The billions spent on government remote work

Welcome to Long Story Short’s monthly data dive! In this issue I went down a rabbit hole of Coronavirus Relief Fund spending data and have emerged with some interesting facts and takeaways on governments’ telework spending.

Just a reminder that this data dive issue is free to all subscribers, but starting in January it will only be available to paid subscribers. If you like what you see, please consider converting your subscription! 

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OK, enough peddling—on to the news.

The headline number: $1.8 billion spent on telework

State and local governments spent nearly $1.8 billion from their federal Coronavirus Relief Funds on telework and remote technology, according to my analysis of data from the Pandemic Response Accountability Committee. The actual figure, however, is likely closer to $2 billion because a few dozen governments did not distinguish telework expenses from other social distancing measures such as PPE, so their spending was not included in the total.

The median amount spent per teleworking expense was about $36,000 but the range of reported expenditures is vast, from $15 to Zoom (the cost of a one-month subscription) paid by the state of North Dakota to $49 million by the state of Alaska on behalf of its Department of Health and Human Services. As these examples show, governments varied greatly in how detailed they were in their reporting.

A reminder: The Coronavirus Relief Fund is the $150 billion in direct federal aid for large governments authorized by the CARES Act in March 2020. It is separate from the American Rescue Plan’s $350 billion in emergency funding for all governments, known as the Coronavirus State and Local Fiscal Recovery Funds.

Some governments and agencies also chose to include detailed explanations. For example the state of Oklahoma’s executive branch outlined program goals for $17 million in spending, including creating online access to agency communications and services, and adding staff telework capabilities. “The COVID-19 pandemic highlighted a great need for state agencies to modernize to better serve Oklahomans, and to allow for remote work without interruptions to business continuity,” it says. “It also highlighted needs for efficient communication to both the state workforce and general public at large.”

But currently, fewer public employees are working remotely. At the beginning of the pandemic about three-quarters of government workers were teleworking full- or part-time. That was a huge (and dramatically quick) shift from pre-pandemic, where just one in five employees even had experience teleworking. Now, 20 months and $2 billion dollars later, fewer state and local employees are working remotely at all. According to the latest survey by Mission Research, 39% of employees are teleworking some or all of the time. 

That doesn’t mean this money was wasted. Far from being a waste, adopting remote work capabilities makes governments a more competitive employer. Big picture, the share of public sector teleworkers has now doubled from the pre-pandemic days and that number is likely to hold. Given that flexible work is a high priority for job seekers, that’s a win for governments. 

Plus, a lot of this spending went toward putting more government services online and streaming public meetings. These are permanent changes that make governments more accessible—a win for constituents.

Government telework’s biggest corporate winners

A few companies were big players when it came to getting state and local government operations online and telework ready. The biggest was Dell Technologies, which has so far been paid a little over $157 million by about 100 different governments. One of the Texas-based company’s biggest clients was Maricopa County, Arizona, which spent more than $6 million on telework-related Dell equipment and other technology. In total, the county has spent more than $21 million with Dell for other tech related to distance learning and contact tracing.

Another Texas company also scored big in government telework contracting. SHI Government Solutions, which sells products and services geared toward remote and hybrid workplaces, has so far collected about $75 million from roughly 150 governments. 

CDW Government, which offers online software management, products and security systems was another popular choice. Governments have so far paid the Illinois-based company more than $62 million—Orange County, Florida, spent $7.5 million alone with the company.

What did governments buy to launch telework?

• Chromebooks, laptops, tablets, routers, docking stations, printer ink and headsets

  • Fun fact: San Bernardino County, Calif., spent a half-million on 3,200 Boogie Board reusable writing tablets, sleeves and stylus pens; 100 HP notebooks and 1,104 hard drives.

• Audio/visual equipment and licenses for Microsoft Teams, Zoom, Cisco, and other conferencing software

• Software for word processing, identity security, inventory management, case management and court services, among other things.

Legacy modernization. A lot of things on this list have long been standard practice in the private sector, especially for larger companies with employees in multiple offices. It illustrates just how far behind the modern workforce most governments were two years ago. In fact, the recent survey of state chief information officers reports that more than 70% of state CIOs said they adopted technology to modernize legacy systems.

“The modernization of legacy systems is another longstanding issue that was put on full display during the COVID-19 pandemic,” the survey said. “While some systems were exposed for being out of date, others simply no longer met the business needs of the state.”

What’s next?

Remote access to government will remain a top priority in the coming years. Nearly all state CIOs in the survey said the pandemic has increased the demand for digital government services, with more than half saying demand has “dramatically” accelerated.

Modernizing legacy systems will continue to be a focus. CIOs named health and human services, labor, and unemployment systems among their top targets in the coming years.

And when asked what digital services and work practices instituted during the pandemic they expect to retain, work from home, enhanced security and online services were the top choices for state CIOs.

What I’m working on

In case you missed it, the recording of last week’s webinar on the Infrastructure Investment and Jobs Act themes for governments and private sector is now online. As Philadelphia Mayor Michael Nutter said, “the devil is in the details when it comes to IIJA funding and using it impactfully.” We cover a lot of them.

Watch the webinar here.

What do you call a text that’s been sent by an app rather than a phone? It’s not a joke, it’s a legit question for states and localities that are trying to figure out how best to treat—and tax—services that blend traditional communication methods with software. Look for an upcoming story from me in Forbes on this topic.

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That’s it for this week and if you’ve made it this far, I’d love your feedback. Was this too long? Too short? Could you care less about remote work? Please don’t hesitate to email me or simply reply to this message with your thoughts.

And don’t forget that subscribers to the free newsletter will see the full version through the end of this month. The paywall goes up in January so if you like what you see, please consider converting your subscription! Get more details from my announcement post.