We left off at Part 1 begging the question "Why are we so focused on procurement in the first place?" Let’s talk about the elephant in the room. The federal government has become completely dependent on contractors for technical talent. Engineers, designers, product managers—they're all contracted rather than hired directly by agencies.
Think about this for a few seconds: How many successful tech companies outsource their most critical products? Almost none. Yet that's exactly how the federal government operates, making procurement the whole ballgame when it comes to building digital services, all because a totally different government process is broken.
The talent problem
The government runs systems that millions of Americans depend on daily, yet it lacks the in-house technical expertise to properly oversee these systems. Why? Because the hiring process is painfully slow, pay scales are rigid and uncompetitive, security clearance can take forever, and federal tech jobs lack the prestige and flexibility of private sector roles.
Instead of fixing these fundamental hiring issues, agencies take the easy route: they bring in outside vendors through contracts. This might seem practical in the short term, but it has created a dangerous cycle where the government loses more and more of its ability to manage its own technology.
How government hiring works (or doesn't)
The government hiring process bears little resemblance to the private sector (see this post by Jen Pahlka for a great explainer). While tech companies can make offers to superstar candidates in days or weeks, government hiring can drag on and on for months. Once an agency identifies a need for technical talent, they spend months defining the job description and posting it on USAJobs, only for talented candidates to miss it entirely due to confusing language and requirements. Then comes the cumbersome (and woefully ineffective) HR review process, months of background checks, and paperwork. By the time all of the bureaucratic hoop-jumping is complete, most talented candidates have moved on to better opportunities elsewhere.
But here's the truly troubling part: many agencies don't even believe they can (or should) hire modern tech talent! This creates a self-defeating cycle: since they don't build internal expertise, they assume the only way to deliver technology is to outsource.
Ceding the responsibility to build technology
In her book Recoding America, Jen Pahlka outlines how we got to a place where government didn't think it was its role to build technology. In 1996, amidst rising prominence of the internet and technology in daily life, Congress sought to revise the laws governing federal technology strategy. Part of the legislation writing process involved a cross-government task force researching and recommend how to prevent more government technology failures. As Pahlka recounts, "The task force saw how agencies were needlessly building bespoke software at great cost even as vendors offered off-the-shelf products that could meet their needs, so they concluded that buying really was the skill they needed to develop."This focus on technology procurement thus became a key part of the new law, the Clinger Cohen Act in 1996.
Why outsourcing everything is dangerous
The stakes here are enormous. First of all, in an age where so many government services can and should be delivered digitally (to most of the public) by outsourcing technology development, agencies are essentially outsourcing implementation of policy. Policies don't run themselves - things have to be built and managed to make the policy's vision a reality. Thus, implementation is as critical if not more critical than the policy itself. Besides that, government agencies oversee critical systems—from national security databases to healthcare platforms. These systems need constant updates, security fixes, and improvements to the user experience to keep running smoothly.
When agencies outsource everything, they:
- Lose (or never develop in the first place) the institutional knowledge needed to maintain systems or products
- Can't properly evaluate vendor work quality
- Pay too much for mediocre solutions
- Become dependent on specific contractors
Without strong in-house expertise, government digital service delivery and technology overall becomes outdated, vulnerable to security threats, and, dare we say, inefficient.
A better way forward
Building a better government tech ecosystem requires a two-pronged approach:
- Smart procurement: Use better strategies— Modular contracts, agile development, user-centered design, and performance-based metrics are essential to better contracts that attract better vendors. There are resources to help navigate this complex landscape—trainings like DITAP, tools like the Periodic Table of Acquisition Innovations, and guides from 18F and USDS.
- Build internal capacity— Agencies must invest in their own technical talent. The recent success of IRS Direct File (which featured a huge amount of internal top talent) and the decade of many top tech experts coming through CFPB, USDS, and 18F show that it is possible to bring top tech talent into the government through creative hiring.
Bottom line
Even in the wildest dreams of government in-sourcing proponents, procurement will be necessary and good contractors will always be critical to the delivery of government services. But the government's over-reliance on contractors has weakened its ability to function effectively and efficiently.
Fixing this is about better contracts, but it's also so much more—it's about fundamentally changing how the government values and invests in its own technical workforce. If we want our government to deliver services that actually work for the American people, we need to break this cycle of procurement dependency and start building expertise where it matters most.