Collaboration

 

Collaboration

Redefining the Business of Human Resources

Friday, October 12th, 2007 - 11:56
Posted by: 
  Chief Human Capital OfficerU.S. Department of Energy

Connecting People, Systems, and Data in the 21st-Century Air Force

Friday, October 12th, 2007 - 11:50
Posted by: 
Chief of Warfighting Integration and Chief Information OfficerU.S. Air Force

Responding to Ever-Changing Threats to Keep the Country Safe

Friday, October 12th, 2007 - 11:41
Posted by: 
Deputy Secretary, U.S. Department of Homeland Security

Protecting the Nation’s Natural Heritage

Friday, October 12th, 2007 - 11:31
Posted by: 
Deputy Assistant Secretary for Business Management and Wildland FireU.S. Department of the Interior

Expanding Healthcare Services for the Military Community

Friday, October 12th, 2007 - 11:19
Posted by: 
Major General Elder GrangerDeputy Director and Program Executive Officer, TRICARE Management ActivityU.S. Department of Defense

Balancing the Flow of Travel and Trade with Border Security

Friday, October 12th, 2007 - 11:11
Posted by: 
Deputy Commissioner, U.S. Customs and Border ProtectionU.S. Department of Homeland SecurityProfiles in Leadership

A Conversation with Clay Johnson III

Friday, October 12th, 2007 - 10:57
Posted by: 
Deputy Director for ManagementU.S. Office of Management and BudgetA Conversation with Leaders  

A Conversation with the Honorable Timothy M. Kaine

Friday, October 5th, 2007 - 11:03
Posted by: 
Conversation with LeadersA Governor of the Commonwealth of Virginia

Dan Blair interview

Friday, August 31st, 2007 - 20:00
Phrase: 
Mr. Blair serves as the first Chairman of the independent Postal Regulatory Commission, the successor agency to the former Postal Rate Commission.
Radio show date: 
Sat, 09/01/2007
Guest: 
Intro text: 
Missions and Programs...
Missions and Programs
Complete transcript: 

Originally Broadcast September 1, 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. Morales: Good morning. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government.

Recent postal reform has provided opportunities to address issues facing the country's Postal Service as it continues its transformation in a more competitive environment, with a variety of electronic alternatives for communications and payments.

With us this morning to discuss his organization and its efforts to facilitate this reform is our special guest, Dan Blair, Chairman of the Postal Regulatory Commission.

Good morning, Dan.

Mr. Blair: Good morning, Al.

Mr. Morales: And joining us in our conversation is Solly Thomas, associate partner in IBM's human capital practice.

Good morning, Solly.

Mr. Thomas: Good morning, Al. Good morning, Dan.

Hotlink Topic 1

Mr. Morales: Dan, let's start off by learning a little bit more about your organization, the Postal Regulatory Commission. Can you give us an overview of the Commission's purpose and its mission?

Mr. Blair: The Commission is a new organization built on the foundation of the former Postal Rate Commission. Last December, the President signed into law the Postal Accountability and Enhancement Act. And under that new legislation, the Postal Rate Commission was changed into the Postal Regulatory Commission, with new additional authorities and responsibilities to exercise oversight and regulatory authority over the Postal Service.

Mr. Morales: Can you give us a sense of scale then of this organization? Can you tell us a little bit about how it's organized, its size, its budget and perhaps its geographic footprint, if it has a broader footprint?

Mr. Blair: The organization is a very small organization. I was formerly at the Office of Personnel Management. We were around 5,500 employees -- on a good day with everyone there, 55 employees, but we oversee an entity that generates around $78 billion in revenues that has 850,000 employees, and so it's a big task for a very small organization.

Mr. Morales: $78 billion? That's probably about the size of a Fortune 50 company, if not bigger.

Mr. Blair: Oh, probably larger, probably larger, more like a Fortune 10, and really the depth and scope and breadth of the Postal Service is amazing. It's really the one federal agency that touches everyone almost on a daily basis.

Mr. Thomas: Dan, you've given us a nice broad context of the agency. Can you tell us a little bit about your roles and responsibilities as the Chairman of the Commission?

Mr. Blair: The Chairman of the Commission serves at the pleasure of the President, and is designated chairman from among the five commissioners. We have five Presidentially appointed Senate-confirmed commissioners; we serve terms of six years each; we are located in downtown Washington D.C., at 901 New York Avenue.

As chairman, I'm the administrative head of the agency, and have broad authority over the employees and over the management of the organization. Everything we do though is as a commission, appointment of office heads, organization, all require input of the commissioners, and we work very collegially together. And so I'm very fortunate to be part of a very intelligent, very hard-working group of individuals.

Mr. Morales: Great. Dan, earlier, you mentioned your transition from OPM. Could you describe your career path for our listeners? How did you get started, and what attracted you to leave your senior position at the Office of Personnel Management to become the first Chairman of the Postal Regulatory Commission?

Mr. Blair: I started my career on Capitol Hill working for the former ranking Republican on the old Post Office and Civil Service Committee in the House of Representatives. My issue portfolio included both postal and civil service issues. After the Republicans took over the House in 1994, I had the good fortune to become the Staff Director for then-Chairman John McHugh on the Postal Service Subcommittee. And one of the things that we began on that subcommittee was the Postal reform movement. We conducted a series of hearings on conducting oversight of the Postal Service, and came to the conclusion that the basic business model under which it was operating was broken, the legislation needed fixing. And under Chairman McHugh's leadership, he began the Postal reform movement.

After three years working on the House Government Reform Committee for Chairman McHugh, I moved over to the Senate side and worked for Senator Fred Thompson, who was the Chairman of the Senate Governmental Affairs committee at that time. My portfolio changed a little bit -- I got back into the civil service arena, but was also involved in the Postal Service as well, government ethics, budget issues, and it's from that platform that I was able to make the transition to the Office of Personnel Management, where I was appointed the Deputy Director by President Bush and confirmed by the Senate.

Served there for about five years. It was a phenomenal and educational experience for me, working with some really good people, such as one of the interviewers here today, Solly Thomas, but it was really a phenomenal opportunity for me to gain good management experience and insights on how to run an organization. My passion has always been I think on the Postal side, and when this opportunity arose last year to serve the President as Chairman of the Commission and serve on the Commission, I seized it, because I think this is a one-time opportunity to really help change the way the Postal Service operates.

The legislation granted significant new authorities, but also counterbalanced it by empowering a new commission, a regulator in this point, to make sure that the intent of the legislation was being properly carried out. We view ourselves really as the agents of transparency and accountability, and take that very seriously.

Mr. Morales: That's a very broad set of experiences. I'm curious, Dan, how have these experiences prepared you for this current role -- leadership role, and shaped your current approach and leadership style?

Mr. Blair: I think that my work at OPM certainly gave me the management skills that were necessary for running an organization. And they gave me an appreciation for one fundamental concept, and that is that the organization is only as good as the people that you have for it. So I come into the job with a special appreciation for the human capital side of the equation. I also come into with a broad knowledge and background in Postal issues. This is almost an alternate world of sorts in that many of the ways that government functions -- functions just a bit differently when it comes to the Postal side, and I think there is a steep learning curve for some folks, and luckily, I've had a background in that and I've able to negotiate that steep learning curve well.

Mr. Morales: What are the goals and priorities of the Postal Regulatory Commission?

We will ask Dan Blair, Chairman of the Postal Regulatory Commission, 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 Dan Blair, Chairman of the Postal Regulatory Commission.

Also joining us in our conversation is Solly Thomas, associate partner in IBM's human capital practice.

Mr. Morales: Dan, can you give us an overview of the Postal Accountability and Enhancement Act? What was the impetus for this legislation, and what additional tools does the new law provide the Postal Service to meet the challenges of a changing marketplace?

Mr. Blair: The Postal Accountability Enhancement Act was intended by Congress to give the Postal Service additional flexibility in the way it sets its rates. Right now, the way we set rates for the Postal Service is that they come into the Regulatory Commission, it's a 10-month litigated proceeding at which point we make a recommended decision, which is then considered by the Governors of the Postal Service. This process was clearly broken, it was very adversarial in nature, and I don't think there was anyone who thought that this was a viable model for a 21st Century Postal Authority.

