Sunday, April 7, 2013

What Has Your Government Screwed Up Today?

Government action in a Republic is subject to politics and bureaucracy, by definition.  It should attempt nothing that can be performed by the private sector, because politics and bureaucratic rules will cause its efforts to fail.

This news was filled with examples last week.

First, the City of El Cajon is out $600K over a loan made to a brewery as part of an effort to revitalize the city center.  Hey, why not a brewery?  Maybe because San Diego already has over 30 breweries, almost Belgianesque.  Now the brewery is closing after being unable to emerge from bankruptcy.  In the comments section of the linked article, Stephen Meadows, the owner, is called a con man by someone who appears to be his brother.

Meanwhile, at the Federal level, Fisker Automotive, which took a $529 million loan in 2009 to build luxury electric cars in Finland, laid off about three quarters of its work force as it "worked through financial difficulties" like no buyers for its cars and preparing for bankruptcy.  To be fair, it did not receive all of the proceeds from that loan, but the company does owe the $129 million to the DOE.

Various provisions of the Affordable Care Act are unlikely to be implemented on time, proving that even if we had read the bill, we still wouldn't know what was in it.  This week? The federal government's health insurance marketplace for small businesses, SHOP, will be delayed, with no reported date of delivery.
The reason for the delay is likely that the government "underestimated a logistical challenge inherent in getting these exchanges up and running," said Bob Graboyes, senior fellow, health care, at the National Federation of Independent Business, a small-business lobbying group in Washington that opposes the law. 
"The information-technology needs required to get these up and running are staggering," he said. "They didn't leave enough time and they underestimated the extent of the task."
I am an IT Manager for the federal government, and I know that even the simplest system is complex to deliver, because government regulation requires reasonable assurances about system security and performance.  But this is a reason to let the private sector do this job.  Further, the government's IT will always fall short for a system like this.  In the private sector, the business has a vested interest in understanding the translation of complex business processes into IT functional requirements.  In fact, business engagement with the IT team is one of the key predictors of IT project success.  However, the federal government is acting as a middleman in this application.  There is no one who really has a business interest in the successful outcome of the system.  I doubt if they will ever build a reasonable IT system.  The alternative will be a very expensive hybrid manual system.

Even though I loathe the idea of the government running an exchange at all, a better solution would be to bid out the business function of running the marketplace and give a cut of the action to the winning bidder.  Then there would be a business with a vested interest in assessing cost, schedule and performance trade-offs necessary to deliver a reasonable system.  It's cheaper to give a business a cut of the action than the billions that will be wasted on a system that is never really going to work.

Putting a bow on this; if only microbreweries needed complex IT systems, maybe I could go to work in my ideal industry in the private sector.

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