"Unraveling the Government's Struggle with Digital Transformation: Why Can't They Get Tech Right?"
- Megan Rashid
- Feb 25, 2024
- 8 min read
Billions lost, failed IT projects, and why it doesn’t have to be this way.
For US high school seniors, early spring is usually the time for obsessively checking mailboxes for emails or “large envelopes” congratulating them on their acceptance to university. However, this spring the only thing worse than reading “we thank you for your interest in our university” is:
image from Reddit: r/uichicago
FAFSA (Free Application for Federal Student Aid) how US students and families determine their financial aid eligibility for university education. Individualized financial aid packages are created through loans, grants and work study opportunities based on a student/family’s economic standing, cost of attendance, scholarship opportunities, and eligibility criteria. With increasing education costs, getting the FAFSA right saves thousands and reduces the time spent paying back debt.
Every $1000 of additional financial aid increases university enrollment by 4% (Northwest, n.d.). Many miss potential aid because of misinformation, mistrust or beliefs they are ineligible. Nearly 30% of people who did not fill out the 2011/12 FAFSA would have been eligible for a Pell Grant, which reduces costs for low-income students (Northwest, n.d.). Because most students rely on their parents for help with the FAFSA, lack of information or financial literacy has a real cost.
The 2024/5 FAFSA application has undergone significant changes in line with the 2020 FAFSA Simplification Act. These changes should expand financial aid while reducing errors and fraud by integrating directly to IRS (US Internal Revenue Service) tax history.
The rollout of the 2024/5 FAFSA form has been a user experience and digital transformation disaster — launched months late, missing key features, inaccurate/exclusive design, eroded user trust… Even worse, many of the specific communities who should have benefited from expanded access to financial aid have quite literally excluded from the application. Desperate families are looking to potentially illegal workarounds. It’s leaving many feeling as though there are no solutions for them.
FAFSA is just another failed attempt at digital transformation in government.
The failed launch of Healthcare.gov, i.e. the Obamacare healthcare marketplace started with an initial budget of $93.7M that ballooned to $1.7B (The Failed Launch of www.HealthCare.gov — Technology and Operations Management, 2016).
94 percent of large federal information technology projects over the past 10 years were unsuccessful — more than half were delayed, over budget, or didn’t meet user expectations, and 41.4 percent failed completely — (Johnson & Reed, 2013)
Bureaucratic governments continually struggle to develop digital transformation solutions that meet user expectations. Unlike many software development projects rolled out slowly, government tech projects tend to follow the “big-bang” release. These solutions are more than websites. They require data and process integrations between agencies and legacy technology stacks. Additionally, they require extensive regulatory provisions that cannot be managed in silos.
The government is not a startup. They can’t easily follow Agile frameworks for development. State and federal IT projects have the same challenges of commercial projects, which don’t always have the best success rate. However, unlike commercial projects, government projects are dependent upon contractors for development talent. Those who can navigate the red tape are not necessarily the best for the work.
Addressing the federal procurement process is only part of the solution. Government agencies must also invest in scaling offices with the talent, experience, tools and resources required to integrate technologies.
How can we expect these same agencies to regulate new technologies when they can’t even launch a successful IT project?
Government tech projects seem to fail by default.
It took 3 years to bring the problem-ridden 2024/5 FAFSA form to life. Scheduled for October, the form did not become available until mid-January. This delay means that universities won’t receive FAFSA information until March. Therefore, students will have to decide later where they will attend and how they will finance it. Given the ongoing US student debt crisis, it’s heart wrenching to see another class of students make financial decisions that will impact the rest of their lives under this pressure.
Children of permanent residents, green card holders and undocumented parents without SSN (social security numbers) are facing errors because of faulty system design. The government helpline is overwhelmed and many struggle to make contact. To resolve, students are emailing copies of their parents’ passports to the Education Department (Carrillo & Lee, 2024). 1) This solution assumes parents have US passports and 2) the data security implications!