Under the new legislation, we won't be recommending rates, we'll be reviewing the rates, but we'll also be looking at all aspects of Postal operations. The new legislation divided Postal products into two areas: competitive products and market-dominant products. And this is really a watershed in the way that Postal products are viewed and how they'll be regulated.

Mr. Morales: Now, the enactment of this new piece of legislation brought about several changes to the organization itself. Could you describe the fundamental differences between the roles and responsibilities of the predecessor agency?

Mr. Blair: Most fundamental is the name change, and I think that that speaks volumes. We were formerly the Postal Rate Commission, and what we did was recommend rates. As a regulator, we'll be reviewing the rates that the Postal Service sets in the future, but we're also going to be looking at things such as, is there cross-subsidization? Are they keeping rates within the price cap?

The new law has said that the Postal Service could raise rates within each class subject to a price cap, which should be equal to the rate of inflation. But within that, they have great flexibility; we'll be reviewing those rates as well.

Also, the legislation strengthened the complaint process, and it gave the regulator the authority to order corrective action. Now if there's a complaint filed with the Commission, we could only recommend changes. Under the new legislation, we can enforce those changes. We have subpoena authority. So there is significant new authority vested in the regulator to counterbalance the flexibility and additional authorities granted to the Postal Service.

Mr. Thomas: Dan, can you talk some more about the new oversight roles and responsibilities, and to that end, what are your goals and priorities, and how do you plan to accomplish them?

Mr. Blair: Right now, we're multitasking. The legislation gave the Postal Regulatory Commission 18 months from the date of enactment to come up with a new set of regulations governing the new system of ratemaking. In our conference with the Postal Service, I said that I thought it would benefit the system if we had those regulations in place sooner rather than later, and suggested that we might be able to get those regulations up as soon as October of this year, and we're on target to do that. Thus far, we've put out two Notices of Advanced Rulemaking in the Federal Register to receive comments on what this new system would look like. We're engaging the Postal Service in the preliminary stages before full consultation on how to develop new service standards for Postal customers as well with the Postal Service.

But still, we have some clean-up to do under the old act. We issued a decision cleaning up from the rate case that was issued back in February of 2007. We still have a number of smaller cases that are pending. We have negotiated service agreement cases that are pending -- one by Bank of America -- so we're multitasking, we're doing things under the old law, we're trying to get the new law in place, and we're also -- I'm trying to make sure that the organization is prepared to undertake the new responsibilities granted to it by the Congress.

Mr. Thomas: We'd like to give our listeners a better understanding of the relationship between the Commission and the U.S. Postal Service. Can you explain the regulatory role played by the Commission?

Mr. Blair: We have a great relationship thus far with Postal Service. I think it's one of mutual respect and understanding. I've developed a good working relationship with Postmaster General Jack Potter. I think he's done a fine job in his position. Also, Jim Miller, as the Chairman of the Board of Governors, has reached out, and we've established a good working relationship there.

But the legislation definitely empowered the regulator, and we're going to be working to make sure that the regulator fulfills those roles. Part of this will be compliance with the new rate cap, making sure that rates are within the cap that's envisioned by Congress; adherence to new Sarbanes-Oxley reporting requirements.

The Postal Service will be required to develop for the Postal Service new accounting principles for their competitive products category. In addition, we'll be consulting with them later this summer in a formal process on development of service standards, and so it really has given the Commission a new role in helping the Postal Service obtain its missions and objectives.

Mr. Thomas: Given the rather unique nature of the U.S. Postal Service in that it receives no federal funding and operates on its own revenue generation, could you elaborate on this, and how the Commission works to ensure the sustainability of the Postal Service?

Mr. Blair: Under the old law, it was a cost of service pricing system whereby the Postal Service would come in and say that their costs are "X," and the Rate Commission would recommend rates to cover those costs. Under the new regime, the Postal Service will be able to raise rates up to inflation, but will have to manage within that, and so if rate increases in the future will mirror inflation, they're going to have to manage their cost within the allowed framework. It's a substantially new framework for them to operate in.

Congress envisioned more flexibility in ratemaking for the Postal Service under this legislation, but they also said that the overarching considerations were that rate stay within the price cap, and so we'll be making sure the rates within the class -- that the class itself isn't raised higher than the rate of inflation.

Mr. Morales: Dan, you've used the term now "competitive products" and "market-dominant products." Could you describe more specifically what these are for our listeners?

Mr. Blair: The market-dominant products include Postal products such as first class mail, your letters and sealed parcels, post cards, periodicals, magazines, newspapers, standard mail, the mail that you read -- advertising mail, including catalogs, single-piece parcel post, packages that you might sent through the Postal Service and library mail. The competitive products are those areas where the Postal Service finds itself competing against private competitors, and they include products such as priority mail, expedited or express mail, and bulk parcel service for business users.

Mr. Morales: Great. Now, going back to the Postal Regulatory Commission and the Act, one of the most critical requirements of the Act is the establishment of a modern system for regulating rates and classes of market-dominant postal products as you've described, and the law is very clear on the objectives of the system as well as factors for the Commission to consider.

Can you describe these in a little bit more detail for us?

Mr. Blair: Congress granted the Postal Service the ability to raise rates within each Postal class up to the rate of change in the Consumer Price Index. This was done in order to give Postal customers the ability to better predict annual increases, and that was especially important to business mailers. We've seen that under the old cost of service system, some rates were more predictable than others, and that some rates would shoot up based upon their cost, and that would lead to hardship for many businesses. And so a price cap is intended to solve that by introducing an element of predictability and allow businesses to better budget for price increases in the future.

The Act listed objectives and factors by which the rates will be evaluated. The objectives include the value of the Postal services to both the sender and the recipient, making sure that we have regular and effective access to Postal services for all communities, both urban and rural, ensuring that the Postal Service's customers receive reliable delivery, speed and frequency of Postal service, and that they also have objective external performance measures for each of the market-dominant products, and that's what we're working with the Postal Service in the future to develop.

Mr. Morales: On a related matter, can you talk about how the Commission plans to in fact establish this system, and what are your ongoing efforts to outreach to stakeholders, mail users and other government agencies?

Mr. Blair: The first thing we did was we issued a notice in the Federal Register earlier this year, asking stakeholders what this new system rate regulation should look like. We received I believe 30-some-odd responses. Also, those responses were subject to reply responses as well. We also issued another Notice of Proposed Rulemaking. We co-hosted a summit with the Postal Service with over 200 attendees talking about what this new system would look like, and we've also invited comments on service standards and performance measurement for market-dominant products.

But this has all been really Washington-centric, and we wanted to take the message out beyond Washington, and so what we're doing is conducting three field hearings in Wilmington, Los Angeles and Kansas City, in which we're going to hear from different Postal customers as well, and we're inviting written testimony from the public as well as in the Federal Register.

Mr. Morales: Great.

What is the Postal Regulatory Commission's approach to performing its auditing and reporting function?

We will ask Dan Blair, Chairman of the Postal Regulatory Commission, 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 Dan Blair, Chairman of the Postal Regulatory Commission.

Also joining us on our conversation is Solly Thomas, associate partner in IBM's human capital practice.

Dan, with the recent postal rate increase, the Commission also approved the Postal Service's new "Forever" stamp to ease the transition to the new rates. Could you tell us about this new innovative approach, and how does this effort illustrate your collaborative relationship with the Postal Service?

Mr. Blair: Well, I think the adoption of the Forever stamp really evidences the collaborative relationship between the Service and the new Regulatory Commission. It was a proposal by the Postal Service, but it's also grounded in the Commissioner's desire to move forward with something that was very consumer-friendly. We've heard complaints throughout the years of people having old stamps, which they had to go buy the make-up stamps for, if you had a 37-cent stamp, you had to go buy another 2-cent stamp. And so people have rolls and rolls -- odds and ends of old stamps in their desk drawer.

The Forever stamp is intended to be very consumer-friendly, and if you purchase it, it will be good for -- a single piece for a class letter basically forever. But this was an instance where the Commissioners had voiced support for the concept; the Governors of the Postal Service took that and made that a formal recommendation. The Commission adopted it, and it shows you that this can work, that good things can come out of a very collaborative environment. It was a win-win for Postal customers and for the Postal Service.

