Originally Broadcast August 8, 2009

Washington, DC

Mr. Morales: Welcome to another edition of The Business of Government Hour. I'm Albert Morales, your host and managing partner of the IBM Center for the Business of Government. One of today's greatest challenges is protecting the country from terrorists and the instruments of terror, while at the same time, fostering the country's economic security through lawful travel and trade. U.S. Customs and Border Protection operates at the nexus of national security and American economic security. In meeting this challenge, CBP has unique challenges and requires a focused procurement and acquisition strategy. With us this morning to discuss his efforts in making this happen is our special guest, John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection. John, welcome to our show. It's a pleasure having you.

Mr. Ely: Thank you. It's great to be here.

Mr. Morales: Also joining our conversation is Solly Thomas, associate partner in IBM's public sector consulting practice. Solly, good to have you as always.

Mr. Thomas: Good morning Al and good to see you again John.

Mr. Morales: John, let's start by providing our listeners some context around your organization. Can you tell us a little about the mission and this history of the U.S. Customs and Border Protection, otherwise known as CBP?

Mr. Ely: Yeah, I'd be glad to. I think that the best way that I can articulate that is just to read the CBP mission statement because it's very well-crafted and I believe it says everything that CBP needs to say in a statement. The mission statements goes like this: "We are the guardians of our nation's borders. We are America's frontline. We safeguard the homeland at and beyond our borders. We protect the American public against terrorists and the instruments of terror. We steadfastly enforce the laws of the United States while fostering our nation's economic security through lawful international trade and travel. We serve the American public with vigilance, integrity and professionalism."

A little bit of history about Customs and Border Protection, I'm going to keep it really brief. The customs component of CBP was created in 1789. It is extremely old organization. The U.S. Border Patrol was created originally under the Department of Labor back in 1924 and then INS, Immigration and Naturalization Service was created in 1933. And customs, border patrol and some component of INS was pulled together in 2003 when CBP was created as a component of the Department of Homeland Security.

Mr. Morales: So John, obviously a very powerful mission and a very broad mission. Can you put a finer point on the scale of operations over at CBP? Perhaps you could tell us a little about, you mentioned border protection, how many miles of borders are covered? How many ports of entry might exist? And how many people and items pass in and out of these borders?

Mr. Ely: I've got some statistics and some information that I find fascinating. I look at this information quite regularly because it amazes me when I see the mission the CBP undertakes everyday. And I've got some statistics. We protect 1,900 miles of border with Mexico. We protect 5,000 miles of border with Canada. We have 327 official entry ports and we have 144 CBP border patrol stations. In terms of what we process daily, and this is a daily set of numbers, 1.09 million passengers daily. We process 70,451 truck, rail and sea containers. We execute 2,895 apprehensions between the ports for illegal entry and 73 arrests of criminals at ports of entry.

Our seizures, 7,621 pounds of narcotics and seizures of 4,125 agricultural items and 435 pests at ports of entry. And again, those are daily figures.

Mr. Morales: That's certainly a heck of a day. (Laughter--)

Mr. Ely: Sure is.

Mr. Thomas: John, would this description of the agency and its incredible responsibilities, perhaps you could tell our listeners a little bit more about the specific mission and scope of your office. I'm curious to hear what the size of your budget is and how many employees work in your organization to support the agency.

Mr. Ely: First of all, I'm absolutely thrilled to be part of this organization and the important mission that they have been entrusted with and I feel that our acquisition procurement organization is truly a big part of bringing success to that mission. We are in the acquisition business and that is our job. We acquire the products and services to continuously improve the operations of U.S. Customs and Border Protection.

I have about 177 employees. They're located all over the country. I have people strewn along the southern border co-located with border patrol stations. I have people on the northern border. I have a fairly large office in Indianapolis, Indiana and a large office in the Washington D.C. area. Our annual spend is approximately $3.3 billion dollars and that's the money that comes through my procurement organization. That's pretty much a summary of the operation.

Mr. Thomas: And John, continuing to drill down on the responsibilities, talk to us a little bit about your role as CBP's Executive Director of Procurement. What are your official responsibilities and how do you support the mission of CBP?

Mr. Ely: While it doesn't sound official, my belief that my primary role is a facilitator to the employees, customers and the commercial business partners that are all involved in the procurement area and supporting the mission of customs and border protection. I'm responsible for managing the spend that supports our organization as efficiently, as effectively as possible and representing our American taxpayer by being prudent in the way that I spend their dollars; yet being effective in supporting the mission of the organization.

With that said, I'd like to emphasize that this is the operating principles for all of the heads of contracting activities in the Department of Homeland Security components. We all have the focus and we all have that function. I, as a senior procurement professional, I'm very familiar with CBP's mission and I understand the challenges that my customers face and it makes my organization better in terms of standing up the support that they need to be successful in their operations.

As a strategic leader, my goal is to full integrate the procurement process with a customer environment that delivers the required results while complying with law regulation and ensuring prudent expenditure of taxpayer's money. The point there is my goal is to continuously make our process, which at times can be viewed as a bureaucratic process, transparent to my customers so that they don't see the things that aren't really pertinent to them getting the goods and services that they need.

Mr. Morales: Now John I understand that you have some 30 years with the U.S. Federal government. Tell me a little bit about your career path. And how'd you get started?

Mr. Ely: Started very early in my life. I've got 34 years as a federal employee. Pretty much all of my 34 years has been in the procurement or acquisitions environments. I actually started as a summer hire when I was in college. I worked for the Department of the Army. And when I got out of school, I became an Army intern in a contracting shop and I stayed in that contracting shop at the Pentagon for 15 years.

Mr. Morales: That's a long summer.

Mr. Ely: It was a long summer.

Mr. Ely: It was an incredible place to learn procurement. It was an incredible mission supporting the Department of Defense. After that, I moved on to the Internal Revenue Service which was a very different environment where I started off as a branch chief; basically, my first significant supervisory experience. I was promoted later to Division Director and then Deputy Head of Contracting Activity. And I was there for 12 years mostly engaged in the information technology acquisition business, which while it might sound kind of mundane, is a very exciting field because it's very competitive and the technologies that we used and that were acquiring are very important, especially in the tax collection business.

Now I'm at CBP as the Head of Contracting Activity and I've been there for 5 years and I'm absolutely thrilled in this position and very much challenged and excited every day that I come to work.

Mr. Morales: So, John as you reflect back on your 15 years with the Army and the 12 years over at IRS, how have these experiences prepared for you for your current leadership role and perhaps have shaped your management approach and your leadership style over the years?

Mr. Ely: I want to start off with the very beginning. I'm an Army brat. My dad was an Army officer. My grandfather was an army officer. My father was very much loved by his troops and I watched him and I tried to emulate a lot about him that I saw as driving his success. And his success was in genuinely caring about his people and they in turn, delivered for him. He saw himself as facilitator to the success of others and I try to emulate that style.

When I first started working in procurement, I learned the business first. And I always work with the goal of balancing the customers' needs along with properly managing taxpayer dollars. During my career, I worked with a wide range of managers and executives and I tried to develop my style as a combination of what I saw as the best of both. During the latter part of my federal career, I spent lots of time with people who were experts in continuous improvement. And above and beyond the procurement field, I started getting into the concept of continuous process improvement.

I'm not the most organized person in the world but I do recognize the value that predictable processes, improvement processes, being imbedded in organizations and I try to capture that through a process improvement program. So, I worked with process improvement experts that have helped me get in place documented repeatable processes that make my organization extremely efficient and effective.

Mr. Morales: What is CBP's acquisition and improvement initiative? We will ask John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and today's conversation is with John Ely, Executive Director of Procurement at U.S. Customs and Border Protection. Also, joining us from IBM is Solly Thomas. John, much like finance or information technology or human resources, you lead one of CBP's core business functions. Could you take a moment to describe in a bit more detail the procurement function? And tell us a bit about some of the key elements of acquisition management.

Mr. Ely: I'll give you the basic process. It involves early definition of requirements by the customer. That's a little more complicated than it sounds because articulating what your needs are for a government customer sometimes can be difficult. But, we seek to get a good solid definition of the outcomes or the products that our customers are looking for. And then we secure the funding associated with those requirements. There's a collaboration between the procurement organization, the contracting officer and the customer over a strategy for acquisition. There are multiple ways to acquire things and the best fit for the customer and the particular product is something that we arrive at in collaborative way.

At some point, we release a solicitation or a request for proposals for pricing and descriptions on supplies and services that we're looking for. We take those products and we give them to our customers to do an evaluation. And evaluations are either for compliance and award to the lowest cost or we also have what's known as best value awards, where there is technical merit associated with an offer's proposal and those technical merits are evaluated. And then a balance is drawn between the offered price and the technical merit and what we call a best value acquisition can be awarded.

That is very much different than a low cost award because you can actually pay more for something if the government team's perception of the value warrants that extra payment. Then comes the notice to the contractors and the debriefing of unsuccessful offers. What I think is really important is that debriefings to unsuccessful offers are not just I'm sorry, you didn't get the job. We are required to give meaningful, helpful information to companies as to why they did not receive the award of the contract without giving away proprietary or trade secrets for the winning offer.

Finally, we initiate contract performance and contract management activities that in and of itself, is a very important complex process. And then at the end of contract performance, or delivery period, there's a contract closeout where we double check and make sure everything was provided to the satisfaction of the government customer, the contractor's been paid and then at some point we close the contract out completely.

In terms of success in procurement function, I'll give you some ideas about what I view as steps in ensuring procurement success. That mutual understanding between the customer and procurement personnel regarding the procurement process, the roles and responsibilities of the different parties and building a solid, trusting, working relationship between the government procurement personnel and the mission individuals that are representing the customer needs is absolutely critical.

Good contracting organizations have people that are not just buyers, but they're good business specialists. They understand their customers. They seek to engage both the customer and ideas from contractors throughout the lifecycle of whatever product or service is being ordered. Good procurement organizations are involved in all aspects of the lifecycle. We know about our customer. My border patrol buyers are very familiar with the border patrol function. My legacy customs support buyers, they know customs; they know what custom officers do. And all of our buyers are very close to the functional needs of our components and it makes them very good at what they do because they're continuously involved in the mission and the needs of the organization.

In most organizations, weaknesses are found in contract management. And to be honest with you, I think that's a problem with government contracting in general. There aren't the people out there and the emphasis. Even though we've been trying to place the emphasis, it's still not there in terms of what happens once the contract is signed. The government in general needs to be more attentive to what happens after the contract's signed because you've only just begun. But shortage of federal contracting personnel still keeps us in the hole that we're in and not as able to manage contracts after they're awarded.

Mr. Morales: Now John, on that note, in our earlier segment, you made a reference to continuous improvement and you used the word repeatable. So, tell us a little about CBP's acquisition improvement initiative. Where does it focus and how is this program defined, developed and deployed these customer-focused solutions that you reference?

Mr. Ely: When I first started working at IRS, I ended up working with some information technology specialists who were focused on software development and one of the people that I worked very closely with was a certified process improvement expert. And I soon came to find out that these people are out there and they're very good at articulating and stringing together processes so people understand how you get from point a to point z when you're trying to develop and build an end product. In this case, it was software, which is pretty complex. But, the concept behind these process improvement experts is they articulate the process, they make it as efficient and effective as possible and they stick to standards where they repeat the process and you should be able to get the same exact outcomes in terms of your desired results.

In meeting and getting engaged with people like that, I started realizing we could apply this to the procurement process. And I eventually hired a process improvement expert and brought them on as senior staff in looking at the procurement process. One of the problems that we had is our customers felt that every process or every procurement was run differently. And what I basically did is I implemented a very structured environment where we very clearly outlined the process, outlined the outcomes and the roles and responsibilities of all the people that were involved in the procurement process.

It's actually done a lot for me in terms of being able to be predictable in terms of results to my customers. In terms of the acquisition improvement initiative, that is what we've stood up at customs and border protection procurement. And again, I have a full-time process improvement expert responsible for that. In CBP's AI2 program, we focus on four broad areas: assets, business, customer and data. We call it the ABCD model. The asset piece is our people, it's our systems. The business piece is our customers; what they do, what they acquire to achieve. The customer is our customer themselves, you know, who is that customer? What is it that they're looking for? What do they stand for? And then data, which to us, is probably one of the most important things. We strive to collect and understand data relative to what our customers need, what we've bought in the past. And that data helps us optimize how well we do in the future in terms of performing the acquisition function.

The bottom line is all of our efforts in AI2 are geared to supporting customer's needs and mission success in creating a work environment where people can grow and thrive. AI2 generates improvement opportunities from both top down and bottom up. And what is real exciting to me is that with a lot of the new entry-level people we have working in the procurement organization, we have some people that have just walked in the door and they have been with us more than a year, that are coming up with some fabulous ideas because of their fresh perspective. They're not mired in the federal process. And we're starting to listen to those ideas and actually build some improvements in the program based upon somebody who's just walked through the door saying, hey, why not? And that's been very, very good for us.

We have participation goals in acquisition improvement. I have expectations of all my directors on their folks and what percentage of those people will continuously be involved. That hasn't been a problem because what has happened is when people in my organization see that they really can change the direction that we're taking and deliver better results for our customers as a result of their efforts, they participate. And they don't have to be asked to participate because they see that they're making a difference.

I'll give you an example of some of the teams we have because AI2 is broken down into some teams, different teams, and that's how we control memberships and outcomes. We have the quality of life team. The quality of life team really does focus on how are things going for the people in the organization. What's the work life like? What do people like, don't like? How can we make the quality of life from 9-5 better for our people and therefore, make them more productive and effective as federal employees.

We have a contract administration team. Again, federal procurement organizations tend to sometimes award the contract, walk away from them because they've got the next thing they've got to focus on. When we, in fact, with our contract administration team are looking for ways to stay there with our customer, administer the contracts and assure them that they receive the desired products or services.

And then, my data and spend analysis team is probably one of the ones I'm really the most proud of. Although, I really shouldn't say anything about being the most proud. But, our ability to slice and dice the data has been one of the most rewarding things for me. You can ask me how many light bulbs we bought last year and I can tell you. You ask me how many mainframe computers we bought, I will tell you. If you ask me how many detainee meals we bought and where they went, I can tell you. What that has done for us is it gives us the opportunity to sift through our spend data and look for low hanging fruit or even high hanging fruit for our strategic sourcing initiatives. When we decided that we needed to start hitting strategic sourcing, we looked at the spend and it gave us a profile of where our CBP money is going all the way down to the day to day subsistent level.

And then, the strategic sourcing teams. And I also have a mentoring team which is a very structured program around bringing our entry-level people up faster up into operational mode.

Mr. Thomas: Now John, it's been my experience that agencies need to have an effective strategy for organizing and retaining its intellectual resources and its institutional memory. So, to that end, can you elaborate on your efforts to implement an effective knowledge management system. And I'm particularly interested in hearing more about your Acquisition Resource Management System and how it factors into this efforts and provides the one-stop shopping capabilities.

Mr. Ely: We have implemented ARMS. And ARMS is something I'm extremely proud of because we do have, in the organization, a fairly mature knowledge management system. With our aging workforce and the expansion of our headcount, it's imperative that we have that knowledge and that we share the information and this ARMS is a repository for information and also for exchanging ideas, communications across a large, geographically diverse work environment.

And really, one of the most important things that has come of our knowledge management system is connecting our broad customer base and a youthful workforce. We have people now that are attracted to technology and the ARMS system is something people tend to move towards and use because it's got data in it, it's got communications in it; and those are the things people need to communicate effectively.

ARMS is a way to both get knowledge into the repository and a better way to use and improve the knowledge and our collaboration for the betterment of the mission. Our documents, our announcements, our regulations, our memorandum are all posted through ARMS. And probably one of the most interesting things is the discussion threads. We have chat rooms and discussion threads where people can talk about the collaboration of improving a contract document or how to manage a contract better. We have a birds of a feather area in ARMS where people can gather and talk about areas that are of common interest. And we also have a message center and I have a blog now that helps me connect to a very geographically diverse organization. I log in and I can just say hello and talk to my people without ever having to worry about dialing or being in any physical place. And that's been a wonderful, wonderful benefit for me.

Mr. Thomas: Now John, you eluded to strategic sourcing a little bit earlier and of course, that's typically defined as a means to achieve benefits through an organized, systematic and collaborative approach, to acquire goods and services. Could you elaborate more on your strategic sourcing program? What types of opportunities have been identified and to what extent has it enhanced your coordination in strategic thinking across the department?

Mr. Ely: What I'd like to do before I get into the rest of that question, I'd like to talk a little bit about how I got into strategic sourcing in the first place because I think it's a fairly interesting story. When I was at IRS, I signed up for a course, and it had some mundane title and I don't even remember what that course was -

Mr. Ely: -- but a gentleman that I worked with and I went to this course. I believe it was in Dallas, and we ended up in this room full of people and not one of them was a government employee. And it turned out what this group was, and it had something to do with sourcing, sourcing was in the title. Basically, what it was, was a group of people who were part of the sourcing organizations for very large companies. If I'm not mistaken, TI was there, Ford Industries was there, IBM was there. Several other major companies were there. And all of these people had one thing in common and it struck us very quickly that this was going to be an interesting environment.

Every one of those companies were at one point on the brink of going out of business. And what those people in that room had done is through the sourcing of supplies and services into their production process or their delivery process in a service environment they turned to strategic sourcing and said, if we do business the old way we will be out of business. What is the new way of doing business? And I spent about three or four days with those people and I learned a whole lot about how you can adopt that mindset, the stay in business mindset. Even if we're government, let's pretend we could be sent home and fired tomorrow. Let's get lean and mean and look at ways we can be effective, efficient and save money all at the same time.

We came back to IRS and that's when we started realizing our capability in spend analysis; knowing where the IRS dollar was going. And knowing where that dollar was going, we started targeting commodity and service groupings and looking at how can we do business better. We brought in some people that consulted with us to talk to us about smarter ways of doing business and we took on strategic sourcing initiatives for cell phones, guard services, copiers, faxes and printers. And to give you a little bit of insight into the true strategic sourcing concept; copiers, faxes and printers, the idea to strategic sourcing those is not to get economy of scale on contracts. That's one objective. But the perception that we had was that there might be a better way to deal with copiers, faxes and printers.

Now, in a federal environment, a lot of times you'll see a copier, a fax and a printer. And in some cases, you'll see all three of those around an individual's desk and you'll see those all over the place around different individual desks. We started talking about multi-function machines, acquiring multi-function machines. A single machine that copies, faxes, prints. And having those machines in a central environment rather than dedicated to a given workstation. So, you think about how often your printer's humming or fax is humming on your desk dedicated to your work, you can start seeing how a multi-function machine might actually be economical and provide the services that everybody else needs at a significantly lower cost. That's where strategic sourcing comes in.

