Collaboration

 

Collaboration

David Combs interview

Friday, February 10th, 2006 - 20:00
Phrase: 
"Globalization, advances in secure communications, and customer expectations for electronic access have prompted the department to assess its infrastructure and explore options for accommodating these trends."
Radio show date: 
Sat, 02/11/2006
Guest: 
Intro text: 
Combs discusses how the USDA Office of the CIO works closely with each of the CIOs in the department's various agencies, develops project management training programs, and works toward the electronic government goals in the President's Management Agenda....
Combs discusses how the USDA Office of the CIO works closely with each of the CIOs in the department's various agencies, develops project management training programs, and works toward the electronic government goals in the President's Management Agenda. Combs describes how USDA's Information Technology Services (ITS) provides service and support for more than 40,000 employees in the USDA's "service center agencies," such as the Farm Service Agency and the Natural Resource Conservation Service.
Complete transcript: 

Wednesday, January 18, 2006

Arlington, Virginia  

Mr. Morales: Good Morning, and welcome to The Business of Government Hour. I am Albert Morales, your host and managing partner of The IBM Center for The Business of Government. We created the center 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 www.businessofgovernment.org. The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is David Combs, Chief Information Officer at the Department of Agriculture. Good Morning, Dave.

Mr. Combs: Good Morning, Al.

Mr. Morales: And joining us in our conversation, also from IBM, is Mike Wasson. Good Morning, Mike.

Mr. Wasson: Good Morning, Al. Good Morning, Dave.

Mr. Combs: Good Morning, Mike.

Mr. Morales: Dave, can you begin by telling us about the history and mission of the Department of Agriculture?

Mr. Combs: Sure. In 1862 President Abraham Lincoln founded the U.S. Department of Agriculture. He called it "The People's Department." In Lincoln's days 58 per cent of the people were farmers. They needed good seeds and helpful information to grow their crops. Well, today, USDA continues Abraham Lincoln's legacy by helping America's farmers and ranchers. But today we also do much more. We lead the federal anti-hunger effort with programs like food stamps, school lunch, school breakfast and the Women, Infants, and Children's, or WIC, program. We are the steward of our nation's 192 million acres of national forests and range lands. We are the country's largest conservation agency. We encourage voluntary efforts to protect soil, water, and wildlife on the 70 percent of America's lands that are in private hands. We bring housing, modern telecommunications, and safe drinking water to rural America. We are responsible for the safety of meat, poultry, and egg products. We lead research in everything from human nutrition to new crop technologies that allow us to grow more food and fiber per acre using less water and pesticides. We help ensure open markets for U.S. agricultural products. We provide food aid to needy people overseas. The U.S. Department of Agriculture touches virtually every aspect of rural life in America.

Mr. Morales: Dave, that's a very, very broad mission. Can you tell us about your office specifically, the Office of the Chief Information Officer? How many people work there and what kind of skill sets do you have?

Mr. Combs: The USDA is a very diverse organization as you just saw from our mission. It's comprised of 29 agency and staff offices. And my office, the Office of the Chief Information Officer, is responsible for managing the IT assets and the direction of IT investments needed to improve the quality, timeliness, and cost effectiveness of service delivery by the many agencies of the department. My organization has more than 1100 information technology professionals. And as CIO, I am responsible for nearly $2 billion a year that is spent on information technology to support the entire Department of Agriculture. Our information professionals come from very diverse backgrounds: project management, finance, programming and analysis, policy, telecommunications, and security. But most importantly, we need folks that know how to leverage technology to deliver services. Several of my senior managers do not have technical backgrounds. But they do possess the leadership and customer skills that will get us where we want to go and need to be.

Mr. Morales: I understand that you've been in the Office of the CIO at USDA for some time but you've recently been appointed to the CIO position. Congratulations. Can you tell us a little more specifically about the responsibilities as CIO, and to the extent that you have a typical day, what your typical day looks like?

Mr. Combs: Well, thank you very much. This has been a wonderful opportunity for me. But I want you and the audience to understand upfront that this is not about me. It's about getting results and establishing the people processes and tools that will support the mission of USDA long after my tour of service is over. And under my watch the OCIO has taken an integrated approach to ensure that all technology disciplines are woven together. These disciplines include capital planning, cyber security, e-government, telecommunications, and enterprise architecture. This integrated approach is intended to create a strategy that provides customers with access to the information that they need, protects the safety of USDA information resources, and strengthens the management and use of USDA information technology resources.

This past fall, I took my executive team on a retreat, to take a fresh look at what we do and where we're going. We took a look at the foundational legislation that established this office. And we found that according to the Clinger-Cohen Act, we needed to do several things. We needed to insert ourselves into the USDA agency, CIO selection and evaluation process which we now have done. We've developed performance standards to be used as a critical element in the evaluation of every agency's CIO's performance. We have also established performance standards for agency project managers. And speaking of project management, USDA is leading the federal government with its project management training program. So far we have graduated over 500 students. 200 of these students have received their Project Management Professional or PMP certification. This professional training is critical for USDA as the demand for skilled project managers increases. The President's management agenda is without question my top priority. As the CIO, I am considered the owner of the expanding electronic government initiative. And in this initiative we're evaluated in seven major areas: Enterprise architecture, acceptable business cases, earned value management, IT system certification and accreditation, implementing electronic government lines of business and smart buy initiatives, privacy impact assessments, and systems of records.

And USDA continues to make tremendous progress in moving this initiative forward. The scoring method is simple: Green, yellow, red. The President made it clear to me in a recent meeting that he does not like red or yellow. And neither do I. We're scored in two categories: Status and progress. And I am proud to report that USDA continues to be green for progress. Right now we're yellow in status but we're closer than ever to green. We're doing well and our goal is to be green by the end of June this year. This is truly a team effort involving a very talented and dedicated team of USDA agency CIOs and IT professionals that I'm proud to work with every day. We're also fortunate to have at USDA the full support of Secretary Johanns and Deputy Secretary Chuck Connor.

Mr. Morales: Dave, you have held several high level positions in federal agencies in the past. Which has best prepared you for your current role?

Mr. Combs: Well, we're all products of our past experiences, and my 30 plus years of experience in the private sector, in IT and telecommunications, and as an entrepreneur, were a great foundation. Serving for a year as acting deputy CIO here at USDA, and working with my good friend and colleague Scott Charbo was also great preparation.

Mr. Morales: Dave, you referenced a little bit of your past. You spent 23 years at AT&T prior to your service in government. And then you also spent some time in your own music business. This is sort of a fascinating background. I'm curious what led you to government and how has your leadership style changed over the years.

Mr. Combs: Well, I came to government primarily to -- first of all, to be in the same town with my wife. She, as you know, works in the federal government as well, as controller at OMB. And, rather than me living in Winston-Salem and her up here I decided to rearrange things in North Carolina and come up here and see what I could do productively as well. So that's how I ended up here. But, in asking about my leadership style, obviously, you know, years of experience certainly have been helpful in my leadership style, and I've come to appreciate the importance of selecting and depending upon an executive management team that will carry out the mission of my organization without being micromanaged. I've learned to delegate more, and always though with the motto of President Reagan: Trust but verify. I have surrounded myself with seasoned professionals and they know what is expected of them. I have a great team.

Mr. Morales: Dave, we talked a little bit prior to the show about your music business. I was hoping you just share a little bit about that business with us.

Mr. Combs: Well, it was basically one of those things, it was a hobby that turned into a career and now back into a hobby for the time being anyway. I come from a musical family and happened to be fortunate to have written a song called "Rachel's song" which kind of took off. Everyone that heard it on the radio and wherever they heard it just fell in love with it, and it's now been played millions of times around the world. And that one song launched me into a career of writing music and I have written over 150 songs and now have 15 albums of music. But that was, it's basically a hobby that kind of took on a life of its own and I had to catch up with it and enjoyed 10 years of doing nothing but my music as a support for my wife and myself.

Mr. Morales: That's fantastic. What is the information technology service? We will ask USDA CIO Dave Combs 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 Department of Agriculture Chief Information Officer David Combs. Also joining us in our conversation is Mike Wasson. Dave, what is the Information Technology Service, otherwise known as ITS? Who are its main customers and how do you ensure that your customers are satisfied with the services provided by ITS?

Mr. Combs: Well, the information technology services, or ITS as we call it for short, was born into OCIO on November 28, 2004. On that date it became the in-house provider of information technology service and support for over 40,000 USDA service center agency employees. ITS supports all their networked computers, IT equipment, and the shared infrastructure that their agency networks and applications run on. The shared infrastructure is also known as the common computing environment or CCE for short. Our customers are the three service center agencies and their partner organizations. They are the Farm Service Agency, or FSA; the Natural Resources Conservation Service, or NRCS; and Rural Development, or RD. The Farm Service Agency, FSA, administers farm commodity, crop insurance, credit, environmental, conservation, and emergency assistance programs for farmers and ranchers. The Natural Resource Conservation Service, NRCS, is the primary federal agency that works with private landowners to help them conserve, maintain, and improve their natural resources. And Rural Development, RD, creates partnerships with rural communities to fund projects that bring housing, community facilities, utilities, and other services to increase rural Americans' economic opportunities and improve their quality of life. The service center agencies use many sophisticated applications to provide over $55 billion in vital programs to over 6 million farmers and thousands of rural communities across the country. These programs include loans, grants, technical assistance, and basic information.

