18F Built Login.gov for Less. Now the Same Code Costs Taxpayers More.

January's Purge: How 18F Fell in Weeks

The General Services Administration's Technology Transformation Services — 18F's organizational home — cut roughly two-thirds of its staff in January 2025, dismantling the federal government's premier digital-services team. A federal court order dated January 25, 2025, halted further separations and required the administration to preserve records. The case turns on whether the elimination complied with Office of Personnel Management regulations governing reorganizations and adverse actions.

The team had operated since 2014 as a fee-for-service consultancy inside GSA. The structural elimination, executed at unusual velocity, now faces judicial review that will determine whether the separations stand.

The Model That Worked: 18F's Fee-for-Service Engine

18F was built differently. It ran on cost-recovery rather than appropriated funds. It hired mid- and senior-level engineers under Schedule A and other excepted-service authorities for two- to four-year tours. It delivered open-source, user-centered platforms such as Login.gov, cloud migration, and procurement reform instead of custom builds for single agencies.

That model let the government recruit talent it couldn't otherwise afford. Term-limited technologists accepted below-market pay for mission and autonomy. The reimbursable structure meant partner agencies paid only for direct labor and overhead. No other federal IT shop operated this way.

Thomas Shedd's Playbook: From Tesla to TTS

The purge arrived with a leadership shift. Thomas Shedd, a former Tesla engineer, took control of GSA's technology division and moved rapidly to dismantle 18F. An all-hands meeting recording and transcript reference a "deferred resignation" fork directive, an attempt to use voluntary-separation incentives for speed that signaled private-sector restructuring tactics landing in a federal agency. The OPM deferred resignation fork directive was implemented at GSA TTS in January 2025.

The precise mechanics remain undocumented. The outcome is clear: 18F eliminated, its engineers scattered, digital-modernization work shifting to contractors.

Who Pays More: The Contractor Premium

When an agency loses internal digital capacity, the work migrates to GSA's contract vehicles. GSA Advantage offers "access to thousands of contractors with millions of products" across IT services. Government-wide acquisition contracts like Alliant 3 let agencies issue task orders for digital services on demand.

The cost structure shifts predictably. A federal employee's fully loaded cost covers salary, benefits, and agency overhead. A contractor's billing rate adds the firm's indirect costs, fee, and the government's contract-administration burden. For steady, well-defined work such as Login.gov operations, IRS modernization modules, and VA digital services, the premium compounds. The contract model incentivizes retaining billable staff rather than reducing scope. Task orders under Alliant 3 or similar GWACs need not publish unit-price comparisons against in-house alternatives, so the bill comes due in aggregate obligation data, not line-item visibility.

No public dataset quantifies the post-18F surge in Alliant 3 task orders or the specific billing rates charged for work 18F performed at cost recovery. The vehicles exist, the mechanism is established, the economic logic clear: the same code, deployed by the same people under a different employer, costs the taxpayer more.

Projects in Limbo: Login.gov, IRS, VA, CMS

18F's removal pulls the federal government's most experienced in-house digital team from active projects. Agencies have not published transition plans. Congress has not appropriated replacement funding. Courts have not ruled.

Login.gov — the shared identity platform built and operated by 18F engineers — serves agencies and citizens for benefit enrollment, tax filing, and veterans' services. Institutional knowledge of its architecture, security model, and continuous-deployment pipeline resides in the team that built it. No simple contractor substitute exists.

The Internal Revenue Service partnered with 18F on the Direct File pilot, a congressionally mandated test of free, government-run tax filing. 18F supplied agile delivery capacity IRS's own IT workforce could not. Recent IRS hiring shows taxpayer-facing and enforcement positions, not the software engineering and product specialties 18F contributed.

The Department of Veterans Affairs collaborated on VA.gov, the veteran-facing front door consolidating dozens of legacy sites. VA's hiring profile, with 1,936 hires in the most recent month and clinical roles dominating the top five (Nurse $124,827 median, Medical Support Assistance $57,605, Nursing Assistant $55,463), underscores its dependence on external digital expertise for the platform modernization 18F helped lead.

The Centers for Medicare & Medicaid Services engaged 18F on Medicare Plan Finder and FHIR API interoperability work. CMS's agenda depends on iterative, user-centered delivery, the methodology 18F pioneered, rather than the waterfall contracts that historically produced cost overruns and unusable systems.

The Department of Homeland Security added 1,465 hires. The Department of Defense brought on 1,032, with IT Management a minority among top roles. Across these agencies, when IT roles cannot be filled competitively, a chronic problem the tour-of-duty model was designed to mitigate, the default is a task order, not a vacancy announcement.

Across these agencies, the common thread was a working model: 18F embedded product managers, designers, and engineers inside agency teams, transferring capability rather than merely delivering code. With 18F dissolved, each agency must rebuild that capability internally, competing for scarce talent where private-sector compensation far exceeds federal bands, or procure it through the large systems integrators that dominate federal IT spending. The projects continue. The team that knew how to ship them does not.

The Precedent: Can USDS and PIF Survive?

18F's elimination reverberates beyond a single office. Founded in 2014 by Presidential Innovation Fellows, it completed more than 450 projects across 11 years. Its model — term-limited tours for technologists, funded through reimbursable work rather than direct appropriations — became the template for recruiting senior engineering and product talent without competing with private-sector pay.

The shutdown signals that model is vulnerable. 18F operated as a non-partisan civil service organization; in their final public statement, the team said they were "dedicated to the American public" and explicitly "not done yet." Dismantling it while courts scramble to halt the bleed shows even established, revenue-generating digital teams can be zeroed out without congressional action.

For the U.S. Digital Service and the Presidential Innovation Fellows program, built on the same premise that top-tier technologists will serve limited tours if mission and autonomy are real, the precedent raises a structural question: whether the federal personnel system can protect term-limited tech talent when political leadership decides the model is expendable.

The chilling effect on recruitment is immediate. Prospective fellows and USDS hires now face a demonstrable case where a team of 18F's scale and track record, including 450+ projects, reimbursable funding, and cross-agency demand, was eliminated by administrative action. The signal to private-sector talent: tour-of-duty service carries not only the usual opportunity cost of leaving industry, but also the risk that the institutional home for that service can be erased mid-tour.

For agencies that relied on 18F as a technical co-pilot, including Login.gov, IRS, VA, and CMS, the loss means losing a proven pathway to bring in outside expertise without the overhead and lock-in of traditional contractors.

Login.gov runs today on code its builders no longer control. The next crisis will be managed by contractors billing at a premium.