The Life and Death of Direct File [pdf]

It's unusually well-written, providing lots of key details or dropping in relevant context without ever losing sight of the big picture and the looming deadlines. I expected to just read the executive summary and then skim the rest, but it held my attention the whole way through.

Anyone wheeling and dealing along in the shadows between "politics" and "deliverable, functioning product" should read it. Or, I guess, paste the link into Claude or ChatGPT and ask it to summarize for them, lessons learned in bullet points and how it could apply to $their_job.

But I'm generally a weirdo who finds these kinds of reports fascinating, so don't purely go on my recommendation.

All I said was that the cost was higher for tax payers than private industry.

Would love to hear the opposite argument but the point I first saw online is saying the same, that it cost more tax payer money to run than it saved those tax payers.

Scale problem? Open to hearing the opposite argument.

- ~$50M all-in to build which sounds egregious but is small for a government project

- mostly good outcomes

- ~4y to pilot which also sounds egregious for a single moderate-complexity web app but again is practically lightspeed for a government project

People blame it getting shuttered on Trump but this is both a misread and a fundamental misunderstanding of how the government operates. The entire federal government is deliberately paced and primarily driven by a combination of politicals, regulation, budget, Congressional policymaking, and program staffing. The hammer on this was always going to fall,

[1] Congress has maintained a "buy over build" policy since literally the Cold War. Ironically the first policy here (1965) was to buy computers from ADP instead of custom-building them. The most impactful "buy commercial" policy (1996) was also IT focused. This was literally codified in several parts of the FAR, and if we're going to be blaming admins, the Trump admin has actually weakened the FAR with the RFO and would be on the other side of this issue.

[2] This policy is also the foundation upon which IT contractors like Palantir are built, if you've ever wondered "wtf do they do" they are a commercial contractor that builds custom software for government. So agencies get their custom stuff, Congress is happy they bought commercial, and the only loser is the taxpayer who overpaid a factor of 3-5x. To their credit, Palantir is a huge improvement on the status quo, because they charge by use cases and outcomes, whereas traditional SI's operate on a staffing model and a combination of high wrap rates and perverse incentives with billable hours creates horrible outcomes and ballooning costs. Anyways, there are a lot of commercial vendors that this work "could have" gone to and didn't. It would also have been really easy for them to shop this out because this was shaped really well for GSA MAS or STARS III.

[3] When you build things internally with e.g. 18F, one agency is typically the "customer" and pays the other agency (afaik 18F program is nested under the White House). So this really sucks when they walk away; 18F earned a reputation for building things through pilot, blogging about it, puffing their cheeks in the media, sending a bill to the agency, and then running off to the next shiny thing as engineers tend to do. As an agency you save a bit of money initially but now you are left with something nobody knows how to maintain, you have to hire contractors to do it, which by nature has to be a staffing contract, and then the wrap rate alone wrecks you. This happens all the time with commercial vendors, usually when they are outsized or don't get renewed, but obviously upsetting when it happens internally.

[4] The author of this piece was part of the team and so as you'd expect this piece is exceptionally biased. The reality is that the IRS self-assessed the maintenance as low and everybody who reports on this treats this as fact when it was not a GAO estimate, which is what carries any actual weight, it was internal IRS estimates and a single independent that mainly assessed call center volume not the actual system. Not only does their reputation precede them here, but their own spend on buildout (~$30M on contractors to help) contradicts the low maintenance narrative. We may never see a GAO estimate here, but the contract would almost certainly go out to TrussWorks, all government contracting data is public and you can look up for yourself how much TrussWorks typically charges the IRS whether directly or thru ATI's vehicles as subawards.