The goal of ITS is to keep the computing environment operating flawlessly so customers at the service center agencies, offices throughout the country, almost don't even know that it's there. Our goal is for their computers, applications, networks, and communications technologies to do what they're supposed to do and let the agency spend their time supporting the efforts of farmers, property owners, and rural communities.

ITS was formed by combining the service center agency's highly skilled IT specialists and support teams with a core team from OCIO into one organization of about 800 people. These folks are distributed in agency offices all across the country. I believe that this convergent plan is unique in the U.S. government. ITS is adapting best industry practices to organize IT resources and personnel efficiently and deploying them where and when they are needed. The point of creating ITS was to have one unified organization dedicated to supporting both the shared and the diverse IT requirements of the service center agencies and their partner organizations. On the one hand the agencies were already sharing and investing in a common computing environment with its infrastructure and network systems and associated hardware, software, and training. But on the other hand, each agency had to manage its own distinct computer system, software, and IT support teams. By converging both the technology resources and the skilled IT staff into one organization, ITS efficiently focuses on a broad range of technology, investment, and diverse support planning and management services spread equitably back to the agencies replacing what might be considered triplicate efforts. ITS has formed a customer-service support system based upon a central help desk that can flexibly and efficiently dispatch technical support specialists who are co-located in teams at many agency offices.

Mr. Morales: What kind of telecommunications services are provided by your office? And how does centralization impact the costs of services, and what other impacts does centralization drive?

Mr. Combs: During the fourth quarter of fiscal year 2005, we completed the launch of our new wide area network telecommunications infrastructure known as the "Universal Telecommunications Network" or UTN. It's a new corporate data network backbone for providing our customers with more secure, robust, and flexible telecommunications capabilities, and enhanced network support services. The UTN project team worked collaborative with USDA agencies and offices to transform the old USDA telecommunications environment into one that is state-of-the-art and well better to meet the delivery challenges of today and tomorrow.

Telecommunications voice and data services are increasingly critical to successful delivery of USDA programs and services. Since 1998, USDA's Internet access capability has increased 20-fold. The ability to interconnect systems and entire local area networks via the web has created increased demand for telecommunications capacity to carry information in multimedia formats to increasingly sophisticated USDA customers. And greater reliance on the Internet to conduct business and deliver services is also generating requirements for improved access, speed, reliability, robustness, security, and related standards.

In recent trends towards globalization, advances in secure communications, and growing customer expectations that electronic access will be made more widely available by the federal government within a five-year time span, have prompted the department to assess its current state of infrastructure support and explore options for accommodating these future trends as we move further into this century. The Universal Telecommunications Network Project is meeting those challenges.

Mr. Morales: It certainly sounds like a lot of bandwidth that's going to be required.

Mr. Combs: Yes, and very flexible.

Mr. Morales: We understand that your office is taking steps to innovate in the area of asset management. What are the goals of this effort, and what's its current status? And how does an organization called the IT Management Advisory Committee support this effort?

Mr. Combs: USDA has a vast number of IT assets, as you can imagine, and they are currently managed de-centrally, through disparate approaches. These dissimilar approaches present a challenge for managing USDA's IT infrastructure. USDA can gain significant efficiencies and productivity increases by establishing a uniform IT asset-management program that provides the information necessary to manage these IT assets from an enterprise perspective. We are in the early stages of this effort. Our goal is to implement an IT asset-management program that supports the establishment of standards-based technology architecture for USDA.

The IT Asset-Management Program will implement an automated system for managing USDA's IT assets from both an agency and enterprise perspective. Having a good inventory of USDA's IT assets will better enable enterprise approaches for procuring commonly used products. The Information Technology Management Advisory Council, or ITMAC as we call it, is a group of professionals representing many agencies throughout USDA. The ITMAC advises OCIO on best practices and approaches to enterprise issues. And one of the key roles of the ITMAC in this effort is to identify key issues and concerns and management decision points to ensure successful completion of the IT asset management initiative.

Mr. Morales: Dave, we understand that many of the forms at the government have now gone electronic. What role does your office play in supporting the forms? What are the benefits of the electronic processes, and what lessons could you share with other government leaders about your experience?

Mr. Combs: Well, that's correct. Over 500 of the department's most commonly used forms are available in an electronic format to provide citizens and businesses with an alternative to traditional paper-based processes. My office plays the lead role in coordinating this effort in several ways. First, we manage the paperwork and reporting burden that USDA imposes on citizens and businesses. To participate in our programs under the Paperwork Reduction Act, using online forms may reduce burden by permitting customers to compile information when it's most convenient for them, and to reuse information from prior submissions of the same or similar information. Electronic forms may also reduce travel time associated with completing the forms at a USDA office.

Further, USDA's participation in the President's interdepartmental E-Government initiatives has provided integrated access to forms required by multiple agencies within specific business areas. For example, businesses may locate forms required to apply for permits, and report compliance in a single location at http://business.usa.gov, regardless of which government agency requires them. Grant applications will find both the common and unique forms required to apply for grants at www.grants.gov. And USDA's export-related assistance and market information has been consolidated with similar information from our partners in the federal and private sector in one location at www.export.gov. There are many other examples.

The demand for electronic interaction in government is continuing to grow at a steady pace. But it isn't for everyone served by USDA. Government is striving to consolidate the presentation of its information and services in a seamless online manner similar to what many state governments have already accomplished. Forms will ultimately be replaced in this venue by fully electronic transaction tools that further simplify interaction with government by reusing information from prior transactions. However, many of the department's program beneficiaries prefer to visit a USDA office, or they do not have easy access to computers or sufficient bandwidth to make using electronic forms a viable alternative.

USDA will continue to offer the more traditional interaction methods for this group of customers. And many of our forms, though, are now electronic. Not all are electronic, but the amount of information we generate has increased exponentially over the past few years. The expectation is that over the coming few years we will generate even more information. There will be commensurate expansion of records, and much of this will be electronic. And my office plays a lead role in coordinating this effort across the department.

Mr. Morales: How do you ensure that customers are involved in technical decision-making, and what role does the Capital Planning Investment and Control play in this effort?

Mr. Combs: In the past, agencies and IT personnel across the department were not used to collaborating on IT. Although the Clinger-Cohen Act required greater coordination of USDA's IT budget at the department level, agencies still planned many investments and activities independently. They often did not collaborate even when other agencies were planning similar investments, usually for the simple reason they did not communicate with other agency IT staffs, and did not know that collaboration opportunities even existed.

Through activities such as what we call CPIC, USDA has been working to increase coordination across agency and department IT activities. This included developing a shared vision and purpose for IT collaboration, as well as developing the enterprise-wide governance structures to integrate coordination into all aspects of the USDA's IT activities. At USDA we have a very active internal CIO council that we call IT Leadership. This council is made up of all of the agencies' CIOs and IT leaders. We meet twice a month with the purpose of communicating on all IT issues, both technical and non-technical.

The foundation for IT portfolio management at USDA is the Capital Planning Investment Control or CPIC process. CPIC is a structured integrated approach to managing IT investments. It ensures that all IT investments align with the USDA mission, and support business needs while minimizing risks and maximizing returns throughout the investment's life cycle. CPIC relies on a systematic pre-selection, selection, control, and ongoing evaluation process to ensure each investment's objectives support the business and mission needs of the department.

Mr. Morales: Dave, how do you ensure your customers' data is secure? And perhaps you can share with us a little bit of the experiences during the recent hurricane disasters.

Mr. Combs: Well, securing USDA's IT assets is of paramount importance to the department and an integral part of USDA's enterprise architecture and IT transformation activities. Cyber security considerations are included at every stage of USDA's CPIC process. All proposed investments are required to develop robust and detailed security plans before they are even funded. Systems in the development require creation of adequate security infrastructure and the obtainment of a certification and accreditation, or what we call CNA, for continued funding. Annual security reviews are also required for major investments to receive continued funding.

And the recent experience with the hurricanes and the Katrina certainly emphasize the need to secure the data that we have. For example, at our National Finance Center in New Orleans, to make sure that that was securely transported to our backup site in Philadelphia, brought up, and which was done within a two-week period. And they actually just didn't miss a beat and actually brought on two new customers at the same time. So security and protection of our customers' data is of paramount importance to us.

Mr. Morales: It's a great story. How is the department ensuring data quality? We will ask USDA CIO David Combs to explain this to 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 Department of Agriculture CIO David Combs. Also joining us in our conversation is Mike Wasson.

Dave, we understand that your office has implemented a set of quality guidelines for information. Could you share a bit about the guidelines with our listeners? And what was the process that was used to develop and implement them?

Mr. Combs: Sure. The quality guidelines apply to all types of information disseminated by USDA agencies and offices. Now, I won't read them to you, but the basic premise is that USDA will strive to ensure the maximum quality, objectivity, utility, and integrity of the information that its agencies and offices disseminate to the public.

