was the logo worth that much to change? they need to be more nimble and thrifty

by tyre 10y ago

ikeboy 10y ago

>In a perfect market, they would be able to sell their services at the same price as the value of those services. Uh nope. A perfect market means the price is equal to their costs, not the value provided. A monopoly is when you can extract the value provided as rent.

tyre 10y ago
Sorry, I meant in this case, since they are a monopoly. Good clarification!
- Pyxl101 10y ago
  I don't think they are a monopoly. Other agencies can pay outside firms as an alternative to using 18F, can't they? I'm not exactly sure how it works so please educate me. I also separately heard that 18F wasn't supposed to bid against outside firms for government contracts. That doesn't really make sense, then, if they're supposed to earn revenue. If they're expected to earn revenue then they should be able to bid for government contracts.
  - madeofpalk 10y ago
    At least Australia's version of 18F (called DTA) has an enforced monopoly The Australian Government has established a moratorium that stops Commonwealth (federal) agencies from investing in new, or duplicating, service delivery capability. The moratorium is an important tool to help government limit the fragmenting of users’ experience across the Australian Government.
1123581321 10y ago
Zero economic profit is greater than costs.

protomyth 10y ago

$32m is not nothing, it would pay for a big chunk of a lot of programs. The federal government could actually pay the amount of educational money promised in the original legislation to the tribal colleges for many years. It would pay our tribal college's general fund for well over a decade.

mmanfrin 10y ago
$32mil is 10 cents a person for a year to fund. It's worth it.
- blowski 10y ago
  Saying "it's an acceptable cost because the $32 million loss is balanced by gains in other areas" is potentially winning argument. Saying "it's nothing" is a losing argument in every town hall meeting that ever takes place. $32 million is a lot of parks, operations, libraries, and whatever else you like. We should focus on the value bought by that money, not on waving it away as "nothing".
  - languagewars 10y ago
    > Saying "it's nothing" is a losing argument in every town hall meeting that ever takes place. $32 million is a lot of parks, operations, libraries, and whatever else you like. You have changed the scale by 2 orders of magnitude to make it something. $100 is a 5th of someone people's yearly salary, so how dare you waste it on entertainment every month?
    - blowski 10y ago
      Compare: $100 is nothing so it doesn't matter what I spend it on. to I spend $100 on entertainment every month because I like watching TV. To clarify, the $32 million spent by 18F sounds like fantastic value for money, and we should emphasise that value.
      - 10y ago

ramblenode 10y ago

Yep. Revenue really isn't a useful metric for an organization like this. They may save the entire government money even if they are recording losses on their own balance sheet. The opportunity cost of using private contractors vs. doing the work in-house through 18F is what should be emphasized.

ProAm 10y ago

18F is another money grab. A bunch of SV people said to themselves, here is an easy few years to make money and if nothing comes of it we can say "Ah well start up culture...lol". I never had high hopes of this, it's sad that it was touted as a startup. 99% of start ups fail over the course of 5 years....

wpietri 10y ago
If it's a money grab, it's a badly designed one. I interviewed with 18F and would have had to take a pay cut even on a cash basis. (Government salaries are strictly limited by law.) They certainly don't give stock, and (gasp) you have to buy your own meals. So financially it's not a good deal at all.
- jldugger 10y ago
  And they're _still_ not breaking even.
- em3rgent0rdr 10y ago
  no risk and guaranteed but limited salary...not great incentivization.
  - wpietri 10y ago
    They're looking for people with a different motivation than maximizing personal profit. The people I talked to there were motivated by public service, solving big problems, and getting shit done.
  - NoGravitas 10y ago
    If the hours are likewise limited, that can be a valuable benefit for some people.

