After spending the last two years as the darling of the White House, the U.S. Digital Service, in its current incarnation, is not long for this world.

The size and reporting structure of the USDS is expected to change in the coming months under the Trump administration.

It seems after two years of calling its own shots, the Trump transition team recognized the need to rein in USDS.

A source with knowledge of the Trump transition team’s planning said USDS in its present form will not persist under the new administration.

The source, who requested anonymity in order to talk about the new administration’s plans, said Trump transition leaders believe an organization like USDS is important and necessary. But the source said the transition team is considering reducing the size of USDS from more than 200 to a few dozen technology experts.

“In its present form of nearly 200 people, it’s just too big and uncontrollable and an organization independent of the technology bureaucracy will not persist,” the source said. “It’s also highly unlikely USDS will be funded as they requested. There is a belief that this group not reporting to the chief information officer of the government is not a successful or appropriate approach.”

The Office of Management and Budget changed the reporting structure of USDS on Dec. 12. An OMB official said making USDS a separate office that reports directly to OMB’s deputy director of management “better reflects the current structure while continuing to foster a close collaboration between the offices within the management team.”

When the Obama administration first created USDS in August 2014, the office reported to the federal chief information officer and Mike Dickerson, the USDS administrator, was a politically appointed deputy CIO.

But over time, multiple sources say Dickerson and federal CIO Tony Scott’s relationship deteriorated. Dickerson would use his relationship with former White House Deputy Chief of Staff Kristie Canegallo to bypass Scott’s oversight.

“USDS leadership would frequently go around the deputy CIO, the CIO, the Deputy Director for Management, the Director of OMB, and the White House deputy chief of staff to bring issues to the President,” said a former government official, who requested anonymity in order to speak more candidly about USDS. “After this happens several times and there are real questions about USDS’ ability to produce on the ground, then the question becomes, ‘We created this monster with a personal relationship with the President and how do we rein it in?’”

Meeting spirit and intent of FITARA?

And moving USDS out from under the federal CIO also begs the question whether OMB is following the spirit and intent of the Federal IT Acquisition Reform Act (FITARA). If OMB is bifurcating the office that manages the policy and budget from the office that does operations, doesn’t that fly in the face of what Congress was trying to address with the IT reform law?

Trevor Rudolph, who served as the chief of OMB’s Cyber and National Security Unit for five years and now is chief of business operations and cybersecurity for a cyber startup called Whitehawk, said the support for the USDS mission is widespread.

“I think placing USDS under the DDM is a mistake as it undermines the federal CIO and only perpetuates inefficiencies in our bureaucracy where you have one team overseeing the federal IT portfolio and another team actually operating on that IT portfolio and those teams need to be one in the same,” he said.

Repeated attempts to contact Dickerson and his deputy Haley Van Dyck through OMB, through LinkedIn, through Facebook and Van Dyck’s personal website were unsuccessful.

Dickerson wrote in a goodbye letter posted on Medium on Jan. 17 that his two-plus years in government were some of the hardest and most enjoyable of his professional career.

“When I look back on the last two years, I’m astounded by how difficult this work has been to do, but those struggles pale in comparison to the positive impact the team has made on the lives of millions of Americans,” Dickerson wrote. “Leading the U.S. Digital Service has rarely been fun, and has always been hard, but today I thank everyone I’ve shared this experience with.”

Nick Sinai, a former federal deputy chief technology officer, who along with many other colleagues in the White House, helped set up the USDS before he left the White House in November 2014.

He said the move to the DDM was less about relationships and more about the recognition of the important work USDS is doing, and a reflection of how they work.

“My understanding is that the move was part of a longstanding plan to institutionalize the USDS, and it’s also a reflection of their operating reality,” said Sinai, who now is an adjunct professor at the Harvard University, John F. Kennedy School of Government and a venture partner with Insight Venture Partners. “I would argue that USDS is remarkably successful in saving lives, saving taxpayer dollars and otherwise taking massive IT projects and steering them back on course — some of which are known and others of which are unknown to the American people.”

Sinai said the USDS model of executing hands-on engineering engagements with high priority agency programs is different than the mission of the Office of the CIO, which is to set effective IT policy for the federal government and oversee the entire IT budget.

Sinai said USDS already works closely with many of the management offices in OMB, because agency programs depend on effective IT policies, personnel policies, procurement policies and performance management. Reporting into the DDM actually makes a lot of sense, according to Sinai, since the DDM has visibility into all of these pieces — as well as the agency program priorities, via the President’s Management Council.

He said from what he’s heard at the agency level, the Trump transition team has been impressed with USDS and agency digital service teams’ results.

USDS outlines most impactful projects

USDS highlighted some of its best work in a new report to Congress.

The report details USDS’ efforts on 11 projects, including HealthCare.gov, IRS’ Get Transcript cyber breach and the Defense Department’s travel system upgrade.

“The central focus of USDS is on the measurable improvement of the performance and cost-effectiveness of important, public-facing federal government digital services — via the application of modern technology best practices,” the report stated. “USDS has developed procedures and criteria for prioritizing projects, which includes obtaining input from OMB’s IT Dashboard, agency leadership, and relevant U.S. Government Accountability Office (GAO) reports.”

