One way government agencies can stop wasting taxpayer money

Chances are you’ve heard the term “government waste” over the last decades. It’s become a go-to catchphrase for politicians, pundits, and others looking for an easy way to make headlines.

But for all the talk, there’s been relatively little research on what makes government programs inefficient. That motivated former Carlson School PhD candidate and current Assistant Professor at the University of Virginia Darden School of Business Dwaipayan Roy, and two co-authors from the Carlson School–Professor Kingshuk Sinha and Associate Professor Anant Mishra–to explore the causes and potential solutions.  

In a recent publication in Manufacturing & Service Operations Management, the trio examined 240 government technology programs run by 24 federal agencies and private contractors. Each program monitored its efforts against baseline metrics that included schedules, budgets, program scope, and the like. As they analyzed the data, they discovered that “rebaselining”—updating or modifying baseline budgets—was common. This delayed projects, expanded their scope, and drove up costs. 

What led to rebaselining? Sinha points to what the program is trying to do, “the broader the scope,” he explains, “the more likely it was that there would be rebaselining.”

Mishra says project management methods also play a role. “Execution methodology had a direct effect on baseline changes,” he says, adding that one approach—a process known as Agile—offered a telling example. In short, programs that embraced Agile had consistently higher rates of rebaselining.

To see why, it helps to understand Agile. In it, cross-functional teams collaborate by breaking project tasks into iterative steps and working in predetermined time periods known as “sprints.” The methodology originated in the software industry, but has moved into such fields as advertising and marketing, construction, finance, health care, and more. 

Agile can be an effective way to keep projects on track and on budget, but it’s not always easy to implement. It demands full organizational buy-in, rigorous adherence to its core practices, and painstaking planning. For every Agile success story (and there are many), you’ll also find plenty of failures. Still, the researchers found Agile itself wasn’t necessarily the problem. The real issue: The agencies and their contractors failed to correctly implement it. “For example, they often lacked sufficient upfront effort in determining the initial baseline,” says Roy. “They also relied too much on run-time modifications during program execution.”

Roy adds that finding the right people for the job is one solution. “Deploying managers with high levels of technical and practical program management knowledge is essential,” he explains. “That’s a critical competency, and it can help reduce the number of baseline changes.”

Sinha agrees, but adds that splitting up projects into clearly defined units of work is equally important. “Increasing the levels of granularity, along with better program management competency, can attenuate the relationship between program scope and the number of baseline changes,” he explains.

“That pushes program managers to think through resource assignment and create better divisions of labor,” says Mishra. “Both can decrease estimation errors and help reduce rebaselining.”

Put it all together, and it can lead to improved outcomes—and maybe even less talk about government waste. “The study findings are relevant to technology projects across federal agencies,” says Sinha. “And they can create significant savings in taxpayer contributions.”