Well, what do I mean by "objectivity"? USDA offices and agencies will strive to ensure that the information they disseminate is substantively accurate, reliable, and unbiased, and presented in an accurate, clear, complete, and unbiased manner, and to the extent possible, consistent with confidentiality protections, USDA agencies and offices will identify the source of the information so that the public can assess for themselves whether the information is objective.

And what do I mean by "utility"? USDA offices and agencies will assess the usefulness of the information they disseminate to its intended users, including the public. When transparency of information is relevant for assessing the information's usefulness from the public's perspective, the USDA agencies and offices will ensure that transparency is addressed in their review of the information prior to its dissemination. USDA agencies and offices will ensure that disseminated information is accessible to all persons pursuant to the requirements of Section 508 of the Rehabilitation Act.

And what do I mean by "integrity"? USDA agencies and offices will protect information they maintain from unauthorized access or revision to ensure that disseminated information is not compromised through corruption or falsification. USDA agencies and offices will ensure their information resources by implementing the programs and policies required by the Government Information Securities Reform Act. And USDA agencies and offices will maintain the integrity of confidential information and comply with the statutory requirements to protect the information it gathers and disseminates. And these include the Privacy Act of 1974 as amended, the Paperwork Reduction Act of 1995, the Computer Security Act of 1987, the Freedom of Information Act, and OMB Circulars A-123, A-127, and A-130.

Mr. Morales: Dave, we understand that your office has a role in records management for the department. Are all your records stored electronically? And how does your office manage risk and redundancy in storing these records?

Mr. Combs: Yes, as I mentioned earlier, my office leads this effort at the department, and no, not all records are electronic. But the amount of information we generate has increased exponentially over the past few years. The expectation is that over the coming few years we'll generate even more information and much of this will be electronic. We manage the risk and redundancy in storing these records in various ways. We do it through continuity of operations planning, periodic exercises for the deployment of operations. We do it through vital records exercises, where records are positioned at primary and an alternate site. And through ongoing training of our records officers and project managers.

USDA is in the process of evaluating an electronics records management application. And after evaluating this application, we will be conducting a proof of concept pilot. By approaching electronic records management from a department perspective, USDA will benefit from reduced development and maintenance cost as well from the standardization of processes that will support e-records management.

USDA understands the need to manage a project of this magnitude at the department level to ensure conformity of standards across all USDA agencies to manage risk and redundancy.

Mr. Morales: Dave, how is the enterprise architecture that is already in place at USDA impacting operations, and where are you in the process of implementing the target architecture?

Mr. Combs: USDA's IT transformation framework, has better enabled USDA to manage its IT investment portfolio and select the best combinations of IT systems to effectively and efficiently support USDA's mission. Using the department's blueprint for the vision provided by the USDA enterprise architecture, USDA has conducted an extensive review of IT investments during the fiscal year 2005 budget process.

All USDA investments, major and non-major, were evaluated to determine whether they aligned with the enterprise architecture and provided a necessary and efficient service. The process particularly focused on consolidation with systems providing similar functionality identified using the tools and structure provided by the USDA and the Federal Enterprise Architecture. This careful review allowed USDA to eliminate nearly 150 of its 500 IT investments through consolidation and realignment, saving around $160 million annually. USDA's IT transformation activities have resulted in additional IT portfolio improvements as well. This was accomplished by having the department focus on developing enterprise-wide systems and services to serve business needs and replace the duplicative agency-specific approaches previously used. This activity has increased from 24 major investments to 66 over five years, nearly a 200 percent increase. And at the same time the number of small and generally agency-specific investments has declined significantly from 605 down to 330.

Mr. Morales: What is the directives system, how did the system evolve, and what can you share with us about the results that this office has seen in making directives centrally available and electronic?

Mr. Combs: The USDA directives system is basically an online repository of all USDA departmental regulations and notices, manuals, and secretarial memoranda. The old process was paper intensive, and a great deal of time and effort was put into copying and storing those paper forms. Well, that process was transformed basically into a print-on-demand function, online, and our customers now have access to the information they need without having to go through any other organization, pretty simple.

Mr. Morales: David, earlier you mentioned the programs you have to support the development of project management skills among your technical staff. I think you mentioned you had somewhere on the order of about 500 folks going through these programs. How have your efforts improved technical outcomes?

Mr. Combs: The USDA IT investment project management training program provides participants with the tools and techniques needed to manage IT projects effectively with an emphasis on the issues encountered in managing within the capital planning investment control process and other federal guidance.

This training program was initiated in response to the results of a survey of USDA IT executives which indicated the need for more training in project management. And the Federal CIO council as well as industry leaders considers project management to be a critical competency for IT managers. As I mentioned before, USDA has graduated over 500 students from this five-week course, and over 200 now have their project management professional certification. And our multimillion dollar IT development projects demand professional, experienced, and effective project managers.

Mr. Morales: What does the future hold for the Department of Agriculture? We will ask Chief Information Officer David Combs to discuss this 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 am your host Albert Morales, and this morning's conversation is with David Combs, chief information officer at the Department of Agriculture. Also joining us in our conversation is Mike Wasson.

Dave, we talk a great deal with government leaders about the pending retirement wave. Can you tell us about the steps that your office has taken to manage the retirement wave within the USDA, and what lessons learned could you share with other leaders in government?

Mr. Combs: In an effort to address an increasing shortage of skilled information technology workers at USDA, OCIO and our Office of Human Resources Management work closely together to provide USDA managers with recommendations and solutions on how to continually improve their IT work force.

The increased focus on the strategic management of human capital dates back to the Clinger-Cohen Act of 1996. And one of the requirements of this act is the mandate for all federal agencies to perform an IT workforce assessment. The act requires the federal chief information officers to implement a professional development strategy to ensure that IT staff possess the knowledge, competencies, and skills necessary to meet agency requirements as they relate to information resource management.

In partnership with our Office of Human Resources Management, we've established a USDA IT HR working group. This working group closely works with every other team within the OCIO to achieve the goal of recruiting, retaining, and training the most qualified team of IT professionals. In addition, this group meets monthly with representatives from numerous agencies, IT, and HR specialists within the department. The working group is focused on developing, implementing, and promoting recruitment and retention strategies to ensure that USDA maintains a quality IT job force capable of leading the department to meet its mission objectives.

Working group members are briefed regularly on all activities occurring at the federal level in the area of IT workforce improvement. They're responsible for achieving USDA's IT and HR leadership, in planning for and implementing effective recruitment, retention, and training strategies. The USDA IT HR working group is the department's only forum for active IT HR collaboration in the area of IT workforce planning.

Mr. Morales: Dave, you touched on this a little bit, but is your office also working on recruitment and retention activities, and how does this fit into the overall HR strategy for OCIO?

Mr. Combs: Yes, this ties directly to the overall HR strategy I just mentioned. We clearly recognize the issue of recruitment and retention. And we've been working very hard over the last year to recruit strong talent to fill these critical vacancies at all levels.

Mr. Morales: Dave, how do you envision the operations of the OCIO in five to ten years? Is the OCIO considering expanding its customer base through shared services or other methods?

Mr. Combs: Well, absolutely. We've already begun to move in that direction. Just last December USDA's executive board granted my office permission to move forward with three major initiatives, a single electronic mail system, a consolidated network with centralized support, and a consolidated data center and disaster recovery infrastructure.

Mr. Morales: Earlier, Dave, we talked a little about enterprise architecture, but can you discuss what impacts will the enterprise architecture planning have on the long term capabilities of the department?

Mr. Combs: The USDA-wide enterprise architecture supports and reinforces the goals of the President's management agenda. The USDA-wide EA repository and EA program is a catalyst for creating easy to find, single points of access to government services. It encourages automating internal processes to reduce the costs. It enables reducing cost by disseminating best practices and coordinating approaches across USDA agencies and staff offices, and it results in reducing duplication of efforts to build similar software systems. The USDA EA program supports the coordination of USDA's participation in the E-Government presidential initiatives.

This year, in its first year of use, the USDA EA repository and program will support initiatives such as FirstGov portal, Recreation One-Stop, e-authentication, e-loans, and e-grants initiatives. This support is in the form of the development of standards, the development of common data sets and structures, identification of common processes, and identification of common technologies. The EA repository also supports the federal architectures being developed for finance, human resources grants, and federal health.

And finally, the EA repository and EA program closely align the E-Government initiatives defined in USDA's E-Government strategic plan leveraging e-authentication, enterprise shared services, web-based supply chain management, and other initiatives. This alignment advances USDA's EA goal of using common enterprise-wide and intergovernmental systems when possible.

The EA repository directly supports the achievement of USDA's EA vision. The information it provides will help the Office of the Chief Information Officer and the executive board to make informed IT investment decisions based on a clear understanding of the department's existing and planned architectures at both the agency level and the federal level. Further, it will help agency and staff office personnel to identify opportunities to leverage existing systems or contracts already in use elsewhere in the department, helping to avoid redundant IT investments.

Mr. Morales: Dave, you've had a highly successful career starting in the private sector. You've turned a passion into a business, and now you're in public service. What advice can you give to a person who is interested in a career in public service, especially in information technology?

Mr. Combs: Well, if you're looking for a rewarding and challenging opportunity, you need to look no further. It's truly an honor and a privilege to be in public service, and the demand for information and the technology to create it, organize it intelligently, and communicate it efficiently and effectively is growing exponentially. The future for informational professionals is bright. Unlike my generation, children today are exposed to information technologies before they can even walk.