But others questioned USDS’ efforts.

Many current and former federal IT officials say USDS grew too big too fast and didn’t provide the type of expertise or service initially envisioned by the administration.

“In the past, USDS didn’t seem that well aligned to agency needs,” said one government source, who requested anonymity. “In the past, it wasn’t clear how agencies could tap into USDS’ assistance —including one time when Mikey Dickerson said to an agency CIO and the federal CIO that USDS was too busy to help an agency with an important four-month transformation effort because they were doing a Fast Company photoshoot.”

These anecdotal stories are not rare. While the Government Accountability Office found in June that agencies were satisfied with USDS’ efforts, there are plenty of agency IT executives who were hoping to tap into USDS only to be told they couldn’t help.

The government source said there were several instances where USDS rejected requests for help from agencies.

“A CIO and his team at a different agency were asked by USDS for advice — that CIO recommended USDS focus on remixable, modular, cloud services that could be reused across agencies. For example: why do departments and agencies have different, non-interoperable HR systems or finance systems?” the source said. “USDS’ response at the time was reusable, modular, cloud services ‘weren’t sexy enough for Silicon Valley’ and USDS’ employees.”

The official said that agency CIO had other employees from Silicon Valley who were happy to help with the project, countering USDS’ “negative attitude.”

An industry source said they found USDS’ report to Congress highlighting its work a bit odd because it showed they weren’t necessarily taking on the hardest IT programs in the most need of help.

The source said it seems that some of the brightest minds in Silicon Valley should be on projects where the impact would be greater.

House lawmakers offered similar criticism during a June hearing, wondering why USDS hasn’t taken on projects on the Government Accountability Office’s high-risk list.

Secret cyber SWAT team?

The industry source said one reason that the projects on the surface weren’t that exciting is USDS is spending more time on cyber problems.

“I’ve been told they are a presidentially directed cyber SWAT team which goes in and addresses vulnerabilities in systems and agencies. Many of these cyber problems we never hear about,” the source said. “That would explain a number of things, like these are just side projects so it looks like they are doing something.”

Other sources denied USDS being a secret cyber swat team — though it would be cool if they were.

But one former government official said about a quarter of the USDS staff were highly technical with cyber credentials. The source said they did work on cyber issues related to projects and programs, but they weren’t a secret SWAT team.

“USDS was never a team player in the development of the administration’s cyber strategy or plans,” the source said. “I think they saw these efforts as far too strategic to understand and far too unsexy to engage in.”

Sinai disagreed with the idea that USDS didn’t take on important projects.

He said many of the projects were high-profile and part of the administration’s goal to improve citizen services, including projects that focused on veterans, students and IRS taxpayers.

“The fact that USDS has been successful and grown quickly is because Mikey, Haley and their teams have been able to avert crises and help cabinet secretaries with high-priority projects,” Sinai said. “Did it grow quickly because Mikey is just a cranky guy with unusual access or because they knew what they were doing and were successfully fighting fires — some of which they could talk about and some which they can’t? Mikey got where he is because of his ability to recruit small teams of exceptional engineers, designers and product managers to tackle hard problems in concert with talented civil servants.”

Several sources believe the move under the OMB DDM is about survival.

“This might be USDS ‘reading the tea leaves’ with the new administration and if USDS is to continue to survive it must be aligned to helping meet presidential priorities in partnerships with the agencies,” the government source said. “Now in the future, when an agency indicates it needs assistance with a presidential priority, OMB which oversees agency budgets can make sure the agency gets the IT funds it needs, or gets a portion of USDS’s time via the DDM, or a mixture of both.”

We still are waiting for so many details of how the Trump administration will address USDS and other Obama technology initiatives. In the short term, we know Matt Cutts, who joined USDS a few months ago, is the interim administrator. Cutts wrote in a blog post on Jan. 18 that he planned to stay only three months after leaving his job at Google, but saw the impact USDS is having and decided to stay on.

“Working for the government doesn’t pay as well as a big company in Silicon Valley. We don’t get any free lunches. Many days are incredibly frustrating,” Cutts wrote. “All I can tell you is that the work is deeply important and inspiring, and you have a chance to work on things that genuinely make peoples’ lives better. A friend who started working in this space several years ago told me ‘These last five years have been the hardest and worst and best and most rewarding I think I will ever have.’”

One possible option is to reduce USDS down to a few dozen people and move the rest of the employees to digital service teams within the agencies. This would allow these experts to understand the agency’s culture, report directly to the CIO and take on projects where there was a consensus. The Obama administration’s State of Federal IT report said eight agencies hired a digital services expert, up from just two agencies in 2015 — meaning agencies understand the value of these experts and are looking for more of them so a move from USDS into the agencies would be a logical way to rein in USDS.

“I think there are a lot of people who truly believe in USDS’ capability,” the former government official said. “But what has rubbed people the wrong way is not necessarily the access one person had versus another, but USDS’ attitude and way they went about what they did. It all comes down to a fundamental disagreement about how someone goes about their business.”

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