Mr. Thomas: Dan, under the Postal Accountability and Enhancement Act, the Commission is also advancing toward performance of its auditing and reporting responsibilities. Can you talk about the actions you plan to undertake at the Commission to carry out these responsibilities?

Mr. Blair: The new Act does require the Commission undertake significant new auditing and reporting responsibilities. Part of that will be involving consultation with the Department of Treasury on recommending appropriate accounting principles in the competitive market areas. We've engaged the Department of Treasury in that area. We're also consulting with the Federal Trade Commission about laws on governing competitive products. And Congress asked us to perform a number of reports in the legislation, which we'll be doing over the next few years, in order to give them an idea of where we stand on implementation of the Act as well as ways that we might be able to improve on the Act in the future.

Mr. Thomas: Dan, you've taken over a relatively small agency that now has new authorities and responsibilities, and surely this is a tall order for any agency, particularly one with limited resources.

What changes do you see are necessary for the Commission to carry out its mission and its new responsibilities?

Mr. Blair: That's where I approach this job maybe little bit differently than my predecessors did. Having come from the Office of Personal Management and helped lead the President's Initiative on the Strategic Management of Human Capital, I have a special appreciation for the people that work in an organization, realizing that the organization is only as good as the people that work for it. And so we want to take a hard look at the Commission to make sure, and do the cross-walk between what our old responsibilities were, what the new responsibilities are, what that difference or delta will be, and make sure that we have staff capable of performing those new tasks.

And if we don't, how are we going to bring the staff up to speed, or what new staff are we going to have to bring in to augment that? Along this course, we've hired some outside experts to conduct a skills gap analysis and recommend some organizational changes. We're looking at succession planning. The Commission, much like rest of the federal government, is facing a retirement wave. I believe that 100 percent of my senior management team will be eligible to retire over the next five years, and so we're taking a look at that, to ensure that we have some good succession planning strategies in place.

One of the new areas in which the Commission hasn't had to focus on before, but the legislation requires it, is in the financial reporting area. For example, the Sarbanes-Oxley reporting review and the new accounting principles. So these are new areas for the Commission, and we'll be working to fulfill our goals and roles in these areas over the next few months.

Mr. Morales: Recently, the Commission made two structural changes: the appointment of the Commission's first Inspector General, and the creation of the Office of Public Affairs and Governmental Relations.

Can you elaborate on why these two changes were made, and what are you looking to accomplish with these new organizations?

Mr. Blair: When I came to the Commission, realizing the Commission's augmented role and profile with regards to its new role as a regulator, one of the things that struck me is that we really need to make sure we have a good external outreach. And so the Commission undertook an effort to develop and create a new Office of Public Affairs and Government Relations.

The Commission has been very fortunate in that we were able to secure the services of a long-time Hill staffer who worked on the Senate Homeland Security and Governmental Affairs Committee, Nancy Langley. She's doing an outstanding job in working with our media stakeholders, as well as with our congressional oversight committees and appropriators, to make sure that we're communicating well with them and meeting the expectations of the Act.

The Act also called for the appointment by the agency of a new Inspector General. So that was one of the first actions that we took at the Commission was a creation of this office. And Jack Calendar joined the staff of the Commission as its first Inspector General. Jack came to us as the Chief Postal Counsel from the House Oversight Committee, where he served as Chief Postal Counsel for ranking Republican member Tom Davis.

Also have the good fortune to have join us at the Commission, Ann Fisher, who served as the Deputy Staff Director on the Homeland Security and Governmental Affairs Committee for Susan Collins. Senator Collins was the chief sponsor, along with Senator Carper, of the reform bill in the Senate, and helped shepherd that legislation through the Senate and through its enactments. So we have some really good new staff joining the Commission as well.

Mr. Morales: With the Commission's changed role, do you see the need to undergo further changes in the Commission's organizational structure, its workforce size, skill mix, staff expertise, or perhaps in the policies and procedures? And can you talk about what you think these changes might be?

Mr. Blair: Again, we've brought in an outside consultant to help us better focus on what we need to do differently in order to be successful in meeting the mandates of the new Act. We want to make sure that our organizational structure is best-suited and aligned to this new role. So one of things we're going to have to do is develop a strategic plan.

And we're also moving in several directions at one time, which makes it just a little bit more interesting, if not more complicated, by wrapping up the old rate case and soliciting comments on the new system, reviewing a new negotiated service agreement case, along with the possibility of another rate case being filed before December, which is the last date in which the Postal Service can file for an old cost of service rate increase under the old law.

Mr. Morales: So it's fair to say that the organization is still under a state of transition?

Mr. Blair: We're very much under transition, and we're working forward to making sure that we have the right people onboard in order to carry out the duties of the new Act.

Mr. Thomas: Dan, as a follow-up to your discussion on your role as chairman of the agency, can you also describe your business interactions with the other Commissioners within the agency?

Mr. Blair: As I said early, the Commission's comprised of five Presidentially-appointed Senate-confirmed Commissioners. The President designates the Chairman. The Chairman is the administrative head of the agency. However, all the decisions that are rendered by the Commission, including the employment of office heads, are done on the basis of majority vote of the Commission. Decisions that we've rendered since I've been there, we've been fortunate in that they've all being unanimous decisions, which I think shows you how well and collegially the five Commissioners work together.

We come from divergent backgrounds, with different points of view and different political philosophies. But I think it's a testament to the way that the Commission works is that rather than emphasizing our differences, we've emphasized where we have our commonalities, where we share common beliefs and common strengths and we're able to work out any differences. And so I think that it speaks well for the Commission and strengthens the Commission that we're able to work in that kind of fashion.

Mr. Thomas: Dan, given the regulatory nature of the Commission, can you describe to our listeners the deliberative process that is in place at the Agency?

Mr. Blair: Right now, under the current rate regime, the Postal Service comes into the Commission with a request to raise rates, and that is a fully-litigated case in which parties hire representation and counsel. We have briefs filed, we have cross-examination of witnesses, and it's an adversarial quasi-judicial proceeding. At the end of ten months, the Commission issues a recommendation to the Governors.

That will be changing, however. Since the Postal Service will be given the flexibility to determine it its own rate increases subject to a 45-day review of the Commission, our quasi-judicial role will really be taking a background to our regulatory and oversight role, which will be reviewing how those rates were set, whether or not they are in compliance with the cap as established, and other issues that might come up regarding compliance with the law.

Mr. Morales: 45 days certainly sounds more efficient than 10 months.

Mr. Blair: That's why the Congress enacted it

Mr. Morales: Great. What does the future hold for the Postal Regulatory Commission?

We will ask Dan Blair, Chairman of the Postal Regulatory Commission, 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 Dan Blair, Chairman of the Postal Regulatory Commission.

Also joining us in our conversation is Solly Thomas, associate partner in IBM's human capital practice.

Dan, we don't often see many federal employees with your type of background, particularly one who has held senior positions in both the legislative and the executive branches. Can you tell us what some of the major differences, or perhaps similarities, there are between life in the legislative and life in the executive branches?

Mr. Blair: I think life in the legislative branch allows you the opportunity to conduct the oversight and to get to know government broadly, and to get know the agencies in which you can exercise oversight. The flip side is actually being in the agency where the oversight's conducted and you see the operational challenges and the daily activities, and you gain an appreciation for what it actually takes to make the trains to run on time.

I've been able to come full circle. I've been on both sides. I helped initiate with Chairman McHugh a fundamental reform movement of our largest domestic federal agency, the Postal Service, and saw that to fruition -- from the legislative branch through my work with Senator Thompson, then working for the executive branch when the President signed it into law; now, I'm chairing the Commission which was a key component of that legislative reform effort, and making sure that the intent of Congress is carried out through the regulatory oversight that the Commission will be conducting.

That's a full plate, but it's interesting to see how that has come full circle. I come from a government oversight background. I worked for both the House Government Reform Committee and the Senate Governmental Affairs Committee. So I have a full appreciation for the efforts involved on both the legislative and executive branches of good governance. I helped lead while I was at OPM the President's Strategic Management of Human Capital Initiative, and saw how important it was for agencies to have the right people with the right skills in place, and for agencies having strategies in place to bring that about as well.

