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Have you heard of Palantir?
Yeah, this is Palantir. Of course, recognizing that would take 20 minutes of wading through conspiracy theories and vague press releases :)
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Have you heard that many of these contracts come with preselected tech stacks or have to integrate with legacy systems that violate the standard your contracts have to adhere to? Your requirements will change every few quarters and those requirements may dictate a completely different tech stack? One lovely contract I worked on required C#, C++, and then Java. All within the span of 2 years. The actual project goals were so removed from the original stated goal that it would not have been even remotely recognized by the original project lead. That's good because the project lead changed three times.
I think this is an awesome idea on paper, but could fail to translate into a successful venture. Maybe it is because I am too cynical, however, there is so much friction in the market. It is the way enterprise was in the 80s. No one ever got fired for buying BigGov'tContractor. Quality may take a back seat (in terms of contract procurement) to political affiliation, personal network, and relationship.

Conversely, it would be great to see someone try this. The space industry (ine of the nost monolithic and change resistant industries) seems to be favouring privatization, cost, and reliability. Prove the cynics wrong!

Speaking from first hand experience I can tell you it would take a lot more than start-up culture to change the way the software is built for the government. For one, a lot of agencies are regulated by DHS or DoD on what is allowed, prohibited, and open for discussion. Another big, and I'd argue bigger issue, is that many of the people in positions to make these decision are nearing retirement and for them it is advantageous to award lucrative contracts to those companies that are likely to employ them or their friends later.
> Start it as a non-profit or an intentionally unprofitable corporation. > Hire better people. You’ll be able to compete with top startups for talent, because your startup work environment combined with the mission of making this country a better place will be a powerful call.

Not sure the "startup work environment" of macbook pros and free lunch will really help you compete against startups that offer stock options in a profitable company. Selling people on taking a worse deal in order to make the world a "better place" always seems disingenuous to me whether the goals are altruistic (help the American people!) or commercial (re-invent the tablet!)

If I put on my employee hat for a second, this is what the deal sounds like:

1. Work on uninteresting or incredibly regulation-encumbered projects that can't or won't be measured on customer satisfaction. Where do complaints about healthcare.gov go? How are you as an employee of the contractor that made it able to respond to those complaints? At least when its a product 1) people can go to a competing product (show failure), or 2) people can use it because they genuinely want to (show success) and not because its the only game in town.

2. No potential massive IPO (per the description here).

3. Very unlikely you'll get the actual cool perks of adding quirky features you guys come up with together from analyzing customers. Its probably going to be a super refined spec, decided by a bunch of politicians, and since you're working at the lowest bid anyways even if you could afford to work on cool genuine ideas you have, you probably can't afford it.

4. Huge potential for the project to fail for political reasons anyways. (or you'll have to work with other gov contractors on a different part of the project)

5. The reality that some component of the company will have to become good at the "gov contracting game".

www.palantir.com

Seriously, a point-by-point real world counterargument of your comment.

I'm relatively certain that despite not seeking an IPO, Palantir is not a nonprofit organization (a key part of the proposal in this article). Maybe I missed that memo though, can you point to their page so I can make a tax-deductible donation?
Maybe I missed that being nonprofit was a criterion here? But it that's the case, sure you're correct.
It was certainly 1) mentioned in the article and 2) a part of my critique (that I specifically quoted). And since Palantir is a "point-by-point" counterargument of my critique, I suppose it should at least be somewhat important.

Palantir is a for profit company that works on both commercial and government projects, and is valued at $9 billion. If you believe that that is in the spirit of what this article is proposing, then sure, I suppose this is the perfect counterargument. I think its pretty clear that Palantir is a very different company with very different goals than what is being proposed here.

The point of this article is creating a "for the common good" contractor with the aim of lowering bidding prices, and increasing software quality across the board, funded perhaps by donations, and certainly not having profitability as its primary driving force. Palantir is just another company, a very successful one mind you, that yes happens to make good government software.

