The past few months have been trying times for 18F, the Obama administration’s highly touted two-year-old tech consultancy group and subject of three separate audits: two by the General Services Administration’s inspector general and one by the Government Accountability Office.
The latest IG report, which followed a separate investigation regarding the use of Slack, mirrored GAO’s findings—chiefly that 18F was operating in the red. It experienced a net loss of $31 million between fiscal 2014 and 2016 because of “inaccurate financial projections, increased staffing levels, and the amount of staff time spent on non-billable activities,” according to the audit.
When 18F launched in March 2014 with a 15-person team of innovators, the group was in its equivalent of Act I, hiring talent and figuring out its role within government. It’s since grown to more than 180 personnel across four offices nationwide—housed within GSA’s Technology Transformation Service—and with that growth came more scrutiny and expectations to deliver services across government. Now, under the leadership of former Pixar executive Rob Cook, who began a three-year term as the Technology Transformation Commissioner Monday,18F is essentially beginning Act II.
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Priority one is righting the cost-recovery issues highlighted first by GAO and the IG, according to GSA Administrator Denise Turner Roth. Even with a 69 percent increase in revenue from fiscal 2015 to 2016, 18F is still slated to spend more than $10 million more than it earns.
“We need to ensure cost recovery, and we are working to do that,” Roth told Nextgov. “Us having a break-even position and getting cost recovery is absolutely the prime expectation.”
Under current estimates, 18F isn’t likely to reach a break-even point until fiscal 2018. Yet additional changes within “the next iteration of 18F,” Roth said, have the opportunity to significantly alter the tech consultancy’s trajectory financially and in others ways, too.
Work requests will be prioritized, Roth said, based on 18F’s two years of experience. Does it make sense to tackle a single agency project or platform or one that might positively impact several agencies? Will shared services requests trump the creation of one-off projects, like a single application? Does a project have a high likelihood of success, and for that matter, what does success for each undertaken project look like? 18F, she said, will have to weigh those questions and others against the organization’s bottom line.
Roth also said the percentage of time staff spends on non-billable activities such as marketing and promotion will decrease. Billable activities—delivering apps or services—will increase. Metrics, too, will be a major focus point, helping create internal and external transparency with stakeholders.
“We have and will continue to focus on process improvements, internal controls and financial production of 18F and [TTS],” Roth said.
As Cook begins his tenure, Roth said he’ll also examine the makeup of 18F’s workforce. Roth said Cook will focus on right-sizing 18F's priorities, goals, operations and personnel, and that it’s imperative the organization has the right makeup of skill sets for the work it wants to do and services it wants to deliver.
“Part of Rob’s purview is to look at the mix of skill sets, the demand we have and what our priorities are going forward,” Roth said. “That doesn’t mean we are reducing [personnel], necessarily.”
Despite several spotlight-inducing investigations—the latest of which stemmed from concerned GSA executives—Roth said the mood at TTS isn’t glum, weathered or weary. The internal reaction, she said, is “one of expectation, ready for the next opportunity.” In other words, its employees are galvanized and ready for action.
“I think we’ve seen from 18F that there is truly a demand and desire for the work they provide, and they’ve shown the capacity to help federal agencies transform their tech uses to meet missions overall,” Roth said.