I also saw the efforts of good government acts such as Clinger-Cohen and the Government's Performance and Results Act and the CFO Act, and how important that is to management initiatives within the federal sector. And so I have a keen appreciation for the way that federal government works, in an effort for transparency and accountability to the public and to Congress.

Mr. Thomas: Dan, in your last position as the Deputy Director of the Office of Personnel Management, you led a number of government-wide initiatives to address human capital challenges, such as recruitment, succession planning, leadership development, and performance management.

We'd like our listeners to get your broad prospective on what you see as the biggest issues facing the federal government as a whole.

Mr. Blair: You know, it's on several fronts. One I think is making sure that we have a workforce that meets the talent requirements of the federal agencies, making sure that we have good talent onboard, and that we can bring that good onboard quickly rather than having them languishing over periods and months in which you have to go through a hiring process. We've made gains in that area, but I think there's still a lot of ways that we can go on in that area.

I think addressing the security background backlog -- OPM is working hard to do that, but I think that as we continue in the War on Terror, I think bringing people into government with credible suitability backgrounds is going to be ever more important in making sure that we can conduct those backgrounds on a timely basis, will always be an effort on the part of OPM, which does about 90 percent of those background checks, and other agencies as well.

The retirement wave -- I look at the retirement wave in two aspects. One, it certainly is a challenge, because you don't want to have your key staff leave; at the same time, it's a tremendous opportunity to bring new staff on and to grow staff. And so that's why you need to have systems in place to bring younger people on -- people in mid-career on. At OPM, I was able to be part of some initiatives where we looked at mid-career hiring. And so I think that having a well-balanced workforce is a key to success in the succession strategy planning of the future.

So I think those are things that have to be done -- you look at the big picture, but you also have to look at the little picture -- making sure that the workforce that you have in place is meeting your goals and expectations. You need to align workforce performance goals with that of the agency and make sure that's cascaded down to the people who are in the mailroom understand as well as the top executives what the mission of the agency is, and how what they do every day, and how their jobs contribute to the overall success and mission of the agency.

Mr. Morales: Dan, given all the changes, what do you see as your vision and goals over the next five years for the Postal Service?

Mr. Blair: Clearly, we have to get a new regulatory regime in place, as envisioned by the Act, and the Act does lay out specific reporting requirements as well. But overall, I think that our measure of success is to the degree to which we have a vibrant Postal system in the United States. Clearly, the viability and sustainability of the U.S. Postal Service is important, but so is the importance of the competitive nature of the system, and the competitors making sure that there's no cross-subsidization, ensuring fair competition, but also making sure that businesses are being well-served, that individuals are being well-served by the Postal Service, and that the Postal-dependent businesses, be they small or large, that the system itself is vital and that we have done everything we can to encourage the vibrancy of that.

Mr. Morales: So that it continues to provide growth for this country?

Mr. Blair: Absolutely.

Mr. Morales: Dan, you've had a very broad and diverse set of experiences with your career, and you've been very successful.

What advice would you give to a person who perhaps is considering a career in public service, or perhaps in the federal government?

Mr. Blair: I think it's an incredibly important calling to be able to say that you can put yourself out -- there is a key speech by President Theodore Roosevelt about The Man in the Arena. When you get battered about in the press or you've had a bad Congressional hearing, or you've had just a generally bad day in which people are second- and third-guessing everything you are doing, you have to remember that you're putting yourself out there on a line and you have to do the best you can everyday.

I think public service is a very noble calling. It may not be for everyone, but you know what? It doesn't have to be for everyone. And anyone who picks up that mantle to engage in public service, it's not something they have to do for a career either. It's turned out to be a career for me, but for others, it can be a period of a couple of years, five years, a short time or a long time, but I do think public service is very important, and I think we need to create an environment in which public service is recognized and appreciated.

Mr. Morales: Dan, that's a fantastic prospective. Unfortunately, we have reached the end of our time together.

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 federal career.

Mr. Blair: Thank you Al, I appreciate that. And thank you, Solly. I also want to thank the folks who helped me prepare for today's session, and that includes Nancy Langley, Jeremy Sermons, Ann Fisher as well as Judy Grady.

Mr. Morales: Great. And thank you, Dan.

This has been The Business of Government Hour, featuring a conversation with Dan Blair, Chairman of the Postal Regulatory Commission.

My co-host has been Solly Thomas, associate partner in IBM's human capital 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.

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.

Jonathan "Jock" Scharfen interview

Friday, July 6th, 2007 - 20:00
Phrase: 
"Immigration services has to be focused on national security throughout all of its missions."
Radio show date: 
Sat, 07/07/2007
Intro text: 
Jonathan "Jock" Scharfen
 
Magazine profile: 
Complete transcript: 

Originally Broadcast Saturday, April 28, 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. Morales: Good morning. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government.

A secure homeland depends on the integrity of its immigration system. Since its inception, the United States Citizenship and Immigration Services, otherwise known as USCIS, has sought to strengthen the security and integrity of the nation's immigration system. With much discussion surrounding the possibility of comprehensive immigration reform, much of its execution and success will rest on the shoulders of the Citizenship and Immigration Services.

With us this morning to discuss these challenges is our special guest, Jonathan (Jock) Scharfen, Deputy Director of the U.S. Citizenship and Immigration Services.

Good morning, Jock.

Mr. Scharfen: Good morning, Al. How are you?

Mr. Morales: Great, thank you.

Also joining us in our conversation is Dave Abel, director of Homeland Security Services at IBM.

Good morning, Dave.

Mr. Abel: Good morning, Al.

Mr. Morales: Let's start off by setting some context for our listeners.

Can you tell us about the mission and the evolution of U.S. Citizenship and Immigration Services? Give us a sense of its history and the programs it runs.

Mr. Scharfen: Yes. The U.S. Citizenship and Immigration Services was originally the INS, Immigration and Naturalization Service, which was part of the Department of Justice. But after 9/11 and after March 2003, it was broken out -- "it" being the old INS -- was broken out from the Department of Justice and placed in the Department of Homeland Security. And then in turn, the old immigration service was broken into three parts.

One part was the Customs and Border Protection. Another part was the Immigration Customs Enforcement. And the third part was my organization, the United States Citizenship and Immigration Services.

Immigration Services has to be focused on national security throughout all of its missions. And we work in conjunction with the other organizations. We work with CBP and ICE almost in -- if you think of it in terms of concentric circles -- CBP protects the borders. ICE does internal enforcement, and we run the immigration services. We provide the benefits when people apply for citizenship or a green card or for some type of immigration status.

To give you a sense of the scale of our operations, Al, we end up processing about 6 to 8 million applications a year. We have 250 offices throughout the country and the world. The scale of it gives you an indication that the management -- you started off talking about the management of Immigration Services -- is a real struggle. It's a challenge for any good manager to be able to manage just the daily operations.

For instance, we conduct 135,000 security background checks a day. We have 135,000 visitors visit our internet site a day. We have 82,000 calls, phone inquires, to our phone lines. We take 8,000 sets of fingerprints. We welcome about 2,000 new citizens every day and swear them in. You can see that the management side of immigration services alone is a serious challenge.

Mr. Morales: In support of that broad and complex mission, can you give us a sense of the budget and the employees involved in your organization?

Mr. Scharfen: Our budget is approximately $2 billion a year. Most of that is derived from fees, and so it's not from appropriated monies, Al, but rather fees that the applicants for immigration benefit when they make an application -- they also have to pay a fee, and we collect those fees, and it comes to about $2 billion, and we run our enterprise based on that.

In terms of our employees, we have 15,000 employees. 10,000 of them are full-time employees, and then we have on top of that 5,000 term or contract employees, for a total of 15,000 employees.

Mr. Abel: Jock, let's narrow in a little bit. We're talking about CIS broadly. I'd like to get a better understanding of your role as Deputy Director. What do you do on a regular basis?

Mr. Scharfen: Dave, I serve as the Chief Operating Officer. The Director, Dr. Emilio Gonzalez, sets the goals and emphasizes strategic direction of the organization. I work with him closely with that, but I'm in charge and responsible as a Chief Operating Officer to implement that, to operationalize, if you will, those strategic directions. And I work with the Domestic Operations Director, our Refugee Asylum and International Operations Directorate, and our National Security and Records Verification Directorate. Those are three major directorates the way our organization is broken down.