Ah, I read the "start it as an... intentionally unprofitable company" as one that starts in the red but doesn't necessarily have to remain unprofitable forever.
They're not public, but I'm pretty sure they're not underbidding anyone. Nor are they bidding on the giant IT projects. Seems more like they're doing specialized work in niches where the government is actively seeking novel solutions (and by the standards of government contracts, these are small projects so they can get away with less specification).
The whole Palantir vs DCGS-A thing seems to fall under both the underbidding and large (although not massive) projects. They're definitely fighting an uphill battle for it though.
Palantir is the exception, not the rule. Most software built within governments, (I work on the finance side of tech projects for the city of New York) are basic crud apps that have to integrate with very old data systems. Most developers are "consultants" that are treated as code monkeys because managers have absolutely no idea about building software - for example, there was a CIO who didn't know what a stored procedure was and didn't understand why they exist after a developer spent time explaining what one was. There are smart developers working on projects, but they are typically not given the freedom to be creative.

EDIT: relevant essay by PG http://www.paulgraham.com/icad.html

I totally agree that it's the exception, but I think if it were the rule this article never would've been written.
And this is why I stopped working in gov.
I'm working with a company in this space, so here's my responses:

1. It's very rewarding to feel like you're doing civic duty. I think we have a real shot at reforming the way government percieves what's possible in government contracting.

Healthcare.gov is very rewarding to work on, because even though I'm super apolitical, I'd like to see people inside the government see that an order of magnitude cost reduction is possible, and people outside the government see that the government can produce good software.

Healthcare.gov anonymous shopper is a go and postgres app that has served >250mil visits. How is it not rewarding to serve that many people in getting their health care?

2. I've had my lottery tickets at other companies, I'm not worried about getting mine in an IPO any more. I never was part of a good exit.

3. Some of this is true, and some is not. Yes, you're not in total control of the product, because you're working with gov agencies. However, there's plenty of latitude to implement good user-focused software, especially when you're small and nimble.

4. Just like there's a huge potential for your IPO lottery ticket to fail. No different.

5. Just like some component of your startup will have to become good at the "VC schmoozing game".

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I don't know how you define "startup", but if you mean a Bay Area-based venture-backed software company with less than, say, a couple of hundred employees that's been around less may, say, five years, then they most certainly do. I have worked for two such companies that made a fair bit of money. One of them even had their own direct GSA schedule, if you think that going via a reseller doesn't count. (For the purposes of this thought experiment, of course it should.)
Several pieces of evidence point to this not being true:

There's a fairly large government program specifically designed to award technology and R&D contracts to small businesses. http://www.sbir.gov/ There's even a good bit of hand-holding through the process to make sure the business knows how to sell the resulting product.

I've also seen many, many dozens of sole proprietorships awarded non-SBIR contracts.

> The hardest part will be understanding the world of contractors

This point cannot be emphasized enough. I've dealt with Medicaid bids and the amount of regulation one must adhere to is unfathomable. This unfortunately makes his next point just as difficult:

> Hire the best computer scientists and data nerds to improve the government from the outside.

Data nerds want to play with data. Comp Sci folks love algorithms and novel implementations. Neither of them like reading 300 page annotated Word documents with multiple revisions about every little thing a system should do, especially when the requirements are not always rational.

So the missing requirement in this list is to first hire a bunch of experienced analysts, project managers, and people who can do the paperwork and make them the bridge between the client and the coders. I would love to work on pure tech. for complex Govt. problems but I do not want the headache of HL7 and MITA 3.0 requirements.

The moment you have a good business team, you will find willing developers. Without a business team with experience, connections, and negotiation skills, you will have a hard time building the product, let alone sell it.

I cannot emphasize this enough. To bid for a government contract is a MASSIVE undertaking. Just to win the bid is very, very difficult. The RFP, RFQ, ITB are just a small part of the process and the evaluation process of each bid is not merely the lowest price, but also a combination of responsiveness, history of responsibility and the politics of a selection committee.
> the politics of a selection committee.

Working in government and having to deal with these things on a day to day basis, you couldn't be more right. Also, it doesn't help that people hate when they have to be a part of a selection committee.

I'm in the process of looking at this space, and the approach we're thinking of taking is starting with smaller/local municipalities first, vs larger orgs (and larger contracts).

We're in the learning process right now, to see if there's any interest/demand. One of the things that's come up is the RFP review process - even at county levels, I've been surprised at how... paper-based it still is, and even more surprised that people seem willing to change to e-processes.