IT has become engrained in their everyday routine. From the time they enter kindergarten, sometimes sooner, children are exposed to computers and electronic knowledge. These experiences translate into capabilities that can be applied to future careers in information technology. But you don't have to major in computer science to have a career in IT. The federal IT organizations are always looking for smart, energetic people who are good thinkers and good leaders and not afraid to tackle large and difficult problems. If that description fits you, then there are several people in the federal CIO community that want to talk to you.

Mr. Morales: That's great advice. We've reached the end of our time, and that will have to be our last question. First, I want to thank you for fitting us into your busy schedule. Second, Mike and I would like to thank you for your dedicated service to the public and our country in the various roles you've held at the Department of Agriculture.

Mr. Combs: Thank you Al and Mike; it's been a pleasure and an honor for me to be here this morning, and I welcome the opportunity to discuss our many missions and areas of -- that we are working on at USDA and it's a big department with a wonderful service mission to the rural parts of United States of America, and actually to all of it, when you consider the food safety protection and everything. So there's hardly an area of American life that we aren't intimately involved with, and it's a real honor and a privilege to work in that department.

Mr. Morales: This has been The Business of Government Hour featuring a conversation with David Combs, chief information officer at the Department of Agriculture. Be sure to visit us on the web at www.businessofgovernment.org. There you can learn more about our programs and get a transcript of today's fascinating conversation. Once again, that's www.businessofgovernment.org.

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.

 

Thomas Cooley interview

Friday, January 27th, 2006 - 20:00
Phrase: 
"Our system enables program managers to tick down their funds throughout the year. Every morning you can log on, see how much money you’ve got. Then, if you’ve made some award recommendations and commitments, you can see how much you have left."
Radio show date: 
Sat, 01/28/2006
Guest: 
Intro text: 
Cooley discusses the process of managing grants and research priorities across the NSF and working to support and nurture the future scientists and engineers of America. He discusses the NSF’s efforts to understand the impact of technology, especially...
Cooley discusses the process of managing grants and research priorities across the NSF and working to support and nurture the future scientists and engineers of America. He discusses the NSF’s efforts to understand the impact of technology, especially nanocomputer technology, on American lives.
Complete transcript: 

Wednesday, August 3, 2005

Arlington, Virginia

Mr. Morales: Good morning and welcome to The Business of Government Hour. I'm Albert Morales, managing partner of The IBM Center for The Business of Government. We created the center 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 www.businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Thomas Cooley, Chief Financial Officer and Director of the Office of Budget Finance and Award Management at the National Science Foundation. Good morning, Tom.

Mr. Cooley: Good morning, Al.

Mr. Morales: And joining us in our conversation, also from IBM, is Steve Watson. Good morning Steve.

Mr. Watson: Good morning Al and good morning Tom. Thank you for joining us.

Mr. Cooley: Thank you Steve.

Mr. Morales: Tom, can you begin by telling us the history and the mission of the National Science Foundation, and more specifically, the Office of Budget Finance and Award Management.

Mr. Cooley: Sure, but I don't want to take a whole lot of time. I could spend an hour just talking about that. The National Science Foundation is a branch and arm of the federal government. It was created in 1950 after World War II, after they found out how important science was -- research and development was to the mission of carrying out that war effort. Our fundamental mission is to support basic science and engineering research and education, primarily through colleges and universities, but we also have activities that are engaging the profits and non-profits as well. We currently have a budget of about $5.8 billion each year. We are waiting to get our fiscal year 2006 budget through Congress right now. What that translates to is roughly thirty-five thousand active awards every year. We get about forty-four thousand proposals from principal investigators at universities and colleges throughout the country. We put them through a rigorous external merit review process. Each year we make about eleven or twelve thousand awards. The typical duration of an award is about three years. Hence we have an active award portfolio in the neighborhood of thirty-four to thirty-six thousand awards each year.

Mr. Morales: Can you tell us about some of NSF's research priority areas?

Mr. Cooley: Well, fundamentally you have to understand that research covers everything from anthropology through zoology, and fundamentally, that is our role, that is our mission, and we do do that. So we have a directorate for biological sciences, we have a director for math and physical science, there's a director for engineering sciences, for example. But there are priorities in any era, and right now some of those priorities are in areas such as nanoscale science and engineering. The public tends to think of that as nanotechnology, and how that may help manufacturing processes in the future, how it may help the healthcare industry in the future, for example. We also have a very interesting research priority in social and dynamic behavior of people and organizations. How do we get things done? How do we get them done more effectively? How do people interact with technology, and what impact is technology having on our lives? There's also a very -- there are some broad national kinds of things going on right now, we call them administration priorities. One is in the National Information Technology Research and Development Program called NITRD. One is in the Nanoscale Science Initiative, that's called NNI. There is also a very broad research program across the federal government in global climate change supported by the administration. It's important for policy to be set by the best science that we can get, and so in order to understand what is really happening with global climate change, it's important to get the research done. These are integrated government-wide programs where the National Science Foundation, NOAA, NASA, Department of Energy, the United States Department of Agriculture, they all collaborate and coordinate and carve out a unique piece that fits their mission and then put an integrated program together.

Mr. Morales: Tom you mentioned some of these other organizations, how does the research in science supported by NSF complement the research supported by organizations such as NASA or NOAA and the National Institutes of Health, and how does NSF work together with these science organizations?

Mr. Cooley: I think the answer is actually a fairly simple one. When one thinks of NASA or NOAA, one thinks of the mission that they have. NASA, space, to put it very distinctly, NOAA is oceans and atmospheres. So in carrying out their missions, they have specific things that they're interested in looking in to. Our mission is about basic research, so we don't have a mission that's directed to a particular component of the environment, the world, the population. What we try to do, and a very fundamental part of our mantra, so to speak, is the training of the future generation of scientists and engineers, so that we're not only helping to fulfill other agency's missions by training people that are going to be the scientists or engineers that work for those agencies, but we also do the kind of basic research that those mission agencies draw upon in order to carry out their own missions. So, for example, one of our partnerships is at the National Center for Atmospheric Research in Boulder, Colorado. We collaborate with them. We are interested in generally, you know, what is causing climates to change, how do you map weather, how can you use super computers to model weather changes and predict and forecast weather at a microscale, which is going to be very difficult, but that's ultimately where people want to go. And so, when storms are coming up, I'm not interested in what's happening in the general D.C. area, I want to know exactly what's going on in Columbia, Maryland where I live, and I think a lot of people feel like that. So many of the National Weather Service activities that are carried out and for which NCAR in part participates -- NCAR, as I said, is the National Center for Atmospheric Research is through a collaborative set of activities that we have working with this center out in Boulder, and with the National Weather Service, with NOAA, whatever.

Mr. Morales: Tom, thank you. That's a fascinating and certainly a broad set of issues, and I would certainly be interested in understanding the weather patterns just around my block. You talked about the budget of $5.8 billion dollars, can you describe a little bit just the overall size of NSF and the skill set of the employees there?

Mr. Cooley: Sure. I think the audience would be surprised to find out how small we actually are. We're about twelve hundred federal employees with about three hundred fifty contractors who help us. Those contractors assist us in classification for our position descriptions. The bulk of our contractors actually assist us in the development of our hardware, software, and maintain those electronics systems for us, and then they do other things, such as the mailroom, delivery into buildings, support services of various kinds. So, within the building over there at 4201 Wilson Boulevard in Arlington, we've got roughly fifteen hundred people, about 75 to 80 percent are full-time federal government employees. The mix of that staff, you know, you've got it all the way down from a GS-4, 5, 6, 7 kind of secretary, program assistant. Usually, traditionally, there are people who are born raised right in this area here. And then at the top end of the system, you have got PhDs, scientists, and engineers working in NSF from Harvard, Yale, MIT, Cornell, the University of Maryland of College Park, Wisconsin, Madison, Charlottesville, University of Virginia, we draw them in from all over. We have a mix right now of about 50 percent full-time program managers and about 50 percent rotaters, and that ensures that about every two to three years those rotaters turn over. These are people who are actually bench scientists. They are out there at the universities, they're on the cutting edge, and they really know what's going on. So that when we get proposals in from the principal investigators, the people who are looking at those proposals, evaluating them and trying to find people to review them, other scientists and engineers in the community. Our staff is really plugged into that community, they know what the hot topics are, and they who are the best and most highly qualified reviewers are. From my perspective as the chief financial officer, that means I can tell the American public the proposals that we fund have undergone the most rigorous external merit review process that we can envision. Many people on the hill refer to it as the gold standard. So that when we make an award with American taxpayer's dollars, my confidence that this is going for something that's really cutting edge, that could really impact our lives, ten, twenty, thirty years from now is really great. I mean, when we look at the fact that research on transistors was done fifty years before transistors were ever used. Sometimes the concept doesn't lead to a product for a very long period of time. And some concepts don't lead to any products at all. They're dead ends. I mean there's value in finding out that there's a dead end out there. It saves other people time and effort from pursuing what ultimately would be a dead end, and then go in a different direction.