We changed the way we were doing business. We saved money, yet we delivered the same results. So, when I got to CBP after IRS, I instantly knew that I had to make a difference by standing up a very similar program at CBP and that is our acquisition improvement initiative. And that is the same process. It has a very similar approach where we want to stay in business. We want to take the stay in business mindset as a government entity.

I've already stood up a team that now has the spend analysis capability. I can look at any, every piece of everything CBP has bought and we're now focusing on how products and services are acquired. We've had a few near term hits on strategic sourcing. One of them is body armor. In the old days, we bought body armor, the body armor would be shipped, the employee would put the body armor on, measure his specific fit and then send it out to be tailored to fit him or her. We now have awarded a contract for body armor that has a film clip in the website where you're shown how to measure yourself for body armor ahead of time before you order it. So, you ship the order, you ship the measurements, the body armor's delivered and it goes right out of the box and onto your back saving your life sooner. That is a real good example of how strategic sourcing works.

Again, economy's a scale but also a significant improvements in how we utilize the commodities of services. We are looking at canines. We've had some success with puppies. We do a lot of buying of puppies. They're really cute and even when you buy them in quantity, they're really cute. But, we're looking at strategic sourcing of canines, industrial laundry and we're also looking now at our spend on detainee meals. An early glance tells us that there are different kinds of detainee meals that are being served up all over the southwest and actually in all the detention areas. And while they're all fairly low cost, we think that if we standardize that and bought large quantities of detainee meals that were not perishable or could be used over long periods of time, we could save significant amounts of money. So, there's just a few examples of that strategic sourcing environment.

Mr. Ely: Sure. We have an overwhelming workload as most procurement organizations do. We also have a young emerging professional workforce. Those two have come together for us when we started looking at technology. And there are reverse auctioning tools. We use a tool called FedBid, and basically, what tools do is it allows your contracting officials to post their requirements on an electronic forum and bidders will bid on the requirements electronically and then the buying activity can come back to the end of the day and look at the bidding history and make an award.

Basically, it is a seamless, automated process for running our competitions. Its usually done for commercially available items, but we've had a lot of success in the post and go. And again, we post it, we come back, we see what the natural bidding process that occurs through the system and we make awards to the low, responsible offers. Reverse auctioning has done so much in terms of our ability to load those smaller requirements, while we work on the more sophisticated requirements that require attention; where our employees need to develop their skills. At the same time, we're saving lots of money. And I have some statistics about what that automated reverse auctioning process has done for us.

Basically, it is a seamless, automated process for running our competitions. Its usually done for commercially available items, but we've had a lot of success in the post and go. And again, we post it, we come back, we see what the natural bidding process that occurs through the system and we make awards to the low, responsible offers. Reverse auctioning has done so much in terms of our ability to load those smaller requirements, while we work on the more sophisticated requirements that require attention; where our employees need to develop their skills. At the same time, we're saving lots of money. And I have some statistics about what that automated reverse auctioning process has done for us.

Mr. Morales: What about CBP's acquisition workforce management strategy? We will ask John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection, to share with us as the conversation continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and with us today is John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection. Also, joining us from IBM is Solly Thomas. John, the American Recovery and Reinvestment Act of 2009, otherwise known as the Recovery Act, provides some $680 million dollars to CBP for investment in aging infrastructure. First, could you tell us more about your procurement strategy and how the money will be spent. But, more importantly, what role does your office play in this area and how are you managing the procurements associated specifically with the Recovery Act funding?

Mr. Ely: Much of the ARRA funding is targeted for port modernization in both the northern and southern borders. We are very much engaged in writing contracts and facilitating that modernization effort. Our goal is to make awards in a timely manner while competing contracts as much as possible. We've stood up an FM&E facilities management and engineering contracting organization to meet this challenge we're working hand in glove with the CBP FM&E organization to implement. We're competing requirements for technology and construction directly with commercial sources, but we're also utilizing the services of the Corps of Engineers and GSA for construction contracting requirements.

Mr. Morales: It strikes me that balancing the appropriate number of CBP contracting officials with the growth of your portfolio is perhaps a challenging task. What changes have you made to your recruitment process and does CBP use flexible compensation strategies to attract and retain employees who possess what you would deem as critical skills?

Mr. Ely: Excellent question. Initially, when I first came to CBP, we focused on recruiting higher-grade personnel; but, it's really hard to find them. It's really very difficult to find them across government. So, we've moved to entry-level hires and we're supporting the rapid growth through mentoring, training and phased-in levels of contracting sophistication. So, we're trying to bring them up fairly quickly, but we are making sure they're ready for each phase. We think we've got a good plan for getting the entry-level hires up to speed faster than people were ever before by using technology, mentors, etc.

The DHS Chief Procurement Officer supports us through their Acquisition Career Program. They have a very sophisticated program and we are on the recipient list for the ACP interns. And that's born out well for us as well. We're still hiring higher-grade personnel for complex and critical procurements. And if any of you out there are the higher-graded, highly capable contracting types, just let us know.

Actually, on USAjobs, we have a great video clip from one of our CBP contracting officers and some information on job announcements. So, if you go to USAjobs, you'll probably find that icon to click on and see one of my folks with a lot of the products and services in the backdrop giving you some information about working for me. CBP offers flexible work schedules, tuition reimbursement for permanent status employees and in some cases, recruitment bonuses and/or payment of relocation services.

Mr. Thomas: John, staying on that topic, in recent years the size of the acquisition workforce has remained relatively the same while procurement spending has pretty much skyrocketed. For over a year, agencies have had the ability to re-hire the retired acquisition personnel, but only a few agencies have sought to formally use this authority. Could you talk a little bit about the benefits, as well as the possible limitations, of this particular strategy? And more importantly, what are your plans to use this authority as a tool to fulfill staffing needs?

Mr. Ely: Sure. Good contracting people are, as I've said before, are always in high demand both in government and industry. DHS has been successful in implementing authority to hire retired procurement personnel, known as retired annuitants. And we are pursuing the hiring of retired annuitants who offer a wealth of knowledge, skills and abilities and we're seeking to take as much advantage of that as we can. That is still a fairly small number, relatively speaking, of potential resources.

And the flipside of the benefits of that is also that these people will re-retire as some point in time. So, you can't really stake your future on retired annuitants, however, they do help in the near term.

Mr. Thomas: Now shifting from the recruitment discussion to developmental, what are you doing to ensure that your staff has the appropriate training and skills and how are you leveraging the resources from organizations like the Federal Acquisition Institute?

Mr. Ely: I'm very proud of our training program. It's extremely important in our line of business. Our training program is fairly well funded and we have a specific training curriculum in place. Employees can count on receiving specific, substantial training in the procurement business area. And there are training tracks associated with each level of procurement professional. We have a fully funded training. Each employee receives a minimum of forty hours per year. And we utilize FAI for both classroom and online training. And the DHS Chief Procurement Officers Organization has entered into an agreement with DAU to reserve seats in their classes for DHS procurement personnel, and that includes my folks as well.

Mr. Thomas: Now John, at last count, the federal government spends approximately $140 billion dollars on services to meet agency needs and the use of performance-based acquisition is the federal government's preferred approach for acquiring these services. Tell us about CBP's efforts in implementing performance-based acquisition strategies.

Mr. Ely: First, to comment, a personal comment on PBAs. I agree that they are the desired vehicle, but there is something complex about them that needs to be understood and that is that it is an outcomes-oriented acquisition approach. That's where we truly have to get away from the nuts and bolts of how you get from point a to point b when the outcome is articulated get me to point b. And you don't spend a lot of time talking about how you get there. It's the outcomes that drive a performance-based contract to success.

So, in this environment, the government personnel serve as facilitators for contractor success, which is a little different than some government folks you are used to, where they believe that they are supposed to be directing the activities of the contractor. In performance-based acquisitions, they're facilitators. They help the contractor get to the successful end. Again, acting as facilitators versus directors. In CBP procurement, performance-based acquisitions are now automatically the first consideration for service contracts. Every service requirement that we get in, we look for the applicability of performance-based contracting as a solution.

All of my people receive training in performance-based acquisitions and our CBP Acting Commissioner supports performance-based acquisitions, and has asked his assistant commissioners to develop metrics and measures for their contracts to make sure they're receiving value for their dollars. We have a long way to go to reach our PBA goals, but we're working hard and I think we're doing a pretty good job learning more and more as we move along about the unique method of contracting.

Mr. Morales: John, I talk with many of my guests about collaboration. And certainly, procurements and acquisitions are perhaps some of the more complex business processes within a large entity such as CBP. What kinds of partnerships are you developing now to improve operations or outcomes at CBP and how many of these partnerships change over time?

Mr. Ely: That's an excellent question. I think acquisition by definition is a collaborative process. If you're not collaborating with your customers or your contractors who are helping you deliver results, you're going to be surprised by what happens at the end of the day. Procurement's close relationship with our parent organization, which is the Office of Finance, has helped us become very collaborative in terms of working with the components of finance which is budget, asset management, facilities, management and engineering and our financial operations organization.

We work together with them to make sure that CBP's needs are met at a fair and reasonable cost and that taxpayer dollars are properly expended. Our partnerships within the parent Office of Finance have enabled us to leverage our financial management capability. And our relationships with the customers and industry help bring best value for the taxpayer dollars that are entrusted to CBP. I see the further positive change, we build a greater capability in the big A, acquisition arena. The big A, which is acquisition, will bring us closer to being worldclass acquisition organization that's forward-thinking and focused on return investment for the mission and the American taxpayer.

Mr. Morales: Now, since its inception, DHS has had some very large and complex procurements such as, the Coastguard's Deepwater Program and CBP's SBInet. What are some of the key lessons learned from these large acquisitions and how are they shaping and informing your operations today?

Mr. Ely: I'm going to give you a generic answer on that, because I'm not as specifically familiar with Deepwater. I have some familiar, but with CBP's SBInet program, but I'd like to keep it generic because it does apply I guarantee to both programs and probably other, most complex government programs. The key to success with these procurements is planning, proper planning. The formulation of strong acquisitions teams and efficient, effective and responsible source selection process. And most importantly, properly staffed and managed postwar program and contract management organizations.

Too often, we think we've hit the home run. The ball is out the park once the contract's signed, when in fact you haven't even swung yet. I think it's also essential that when managing programs, one must realize that detractors are natural and important part of a balanced government business environment. And while these detractors may be disheartening at times, their presence can help keep acquisition personnel focused on the proper outcomes of their programs.

Mr. Morales: So John, you've eluded a couple times to CBP's acquisition function and its relationship to the broader DHS organization. How does this alignment benefit CBP and DHS' overall acquisition strategy and do you think that DHS will be adopting a more centralized model going beyond just mere oversight?

Mr. Ely: That's an excellent question. I've felt this issue going back and forth. Naturally, the components would like to retain control over their procurement organizations. And it's understandable that DHS would like to centralize, capitalizing on economies of scale, ensuring a consistency in the way that we spend the DHS dollar. But actually, there is a dual accountability role right now at DHS. While, I report to Customs and Border Protections Chief Financial Officer, I have very specific responsibilities for which I'm accountable to the DHS Chief Procurement Officer. And the same holds true for the procurement executives and the other DHS components. They also have that dual accountability.

I would also like to state that the DHS Head of Contracting Activities Organization, that is all the HCAs for the DHS components, are a group that works collaboratively and embraces the authority and leadership of the DHS Chief Procurement Officer. We meet on a regular basis and are actually quite effective in helping make DHS procurement functions as efficient and effective as possible.

Mr. Morales: So what does the future hold for CBP procurement? We will ask John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection, to share with us as the conversation continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to our final segment of The Business of Government Hour. I'm your host, Albert Morales, and with today's conversation is with John Ely, Executive Director of Procurement at U.S. Customs and Border Protection. Also, joining us from IBM is Solly Thomas. John, CBP's experience in applying innovative solutions to help address agency procurement issues has provided some valuable lessons and insights, many of which we've talked about. But, could you summarize some of these key lessons and some of these critical insights?

Mr. Ely: I'd be glad to. Number one, continuously improve. The American taxpayer deserves it. Secondly, get people involved in creating solutions. The old saying, two heads are better than one, holds true. Groups of individuals working with common goals will get you there a lot faster than individuals who are spinning off on their own path. Constantly seek to improve and get industry input on a regular basis. Industry must succeed or die and they're a good model to look at when you're looking at the best way to run your own government operation. Finally, communication is key. When you think you've done it or done enough, do more because trust me, you probably haven't.

Mr. Thomas: Now John, since acquisition is a fiduciary responsibility, the business of government must be conducted with complete impartiality. Could you elaborate on efforts being pursued to ensure procurement integrity, making sure the proper standards of conduct, both ethical and legal requirements are being followed by the Federal Acquisition staff?

Mr. Ely: Sure. First, I'd like to start by saying that I'm very proud to be a federal procurement professional. We've all seen situations where integrity has been an issue in procurements and it's inexcusable. And people that don't use integrity will get caught. But, I have faith in the federal procurement process. The vast majority of people that work in that environment are honest, hard working public servants that want to do good. Furthermore, all federal agencies have programs that emphasize standards of conduct and provide continuous training in the areas of procurement integrity.

Mr. Morales: John, I'd like to transition to now to the future. Could you give us a sense of some of the key issues that will affect acquisition and procurement offices government-wide over the next few years?

Mr. Ely: Sure. Shortages of contracting and program management personnel is a huge challenge. Balancing highly innovative ways of doing procurements within a highly regulated environment is another. Increased oversight and the need for transparency for large scale programs with congressional and public and customer scrutiny in how we do business is again, another. The constant pace of change and the scale of procurements that we're seeing as it continues to grow. And finally, the time constraints for planning large major acquisition initiatives.

Mr. Morales: So, then more locally, what are some of the major opportunities and challenges that your organization will encounter in the future and how do you envision your area will evolve over the next say three to five years?

Mr. Ely: I see significant opportunities in the future as CBP becomes more and more sophisticated in its view and management of investments for the good of its mission. I see an organization that's becoming more and more enlightened in ways to efficiently and effectively invest its resources. And I see my procurement organization as one of the best in government; fully integrated with the CBP customer and delivering the best value for the taxpayers' dollars.

Mr. Morales: So, John you've had a very extensive career with the federal government and you just had a wonderful story of how you got started. So, I'm curious what advice might you give someone who's out there thinking about a career in public service and maybe even perhaps a career in the acquisition community?

Mr. Ely: I've been there. I was there on the brink trying to decide which way to go and I will tell you that serving the American public is an honor and a privilege and has significant financial and personal rewards. The government pays well and the work is rewarding. There is an incredible satisfaction delivering good things to the American public. And our government works hard to take care of its people and public service is an incredible opportunity to be a part of that important task.

Mr. Morales: That's just great. Unfortunately John, we have reached the end of our time. I want to thank you for fitting us into your busy schedule, but more importantly, Solly and I would like to thank you for your dedicated service to our country across your 34 years of federal government service.

Mr. Ely: Thank you so much for having me both of you.

Mr. Morales: This has been The Business of Government Hour featuring a conversation with John Ely, Executive Director of Procurement at U.S. Customs and Border Protection. My co-host has been Solly Thomas, associate partner in IBM's public sector consulting practice.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who may not be able to hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.

For The Business of Government Hour, I'm Albert Morales. Thank you for listening.

Announcer: This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m. And visit us on the web at businessofgovernment.org. There you can learn more about our programs, and get a transcript of today's conversation. Until next week, it's businessofgovernment.org.

* * * * *

Originally Broadcast June 26, 2009

Washington, DC

Welcome to The Business of Government Hour, "A Conversation about Management with a Government Executive Who is Changing the Way Government Does Business."

The Business of Government Hour is produced by the IBM Center for the Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving Government effectiveness.

You can find out more about the Center by visiting us on the web at businessofgovernment.org.

And now The Business of Government Hour.

ALBERT MORALES: Welcome to another edition of The Business of Government Hour. I'm Albert Morales, your Host and Managing Partner of the IBM Center for the Business of Government.

Federal Agencies have sought to identify new and smarter ways to do business and move toward a Government that is citizen centered and results oriented.

To be successful in this area, Federal Agencies require support and assistance, and the U.S. General Services Administration works to provide that support, staking a leadership role in reducing wasteful Government spending, encouraging the adoption of innovative solutions, and coordinating major Government wide management improvement initiatives.

With us today to discuss his efforts in this area is our very special guest, Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at the U.S. General Services Administration. Good morning, Stan.

STAN KACZMARCZYK: Good morning, Albert. Thank you for inviting me.

ALBERT MORALES: Also joining us today is Paul Kayatta, Partner in IBM's Public Sector, General Government Practice. Paul, welcome, good to have you.

PAUL KAYATTA: Thanks, Al. Good morning, Stan.

STAN KACZMARCZYK: Good morning.

ALBERT MORALES: Stan, before we get started, could you set some context by providing our listeners with an overview of the history and the mission of the U.S. General Services Administration or GSA? Tell us when it was created and what its mission is today?

STAN KACZMARCZYK: Sure. GSA was created in 1949. Congress passed the Federal Property and Administrative Services Act, which was signed into law by President Truman. And it basically consolidated all of the administrative service type functions that were being done in various agencies across the Government into GSA so that we could consolidate, centralize, and achieve efficiencies and lower costs.

Some of the historical achievements of GSA, in 1954 we created the first Federal Motor Pool. In 1957 we coined the phrase "telecommunication system" to describe phone service. And in 1963 we inaugurated the FTS inter-city phone system.

The Federal Buildings Fund was authorized in 1972 as a revolving fund which was used to maintain, operate, and renovate the GSA Federal Buildings.

And if we flash forward to 1995, that's when the Office of Government wide Policy was formed, and that consolidated all of GSA's policymaking, regulatory, and oversight functions into one office, enabling the GSA business lines to focus on delivering business services.

ALBERT MORALES: So, Stan, for some more specifics, how is GSA organized, and can you tell us a little bit about the size of the budget, number of fulltime employees, and perhaps how the organization is geographically dispersed across the country?

STAN KACZMARCZYK: Sure. We have two major business lines, the Public Building Service and the Federal Acquisition Service, and we have 12 staff offices, OGP, the Office of Government wide Policy is a staff office. We have 11 regional offices and two independent staff offices.

We have an annual budget of close to $25 billion, about 96% of that consists of reimbursements from our Federal customers for the services that we provide. We influence the management of over $500 billion in Federal assets with the work that we do.