We have a chief financial officer; we have an information technology officer; and then we have a few offices that are peculiar to the Immigration Services. For instance, we have an administrative appeals office that works on appeals, on decisions in different immigration benefits.

Mr. Abel: How many people support you directly? How many people are on your direct team?

Mr. Scharfen: Well, in my direct team, it's rather small. I have just a handful of people that support me directly. But what I do is I reach out to the directorates, and then that's my mode of operation is I work with the associate directors of the organization, and then those organizations in turn provide anything I need.

Mr. Abel: So with such a small group of people supporting you directly, and the numbers you're running through are astonishing in how large they are as far as how many benefits are processed -- phone calls, contacts, things of that nature -- what are the top challenges that you and your team face on a regular basis?

Mr. Scharfen: After 9/11, clearly, we always start off in answering this is that it's national security. Well, no one needs to be reminded, of course, is that the hijackers, many of them had abused different aspects of our immigration system. We know that terrorists continue to want to take advantage of our immigration laws, and so we have to remain vigilant to ensure that our people are trained and that they understand the threats that are out there.

For instance, just last fiscal year, we stood up the National Security and Records Verification Directorate. Its sole mission is to ensure that national security is kept to the forefront in our organization.

A second challenge, I would say, would be public integrity. Recently, unfortunately, there have been some stories just here in the region about fraudulent behavior of some of our CIS employees, and that's of major concern to us. We want to make sure that our employees are honest as well as efficient. And just recently, we announced the creation of an Office of Security and Integrity, to ensure that we have good management systems in place.

Finally, one of our major challenges would be the efficient delivery of immigration services. Just recently, we cleared a 3.4 million application backlog. We were augmented by the Congress with appropriations; half a billion dollars to pay what it took, extra manpower, to work back that backlog.

Moving forward, we have to ensure that we are performing our mission as efficiently as we can so that we don't end up creating backlogs like that again, and that's going to have to end up in the necessity of a fee role in a transformation program.

Mr. Morales: Jock, we had an opportunity before the show to talk about your career as a Marine and as a lawyer, which I find to be a very potent and dangerous combination.

Could you describe for our listeners your career path? How did you get started?

Mr. Scharfen: My dad was a career Marine, and I knew -- gee, since I could remember -- I always wanted to be a marine. So I went to the University of Virginia on a Marine option scholarship, joined the Marine Corps and became an infantry officer.

The Marines have a great program, as do all the Services, and it's a funded law program, and then sent me to law school at the University of Notre Dame. And then later on, the Marine Corps sent me to get a master's of law in environmental law at the University of San Diego.

My assignments were varied in the Marine Corps. I had some great command both as an infantry officer and then as a lawyer. And I had a command as a lieutenant colonel in Frankfurt, Germany, where I commanded Marine security detachments at different embassies.

I was able to serve as a prosecutor at Camp Pendleton. I had three tours at the National Security Council, where I got to see national security policy made and managed.

And then when I finished with the Marine Corps, I retired after 25 years. I then went to work on Capitol Hill. My mother influenced my second career choice. My mom had worked for Senator Warner for 20 years, and I had always admired my mom's work on Capitol Hill. She was a caseworker for Senator Warner, and one of her responsibilities was immigration. I was chief counsel for the House International Relations Committee for three years before assuming my current duties as Deputy Director.

Mr. Morales: That's just a fascinating story and fascinating career. So tell me, how has this broad set of experiences prepared you for your current role at USCIS, and how has it shaped your management approach and leadership style?

Mr. Scharfen: Good question, Al. I would say that the Marine Corps is known for many things, but one of the things that they inculcate in all of its Marines when they train us is the importance of values. So I've taken those leadership traits and values that were taught by the Marine Corps, and I tried to live by those in my current job.

The emphasis on mission, and to try to do the best you can in terms of achieving your mission. Finally, I think in terms of background as being a lawyer, that respect for the law has to be throughout the organization, and so those two things, I try to bring: values and the respect for law, and then finally, the respect for people throughout my management.

Mr. Morales: That's great.

How will USCIS handle the passage of comprehensive immigration reform?

We will Jock Scharfen, Deputy Director of U.S. Citizenship and Immigration Services within the U.S. Department of Homeland Security, 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 Jock Scharfen, Deputy Director of U.S. Citizenship and Immigration Services.

Also joining us in our conversation is Dave Abel, Director of Homeland Security Services at IBM.

Jock, as a result of a comprehensive fee review, which we began to talk about in our first segment, USCIS has sought to adjust the immigration benefit application and petition fees of the examinations fee account. What prompted this comprehensive fee review, and what are some of the examples of fees that applicants will be paying under this proposed structure, and when will they become effective?

Mr. Scharfen: Al, this has been the subject of some intense public debate, and we've gone up to Capitol Hill and testified before some House committees on this. The fee review was prompted by a number of things. First of all, the President, in his FY 2007 budget request, directed that the USCIS reform its fee structure.

A second reason was that the Government Accountability Office, the GAO, had done a report for both the House and Senate Judiciary Committees that indicated and concluded that the fee structure that we currently are operating under was insufficient to fund our operations. In other words, we were operating in the red every year because the fee was inadequate to cover our operations, and the GAO recommended that we do a new fee study to make sure that the fees covered operational costs.

And then, finally, there's a legal requirement under the Chief Financial Officers Act of 1990, which in 2004 began to apply to the DHS, that requires that fee-based agencies have a fee review every two years. But really what's driving this, the reality of this is that we are not covering our current costs. We fall short hundreds of millions of dollars over actual costs.

The backlog numbered up to 3.4 million just back in 2004. That backlog was building because we did not have the fees coming in to be able to pay for both the processes and the manpower to work out those applications in a timely fashion.

Another reason why we need to do the fee rule is that all the new security steps that we're taking, the different integrity measures that we're taking, have not been funded. Those were all new requirements that we placed on ourselves that are not being funded, because the last major fee study was back in 1998. So in between the last major study, we had 9/11 and the requirement of all these national security measures, and they're unfunded. And this leaves us short hundreds of millions of dollars.

Mr. Morales: Can you expand a little bit more on the details of the overall impact of this fee increase? And you referenced a statute, so will USCIS then be conducting these fee reviews on a more regular basis?

Mr. Scharfen: That's correct. Every two years, we're committed and we're required by law to do a new fee study, to ensure that the fees are either meeting the costs of our current operations. We have a new staffing model, we have a new fee model that we're using that's a more nimble and now analytical tool, and we'll be able to, we think, as we go forward here, have fee adjustments that will reflect the actual costs of our doing business, and it will be better for the public.

But to give you some examples of what we're talking about here, to give our listeners a little bit of a context of what this means, I'll just start with the average increases here. Right now, we have an average increase -- if you take the weighted average of the application -- and that's the way you get that is you take the volume, the mass volume of applications, and we'll call that about 4.7 million -- and then divide that by the total projected costs of processing those, which would be roughly $2 billion -- that comes out to a weighted average of about $491 per application. Compare that with the current one, which is $264. That's the average fee for an application. You get an increase of $227.

But when you start taking a look at that in the individual applications, it's not always that great. And if you indulge me here, I'm going throw out a few more numbers, and I'll run through what's a highly-used application. A guess a big, if you will, a business line of USCIS are the I-485s, which is the Adjustment of Status Application.

Today, an individual, an applicant when they file an I-485, or a Application to Adjust Status, they would apply or make an application using this form. They pay $325 to do that. However, in the course of their waiting, they will frequently end up having to apply for an Employment Authorization, which is called an I-765. Or they'll apply to travel -- they need a travel document -- and that would be an I-131.

When they apply for these other benefits, Al, they have to also pay a fee. When you add that up, it comes to about $800. What we plan on doing is charging one fee at the beginning, so when you apply for an I-485, when you want to adjust your status in the United States, in the future, if the rule goes through, and as we propose it, you would make one application, and you'd make one fee. You'd pay one time, and that would be $905.

