Obamacare

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.

(White House Flickr)

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.