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.

Today, the U.S. Department of Labor continues to heed the call that government should be results-oriented and guided not by process, but guided by performance. In the past few years, the Department has become synonymous with high performance, results, accountability in federal government. Labor maintains its dedication to improving performance and ensuring that good government principles inform its day-to-day management and its operations.

With us this morning to discuss his efforts in this area is our special guest, Patrick Pizzella, Assistant Secretary for Administration and Management at the U.S. Department of Labor.

Good morning, Pat.

Mr. Pizzella: Good morning.

Good morning, Steve.

Mr. Sieke: Good morning, Al.

Mr. Morales: Pat, perhaps you could share with our listeners a sense of the history and mission of the U.S. Department of Labor. Can you tell us when it was created, and what's its mission today?

Mr. Pizzella: Sure. The Department of Labor was created by President Taft back in March of 1913, and its mission specified then was to foster, promote, and develop the welfare of the wage earners of the United States to improve their working conditions and to advance their opportunities for profitable employment. And the mission has remained relatively unchanged after almost 100 years.

The first Secretary of Labor was William B. Wilson, who the Department just recently inducted into its Labor Hall of Fame. And there were originally four agencies within the Department: the Bureau of Labor Statistics, the Bureau of Immigration, the Bureau of Naturalization, and the Children's Bureau. Now, over time, the Bureau of Labor Statistics is still a mainstay at the Department of Labor, but over time, there have been other agencies that have been created by Congress and added, like the employment and training area, the workers' safety area, OSHA and MSHA, and such categories as wage and hour enforcement, and the Office of Labor Management Standards to enforce union democracy. So we're prepared for the 21st century, though we were created at the turn of the last century.

Mr. Morales: That's great. Can you continue to give us a sense of the scale of the operations over at Labor in terms of size of the budget, perhaps number of employees, and the geographic footprint that you cover?

Mr. Pizzella: Well, the Department has a discretionary budget of about a little under $11 billion, and with mandatory spending, it gets to about $50 billion. And we have in the neighborhood of 16,500 or so employees located across the country in a little over 500 locations. The national office, of course, is located on Constitution Avenue in the nation's capital. And the building is named after Francis Perkins, who was the longest-serving Secretary of Labor.

Mr. Sieke: Pat, now that you've provided us with a sense of the larger organization, perhaps you could tell us more about your area and specific role within Labor. What are your specific responsibilities and duties as the Assistant Secretary for Administration and Management and its chief information officer? Could you tell us about the areas under your purview, how your area's organized, and the size of your staff and budget, and how does it support the mission of the Department?

Mr. Pizzella: Certainly. As Assistant Secretary of Labor, I serve as the principal advisor to the Secretary in the administration and management programs of the Department. I wear other hats as the Department's chief information officer and the chief human capital officer and the senior real property officer, to name a few. As such, the portfolio I'm responsible for covers budget, human resources, information technology, procurement facilities management, security and emergency management, and the Department's overall civil rights program. The Office of Administration and Management contains three Deputy Assistant Secretaries: one for budget and performance planning, one for operations, and one for security and emergency management.

We have eight centers that operate out of the national office, and we have six associated regional offices, a little over 700 employees that carry out these functions. And as I mentioned, one of the key functional areas is the chief information officer, and that role requires us to ensure there's compliance by DOL agencies with implementation of the information resources management responsibilities that go with any senior official at the Department of Labor. And we also provide advice and assistance to the Secretary and other senior officials in the area of IT, IT security, and other information resources areas.

Mr. Sieke: So Pat, you certainly have a lot of hats that you wear. So regarding all these responsibilities and duties, what do you see as the top three challenges that you face in your position, and how have you addressed those challenges?

Mr. Pizzella: Well, the way we see it is that good management assists good policy. And if you have a good management infrastructure, it should assist the policy implementers at the Department, and so that's really been our focus since we first arrived there. We want to ensure the Department has a professional workforce that's structured to meet the Department's mission, both now and into the future, and we want to meet the challenges of ever-increasing risks, whether those risks are in the information technology area, physical security area, or continuity of operations, things like pandemic flu planning and so forth. And lastly, we want to maintain an effective support operation that will improve the efficiencies of the Department.