But what I would like to add here, Al, is that we're not insensitive to the fact that no matter how you slice this, these are significant fee increases. And we realize and we don't take lightly our proposal on this, and that these are not insignificant fee increases, and we are receiving our public comments as we get through this, and we've gotten some very good ones. We realize that we have a responsibility to the public to make sure that we look at those comments carefully and that we have the fee schedule down properly.

And then the flipside of that is that when we go forward, and we hope that we will be able to go forward with the final fee regulation, that we provide better services to the public.

Mr. Morales: So just as a quick clarification, the $905 that you reference is sort of like a projected lifecycle cost, and so you're sort of providing a convenience by bundling that together?

Mr. Scharfen: Al, I think that's exactly the way to think of it, and I'll start using that now. "Lifecycle cost."

Mr. Abel: Jock, when you were talking about the fees, you mentioned that one of the purposes of increasing the fees was to make sure that CIS has sufficient resources in order to be able to meet its mission going forward.

There's a big debate going on right now about immigration reform. Is CIS ready today to be able to accept the impact that will be created by immigration reform if a temporary worker program does come into existence?

Mr. Scharfen: I would say yes. We've been planning for this day for some time. However, much of what we have to do will be dependent on what type of bill we get. We are working carefully -- the Administration and USCIS -- is working very carefully with the different committees on the Hill to make sure that we're communicating what's operationally feasible, so that whatever bill comes out of the Congress, we hope it'll be something that will be feasible in terms of the operational side of it, and we're working very well and cooperatively with the Congress to try to get those parts of it as right as we can.

But it will be a big lift. We're talking about 12.5 million applications. And if you take a look at our current annual business, we do about 7 million applications on average a year. On top of that, Dave, we'll go from 7 to 12.5 million. It will not be an insignificant management and leadership challenge.

Mr. Abel: I would imagine one of the things that makes growth of demand like that so difficult to be able to meet is the manual paper-based environment in which you currently operate.

Can you tell us a little bit about CIS's integrated digitization document management program?

Mr. Scharfen: Yes. This is part of our effort to move from a old paper-based system. To give our listeners a mental image maybe of what we're dealing with here, we have approximately 100 million paper records in our systems, Dave, and we have different record facilities around the country. Some of them are quite large -- there's just boxes and boxes -- we have records facilities, that you look on it and they go on forever.

That's fraught with extra expenses and dangers: the misfiling of a record, and the trying to manage those, and it's very labor-intensive and it's just not efficient, and it's not congruent with our current capabilities. We should be electronically adjudicating cases. That's what this program is designed to do. It's made up of two parts.

The first part, we have a records digitization facility, and that exists to scan or convert our paper-based A files -- those are Alien files -- into a digitized format. And then with that, we have a management system that will store, manage, and provide access to the digitized files to our organization. And the benefits of this will be we hope to have just-in-time electronic file delivery operation. It'll make it easier to share information with the Department of Homeland Security with our components.

For instance, you can understand ICE, and enforcement actions, need to have access to our files. It'll be faster. We'll get rid of shipping costs as well. And then finally, it reduces significantly the danger of misplaced files.

Mr. Abel: It sounds like a lot of the results of this particular program will help folks within CIS and within the Department of Homeland Security to more effectively manage a case or manage a file.

Are there activities that you're doing electronically that focus on the immigrant or those that are applying for benefits as well, such as online applications or telephone support? Are there customer-facing activities that you're enabling as well?

Mr. Scharfen: Yes. We want to expand our e-filing capabilities significantly. Among our users of the immigration system, we get different requests. For instance, our business users really want us to increase e-filing because they're comfortable with making a computer-based electronic application. Some of the immigration community-based organizations are less enthusiastic about it -- we're trying to do two things. We're trying to be sensitive to both needs there. We want to increase our electronic filing, but in the interim as we move forward with increasing electronic filing opportunities for immigrants making applications, we want to tie this into also including with that the ability to make a paper-based application until people get more comfortable.

We'd like to do this in a number of ways. One, we're working with the Treasury Department, and they have a great system called the lockbox operations. And they specialize in taking in large numbers of applications, taking in the money, as well as setting up electronic filing systems, because the banks that work with the Treasury Department that takes in the money, it's in their business interests to make it as easy as possible to take in the application forms. And they'll set up -- they're expert at it -- new e-filing application forms for us. And so we get to leverage that and perhaps save some money and keep costs down for the immigrants making applications by using these different lockbox contracts to have expansion of our e-filing systems.

Mr. Morales: Jock, we opened the show with you describing one of the greatest challenges is the support of our nation's security.

Could you elaborate on improvements USCIS has pursued in such areas such as background checks, fraud detection, and worksite inspections to meet current and emerging threats to the integrity of the immigration system?

Mr. Scharfen: Yes. We've done a number of things, Al, to try to improve our ability to ensure that we meet our obligations to the American public on national security.

I believe under the Director Gonzalez's leadership is that he set the right tone. I think the principles and the missions emphasis that are made by the Director are very important, and people pick up on that. They want to do what the Director has laid out, and he has made it very clear that national security is the central goal of his. He likes to say there's a reason that USCIS is in the Department of Homeland Security, and that's because of national security.

We've emphasized to our employees that national security is important, and I think that that can't be overemphasized, the importance of that.

The other thing though is what we've organized for national security. We've created just this last fiscal year a new National Security Directorate, and part of that -- also one of the sub-offices of that is a Fraud Detection Office. They are dedicated to looking at the different areas of national security and fraud, both to study our vulnerabilities and then to seek out enhancements. And I'll give you just a couple of examples.

We have been authorized to hire an additional 400 immigration officers. We are in the process of already doing that and deploying them out into the field, who will concentrate on the research and analysis and other aspects of detecting fraud throughout our application pool.

They, for instance, do benefit fraud assessments. They did an assessment on religious worker fraud. And we took some of the statistics from that, which were very telling, and then we've made some policy changes and operational changes in order to try to preempt some of the fraud that we saw with the religious workers.

We have increased our site visits where we go out and we make sure that if someone is making an application as a religious worker, that the person sponsoring that applicant, that the church actually exists, that it's not a fraudulent storefront, and that it's not just a front. We hope to get out a proposed rule that will tighten down some of these processes even further.

On the national security side, we have been careful to ensure that we do fingerprint checks and national security checks. We take 10 fingerprints; we run it through the FBI and run it through the FBI fingerprint checks. We also do name checks, and we run it through the FBI databases to ensure that the individual isn't on, for instance, a terrorist watch list. We have procedures to make sure that we handle that appropriately.

Mr. Morales: Great.

What are USCIS's efforts to build an immigration service for the 21st century?

We will ask Jock Scharfen, Deputy Director of U.S. Citizenship and Immigration Services within the U.S. Department of Homeland Security, 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 Jock Scharfen, Deputy Director of U.S. Citizenship and Immigration Services.

Also joining us in our conversation is Dave Abel, Director of Homeland Security Services at IBM.

Jock, in your efforts to build an immigration service for the 21st century, USCIS continues to pursue an organizational and business transformation program.

Could you elaborate on this transformation initiative? To what extent does your recently developed strategic acquisition plan inform the underlying transformation strategy? And if I may, what are some of the critical challenges facing your organization as it pursues this transformation initiative?

Mr. Scharfen: Thanks, Al. One of the ways we hope to avoid future backlogs, especially of the extent that we had built up in the past where we had millions in the backlog -- we also want to improve the quality of our services that we give to the different applicants. And the way we're going to do that is to transform our business processes of USCIS, and that involves both organizing how we do go about our business of giving benefit applications, or granting them, and also, it feeds into our technology, so it's both the business side or the process side and the technology.

And right now, the different pieces of our transformation initiative involve the digitization, moving from a paper-based system a computer-based system. It also involves moving to a person-centric process from a form-centric process.

The way we look at our immigration applications right now, we do it by application type. When you come in about your application, Al, I wouldn't put your name in. I would have to try to get the A file number and try to match you up with your application file number. I would be able to do a name search for you, but it wouldn't necessarily identify all the different applications that you had submitted. And what we want to do in the future is have a person-centric system where we would be able to get all of the applications up and to get your history there.

That's more efficient for you, for the applicant, and it's more efficient for us to be able to see your record all in one keystroke. The other thing is, that's also better for national security. Because then we can see whether or not you're being consistent in the story you're telling.