mdasen 10y ago

Ultimately, the issue is whether 18F is more effective than other means and accurate accounting is important to that end. Let's say that the VA gets bids to create a new system for something. 18F says they can do it for $900k and ContractorX says they can do it for $1M. 18F gets the contract and produces a system that cost the VA $900k. Let's say the system cost taxpayers an additional $1M that isn't billed to the VA. That means that taxpayers are out $1.9M rather than $1M going with ContractorX. The issue can be that 18F isn't accurately pricing their services and hiding the actual cost to the taxpayer. That isn't to say that I like contractors. I don't. But the point of 18F should be to prove that the government can create its own digital services at a lower cost than contractors. If they're "cheaper" in that they're charging agencies less, but then just taking money from a slush fund to cover the fact that they're not efficient, that's not a good thing. Also, price being "value created - effort to get paid" isn't a good metric. You need to look at alternatives. If a system saves $1M, but you could pay one source $100k for it and another source $900k, you want to go with the $100k source. If we had to pay the value created for things, we'd stop a lot of economic activity. In fact, why would the VA want to do anything at all given that they're going to be charged the full value of any savings? 18F shouldn't be credited with $1M in savings if they spent $900k to achieve it when a contractor could have done it for $100k. The value of 18F is if they can produce digital services better than other methods. Other methods are generally paying some non-governmental company for the services or hiring direct employees for the agency. In order to determine if 18F is a good model, they need to charge agencies enough to cover their costs. Otherwise, it's ridiculous. Someone in Health and Human Services would say, "we could hire people to do this project directly, but then we'd be paying 100% of their cost, but with 18F they'll charge us a fraction of the employees cost. In fact, we'll tell them to hire the dozen people we were going to hire and we'll only pay X% of the salary rather than 100%". Plus, if agencies don't have to pay the full cost, they'll do projects that don't make sense. Let's say that a project for the VA creates $1M in savings. 18F says they'll do it for $900k. The VA green-lights it to save $100k. Great, right? $100k for spending on other things. But 18F actually spends $2M on the project. The VA gets another $100k in their budget, but the government is actually down $1.1M. When people see situations like this, they want to take advantage of it since they're able to basically spend other people's budgets. "If you use 18F, a bunch of the money for your project doesn't come from your budget," is the kind of thing higher-ups dream of. I think 18F will get better at this. Figuring out how much one needs to charge is hard since it's hard to know exactly how much effort a project will take. I'm guessing that 18F is looking to generate good-will with agencies rather than going back to them with cost over-runs. Still, 18F needs to prove that it's a more effective way than alternatives and it can't do that by just under-charging and subsidizing whatever projects they get given. If 18F just offered free services, then every agency would want infinite 18F work (since it isn't coming out of their budget). Then which projects should be worked on? The ones 18F finds interesting? 18F wasn't created to be the arbiter of what the government should do. As such, they need to price accurately based on their costs. They will get better at this. They will likely have to start passing along cost over-runs to agencies. But if they get great, motivated people, they could provide digital services at a lower cost - it just has to actually be a lower cost. Even if you hate contractors, a lot of agencies have tens of thousands of employees. Health and Human Services has ~80,000 employees. The VA has ~313,000 employees. Why shouldn't they just hire an engineering team? Why should they outsource a project to 18F? Agencies that large certainly have enough engineering projects to keep an internal team busy. They're not some restaurant that outsources their website because they don't have enough work to keep a dev busy. Well, maybe 18F can gain efficiencies through hiring better people at higher pay who can create better code and re-use stuff across agencies. Or maybe the overhead of outsourcing outweighs those efficiencies. That's something important to figure out and it's an answer that we can get closer to if 18F accurately charges agencies.

matchagaucho 10y ago

The vets.gov website built by 18F has had "work in progress" and "coming soon" labels on it since inception. I dont care what hourly rate the VA negotiated under the auspices of "savings". If 18F doesnt deliver, then the investment is worthless.

Raphomet 10y ago
The USDS is working on vets.gov, not 18F. Apparently this effort involves taking hundreds of microsites that all look and behave differently and combining them into one unified effort. It's not surprising that this would take a long time, and my understanding is that this is one of USDS's top priorities. I think it's easy to underestimate how hard it is to ship something on the scale of vets.gov from the outside. Source: had early talks with the VA to join this project. I didn't, but came away with a lot of respect for the team working on it.
- fapjacks 10y ago
  Right. I am a veteran that uses government portals for certain services, and you are absolutely right. There are so many moving parts behind the "single" portal the government wants veterans to use for access to services and information. I have been using those services for many years and haven't even seen them all, let alone used them all.
- matchagaucho 10y ago
  18F is/was most definitely contributing to vets.gov. https://www.vets.gov/playbook/platform/ https://www.vets.gov/playbook/platform/ I'll give vets.gov credit for mobilizing content with responsive design. But as expected, "uber-portal" strategies that re-purpose content from other sites quickly suffer from entropy and information rot. The portal just becomes a cut-n-paste curation exercise.

rmason 10y ago

I smell a hit piece from a mile away. 18F has done a lot of good but in trying to change how government IT does business but they've also made powerful enemies who view them as a threat to their power base.. Find something that can be spun negatively and sell the story to a friendly journalist. That it what appears to have been done here. Next get the head of a budget committee to question 18F spending. It is all done behind the scenes and sadly 18F's strongest supporters are all leaving government.

barney54 10y ago
The story is reporting on a report from GSA's Inspector General. It's straight reporting. Not a hit piece.
- jrockway 10y ago
  The author comments that he doesn't like their new logo.
  - yummyfajitas 10y ago
    The greater point is that 727 hours of staff time were spent on it.
    - jrockway 10y ago
      Is that a lot of time for a logo redesign? I've spent more time brushing my teeth than that.
      - striking 10y ago
        If you're younger than 29.88 years old: no, you haven't. https://www.wolframalpha.com/input/?i=(727+hours+%2F+(4+minutes+per+day)+)+in+years https://www.wolframalpha.com/input/?i=(727+hours+%2F+(4+minu... This is assuming you've brushed your teeth for two minutes, twice a day, since the day you came out of the womb.

epynonymous 10y ago

tax dollars, down the drain, was the logo worth that much to change? they need to be more nimble and thrifty