Mr. Morales: Now Pat, you've held various roles across a couple different agencies and departments over the past 25 years. Could you describe your career path for our listeners, and tell us how you got started?

Mr. Pizzella: Well, I began my career in Washington in 1981, and joined the Reagan Administration. And there, I worked as a special assistant to the head of the General Services Administration, which was very good training for someone who's now an Assistant Secretary for Administration and Management. I then served at the U.S. Small Business Administration, and I closed out the era with Pres. Reagan as Deputy Under Secretary for Management at the Department of Education. During that time, I had the opportunity to serve as a member of the Office of Personnel Management's Senior Executive Service Advisory Committee, and also as a member of the President's Council on Management Improvement.

Following that, I served as the chief administrative officer at the Federal Housing Finance Board for about five years. And that's an independent regulatory agency that was created in the aftermath of the S&L crisis, and it oversees the Federal Home Loan Bank system.

In most of the '90s, I was a member of the policy practice group at a Washington state-based law firm here in Washington, D.C., serving as a government affairs counselor.

I arrived at the current administration first as serving as a policy coordinator for the Bush-Cheney General Services Administration transition team. And then on January 20th of '01, I was one of the folks who were in the original landing parties. I was named chief of staff at the U.S. Office of Personnel Management. And I stayed there for about eight weeks and went over to the Department of Labor, where I was nominated by the President in April and confirmed by the U.S. Senate in May of 2001, and I've been in this position ever since.

Mr. Morales: That's a fantastic career. So tell me, if you put all this together, how have these experiences prepared you for the current role that you have today and shaped your management approach and your leadership style?

Mr. Pizzella: Well, most of my previous positions, and certainly in the government area, dealt in one aspect or another of the areas of management administration. So the responsibilities now as Assistant Secretary really are a very neat fit for those things, particularly the experiences in OPM and human resources matters, or as they were known earlier on as personnel issues. And issues like the President's Management Agenda of President Bush really dovetail well with the previous experiences I had. And combining the President's Management Agenda with the Government Performance and Results Act that was passed by Congress in the '90s has given us some tools to have a real impact on how government operates, and I found them very useful.

Mr. Morales: Great.

What about Labor's information technology strategy? We will ask Patrick Pizzella, Assistant Secretary for Administration and Management at the U.S. Department of Labor, 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 Patrick Pizzella, Assistant Secretary for Administration and Management at the U.S. Department of Labor.

Also joining us in our conversation from IBM is Steve Sieke.

Pat, could you tell us a bit more about the IT strategic plan at Labor? How does it address having multiple diverse programs that operate within a heterogeneous IT environment? And to what extent does the plan increase the outcome orientation of DOL's long-term measures and opportunities in the coming years?

Mr. Pizzella: Sure. Let me begin by saying that recently, or actually now it's been a couple of years, in October of '05, we updated our IT strategic plan that covers the years 2005 to 2009 to incorporate and align with DOL's mission, its agencies' requirements and the President's Management Agenda. And we wanted to link it to the federal enterprise architecture and federal government strategies.

In seeking the best IT strategy for the Department, there were several challenges that we were faced with. One was that the IT program operates in a very complex structure where we've got varieties of missions and business environments within the Department's 25 agencies, bureaus, and offices. We have obviously consideration and cooperation with both presidential, legislative, OMB, and other key sort of stakeholder directives that continually modify our IT strategy. And then, of course, we have to balance the appropriate IT resources that we have with the goal to achieve some results-driven performance.

First is the e government. We want to ensure that the IT initiatives and investments are really customer-focused and results-oriented, market-based, and cost-effective. Then we look at the enterprise architecture and we want to develop and maintain an enterprise architecture that is reliable and adaptable and it's driven by business and technology requirements, not just by technology

We're very cognizant of the IT management and governance structure in which we operate at the Department, and we try to promote the cost-effective IT solutions by sharing and implementing best practices, both across the Department as well as across government. Security has been in the forefront of issues that we really focus on, because in this particular age, providing a secure IT infrastructure that ensures the integrity and confidentiality of the data and information systems is vital for both the Department and for its customers.

And finally is the area of human capital, where you've got to develop and maintain high-quality in a competitive IT workforce.

Our Department's IT strategy calls for sort of leveraging and coordinating those goals and being sure that we are inclusive rather than exclusive at the Department of Labor so that we involve all the agencies in trying to achieve these objectives.

