When the government, or anyone for that matter, spends $100 billion annually on information technology, you’d expect transformative results.
Instead, we get a masterclass in institutional capture. It’s clear the federal government is serving the best interests of massive software companies, not taxpayers or federal workers.
Instead, the federal IT landscape resembles a graveyard of ambitious projects.
The Department of Veterans Affairs electronic health records modernization project has consumed $16 billion with projections reaching $50 billion. Yet, basic functions like appointment scheduling remain broken. The Pentagon abandoned multiple HR system overhauls after spending hundreds of millions of dollars and waiting over a decade.
The Department of Homeland Security has been “modernizing” its HR infrastructure for 20 years.
These failures reward systematic entrenchment, complexity and vendor relationships at the expense of innovation, functionality and public service.
In other words, technology companies are eager to gobble up multibillion-dollar contracts, with little effort and no real reward for the federal government.
The mechanics are straightforward. Legacy technology companies like Oracle, SAP and others have built business models that thrive on the government’s structural weaknesses.
Software companies understand all federal agencies operate with extreme risk aversion, have limited technical expertise and that the procurement process is designed for buying commodities, not complex software systems.
Take Oracle’s approach. After settling two False Claims Act cases for systematically overcharging federal agencies, the company evolved its strategy.
Now, their approach involves intricate licensing agreements, making routine IT changes feel like navigating a legal minefield.
Agencies therefore become paralyzed in fear of upgrading hardware or moving to cloud services, believing it might trigger audits demanding millions in unexpected fees.
This creates a perverse incentive structure; clearly, such corporations are taking advantage of the federal agencies’ fear.
Inevitably, vendors profit from prolonging dependencies. An agency locked into a complex ERP suite generates steady revenue through maintenance fees, support contracts and periodic “modernization” initiatives that often just migrate problems to newer platforms.
The Government Accountability Office designated federal IT management as “high risk” since 2015, and have documented a clear pattern: Agencies are spending 80% their IT budgets maintaining obsolete legacy systems.
This leaves insufficient funding for critical modernization and innovation initiatives, resulting in agencies paying a premium price for stagnation rather than advancement. As a bonus, millions of taxpayers’ hard-earned money is wasted.
Why does the federal government ignore their reports? The alternative, changing vendors and operational disruption, feels like the worse alternative.
Adopting open-source alternatives requires building internal expertise. Pursuing cloud-native solutions demands rethinking decades of accumulated technical debt.
So, agencies choose the devil they know. They sign another enterprise agreement, initiate another modernization project and hire another systems integrator. The cycle continues, even though agencies know their systems won’t ever improve and they are being taken advantage of.
Yet, pockets of progress illuminate a different path.
Some agencies have successfully deployed enterprise-grade open-source databases including PostgreSQL, discovering that community-supported software can match commercial alternatives while eliminating licensing headaches.
The Census Bureau built crucial 2020 infrastructure on open-source foundations, demonstrating that government can own its technical destiny.
Fortunately, legislative solutions and efforts by the Trump administration are emerging.
The proposed Strengthening Agency Management and Oversight of Software Assets Act, SAMOSA, would require comprehensive software inventories and independent license assessments, eliminating the information asymmetry vendors exploit.
President Trump has mandated the consolidation of common procurement items under the General Services Administration to root out waste and duplication.
The broader challenge transcends any single vendor or technology. It requires reconceptualizing government IT spending. Currently, technology is treated as overhead to minimize cost. This mindset guarantees mediocrity.
Imagine if we approach digital systems like we approach interstate highways or power grids. They become foundational capabilities requiring sustained investment, careful planning and public accountability.
Imagine if agencies could build and maintain technical expertise without losing talent to private sector salaries. Procurement could reward outcomes, innovation and public benefit, a win-win situation for federal workers and taxpayers.
The private sector has undergone multiple technology revolutions while government systems calcify. Companies once dominant through proprietary lock-in have been disrupted by open standards, cloud platforms and agile development.
Meanwhile, federal agencies remain trapped in contracts signed when flip phones were cutting-edge.
Other nations have modernized government technology successfully. Estonia provides digital services that make American systems look prehistoric. The United Kingdom’s Government Digital Service transformed citizen interactions through a consolidated user-centered design and modern engineering practices.
The path forward requires political will. It demands we acknowledge that current procurement systems, designed for an era of paper forms and mainframes, actively prevents modernization. We must accept short term risk for long-term capability and treating vendor lock-in as technical debt that compounds over time.
Here’s what we refuse to admit: Every billion dollars we spend nursing dying systems, is a billion we don’t spend building the government citizens deserve.
We’ve let critical infrastructure become someone else’s annuity. As a result, the world’s most powerful democracy runs on technology that would embarrass a suburban DMV. That should terrify us.
