Project vs Product Funding - by Jennifer Pahlka

A few months ago, I made a slide deck about the differences between funding technology as projects and funding them as products 1 . Every time I’ve shown it since then, people have asked me for a copy of the slides, so I thought I’d share them here in case they can be helpful more broadly. I also wrote up the narrative that goes along with them and included it in my Congressional testimony in January, so I’ve adapted that below. A link to the slides themselves is at the end.

As with most of what I talk about, this is nominally about technology in government but applies far beyond tech. We need to acquire ongoing capabilities, not static things, in lots of parts of government.

We procure and fund software as if it were static, and thus make it both worse and more expensive. This is best illustrated through a series of graphs, each one entirely fictional but representative of two fundamentally different approaches to funding software.

Government typically follows a “project” model. The following graph shows the number of staff who work on an IT project at its outset, as requirements are being developed, a request for proposal written, bids from contractors sourced and evaluated, and a winner chosen. The contractor, once hired, brings a team to develop the software based on the RFP, and the staffing levels (counting both internal and contracting staff) shoot up. There is a development period, followed by a short period of “user acceptance testing,” and then the project falls into “operations and maintenance,” (or O&M), which is generally a different color of money than the development funds. (This is a huge problem worthy of a separate discussion, but see here for a start.)

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