Mr. Watson: Tom, you're the chief financial officer, and also the Director of the Office of Budget Finance and Award Management. Can you tell us a little bit about the roles and responsibilities of that position?

Mr. Cooley: Sure, Steve. First of all, I think it's important to understand what it means to be the Director of the Office of Budget Finance and Award Management. I have five divisions that report to me. One is the budget division, so we work with the administration and the Congress to propose a budget and then implement a budget once the Congress has passed it. We have the Division of Financial Management that oversees the internal controls and the financial practices that we use to ensure that every dollar that goes out the door goes to the right person for the right reason. The third division is the Division of Grants and Agreements. They're the division that does the bulk of the business at NSF because we are predominantly a grant making entity. The fourth division is our Acquisition Procurement Division, the division of contracts, and they have the very complex agreements, things where we have a much more hands on relationship with the entity that we've made the award to. And then, the fifth and the newest division is the Division of Institution in Awards Support, and its focus primarily is on audit resolution where we have issues that have been raised through the audit process and we have to find out how much money does the government get back because you didn't spend it all appropriately, or maybe even misused it. And then our largest and newest activity, which is post-award monitoring and oversight. The focus of that is to ensure that if you get an award to do X, that you've actually done X, and that the money that you spent on X was relevant to X. It's important for the accountability of the taxpayer's dollars. I think it's also important to the accountability of the Merit Review System.

Mr. Watson: Tom, that's a lot in one position. What was your experience and what path did you take to prepare yourself for that?

Mr. Cooley: Well, there is a long story. When I was a young man, many years ago, I read a couple of books by some fairly famous authors who were doctors and physicians at the time. It got me very interested in a field called microbiology. And I was more interested at that time on potential for microbiology to help me understand how I might help humankind. As I got older, I discovered that microbiology touched all fields, plants, animals, human beings, soils, et cetera, so I majored in microbiology at the University of Maryland, College Park, came out, went into a job and told myself, oh my goodness, what have I done to myself. I didn't enjoy the work experience. I really did not. I was very fortunate, as I have been at three or four critical times in my career, to have a mentor at that time. He was not my immediate boss, but he was a partner with my boss. And my mentor came to me and said, you know, there's something that's not gelling here for you, I can tell. And he encouraged me to go back to graduate school, which I did. I pursued the field of botany. I got married. Things change when you get married. We had a little girl. And I had an opportunity presented to me, it was a career choice. I had one path or another. I could go to a post-doc at the University of Montana, or work part-time for the summer at a place called the National Science Foundation in 1979 to write an environmental impact statement for what at that time was envisioned as the Ocean Margin Drilling Program. My family is here, my wife's family is here, and our daughter was six months old, and the pay here was twice as much as the pay in Bozeman, Montana. So I thought, well let me go with this and see where it goes. They extended it two more times for a year and a half, after which they hired me full time as a GS-11. I worked for some great people. I worked for Sandra Toy, Al Shin, Joe Cull, all of whom had great influences on my career development, basically gave me some advice, pointed me in a direction, and then left me alone to see if I could really do it or not. And a couple of years ago, the Director of the National Science Foundation, at that time Dr. Rita Colwell, turned to me and said, how would you like to be the CFO, and I said, only if I can dot, dot, dot. And she said, fine. So I've been there for five years in this role. There are days when it's a lot of fun, and there are days when I'm glad to get home. But I think all of our jobs are like that.

Mr. Morales: Tom, that's just a fascinating start to just a wonderful career. How is NSF working on the President's management agenda's five government-wide initiatives? We'll ask NSF CFO Tom Cooley to explain this to 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 Tom Cooley, Chief Financial Officer of the National Science Foundation. Also joining us in our conversation is Steve Watson. Tom, can you give us a brief overview as to how NSF is working on the President's management agenda's five government-wide initiatives?

Mr. Cooley: This is not an easy question, and may actually end up being probably one of the most difficult questions you will ask me. First of all, I have answer with a very honest and straightforward one that my staff will recognize, and that is a lot of very hard work. This is not easy. It's one thing when you set your own agenda, it's one thing when someone else sets it for me, and then continually raises the bar so that you do better and better and better. I buy into that philosophy, it's basically a philosophy of continuous feedback, you do something, you do it well, you get feedback for improvement, and then you go off and make improvements based on that feedback. And then I think it's fundamentally the tenant that underlies the President's management agenda. We were very fortunate in that the President's management agenda had two key areas where we had already invested a lot of time and effort -- financial management and e-gov. And it was actually division of my predecessors and now I have to go back to the 1980s to talk about this. My predecessors had thought that it would be good if as many of our paper systems were electronic as is possible. And there were two key vision statements back in the '80s. One by Al Muellbower, who was the Division Director for Financial Management, and he wanted a financial management system that was totally electronic, where on a day to day basis, he knew exactly how much money was left in the bank. On the other hand, Connie -- oh, and I can't think of her name, she was the head of the Division of Information Systems, and her vision was one of how to enable our PIs, or principal investigators, to submit proposals to the foundation electronically rather than in paper copies. When you used to send a paper copy proposal, each proposal was about a half inch thick, and you were required to send twenty of them. So we had stacks of paper in the mailroom. The vision was, if you do this electronically, you can flip them out to your reviewers electronically, you can handle the paperwork electronically, and make your awards electronically. Those visions were put in place in the 1980s, and we were totally electronic by the end of the 1990s. So when the President's management agenda came along, in these two particular areas, it was very natural for us to go over and talk with the President's people in the White House and say we think we're green in financial management because, and we think we're green in e-government because. So when the very first scorecard came out, we in fact were green in financial management. They gave us a yellow in e-gov, because they had some questions for us that we needed to resolve and finish answering. So the next quarter, I believe it was, we did go to green in e-gov. The very interesting thing about the process though, is that they're -- those two do tend to be integrated, and the key integrating function is the other third PMA initiative, the integration of budget and performance. If you're going to integrate your financial system's data with your budget request, your justifications, what we call the budget execution plan, and you want to be able to tell the American public exactly what we are doing with that money and how you're doing, i.e., performance, then these three initiatives are all integrated. What we had not had a vision for was the integration of budget and performance. This agenda item caused us to really think in terms of a vision, we got working on that. My Division Director, Marty Rubenstein, really pulled a great vision together and pulled it off and we've got green and BPI, I believe, three cycles ago, something like that. The other two though were the more difficult ones. We at the National Science Foundation, frankly did not have a vision for human capital. We bought into the system that existed. It seemed to work very well for us. When you look at human capital as the fourth item and competitive sourcing as the fifth item, we were able to take advantage of a concern that we had had about four years ago that we really didn't have a vision for human capital, and we didn't have a vision for how all of the processes of the foundation needed to be integrated to get the most bank for the buck. And we had hired a contractor at that time to do an in depth, integrated assessment of absolutely everything that we do, and everything that we touch at the National Science Foundation, including this very critical piece. The staging of that meant that we needed to understand our human capital needs before we went down the road of trying to figure out what we needed to competitively source. Now part of the background here is that things that the other agencies are competitively sourcing today, we outsourced in the 1980s. I was around, we outsourced mailroom functions, we outsourced all of our IT support functions, we outsourced many, many different things. So where agencies today are looking to outsource those things, we've done other things. So we're on the cutting edge of what do you do after you've done that. Having just gotten to green -- yay, on human capital this last quarter, it allowed us to also integrate our vision for getting to green in human capital with the first steps of competitive sourcing. So we have our first competitive sourcing out on the street. Now we've moved from red to yellow in progress, not in status, so that we now have four greens and a yellow on the progress report card. We're very pleased with that, and I think that in general, while the PMA does take a lot of hard work, if you don't integrate your team across your agency, and you can't be successful if you buy in and set your own vision for yourself, because doing that means that you've got that community integrated within your agency. They see it as part of their vision, and therefore, it's the right thing to do.

Mr. Morales: In the fiscal year 2002, the National Science Foundation established the advisory committee or GPRA performance assessment that is structured internally to report PMA activities to the director of NSF. Who is part of this committee, and how does the committee evaluate NSF's progress on the PMA initiatives?

Mr. Cooley: Well, let me go to ground zero on this question. I think the audience that may by listening in could not necessarily know that the Government Performance and Results Act requires every agency to do its own self-assessment. There's a bit of a conflict of interest in my view with that self-assessment. It means, you know, if I think I'm doing a good job and my staff who work for me tell me that, because they're afraid to tell me otherwise, you know, for whatever reasons, you don't have some independent benchmark. So, a couple of years ago, the foundation agreed, you know, reporting performance was important to the community at large, whether it's a taxpayer, whether it's our principal investigators, whether it's the reviewers that are out there, whether it's the scientific community at large. In order for us to satisfy ourselves, because we have this independent review process that we rely upon to tell us how good a proposal is. The vision that I had was we need an independent group to come in and tell us how good we really think we are. We'll give them all the data, all the information, we won't preload it, we won't prejudge it, or prejudice it. And when they look at that, they have to give us feedback. If they think that we've prejudiced something, or have been lacking and providing them with information in a particular area, then the next time around we'll do better there. So, we came up with this advisory committee for GPRA performance assessment. They do want you here because they review our programs on an annual basis. What we do is we bring in experts in all the fields that we support, they all sit on this, they look at the portfolio of awards that we make, they look at annual reports, they look at collections of reports, they look at our Committee of Visitors reports, they look at National Academy of Science's reports, workshop reports, they look at everything, and they write a report to us and say this is good, or they say this is not so good. We've been very fortunate the last -- at least the last three years that I can remember, they have said that everything that they have seen indicates that the investments that we make to support our mission have been very good and satisfactory, we're making satisfactory progress, they support the mission of the agency, they support the strategic vision and the strategic plan and more importantly, in each annual plan, they support each annual plan in trying to get from point A to point B.