Another thing that we want to do with this transformation program is that we want to have our records and our applications put into electronic form. We have electronic filing, we have paper filing and we scan in the paper into an electronic system and then we get rid of the paper and we just keep that electronic file.

We want to manage that case then from beginning to end electronically. And that requires a sophisticated, nimble system, both hardware and software, to manage the case electronically. How are we doing that? We're starting off with a pilot, the International Adoption Pilot, and we're trying to put all of these different pieces together with that pilot and taking some lessons learned from that and moving on.

We have a spend plan, and it's for $100 million this year. $43 million of that were from appropriated funds, and then we matched it with -- or a little bit more -- $57 million of our fee money to come up with $100 million, and this is moving forward to the next increment of the transformation program.

We'll take our experience there -- and that's if this is approved, of course, by the Department, but it's there and we're talking with the Hill on this, and this has to go through, by law on the transformation program, the Hill is taking great interest in this. And we are working carefully with the committees, and GAO will have to take a look at it, too. But working cooperatively with the Department, with the Congress, we hope to have a robust stage two of this -- increment one, we're calling it -- where we then start taking the lessons we've learned from this initial pilot program and moving it into the naturalization. We have about 11 different applications that fall under the naturalization rubric, and we'll then start seeing whether or not we can have this transformation system work on a larger scale.

Again, we'll work with the Treasury Department as much as we can to set up lockbox operations where the applications will come into these processing centers for the case intake, and it'll either be electronically or it'll be by paper and then it'll be scanned. We're looking then to have biometrics. Those are the 10 fingerprints and the photograph. We want to make this easier so that when you first come in, you have to do that just one time, and we hope to include that into our transform system.

Finally, working on the electronic adjudication piece of it, and that would include having electronic or by computer scheduling for the applicant, as well as notices.

In our fee rule, we would be looking to put $139 million roughly a year going forward, making a very large investment as we move forward in this transformation system.

Mr. Morales: You know, it sounds like this individual-centric single view of data would serve as a great model for the health care industry, who I think is struggling with the same issues around how do you consolidate large amounts of data around a single individual as opposed to having it in disparate systems.

Transformation is often described as an alignment of people, process, and technology with robust investment management.

How has USCIS strengthened its investment management review process to better ensure that programs and initiatives align with the overall strategy, business, and IT initiatives?

Mr. Scharfen: We have hired about a year or so ago a very good Chief Financial Officer, and he is just superb. Rendell Jones has really provided great management organizational skills, as well as just leadership in this area. And what we've done is we have started a strategic resource board where we review the enterprise investment decisions, and the transformation office feeds into -- for instance, its proposed expenditure plans -- go before the Strategic Resource Board, and all of those are reviewed by the senior leadership of the organization.

We put those into the larger context of USCIS's large strategic plan, we put the transformation piece in there and we make sure that it's integrated, and that the different leaders within the organization are first fully advised about the transformation expenditure plans, and then that everyone has a chance to vote on it. We work in a collaborative, collegial fashion there, and we have quarterly reviews then to go back and take a look at -- to make sure that we are getting feedback in to make sure that the expenditures are resulting in the things that we expected.

We also have a review process of these annual expenditure plans. We work with the Department carefully, and we also work closely with OMB, which has a longstanding and continuing interest in our transformation program, and with GAO and Congress.

Mr. Abel: Jock, one of the risk areas in a transformation program like this is being able to work effectively with stakeholders. The stakeholder community for CIS is large, it's complex, and it's diverse.

What are some of the activities that you're doing to make sure that the redesigned processes, systems and IT services meet just not the needs of folks in CIS, but those in the community as well?

Mr. Scharfen: That's a good question, Dave, and my transformation project officer was really spending a lot of time on the road personally going out and meeting with stakeholders. His name's Dan Renault, and he's a very good manager -- I sat down with Dan and I said, Dan, what's going on here? And he explained it to me, and I have to be honest with you, at first, I was a little dubious about the value of that much outreach. Well, I am now a convert, and I understand the value and importance of that.

Number one, we don't have all of the answers, and it's important to reach out to them. And the type of people we've reached out to, for instance, is on the adoption pilot. If I could use that as an example. We have really invested a lot in reaching out to those different adoption agencies, and in fact, right up to the eleventh hour, we've been making changes to our pilot program to reflect some of that input, and I expect as we move forward, as we roll this out this summer, that we'll continue to make some of those changes.

Finally, we expect to get some of our smart people who really know process and who know IT, information technology, kind of brainstorm this thing. Dan has done this on his own, really took the initiative to doing this, and this is one aspect of it that I think we've done well.

Mr. Abel: Jock, a bit earlier, you mentioned that one of the benefits of modernization, of transformation, was an increased ability to be able to share information with other components within DHS and other organizations within the federal government. Can you elaborate a bit on CIS's efforts with other DHS subcomponents to share information, and what your role and responsibility is there?

Mr. Scharfen: Yes, Dave. I think we all can remember that post-9/11, when you had the Commission's report; one of the big failings is is that the government failed to share information. And when it did share information, it didn't share it in the right manner or it didn't share it in an efficient way. And so we're all reminded of that frequently by the Department, and the Department's direction to us has been very clear, that we are to take the initiative and reach out within the Department to share information, and also outside of the Department. For instance, with the State Department.

And our orders on that are very clear from headquarters, and so that's our challenge and that's what we're trying to do. And I'll give you a couple of examples where I think we're being successful on that.

First, within the Department, we are improving our timely sharing of information with US-VISIT, and those would be our fingerprints and our photographs that we include in that database that the US-VISIT then manages for the entire Department, and, for instance, State Department feeds information into US-VISIT and can then tap into that and make checks from abroad on that database.

I met with ICE and CDP representatives to make sure that our digitizing of files are being done in a way that is going to meet their needs. Our mission and our requirement as USCIS was to make sure that we met their needs, that it was given to them using the proper standards and in a way that they could use it efficiently.

We also collaborate with the different departments in that regard, and I think that our big challenge, though, is that we need to digitize our entire operation. We have to go electronically. Until we do that, until we transform into an electronic system, our ability to share information quickly and efficiently will be impeded.

To give you an example of that, if we were subject to another attack, a terrorist attack, one of the first things that are done is that you want to identify who the terrorists were, and if they are immigrants, whether they've touched the immigration system at all, and whether there are any records there. And obviously, the law enforcement agencies would be very interested in getting those files immediately.

It would be much easier just to share that information with multiple investigating law enforcement agencies electronically with just a keypunch. If you're paper, you've got to copy it, you've got to send it, you might be able to scan it, but it's still not as efficient.

The other part of it is, until it's digitized, Dave, we can't datamine it, and I'm careful of how I use that word. We're always advised by our lawyers and our privacy offices, and when we speak about datamining, all of those issues are, I believe, managed aggressively and well by USCIS, but the fact remains is that datamining is important, so that when you want to identify, for instance, other people who have associated perhaps with a terrorist, you're better able to do that when you take a look at the data electronically. You can't do that with a paper file as easily.

Mr. Abel: Jock, nobody can replace CIS's responsibility for adjudicating a benefit decision, but there are lots of industries -- Al mentioned health care previously, and if you look at banking, finance, insurance, there's a lot of industries that have been moving towards a person-centric case management system.

To what extent do you anticipate opportunities for public and private partnerships in the execution of your transformation program going forward?

Mr. Scharfen: Dave, that's a good point, and I think that it's one that we've been talking about extensively with the Department, and we are looking to take advantage of all the opportunities that are out there for a public-private type partnership.

We've been working with our procurement division to ensure that as we go forward with future contracts, particularly some of these major contracts, whether it's if we do get a TWP program, for instance, or our Transformation program, when you take a look that we might be spending $100 million in the upcoming fiscal year, and $100 million going to $139 million in the years as we go forward, that's a significant investment.

We have a responsibility that we spend that money in the wisest, smartest way so that we leverage that to the best of our ability, and that means we have to be open to doing things not just the old way, but that we're open to new ideas, and that we make sure that we have contract provisions that will be designed in such a way that we can get those type of different proposals.