We currently have a staff of 12,000 employees, that's down from a high of about 40,000 employees in the 1980s so we're very lean and efficient. We do contract out a lot of the work that we perform on behalf of the Federal Agencies. We have GSA employees in most parts of the U.S. and around the world.

The Partnership for Public Service recently published their poll on the best places to work in the Government, and I'm happy to say and proud to say that GSA finished number eight on the list of best places to work, and we were number one in the category of family friendly culture and benefits.

PAUL KAYATTA: So thanks for that overview. Can you tell us a little bit more now about the Office of Government wide Policy and your specific role as the Acting Associate Administrator?

STAN KACZMARCZYK: Sure. The office of Government wide Policy has always been led since 1995 by two Senior Executives, a leader of the organization and a deputy. In my real job I'm the Deputy. I'm called the Principal Deputy Associate Administrator, or as I like to call it PDA Squared. Right now, during this transition, I am the Acting Associate Administrator or the leader of the Office.

Prior to becoming the Deputy, which I did in May of 2006, I was one of the Senior Executives of one of the staff offices, and that was the Real Property Policy Office. And then came to be the Deputy of OGP, as I said, in '06.

As the leader or the Deputy I'm responsible for the leadership of the organization, for the allocation of resources according to priorities, and for overseeing our performance management system to make sure we're working on the right things and getting them done efficiently.

We have multiple stakeholders in the Office of Government wide Policy that we deal with. A lot of them at the Office of Management and Budget, at different offices of the Office of Management and Budget, stakeholders on the Hill, other senior leaders in GSA, other parts of the Government.

I could give you a lot of flowery words about what I do and what my role is as far as leadership, but basically I spend 90% of my day doing what I would call "relationship management."

PAUL KAYATTA: So every position comes with its challenges. Can you tell us your top three and what you're doing to address them?

STAN KACZMARCZYK: Sure. One challenge, and I think everybody will say this, is resources. The Office of Government wide Policy is actually a good sized organization, and we have 144 Federal employees and approximately 48 contract employees, and an annual budget of $71.8 million. So we're not real small but we're not real big, so we can get a lot of things done and we want to get a lot of things done, so there are never enough resources to accomplish everything that we feel we need to do.

Another challenge that we face and, again, I think you'll hear this across the Federal Government is the aging workforce and the wave of retirements. And we are trying to address that in several ways. We are hiring more interns these days, and trying to hire them before people leave so they can learn from senior people, taking advantage of a program called "Presidential Management Interns".

We've had good success with that, and one thing we're doing is using some of the new Web 2.0 technologies or establish a Wiki to capture the history of OGP and how -- and the polices and procedures internal to our own office. So it'll be the OGPpedia. But, actually, many other Federal Agencies are doing this, including the Department of Defense.

And, finally, kind of an ongoing challenge of our office is that we do have a Government wide scope but we are part of GSA, so we support GSA, we support the business lines, but we also, you know, we work for the whole Government.

And other Federal Agencies have their own Federal Buildings and their own procurement programs, and we have to provide policy and guidance and award best practices across the Government and not always, you know, pull for the home team.

ALBERT MORALES: So, Stan, I understand that you came to GSA back in 1991. Can you tell me a little bit about your career path? And I'm interested, how did you get started in public service?

STAN KACZMARCZYK: Sure. I was working in the private sector in New York City. I was working in the Wall Street commodities business for I think close to 10 years, and wanted to make a career change, and was interested in public service.

And I was hired by the GSA Public Building Service in the New York Region in 1991, with virtually no experience in real estate, just based on my qualifications and education they were willing to take a chance on me and train me in the business.

Despite that, I was ungrateful enough to move to the Central Office after about seven months in the Regional Office, for which the senior leader of that office I think never forgave me, but he's retired now. He actually retired and went to the private sector and retired again, so I'm double safe.

But I moved to the Central Office because I wanted to know how the Government works, and I figured you have to go to Washington, D.C. to find out. And God help me, I found out how the Government works.

In 1997 I joined the Office of Government wide Policy, which was formed in late '95, so I've been there for most of the history of the office. And in 2004 I joined the Senior Executive Service.

So I joined GSA in 1991 as a GS7 and in 13 years was promoted to -- up the ranks to the Senior Executive Service, so it was -- that's pretty rapid by most terms, a pretty rapid ascent, which I'm pleased with.

ALBERT MORALES: That's fantastic. So, Stan, as you sort of look back and reflect on your experiences going back to 1991 and even your experiences back in the private sector, how have they shaped and informed your current leadership role and shaped your management approach and style?

STAN KACZMARCZYK: Well, I think the diversity of my background in terms of my work experience and my education is a plus. I do have experience in both the public and private sectors. There are different ways of doing business in both those areas.

When you come into the Government from the private sector you learn right away there's a different way to get things done. You have to slow down and work more collaboratively with people.

I have a degree in psychology and a degree in economics, so the economics gives me a good analytical focus, and the psychology helps me to understand people and do that relationship management.

Most of my early experience has been in the real estate part of GSA, but then coming over to Government wide Policy, first as a member of the team and then as a member of the leadership team, I became educated in the IT side of the business and all the other programs that OGP is responsible for.

I give a lot of credit to the previous leadership of OGP. They had consistent leadership in Marty Wagner and John Sindelar, who led the office from its inception through early 2006. It's rare to have the same Leadership Team in place in any agency or office that length of time, and they put in a really good culture and management structure, which I basically took over and kept running with my own spin on it. So I give them a lot of credit.

But I think the diversity of background is good in two ways. It's good to know a lot of programs and a lot of businesses because it helps you manage a diverse organization like OGP, but it also helps to -- because it teaches you that no matter how different the mission or the business is that a lot of the issues with people and teamwork and managing people tend to be the same, so it helps you elicit the core issues, those common denominators of dealing with people and getting things done.

ALBERT MORALES: That's great. How does GSA's Office of Government wide Policy enhance transparency in open Government? We will ask Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at GSA to share with us when the conversation about Management continues on The Business of Government Hour.

(Intermission)

ALBERT MORALES: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and today's conversation is with Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at GSA.

Also joining us today from IBM is Paul Kayatta.

Stan, transparency is certainly taking center stage today with the new Administration, but this really isn't a new concept. In fact, elements such as advisory committees have played an important role in shaping programs and policies from the earliest days of Government.

To better understand this, could you tell us more about the Federal Advisory Committees and specifically how does your Office support the efforts of these Committees and how do these Committees enhance the work done by the sponsoring Agencies?

STAN KACZMARCZYK: Sure. I'd be happy to. In fact, as a side note, when we were asked to help the White House on the new Open Government Directive we were assigned the GSA lead on that. The first person who came to mind was the person who was in charge of the Federal Advisory Committee, as the Committee Management Secretariat, because he was about transparency. In fact, it was about transparency before it was cool I guess is the expression.

But, yes, the Federal Advisory Committee Act was passed by Congress in 1972, and it basically governs the way that the Federal Government can get advice and develop policy from the private sector.

It delineates a formal process for setting up committees and getting recommendations and advice, and having discussions with the private sector, and it requires that it's done publicly so it's Government in the sunlight and not policy being made by certain companies and certain agencies in back rooms.

So there are about 900 Federal Advisory Committees currently. They consist of 65,000 members, and they hold about 7,000 meetings annually. And Advisory Committees influence over $100 billion in Federal Programs each year and they cost $350 million per year to operate these Committees.

Our Office has the role of overseeing the implementation and compliance with the Act, which we refer to as "FACA," Federal Advisory Committee Act. We develop guidance and policy and write regulations for how to conduct these meetings. We conduct an annual comprehensive review of all the Federal Advisory Committees to ensure that they are complying with the law properly.

We have developed performance measures and we track the performance of the Committees, the number of recommendations they come up with, a number of recommendations that actually get implemented, dollars saved as a result of them.

And we conduct an inter-Agency training program for the committee management officers across the Government to keep them up to date. Also, of course, to train new ones because of turnover. And those sessions are held several times a year here in D.C., occasionally outside of D.C., and they're always sold out.

Agencies get a lot of value out of Advisory Committees. They produce over 1,000 reports, addressing such diverse issues as nuclear safety, healthcare, transportation, counterterrorism.

Over the lifetime of the program there have been over 900,000 recommendations issued by these Advisory Committees, with a total impact on Government business of over $100 billion.

And I guess when you ask, "Are they worthwhile?" You have to keep in mind the time that's involved in setting up and running these committees. The cost that's involved, the dollars that are spent, and the fact that you're not required to do so. So agencies really wouldn't go through this if they weren't getting valuable recommendations and input from the private sector using this process.

ALBERT MORALES: So what is your Group's regulatory role and where does it get its authority to establish Government wide regulations? And, if I may, what are some of the sources used to help in the development of these policies?

STAN KACZMARCZYK: Sure. We have, well, OGP is a very diverse office. So we basically have policy responsibilities corresponding to all the different administrative service areas of GSA and a couple of other things, like the Federal Advisory Committee Act, that we just talked about.

So we have various regulatory authorities. In some cases, in the case of travel, transportation, fleet management, we issue actual Government wide regulations that the rest of the Government must comply with.

In other cases, such as real property, we issue regulations that only GSA, itself, has to comply with, but that the rest of the Government that owns and manages their own buildings can refer to as best management practices, and they often do so.We also have a role in overall Government wide regulatory process.

ALBERT MORALES: So as a follow-up, could you tell us more about your efforts to enhance citizen participation in Federal rulemaking? Specifically, how has the Regulatory Information Service Center provided opportunities for citizens to track Federal regulations?

STAN KACZMARCZYK: I'd be happy to. The Regulatory Information Service Center is the smallest office in GSA, but one of the most important. They work closely with the Office of Information and Regulatory Affairs at OMB to manage, to help OIRA manage the whole regulatory process.

We maintain a database, which is called ROCIS, which is actually an acronym made-up of acronyms. It's the Risk in OIRA, the risk in OIRA Consolidated Information System, and it tracks all of the regulatory activity ongoing in the Government.

Twice a year we publish what's called the "Unified Agenda," which enables the public to see what regulations are being developed in the Federal Government and at what stage different regulations are at. We also publish that information and historical information about regulations on the website called reginfo.gov.

Recently, it was in 2007 we used to print this semiannual regulatory agenda, and you can imagine the volume of it. And a very effective doorstop. In 2007 we went to something called the e-agenda, and the vast majority of it is put online and very little is printed out in the Federal Register. This achieved a substantial cost savings of $800,000 annually in printing costs.

We get a lot of traffic on our reginfo.gov. I sit through the management reviews of the program, and I'm amazed when they come in and they show me statistics saying that there are millions of hits on the website, and who is interested in all these regulations, besides the people in the Government who work on them. But you have academics, researchers, lawyers, and businesses who want to know what the Government may be thinking about doing that might impact their business.

So the way it works is we have this ROKAS system that tracks everything, produces the Unified Agenda, publishes it mostly on the web twice a year. Puts it on the web on reginfo.gov.

If a citizen goes into there and sees a regulation that they're interested in that's in process and if the public comment period is still open, they can click on a link which will take them over to a website called "regulations.gov," which EPA manages under the e-rule making initiative. And they can go right in and comment on the regulation in process.

So all that has already been put in place and enables transparency of the regulatory process and collaboration with the citizens. However, the technology behind that is all what we would call Web 1.0 technology.

So what we're going to be doing in the near future is upgrading the whole process using the new Web 2.0 technologies, which will enable citizens to feel more comfortable and it will be more effective in them collaborating in the rulemaking process.

PAUL KAYATTA: Switching gears a bit, could you tell us a bit about the Financial Management Line of Business, or FMLLB, as it's called, and how it seeks to improve Government wide financial management system modernization? And, if you can, tell us a bit about the challenges facing the initiative, and what's the status today?

STAN KACZMARCZYK: Sure. The Financial Management Line of Business seeks to streamline and consolidate the Federal financial management process. You had a situation some years ago where you had a different financial management system for every agency in the Government, so obviously this is not a very cost effective way of doing things.

So what we've been striving to do over the years, first of all, consolidate that down to a number of shared service providers, drive agencies more towards using one of those shared services rather than using their own legacy systems.

But the next step is really to consolidate and streamline and standardize even further so that we can hopefully one day all be using the same Federal financial management system. This involves coming up with standards.

A big accomplishment of this initiative was a couple of years ago to publish what we call CGAC, or the Common Government wide Accounting Code. We continue to go through the process of standardizing the different business processes within Federal financial management to drive greater standardization.

The Financial Management Line of Business works on the same team with what we call the "Financial Systems Integration Office," which years ago under the Treasury Department used to be known as the "Joint Financial Management Improvement Program," and those folks work to test software to make sure it is compliant with existing financial management standards in the Government.

The biggest challenge with any effort to standardize in any area is always each agency thinking that they're special and they have to do their things their way. And there are reasons for that, but I would say in the Federal financial management area, that challenge is about as steep as I've ever seen it.

And it's not just uniqueness from agency to agency, but the uniqueness of the way the Federal Government does its financial management compared to the private sector which makes it difficult for us to readily adapt a commercial off-the-shelf software for use by Government Agencies in financial management.

PAUL KAYATTA: One of the provisions of the American Recovery and Reinvestment Act is to provide economic opportunities and environmental improvements for citizens through the acquisition of motor vehicles. Does GSA manage indoor monitoring expenditures for this funding?

STAN KACZMARCZYK: Yes, we are. I'd like to talk about that particularly in the area of fleet management. It's actually a good example of the difference between OGP's policy role versus Federal Acquisition Service's service providing role.

The Federal Acquisition Service are the people who actually order the cars and deliver them to the agencies, but how that money that was put into the ARRA to upgrade the fleet is spent and how it should be spent is more or less a policy decision of Fleet Management.

So we worked hand in hand with FAS and with stakeholders in the Administration to figure out the best way to spend the $300 million that Congress allocated to upgrade the fleet.

There was a number of policy -- competing policy considerations versus we want to have a stimulus, we want to spend the money as soon as possible to stimulate the economy, versus the provisions that were in the Act to invest in new technologies, new fleet technologies in this case.

So currently there's a total of $300 million that have been allocated to upgrade the fleet. We've obligated $200 million of that already, mostly for hybrid vehicles, and we have another $85 million of orders projected.

But we've held back $15 million to buy plug-in electric hybrids. The reason we're holding it back is the vehicles are not available yet.

So, again, there was this tradeoff between we want to spend money now, because it's a stimulus, but we do want to invest in new technologies that are not quite there yet, so we want to be the leaders and encourage the industry to go down that path, so we worked pretty closely with everybody to come up with the best approach.

PAUL KAYATTA: As you know, Section 508 of the Rehabilitation Act requires accessibility tools to be provided to disabled citizens, to provide access to essential information.

Can you tell us a little bit about the technical assistance provided by your Office in this area and how does this effort improve the accessibility of Government information and technologies for citizens with disabilities?

STAN KACZMARCZYK: One of the areas where we do have responsibility for ensuring compliance with existing law is the Section 508 of the Rehabilitation Act of 1973, which requires the Federal Government to provide citizens with disabilities equal access to technology.

We're talking about things such as screen readers and brail devices. When people set-up websites everything works at lightening speed these days, and they're thinking about the content, they're thinking about user friendly. They're not necessarily thinking about people who need assistance with using that technology.

So and there are products that are 508 compliant and that will enable citizens of all types to be able to use these technologies, but you have to know they exist and you have to build that into your procurement otherwise you're not going to get it.

So one of the things that we do is we have a tool called "Buy Accessible Wizard," which can kind -- when you put it together your solicitation for technology, it will kind of walk you through the steps of how to make sure that what you're buying is going to be 508 compliant.

Another thing we've done is we've been monitoring agency use of that by going to Fed Bus Op and looking at the solicitations that have posted there and kind of examining them to see if they are 508 compliant. And we're pleased to say that over the last couple of years of doing that that the percentage of solicitations that are compliant has been rising.

ALBERT MORALES: Stan, as we talk about technology, it goes without saying that today it's critical to protect data and manage the access to electronic information.

Could you elaborate on your Office's efforts in providing an identity management infrastructure for the public? Specifically, can you address how this infrastructure provides a common and secure means for the Federal Government to authenticate the public and gain trusted access?

STAN KACZMARCZYK: Sure. Identity management is a very critical area in OGP and in the Government, and there are several levels of authentication. Just signing into a website with your user name and your password is one of the lowest ones, and then actually having -- using digital certificates to make sure that you really are who you are is one of the higher ones.

So we work with the various committees and agencies, such as NIST on developing the standards for authentication. We actually test products to make sure that they're compliant with those standards, and that they're compliant with what's called "FIPS 201," which is the Federal Information Processing Standards Publication 201, the latest from NIST.

And we actually operate what's called a "public key infrastructure," and this is a system comprised of hardware, software, and policies that enable people to authenticate themselves to the Federal Government when they do business with the Federal Government.

ALBERT MORALES: So switching gears a bit, could you tell us more about GSA's federal asset sales or EFAS initiative? What types of property are included in this initiative and how does it maximize the public's access to these assets that are for sale while increasing efficiency and reducing cost?

STAN KACZMARCZYK: Be happy to. Federal asset sales, which is -- you can access through a website which is actually called govsales.gov is a one-stop portal that pulls together all of the surplus property that's for sale by the Federal Government.

As you know, when the Government no longer needs, and this applies to both real and personal property, the first thing we do is to look to see if another Federal Agency can use it, and then it goes, at least in real property it goes through state and local. And then eventually if nobody wants it, it goes -- it's surplus, and it goes for sale to the public.

So this portal pulls together everything that's for sale. It's, the concept is that everything is one place, makes it easy for the citizens to find what they're looking for, and it increases the competition by putting it on the internet so that the Government gets the best price for its surplus property.

It's a very successful effort. 2008 was the first year that we really have a full year's worth of data for. In 2008 we sold $4 billion of surplus real property, and $333 million of surplus personal property. The portal, itself, in 2008 had over a million unique visitors, generating 1.7 million visits.

This initiative has been very successful. It's won a number of awards, including Steve Rosen, who is the Manager, Project Manager of the initiative, was one of the winners in 2009 of the CIO Council Individual Awards, recently given out at IRMCO.

ALBERT MORALES: That's great.

How does GSA manage the adoption of Government wide policy? We will ask Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at GSA to share with us when our conversation about management continues on The Business of Government Hour.

(Intermission)

ALBERT MORALES: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and with us today is Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at GSA.

Also joining us from IBM is Paul Kayatta.

Stan, GSA has long been a strong advocate for increasing the practice of telework across Government. Also, GSA is known for leading by example, and I understand that you're in your second year of an aggressive Agency wide initiative to increase teleworking.

