Why Government Websites Cost More and Perform Worse Than Private Sector Sites

Nearly 2,000 pages of cumbersome federal contractor regulations could be to blame.


Credit: White House / Flickr.com

Was the failure of the federal government's $2.1 billion Obamacare enrollment website an isolated fluke or part of a broader pattern of overpriced government failure when it comes to consumer-facing technology?

Recent events show a pattern. The other failures aren't as costly or as high-profile as Healthcare.gov. But they're worth paying attention to nonetheless. One good reason to favor a smaller federal government that does less is that the private sector often does things cheaper, faster, and better than the government does. Dot-com and dot-org work better than dot-gov.

Example number one: The independent non-profit news website ProPublica has a "Dollars for Docs" web site that, for the past four years, has allowed patients to go online and see if their doctors have any financial relationships with pharmaceutical companies. The federal government just spent about $10 million—more than five Times what ProPublica spent—to build a site that doesn't work as well and is much less user friendly.

The ProPublica site features a simple search box beneath the question: "Has your health professional received drug company money?" The federal government's Open Payments site features a six-step instruction manual about how to search:

1.     Click on the file labeled, "General Payment Data with Identifying Recipient Information – Detailed Dataset 2013 Reporting Year." This will display a table where the first column reads, "General_Transaction_ID."
2.     To the right of the table you will see a sidebar labeled, "Filter."
3.     In the first white box, you will see "Teaching_Hospital_Name" and a down arrow next to it. Click the first down arrow (circled in red on the screenshot). This will open up a dropdown menu where you can "Select a column to filter by." Scroll down the list using the scroll bar on the right until you see "Physician_First_Name."
4.     Select "Physician_First_Name" and enter the first name of your doctor into the text box that appears under "Physician_First_Name." Press Enter or Return.

And so on.

Example number two: In August of 2013, President Obama announced that the federal government would create a new college rating system that would "give consumers clear, transparent information on college performance." The ratings would be based in part on "outcomes," including "graduate earnings." The idea reportedly infuriated college presidents, especially when an Education Department official likened the process to "rating a blender."

The federal site isn't yet up and running. But in the meantime, LinkedIn, the career network site, recently unveiled its own college rankings that track the performance of institutions of higher education based on how well graduates do at getting "desirable" jobs.

One reason that LinkedIn and ProPublica can create data-based applications faster, cheaper, and better than the federal government can is that they don't have to follow the absurdly cumbersome regulations that apply to federal contractors. Those regulations, known as the Federal Acquisitions Regulation System, govern everything from what qualifies as a "women-owned small business concern" to the Davis-Bacon Act mandating the payment of prevailing union wages to the requirement of "contractor policy to ban text messaging while driving." The regulations are so vast that, as of 2010, the Government Printing Office split them up into two volumes—Volume 1, in 1148 pages, and Volume II, in 630 pages.

Federal contracting reform is not exactly the kind of issue that generates passionate sign-waving crowds in the streets. In fact, the people who are most passionate about it are the existing federal contractors, who have invested a lot of money to comply with and navigate the current system and who aren't terribly enthusiastic about changes that would make it easier for other firms to compete.

The private sector is hardly entirely devoid of information technology foul-ups, as the spate of credit card data breaches attests. But none of those approach the data losses the federal government experienced in the Wikileaks and Edward Snowden cases, let alone IRS official Lois Lerner's vanished e-mails.

Maybe some day a politician will arise with an interest in federal contracting reform and the ability to articulate the importance of it in a way that will inspire congressional action. Until then, expect dot-gov failure after dot-gov failure.

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  1. ProPublica succeeded, most likely, because their tool was built by 4 people or less.

    The feds failed because they probably hired a contractor who assigned 40 people to the job.

    The likelihood that a new piece of software will be successfully developed is inversely proportional to the number of people working on the project. Call it Fluffy’s Law.

    1. It DOES NOT MATTER that we in government blow all the $ we take from you on a bad website; our IRS will just victimize more of you while you cheer us on for doing so.

      You Americans love this treatment from us.


  2. ProPublica succeeded, most likely, because their tool was built without a 1770 page document to “guide” them, and without them having to go through a disabled-black-veteran-woman-owned-lowest-bidder small business.

    1. you forgot to add LGBT to the list of qualified candidates

  3. Man, two volumes for contracting regulations? I think I will just wait for the movies.

  4. “One good reason to favor a smaller federal government that does less is that the private sector often does things cheaper, faster, and better than the government does.”

    …often does? Come on, Ira. Don’t be so mealy-mouthed, lame.

    Its not the best reason, anyway. The best reason is that the private sector does not depend upon force to finance or regulate consumer behavior. It depends upon volunteer decision making.

    1. ” It depends upon volunteer decision making.”

      Yeah, like robber barons having illiterate folks sign over mineral rights forever for a couple cents an acre!

      Cheers for volunteer decisions!

      1. Thankfully that doesn’t happen in the Socialist Workers’ Paradise of Europe. Why not? Because the state always owned the mineral rights. Yay State!

      2. Still better than the government just assuming its theirs.

      3. If you are illiterate enough to sign over any of your rights to somebody else then I understand why you love government.

