Why states pay full price repeatedly

Patrick McKenzie (patio11) and Luke Farrell examine the structural "technical imagination" gap that prevents the US government from delivering high-fidelity digital services. They discuss why states routinely pay full price 29 times for the same buggy codebase, why failure is the default outcome, and why rooms full of government administrators cannot muster the expertise to say a two line code change should be trivial. They also discuss Luke’s work on the "means testing industrial complex,” why the government redundantly pays a private vendor to do a SQL query for information the IRS already knows, and what vendors would say about their own discontents.

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Full transcript available here: http://www.complexsystemspodcast.com/understanding-government-procurement-with-luke-farrell/

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Links:

• Luke Farrell's Substack: https://donmoynihan.substack.com/
• Luke Farrell, The Means-Testing Industrial Complex: https://donmoynihan.substack.com/p/the-means-testing-industrial-complex

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Timestamps:

(00:00) Intro
(01:52) Transitioning from Google to the US Digital Service (USDS) 
(05:18) How rule buildup and administrative burdens create "Kafkaesque" mazes 
(08:21) Using diagrams and funnels to visualize benefit denials 
(11:49) Software logic errors that improperly kicked children off Medicaid 
(18:25) Why government payroll IT costs hundreds of millions of dollars 
(20:02) Sponsors: Mercury and Framer
(22:02) How recursive legal requirements and DOD standards inflate IT scope 
(26:57) Market consolidation and the lack of competition in procurement 
(33:47) Aligning program administrator incentives with successful service delivery 
(36:03) Using in-house technologists to push back on vendor change orders 
(39:27) Shifting from "Big Bang" contracts to iterative, agile development 
(53:10) The moral incoherence of asset limits 
(01:11:36) Insourcing electronic income verification databases 
(01:16:56) Building public sector competence to manage modern technical risk 
(01:20:08) Wrap