Tell us a little bit about GSA's telework challenge? What is it, how is it progressing, and what's making it work, and what can other agencies learn from this effort?

STAN KACZMARCZYK: I'd be happy to talk about the GSA telework challenge. It's a GSA Agency Program to increase telework participation in our Agency.

In OGP we have a role in coordination with OPM to provide guidance for Government wide telework programs. This is an internal program, but we partnered very strongly with our internal folks because we were interested in practice, in having GSA practice what we preach, at least from a Government wide standpoint, and to really get telework up to speed in the Federal Government.

Plus I was making a lot of presentations on telework and I got tired of talking about the patent and trademark office and the Treasury Inspector General for Tax Administration case studies all the time. And I said, "We need another case study, let's do it ourselves."

So we came up with a very aggressive program where we were going to -- we set some goals and we wanted to increase the number of participation, number of people participating in telework who were eligible, whose positions are eligible for telework.

And at the time we started in 2007 our participation rate of our eligible folks was about 10%, so we set some aggressive targets and we said by the end of calendar year 2008 we want to have 20% people, of our folks participating. By the end of calendar year 2009 double that to 40%. And then by the end of calendar year 2010 or 2010, 50% of those people who are eligible to participate in the telework program will be teleworking at least one day a week.

Currently, and we're sitting here in calendar '09, the number is 43%, so we have well exceeded and almost closed the gap on our ultimate goal for the end of 2010.

I think the keys to our success in this area were top level leadership and support, which is not just talking about it but putting it right into our performance plans.

Using a strategy that a colleague of mine in the British Government calls "name and shame," every month we report on our internet the progress that the various staff offices and regions are making towards the goal, so you can see who is on track, who is behind. And that was very effective.

Another thing we did was used IT effectively to promote this, and by that I mean we replaced everybody's laptops during the normal IT refresh cycle with -- everybody's desktops, rather, with laptops.

And if you participate in the program you have documentation and you take the laptop home with you and use the same laptop, so that takes care of, you know, economics, you don't have to pay for two computers. It takes care of security, the same security is in place at home because it's the same laptop and you're going into your system or your LAN over the internet using a virtual private network.

So it solved a lot of problems, and I was kind of worried that people wouldn't want to take their laptop back and forth but it didn't turn out that way. They're making them lighter and lighter these days. I don't have to tell you guys that. And the cost has come down. So it's been a very effective program.

We've been promoting it for reasons of it's good for the environment. It's good especially in the Washington area to reduce traffic congestion. Its flexibility, continuity of operations. The more people that can telework, will be able to telework in the event that people cannot get downtown or get to the GSA building or something happens there. And it's a good work/life balance program, and people like it.

Down the road if we get to 50%, 60%, 70%, who knows where, I think we can actually do some stuff in our workplace to make it more effective or even to reduce our space holdings and reap some other economic benefits from it. So it's been a very successful program for GSA.

PAUL KAYATTA: That's real progress in an area I think that will have great dividends.

Hey, Stan, can you tell us a bit about how your office collaborates with Federal, State, local Governments on policy development and implementation? And to what extent do interagency working groups assist you in those efforts?

STAN KACZMARCZYK: We do quite a bit of that, in all of our program areas, our major program areas; we generally have some kind of Executive Steering Committee set-up with agency executives from across the Government to develop policy in a collaborative fashion with them.

Less so with the State and local Governments, but that ties back to the resource challenge, I said before, but we need to do more with them.

We do a pretty good job keeping track with the private sector as far as what are the best practices are. But, as we know, some best practices that work for the private sector may not work for the Federal Government.

So we -- but we definitely do a job, a good job with collaboration with the Federal Agencies because it's a lot easier if you get buy-in early on in the policy development process, it's a lot easier for the agencies to comply with them down the road.

PAUL KAYATTA: In your opinion, what have been some of the more innovative ideas and constructive solutions that you and your team have developed and implemented? And how does the OGP cultivate a culture of innovation and performance?

STAN KACZMARCZYK: Well, you always get in trouble here when you talk about the successes you're the most proud of, and I've got five staff offices and I don't know if I'm going to cover them all, but I just have really just a sampling of some of them, but some of the major conferences that we managed, the IRMCO conference and also the Fed Fleet Conference.

We actually stood up the first version of the website, which is Today at usa.gov, which is now operated by the Office of Citizen Services in GSA. We do tend to develop a lot of things upfront that then get spun-off into an operational area.

On the HSPD 12 initiative, the smartcards, we did all the upfront work on developing the standards and testing the products for compliance with the standards and then helped the Federal Acquisition Service set-up a managed service offering so they could actually provide the cards to Federal Agencies.

In the area of the Federal Fleet we talked about already, but the Federal Fleet is operated by the Federal Acquisition Service but we do all the policy for Fleet management and it goes back to that Fed Fleet Conference.

The e-travel initiative is also managed now by the Federal Acquisition Service but we developed that as a pilot. The Government, similar to the situation we talked about with the financial management, you had a different travel management system for every Government Agency in town, so now we have three, and they're commercial vendors.

We talked about the Federal asset sales, that's been a great success for us. We have a motor vehicle registration system that we put in for the Federal Government because if you get pulled over, somebody can look-up your license but not so yet with the Federal Government, but we're working on that.

Some of the work we've done in aircraft safety we're very proud of. The work that we've done with the Federal real property inventory to support the real property asset management initiative that was kicked off by Executive Order 13327 and the performance measures and the feedback that we've gotten and, again, the rightsizing of the Federal inventory that's occurred as a result of that, and various other things.

The thing about a culture of innovation is, and we do have a culture of innovation at OGP, is people get very excited and very motivated, and you're developing something new and it's important and it's innovative.

And once it gets developed and successful and it's up and running people get comfortable with it and they want to keep running it themselves. But our job is, like I say, if it's a success move it on somewhere else into its operational phase and then move on to the next thing.

So if you're busy holding on to what you've already innovated you can't innovate something else, so it's kind of sometimes a difficult management decision to wean people off of things, but if I don't do that then there'll be no further innovation.

ALBERT MORALES: There is certainly a life cycle there. So, Stan, you've mentioned IRMCO now a few times, and I understand that you've held the 48th Annual IRMCO Conference. What was the theme of this year's conference, and how does the conference promote partnerships, facilitate dialogues, and motivate collaborations across multiple disciplines and communities, both within and outside the Government?

STAN KACZMARCZYK: Well, we had a good opportunity this spring and IRMCO was sold out. IRMCO is held in April, and we had a new Administration come in, in January, and we had a theme of "Transformational Leadership, Steering a New Course."

So we were fortunate to get some of the new Administration people, such as Vivette Kunja and Beth Noveck to come speak, so there was a lot of interest, obviously, in hearing what the new direction is.

But IRMCO is the Interagency Resources Management Conference, and it pulls together what we call the "CXOs" in the Governments, the CFOs, CIOs, Chief Acquisition Officers, the Chico's, the Human Capital Officers. And this year some of the Inspector Generals, also.

It pulls together the senior leaders of the Government to share information, hear -- learn about best practices and hear about policy directions, both from us and from the Administration Officials.

This year, like I say, there was a lot of interest in the new directions that are coming, particularly in the IT area but actually across the Government and acquisition reform and things of that nature.

ALBERT MORALES: Are there other conferences or workshops in policy areas that you host?

STAN KACZMARCZYK: Yes, there are, particularly in the area of our biggest office is the Office of Travel, Transportation, and Asset Management. They have responsibility for about seven different administrative programs.

I mentioned Fed Fleet. We do the Government's policy for fleet management, and that's both in terms of the automotive fleet and the aviation fleet.

So Fed Fleet is a big conference, thousands of people. This year's conference is going to be held from July 28th to 30th in Chicago, and it is really the premiere event for fleet management in the Government. It offers training courses and networking opportunities, and the opportunity to learn from vendors and to exchange best practices within the Government and with the private sector. It really is a unique opportunity.

We also hold a Mail Forum every year, and we just recently held one this spring. And the GSA Mail Forum, some of the subjects we discussed were intelligent mail, digital mail, green mail, and mail security.

Now, mail management may not sound very sexy but in 2001 after the anthrax attacks it was -- mail security was a big issue, and it continues to be so. So we continue to hold that conference every year.

Every two years we hold the National Travel Forum because we do the Government's travel policy. In fact, we're the office that publishes the per diem rates every year, which is always of great interest, and Travel Forum is another well attended event.

ALBERT MORALES: So with so many programs, how does OGP reward Federal Agencies for their significant accomplishments and achievements and innovation? And can you give some examples of these awards and perhaps the process involved in achieving these awards?

STAN KACZMARCZYK: Sure. Our general areas and doing policy, you know, is guidance, there are regulations, there are performance measures, Government wide databases, and best practices.

And we determined early on that one of the best ways to find out what the best practices are and to disseminate them on the Federal Government is to run awards programs. And they generally set-up, usually annual programs, you get a panel of independent judges from across the Government and the private sector, they review the submissions and then we annually award, usually with monetary rewards associated with it.

We have a total of 12 awards programs that we run annually. We have the IRMCO Awards, given out at the IRMCO Conference for leadership across, leadership in the IT sector. We have the Donald L. Scantlebury Memorial Award, which is in financial management. We run a big Financial Management Conference every -- once a year, and Federal financial management professionals get continuing education credits for attending the day-long conference, and that award is given out at the conference.

We also have the CIO Council Leadership Awards, which are also represented at IRMCO. We have the Bob Baker Fleet Manager of the Year Award, which is presented at Fed Fleet. And the Federal Aviation Program and Professional Awards, also presented at Fed Fleet.

In the area of personal property management, which is another one of our policy areas, we have the Miles Romney Award. And we have mail awards and travel and relocation awards.

Our longest running award, I believe, I say with a sense of pride having come from that Office, is the GSA Achievement Award for Real property Innovation which has been given out annually since 1997.

ALBERT MORALES: Great. What does the future hold for GSA's Office of Government wide Policy? We will ask Stan Kaczmarczyk, Acting Associate Administrator for the office of Government wide Policy at GSA to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

ALBERT MORALES: Welcome to our final segment of The Business of Government Hour. I'm your host, Albert Morales, and today's conversation is with Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at GSA.

Also joining me from IBM is Paul Kayatta.

Stan, there is a lot in the press about new social networking models and technologies that are redefining the relationship of citizens and their Government.

In the past year many Federal Agencies and communities have launched their own versions of a Wikipedia or a blog and, in fact, I think you mentioned that this was a direction that GSA was heading in.

Could you talk about the efforts within OGP to leverage these new social networking ideas and technologies? And how can these tools support your operations and mission?

STAN KACZMARCZYK: We've done a number of things and we'll continue to do so. We've been a longtime supporter and contributor to a Government wide Wiki called MAX, which is hosted by OMB.

And, as I mentioned, we're developing an internal Wiki to -- from a knowledge management standpoint to capture all the processes and history of OGP before people walk out the door.

Another thing that we started is our own blog, and been trying to get people to participate and blog along with me. I actually had to order the middle managers to blog, they're the only ones I had control over, and they begrudgingly did it and found it was fun.

But we will continue to work with the Administration on developing policies for using social networking tools, such as Facebook, Twitter, and YouTube. I, myself, use some of these tools, so I shout out to all my Facebook friends and my Tweeples, and I have found them to be useful as far as business applications and making connections with people and also a lot of fun.

PAUL KAYATTA: As you certainly know, most work and accomplishments in the Government is a team effort, so with this could you elaborate on your approach to empowering employees? And how do you, more specifically, lead change and enable your staff and those within the organization to accept the inevitability of change, embrace it, and make the most of it?

STAN KACZMARCZYK: I consider myself a good delegator, but I'm a delegator who never forgets. So as long as it gets done you won't hear from me again, but if it doesn't get done I'll probably remember that I delegated it to you.

I believe in managing by our results, and my experience early on managing the Government wide Telework Program, which I used to do more directly, showed me the value of that because that's the only way you can manage people that are not in the office, you have to manage by results and not by what they're doing.

As far as change goes, I try to maintain a consistent structure and tradition within the Office of Government wide Policy, so that even though there are changes in the work or the programs that we're doing it's still the same place. I don't believe in making a lot of extraneous changes in the way we do things. I try to keep some consistent core structure there as far as the management of OGP.

A lot of people tend to react to what if scenarios I think way too strongly, so when change is in the wind I think it's good to discuss it. I think it's good to analyze it, but I don't think it's good to react to it emotionally as if it's already happening because a lot of times things are discussed and never happen and there's no point in investing all that emotion upfront over things that are just being discussed.

So if anything, if anybody was to reorganize GSA or OGP, all these things would have to be done anyway, they just -- and you lose all the efficiencies of having them in one place, so it's a good way of reminding people that change will come, change is inevitable but the office will go on.

ALBERT MORALES: So, Stan, let's transition to the future, can you give us a sense of some of the key issues that will affect GSA and Government wide policy over the next few years? And within these issues, how do you envision your office will need to evolve over these years?

STAN KACZMARCZYK: And as the leader of an organization that has five staff offices, it may not surprise you that I have a list of five challenges to discuss, each one corresponding to an office.

But I think in the information technology area, the biggest challenge is the tension between more transparency and more security. So as we open up more of Government process to the public and put more things on the web, at the same time we need to be securing that even more.

Then there's also the big picture, cyber security, all the stuff that's not open to the public, but everything is web enabled these days. Everybody is using the internet, and that includes, you know, the people who are protecting us and the military and security agencies. So it's a lot of vulnerability there, which I know the Administration, the last Administration and the current Administration are addressing.

In the area of transportation, travel, and asset management, the office that does the seven different administrative programs, that's the office that has real regulatory authority. You must, the rest of the Government must follow those regulations of fleet management and travel management, mail management, et cetera.

We have been moving slowly over the years to a mindset where we are going to be developing performance measures, collecting data -- I mentioned the vehicle registration system -- and providing, using that data to provide feedback and evaluation to the agencies, themselves. So this is a way of managing, self-managing kind of feedback loop, what's the best in class and how am I doing compared to it.

It's a completely different mindset from saying, "Okay, we're OGP, we're going to put the regulations in place in a collaborative manner, but here we're going to tell you how it's going to be done versus we're going to tell you how you're doing and let you compare that to the best in class and improve further."

So it's not just a matter of putting the technology in place to do it, but it's a matter of shifting the culture of the organization.

In the real property area there's been a lot of talk about the state of the Federal real property inventory. GAO has been upset with it. We're on the high risk list for a number of years. It's been a real property initiative under Executive Order 13327. A lot of stuff has been done under that initiative.

Recently, the Recovery Act allocated $5.5 billion for GSA to upgrade a number of its buildings, and it allows us to get through a lot of our backlog of renovation projects, which is good. There's other money floating around the Government under the Recovery Act, which is good.

Unfortunately, from where I'm sitting, looking at the whole 3.4 billion square foot Federal real property inventory that the problem is really big. We need to do more to renovate the buildings that we need, continue to have a need for.

We need to do more to dispose of the buildings that we don't need or that need too much money to fix-up, and we need to do more in employing alternative work strategies, such as telework and hoteling to reduce the amount of space that we need.

We need to do that as a Government, we need a Government wide approach. GAO calls this "a need for a transformation strategy in the Government". So that's the biggest challenge in that area.

In the area of the regulations and the Regulatory Information Service Center that we talked about, as I said, there has been transparency and collaboration in that area already. We're going to be employing more Web 2.0 technologies to increase that. As we do that, we're going to have the public growing in importance as stakeholders in the regulatory process.

And, again, it's a culture shift, and it actually is a theme here and that the technologies are tools but it's how they impact the way we do business and the culture shift that's needed to get from 1.0 to 2.0 is the real challenge.

And, in this case, you know, the folks in the regulatory arena are used to dealing with each other. This is kind of a technical, analytical process, and they're not as much used to dealing with the public as more active vocal stakeholders in the process, so that's going to happen as employees, new technologies.

In the area of the Committee Management Secretary, again, as I say, they've always been about openness and transparency but, again, as we modernize with the 2.0 technology we're going to have to learn how to deal with what I call the "gray areas".

The FACA was passed in 1972, there was no such thing really as the internet the way we know it today, but certainly Web 2.0, social networking back then. People are interacting using these tools right now, and I often look at it and say, "Are they doing something similar to an Advisory Committee or not and how do we put policy in place to differentiate that?"

So, again, it's kind of a culture shift, and maybe we need to modernize the Act, because 1972 was a different world from 2009.

ALBERT MORALES: So, Stan, that's wonderful, a wonderful perspective there. As you reflect on your career and your transition from the private sector what advice might you give to someone who is out there considering a career in public service?

STAN KACZMARCZYK: I would say particularly to the younger people, if you're considering a career in public service, do it now rather than wait till later. I know when you're younger you say, "Well, the starting salary is higher in the private sector." And you kind of take the short-term perspective. But I would say do it now, you can always go to the private sector later on when you get some experience.

And if it turns out you like the Federal Government, you make a career of it, that's where you'll reap the most benefit of working for the Federal Government with a long-term career and full realization of the benefits that are involved.

I'd also say to people that I think in my experience I find that you learn more from others that you work with than you learn from an organization, itself, and I've always found the quality of people that I deal with in the Federal Government to be impeccable, and particularly in GSA, I've worked with a number of wonderful people and smart people and dedicated people over the years. And you'll learn more from those folks than you will from any culture or from any school really.

Finally, I think the Government, especially GSA, in particular, is a place where you can be a generalist or you can move around, you can learn different things, and if you're not sure of what you want to do and if you're looking for a career change maybe that applies.

It's a good place to find yourself, if you just come in and be flexible and be open to different things and new ideas, and you can find your career.

ALBERT MORALES: That's wonderful advice. Thank you.

Unfortunately, we have reached the end of our time. I want to thank you for fitting us into your busy schedule, but, more importantly, Paul and I would like to thank you for your dedicated service to our country over the past 18 years in your role at GSA.

STAN KACZMARCZYK: Thank you. I'd like to take this opportunity actually to thank my Leadership Team at the Office of Government wide Policy.

We've had a couple of acting leaders over the last couple of years, including me now, and sometimes an organization can drift in that situation, and just waiting for the next permanent leader, but we have such a solid Leadership Team in place that that has not happened. We have continued to move forward and make great progress on behalf of the Government and the American people.

I'd like to thank my Acting Deputy, Jim Deans, who is doing a fantastic job. I didn't think I needed a Deputy and Jim proved otherwise. Now I couldn't live without him.

I'd like to thank Tony Butcher, who is my Chief of Staff.

Becky Rhodes is the Senior Executive in charge of the Office of Travel, Transportation, and Asset Management. She's kind of the heart and soul of OGP.