Mr. Morales: So Pat, it's been my experience that in the area of information technology, we tend to see things such as turf battles and proprietary views. Could you elaborate on your efforts to foster an enterprise view and break down these silos? And how are you revamping the Department's IT decision-making process?

Mr. Pizzella: Well, I think one of the keys to our ability to break down the silos has really been our success in capitalizing on the President's Management Agenda, particularly the e government initiative in that agenda. Our IT governing structure really fosters enterprise-wide thinking and collaboration at the Department. We have regular meetings with senior IT officials from all our agencies and bureaus and offices to really vet the issues that are before us and figure out what is the best solution when a Department solution is required.

We early on, very early on, tackled the -- what now seems rather funny in retrospect, the problem of having a variety of e mail systems serving one department. And we really made that an early test case where we wanted to get to one common e-mail system, and it took us 18 months. We started in '01. It was something that early on popped on the radar screen. But that experience, one, it showed us as a department we could work together; and two, it demonstrated that you can produce a common solution that works to everyone's benefit.

The story behind all that is that one of my fellow Assistant Secretaries was meeting with the Secretary one afternoon. And upon arriving at the Secretary's office, the Secretary asked her, I hadn't heard a response to the e-mail I sent you this morning. When do you think I'll get that? And the Assistant Secretary said I don't think I got your e-mail. And so of course, as the CIO, I was called into this discussion, and it turned out the reason it took so long for the Secretary's e mail to reach the Assistant Secretary, who only worked about 100 yards or so down the hall, was that we were on sort of two different e-mail systems. And we decided right then and there we were going to correct that situation, and very glad that we did.

Mr. Sieke: Pat, you talked about e-gov as one of your strategic initiatives. And we know that e gov initiatives are continuing to improve and expand services to citizens, businesses, and agencies alike. Would you tell us about your Department's efforts in this area, and what about the role your Unified DOL Technology Infrastructure, the UDTI initiative, has played in making your efforts successful?

Mr. Pizzella: Sure. One of the things that from a Department-wide standpoint we're looking at right now is something that the Secretary directed, which is a DOL enterprise communications initiative that includes all of our Internet, Intranet, our call center, our e-correspondence, language translation services. We want to get a common approach that gives us a convenient and secure access to DOL information and services, not just us, but our customers, with a consistent look and feel for clarity. So we'd be in the process of the centralization of web services, and this is, again, an effort where we're trying to break down the silos and stovepiping and working with all the agencies. And we're in the midst of that right now, and it's moving along quite successfully.

And in the area of the Unified Technology Infrastructure Initiative, we began that in late Fiscal Year 2004, and it really dovetails nicely with OMB's IT infrastructure line of business. We've already begun some consolidation of various agency networks into a single departmental network, and so we've achieved some savings through that right now. And we expect to save much more through consolidation, and we expect to improve the overall efficiency of our IT network through this infrastructure initiative.

Mr. Sieke: That's terrific. Now, last year, govbenefits.gov was recognized as one of the top 50 most innovative government programs in the Innovations in American Government Award program given by the Ash Institute and Harvard University's Kennedy School of Government. Could you tell us more about this program and your Department's role in its success? And how does it more effectively connect citizens to government?

Mr. Pizzella: Sure. We're very proud to be named a top 50 program, and one reason for our success is our collaborative and interagency partnership. We happen to be the lead agency or the managing partner of govbenefits.gov. We've worked with our fellow agencies, 15 partner agencies to be specific, in getting this program up and running. It was one of the earlier e gov initiatives of the Bush Administration. And as a result, today, govbenefits.gov, it's a comprehensive, user-friendly benefit information source that features over 1,000 government benefit programs.

And what makes it so useful for the citizen is that we have a powerful prescreening questionnaire that allows citizens to come to the govbenefits website and answer some questions that will help determine their possible eligibility for the variety of federal programs out there. So rather than citizens having to sort of shop through pages and pages of information, by answering some questions, the prescreening questionnaire is able to help eliminate those programs of which they would have no eligibility for. And it's been one of the projects we've been very proud of.