Mr. Watson: Tom, you mentioned you're green already in four of the five key PMA areas. What is your plan for staying there? Is it as difficult to stay there as it is to get there, or do you have processes in place that carry it to this point forward?

Mr. Cooley: The answer is yes, it's as difficult to stay there, and as I had mentioned earlier, it is as difficult to stay there because once you pass a bar, what the government is saying to itself is we need to move that bar higher. If we really want to be an effective and efficient organization, and I think most organizations buy into this concept, you need to do everything that you can through some process of continuous feedback loops, to figure out where you can still improve. It does take a lot of hard work, it does take a lot of effort, and people do pull their hair out, I'll be the first to admit that. But fundamentally, the only way that I, as the CFO of the agency can do it, is to set up a system of trust and integrity, and I think most of us in the government have tried to do that, let your people who are in charge with these activities run with them, get reports periodically on how they're doing, hold them accountable, but fundamentally trust them to do their jobs. Once in a while I find that I have to set a due date to make sure something continues to move along and it doesn't languish. But I think that if you trust your staff, and realizing that they trust you, whatever job you're asking them to do, they'll do their darndest to accomplish for you. And I have seen that time and time again. I've got a -- oh, I guess it's about one hundred twenty-eight or one hundred thirty people that work for me right now, small by most departmental standards, but nonetheless, I know most all of them by their first name. I know something about their history, their family, what their interests are. When I pass them in the hall, I always say hello to them. They always say hello to me. There's a sense of camaraderie, but I think fundamentally underlying that, we each share core values. For the Office of Budget Finance and Award Management, and that's posted on our BFA website. We talk about it at all of retreats to make sure that it's still the appropriate kind of core value and vision for us. And the last phrase in there is have fun. And as long as we don't lose our sense of humor, and we try to find ways to have fun in doing our job, then I think everybody has that little blowout patch available to them on a daily basis.

Mr. Morales: I think I'd certainly like to see that as one of the new initiatives on the PMA having fun. How has NSF successfully linked financial data and performance data? We will ask NSF CFO, Tom Cooley to explain this to 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 Tom Cooley, Chief Financial Officer of the National Science Foundation. Also joining us in our conversation is Steve Watson. Tom, I understand that NSF is one of the agencies that excel in the performance assessment report, which links financial data to program performance. What are some of the factors that have lead NSF to successfully articulate and link financial data to performance data.

Mr. Cooley: Well, I think that one of the most fundamental successful factors is the integrity of the science process itself. It starts with the person, man or woman, who has an idea, wants to put it forward, and hopes to get it funded by the federal government. What they want is an excelling research project that is going to make into the scientific literature because after all, these people are -- have the ability to become a tenured faculty member at a university or college, and I think that's part of their own career path. In establishing their research record, while at the same time they're establishing the fact that they teach well at a university or college. That helps them move up the ranks from an assistant to an associate professor, ultimately to a fully tenured faculty member. They have a vested interest themselves in making sure that the results of their research, their education project -- we fund things in informal science education at museums, for example, is known nationally. It's name recognition. You know, they want to become a recognized name in the field. So they want to publish their results. That's an effective way of measuring their performance out there with the taxpayer's funds. If they've got a successful project and it's been successfully published, then taxpayer funded information is now in the public domain for other scientists, engineers, and educators to use around the country to influence not only their own teaching and what information they impart to their undergraduate and graduate students, but their own personal venues of research. Then there's the internal piece of performance, how are we, as members of the federal government, performing with the taxpayer's funds. And in that regard, I think we do a very, very good job. We have one of those systems that, at the beginning of the fiscal year on October 1, you fundamentally load up whatever your appropriation is, and then we start ticking it down. Our system enables every program manager who has a slice of that pie, they can start ticking down from whatever their amount is throughout the fiscal year. Every morning you can log on, you see how much you've got at the beginning of the day, and at the end of day, if you've made some award recommendations, those funds get committed, and you see how much money you have left at the end of the day. The other thing that we have, are online progress reports. PIs are required to submit an annual progress report so you can review it and see how it's doing. They tell us how many graduates students they've got, how many they've trained, did any of them get their Master's, did any of them get their PHD, have they submitted any publications, what's going on in your lab, have you had any kids in, did you talk to them, all of that kind of information is embedded in these so that you get a real picture on an annual basis of what's actually happening out there in the lab. That helps you as the program manager assess whether this project is performing well, and the person who writes it up, generally speaking, the principal investigator at the other end, goes through this thought process once a year. Yeah, I'm doing this and this and this and this and this and stop some things, but I'm not doing so good over here. I need to reach out more to let people know what I'm doing, and you know, some of the area high schools maybe reach out to them, offer field trips for people to come in where you can talk to them about your research and a lot of these PIs do that kind of thing, they tend to get really plugged in to the community around the university.

Mr. Morales: Tom, to dabble a little bit more into the secret sauce over at NSF, how is NSF moving to adopt new technologies in business processes and maintain financial integrity in internal controls?

Mr. Cooley: Well, I would like to think of it as driving business processes rather than moving business processes. We are a homegrown e-system, so what we have are legacy systems that are our contractors built and maintained for us. That comes with a heavy cost in terms of maintenance and operations and upgrades. And I think in the area of financial management there are commercially off the shelf software technologies that are getting better to address the federal needs, but they were built to address private sector needs, and they need some refinement, quite frankly, but I can see those refinements coming. So, where the federal agencies are beginning to go into cuts packages and work with those providers, the providers are learning how to improve the cuts packages. That's fine from my perspective. But in the grant making world, there are no such cuts packages. In order for us to do electronic grants administration, we had to build our own legacy system, that's what we've got. In terms of driving the future, what I would like to see is the government through this new grants management line of business, send a signal to the private sector that if we're really going to do this, we're going to need cuts packages. The grants business alone is something like $560 billion a year that go out in grants. So if the private sector starts building some of those cuts packages and offering them up to the government agencies, then there should become a point in time when we don't have to worry about legacy systems, where we can have integrated systems for grants management across the federal government, some of which may be a legacy system at a huge agency, such as HHS, might be. Or they may have cuts packages that are shared by multiple agencies. So I would like to see the government act a little bit more like the private sector in terms of trying to drive improvement by laying it out there to the private sector, you know, $560 billion a year is a big chunk of change, and if we really want to see if we can do some cost savings government wide by using cuts packages, you guys need to start building those and offering them to us.

Mr. Watson: Tom, you touched on the line of business concept, which is a current push in government and a number of areas. How is that impacting the National Science Foundation?

Mr. Cooley: It's really impacting all government agencies, not just NSF. But if I use NSF as the example, it's forcing us to make key decisions about, do we provide a service or do we go find a service provider? I think it's a key fundamental issue for the government. In the old days, one used to think -- and I'm talking fifty, eighty years ago, the Office of Personnel Management provided all of the personnel functions for the federal government, and everything you did went through OPM. That was disbursed -- probably for very good reasons at that point in time. What they're looking at now is rather than every single agency, and within major departments, every separate bureau having its own system, you name it, classification system for personnel, financial management system, procurement, contracts. Rather than having everybody have to duplicate that everywhere, you can get economy of scale and efficiency of operations by offering that service at a key few touch points. So that ultimately, like we did with the payroll, NSF had its own separate payroll system. The government went from something like twenty-six major providers for payroll to four. And the intent eventually is to get down to two. That created some streamlining, and there were good benefits that came out of that. Were there bumps along the way? Of course, there were bumps along the way. You don't bring any system up without bumps along the way, nothing goes absolutely smoothly. But in terms of trying to turn the government into a much more efficient and streamlined operation, there are shared operations across federal government, grants is one of them, where we need to start thinking strategically about how to do the front end, which we're already out in the front on with the grants.gov find and mechanisms, and how to do the back end, which is, you know, grants management within the federal government, and how to streamline that, make it more effective, make it more useful. One of the criticisms that we hear from -- well, let's say the governor's office. There is a lot of federal money funneling into the states, but there isn't any single portal where anybody in that state can figure out, well, how much is coming in on an annual basis and where is it going. How much is going to our Department of Transportation, how much is going to our public universities and colleges that we support in the state, and for what reasons? So, what's lacking and what is the value added here is the possibility that in the future that information allows you as the governor or as the state legislator, or as a single PI in the university to start to begin to integrate those efforts to get even greater value added our of the integration of those efforts. I've got an award over here and this guy over in the Department of Transportation has an award over here, I got to talk to him about what he's doing and let him know what I'm doing because maybe we have great information to share that may be of value to both of us.

Mr. Watson: Tom, you have mentioned using some of these lines of business, payroll for example. Any areas where you envision the National Science Foundation becoming a center of excellence providing a line of business?

