John Petersen

How I Cost The Government $499 Million

It’s hard work as a founder of a growing company. I had an ever-growing list of critical to-do’s on my plate. I initially battled this by putting in ridiculous hours at the office. When the eventual realization hit that infinity hours per week wouldn’t be enough, I promised myself that I was going to focus on the top priorities. This meant that I was going to have to pass on opportunities that weren’t core to growing the business, and this is how it all began.

It was the first week of October in 2012, and a few members of my team decided to go to the NY Tech Meetup. After hours, non-work related team building definitely falls into the core category. I remember thinking that the lineup of teams presenting at the NYTM seemed better than usual, so I definitely had some high expectations for the event. It wasn’t until I got there that I realized that Todd Park, the CTO of the United States, was going to speak about some of the projects that they were working on down in Washington. Todd announced a project RFP EZ which would be a “web-based solution for small businesses to bid on high-technology government projects.” I immediately emailed Todd before he even left the stage to let him know that I wanted to be involved.

Todd responded 17 minutes later with an introduction to the person who was in charge of the RFP EZ project. I emailed this person to let him know how excited I was for the opportunity to work with the government on some amazing projects.

The project leader responded with the following 4 points:

  1. He complemented us on our company’s website (score!)
  2. He asked me not to judge him for building the project in PHP as they were "designing for maximum deployability" (I didn’t, even though I'm still not sure what that means)
  3. He said the only thing I could do to help them until they completed the project was tell my friends (I did)
  4. He said, and this is an exact quote, “You’re exactly the kind of businesses we want working on government stuff” (jackpot! although I'm sure he's used that line many times before)


So I made a note to follow-up with him in a few months to see how things were coming along with the project. I checked their blog a few times which had minimal updates and then gave up on the project. I dropped the ball.

Turns out they launched the site in January 2013 and it looks like RFP EZ is still up and running today, so they must be having some success, right?. This was my opportunity to win some small projects to build a relationship with the US Government, but I was busy focusing my priorities and trying to grow my business.

As a result of my focus, I missed out on the opportunity to build healthcare.gov.

My team at Firehawk Creative could have saved the US Government an awful lot of embarrassment and about $499,000,000 of the taxpayers money (by some estimates), by building them a site that actually works. I missed my calling. At a previous role, I became the go-to problem solver for the biggest failing projects at an international bank. These were multi-million dollar international IT projects with incredibly ugly legacy systems and some of them were certainly failing miserably. But, I'd jump in there, roll up my sleeves and get things done.

I'm confident we could have done the same for healthcare.gov if Obama had given us a call. With a $1 million budget and a several months, there is absolutely no doubt in my mind that we would have delivered on time (certainly wouldn't take 3 years), on budget (likely much under budget) and with a much better overall experience than what we see today. Startups take a seed round of funding and produce massive traction under conditions of enormous uncertainty. The big government contractors have virtually limitless budgets and either don't have the experience or don't have the proper incentives required to get the job done right.

As of right now, healthcare.gov is filled with massive glitches in all areas of the site. Jeffery Zients, who was brought in to fix the site, claims that the site will be ready by the end of November. I'm not so convinced, but I guess if you throw enough money at something, anything is possible. He is quoted as saying, “We’re now at 90%; 90% can create an account.” I know it’s a vast improvement from where it was, but that still means that 10% of the people who visit the site can’t even get past the account creation, let alone use the service for what it’s intended for.

I recently attempted to use the site to experience this all first hand. I was fortunate enough to be in the 90%, but I found another massive problem (that I’m sure they're aware of and is currently on a to-do list somewhere). I went through the entire process of creating an account and verifying my identity. I finally get to a page where I’m ready to continue on to the marketplace, but the giant green continue button doesn’t actually direct me anywhere. It just lets me click on it endlessly with no results. Wonderful.


I’m not here knock anyone down for the work that was done. I’m sure that they did the best that they could with the tools that they had available to them. This site could have been built as an amazing success story and a shining example of how government and small business can work together successfully. Instead, they bring in an army of private contractors who get paid insanely expensive contracts.

Can I ask why it was so necessary to build out an entire new infrastructure that couldn’t even handle a few hundred thousand signups? My friends at DigitalOcean could have helped us build out something that would scale to the moon for a fraction of the cost. Looking at the fact that there are so many problems with creating accounts and basic site navigation, I can’t imagine anyone feeling very comfortable that the site is actually going to produce accurate results.

Look, I understand the new rules created by Obamacare are difficult. We built out a project for a client that is being used by major healthcare providers right now to advise their users about the new penalties, tax credits and rates created by Obamacare. These rules are obnoxiously complex, but we built it on time and budget with amazing results.

I fully realize that healthcare.gov is a massive effort involving countless legacy systems with changing requirements and regulations up until the very end. My point is that there are incredibly talented people who could have pulled off this project for a fraction of the cost with much better results. This deeply upsets me as a taxpayer and as a person in technology who understands more about the development process than most. We need to demand more out of our elected officials and they need to be held accountable for their mistakes.

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