Mr. Sieke: Well, congratulations on what has really been a successful program for you. Let me turn now to another topic. OMB has launched a budget formulation and execution line of business, which seeks to improve budget processes government-wide. Could you tell us more about this effort, and more specifically, what is DOL's E-Budgeting System, or DEBS, and to what extent has it influenced the framework development around this budget formulation and execution line of business?

Mr. Pizzella: Sure. Most agencies currently do not have an integrated budget environment to automate their budgeting activities. Instead, they depend on basic desktop office software to prepare and justify multi-billion-dollar budgets. The budget formulation and execution line of business was created by a group of pioneering agencies, including DOL, to identify a solution that linked budget formulation, execution, planning, performance, and financial information. And it also has the additional benefit of improving the human capital component of the budget community.

So working closely with the line of business, we delivered a budget system we call DEBS, it's the Departmental e-budgeting system, to all 18 agency components, comprising over 300 users at the Department of Labor. DEBS automates and integrates budget data. And the immediate benefits of DEBS are, one, it's the centralized management of the budget and performance information for improved decision-making; the near-elimination of document preparation tasks, sort of the tedious pagination and header/footer manipulation, that's virtually gone; numbers are consistently displayed throughout documents. It's easy now to electronically route documents for decision-making; and we cut down on errors with numbers and decimal points missing their particular place.

In the future, we'd like to see DEBS provide an electronic transmission of budget data for the Fiscal Year '10 President's budget. And we're looking to provide end-to-end automation of budget formulation and execution. So there are components and things that will happen down the road, but in the meantime, certainly at the Department of Labor, people are a little relieved in not having to go through the very tedious process that they've gone through for years.

And incidentally, as an aside, the DEBS project manager was recently recognized as a young leader in government information technology by Federal Computer Week, with a Rising Star Award.

Mr. Morales: That's fantastic. Now, Pat, technology has enhanced the ability to share information, and it also has made organizations more vulnerable to unlawful and destructive penetration, which you touched upon a bit earlier. But could you elaborate on your Department's efforts to improve your IT security and your controls?

Mr. Pizzella: Well, achieving a common security posture for the Department, you know, has been a challenge, but it's like other challenges we face, it's something where we've had to work together within the Department. Particularly, we built an effective working relationship with the Department's Office of Inspector General, all our agencies, and we work hard to make managers more aware of IT security concerns, because we consider it a key part of everyday business. It's just not something you look at once a year or once a quarter.

This positive relationship I think is evident in the consistent reporting of our FISMA report, the Federal Information Security Management Act report that's required annually. We paid close attention to our implementation of security controls that are outlined in guidance provided by the National Institute of Standards and Technology. And through a phased approach, our systems were upgraded to meet NIST's set of security controls.

We have made security sort of second nature to the IT professionals. And we have included a very comprehensive security training program for all our employees. You really have to develop a culture of security, and that has been one of our prime objectives.

Mr. Morales: So along those lines, Pat, can you tell me a little bit more about specifically some of the steps you've taken to create or cultivate this culture of accountability and protection of sensitive IT data?

Mr. Pizzella: You know, since 2006, it's no secret there's been events reported in the media that have underscored the potentially serious consequences of lapses in maintaining security, particularly of what's known as personally identifiable information -- PII for the shorthand term. And at DOL, we've really approached that in a very, again, comprehensive and coordinated way, where communications to all employees are filled with reminders about the responsibility of senior managers in this area, because it's not something that just the CIO is responsible for. Managers and employees are responsible because they're often entrusted with PII, and therefore, they have a responsibility to protect that.

We have an annual Departmental PII review and reporting process that requires agency head certification of the adequacy of their agency's protection of PII. We have currently a Social Security number reduction task force charged with reviewing the Department's PII collections that determine candidates for elimination. I mentioned earlier we have a strong computer security awareness and role-based training program.

And in those instances where we find there has been a lapse and some PII has been exposed, we have a systematic effort where we alert folks to the possibility that some of their information could have been compromised. And I'm glad to say we have not run into situations where any we have any proof of anything actually being compromised, but we've always been alert not only to be sure that our employees are aware of this, but to be sure that those people whose information might have been exposed are alerted so that they can take their own personal precautions.

Mr. Morales: So it sounds like you have layers and programs and activities that sort of drive that message home with employees.

Mr. Pizzella: We do.

Mr. Morales: That's great.

