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Millions of Americans interact with the government and its programs through technology. Recently, Propel, a startup that lets Supplemental Nutrition Assistance Program recipients track their spending on their phones has come into conflict with Conduent, the private government contractor hired to administer web services related to the program. How are emerging digital technologies and capitalistic competition affecting the way Americans utilize these services? Josh Miller, the director of product for the Obama administration, now works in venture capital, focusing on working with underserved communities. He joined Marketplace weekend host Lizzie O’Leary to talk about the intersection of government programs, like, SNAP, and technology. The following is an edited transcript of their conversation.

Lizzie O'Leary: One of the things that I think is confusing for people is to try to understand how a great big government program like, say, SNAP, known to most people as food stamps, can adapt to the world we live in now. From a technological standpoint, how do people experience it? How do users experience it?

Josh Miller: So SNAP, for example, used to be print-out, essentially, coupons. They'd be little printed pieces of paper. In the late '90s, the government transitioned over to a system called EBT, which are essentially, you can think of —

O'Leary: Electronic benefit transfer. 

Miller: Yeah, you can think of them like debit cards. The underlying technology hasn't changed all that much since the late '90s. On top of that underlying system, there are various ways that citizens interact with SNAP. It could be signing up for the program, which often requires an in-person piece of paper or fax. It could be checking how much money you have left in the third week of the month because you need to get groceries for your family. So in some states, you have to call a 1-800 number, memorize your 10 digit PIN or whatever it is, hit pound and it will spit back out: "You have $7 and 28 cents left." And there have been a number of digital services, namely web sites and web services, that have been layered on since then.

O'Leary: One of the reasons that we're talking about this is a sort of fight between a startup company, Propel, that has been using an app to allow people to check their balances, do things like that, and the underlying government contractor that administers the program. And I guess I'm wondering, this sort of conflict between the cutting-edge tech version and the big kind of company that carries the government contract — how common is that when we think about how government programs are administered in the 21st century?

Miller: So the thing that completely blew my mind when I joined the administration, I was in retrospect completely ignorant —

O'Leary: And you came from the tech world.

Miller: I came from the private sector. I built a technology startup, sold it to Facebook, worked at Facebook. I thought because I read The New York Times and listen to NPR Weekend, Marketplace, that I knew how technology was built in the government. I was completely wrong in one big key area: Most government technology services are not built by the government. They're built by private-sector corporations — government contractors — on behalf of the government. So whether you're calling a healthcare.gov hotline and speaking to an individual or going to their website or you're checking your SNAP balance, that technology is actually not built by the government, it's built by private contractors. So I think that's incredibly important looking at a situation like the one you're covering today because you have to look at the incentives. The incentive of a private contractor, which is a private for-profit corporation, is to maximize the amount of money they make with as little effort as possible. If you work at the USDA and FNS administering the SNAP program, your mission and your incentive is to feed as many Americans as quickly and effectively as possible.

O'Leary: The Food Nutrition Service.

Miller: Yes. And so that tends to conflict at times.

O'Leary: I mean, this is sort of a fascinating question about government and capitalism and the different goals that they seek. Because if you wanted to take the purely capitalist perspective, you would say open all of this up and increase competition to multiple different companies to try to, you know, get the best experience for the user. And yet government runs with consistency. And I want to pay one vendor and make that something I can do year after year. Are there any incentives in government, do you think, to essentially have more capitalistic competition to make things better for citizens?

Miller: One thing that I found very surprising is that oftentimes when we wanted to build something there at the White House or in an agency, one of the biggest constraints was budget, was where's the money going to come from, the resources to fund this? Most of the time or a lot of the time, they were constrained because of the conservative view that there should be a small government. And one of the things I think that's interesting about that is that if you look at the amount of money we spend on contractors for any given service, relative to what it would cost if we had the talent in-house, we spend a lot more money on private-sector companies in the name of small government than we would if we had that expertise on staff. I don't want to romanticize the private sector. The takeaway from this interview should not be "We want Facebook or Twitter or the private sector to build government services." I think the world we need to get to is that we're increasingly living in a world of digital technologies being integral in our day-to-day life. It is very important that the government is as effective at building those services for citizen services as the private sector, and that's going to require more people in the government with those expertise, not more money and more attention flowing to "How do we offload all these government digital tools to the private sector?" And that's why I think we really need to look at procurement law and re-examine how we build technology in the government.

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Follow Lizzie O'Leary at @lizzieohreally