I'd like to thank or acknowledge Carolyn Austin Digs, who is the head of the Real Property Policy Office, the Senior Executive who took over that office behind me, enabling me to move on to the front office and not worry about the old shop.

Peter Altman is the head of our IT Policy Office.

John Thomas, the head of our Regulatory information Service Center.

And Bob Flack, who is the Committee Management Secretary.

This is an impeccable Leadership Team, and I couldn't get anything done without them.

ALBERT MORALES: That's great. Thank you.

This has been The Business of Government Hour, featuring a conversation with Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at GSA

My Co-host has been Paul Kayatta, Partner in IBM's Public Sector, General Government Practice.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who may not be able to hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.

For The Business of Government Hour, I'm Albert Morales. Thank you for listening.

Announcer: This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m. And visit us on the web at businessofgovernment.org. There you can learn more about our programs, and get a transcript of today's conversation. Until next week, it's businessofgovernment.org.

Originally Broadcast July 12, 2008

Washington, D.C.

Announcer: Welcome to The Business of Government Hour, a conversation about management with a government executive who is changing the way government does business. The Business of Government Hour is produced by The IBM Center for The Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about The Center by visiting us on the web at businessofgovernment.org. And now The Business of Government Hour.

Mr. Morales: Good morning, I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government.

Challenged by the administration, federal agencies have sought to identify new and smarter ways to do business and move toward a government that is citizen centered and results oriented. To be successful in this area, federal agencies require support and assistance, and the U.S. General Services Administration or GSA works to provide that support, staking a leadership role and reducing wasteful government spending.

With us this morning to discuss his organization's leadership is our very special guest, David Bibb, acting administrator at the U.S. General Services Administration.

Good morning, David.

Mr. Bibb: Good morning, Albert. How are you?

Mr. Morales: Good, good, thank you. Also joining us in our conversation is Marty Wagner, senior fellow at the IBM Center for The Business of Government.

Good morning, Marty.

Mr. Wagner: Good morning.

Mr. Morales: David, before we get started, could you set some context for our listeners by providing a sense of the history and mission of the U.S. General Services Administration? Can you tell us when it was created and what its mission is today?

Mr. Bibb: Sure, we were created in 1949, and really we were an outgrowth of World War II in a lot of ways. The government had a lot of real property assets that it needed to dispose of, and there was also a perceived need to centralize the acquisition of basic common goods. So GSA was set up to do those two things from the start. Over the years, the mission has grown to the point that we're a very large business today, doing business to the tune of about $60 billion worth of sales to other federal agencies and in some cases state and local governments too each year.

From time to time, because we do change, we revise our mission statement, and we did that last year. So our mission statement starts out by talking about leveraging the buying power of the federal government, which we can do, because we, as a $60 billion business, we're buying a lot of stuff -- goods and services and buildings. But we've added to that over the years, maybe this one goes back to 1949 when GSA was set up, but part of the mission statement says we exercise responsible asset management.

In other words, we have many historic buildings that are held in trust for the American people from here on out. They are going to be here as long as there is the United States of America and we take that stewardship seriously, and that extends to other areas too. But then we talk about in our mission statement delivering superior work places, and you wouldn't have found that when GSA was formed. We believe there is a direct co-relation between the quality of the workplace and the performance of the people who work in the space.

So we're getting better and better at figuring out how to provide good work places both within the buildings that we manage, and if people want to work at home or work anywhere else. That's why we call them superior workplaces because they can be anywhere. We also talk about expert business solutions; we think we can talk with an agency and understand how they operate and come up with solutions that they might not have even thought about themselves.

And then finally, the last phrase of our mission statement talks about innovative and effective management policies. We do have a government-wide policy rule that didn't exist when GSA was formed. And we always want to be -- the word innovative is in our mission statement, because we just can't be stagnant, whether it's developing policies or thinking about how we provide, you know, what are the services and goods that federal agencies are going to need 10 years from now, we've got to constantly innovate.

Mr. Morales: Well, it's a very broad and sounds like a very evolving mission that you describe. Can you give us perhaps some more particulars about the organization itself, perhaps, the size of the budget, you talk about $60 billion organization, the number of full-time employees, how you are geographically organized around the country?

Mr. Bibb: Well, we have our headquarters and 11 regional offices, and because of our buildings being in virtually every community, we actually have field offices in about a 120 locations, primarily for people to manage those buildings through contractors. We are primarily within the United States, although our federal acquisition service, goods and services that they supply are actually provided worldwide. So we have some people in Europe, some people in the far East, but the majority of our employees are in the United States, and we have 12,000 employees.

I mentioned the annual business volume; our revenue is $60 billion, because when you talk about budget, only about one percent of GSA's operating funds come from direct appropriations, the rest come from the fees that we charge our users. And in many areas we are non-mandatory, so we had to be sharp as a business or federal agencies will take their business elsewhere, so 12,000 employees, about $60 billion worth of business per year, one percent of that is appropriated geographic footprint, all over the country with our 11 regional offices and the field offices plus some presence overseas too.

Mr. Wagner: And David, now that you have provided us with a sense of the larger organization, perhaps you could tell us more about your specific role what your specific responsibilities and duties are?

Mr. Bibb: Well, I view myself as being in the front office of GSA and one of the roles is to be a face of GSA for both our employees, and for the vendor community, for our customers. So a part of it is symbolic and that goes with anyone who is number one or number two at any federal agency or any institution. I also have some pretty specific roles that I've carved out for myself. I've been very interested in really developing a strategic marketing capability within the agency, so that we are more intentional. When I say marketing, we're not out to raise revenues just for revenues sake, we believe we're the best way you're going in the government.

So we need to intentionally target who looks to be a good customer who could benefit from GSA. Another thing that I've been working in is our relationship with the Department of Defense, which is by far our largest customer on the federal acquisition side of the business. And I didn't mention before when we were talking about organization, our two main business lines are the federal acquisition service, which provides just about any good and service you can think about, and information technology services. The other side, the other major business is the public building service, which builds the federal buildings you see all over the country, it leases space for federal employers.

But our relationship with DOD has been over the last three years or so improving, we went through a rocky period of time when working with DOD, I think we were both to blame in some ways, we simply were not making good contracts, and we were not handling their money correctly. So it has taken some time to rebuild some of those relationships with DOD. So I've been working very hard myself with a working group to build -- rebuild that business and it has grown. We are up 6 percent this year in DOD business versus last year; many of our interfaces with DOD are on the upswing.

I feel like part of my job is to set strategic direction for the agency that's one reason we updated our strategic plan last year and then our executives performance plans and our individual performance plan is tied to that strategic plan, and their bonuses, both rank and file employees and executives are tied to in part, how well they do against those performance measures, which dovetail back to the strategic plan. Another key part of my job is to monitor performance, and we have a very strong quarterly performance review program. I sit in on some of those, for example, with the federal acquisition service and the public building service, and our chief financial officer, to see what they said they were going to do for the quarter and for the year, whether it's revenue or responsiveness in terms of time to respond to a customer, and I sit in on those, and see how we're doing, and if we are not doing well in an area, I'll be asking questions about -- how come.

And then the other piece really is the intangible of leadership; I think people need to be lifted above themselves, and I think that's part of my role is to be out there doing that, not so much as a cheerleader, but when I acted as administrator back a couple of years ago, one of the first things I did was to put out a video, and I did a series of those for all employees, almost kind of a personal one on one, they could bring it up on their computer anytime just to reassure them that the previous administrator left, but he had some very clear goals and that I was there to lead them in continuing to achieve and improve. I think that's important; I learned a long time ago about myself that on the scale of introvert to extrovert, I'm more introverted than extroverted.

So then I took a course in leadership where the guy who was teaching was very good about moving beyond yourself, giving the employees, the people you work with, a kind of shoot for the stars feeling, this is fun, this is -- you can do this, and I think that's a very important role. It is just the leader role. And I might mention something that may get a little touchy feeling, but I believe it's important; there is something called a servant leader that you really -- you remember that you're there to serve the people who are working in the agency, you're certainly there to serve the customer, but I believe in treating people well, I believe in treating people with respect, and I believe when you do that that it filters on down through the organization.

Mr. Wagner: David, could you maybe talk to the top three challenges you face and what you're doing to address them?

Mr. Bibb: Well, we have -- being a competitive non-mandatory competition is always a challenge and one calls that as our personal cause; and with me it is the proliferation of acquisition vehicles that have sprung up around the government. Most people think of GSA as the supplier of goods and services, but when you start looking across the government, there are over 250 vehicles that agencies can use either within their own agency or on an interagency basis that directly competes with what GSA does.

Now, we don't mind competition, but 250 is too many, that's proliferation to a scale that is out of control. So you know, I don't expect that to be fully remedied during this administration, there is not enough time left to do that frankly, but we do have transition coming up. It's an issue that we have discussed over the last few months with some of the political leadership within the administration, and certainly an issue that I intend to discuss with the incoming administration also. That's a challenge; another challenge in any big organization is just staying on the same page. We have so many people and so many programs that it's a challenge to get us all going in the same direction.

I found it to be very effective to form working groups; I mentioned I had the DOD GSA working group. At the table we'll have our congressional affairs group, our public affairs group, federal acquisitions service, public building service, our any -- chief acquisition officers, so that we all are hearing the same thing and we'll make assignments, and so often, and we'll agree on due dates, and it just helps to coordinate and we can bring everybody together.

The third big -- big challenge we have is just the shortage of capital for infrastructure, that's not unique to GSA. GSA owns about, or hour leases about one tenth of the total federal inventory of real property, because there are lots of defense bases, VA hospitals, energy plants, Department of Energy plants. So when you add it all up -- post offices, we have about 10 percent, mostly general purpose office space, we're all on the same boat. And you read about it on highways and bridges and anything in the nation's infrastructure. Too many needs and not enough dollars and in our current budgets -- budget arrangement in the U.S. government, it's a cash-on-the-barrel arrangement.

There is no creative financing or mortgage financing that just can't -- in my opinion that just can't continue forever; there are going to have to be new tools to deal with that.

Mr. Morales: So David, I understand that you started your career back in 1971 as an intern over at GSA, could you describe your career path for our listeners and as you sort of reflect in your career, you talked a little bit about leadership, were there other moments in your career that perhaps have shaped your current management style and approach?

Mr. Bibb: Well, I began in 1971, as you said, and in our Atlanta regional office, and that was a good place to start, because being in the head quarters, it certainly helps to have had some regional experience, because they are the folks who get the job done on the line. We set the policies, set the budgets, provide some leadership, but they are where the rubber meets the road. So that was very helpful to me; in 1978 I had an opportunity to come to Washington and I've stayed. I feel like a Washington area native by now certainly and have enjoyed it very much.

There have certainly been people and opportunities that have impacted my career. The first one was moving up here, at some time, people have to make a decision if they are going to make a physical move. And I had help in Atlanta, mentors, I had help when I got here, various people through my career have appeared or I've sought out for advice and counsel, I've tried to apply the lessons I've learned from those folks. I remember early on, not long after I came to Washington, one of the senior executives I work for, made it a point to take me along with several others, just to watch him as he testified before Congress. And he would probably testify ten or twelve times per year.

He was an absolute master at it, I adopted a lot of his techniques, I probably testified a hundred times before Congress, and every time I go up there, I'm thinking about some of the things I saw in action. All of that has led me to one role I serve at GSA, which is the mentoring champion for the agency. Most of my mentoring was informal mentoring, to toss a bouquet at Marty, he came along at a time in my career when it was time for a change; he offered me the opportunity to make a change when he worked at GSA and I did. And Marty was a good man, Al, but a lot of that was informal mentoring. We have a very strong formal mentor prot�g� program at GSA, and I think I'm committed to that because of the help I got along the way.

Mr. Morales: That's great. What is the value of having a central provider like GSA? We will ask David Bibb, acting administrator at the U.S. General Services Administration to share with us, when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host Albert Morales, and this morning's conversation is with David Bibb, acting administrator at the U.S. General Services Administration. Also joining us in our conversation is Marty Wagner, senior fellow at the IBM Center for The Business of Government.

David, can you review the value of a central provider like GSA, but more specifically, with more than 10,000 contract holders on GSA scheduled contracts, how does the agency streamline its e-procurement program and ease the administrative burden on your employees?

Mr. Bibb: Well, the value of a central provider is that we really and truly can buy goods and services at tremendous discounts versus what a single agency could do on its own. We do allow agencies the freedom, for example, we set up airline contracts between all the major U.S. cities, and they should look at those first, but if they can go on one of the search engines online and find a cheaper rate, that's okay, they can do that, but our contracts with the airlines allow you to book one hour before the flight leaves, you get that set price.

If you cancel, you can cancel right up to the time of flight, just all kinds of flexibilities as you can get with an Internet deal. We buy automobiles and provide them to the agencies at, at least 25 percent off what you could find anywhere else. When we are able to pool our requirements, we know that we can buy a software sometimes at 15 percent of what buying a single item would be, so central provider just can aggregate that buying power and whether we are guaranteeing a level of purchases, which we do in some of our programs.

In other programs, we simply give vendors the opportunity to make themselves available to federal buyers that's called our Multiple Award Schedule Program. Still, they know that when they are on schedule, they are obligated to offer their lowest -- at least their lowest commercial price or to their most favorite customer, and then agencies can negotiate a price below that, so that's the central agency value proposition. And the same goes for public buildings. It doesn't make any sense in Washington, D.C. for example, to have 25 different agencies out in the Washington real estate market competing against each other, and we can make better use of our inventory by assigning and reassigning people the space.

And I want to mention one more thing about being a central provider. We have the ability to channel a lot of these purchases to groups like small businesses, service-disabled veteran-owned businesses, women-owned businesses, and so on, and we do that, we do it very, very well. We are one of the -- one of the highest rate of contracts with those groups of any federal agency. And then talking about simplifying the process, we have, under our previous administrator, Lurita Doan, we made a real concerted effort to cut down the amount of time it takes vendors to get on the GSA schedule.

And we actually have succeeded in getting some on at 30 days or less, which is versus 6 months or more, so that's helped. We have a number of -- you've mentioned e-tools, we have things like, to help our customers, e-buy, where you can simply go in and go to our Multiple Award Schedules. If you are an agency that is required to get three bids and for a certain dollar volume contract you are, simply plug that into our tool it will evaluate the offers and pop out the best deals that we have on the Multiple Award Schedule.

We have a lot of tools to help our employees deal with the volume of work that they have to do from automated systems that lead you through making a contract, we are particularly strong on that and the Public Building Service, to upgrades in our financial system that make them much easier to work, but we couldn't do it without automation. We are basically -- I mentioned we have 12,000 employees. We are basically an agency of contractors and contracting officers who are seeking to pull all of these goods and services and buildings together, so that other agencies can either order against our contracts themselves or use our experts. We do have experts to assist them in putting together a set of requirements. So we are heavily dependent upon e-tools both for the vendors that we interface with, with our clients and to help people process-wise too.

Mr. Morales: Now, David, you mentioned briefly buildings and properties, could you tell us a little bit more about your work in policy involving real property and assessment management. What have you done to sort of enhance the efforts in this area?

Mr. Bibb: Well, a lot of what I did actually occurred before I became deputy administrator in 2003. I remain involved in it, because most of my career has been in real estate -- on the real estate side of GSA with the Public Building Service and then in -- for several years in the Office of Governmentwide Policy. But probably the most effective thing that I did while I was -- this occurred while I was in the Office of Governmentwide Policy was to put forth a comprehensive piece of legislation, which would have amended the 1949 Act for the first time in the real property area in 55 years or so.

We put forth to the Congress a whole series of changes asking every property holding agency to name a federal or property officer. They would then come together in a council; we had provisions for improving the database of federal real property. Many agencies had no idea what they owned at least worldwide. And we also had some creative tools in there that would have given the agencies the opportunity, not just GSA, but other agencies the opportunity to retain proceeds if they sold a building and to enter into contracts that would in effect, spread the cost of a project over time, and we were very careful at how we structured that.

The end result was, we got passage unanimously by two committees in the House, both they were unanimous bipartisan approval. We ran into some difficulties with the Congressional Budget Office on the -- how those were scored against the federal budget and a real difference of opinion with them, but it was serious enough that it led to the legislation being stopped in its tracks. But out of that came conversations with the Office of Management and Budget in which they said well, let's do what we can that was in your bill under executive order.

So the President did issue an executive order on real property management and that called for the naming of a senior real property official in each agency, the formation of federal real property council, the establishment of a governmentwide database, all of which have been done and all of which the Government Accountability Office has recognized as really good practices. What is still left to be done is this issue of how do we get the money to do the renovations that everybody needs to do, but I am very proud of some of the efforts that I was involved in there to make something happen and there are still discussions going on even with OMB now that I have participated in even within the last month about what can we do about this problem.

I am not having the cash on the barrel, none of us, you know, whether we have a mortgage crisis or not, I still don't see anybody going out and paying cash for $400,000 house. There's another way to do it and that's the position we are in, if we are going to renovate our home, we have to have the $200,000 in hand to do it, using home as a metaphor for the -- for a building. If we are going to buy a new house we would have to have the $300,000 cash in hand which of course is not the way the world really works, but that is the way the federal budgeting process works.

I've been very supportive of efforts in the Public Building Service to what we call tier their inventory -- t-i-e-r. Their inventory is layered into three levels, number one, are the real money-making buildings where we must reinvest. The scarce dollars we have that we collect from the agencies in rent, go into a fund and from that fund we allocate as much money as we possibly can to those tier one buildings. Then we have on the other end of the spectrum, tier three buildings, which there is just not much reason to keep them, and we will try to sell those or dispose them otherwise.

And then we have tier two in the middle, which with proper investment could become profitable and profit -- I am only saying profit, because we -- obviously we can't have a whole inventory of buildings that lose money. We have to make operating expenses off that inventory, so I've been very supportive of that and that continues today.

Mr. Wagner: David, GSA has made some significant management and financial changes to procurement operations over the last five years, would you elaborate on these efforts and how have these changes enhanced accountability, transparency, and delivery of services to customers?

Mr. Bibb: Well, Marty, in some parts of our business, we just didn't have any choice. We were doing some things -- I don't think anybody was intentionally doing anything wrong. but things for example, that were being bought under the information technology contracts clearly want information technology, and I won't go into details about that, but that was happening, so we had to go back about 3-1/2 years or so ago and make sure that everybody understood the rules and were buying proper things on behalf of other agencies through the proper vehicles on the proper account so we straightened all that out.

At that time we had a program called "Get It Right," which was another initiative that I chaired, another one where we brought everybody around the table, as I talked about, and the whole reason for doing that was we simply had no choice, but to contract correctly. There was even a legislation passed in the defense authorization bill that said start doing it right our defense won't do business with you anymore. And we were subsequently in that law, it called for review by the DOD IG and the GSA IG, so we had to get our act together.