What about Labor's success with implementing the President's Management Agenda? We will ask Pat Pizzella, Assistant Secretary for Administration and Management at the U.S. Department of Labor, 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 Pat Pizzella, Assistant Secretary for Administration and Management at the U.S. Department of Labor.

Also joining us in our conversation is Steve Sieke, director in IBM's federal civilian industry practice.

Pat, we talked earlier about the PMA, and since its inception in 2001, it remains the key strategy for improving the management and performance of the federal government. Now, your Department has the honor of being the first Executive Branch department or agency to achieve and retain a green status score in all five government-wide PMA areas. Could you elaborate on how your Department has been so successful with the PMA? And more specifically, could you give us a sense of how DOL leadership sought to manage and approach the PMA from the beginning, how you got to green, and what were some of the critical lessons that you learned through this effort?

Mr. Pizzella: Sure. When the President's Management Agenda was launched in the summer of 2001, we knew this aggressive strategy for improving the management of federal government would be a challenge. First and foremost in our success has been the attention paid to it by Sec. Chao and the agency heads at the Department.

One of the key elements to help us along with implementing the PMA was the establishment of the Management Review Board by Sec. Chao in August of 2001, and it's still going on. This board meets for one hour once a month, and we just focus on management issues. And it provides the Department-wide forum for any and all of the cross-cutting management issues, whether they're in the PMA or not. I chair that board, and the membership includes all the major agency heads, the Department's chief of staff, and the Deputy Secretary of Labor.

The chief of the labor branch at the Office of Management Budget attends the monthly MRB meetings, and that's allowed us to maintain a good line of communication with OMB and to share information and ideas, particularly on budget administration initiatives. And it also, of course, helps build that transparency between ourselves and OMB in this key area.

We also from time to time invite outside guests to speak to the Management Review Board on the issues of the day. We've had obviously Clay Johnson, the Deputy Director for Management, has spoken to us. And John Mercer, who helped author the Government Performance and Results Act, has been someone who has addressed the Management Review Board, as has Maurice McTeague of the Government Accountability Project at George Mason University.

So the MRB was a perfect vehicle to serve as a launching pad for not only the PMA, but other DOL initiatives. As a matter of fact, the last time we spoke here at IBM, the PMA was just getting off the ground. That was in 2002. And the former president of the National Academy of Public Administration remarked that the DOL was off to a good start because we had yellow scores. Well, I'm proud to say, as you've referenced earlier, of those on the five government-wide management challenges that the President gave to the federal government, four of those are the responsibility of my office, and the improved financial performance initiative rests with the chief financial officer. But we were able to, in a coordinated effort, have the Department reach a green status and green progress in all those government-wide initiatives in June of '05. And like most departments since that time it's not easy being green, as someone once said. But we're glad in the last scorecard that just was issued at the end of Fiscal Year '07, we were able to begin all green on status scores for these government-wide initiatives.

We saw the PMA as really a way not only to implement a management agenda, but to engage career employees in what I'll call sort of a healthy competition amongst themselves and other agencies on how to achieve success and reach a goal. And I think the Department of Labor employees really rose to that task, and they were recognized. In December of '04, we received two President Quality Awards: one for the strategic management of human capital, and one for budget and performance integration. And we received two other President's Quality Awards: one in '05 and one in '06.

One of the things we did early on is the Secretary's a firm believer that personnel is policy. And we focused at the beginning on the strategic management of human capital, one of those five PMA initiatives, because we really felt if we were able to get that right, if we were able to get human capital right, it would help us achieve the other initiatives. And I think that really was one of the cornerstones of our success was how we focused early on human capital, and how it did spill over into the other initiatives.

Mr. Morales: Well, that certainly is a phenomenal success, and you all should be very proud of that progress. So in a related area, Pat, OMB's Program Assessment Rating Tool, or the PART, was developed to assess and improve programs' positive impact on outcomes that matter to the public. Now, to date, some 35 DOL programs have been assessed using the PART. Could you elaborate on DOL's overall PART performance? And more importantly, to what extent have these assessments enhanced accountability and program performance?

