Investments in IT can enrich people’s lives and improve organizational performance. During the last two decades the Internet has matured from being a means for academics and scientists to communicate with each other to a national resource where citizens can interact with their government in many ways, such as by receiving services, supplying and obtaining information, asking questions, and providing comments on proposed rules. However, while these investments have the potential to improve lives and organizations, some federally funded IT projects can—and have— become risky, costly, unproductive mistakes. We have previously testified that the federal government has spent billions of dollars on failed and troubled IT investments, such as the Office of Personnel Management’s Retirement Systems Modernization program, which was canceled in February 2011, after spending approximately $231 million on the agency’s third attempt to automate the processing of federal employee retirement claims; the tri-agency National Polar-orbiting Operational Environmental Satellite System, which was stopped in February 2010 by the White House’s Office of Science and Technology Policy after the program spent 16 years and almost $5 billion; the Department of Veterans Affairs’ Scheduling Replacement Project, which was terminated in September 2009 after spending an estimated $127 million over 9 years; and the Department of Health and Human Services’ (HHS) Healthcare.gov website and its supporting systems, which were to facilitate the establishment of a health insurance marketplace by January 2014, encountered significant cost increases, schedule slips, and delayed functionality. In a series of reports we identified numerous planning, oversight, security, and system development challenges faced by this program and made recommendations to address them. In light of these failures and other challenges, last year we introduced a new government-wide high-risk area, Improving the Management of IT Acquisitions and Operations. 18F and USDS were formed in 2014 to help address the federal government’s troubled IT efforts. Both programs have similar missions of improving public-facing federal digital services. 18F was created in March 2014 by GSA with the mission of transforming the way the federal government builds and buys digital services. Agencies across the federal government have access to 18F services. Work is largely initiated by agencies seeking assistance from 18F and then the program decides how and if it will provide assistance. According to GSA, 18F seeks to accomplish its mission by providing a team of expert designers, developers, technologists, researchers, and product specialists to help rapidly deploy tools and online services that are reusable, less costly, and easier for people and businesses to use. In addition, 18F has several guiding principles, to include the use of open source development, user-centered design, and agile software development. 18F is an office within the Technology Transformation Service within GSA that was recently formed in May 2016. 18F is led by the Deputy Commissioner for the Technology Transformation Service, who reports to the service’s Commissioner. Prior to May 2016, 18F was located within the Office of Citizen Services and Innovative Technologies and reported to the Associate Administrator for Citizen Services and Innovative Technologies. In March 2016 GSA created a new organizational structure for 18F that centers around five business units. Custom Partner Solutions. Provides agencies with custom application solutions. Products and Platforms. Provides agencies with access to tools that address common government-wide needs. Transformation Services. Aims to improve how agencies acquire and manage IT by providing them with consulting services, to include new management models, modern software development practices, and hiring processes. Acquisition Services. Provides acquisition services and solutions to support digital service delivery, including access to vendors specializing in agile software development, and request for proposal development consultation. Learn. Provides agencies with education, workshops, outreach, and communication tools on developing and managing digital services. To provide the products and services offered by each business unit, 18F relied on 173 staff to carry out its mission, as of March 2016. The staff are assigned to different projects that are managed by the business units. According to18F officials, the program used special hiring authorities for the vast majority of its staff: Schedule A excepted service authorities were used to hire 162 staff. These authorities permit the appointment of qualified personnel without the use of a competitive examination process. GSA has appointed its staff to terms that are not to exceed 2 years. According to the Director of the 18F Talent division, after the initial appointment has ended, GSA has the option of appointing staff to an additional term not to exceed 2 years. GSA funds 18F through the Acquisition Services Fund—a revolving fund, which operates on the revenue generated from its business units rather than an appropriation received from Congress. The Federal Acquisition Service is responsible for managing this fund and uses it to invest in the development of 18F products and services that will be used by other organizations. 