Soon after launch, NPR reported that mistakes in the FAFSA form’s calculations could cost students up to $2 billion (Turner, 2024). This mistake falsely inflated families’ income, reducing potential financial aid opportunities. While the Education Department (ED) promises to remedy this mistake, I can’t help but fall into the well of “what if’s”. What if NPR had not found this?
How many students would have not attended university or taken on additional debt that would take additional years to repay?
“I get that there’s complexities in building and programming a new system. OK. But forgetting to put the right numbers into a table that now has created all this consternation and delays really surprised me.” — Brad Barnett, financial aid director James Madison (Turner, 2024)
In 2012, the US Airforce cancelled an ERP (enterprise resource planning) project that totaled $1B but failed to provide any military capabilities after seven years of development. This ERP solution would have replaced 200 legacy systems (Kanaracus, 2012). Not to be left out, the US Marine Corps started their own ERP migration in 2009 that ballooned from $126M to $2.7B by 2013 (Kanaracus, 2012).Who can forget the Hawaii missile alert system?
I hope no one is still in a bunker. Image from: Wikipedia
There are many reasons why these projects fail — mismanagement, lack of budget, ballooning budgets, lack of executive support, executive intervention, conflicting political agendas, inefficient talent pipelines, inadequate design practices, the list goes on. The solutions seem so straightforward — adopt agile development practices, rollout projects incrementally, bring in effective design principles, maintain close proximity to users. While it’s certainly easy to poke fun at these massive figures and cry about wasted tax dollars, it’s important to remember that there are people at every level of government who are doing their best to bring innovation and best practices to a very slow-moving machine.
As Mark Lerner (2020) notes, “outdated requirements, restrictive policies, confining interpretations, and perverse incentive structures that not only keep them from doing the right thing, but push them (government) towards working in ways we know will lead towards failure”. The problem can also be culturally ingrained in an organization. For example, Erie (2017) points out that there is a longstanding misconception that user research is illegal in government under the Paperwork Reduction Act of 1995 (PRA). She explains that though untrue, this misconception is still having a serious impact on using user research within government agencies.
It’s also difficult to adopt agile ways of working when your agency is governed by bureaucratic processes that cannot or are unlikely to change. There are Congressional budget processes and committees on investment that can impact funding and prioritization. Reporting requirements vary greatly by agency or federal leadership adding to the red tape. There are also lengthy approval processes through the PRA. All of these factors are demotivating and easily drive federal employees back into bureaucratic ways of working. When things go wrong, the response is often to spend more time and money rather than address the root cause.
The user experience doesn’t have to be this way.
Just because the government has a bad track record with tech projects doesn’t mean it always has to. One first step is to address the mechanisms within the government that stymie innovation and slow progress. It’s not about adding additional oversight but rather analyzing each piece of the pipeline. Understanding where the inefficiencies lie inter- and intra-agency all the way to the top of Congress’s policies will help address the status quo.
This isn’t necessarily an easy road. In 2011, the UK established the Government Digital Service (GDS)to bring the public service into the modern, digital era. GDS recruited top technologist talent within the UK government to either build the right technology or find the right vendor across all functions. It was the government’s own internal technical brain.
Success came quickly for GDS. The 2013 launch of gov.uk was delivered considerably cheaper than preceding gov IT projects and also received best design of the year (Greenway, 2020). Some even claimed GDS was the top startup in Europe at the time.
In less than two years GDS has hired over 200 staff (including some of the UK’s top digital talent), shipped an award-winning service, and begun the long and arduous journey of completely revolutionizing the way that 62 million citizens interact with more than 700 services from 24 government departments and their 331 agencies. — Saul Klein (2017)
Rather than changing websites, GDS focused on changing how the public service developed and delivered these services. Sitting independently from other offices, GDS could identify inefficiencies caused by duplicative services and solutions. They could supercharge developing a solution that would integrate across functions. For example, instead of separate offices administering tech to send text messages or receive payments, GDS was able to replace with a harmonized solution that reduced costs by up to £1.7B (Greenway, 2020), limited technical issues and improved the user experience.