Mr. Pizzella: Of the 35 DOL programs assessed through the PART, more than 75 percent demonstrated positive results. Some programs with notable performance include the Bureau of Labor Statistics, and two programs that train veterans: the Veterans Employment and Training State Grants and the Homeless Veterans Reintegration Program. So we have found the PART is a good tool to analyze and review how a particular program is performing, and then for us to make some adjustments once we have those results. Sometimes the PART will identify inefficiencies, and that'll provide us a key as to where we need to maybe focus a little more on or provide a -- more or allocated resources in a different way. So the PART is one sort of arrow in our quiver of management tools we use to move forward at the Department of Labor.

Mr. Sieke: So Pat, you mentioned the importance of the DOL human capital strategy, so I want to switch over to one of your other leadership roles and ask you to describe how that strategy aligns and complements the Department's missions, goals, and organizational objectives.

Mr. Pizzella: Well, we touched on this a little earlier on, but the human capital strategic plan that we developed at the Department really brought together where we were going on this by outlining our mission, our vision, our departmental structure, the standards for success we would have. Our major objectives included reducing the competency gaps that existed in the Department, maintaining SES and mid-level management development and training programs to assist us in succession planning, continued improvement of the hiring process, preparing DOL's performance management system for pay-for-performance, and developing and implementing an e learning management system that provides a department-wide architecture for learning management and course development.

And that's really been our focus.

Mr. Sieke: That's great. Now, could you tell us about DOL's efforts to develop and implement a Department-wide performance management system which aligns employee performance expectations with organizational goals and objectives, links awards and recognition to organizational goals, and addresses poor performance?

Mr. Pizzella: Sure. As I mentioned briefly earlier, early on in this administration, the Department began moving towards a DOL-wide performance management system that focused on results. And by October of '03, we placed all our employees under one performance appraisal system. When we first got there, we found there were nine different systems and people were on different cycles. So you had different systems and different cycles amongst all our agencies, and it got to be a little bit confusing. And it was really tough at the end of the year to fairly assess the ratings, because sometimes you were literally looking at apples and oranges and whatnot.

So we continued to make strides in ensuring our performance management system was aligned and results-oriented by amending our policy on performance management and requiring performance elements to reference the Departmental agency or other organizational strategic goals with each is linked. We really like to connect the dots: our performance agreements for employees with our strategic plan for the Department and other department-wide efforts, like our e gov strategic plan or our human capital plan. We like to see things looped together.

We require all employee performance plans to include at least one critical element that makes it possible to hold employees accountable for work results. To address poor performance, DOL management and managers and supervisors should meet at a minimum with their employees at least once formally to conduct a midterm progress review. And to show that this is not a matter we take lightly, agencies must certify to the Department that the midyear progress reviews have been conducted in a timely manner.

We also require that any employee who fails to meet any of his or her performance elements in their performance plan must be placed on a performance improvement plan. So we've tried to build in some good safeguards for ensuring that our performance management system produces some results, and we think we've been successful with that.

Mr. Sieke: It sounds like a great example of kind of the laser focus you've had on performance in the Department. That's great. Now, Pat, would you elaborate for our listeners on DOL's MBA Fellows Program and what is required of the fellows? How does this program fit into DOL's succession planning approach, and what other changes are you making to the recruitment process at DOL?

Mr. Pizzella: I'm glad you raised the MBA Fellows Program because it is one of the success stories we're very proud of at the Department. It's a comprehensive, Department-wide, entry-level employment and career development program that's a key component of our structured approach to succession planning and developing future leaders for the 21st century. It was inspired by the President's Management Agenda and it was launched by Sec. Chao in June of 2002. The Secretary, herself an MBA, was very interested in utilizing this program to help attract individuals with the type of business skills needed to make the government more results-oriented and citizen-centered.

We joke about -- you know, if Nixon can go to China, then the Department of Labor can go to MBA schools. And we've really had quite a success. Early on, the Secretary herself wrote to every MBA school in America, alerting them about this program and seeking applicants for the program, as well as writing to every MBA alumni organization. Because we also wanted to get on the radar screen of MBAs out there who might be seeking career changes, and try to attract them to apply, particularly for our senior executive positions.

But we found that we have 15 MBA fellows a year we hire through this program, and we get a minimum of 300 applications for those 15 slots. We've ranged from 300 to 600 applications each year. As a matter of fact, since the inception of the MBA Fellows Program, we have doubled the percentage of employees with MBAs at the Department. So we're very proud of the program, and it's been very helpful to our overall succession planning effort.