At the same time, we weren't always handling agency's funding correctly. We have revolving funds; agencies generally have funds that expire at the end of 1 year. What we were doing was taking some of that 1-year money putting it into our fund and then it magically became multiyear money, which is not a correct way in our view, although there had been some legal opinions. At that I said, it was okay, its not-- we did not, no longer view that as okay, so we had to straighten that out.

In the middle of that, we lost our clean audit opinion after like 17 straight years of having a clean audit opinion. So we had to -- we had to change the way we were acquiring goods and services to be sure we were having competition, to be sure the statements at work weren't being written to steer work to a particular contractor and we don't do that anymore.

And we handle agency's money correctly now, and we regained our clean audit and all of those things were wrenching changes and caused us in some cases to lose some business, because agencies -- some agencies had grown used to tell GSA what you want, GSA will go buy it for you. And we had to make -- we had to change that, but I believe today, it's a value-add. It's a competitive advantage, I think agencies can trust us to do it correctly to handle their money correctly, which is important to them and to go through the procurement process, so we don't have protests and they don't have problems with their own inspector general, so major changes over the last 5 years particularly on the federal acquisition side of the house that made us better.

Mr. Wagner: Thanks. Now, David, what has GSA done to enhance and transform its customer service capability? To what extent, for example, has GSA one voice kept sure that the intent of your integrated approach to produce greater value for customers and bring your organization closer to its vision of one face to the customer?

Mr. Bibb: Well, we have done a couple of things to enhance our customer service capability; both our Public Building Service and our Federal Acquisition Service have put together very strong customer relationship groups both in the headquarters and in the field. They've both made major progress in scheduling visits for their customers, talking with them about their needs. A big problem I saw was the two groups weren't talking to each other, and we had two GSA's out there interfacing with our customers. So one thing I have been working very hard to do is to bring the Federal Acquisition Service and Public Building Services together where it makes sense.

It doesn't always make sense, but even when you are working on a contract for airline contracts, if you don't do a good job of that on the federal acquisition side of the house then someone in an agency is going to get a bad view of you as an agency and that could impact your public buildings business. But there are other cases where, particularly where agencies are in need of space and we provide it where we just have not done well in the past at integrating the building itself, the furniture systems, the information technology, even vehicles all that goes along with providing a workplace.

So we have now by having the Public Building Service and Federal Acquisition Service, come together, we now have a process by which automatically at certain points in the process, they will come together and they will talk about needs and they will deliver those seamlessly. At the same time, the two customer groups are working together for example, I've done a series of outreach visits to heads of other federal agencies and the two groups work together, FAS and PBS, Federal Acquisition Service and Public Building Service to put together a joint product that I then use as we visit secretary of veterans affairs, for example.

The public buildings plan will have a reference to the services at the Federal Acquisition Service as a reminder to all of our customer service reps in public buildings that they should be talking about FAS, federal acquisition programs and vice versa. So we've done a lot to promote this idea that we really are one big agency and there are lots of models in the private sector where you have a number of business lines, but you have the same set of expectations as far as service levels and various business levels working together when it makes sense and that's what we are trying to do in GSA.

Mr. Morales: Now, David, just transitioning here a bit, I understand that you are preparing to transition to a new government-wide telecommunications contract known as the networks program. I only have about a minute left, but could you elaborate on the networks program and how do the advanced technologies and services define within this program serve as a platform if you will, to transform the government's telecommunications infrastructure to something that's a bit more seamless and secure?

Mr. Bibb: We've come a long way from providing long distance service, which is what the ancestor of this program is to be. You can get anything under the networks contract, anything you can think of, and right now, the agencies there are so many offerings, there are 50 versus 15 under the old FTS 2001 contract. It was called under networks, there are 50 different services. IP voice over anything that is cutting edge, things that are in common use and things that we think are coming along are available under networks.

We think it has a potential to be transformative. Some agencies are moving a little slowly, they are a little hesitant to transform at the same time as they are switching from the old network to the new one, so some will probably just slide over the same thing they've been buying from us and put it under this new contract. Other agencies are using it to rethink the entire way that they organize their business and their way of operating. So what we have put in place can range from, well, just meeting the basic need to just being a very, very sophisticated set of communication tools that are available to all of the federal agencies.

Mr. Morales: That's Great. What about GSA's leadership role during the presidential transition, we will ask David Bibb, acting administrator at the U.S. General Services Administration, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host Albert Morales, and this morning's conversation is with David Bibb, acting administrator at the U.S. General Services Administration. Also joining us in our conversation is Marty Wagner, senior fellow at The IBM Center for The Business of Government.

David, as we begin to gear up for an administration transition here in a couple of months, GSA plays an integral role in making this transition as smooth and as seamless as possible. Perhaps you could give us a brief historical perspective on what led GSA to have such a critical role during these transitions and how has that authority evolved over the years.

Mr. Bibb: We have by statute, in the 1963 Presidential Transition Act, certain duties that no other agency has. That act was put into law in recognition that the Congress needed to codify this time when we would be changing governments. And it basically says that GSA will provide all the space, all the telecommunications, all the furniture, all the payroll services, all the travel services for the incoming administration. And that begins on the day after the election and continues through January 20th, with a little wind-down period after that.

So there is a little piece of trivia -- who is the only person named by law as being responsible for calling the winner of the presidential election prior to the convening of the electoral college, and of course the answer is the administrator of General Services. It actually says in the law that the administrator will determine the apparent winner and then the reason for that is so we can begin providing these services to the transition team. We hold the keys until a clear winner is apparent and then we turn over what will be 120,000 square feet of space for 600 people who will go about the duty of forming the new government.

We've gotten a lot more sophisticated about how we do that. We have a very good 40-person team that will be going 24/7 beginning about 3 months from now. We began preparing for this 6 months after the last election; we are in great shape. The team could -- transition team could move in tomorrow if they needed to, but on another front there is really nobody when you look at transition -- nobody in the federal government is responsible for telling the executive branch how to transition.

And we are finding that because we had this other role in transition and many agencies are calling upon us to kind of share best practices about what do you do, how do you treat the outgoing political appointees, what kind of counseling do you give them? How do you go about preparing briefing materials for the incoming transition team and for the presidential appointees who are going to be nominated? And there are some agencies that have had enough turnover that they just -- they don't know what they are supposed to do.

So our chief human capital officer, Gail Lovelace, and I have found ourselves on a traveling road show. We've probably spoken at least a dozen times over the last 2 or 3 months to other agencies and other interest groups who are just interested and want to know, are you doing it over there at GSA because you seem to know what you're doing. So that's -- kind of an informal role that's developed, but it's actually the thirst for information about what to do and how to do it during transition is pretty amazing.

Mr. Wagner: David, I'd like to maybe follow up on the specific activities that GSA does and maybe work through if -- you can maybe work out specific stories to illustrate the points that you've made and perhaps some of the best practices that you found work best in this situation.

Mr. Bibb: Well, the -- on our one -- on the duty I mentioned of providing all the facilities for the incoming administration, the best lesson we learned about that is to start early. If you start looking for office space in Washington, D.C., with 6 months left to go before the election, you're going to be in a lot of trouble. So that was one thing that we learned to do.

In transition, in general, I will say there -- whether it's GSA's special duties or we're talking about dealing with the -- what we call the parachute teams from the transition group that actually drop into the agencies to learn about what the agencies do and how they go about functioning and what their issues are.

But a couple of universal principles apply to both of those. One is to be prepared. We are certainly prepared on the provision of facilities. We are -- have already begun work on our briefing materials for the incoming administration and our issue papers, things that we want to lay before the incoming group. Another lesson learned is that the first impression is absolutely critical. That is one thing that we are ever mindful of with our folks.

We put on the transition support team, the 40 people I mentioned who work round the clock to support the transition activities. We put our very best people on that because not only are they representing GSA, but for many people who are forming the new government and will in fact work in the new government this is their first exposure to federal employees. So we are very mindful that on behalf of the entire federal government we need to be sharp and do a sharp job. But that also applies back to any agency when the transition team comes in. You've got to know what you are talking about; you can't be halfway prepared or wander around in philosophical discussions.

I think it's just important that people see professional people who know what they are talking about, have the issues nailed, and you only get one chance to make that first impression, so that's critical. I think it's critical and important to make it clear to the incoming folks who we work for, we work for them. And most federal employees know that very clearly, that we work for the president of the United States, we are part of the executive branch, and we are here to help you succeed with your agenda.

Now, we may have some issues that we think you ought to consider, but we want to convey that understanding upfront they we're not here to oppose you, fight you, carry our own hidden agenda forward. We're here to be part of your team because you're going to need us and we're going to need you, and then I think the last lesson is don't be afraid to advance ideas. I think the incoming groups will have ideas of their own certainly, but they're not going to have all the ideas that they'd like to pursue, so I think they're grateful to get the full spectrum of things as we see them. That's been my experience anyhow.

Mr. Wagner: Well, moving beyond the transition and to your biggest customer, the Department of Defense, their -- the amount they've been spending on services has been steadily increasing over the past decade and DOD is taking steps to improve how it buys those services. To that end, what is GSA doing to influence DOD's use of non-DOD contracts and what steps are you taking to foster GSA's working relationship with the Defense Department?

Mr. Bibb: As, Marty, I think you know, I've been -- and I mentioned earlier I've been chairing for a couple of years now a GSA-DOD working group which is an internal working group that meets biweekly with our sole function being to figure out how to be a better provider for our biggest customer. What we actually do coming out of those meetings covers a broad front after -- I mentioned earlier that both the DOD IG and GSA IG looked at our assisted acquisition program under the provisions of the Defense Authorization Act a couple of years back.

Out of their audits came some 20 action items that they felt like needed to be done. We sat down, formed a team to sit out with DOD, and went through -- fleshed those out in a almost a to-do list of things to get done and we have religiously worked that with DOD even when it's gotten hectic at DOD and sometimes they didn't have time. We'd be panting on the door saying it's time to sit down and talk about the MOA. And then we've reported back to the Congress, every month or every 2 months with a summary -- or quarterly of what we've done against that memorandum of agreement to make sure that we are both contracting correctly.

Beyond that we talk about pursuing business opportunities with DOD on every front at our meetings we will talk about now the commissioner of the Federal Acquisition Service is going to meet with the following people on the following schedule. Have you talked with e Army recently, when are you going to talk with Air Force? All the way down to what kind of visits our customer service representatives in the field are making. And the whole idea also -- things have changed with DOD -- within DOD some.

In the past, if a program officer or base commander wanted something he would just tell GSA he needs it. DOD has instilled more control within their program so that they are asking their contracting officers to sign off before DOD comes to GSA for services. That means our people have had to in addition to have a relationship with the base commander, they've also had to make -- establish a relationship with contracting shop in DOD because you need both of them to want to do business with you before the business will come your way. So our discussions are fairly wide-ranging, those were a couple of examples of the things we do.

Mr. Morales: David, there's been a fair amount of discussion and activity around a government-wide standard for secure and reliable forms of identification for both federal employees and contractors. Could you elaborate on Homeland Security Presidential Directive 12, commonly known as HSPD-12? Just real quickly, what are some of the key requirements of this directive and can you tell us about the services that your organization is offering in this area to agencies?

Mr. Bibb: It's -- it's was a concern of the President that we all have across the government identical and interoperable identity cards as government employees or as government contractors. There must have been 100 different systems before this presidential directive came out. The directive came out and GSA had a strong role in setting the standards for what that identity card would look like and that identity card is used both for admittance to federal properties and for logging into your computer system.

The idea is to make it a kind of one-stop identity card. It's strongly resistant to tampering, counterfeiting, has all kinds of built-in security features, got the photo -- your photo, fingerprint ID electronically embedded on the card, so that it's very hard to misuse it. So GSA, in addition to playing a strong role in developing the standards for that card which are now standard across the government, also is operating what we call a managed service office, in effect it is a business under the Federal Acquisition Service to provide credentials to some 800,000 federal employees and contractors.

Now, DOD is running its own system, but we have put in place 200 enrolment centers. So far it's not going as fast as I would like, we have something in the neighborhood of 100,000 employees and contractors, what we call sponsored, that is minimal information is available to get the process rolling and that's increasing at about 5,000 a week, but we need to issue 800,000 of these things. At the rate we're going we'll hit about 250,000 or 300,000 by the end of the year and we need to do a larger volume than that in order to -- we have assumed certain volumes of business in order to give a very inexpensive rate for each card and we're not coming up to those business volumes.

So we are working with the Office of Management and Budget, you know, get a little fire lit. Some agencies are not moving as fast as we'd like to see them move. It's a great thing though when. It's in place there will be background checks done before you can get your card whether you are an employee or contractor and it will just eliminate a lot of very bulky non-interoperable systems that we have now and replace it with a state-of-the-art tool.

Mr. Morales: What does the future hold for the U.S. General Services Administration? We will ask David Bibb, acting administrator at the U.S. General Services Administration to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to our final segment of The Business of Government Hour. I'm your host Albert Morales, and this morning's conversation is with David Bibb, acting administrator at the U.S. General Services Administration. Also joining us in our conversation is Marty Wagner, senior fellow at The IBM Center for The Business of Government.

David, most achievements in government are not solo acts, certainly some of the best programs are accomplished by teams of employees within the government. Could you elaborate on your approach to empowering your employees? How do you lead change and enable your staff within the organization to accept the inevitability of change and make the most of it?

Mr. Bibb: Well, Albert, there are a variety of methods that I've found to be effective. I do believe in consensus up to a point and will strive for that, not to the point of paralysis, because I've seen that in action too. I think you want to get a lot of people's viewpoint, if time permits. Other times you're going to have to move quickly and say this is the way it is and hope you can pick up support along the way.

I use a variety of techniques myself as a leader, one is, I've mentioned earlier, the videos. They are a great way to get out to everybody so that they can see you, get a feel for your personality as you have a -- what amounts to a one on one. It's not really a conversation but a talk with the person, and communication itself is vitally important.

I've probably said enough about the various working groups we have but a vital component of each one of those is a communication strategy and that's a communication strategy both we will talk about. Our own employees, our own executives across the country, congressional staffs we deal with, members of Congress, the vendor communities that we deal with, whenever we're thinking about doing anything of substance, we have to stop and think about each of those communities and how we communicate that change to them. So communication is vital, and that's part of making change happen, being sure everybody is well aware of it and not surprised by it.

We also manage very much by performance measures and personal performance plans across GSA to the point that -- and we've gotten much better at having a common set of performance measures now. Some regions do a few different tasks from other regions and we allow for that and the headquarters are a little bit different from the regions, but everybody knows that those performance plans make a difference. The strategic plan is done first, then the performances -- organizational plans are done, then the individual plans are done, and people know that their success depends in a large part on how well they're carrying out that cascade of things that start at the strategic level.

Mr. Wagner: David, we talk with many of our guests about collaboration. What kinds of partnerships are you developing now to improve operations or outcomes at GSA, and could you also speculate into the future, how may these partnerships change over time?

Mr. Bibb: We have everything from formal partnerships which are where we -- for example, I was asked to come out to Scott Air Force base to meet with the U.S. Transportation Command, TRANSCOM. This is co-headed by a four-star general. The four-star and I hit it off very, very well. Then he paid a visit to our headquarters and out of that we said, you know, we really have some things in common we can work together on. Why don't we memorialize that and enter into a memorandum of agreement that here is what Defense Logistics Agency will do, here is what GSA will do, here is what the U.S. Transportation Command will do. Let's put that down on a paper and we'll all sign it, and that's just worked terrifically well.

There are other cases where a formal memorandum of understanding or memorandum of agreement is not the way to go; you want a much more informal approach. And we try to do that, I mentioned earlier the customer visits we have which -- where I might go visit the secretary of a cabinet-level agency, take along our top leadership team, and they would have theirs. And lots of times the things we talk about -- we talk about basic services, we go in prepared to talk about issues they may have with some of the things we're providing. But we try to open their eyes to some of the things that might help them get their job done better than they are doing it now. And nearly always we come away from that with a new area of business to pursue, becomes pretty self-evident.

We are also working very hard to develop better partnerships with associations that represent our vendor community. We've been active in those for some time, but we want to look for even more opportunities. If there is an association of vendors that had been dealing primarily with the Department of Defense we are making it our business to become a part of that association, so that we're part of the conversation. Not to be in competition with Defense because that's not our role but sometimes there is an area that we can slide in nicely that might not be provided, but we need to know the people.

So we have a variety of partnership-type of arrangements, from formal, to informal, to outreach, to making it a conscious decision to be active in various associations.

Mr. Morales: So David, as we continue to sort of look into the future, can you give us a sense of some of the key issues that will affect GSA and government-wide procurement over the next few years and how do you envision your office will need to evolve to meet some of these challenges?

Mr. Bibb: I've mentioned a couple of them, some of the key issues. I mentioned the proliferation of contract vehicles. We now have another key issue that we're dealing with right now is how to be sure, you know, you mentioned we had 10,000 contractors, we have -- a lot of them are on our multiple-award schedules. We do $35 to $40 billion worth of sales of those schedules annually. And we want to be sure that the people who are ordering against those schedules are getting the best price.

There has been a lot of discussion about whether the clauses we use now to ensure that best price are the most effective clauses that we can possibly have. That's what we want, we're not making change for change's sake, we want a good clause in those multiple-award schedule contracts that will ensure the best possible price and value for the customer.

So Lurita Doan, our former administrator established a blue-ribbon panel to take a look at that. And it includes people from associations and it includes contracting officers from across the government. The Department of Defense is chairing it actually, a representative from the Department of Defense. When those recommendations start rolling those will be major issues for us to deal with unless of course they say, leave things as they are, in which case it won't be too earthshaking but they would reaffirm that what we have in place is the best way to go.

That is a key element in our ability to continue to -- that's our premier vehicle, you know, that's two-thirds of our $60 billion a year. So we need to be sure those are best value, those results, as I said, will be rolling out this fall.

I think the role of every contracting organization in the government is strapped for people and there is a continuing debate about how much you can do with in-house government employees versus hiring private sector to help with the contracting process. We think there is a role for the private sector in that contracting process and we do use contractors to help us. But they don't sign the contract; that's a government function. There are certain decisions they can't make.

There are others ,particularly in the Congress, who don't think that's a good idea at all. We were somehow to be barred from going down that route. We already have a problem with having enough contracting officers as it is. That would exacerbate that problem greatly, but it's an issue that's still out there.