  5. Oh my god this is so true it’s not even funny. I work for an organization that is ostensibly a “partnership” of various nonprofits, state governments, universities, and a few federal agencies. The EPA represents a significant part of the funding and is constantly throwing its weight around in an attempt to control the entire thing. One way this is done is by trying to enforce FISMA compliance everywhere they can, even where the information involved is publicly available, non-sensitive, and not a product of a federal agency. As a result, I spend two weeks explaining why you can’t set up automated unit testing for what amounts to a blog and why the web dev team isn’t obligated to clear design documents with EPA sys admins or to obtain their approval of our dev process or UAT.

    1. Just ask Richard Windsor to approve it.

    2. “I work for an organization that is ostensibly a “partnership” of various nonprofits, state governments, universities, and a few federal agencies”

      If you were a true libertarian, you’d quit that job and do a John Galt something….


  6. I started a couple web sites back in 1995 – one of which grew very large. I did everything myself on a very part-time basis.

    I knew a very smart gal who got her Engineering degree along with my daughter and went into high end internet consulting. Her and a team were hired to put together a site for one of GE’s divisions – at the time (maybe 1998), the budget was 2 million. The site never came to be, but those and many more millions were spent!

    The web, and software to a lesser extent, really did level the playing field to a degree…or even give the little guy a vast advantage since he could move quicker. Web sites by committee didn’t work back then.

    For the first 3 years of the web, there was only one job description – webmaster – because you didn’t need these vast teams of people for 99% of sites.

    Now that has changed. Now you need 4 or 5 people for a very large site, but 1 or 2 can do a very decent smaller one.

    But this is pretty damn obvious…..next thing, they’ll publish a story here about $600 screwdrivers!

    Let me save them the sweat. Large institutions of ALL types breed various inefficiencies. It goes with the territory. Then again, there are many thing individuals can’t accomplish – that’s why we created large institutions.

    I know…tough to get your head around. It’s like preaching the internet to Luddites.

    1. So you ramble through a personal anecdote about how small teams are more efficient and the large ones waste huge resources and you take away from that that we need more government.

      1. “So you ramble through a personal anecdote about how small teams are more efficient and the large ones waste huge resources and you take away from that that we need more government.”

        Not at all. People are always better at instant reactions…If I want a new web site feature, I can do it tonight…just install a new plug-in or add-on.

        Expecting the same out of the military, a university, a large corporation or the gubment simply is ridiculous.

        A dumptruck does very poorly off the line also. Tesla’s are so much quicker. Doesn’t prove anything except that comparing apples to oranges isn’t of much value.

        1. We could compare apples to Apple.

          Apple gets an OS out with remarkably few bugs when you look at the complexity of the code.

          Of course the difference is – if Apple screws up their OS rollout they lose money. If a government agency screws up their project, they *get more* money.

          As both the PPACA website and VA Hospital (at a minimum) fiascos have shown us.

          DHS can’t manage its budget and has *millions* unaccounted for, not to mention the actual misconduct in their spending and they just get a pass and a new budget.

    2. First, it’s interesting that your corporate waste example is coming from GE, one of the government’s favorites. Perhaps GE can afford to waste money because of their relationship with government.

      Secondly, in a free market, GE would waste its own money rather than someone else’s and could go out of business if they are too wasteful.

      1. One of my fondest dreams is of GE (the parasitic crony capitalist writ large) going belly up in a complete Chapter 7.
        Of course, no matter what stupid stuff they do, the government would bail them out, so that won’t happen.

        Notice that GE keeps getting out of business’ (appliances recently) that exist in a competitive marketplace to concentrate on business’ living in the government, or government-secondary markets.

        GE IS part of the government in the same way Volkswagon was part of the NAZI fascist government.

  7. I think one of the main reasons is that the feds cut up the job into numerous multiple contractors, instead of letting the private sector do it. Fewer moving parts mean fewer potential glitches.


    As someone who has actually worked for the fed govt for years, I can tell you that affirmative action is the reason why.

    1. Do you mean you WORKED for the government, or got PAID by the government?

      Just trying to be clear here.

  9. my co-worker’s mother-in-law makes $84 /hr on the internet . She has been without work for eight months but last month her paycheck was $21951 just working on the internet for a few hours. check out the post right here….
    ??????? http://www.paygazette.com

  10. my classmate’s mother-in-law makes $70 /hour on the computer . She has been out of work for eight months but last month her income was $13415 just working on the computer for a few hours. see this………….


  11. “Maybe some day a politician will arise with an interest in federal contracting reform, oh, you mean a candidate (like Ron Paul) who just wanted the government to do only what the constitution requires would not suffice?

  12. my friend’s sister makes $83 an hour on the laptop . She has been fired for ten months but last month her payment was $12435 just working on the laptop for a few hours
    Find Out More. ???????????? http://www.jobsfish.com

  13. No surprise. The company I work for looked at participating in government contracting about 20 years ago. Not worth it. To even bid, you pretty much have to agree to let the government crawl up your backside as far as it wants as often as it wants.
    Who’s left to bid on government work? Only those vendors who have large bureaucracies set up to deal with the government’s bureaucracy. And do you think that large bureaucracies are free? It’s a lot of up front cost to amortize.
    Is it a wonder that we buy $600 toilet seats for aircraft?

  14. Well! as you may see, The federal government’s Obamacare enrollment system has cost about $2.1 billion so far. However, It’s features and services are not really impressive. I am running a web design company in Minneapolis, MN (here is my website: http://www.proweb365.com/services )…I believe that if I have a chance to develop Obamacare website..It will cost much cheaper than $2.1 billion. Government website cost much because they have a lot of money.

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