It's time for the federal government to nab an idea from state governments.
Angela Fultz Nordstrom is vice president at NIC Inc.
It’s budget season for the federal government, and the Trump administration is sending a clear message with its recent budget blueprint: Agencies must strengthen relationships with industry partners and find ways to improve service delivery with less resources.
With the exception of national security and defense, this new budget proposal seeks to transition the responsibility of many civil services from the government to the private sector and states by proposing cuts to discretionary spending. Additionally, the president signed an executive order March 13 requiring an audit of the executive branch in an effort to identify ways to decrease costs and eliminate service redundancy. These are clear signals of an executive branch seeking new ways to do business.
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And while the administration is seemingly poised to downsize some budgets, government agencies must still execute their missions. In many cases, these missions involve delivery of services to citizens and businesses. Delivery of services cannot afford to suffer because of reduced budgets or hiring freezes.
All it takes is the adoption of a simple, very successful service delivery contracting model to ensure delivery of digital services to U.S. citizens and businesses are not adversely impacted during this time. Already in use in some federal agencies, forward-thinking federal government leadership can forge an effective path forward by embracing a contracting concept used not just in the private sector, but also by state governments for 25 years.
Doing Business Differently
State governments are constantly faced with budgetary challenges and increased needs for delivering citizen and business services while still balancing their budgets. Twenty-five years ago they found an answer in the electronic government movement. They began establishing public-private partnerships with industry to electronically deliver transaction-based government services.
By doing so, they pioneered a new way of doing business, all while balancing their budgets, providing new and better services to their constituents, and even creating new revenue streams in some cases. It’s a delivery model called transaction-based contracting and states have been using variations of it for years.
Unlike traditional contracting methods, which might pay for the one-time creation of a digital service, transaction-based contracting creates a public-private partnership that transfers financial obligation, risk, accountability and the ultimate success of the service onto the shoulders of industry.
These public-private partnerships with industry are often delivered at little or no cost to the government, and while that may seem unusual at first blush, innovative state leaders have proven these arrangements can reduce costs and still provide the services constituents need and want with the seamless digital experience they expect.
When the federal government has a need or requirement (budgeted or not) to deliver a service with a transaction component, establishing a public-private partnership places the financial investment to build and develop the service on industry—not government. The only compensation industry receives is through efficiency fees collected from the users when the service is used.
Because of this, industry is heavily incentivized to quickly build and maintain user-friendly services and drive adoption rates. This shift in responsibility ensures the service is continually enhanced and always promoted by industry on behalf of the government.
Consider all the digital services available online by a state Department of Motor Vehicles. Citizens can renew their driver’s license, pay traffic violations, cancel vehicle tags—all when it is most convenient for them. As a result, lines at the DMV are shorter; citizens experience a positive interaction with government, taxpayers are not paying for services they don’t use; government provides a digital experience that meets the expectations of their users; and the technology that powers the service is constantly enhanced and maintained, regardless of how long the partnership has been in place. Citizens are happy, government is delivering on its mission, and industry is being held accountable.
Using Transaction-Based Contracting to Deliver Digital Services
The government doesn’t need to look far for successful examples of transaction-based contracting. Right in the federal government’s backyard, the state of Maryland is improving citizen and business interaction and access to government services using this delivery model. The state of Maryland currently offers more than 80 digital services, of which nearly one-third are provided without citizens paying any fees at all. In 2016 alone, the state of Maryland realized $76.4 million in value by using transaction-based contracting to deliver digital services.
The state of Arkansas, another great example, has realized tremendous success by using transaction-based contracting. With 24.4 million Arkansas.gov users and 7.8 million transactions securely processed since 2011, Arkansas has realized $91 million in cost avoidance in less than five years. With more than 830 digital products and services launched since 2011, Arkansas.gov has received 52 awards for the services it delivers on behalf of the state.
And it’s not just states that realize success with transaction-based contracting. In early 2016, the National Park Service used a transaction-based delivery model to launch YourPassNow, a digital marketplace that provides a new way to explore and enjoy America’s treasured outdoor places by making recreation access to public lands available for purchase online.
Similarly, the Department of Transportation’s Federal Motor Carrier Safety Administration uses a transaction-based contracting model to deliver its Pre-Employment Screening Program. When commercial motor carriers hire drivers, they need quick and easy access to their crash and inspection histories to make informed hiring decisions. By offering users of PSP immediate, digital access to a commercial driver’s safety history, PSP helps inform hiring decisions and improves the safety of commercial motor vehicles on America’s roadways.
The president’s budget message in all of this is clear: The government is looking to do business differently. But different doesn’t have to mean ineffective, and different doesn’t have to impede the delivery of digital government services. Broad adoption of transaction-based contracting in the federal government aligns with the administration’s goal of identifying new ways to do business. The opportunity to redefine how federal digital government services are delivered is now and adoption of transaction-based contracting is a way to do it.