Mr. Cooley: I would like to see us be able to do it for the grants management line of business, but we have a legacy system. It was not built with the intention of having a lot of capacity to it. We're not stretched right now in receiving forty-five thousand proposals a year, but on the other hand, we certainly couldn't handle the volume of proposals that comes in to the National Institutes of Health. If we did want to pursue becoming a center of excellence for the grants management line of business, we would have to bite off a discreet chunk that we felt that we could handle appropriately. Small bureaus, small departments, people in the federal government that already operate similarly to us, so if a portion of USDA, maybe EPA, maybe the National Endowment of the Humanities -- if I were to just take three random organizations, my guess is those three just about fill up our capacity. So then our concern would be what do we do if all of a sudden state funding dries up, and even more proposals -- say our proposal load goes from forty-five thousand per year to sixty thousand per year, that would saturate our capacity, we wouldn't be able to provide the service that we're supposed to be providing to the other agencies and the whole system could come crashing down. So, you know, we still got some homework to do, but I think that there would be value in pursuing that. The government is right now asking agencies to consider if they want to be a service provider, do a business case for yourself, and at the end of the business case, make a decision. So what I'd like to do is do the business case and see what it tells me.

Mr. Morales: Certainly a challenge, but an opportunity. What does the future hold for NSF? We will ask NSF CFO, Tom Cooley to explain this to 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 Tom Cooley, Chief Financial Officer of the National Science Foundation. Also joining us in our conversation is Steve Watson. Tom, how is NSF promoting partnership with academia, government industry, and international stakeholders?

Mr. Cooley: That's an easy one. Person to person contact. Without that personal contact, things just aren't going to get done. This is one area that I would say NSF has excelled in the past fifty-five years of our existence. The very nature of research is global in scope. That caused the agency when it was first forming itself to worry about how do you touch all the bases, how do we touch the Office of Naval Research, how do we touch the United States Department of Agriculture and their research programs? So many of our program managers that reside at the National Science Foundation know the other program managers that work at the Office of Naval Research, or the Defense Advance Research Agency, DARPA, or the USDA. So there's that inside the government natural connection that already exists, and we frequently invite them to be reviewers on our panels and they invite us to be reviewers on their panels. In terms of working with academia, that is the fundamental tenant of the Principle of Operation at the National Science Foundation. The relationship between the foundation as an arm of the federal government and academia is one of partnership. We expect them to put something in, you know, they turn on the lights everyday for the PIs, and they make sure the water is running. The PIs give something back to the institution, sure they're being paid a salary, but they're expected to teach and do research, find time to mentor students, graduate students, post-docs, find time to talk with undergraduates, bring undergraduate students into the laboratory and have an undergraduate research experience those students who are thinking about a science or engineering career, reach out to the community, visit high schools, that is just a nature of our business. Even our own program managers in NSF do science fairs, participate in research at nearby universities, keep their ongoing research programs going. Industry has been a bit more of a sticky wicket, and I think that our real outreach to industry started about in the 1970s, but really solidified under our director for six years from -- I think it was about '84 to '90, Dr. Erich Bloch promoted a lot more partnerships. He envisioned a couple of very key programs that required industrial participation. That has. We have some centers -- I remember one that's up in Rochester, New York, where for a long time, I believe it's still in existence, Kodak was a partner because it was research on -- in the whole field of photography. And then international, well, we have several ways to do that. First of all, government-wide, you've got the State Department. So you'll always need to be concerned with working through the State Department, particularly in some sensitive countries, but we have our own Office of International Science and Engineering, and they have their own connections to their counterparts in -- out in the other countries. So, for example, my boss at the time who was the Chief Operating Officer, Joe Bordogna and I were invited to go to Beijing about a year and a half ago because the National Science Foundation's counterpart in the Chinese government located in Beijing was undergoing a strategic planning and envisioning exercise, and they wanted to know how NSF did it, and how NSF implemented it, and sold it to their own administration. Well, we found out about that because there was a very natural relationship between the people in those -- in that office in Beijing, and our people, here at NSF and the Office of International Science and Engineering who are always going back and forth and touching base and finding out what's going on in each other's countries, so we do that with virtually every country on every continent, and of course with cell phones now, it's instantaneous, call up, dial up, email, whatever. Then there are some research communities which by their very nature are international in scope. The astronomy community comes to mind, the ocean sciences community comes to mind. But you see more and more of this internationalization of research, biosciences is probably the hottest topic right now, and that's the sharing of information across borders about what's going on with the human genome and plant genomes, and how to worry about getting better crops that are drought resistant, or other kinds of things, that's very important on a world-wide basis.

Mr. Watson: Tom, looking into the future, what are the major challenges you see for the National Science Foundation, generally, and then more specifically, for your office?

Mr. Cooley: Making sure that people can actually go home at the end of a very busy, hard day. We all work more than eight hours, we know that now. Email has made it -- you work virtually twenty-four/seven. I get home, I take off my tie, and in the summer time put on shorts and go around in flip-flips because of the heat, but after dinner I logon. Do I have any important messages, did somebody need to give me a heads up about things the next day, is there something I didn't get to today because I had meetings all day long and I didn't have time to actually sit back and think? I think that in my own opinion right now, the biggest problem that we, as a nation are facing is that there is so little time left to be proactive or reacting to everything because it's information coming at you twenty-four/seven, whether it's TV, radio, email, people in the halls, and having that quiet time to stop and think strategically about where you should go right now is lacking. So, I guess the answer to the question is, the biggest significant challenge is carving out a piece of time to yourself, and letting your employees carve out a similar piece of time to themselves. One of the ways I do that, I refuse to have an iPod or a Blackberry or a cell phone. If you want to reach me, I log on to email, you can leave me a message. If it's really that important, you have that venue, but I don't want you calling me on my cell phone at 11 p.m. at night, nothing's that urgent, I'll deal with it in the morning when I get in. And I think that as long as people wherever they work feel like they still have that little safe spot they can go to, you know, you can keep pushing yourself along, you can bring home the paycheck, you can do what you need to do for the family, but we all need that little safe spot.

Mr. Watson: Tom, earlier in the program you told us a wonderful story about how you got started. What advice can you give a person who is interested in a career in public service?

Mr. Cooley: Understand what you're getting into. I think that was the real wakeup call for me when I got into my first real job. Like many of us, we had part-time jobs in high school and college. I worked my way through college. But, you know, you see multiple career paths, and sometimes you have to actually get on that path and find out for yourself whether you're going to be happy or not. In terms of the basics, I think most people who are worried about any kind of future career need to be thinking about to what extent am I going to be happy, and to what extent is my earning power going to support my family if I'm the kind of person that wants to have a family, big or small. So, good high school education, certainly go to college, because I think having a college degree opens up your earning potential as you get older. If you really love college, stay in college, get a Master's, get an MBA, go on for a PhD if you're interested in pursuing education, if you're interested in pursuing science or engineering. I'll tell you one thing about having a well-rounded, educated background, whether it's just a Bachelor's or a Master's, is I do think it prepares you to take advantage of the opportunities. As we all know in life, doors close and it's up to you to find out where that window is open, and trust me, based on my own personal experience, when a door closes somewhere, there's always a window open somewhere, but you've got to find it. And then when you find it, you have to have confidence in yourself that your background, your education, your experience, your training allows you to leap through that window. And frankly, if you're not sure, leap anyway, take the chance. You can always go to the supervisor and say, you know, I thought I really understood this, I need some more training in this area. And if you've got a good supervisor, they're going to say, absolutely, go do it. I'll pay for it.

Mr. Morales: Tom, that is just great advice. Unfortunately, that will have to be our last question. Steve and I want to thank you for fitting us into your busy schedule and joining us this morning. And we also want to especially thank you for your service to our country, both first at the Department of Agriculture, and now at the National Science Foundation.

Mr. Cooley: Well, that's great. I really do appreciate that. I'm third generation in service to this country, so over the past one hundred years, I've loved living in Washington, D.C., all of my life. If anybody wants to find anything else about the National Science Foundation, a very simple website, www.nsf.gov. Thank you.

Mr. Morales: This has been The Business of Government Hour featuring a conversation with Tom Cooley, Chief Financial Officer of the National Science Foundation. Be sure to visit us on the web at www.businessofgovernment.org. There you can learn more about our programs and get a transcript of today's fascinating conversation. Once again, that's www.businessofgovernment.org.

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

Norman Enger interview

Wednesday, January 25th, 2006 - 20:00
Phrase: 
"The goal of the HR line of business is essentially to free HR professionals in the government from routine back-office type work so they can focus on recruiting, motivating, training and rewarding the people in the federal workforce."
Radio show date: 
Thu, 01/26/2006
Guest: 
Intro text: 
Enger discusses the HR Line of Business program, its relationship to the e-government initiative in the President's Management Agenda, and its alignment with the Federal Enterprise Architecture. Enger also describes some of the programs that have arisen...
Enger discusses the HR Line of Business program, its relationship to the e-government initiative in the President's Management Agenda, and its alignment with the Federal Enterprise Architecture. Enger also describes some of the programs that have arisen from the HR Line of Business and OPM e-government initiatives, such as the USAJOBS web site, the improved security clearance system, and improved employee training programs.
Complete transcript: 

Thursday, January 26, 2006

Arlington, Virginia

Mr. Morales: Good morning and welcome to The Business of Government Hour. I'm Albert Morales, your host and managing partner of The IBM Center for The Business of Government. We created the center 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 at the web at businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Mr. Norm Enger, director of the Office of Human Resource Line of Business at the Office of Personnel Management. Good morning, Norm.

