If I told you the US government paid more than $500 million for a website, you would probably cringe and think of this as another example of taxpayer dollars wasted.

And you would be wrong.

This story is nothing but wins for every party involved, with plenty of lessons for buyers and sellers of all kinds of services. 

The Story

At peak DOGE, in May of 2025, The Wall Street Journal reported that consulting firm Booz Allen Hamilton (Booz Allen) was laying off 2,500 workers. Booz Allen had come under scrutiny as “the archetype of an ‘over-concentrated’ federal government vendor” with 98% of their $12 billion in annual revenue coming from government contracts. 

The layoffs—amounting to 7% of their workforce—were in anticipation of the rough waters ahead for Booz Allen as the government slashed costs.

I’m in favor of governments trimming waste and balancing budgets, but when I heard podcasters railing against Booz Allen because of these figures, I didn’t join in.

Instead, I immediately thought of recreation.gov, designed, built and run by Booz Allen. 

As a Canadian, I don’t have much interaction with US government websites, but in the last six months I’ve used two, and they were a dramatic contrast in experiences.

In March, Colette and I went hiking in Joshua Tree National Park in California. As we approached the park gate we realized we needed a pass to enter. The Park’s website directed me to Recreation.gov where the mobile friendly UI was modern, intuitive and fast. A few clicks later, including paying with Apple Pay, we had our Park pass. 

It was an impressive and decidedly un-government-like experience.

When we returned home in April I set about renewing my US visa. I’ll skip the details and generalize that experience by saying it felt like the DMV experience ported to Windows Me with 10X the complexity and all the crashes. 

Compared to your favorite app, the State Department web experience was horrible. This being government however, meant that it was exactly in line with expectations. That’s not a knock against the US government—a lousy user experience is simply most people’s expectation of most government websites in almost any country at almost any level of government. (I can attest to the Canadian government experience.)

Recreation.gov is the exception. It works and it works well. 

Follow The Incentives

Recreation.gov works as well as it does, in large part because of HOW Booz Allen was paid. 

Aligning the incentives properly resulted in an excellent user experience that has increased adoption, conversion and customer satisfaction that will earn Booz Allen an estimated $530 million—$620 million by the time their contract expires in September 2028.

More than half a billion dollars. 

Yes, that’s a huge amount of money. It’s congressional appropriations bill-level spending. But it didn’t require a bill because the US government funded none of it.

The Contract

Booz Allen’s bid for the initial five-year contract back in 2017 proposed that they would design and maintain the website and mobile apps, integrate the ecommerce transactions of 14 different government agencies, build and staff a 24/7 call center all with no appropriated dollars. 

Instead, they would add a small fee onto every transaction, such as a park pass, camp site or event lottery ticket. That fee is borne by the user and, from my own experience, the surcharge is a small price to pay for the seamless user experience that is intuitive and works.

Recreation.gov is a rare government website that works like you would expect any of your favorite apps to work. 

In Booz Allen’s submission for the original contract they estimated they would earn $87 million in top line revenue in the first five years and up to $182 million over ten years. (It was a five-year contract with five one-year renewal options, all of which have been granted so far.) 

They funded all the upfront development costs and they had uptime, usability and NPS score requirements they had to hit. They took their profit out of the proceeds, taking most of the risk away from their client, the US government and its taxpayers.

It was a win for the client and their end user, and a potential win for Booz Allen, while also a potential loss. They earned the right to make a bunch of money, but they had no downside protection. That was the trade.

So what happened? Two things.

First, they absolutely smashed it. I don’t know anything about what happened behind the scenes but the user experience has got to be the best of all US federal government online experiences. Making it easier to buy meant many more people bought. 

(Surprise!)

Second, they got a little lucky. COVID-19 hit soon after the launch and outdoor recreation of all kinds spiked. But they have maintained that momentum in post-pandemic years. 

The Numbers

The table below shows how reservations went from 3.8 million in 2019 to 10 million in 2022 and are projected to hit 13.5 million in 2028. Everyone makes money—more money than expected. Note how the government’s share of annual revenue goes from $95 million in 2019 to $432 million in 2028. 

Lessons for Pricers and Procurement

Performance pay models like this don’t work for all clients all the time, and government isn’t necessarily the ideal client for this model, but a few things aligned on this project:

The customers were already there

  • This wasn’t a startup with a large TAM but no customers. Revenue was easily modeled from 30 years of historical data provided by the client.
  • The consultant surely knew they could significantly increase revenue through a better user experience.

The costs were shifted from the client to the end user

  • The mark-up on the transactions was nominal, and worth the improved experience.
  • The client was never upside down by even $1. It cost them no money out of pocket. They had to budget nothing. 

The consultant took the risk

  • With years of demand data, there was little risk the consultant would get paid zero or even not be profitable, but think of the upfront financing on this project. They had a large team working for well over a year before they earned the first dollar. A small consulting firm could not have carried the expenses.
  • There was significant performance risk in the complexity of integrating 14 government departments all at a high security standard.
  • There were other edge risks. For example, a global pandemic could have kept people at home.

It was all tightly contracted

Performance pay is a nice theory but it can easily go bad when someone on the client-side procurement or finance team decides they don’t want to pay the incentives that have rightly been earned. For this reason, you have to trust your client in a model like this. And you need to have a tight, enforceable contract. 

I imagine there were politicians screaming for the fees to be decreased in the renewal years of the contract, eager to demonize the wasteful, greedy consulting company in their reelection campaign. I’m glad they failed.

The Time and Materials Counterfactual

I’m sure some will look at the revenue flowing to Booz Allen as “waste” and imagine what those many millions could have done if they flowed into the government’s coffers.

In reply I would point to the healthcare.gov project as a near counterfactual. In September 2011, consulting firm CGI Federal was awarded a contract to build the federal government’s healthcare marketplace website on a “time-and- materials-fixed-fee” basis, which allowed for the reimbursement of all “allowable costs” which were capped at $56 million in year one and a total ceiling price of $94 million after five years.

Three years in, however, the scope—and allowable costs—had crept up to $209 million. 

The site crashed on launch and was deemed a failure. The government then released CGI Federal from the contract and hired Accenture on a 12-month bridge contract for $91 million. Accenture then earned another $563 million in a five-year cost-plus-reward-fee contract.

By July 2014, the US Government Accountability Office (GAO) put total obligations for HealthCare.gov at about $840 million. Other sources estimated $1.7 billion in total contract ceilings tied to the federal marketplace.

More Performance Pay, Please

With Recreation.gov, the client pushed the risk and the project financing to the consultant. The consultant navigated those risks and performed excellently, earning an estimated $580 million for themselves over ten years, while generating an estimated $3 billion in gross recreation revenue for the client.

  • The consultant wins by taking the risk and earning the commensurate reward. 
  • The client wins by taking no risk, no direct costs and no project financing charges, and seeing a massive surge in adoption.
  • The end customer wins by getting an elegant, easy-to-use experience for which the vast majority are happy to pay a small fee. 

In a time-and-materials contract the incentive is to go slow and make things more complex. In a performance pay model the incentives are for the work to perform—to create value—and to do it quickly.

When scope is knowable and volume data exist, outcome-based deals like Recreation.gov can let the consultant finance the build, shoulder the risk, and profit—while the client and end user both pay only for results.

This is partnership. This is win-win. 

Bravo. More, please.

-Blair

*ChatGPT o3 was used to do the research and fact checking and to create the financial table for this post.