18F is to recover costs through the Acquisition Services Fund reimbursement authority for work related to acquisitions and the Economy Act reimbursement authority for all other projects. According to the memorandum of agreement between 18F and the Federal Acquisition Service, 18F, like all programs funded by the Acquisition Services Fund, is required to have a plan to achieve full cost recovery. In order to recover its costs, 18F is to establish interagency agreements with partner agencies and charges them for actual time and material costs, as well as a fixed overhead amount. Table 1 describes 18F’s revenue, expenses, and net revenue for fiscal years 2014 and 2015. Table 2 describes 18F’s projected revenue, expenses, and net revenue for fiscal years 2016 through 2019. As shown in table 2, according to its projections, 18F plans to generate revenue that meets or exceeds operating expenses and cost of goods sold beginning in fiscal year 2019. In May 2016, the GSA Inspector General reported on an information security weakness pertaining to 18F. Specifically, according to the report, 18F misconfigured a messaging and collaboration application, which resulted in the potential exposure of personally identifiable information (PII). 18F officials told us that, based on the preliminary results of their ongoing review, information such as individual’s first names, last names, e-mail addresses, and phone numbers were made available on the messaging and collaboration platform’s databases, which are managed by that application’s vendor. Those officials also stated that based on the preliminary results of their ongoing review, more sensitive PII, such as Social Security numbers and protected health information, were not exposed. They added that they are continuing a detailed review, in coordination with the GSA IT organization, to confirm that more sensitive PII were not made available. According to the Administration, in 2013 it initiated an effort that brought together a group of digital and technology experts from the private sector that helped fix Healthcare.gov. In an effort to apply similar resources to additional projects, in August 2014 the Administration announced the launch of USDS, to be led by an Administrator and Deputy Federal CIO who reports to the Federal CIO. According to OMB, USDS’s mission is to transform the most important digital services for citizens. USDS selects which projects it will apply resources to and generally initiates its effort with agencies. To accomplish its mission, USDS aims to recruit private sector experts (e.g., IT engineers and designers) and partner them with government agencies. With the help of these experts, OMB states that USDS applies best practices in product design and engineering to improve the usefulness, user experience, and reliability of the most important public- facing federal digital services. As of November 2015, USDS staff totaled about 98 individuals. Similar to 18F, USDS assigns individuals directly to projects aimed at achieving its mission. USDS has used special hiring authorities for the vast majority of it staff. Specifically: Schedule A excepted service. According to USDS, as of November 2015, 52 USDS staff members were hired using the schedule A excepted service hiring authority. According to the USDS Administrator, appointments made using this authority are not to exceed 2 years. At the end of that period, staff can be appointed for an additional term of no more than 2 years. Intermittent consultants. According to USDS, as of November 2015, 39 USDS staff members were intermittent consultants—that is, individuals hired through a noncompetitive process to serve as consultants on an intermittent basis or without a regular tour of duty. The USDS Administrator explained that some of these staff are eventually converted to temporary appointments under the Schedule A authority. According to its Administrator, USDS does not generally make permanent appointments for its staff because it allows the program to continuously bring in new staff and ensure that its ideas are continually evolving. USDS reported spending $318,778 during fiscal year 2014 and approximately $4.7 million during fiscal year 2015. For fiscal year 2016, USDS plans to spend approximately $14 million, and the President’s fiscal year 2017 budget estimated obligations of $18 million for USDS. In an effort to make improvements to critical IT services throughout the federal government, the Presidents’ Budget for fiscal year 2016 proposed funding for the 24 Chief Financial Officers Act agencies, as well as the National Archives and Records Administration, to establish digital services teams. USDS policy calls for these agencies to, among other things, hire or designate an executive for managing their digital services teams. According to USDS policy, the digital service team leader is to report directly to the head of the agency or the deputy. Additionally, USDS has established a hiring pipeline for digital service experts—that is, a unified process managed by USDS for accepting and reviewing applications, performing initial interviews, and providing agencies with candidates for their digital service teams. According to OMB, before using this service, agencies must agree to a charter with the USDS Administrator. Over the last three decades, several laws have been enacted to assist federal agencies in managing IT investments.