Mr. Morales: That's great. Pat, I want to switch gears here for a moment to competitive sourcing. Now, competitive sourcing is about using competition to enhance business results within government agencies. Could you tell us a little bit about your Department's efforts in this area, and what are some of the challenges faced and what remains to be done in your perspective?

Mr. Pizzella: From 2004 through today, the Department has undertaken 28 competitions, of which 25 have been won by our Department of Labor federal staff. The activities subject to competition are commercial in nature, ranging from printing services to operations of the conference center, library services, claims examiners, facilities management staff. Through competitions, we've been able to streamline and make these activities more efficient.

One measure of the efficiencies gained are the estimated reduced costs over a five-year period of performance. The Department has been able to redeploy $67 million to high-priority program areas directly attributed to our A-76 competitions.

At the same time as we're doing this, and even though the Department is winning the vast majority of these competitions, we've been very mindful and made it a priority to protect the rights and interests of employees by helping DOL employees manage their careers and lives and to adapt to changes by applying various HR flexibilities to assist employees.

Let me give you a few examples. We offer voluntary early retirement on a regular basis, and often, we also offer voluntary separation incentive payments, buyouts, to employees wanting to take advantage of those things. We provide ongoing career transition assistance to employees, and we provide information through training sessions. We provide retirement and financial planning classes for employees who may be faced with a competition and want to know more about their options.

Of the more than 1,000 positions covered by A-76 competitions to date at the Department of Labor, only six employees were involuntarily separated from federal service, and we're very proud of that. So we've been able to minimize as best we can the impact on employees while improving the efficiencies at the Department through the competitions.

Mr. Morales: That's great.

What does the future hold for the U.S. Department of Labor? We will ask Patrick Pizzella, Assistant Secretary for Administration and Management at the U.S. Department of Labor, 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 Pat Pizzella, Assistant Secretary for Administration and Management at the U.S. Department of Labor.

Also joining us in our conversation is Steve Sieke, director in IBM's federal civilian industry practice.

Pat, we talk with many of our guests about collaboration, and you've talked about this yourself in a previous segment. So what kinds of partnerships are you developing now to improve operations or outcomes at Labor? And how many of these partnerships change over time?

Mr. Pizzella: As I mentioned earlier, one of the partnerships we're proudest of is govbenefits.gov. And we're continually seeking out new partners, but the 15 partners we've been working with for the last several years on this have produced I think a first-class website that's beneficial to the citizens. That's govbenefits.gov.

We've also been collaborating with 22 other agencies in providing disabilityinfo.gov, a White House New Freedom initiative. And this comprehensive interagency initiative removes barriers and improves online public access to disability-related resources. The DOL Office of Disability Employment Policy is the managing partner for this one-stop interagency web portal.

Also, we have the Department's Safety and Health Information Management system. It's a web-based information management system designed and implemented to comply with federal on-the-job injury and illness reporting requirements. And we've worked with the Transportation Security Administration on that and a variety of other agencies who are literally using our SHIM system, as it's called, because it's very current and it also helps achieve the specific goals that are required under the Act.

Mr. Morales: So, Pat, as you look into the future, can you give us a sense of some of the key issues that will affect CIOs government-wide over the next couple of years? And given this perspective, what emerging technologies hold the most promise for improving federal IT?

Mr. Pizzella: Well, I think the challenges will be the never-ending need to provide IT services in a budget-constrained environment. But that's somewhat minor compared to the major challenge I think will be the security challenge, because that focuses on both physical and technology. And I think many of your listeners are probably familiar with a Homeland Security presidential directive that deals with providing one federal ID card, a common ID card, and we're in the midst of doing that, and that's a several-year process.

What we find is technology can be very helpful, it can be very friendly, but it can also be challenging. And for agencies that are looking to improve efficiencies and truly gain real-time access to the type of management information that will help make every other decision you make a little more accurate and a little more efficient, good technology is the key to that.

Mr. Sieke: So, Pat, on a broader basis across all the roles that you play, what are some of the major opportunities and challenges your organization will encounter in the future? And how do you envision your offices will evolve over the next five years?

Mr. Pizzella: I think, as I mentioned earlier, we're looking forward to the -- really automating the budget formulation and execution process. That will have a Department-wide impact in not only improving efficiency, but improving the instant availability of budget information, which is so crucial to making management decisions. And it's not just the budget information of the moment, but it's historical budget information which can help you put things in perspective.