Anyone that has any more info/insight on local gov bid processes and willing to share insight, please hit me up.

tia :)

As a former contracting grunt, my understanding is that the smaller groups tend to have no money and be at least as disorganized as the big ones. I saw several small companies trying to work their way up, and their method of choice seemed to be subcontracting to the big contractors to help meet small business requirements.

It helps if you manage the tick the disabled-minority-veteran boxes, because then you have a better shot of getting some of the small business setasides.

And hey! If your small business manages to become prime on a contract, you'll find that Raytheon or Lockheed or Boeing will be willing to sub to you...

My email is in my profile - don't know if I'll be able to help but feel free to reach out with any questions and I'll do my best to answer.
actually, I don't see it there - mine is mgkimsal@gmail.com
Few municipalities and counties do a lot of bespoke software work -- most of their contracting hours go either to configuring and integrating COTS systems that handle specific aspects of their operations, or doing reporting out of those systems. The lion's share of their IT dollars go to licensing the systems themselves, so if you really want to get into the municipal space, find an underserved departmental need and establish yourself as a player in that space.

States are more complex, as the agencies are larger and generally have more specific needs; you can do more custom software work, but your best bet is to get embedded in an agency and learn their processes and systems extensively. I don't recommend trying to break out of a governmental "level" (local to state, state to fed) -- totally different contracting environments, and your time is best spent learning your given market very well.

After that, it's a lot of sales efforts and searching for/responding to RFPs. Your best bet is to get onto state purchasing lists (similar to GSA, but generally with a lot less red tape), as most states will let cities and agencies skip the bid process if they're buying off an approved vendor list. If you have to go through bid, the very best thing you can do is get a champion with purchasing authority and let them know exactly what your product does that the competitors don't -- it's very common to write bids so that they end up targeting a single vendor, but you have to have valid and meaningful differentiators (not always technical -- don't forget that bids encompass not only software but also support and consulting!) for the bids to pass muster. If you're looking for competitive intelligence, you can generally get access to city and state contracts under sunshine laws -- these will tell you not only what the pricing is in your market, but also what cities and agencies are looking for in their bids.

This may or may not apply, but female-, minority- and veteran-owned businesses (so-called "historically underutilized businesses," or HUBs) are usually a plus when bidding, as are small disadvantaged businesses. I strongly recommend checking out getting SDB or HUBZone certification from the US Small Business Administration if you think you qualify -- it'll open some doors for you.

However, the _SUB_contractor space is very open to competition. And once you get your foot in the door, the government has all sorts of incentives for "small businesses" who want to act as prime.

Understanding the contracting world begins at step one: understanding the bureaucracy. And due to "small business incentives", small businesses have legal advantages that no "big company" are ever given.

https://www.sba.gov/content/register-government-contracting

Not saying that it is easy, but seriously. SBA.gov should have been the _first_ link on that page. Navigate the bureaucracy, define your business as a small business, and start bidding on some subcontractor deals to get your foot in the door and build up a history.

(I worked on healthcare.gov)

Some of my colleagues are doing just this. Stay tuned.

As a former CfA fellow and civic-tech startup founder, this is a very intriguing comment. Would you like to say more?
This won't work in the US. The problem is the way government contracting works. Government Digital Service in the UK has managed to reform things there because they demanded and got to control the way the UK contracts for software. The whole nice 18F folks in the US are great people but they lack the power to fix anything.

FUNDAMENTAL CONTRACTING AND BIDDING REFORM IS NEEDED.

It's a good idea. The existence of other groups trying it underlines that it IS a good idea, and you might be able to start working on it today.

Others have mentioned Palantir (for-profit) and 18F and USDS (within the federal government). Other groups to check out: Code for America (non-profit) and Department of Better Technology (for-profit)

I'm not getting the impression that the OP understands the nature of government contracts and the underlying incentives that have shaped things to be the way they are. Lack of free lunch and Mac book pros has nothing to do with the problem. I'm also skeptical of any company who's sole customer is government. A better idea would be to start a service to help existing reputable companies break into government contracts to offer more competition.
Don't you have clauses requiring X years of existence, Y number of previous projects of a given size or Z income per year in government RFPs? They exist in my country. You could think they are thought to avoid two guys in a garage to win a contract where you ( the government) want to hire a reliable company that can deliver and support the product. Or you can think it's just another way to tailor the RFP to that same big companies every time.

