WASHINGTON- The Obama administration’s “1 8F” program to create its own version of a high-tech startup for government digital projects has foundered since its launch in 2014, losing nearly $32 million as its staff expended most of its period on unbillable run, according to a new inspector general report.
The comparings to some Silicon Valley startups were stark: Senior 18 F managers overestimated the amount of money their projects would recoup; increased hiring use special rules every three months since April 2014; and devoted less than half the program’s personnel period on projects for which it could bill other federal agencies, said the report released Monday. It noted the 18 F program has “struggled financially” and “has not developed a viable plan to achieve full cost recovery.”
In one case, 18 F hired a full-time head of state and local government practise at an annual salary of $152,780, even though at the time, 18 F was not authorized to work directly for state and local governments.
The program, named after its Washington street address, was intended to create an upper-class branch of the General Services Administration with creative, tech-savvy employees who could promptly re-engineer any government agency’s website or improve other digital projects. At a hour when federal departments were cutting budgets, it was funded under a model that foresaw it would earn back more money than it cost to run. The 18 F unit was informally related to the administration’s new U.S. Digital Service, which helps manage government technology projects.
In internal debates, some senior 18 F directors seemed cavalier about recouping expenses, research reports said.
It quoth exchange experiences with the 18 F director of operations, who told a GSA regional administrator, “To be frank, there are some of us that don’t give rend about the losses.” The administrator, identified as Andrew McMahon, reacted, “Sure, in the end, I could care less.” McMahon declined to comment.
18F’s acting executive director, Dave Zvenyach, said in a statement that like any startup, 18 F grew quickly and is learning how to scale. In his comments defending the organization’s run, Zvenyach cited examples that appeared hard to tangibly account for since they dealt with government practices and culture.
Zvenyach said 18 F has worked on 250 projects with 37 federal government agencies for example, helping the Treasury Department increase transparency on federal spending. He said the organization is working to address the report’s findings and has brought in an independent third party to review its financial processes and controls, and added more controls on unbillable work.
The 10 -month investigation by the GSA’s inspector general found that 52 percentage of 18F’s run was unbillable and included an internal project to change its logo by altering its font, alignment and background colour. In all, 727 faculty hours, or $140,104, were spent on developing the brand, including that logo change.
Staff expended 13,989 hours, worth $2.34 million, promoting their work through blog posts, websites, social media and speaking events.
The program also expended $235,950 on its internal timekeeping system. The report found that in half of 202 projects it reviewed, the staff often started work before the process of developing a required agreement, which is supposed to ensure that taxpayers aren’t overcharged for work that could be more easily or cheaply provided by a private vendor and that the office is actually refunded for its work.
The report said 18 F expended about 20 hours or $4,148 on two customized “bots” for Slack, an online messaging application. One of the automated programs would monitor users’ messages for the words “guys, ” ”guyz” and “dudes, ” which could have been perceived as being not inclusive for women. It prompted users to hold replacing those terms with 21 options that included buds, compatriots, fellow humen, posse, squad, mateys, persons of any kind, organic carbon-based life-forms living on the third planet from the sunlight, comrades and cats.