So well, that kind of leads me to the last issue which is just the shortage of qualified contracting people and the people who're walking out the door. We've just got to find ways of bringing people in, getting them up to speed quickly, giving them the right training, presenting the contracting field as a desirable thing to do for a career and developing that.

Mr. Morales: So David, on that note, you've obviously had over three decades of a very successful career over at GSA. So what advice might you give someone who perhaps is out there considering a role within government and perhaps maybe even a role within the procurement community?

Mr. Bibb: Well, you know, it's -- my feeling on that is changing. I came onboard in the 1970s and by the 1980s it was a bad thing to be a federal employee. We were told time and again in the press and by the politicians that we were basically a bunch of bums who were sitting around with our feet up on the desk. And it got to the point that as my own children were growing up they would say, well, what do you think, Dad, do you think I should think about a government career? And I said, I don't think you should, I think, you know, you get no respect, people think we're loafing our way through life and I'd go for something else.

If I were advising them today, you know, I think the tide has turned a little bit. You look at some of the opinion surveys -- and you can't base it all on opinion surveys, but you know, there are a lot of federal employees who are doing a great job and the work can't be beat for interest. So I would certainly be less vocal in my steering my kids away and I might even steer them toward it, toward a career in public service. They've gravitated that way anyhow.

To others I really do think things have changed. The retirement system has changed, your retirement system is portable, you can take it with you. I would say to anybody who has any inkling of an interest in public service, give it a shot. Your pension is going to be portable; you can -- if you don't like it you can go elsewhere. I will say that for young people particularly there is nowhere you can go and get the level of responsibility and challenge that we offer at an early stage of a person's career.

And the sky is the limit as far as you can do as much as you want to do. As a matter of fact our recruiting material at GSA -- say you can do that here, because we have a job for just about everybody in GSA.

Mr. Morales: Let's say that's a wonderful perspective, thank you. Unfortunately, we have reached the end of our time. I want to thank you for fitting us into your busy schedule. But more importantly, Marty and I would like to thank you for the 36-plus years of service that you've given our country.

Mr. Bibb: It's been a pleasure, and I will say that as far as working for GSA it's a great place to work, tremendous organization, very sharp people, very dedicated people. We have a very distinct mission that's measurable, that at the end of the day you can look at what you've done and know that you've delivered great service and great price. And I would simply say to anybody who is interested in what GSA does, take a look at our website, gsa.gov. You can find out anything you want to about GSA there, or if you're interested listening to this and interested beyond GSA and want to know more about the federal government, visit a website developed by GSA, it's what Time magazine has identified as one of 25 websites you cannot live without. It's called usa.gov and anything you want to know about the federal government is right there.

Mr. Morales: That's great, thank you.

This has been The Business of Government Hour, featuring a conversation with David Bibb, acting administrator at the U.S. General Services Administration. My co-host has been Marty Wagner, senior fellow at The IBM Center for The Business of Government.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who may not be able to hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.

For The Business of Government Hour, I'm Albert Morales. Thank you for listening.

Speaker: This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m. and visit us on the web at businessofgovernment.org. There you can learn more about our programs and get a transcript of today's conversation. Until next week, it's businessofgovernment.org.

Originally Broadcast October 20, 2007

Washington, D.C.

Welcome to The Business of Government Hour, a conversation about management with a government executive who is changing the way government does business. The Business of Government Hour is produced by The IBM Center for The Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about The Center by visiting us on the web at businessofgovernment.org. And now The Business of Government Hour.

Mr. Breul: Good morning. I'm Jonathan Breul, executive director of The IBM Center for The Business of Government, sitting in for Albert Morales this morning.

Since its establishment some 4 years ago, the Department of Homeland Security has been faced with assembling 22 separate federal agencies and organizations with multiple missions and cultures into one department. This mammoth task involved a variety of transformational efforts, one of which was design and implement the necessary management structure and processes for the acquisition of goods and services.

With us this morning to discuss her efforts in this area is our special guest Elaine Duke, chief procurement officer, U.S. Department of Homeland Security. Good morning, Elaine.

Ms. Duke: Good morning.

Mr. Breul: Also joining us in our conversation is Dave Abel, director of Homeland Security Services at IBM. Good morning, Dave.

Mr. Abel: Good morning, Jonathan.

Mr. Breul: Elaine, let's get started with the department itself. I doubt a single American hasn't heard of the Department of Homeland Security. Having said this, many may not realize the creation of DHS represents one of the largest reorganizations in government since World War II. Perhaps you could give us a sense of its mission and continued evolution.

Ms. Duke: Yes. Our mission is a very, very broad homeland security mission and it consists really most concisely of five priorities set forth by our secretary. The first priority is to continue to protect our nation from dangerous people. The second is to continue to protect our nation from dangerous goods. A third is to protect the critical infrastructure. This is a huge mission, growing in strength within the department and a focus for us throughout 2007 and into 2008. As a fourth priority we're building a nimble, effective emergency response system and a culture of preparedness. And I think that's key to have both the preparedness piece to anticipate homeland security needs as well as the response system, to have the responses in place for a homeland security need. And our fifth is to strengthen and unify the DHS operations and management. And that priority is specifically focused on what you mentioned earlier regarding bringing the disparate agencies in together to one department.

Mr. Breul: That's an important mission and a significant one. Could you give us some sense of the scale of your operations? How is DHS organized and what is the size of its budget, the number of full-time employees, and its geographic footprint?

Ms. Duke: The geographic footprint is worldwide. We have about 180,000 employees in the Department of Homeland Security and the budget for Fiscal Year 2007 was $42.8 billion. The DHS organizational structure is made up of a headquarters that both has the traditional headquarters activities and four distinct directorates with operational focus. That's the National Preparedness Directorate; Science and Technology; the Undersecretary of Management, which house my office and the other chiefs such as the chief financial officer, chief information officer, chief human capital officer; and FEMA, Federal Emergency Management Agency.

We have six operational components and those include Transportation Security Administration, Customs and Border Protection, U.S. Secret Service, U.S. Customs and Immigration Service, Immigrations and Customs Enforcement, and the United States Coast Guard. In addition, we have the support components that you would find in any large department.

Mr. Abel: So, Elaine, from there you mentioned your organization and your position within the Undersecretary of Management. Can we talk a little bit about your specific responsibilities as the chief procurement officer?

Ms. Duke: I think in my responsibility as the chief procurement officer, or CPO, I have two distinct areas. One is I have functional responsibility for contracting throughout Homeland Security, so I have a functional responsibility, we call it a dotted line, if you will, to heads of contracting activities throughout DHS, the nine heads of contracting activities. And so through that I set the policy, I perform the oversight and review for the operational contracting offices.

A second distinct function is to be the, if you will, staff advisor on procurement and acquisition issues for the department. I'm the senior person in contracting in the department, so provide a staff function to the secretary and deputy secretary on procurement matters.

Mr. Abel: So one of the things that may not be obvious to folks is the extent to which the chief procurement officer affects the mission and the way your organization supports the execution of the principles that you laid out in the beginning for the Department of Homeland Security. Can you tell us a little bit about how you guys support the mission in your functions?

Ms. Duke: The major way we support the mission is through our acquisition programs. In some agencies procurement really just is ancillary to direct mission support. In the Department of Homeland Security, the way we were stood up as a department, many of our key mission elements are supported by an acquisition program, for instance, Secure Border Initiative. Under our Secure Border Initiative many acquisitions, but one major acquisition program, which is the SBInet program, which has the scope of securing 6,000 miles of border. Similarly, TSA stood up through a series of acquisitions programs, both the explosive detection for the baggage and also the screening of people, all through acquisition programs; training of screeners when DHS was stood up. We have FEMA, where our preparedness is all done through a series of contingency contracts. So whether you look at Headquarters itself, Domestic Nuclear Detection Office where we have an acquisition program to improve our detection of nuclear materials, each one is direct mission through our partnerships with industry and acquisitions.

Mr. Abel: Now, many organizations have been together for decades if not centuries, and the procurement organizations grew organically with those organizations. When the Department of Homeland Security was started a number of years ago, the competency of procurement in organizations was at different levels. What type of challenges do you see on a regular basis in the different skill sets or skill mix that came together to form the department from a procurement standpoint?

Ms. Duke: I think I see two differences. One is the transition from some of the legacy agencies where procurement was a support function that was true minor procurement into having to do contracts to support major acquisition programs, which is very different. The second area I think are cultural differences and that is where we use terms of art, like "negotiation," like "best value source selection," and to me it means one thing and to people from different backgrounds it means another thing. So we're having to set some basic standards in terms of what does it mean to do a best value source selection in the Department of Homeland Security and how we do things in the department.

Mr. Abel: So what top challenges to you have going forward from here?

Ms. Duke: I think the top challenge is one that's -- the part of supporting the Department of Homeland Security is its dynamic mission. Many of the other major departments have different challenges in their mission, but a basically stable mission. With Department of Homeland Security, since our major foe are small terrorist groups, they have a very nimble and quick adaptation to us securing any kind of threat. So the minute we have something in place to deal with one threat, they're on to the next threat much more quickly than some of our traditional defense enemies. So we're going to have a dynamic mission. And because acquisition is something where you plan for it and often have long-term requirements, we have the challenge of how do we develop acquisitions and acquisition strategies that are flexible enough to adapt to our changing mission yet have the appropriate controls to ensure that we're getting a good business deal?

Mr. Breul: Let's change the discussion a bit from the department and focus on you for a minute. Could you describe for our listeners your career path? How did you begin your career?

Ms. Duke: My career path was a little different than most people that are in the Washington, D.C., area. I did come in under the PACE program, which was the Professional and Administrative Career Exam, back in the early '80s, but I came into a field activity. I went to Charleston Air Force Base. And I also came into the contract administration side, which many people started in the pre-award side. And I spent my career in the field principally started out with Air Force, principally with the Navy, and came to Washington, D.C., in the mid '90s, and have experience with transportation and actually the Smithsonian Institution. So I think that my experience really was operational at the grassroots level.

People talk about where the rubber meets the road. I spent six years at a public work center and that's where the rubber meets the road. And so I try to bring that operational, that field experience on the mission into the D.C. Beltway environment.

Mr. Breul: How has this field and operational experience prepared you for your current leadership role, and how has it shaped your management approach and your leadership style?

Ms. Duke: I think it's prepared me by having a make-it-happen type approach to getting things done. I think that when you're in a field organization and you really have to make things happen, I think that the focus is on how you bring people together, how you stay focused on a solution, how you cut through obstacles, and know when enough talking is enough and when it's time to make a decision. And I really think that that is something that we can benefit from because I think it really manages risk best. It drives towards mission fulfillment, which is why we're all here.

Mr. Breul: What has been the biggest surprises to you coming from more of an operation and field experience and then operating in a place like the Department of Homeland Security at a department-wide level?

Ms. Duke: I think the biggest difference, and I don't think this is unique to the Department of Homeland Security, but to the Washington area, has been the actual level of involvement and the complexity of decisions. That's been the biggest thing. The Department of Homeland Security is a very, very flat organization. So the thing that's been most interesting is how directly and with very few layers decisions that we make on our acquisition studies affect the way this country moves forward. It's a tremendous responsibility.

Mr. Breul: What about DHS's strategic sourcing initiatives? We will ask Elaine Duke, chief procurement officer, U.S. Department of Homeland Security, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Breul: Welcome back to The Business of Government Hour. I'm your host Jonathan Breul, and this morning's conversation is with Elaine Duke, chief procurement officer at the U.S. Department of Homeland Security. Also joining us in our conversation is Dave Abel, director of Homeland Security Services at IBM.

Elaine, though some folks may be quite familiar with other governmental business functions such as finance, accounting, information technology, perhaps you could provide us with an overview of the procurement function. Specifically, what are the key elements of acquisition management, from front-end solicitation to the post-award, and how does the procurement function fit into it?

Ms. Duke: Well, first, I'd like to start by setting the basis for where procurement fits in the acquisition cycle. So acquisition is a much broader focus than procurement. Acquisition is from the point that a business or a department determines that there's some type of mission that needs to be filled and it's going to be filled through a partnership with industry. And it goes all the way through the life cycle of a service or a product through disposal. So there's many career fields that are related to acquisition. The most significant that we hear about often are program management, logistics, test and evaluation, systems engineering. But I know you want me to focus on procurement, so that's what I'll do this morning.

Procurement function is really the business deal. Within Chief Procurement Office we have three priorities. The first one is to build the acquisition workforce, key to us. The second two really summarize what a contracting officer or procurement person does. The second priority we have is making a good business deal and the third is contract administration.

So the making a good business deal, that's making sure that we have not only the right price, but the right intellectual property, the right technical requirements, just looking at every aspect of the business deal. Are we making the best choice to fulfill that mission through an acquisition?

And then contract administration really is everything from the minute the deal is signed through closure of the contract. It includes changes to the contract, in many cases a series of negotiations of tasks and changes. The skills we need to accomplish these? One is to be analytical. I think it's important to have quantitative skills. Effective communication is critical, good organization and time management. And another one is to be able to be independent enough to be making good decisions, yet being disciplined enough to be able to operate in a functional area that does have a myriad of statutes, regulation, and public policy initiatives.

Mr. Abel: What exactly does a DHS contract specialist do? I mean, could you give us a picture of the actual tasks or the cross-disciplinary work performed by a contract specialist?

Ms. Duke: Sure. A contracting officer would get a requirement from a program office, some money and a requirement. And the main purpose in a pre-award is for that contracting officer to negotiate with industry the best value or the best business deal. So what that contracting officer has to do is, first, issue some document that makes it clear to industry what we're trying to buy, whether it's a good or service. The second step of that, once we've made it clear to industry what we want to buy, the contracting officer gets in the proposals from industry and is the lead and the focal point for the review and negotiations. The review are generally technical and then cost and price, and then just an evaluation of the company as a business, its past performance and its record of integrity. And the contracting officer uses a whole support system for that, the sort of selection team, but they are the one responsible for bringing the pieces together and ultimately accountable for signing the contract and executing the deal. That accountability is a huge responsibility for the contracting officer.

Then once the contract's awarded that contracting officer is making sure that all the terms, the conditions, the deliverables, the requirements of that contract are executed by the contractor. Additionally, that contracting officer has to make sure that the government fulfills its pieces of the contract, like paying the contractor on time, like reviewing the deliverables, exercising the contract options.

Mr. Abel: So Elaine, one of the initiatives that your organization has been very visible in executing is around strategic sourcing. Specifically, you've been seeking to create savings, process improvements, increased socioeconomic participation, and really to address the three priorities that you laid out for your organization. Two of the contracts that you guys have competed over the course of the past year or so, one of them First Source and the other Enterprise Acquisition Gateway for Leading Edge Solutions, or EAGLE -- and that's the last time I'll say anything other than EAGLE because it's quite a long title -- how have those initiatives gone for you so far?

Ms. Duke: They've actually gone very, very, very well. The reason behind First Source and EAGLE and First Source is the commodities piece of information technology, EAGLE is the services piece of information technology. I think the reason they've done so well, there are several reasons. One is they really support our Chief Information Officer Scott Charbo's enterprise architecture for the department. We are supposed to be bringing DHS into a one DHS, and it's important that our enterprise architecture is in place. You cannot have a one DHS without a good, solid enterprise architecture.

The second reason it's gone well is we really worked closely with industry during the formation stage. In First Source it was a small business set-aside. In EAGLE we had two tracks: one open competition, one for small business.

The use of EAGLE and First Source has been very successful. We have about 100 orders already pending right now and we have almost 70 already awarded for a total of almost $800 million. In the First Source arena we have well over 200 orders already awarded and another 50, 60 in play, and we have about $40 million awarded under those. So those numbers just show its successes.

Mr. Abel: That sounds fantastic. I know one of the creative things that you did under EAGLE was to develop a series of partitions in the contract itself for functional categories. Have the functional categories met the goals or the objectives that you had for them in terms of competition and vendor teaming?

Ms. Duke: In general they have. One of the things that's helped vendor teaming so much is that we didn't ask primes to bring a set team. We encouraged them and evaluated them in a way such that they would bring the right subcontractor team to each project. And I think that's really helped in terms of teaming arrangements.

In terms of the functional categories that has worked very well. Having the Functional Category 3, the Independent Verification and Validation, IV&V, fenced off organization conflict of interest-wise has really helped in terms of dealing with that. And we're continuing to look at it. We're getting feedback from industry through regularly scheduled meetings. We meet with our EAGLE contractors and they are actually helping us regularly to make sure we're picking the right categories as we move forward.

Mr. Breul: Let's talk for a moment about the President's Management Agenda. Competitive sourcing requires the expertise of the acquisition community to determine and select the best provider of commercial services. In the last OMB scorecard DHS received a yellow rating in competitive sourcing. Could you tell us about the department's latest progress in this area and, from your perspective, why it is so challenging for many agencies across government?

Ms. Duke: Well, first I'd like to talk about our successes in competitive sourcing. For a new department we have done quite a few federal competitive sourcing initiatives, and just over half of them have been won by the federal proposing unit. So that really speaks highly of DHS areas of -- that have been competed, that they were able to sustain a competition against industry.

But one thing I'd like to focus on is not so much the yellow, but the purpose of competitive sourcing, and that's to ensure we get the most efficient best, not just cost-wise, but how do we deliver our mission most successfully. And one of the things we're looking at right now in DHS is what is the right level of outsourcing? It's interesting that as we try to go green on the President's Management Agenda we're getting a lot of feedback from the General Accountability Office, from the Congress, are we appropriately sourced within DHS to execute our mission? So we really have to look at it objectively and make sure that we have the inherent capabilities within our department, and our partnership is with industry, but that within our department we can execute our mission.

Mr. Breul: Well, speaking of the Government Accountability Office, GAO has noted that speed and convenience rather than cost savings seems to drive some agency use of interagency contracting. Could you tell us how the department employs and manages interagency contracting? Do you have the internal controls in place to mitigate risks associated with such contracting vehicles?

Ms. Duke: That's interesting. That's been an area we're working on intensely, but it's also a federal issue. This is a working group under the Office of Federal Procurement Policy, Federal CAO -- chief acquisition officer -- Council, is how to do interagency contracting more effectively. And there should be within the next couple of months some policy guidance coming out of OFPP for the federal level.

But within DHS, what we're trying to look at is, is there a business reason for doing an interagency agreement? In some cases it's very, very clear, for instance, in some of the science and technology areas if we're doing human research or we're doing a very technical area. But what our philosophy behind interagency agreements is, is that when Congress appropriates the money to us, we are accountable for it for the life cycle of that money. And just because we execute the mission through another federal department or agency does not relieve us of our accountability, and that's where we're managing risk. And we do have a close partnership with Department of Defense and several other agencies, but we maintain accountability for not only that funding, but accomplishing the mission, and that's our approach.