We're going to ask those who make a bid on our contracts is that they include their alternate financing mechanisms, those things where you could just contract out by the transaction, for instance, where the government would own none of the infrastructure, and it would just be a contract for services, just as an example, that they would be able to do 12.5 million transactions of a certain type, and they would deliver that and we would set out the standards, and the way they do that would be a matter of contract and all.

But what we would do is that we would invite those type of different alternate scenarios for the provision of these contracting services, or we could go out, alternatively -- it may prove to be better to go out and buy the system for the government, where you buy all the hardware, you buy all the software. But what we want to do is make sure that those options are put into the contracting mechanisms so that we can take a look at that and we do have those type of choices.

Well, we may see what they have to offer in that regard and make business choices based on what we see from there, but we are very interested in trying to get as many different types of offers that we can get so that we can evaluate them and pick those choices that do two things: leverage our money, our investment, the best we can, and provide the very best services, both maybe in the short-term and in the long-term.

Mr. Morales: That's great. That's really going to the marketplace with a limited set of constraints to really get as many ideas as you can. That's fantastic.

What does the future hold for USCIS? We will ask Jock Scharfen, Deputy Director of U.S. Citizenship and Immigration Services within DHS, 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 Jock Scharfen, Deputy Director of U.S. Citizenship and Immigration Services.

Also joining us in our conversation is Dave Abel, Director of Homeland Security Services at IBM.

Jock, what trends will have the largest impact on USCIS in the next 10 years, and how will the organization need to adapt to these changes?

Mr. Scharfen: Well, I think that as we've been talking about the transformation of this organization is that we're clearly in the world of electronic and IT transformation is that as we move into this transformed business process where we go from paper-based to electronic-based, is that that will never end. We will continually have to go back and reassess where we are, and I think that on information technology and re-looking at our processes, that this is not just a one-time effort, but that we'll have to continue to look at that and improve upon that.

And I think in the next decade, the challenge will be first to make sure that we move from a paper-based to an electronic-based, person-centric, modern system, and then to ensure that that system works efficiently and it continues to be improved as it moves on.

I think that we'll also continue to have challenges with managing large numbers of immigrants, and that a subset of that issue of just sheer numbers is also the type of immigrants.

It's important, and we hear from our different stakeholders, is the importance of getting students into our universities, foreign students into our universities, and also getting high-tech immigrants and non-immigrants into our economy. And that is I think an issue that will persist, and that will be one that we'll have to manage going forward in the years ahead.

Mr. Morales: Jock, there's a lot of discussion these days around the pending government employee retirement wave.

I'm curious, how is your organization handling this phenomenon, and what are you doing to ensure that you have the right staff mix to meet the demands of these transformation efforts?

Mr. Scharfen: Al, I can't tell you today we have the answers to that. I can tell you that we've got in place a strategic workforce plan. And that strategic workforce plan for USCIS will profile our workforce, give us the demographics, and give us things like the age profile, fit in the retirement aspects to that. It'll also tell us about our diversity profile, which, by the way, looking at our EEO, our diversity numbers, we're happy with those, but we're going to work hard to make our organization reflect our country as much as it can.

Although the strategic workforce plan will have many parts to it, one of the key parts to that will be the future workforce, and we hope to identify where we're going to have gaps in the future. And that was one of the key things we asked them to do so that we can start planning, that we can identify those gaps, whether it's retirement gaps, whether it's skill gaps, whether it's diversity profile gaps, whether it's education gaps, whether it's our recruitment on the front end, whether we're getting the quality-type people we want.

Question here is right now, we do not require a college degree. That will be addressed there. All of those type questions -- we hope to put them into gap-type language so that we can then not just analyze it, but come up with some type of practical action plan.

Mr. Abel: So as you look at those gaps, to that end, what steps are you taking to attract and maintain a high-quality technical and professional workforce?

Mr. Scharfen: Director Gonzalez has a lot of experience in this area. First of all, he has a Ph.D. and he is committed to education, and he's a thoughtful guy. And he is also in the Army. He has worked in education -- he taught at West Point, and he was also in the personnel leadership management area within the Army, which is a huge organization to manage, and so he's an experienced personnel manager. And he's looked at this and he has come to a number of conclusions, and one way to attract and maintain our high quality of workforce is to offer first-rate world-rate education and training.

This year, we moved $2 million in the short-term into increasing our education and training for our employees from both the most junior employee to our most senior leadership. We also though, looking under the fee rule -- a big part of the fee rule would go towards better training of our employees, and also educational opportunities. And we're talking about investing tens of millions of dollars into the training of our employees and education of our employees. And we believe that that will help attract and maintain that high quality we need. We'll also take a look at the intake process there of how we recruit people. The Army has a saying that the Director is fond of saying, and that is that everyone is a recruiter. He's encouraged the organization, and I've seen that, where people are going out and recruiting.

For instance, we're going to Walter Reed, and we're trying to recruit disabled combat veterans from Iraq, and we're finding a very high-quality group of people there: our veterans, our disabled veterans. But that kind of personal touch that Director Gonzalez is out there setting an example recruiting himself, and he comes back and he has names of individuals who happen to be very good, for instance, in computers. And it's a good thing both to recognize the needs of our disabled vets, and it's also good for our organization.

Mr. Morales: Jock, along a similar theme, you've obviously had a fascinating and a very highly successful career as a Marine and as a lawyer, all in the service of our country.

So what advice would you give to someone who is perhaps thinking about a career in public service? What do you tell that young individual at Walter Reed?

Mr. Scharfen: First of all, I would encourage it. I've really enjoyed public service. And one of the things I mention is that those people I know, for instance, in private practice, when you speak to them, many times, they get the greatest personal and professional satisfaction when they somehow volunteer or get involved in public service.

For instance, I have a friend who's a partner in a law firm here in Washington, D.C., and he volunteers his time as a lawyer to our disabled vets, and he gets great satisfaction out of that. He's a very successful lawyer here in Washington, but when I see him on the soccer field or somewhere else, what he wants to talk about is that service that he's been able to provide, and he gets great personal and professional satisfaction out of that.

So first of all, I'd just encourage them in general and tell them they're going to enjoy it. But that there's a lot of responsibility that goes with that, and that if you do go into public service, that you go into it with the right attitude, and that it is about service. You go in with the right attitude, and if you go in with the goal to serve the public, it has its own rewards. You may not have the largest paycheck and you may be able to get a larger paycheck elsewhere, but you get paid in a different coin, and it's that coin of going home knowing that you've served the public well.

So first of all, I would encourage them to do it. Next, I'd tell them they should take chances, and they should do what they're interested in doing, and that if they see a job, they should not be hesitant to apply for it.

But I'd add a quick caveat to that, that the most important thing you can do, though, is to do the job you're doing currently well, and be enthusiastic about it, and do the best job you possibly can and work well with others, because the government is all about working well with others. You've got to be a team player. But first do the job you're doing well, but then don't be shy about reaching out and trying to apply for a job that may be a little bit out of the ordinary, but you never know unless you apply. And don't be discouraged the first time you've applied and you've been told no. When you reach my age, you can take a no better than when you're younger. And I've been told no many times and you get over it, but that shouldn't stop you from reaching for that job that you're interested in.

Mr. Morales: I think that's fantastic advice for all of us. Unfortunately, we have reached the end of our hour this morning. I want to thank you for fitting us into your busy schedule, but more importantly, Dave and I would like to thank you for your dedicated service to our government in protecting the homeland, and we most definitely want to have you back in September to hear about the results of your strategic workforce plan.

Mr. Scharfen: Thank you very much, Al and Dave, and if I could just close off by making reference so that our listeners can visit us, USCIS, on our Web site. It's uscis.gov, and it's the new Web site that we have there. It was put together by our IT guru, Jeff Conklin, and our communications guru, Jose Montero. I think it's pretty good. We're working hard to make it better, so we encourage the listeners to come visit at uscis.gov.

If you've got some suggestions to make that even better, don't hesitate to give us some ideas. I know those two fellows are working hard to make it the very best they can.

Mr. Morales: Fantastic.

This has been The Business of Government Hour, featuring a conversation with Jock Scharfen, Deputy Director of U.S. Citizenship and Immigration Services.

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.

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.

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