I touched on the information technology area. And as I mentioned a few moments ago, both the PII challenge there from a security standpoint as well as implementing the HSPD-12 are two areas in the future that you're going to see continued focus on.

And in the human resources management area, we at the Department are transitioning to a shared service center. And I think this is one of the Executive Branch's efforts at a human resources line of business. I think the perfect word to describe what's happening in the human resources community is "evolution," because over the next several years, you're going to see that HR people are going to be sort of shedding things that they might consider irrelevant, and improving upon things like competencies and processes and succession planning that are so important to the future.

Mr. Morales: So along similar lines, Pat, we typically ask our guests about the pending government retirement wave. And so I'm curious, how are you handling this phenomenon within your organization to ensure that you have the right staff mix to meet some of the challenges that you described?

Mr. Pizzella: Well, we pay attention both to what has happened in the past and what has happened currently, including projections for the future. We focus more on -- I like to say the faucet rather than the drain. People worry very much about who's leaving, and what we find is that there are many, many people eligible for regular retirement or early retirement, but very few people retire on the first day they're eligible. At least that's our experience. I'm fond of saying that, you know, many are cold, but few are frozen on this topic. But that doesn't mean you don't prepare for succession planning. And as I mentioned earlier, we have an extensive effort in our MBA outreach and MBA Fellows Program. We've offered some SES candidate development programs several times over the last seven years, and we have a mid-level management development program.

So at the Department of Labor, we hire about 1,100 folks a year. What we see is that when we post an SES job, there's usually no shortage of applicants. Obviously you're always looking for the best-qualified, and you hope you get that. We seem to have been fortunate in that area. That's enabled us to get the right mix, staff mix, to meet the future challenges.

Mr. Morales: Now, Pat, you've had a very long, successful, broad set of experiences in the federal government. So I'm curious, what advice might you give to a person who's considering a career in public service?

someplace in the federal government that you can contribute to. But the federal government, you know, has to compete for the best and brightest with what the private sector has to offer, and that's a challenging task. So federal service is really a special calling, but I would encourage people to take a look at it because it might be right for them.

Mr. Morales: That's great. That's fantastic advice. Pat, unfortunately, we have reached the end of our time. I want to thank you for fitting us into your busy schedule.

But more importantly, Steve and I would like to thank you for your dedicated service to our country across the various roles that you've held in the federal government.

Mr. Pizzella: Well, thank you very much, Al and Steve. It's always a pleasure to join you all.

In closing, I would like to point out something that we're very proud of at the Department of Labor. We talked about a lot of recognition and successes that the Department's achieved, but one of the things that goes unmentioned is that we've achieved that while our budget has actually been reduced over the last seven years. As a matter of fact, the budget that was proposed for Fiscal Year '08 by the President and Sec. Chao for the Department of Labor was the smallest budget proposed in over 10 years. We find that you can achieve successful results, like we have achieved in many areas, and still be fiscally restrained and respectful of taxpayers' dollars.

Sometimes it's not big things, but it's little things. Some of your listeners might be interested to know that over the last seven years, we've reduced the number of toll-free telephone numbers at the Department by 77 percent. When we first got there, there were 425 toll-free telephone numbers, and we're now down to 97. Well, the Internet's been expanding and folks aren't using toll-free numbers as much.

We've reduced the number of cars in our fleet. When we first got there, we found out we had 4,500 cars at the Department, or vehicles at the Department of Labor. It's now we've reduced that by 14 percent. Over the last seven years, we've been able to release over 100,000 square feet of space across the country, largely by closing just over 100 offices when resignations or retirements occurred in these small offices.

So I think it's important for your listeners to know that under Sec. Chao's leadership, we've been getting results in the way of increased worker protections and oversight in those areas, but we've been doing it in a fiscally restrained way that we think the taxpayers can be proud of.

Mr. Morales: That is fantastic, Pat. Thank you.

This has been The Business of Government Hour, featuring a conversation with Pat Pizzella, Assistant Secretary for Administration and Management at the U.S. Department of Labor.

My co-host has been Steve Sieke, director in IBM's federal civilian industry 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 can't 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.

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