T

I'll throw my hat in with all the other people who aren't being negative, they are speaking truth. Even if it is equipped to produce a better product, a startup is unlikely to win any government contracts for a few reasons.

First, one of the things that contract selections are based off of are a history of performance. A startup has no history, so they better get some civilian projects under their belt before they start competing for government work.

Second, the government is accountable to its people, and the way that government acquisitions proves that it is being good stewards of the people's money is by hiring companies that can "prove" they aren't going to waste it. That means that your company has to meet several ISO XXXX standards, your company must be certified lean, you must be at least level 3 in the capability maturity model (CMM, which again requires a history of performance), you have to have six sigma black belts on hand, and a whole host of other crappy certifications that you have no choice to go out and get.

Plus, you have to employ a certain percentage of minority races, women, and handicapped people, or you won't get the contract -- while this sounds like it isn't a big deal, look around the startup space and you'll see that it is made up overwhelmingly of white males.

By the time you meet all these requirements (and there are a whole host of nitpicky other things to think about like the contracting process and myriad laws) and still have enough talent on hand to actually make a product, you are no longer a startup. Competing for government contracts is not the way to go for a startup. It is not a system set up to give the little guys a shot.

Source: I am a mid-level certified government (military) acquisitions professional (if you want details I am lvl I in program management and science and technology management, and lvl II in test and evaluation-- certified by the "Defense Acquisition University" which isn't a real university and required by DAWIA -- a congressional act that regulates a lot of this stuff). I am 26 and have taken over 400 hours of acquisitions training in addition to my master's degree. And I'm just the one doing the math/stats work when we test new stuff. The program managers have to navigate a minefield of bureaucracy every day, trying to prove to the taxpayer that we aren't wasting their money. Ironically we end up wasting a lot of money trying to prove that we aren't wasting it.

based in San Francisco

Nope. SF is not the center of the universe.

We're about 1 year into a experiment to do just this. A year ago we founded Ad Hoc LLC, after working on HealthCare.gov; our idea was to bring the very best in private-sector engineering to government projects. Based on what we've learned over the past year, I do think creating a top-notch engineering organization is incredibly important. But, the problem of getting work is not to be ignored.

The procurement process is absolutely the biggest problem we face. The idea that the government puts bids out to an open market and therefore gets the best quality and price is a fable. Most contracts go out to a pre-selected group of companies, are are shaped to fit into the models these companies provide. There are some positive changes happening both at individual agencies and at the broader federal level as to procurement reform that look positive, but by and large this is still the biggest obstacle to getting in the game. Subcontracting is a better option to start.

We absolutely need more companies in this space, both in the product and services arena. The more companies, the more agencies will feel comfortable adopting contracting practices that are geared towards these companies rather than classic contractors.

If you're a senior level developer or UI/UX designer interested in helping people get health care and Veterans get benefits, please be in touch with me; we're hiring and have a lot of really interesting work. Experience with Go, Rails and AWS are a plus, but any significant experience in web development or design/UX will do.

Wow. I could have sworn you were writing about us...

I'm part of a small team of expats from Silicon Valley that came out to DC last year to help fix healthcare.gov. (Mostly Stanford, Google, YCombinator folks) We started our company, Nava, to bring the best of SV startups to DC and create software that radically improves how our government serves its people.

Our trajectory is very similar to what you've described, with some tweaks that I won't go into here.

In the last 6 months, we've launched 2 major projects:

- App 2.0, the new insurance application for healthcare.gov. It's processing 70% of apps coming through the marketplace, and: converts 35% more people than the old app, gets them through in half the time, is mobile-friendly (20% of apps), sits on robust, scalable infrastructure, etc etc. It was the first system that CMS (Center for Medicare and Medicaid Services) ever hosted on Amazon AWS.

- Scalable Login System (SLS), the new identity management system for healthcare.gov. Sadly, the main achievement here is that the system is actually up and available, unlike its predecessor. It's now saving the taxpayer $70M in annual maintenance costs.

Here's a Wired article from last summer about us:

http://www.wired.com/2014/06/healthcare-gov-revamp/

Our momentum is strong, the problem is important, and we're looking for good people.

If you're the type that would get fired up about reimagining broken government experiences and technology, please drop us a line at jobs@navahq.com, we'd love to hear from you!