Mr. Abel: Elaine, there's been some concern over the use of non-competitive or sole-source contracts throughout the federal government. Can you elaborate a little on the proper use of sole-source contracts? Are they always bad? Are there times where they're good? Are there times where they're more effective?

Ms. Duke: I think that there are times when they're effective. And I think that when you look at doing an acquisition strategy, a part of which is should it be sole source or should it be competitive, there are many different factors. You have urgency. You have what's the state of industry? How many people are there that can do it? You have socioeconomic programs. And what I think we have to do is we have to optimize. You can't pick one specific piece of a strategy and make it the only important. You have to look at all of them and how do they blend together. The ones most used in the Department of Homeland Security would be unusual and compelling urgency or only one responsible source. And those are two of the seven reasons under the Competition and Contracting Act that we are supposed to do sole sources, if it's appropriate.

I think that having competition is very important, and we have a huge initiative. Our numbers for Fiscal Year 2007 are going to be much higher than the about 50 percent we got in 2006, so I'm anxious to have those published.

But the one thing I would also say is there's no such thing as a no-bid contract. You might have a one proposal or one bid contract, but it's been interesting the hype behind no-bid. If we don't have a proposal from industry, we don't have a contract.

Mr. Breul: So you mentioned what the benefits are: speed, the ability to be able to procure a skill or a technology that is not prevalent through the marketplace. What are some of the risks of using a sole-source contract?

Ms. Duke: I think the risk is are you getting the right price? That's number one. If a company knows that you're negotiating only with them are they really sharpening their pencil, as the cliche goes?

I think the other risk is from an industrial-based standpoint. If there really is only one contractor that can perform and it's a critical mission, supply, or service, should we be looking at how to enhance the industrial base so we're not in that risk position from a technology standpoint?

Mr. Abel: Now, one other trend in contracting is performance-based contracts, which offer money or other types of rewards for outstanding performance by the contractor. What's your view on performance-based contracts and to what extent does DHS use a vehicle like that?

Ms. Duke: Performance-based contracts are a tool in our toolbox. I don't think they're a panacea. My opinion on this is a little in the minority. I think they are very good. I think that DHS is accurately reflecting its use of performance-based service contracts, but I think that there are some execution problems with performance-based contracts that really aren't being openly talked about.

Performance-based contracts were being used on DOD installations in the '80s in terms of grass-cutting and custodial services and some of the ones where you really can articulate well a performance-based standard. And as we transition and try to use them for more mission-critical broad-scope services, I think a lot of people are having trouble with how to do them effectively, how to really have metrics that are meaningful, how to really give the industry the autonomy and the independence to execute just to the measures and not manage to requirement. I think oversight people have trouble overseeing that way. The oversight people sometimes want to oversee to a requirement rather than a metric.

So I think there's a lot of problems in execution. And I think if we would acknowledge the problems we maybe could deal with them a little more effectively and improve performance-based because I think it is a good tool. It's very difficult.

Mr. Breul: How is DHS recruiting and retaining procurement professionals? We will ask Elaine Duke, chief procurement officer, U.S. Department of Homeland Security, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Breul: Welcome back to The Business of Government Hour. I'm your host Jonathan Breul, and this morning's conversation is with Elaine Duke, chief procurement officer at the U.S. Department of Homeland Security. Also joining us in our conversation is Dave Abel, director of Homeland Security Services at IBM.

Elaine, the seven DHS components have retained their procurement functions and each reports up a direct line to their mission supervisors, which is referred to as functional integration. How does such an alignment benefit DHS's overall acquisition strategy?

Ms. Duke: I think the way it benefits DHS's acquisition strategy is the mission owner has the full authority. So if you think of the component head as really a commander in itself, then that commander has the ability to execute his or her mission and has the acquisition authority, which is a piece of how they -- what they need to execute their mission.

Mr. Breul: How then do you respond to those who believe that DHS should adopt a centralized model, going beyond mere oversight with the ultimate authority for all acquisitions under your office?

Ms. Duke: I think there's two things I can say about that. One is when Sec. Chertoff took over leadership of the Department of Homeland Security he did a comprehensive review, you might have heard about it, 2SR, and it looked at this area and concluded that the functional integration model was appropriate for the department.

The second thing I'd say is I really think that organizations sometimes end up being a crutch for performance issues, meaning some places will organize and reorganize, and every time there's a problem they just reorganize again. And I think there's several ways we can improve our acquisition program that aren't organization-based, and that is building out acquisition, as I mentioned earlier, and focusing on it through all stages of acquisition. So I don't think this is DHS's acquisition challenges necessarily have to be fixed through a reorganization strategy.

Mr. Breul: Well, balancing the appropriate number of DHS contracting officials with the growth of your portfolio has been a real challenge. How many contract specialists are you looking to recruit for optimal performance? And to that end, what changes have you made to your recruitment process? Do you use a flexible compensation strategy? Do you use tuition reimbursement, recruitment bonuses, or other tools to attract and attain quality employees who possess the critical competencies?

Ms. Duke: Yes, this actually has been a challenge. I think acquisition workforce, building an acquisition workforce is our number one priority, as I talked about earlier. And we actually had a study done in 2002, when the department was just standing up, and the optimal number of contract specialists from that study was about 2,500 and we have about 1,000 now. We're not sure, that study is old. We've had so much development and we're actually right now undergoing a new study to determine what is the right number. But whether it's 2,500 or something a little bit less, we still are in the hiring mode and will know that exact number.

We're using many different areas. At the top end, if you will, we are looking at a reemployed annuitant strategy. We'd specifically like the authority to use reemployed annuitants to mentor our younger workforce. We think that's a great way to take that knowledge that persons have built up through their career and plow it back into the government in a recapitalization type effort.

On the younger end of the spectrum, we have a great intern program starting. And in the president's budget we have funding for about 66 interns this year and we're looking at building up to an intern workforce of 300 by Fiscal Year '11. And that will -- we plan a 3-year program with over 400 hours of training. They'll rotate through three different offices, so they'll have great training. And we think that's going to be a huge effort to revitalize our workforce.

And in the middle, we are trying tuition reimbursement, training. Our Chief Human Capital Officer Marta Perez has been very supportive in working with us on the strategic plan for the acquisition workforce and that has been very helpful to us.

Mr. Abel: I'm going to change gears on us a little bit. One of the most profound events to impact the department, the government, and the nation overall in the last couple of years was Hurricane Katrina. What type of lessons related to procurement and acquisition did your organization learn during that event?

Ms. Duke: I think the first lesson we learned was the importance of the advance acquisition planning. When you have a very small disaster it's very -- it's much easier to on the spot send a team out and recover using the local economy. So we're doing two areas of better planning and acquisition: one is the people side and the other is a contract vehicle side. So FEMA has been very successful in putting contracts in place that will allow for initial emergency response transitioning into local contracts for recovery, and that's very important.

The second area is on the people side, is having a workforce that can augment FEMA's workforce or whoever is managing a disaster. And that's actually under a group that the chief acquisition officer from GSA and I co-chair called the Emergency Response and Recovery Working Group, where we're training federal-wide contracting personnel to be able to augment in case of a huge natural or other disaster.

Mr. Abel: And what's the status of some of the outcome from that organization? Are there things that are moving forward into implementation shortly?

Ms. Duke: In terms of the contracts piece? Yes. FEMA has awarded over 70 contracts. The biggest ones that were competitively awarded were the IATACs, which are Individual Assistance Technical Assistance Contracts. There are logistics contracts in place. There are inspection services.

One thing to keep in mind is the Stafford Act does -- which is operated if there's a disaster declared, does give a preference to set aside for local businesses. So as we're developing planning strategies we don't know where a disaster will occur, so we're at a national or regional level. But under the Stafford Act we always will be looking for transitioning as soon as possible to a more localized strategy to revitalize that economy.

Mr. Abel: Earlier in the program we talked a bit about the complex and large mission that DHS has to be able to implement. Since its inception DHS has had some large, complex procurements, like Deepwater Program or SBInet. Can you elaborate on some of the key lessons learned derived from these earlier large acquisitions and how they have informed your organization moving forward?

Ms. Duke: Well, there's a lot of lessons we've learned. I think first and foremost is that the government, when it has an acquisition program, has to have the full complement of acquisition professionals in place before a contract or an acquisition program moves forward. We've really been working very strongly on the acquisition model such as in DOD, where the program manager is the center of the acquisition program.

I think another lesson learned we have is the importance of maintaining the ownership as we move forward in a partnership with industry.

And a third is the importance of contract administration. Because our contracts are very complex, very long, and we do have that dynamic mission, it's so important for us to make sure that we keep in mind that awarding the contract is really only the first step, and sometimes the easier step, in a contract's life.

Mr. Breul: Would you tell us a bit about your efforts to improve the systems you have in place to capture information on procurement actions? And in particular, does your department have plans to deploy a single contract writing software system?

Ms. Duke: There's two layers to that: one is within the department and one is at the federal level. At the federal level we participate very heavily in the FPDSNG, which is the Federal Procurement Data System Next Generation, which is the official contract data system for the federal government. And that is something we participate on continually improving with our federal partners. And I think that is key to making sure that we have accurate data throughout the federal government in the future.

Within DHS we are working towards implementation under -- we're actually under the enterprise system, so we're a piece of the chief financial officer's enterprise system. But our goal is to have a single contract writing software system that basically -- that both helps the contracting officers and also provides management information.

Mr. Breul: We talk with many of our guests about collaboration. What kind of partnerships are you developing now to improve operations or outcomes at DHS?

Ms. Duke: Well, I think that within DHS we have two groups that really are helping in the acquisition arena. One is our Chief Acquisition Officer, which is where I meet with all the persons I have functional integration authority over on a regular basis. We've formed a second group internally and that's the Program Management Council. And that is actually to do the same, is to bring all the other acquisition issues together in a forum under a group that's focusing on building better acquisition in the big sense or, as the Department of Defense would say, the big A sense together and build a more comprehensive program management and acquisition program within DHS. And then at the federal level I've already mentioned that I'm a member of the executive board of the Federal CAO Council chaired by Paul Dennett.

Mr. Breul: That's a good number of partnerships. How do you anticipate that these partnerships are going to change over time?

Ms. Duke: I think they'll change over time not so much with the partnerships, but the focus areas. So the Federal CAO Council has working groups and those working groups change over time. They start up when something becomes important, like some recent starts within the last year or two have been strategic sourcing, acquisition workforce is a huge area. And within DHS right now, for instance, on the Program Management Council, what we're looking at is one of our priorities is to have a program metric system, an automated system. Well, once we get that in place, then we'll be moving on to other priorities, but the same group. Some names will change and faces.

Mr. Breul: Sticking to the Program Management Council within the department, how exactly does it enhance your organization's processes and effectiveness?

Ms. Duke: I've often said and some of you listening may have heard this before that the key to a successful acquisition program is a strong program manager; that without a well thought out mission need, without a sound requirement, we cannot consummate a deal on a good contract. We just really need that basic. It's building a house without a good foundation. So the Program Management Council is both seeking to put some initiatives in place that'll help program managers manage such as, I said, the metric system, but really it's building that competency in DHS. We really need to have properly trained and certified program managers running our major programs. And then once we accomplish that, we need to have the related career fields, like the logistics, test and evaluations, those other ones I've talked about, in place to fulfill the complement of acquisition skills in our major programs.

Mr. Breul: What does the future hold for the U.S. Department of Homeland Security? We will ask Elaine Duke, chief procurement officer, U.S. Department of Homeland Security, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Breul: Welcome back to The Business of Government Hour. I'm your host Jonathan Breul, and this morning's conversation is with Elaine Duke, chief procurement officer at the U.S. Department of Homeland Security. Also joining us in our conversation is Dave Abel, director of Homeland Security Services at IBM.

Elaine, I'd like to transition now to the future. Could you give us a sense of some of the key issues that will affect acquisition and procurement offices government-wide over the couple of years ahead?

Ms. Duke: I think one of the biggest is going to be the workforce issues in terms of how are we going to revitalize and expand our workforce. Not only in DHS, but federal-wide, the number of dollars spent on acquisitions is going up. So with the curve of having the majority of contracting professionals eligible to retire over the next three to five years, how are we going to build that workforce and ensure we have the competencies? And that is a huge area for us right now.

Mr. Abel: So as we narrow that down a bit to the opportunities and challenges that your organization will face in the future, how does that change when you talk just specifically about DHS?

Ms. Duke: I think that if the federal government is change, we're change-squared. I think that I used to think when will DHS mature enough so it's more stable? And I think that from what I spoke about earlier about the dynamic nature of the mission, I think the reality is that DHS will always be more of a changing organization than some of the other departments, and so that is really the challenge now. Rather than trying to eliminate change or stabilize, I think our focus has to be how are we going to manage change? So how are we going to plan things? And I think you really can plan for change if you're thinking about it. So how are we going to plan for the constant change?

In addition to the change in mission, we have the change in the administration, which will be a personnel change for us. And so what are we going to put in place to be able to effectively manage that?

Mr. Abel: So if you were to look three to five years out, what would you see out there that looks different than it looks today? What's changed three to five years out there?

Ms. Duke: Well, I think one of the things that will change is we will have a higher maturity level, so we'll have more discipline of process I call it. And what I mean by that is I think the key to success is optimization, and sometimes we tend to have nothing or we tend to maximize. And I think when it comes to flexibility versus discipline of process the key really is optimization and how much is enough.

Some people talk about bureaucracy as a bad thing. It's not a bad thing. It's only a bad thing when it's useless or when it becomes too cumbersome, but some amount of bureaucracy is good. It exists in industry and it exists in government for a reason. So I hope that in that horizon we'll be moving towards still staying nimble and quick so that we can meet our mission, but having the right amount of discipline so we have some standardization where standardization is appropriate, the repeatable processes where that's a good thing, yet we're still youthful, if you will, enough that we can react to the changing mission.

Mr. Breul: We also talked to many of our guests about the pending government employee retirement wave. How are you handling the retirement wave and what is your organization doing to ensure that you have the right staff mix to meet your future challenges?

Ms. Duke: That is the most complex problem and it is one I spend quite a bit of my time on. I think that bringing in the interns that I talked about earlier is very important. I think we have a generation coming out of college that are really excited about serving their country. And DHS provides those type of mission interests that make it easier for us to recruit than maybe some of the other departments. People know Homeland Security and they're excited about it and really feel that despite all the publicity, I think there's a feeling we can make it better, and that's what we're looking at.

I talked about the reemployed annuitants earlier. In the midterms we're looking at can we take people that haven't done contracting, but are mid-career, but could transition the same basic skills? So if you talk about analytical skills, decision-making, problem-solving, you can learn that in many different career fields. I tend to think that it may be easier to take some of those kind of people and then teach them contracting because contracting is not that hard if you have those basic skills.

Mr. Abel: Earlier on in the program you mentioned one of your top priorities as being continued development of the competencies within the acquisition workforce. What are some of the things that you're doing to ensure that your staff has the appropriate training and skills to be able to fulfill this requirement?

Ms. Duke: Well, we're trying to offer several different ways of training and increasing skills. One is the traditional training. That's through Federal Acquisition Institute, Defense Acquisition University, and some private sector sources. But in addition to just the training in a classroom setting, really I feel like workshops are very useful, especially for DHS where people are very busy, where we have topical-type workshops. Those have been very interesting and very well attended. So we'll have anywhere from a two- to a four- to an eight-hour workshop on a specific topic, focused where we see areas that need attention.

The other thing we're doing is we're using our oversight as we do our management reviews to identify what are the areas that do need skills refreshment, if you will. And so if we have a problem with cost-and-price analysis, then we'll hold training or these workshops on that. So we're really trying to marry our oversight, what we're seeing there, identifying areas that appear to be weaker, and then targeting specifically for those areas.

Mr. Abel: So you've mentioned a number of times on the interview this morning the lynchpin of the program manager in acquisition and in contracting. What are some of the things that you're doing within the department to make sure that you continue to develop the skills and numbers of people that have the competency to be able to manage programs of the size and scale that the department must undertake?

Ms. Duke: Well, we've partnered with the Human Capital Office to do DHS centralized recruiting. So rather than having each component having to go out to recruit, we have done some centralized recruiting. And we're doing centralized screening of those applicants so that we can provide a list of qualified candidates to the components that they can choose from to fill their vacancies.

We're doing training at the executive level on acquisition, so these component commanders, as I called them before, get a better feeling for what acquisition is so they know their needs. Where in Department of Defense you have separate acquisition commands, our component heads have to be both operational commanders and the acquisition commanders, and so giving them some specifically focused executive training. The other thing we're doing is the Program Management Council.

And the other thing that we're working on is the Investment Review Board, and both bringing a focus on ensuring that investments are reviewed from both an acquisition and mission perspective as they move along, but also adding a governance element to it. And what I mean by the governance element is making sure that once a program is approved that it's accomplishing its mission on cost, schedule, and performance targets.

Mr. Breul: Elaine, you had a very interesting career within the public service, so I'm curious, what advice would you give to someone thinking about a career in public service?

Ms. Duke: I'll tell you it's just great. I think that the best thing about public service is you're given as much room to grow as you can handle. I think early on you get a lot of responsibility and you can keep growing in terms of responsibility. I think it's a great place to work, to be able to balance family and professionalism, which was always very important to me and I think that's important to a lot of people, and I think that the federal government does a very good job of letting us balance all pieces of our work life. And I think that it's also just exciting because there is the constant change. There's never a plateau where you say I'm done now. And that's if you're going to spend 30 years doing something, you don't want to be done too early.

Mr. Breul: Elaine, that's great advice. We've reached the end of our time and that will have to be our last question. I want to thank you for fitting us into your very busy schedule and, more importantly, Dave and I would like to thank you for your dedicated service to our country.

Ms. Duke: Thank you. And I'd like to just say in closing that I really -- if you're interested from both doing business with DHS or a career with DHS, we have two great websites. Our website for those interested in doing business with DHS is www.dhs.gov/openforbusiness. If you're interested in a career with us, we have a website, www.dhs.gov/acquisitioncareers. Thank you.

Mr. Breul: This has been The Business of Government Hour, featuring a conversation with Elaine Duke, chief procurement officer at the U.S. Department of Homeland Security. My co-host has been Dave Abel, director of Homeland Security at IBM.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who can't hear this morning's show on how we're improving their government, but who deserve our unconditional support and respect. For The Business of Government Hour, I'm Jonathan Breul. Thank you for listening.

This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m., and visit us on the web at businessofgovernment.org. There you can learn more about our programs and get a transcript of today's conversation. Until next week, it's businessofgovernment.org.