GDS was not universally loved, however. Within government, there were many who viewed GDS as the new kid in town and resented any challenges to the status quo. In 2015, the UK government gave a further vote of confidence through a £450M award that would prove to be GDS’s downfall (Greenway, 2020). The civil service, egged on by officials who had been embarrassed by GDS’s successes, demanded that with this award, GDS would transition from leading projects to supporting departments.
This transition has knocked a lot of the wind out of GDS’s sails but they continue to provide solutions that continue to stand up to extraordinary demand. During COVID, the UK government was able to quickly launch digital services for the NHS that would not have been possible in the US. You tell me which solution is more relevant to the digital era?
Change is difficult within any organization but government poses unique challenges that can and have been solved. It’s about empowering the right people in the right places with the right tools to do the job. There’s no shortage of government employees who want to modernize their domain areas. When the UX is as bad as FAFSA or Healthcare.gov, there are real costs to real people. Personally, I’m not overly optimistic that government can regulate the rapidly changing AI landscape when they struggle to deliver any kind of IT solution. Just as we all have to upskill to stay relevant in this changing job marketplace, government should be held to the same expectation.
References:
Carrillo, S., & Lee, J. W. (2024, February 12). Yet another FAFSA problem: Many noncitizens can’t fill it out. 91.9 FM WUOT, Your Public Radio Station. https://www.wuot.org/2024-02-12/yet-another-fafsa-problem-many-noncitizens-cant-fill-it-out
Northwest, E. (n.d.). Expanding College access: Promising strategies to boost students’ financial aid completion. Education Northwest. https://educationnorthwest.org/insights/expanding-college-access-promising-strategies-boost-students-financial-aid-completion
The failed launch of www.HealthCare.gov — Technology and operations management. (2016, November 18). Technology and Operations Management. https://d3.harvard.edu/platform-rctom/submission/the-failed-launch-of-www-healthcare-gov/
Johnson, C., & Reed, H. (2013, October 25). Opinion | Getting to the bottom of HealthCare.Gov’s flop. The New York Times. https://www.nytimes.com/2013/10/25/opinion/getting-to-the-bottom-of-healthcaregovs-flop.html
Thibodeau, P. (2013, October 21). Healthcare.gov website “didn’t have a chance in hell.” Computerworld.
Blume, H. (2024, February 14). Feds move to ease FAFSA financial aid chaos, but no quick fix emerges — Los Angeles Times. Los Angeles Times. https://www.latimes.com/california/story/2024-02-13/feds-announce-more-steps-to-ease-fafsa-financial-aid-chaos
Turner, C. (2024, January 23). Exclusive: The Education Department says it will fix its $1.8 billion FAFSA mistake. NPR. https://www.npr.org/2024/01/23/1226406495/families-colleges-remain-limbo-education-department-promises-fix-fafsa-mistake
Kanaracus, C. (2012, December 10). The scariest software project horror stories of 2012. Computerworld. https://www.computerworld.com/article/2493658/the-scariest-software-project-horror-stories-of-2012.html
Government tech projects fail by default. It doesn’t have to be this way. | Belfer Center for Science and International Affairs. (n.d.-b). Belfer Center for Science and International Affairs. https://www.belfercenter.org/publication/government-tech-projects-fail-default-it-doesnt-have-be-way
Klein, S. (2017, May 7). Government Digital Service: the best startup in Europe we can’t invest in. The Guardian. https://www.theguardian.com/technology/2013/nov/15/government-digital-service-best-startup-europe-invest
Greenway, Andrew. (2020, September 24). The Government Digital Service truly was once world-beating. What happened? The Guardian. https://www.theguardian.com/society/2020/sep/24/government-digital-service-truly-was-once-world-beating-what-happened
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