Washington's version of Silicon Valley startup founders

The Obama administration's "18F" program to create its own version of a high-tech startup for government digital projects has foundered since its launch in 2014, losing nearly $32 million as its staff spent most of its time on unbillable work, according to a new inspector general report published Monday. The comparisons to some Silicon Valley startups were stark: Senior 18F managers overestimated the amount of money their projects would recoup; increased hiring using special rules every three months since April 2014; and devoted less than half the program's staff time on projects for which it could bill other federal agencies, the report said. It noted the 18F program has "struggled financially" and "has not developed a viable plan to achieve full cost recovery."

In one case, 18F hired a full-time head of state and local government practice at an annual salary of $152,780, even though at the time, 18F was not authorized to work directly for state and local governments.

The program, named after its Washington street address, was intended to create an elite branch of the General Services Administration with creative, tech-savvy employees who could quickly re-engineer any government agency's website or improve other digital projects. At a time when federal departments were cutting budgets, it was funded under a model that envisioned it would earn back more money than it cost to run. The 18F unit was informally related to the administration's new U.S. Digital Service, which helps manage government technology projects. The 10-month investigation by the GSA's inspector general found that 52 percent of 18F's work was unbillable and included an internal project to change its logo by altering its font, alignment and background color.