Mr. Enger: Good morning.

Mr. Morales: And joining us in our conversation, also from IBM, is Don Shaw. Good morning, Don.

Mr. Shaw: Good morning, Al.

Mr. Morales: Norm, can you tell us about the mission and the history of the Office of Personnel Management, otherwise known as OPM?

Mr. Enger: OPM was created by the Civil Service Reform Act of 1978. It has a number of different responsibilities, one of which is to build a high-quality and diverse federal workforce based on merit-system principles. Essentially, it's the guardian of the integrity of the federal merit system. The director of OPM is the HR consultant for the executive branch. She's the President's principal advisor on matters that relate to the civilian workforce.

In addition to this responsibility, the OPM also has responsibility, for example, for the employee benefits systems, and in effect operates and administers the Civil Service Retirement Systems, the Federal Employee Retirement System, and the Civil Service Retirement System, which is servicing millions of retired federal employees. It also administers the Federal Employee Health Benefit System, which, again, services millions of both employed and retired civilian employees.

In addition, a very large responsibility that OPM now has is the processing of personnel background investigations. OPM now performs 90 percent of all the federal government's personnel background investigations, which covers both the civilian workforce, DoD, and also includes contractor personnel.

Mr. Morales: You've been with the Office of Personnel Management now for, I believe, about four years, Norm. Is that correct?

Mr. Enger: That's correct, yes.

Mr. Morales: And you came on board to lead the implementation of the e-government initiatives. Could you describe the various roles at OPM that you've had in these past four years?

Mr. Enger: My background has been private sector. I spent my life in the private sector and what happened, I then was asked by the federal government to help out the federal government. I met with the director of OPM and the chief of staff back in 2000. They asked me would I consider doing some public service. Essentially, at that time, the OPM had five of the original 24 e-government initiatives. These were initiatives that really had three primary mandates, if you will. First one was to make transformational change -- really change a business process in the federal government. Number two, do it in a relatively short space of time -- say, two to three or four years. And also the third mandate was to prove you've been successful. Show us by numbers, metrics, or whatever that you really have achieved that goal. The five that we had really framed the employee life cycle from recruitment to retirement. Essentially, the five we had were what I call point solutions.

For example, one of them dealt with the website where someone goes to find a federal job. That's called usajobs.gov, and we, in effect, transformed that website. What happened is in last three to four years, we've moved those five to a point where they're ready to graduate into the regular business of OPM. They've been successful and met all of their milestones. However, what you're looking at is fixing a piece of the overall HR business process. Namely, you fix the website, but you don't fix the entire hiring process.

What happened is that OMB recognized that perhaps it was wise to expand upon the original concept of improving federal HR systems, and what they did in March of 2004, they announced something called Lines of Business. They announced at that time five lines of business, and one of those five was the Human Resources Line of Business. Essentially, the difference between the original five e-gov I had and the new Line of Business is that this is much broader in scope. They're looking at everything you do in terms of the business process from hiring a person to retiring a person and saying, let's look at the entire scope of this, the entire business process and all the sub-functions and really try and change as much as possible, and where possible use technology.

Mr. Shaw: Norm, you are now the director of the Human Resources Line of Business. Could you tell us about the mission of your office? You've spoken briefly about it, but could you provide some more detail?

Mr. Enger: The mission of my office is really to implement the vision of, now, the Human Resources Line of Business and also to complete the final graduation, if you will, of the original e-gov initiatives. Essentially, we are following the President's Management Agenda, the PMA, which sets forth as one of the five major components, e-government. We're following the goals and desires specified in the PMA -- the part, of course that deals with e-government. We also are following the E-Gov Act of 2002, which, again, has visions to improve federal IT systems. And finally, there's also something now called the Federal Enterprise Architecture, which is a big picture of the government from a business point of view, whereby it's looking at the government as one organization, saying, what does this one organization, this one government do? So we're responsible for, in effect, giving detail and giving the structure to the Human Resources part of the Federal Enterprise Architecture.

In terms of my mission, I have a staff of approximately 37 people working for me. With contractors, we have approximately 60 people working to implement both the HR Line of Business, but also to finish off or complete the earlier 5 e-gov initiatives.

Mr. Shaw: Norm, some of our listeners may have difficulty understanding what the federal government means by "human resources." Could you share your understanding of this term?

Mr. Enger: Human resources really means the 1.8 million people in the civilian workforce. What we are trying to do is we're trying to, in effect, improve how we recruit, how we motivate, how we reward the people in the federal workforce. So human resources means people. Another term that's come into popularity is "human capital." Essentially, this is also the people, but it wants to give the flavor, if you will, of the people in terms of a real asset to the organization. So when you say "human capital," you mean: Think about these people you have and think of them as an asset, like any other asset you have in a large corporation.

Now, the goal of the HR Line of Business is essentially to implement modern and cost-effective HR solutions to support the strategic management of human capital. A goal here is to, in effect, free up the HR professionals in the government from routine back-office type of work and move a lot of that work to federal processing centers -- I should say federal and also private processing centers. So in effect, you free them up to focus on the mission of recruiting, motivating, training, rewarding the people in the federal workforce, the move to a more strategic use of our HR professionals to build a better work force. And of course, a secondary consideration here is the fact that by doing this you also achieve many, many operational efficiencies, you save a lot of money, and you become much more efficient.

Mr. Shaw: As you mentioned earlier, you came to OPM after working in the private sector, including a successful launch of your own technology company. How have you translated your private sector experiences to your work now at OPM?

Mr. Enger: Well, I spent most of my professional life running my own company. It was a consulting, professional services, IT system integration type of company, and then what happened is the company was bought in 2000 by a large multibillion-dollar company called Computer Associates. I spent two years with that company as a vice president. So I really had the experience of both working at my own company and also working for a very successful large corporation.

Now, to answer your question specifically, what has happened is the federal government has moved toward trying to follow the best practices in the private sector. I was surprised when I joined the government in 2002 that I was seeing the government actually turning more and more to the private sector for help, answers, and solutions. Essentially, if you look at how the federal government rates their senior executives, they have several criteria that you have to really try and meet. One is leading change. A second one is leading people. A third one is being results-driven -- give us some results or some tangible evidence you're successful. A fourth one is having business acumen -- namely, you can intelligently operate a business-type function. And the fifth one is building coalitions and communications.

Well, all of these elements, these five, are very, very critical in the private sector. When I ran my own company and when I worked for Computer Associates, these were the criteria by which you judged the successful executives. And now, what I see is that that structure has now moved over into the federal sector, and we find the federal government trying to follow the same model, if you will, that we have in the private sector.

I might also add that a very key element here is results-driven. You see now a very, very keen desire in the federal government to tie performance to results, and that is very much a private sector orientation.

Mr. Morales: What role did OPM play in changing government recruiting? We will ask HR Line of Business director Norm Enger 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 OPM director Norm Enger. Also joining us in our conversation is Don Shaw.

Norm, you were a guest on our radio show in March 2004, and our listeners would be interested in an update on the progress of the e-government initiatives under your purview over the past few years. Let's start with the recruitment one-stop initiative and the usajobs website. Can you give us some background on this initiative? How's it helped with recruiting qualified candidates, and how many visitors do you now have, and how many online r�sum�s have been posted?

Mr. Enger: Well, this is one of the original five e-gov initiatives. It was called Recruitment One Stop; it's really focused on usajobs, our website. What happened is, when I joined the government, there was an old legacy system, which was definitely in need of replacement, renovation, or whatever. So what happened is in August of 2003, we actually brought up a brand new replacement site. Now, let me mention that this is the primary site where a person goes to locate, search for, and apply for a federal job. All competitive federal jobs must be posted by law on this website.

What happened is that in August of 2003, we shut down the old website on a Friday evening, and we were averaging 20,000 visits a day to that old website. We came live on a Monday morning, and fortunately, there were no glitches with the operation, but what did surprise me is on day one, we had 200,000 people on the site. We increased tenfold when people knew there was a new site. The new site is complete -- it's a modern site, the site appearance, the search engines, the r�sum� builder, the guidance on the site, how to locate a job that meets your desires or qualifications -- this has all been totally redone. It's now a modern, very robust site. So what's happened is that we're now averaging over 300,000 visits on the site per day, and that comes down to over 70 million people a year are actually going to this website. By every rating that we know -- and we actually have third parties evaluate the site -- 91 percent of the people that go to the site say they would return to the site and recommend the site to other people looking for a federal job.

At this point in time, we have over one million r�sum�s on the site. The site, I think, has met the earlier mandate I mentioned of e-government -- namely, you transformed a business operation, you've done it in a relatively short space of time, and you can prove that it's been successful by the number of visitors and outside surveys judging how well the site services the U. S. public.

The site is still evolving. Now, we are trying to give the applicants more feedback as to the status of their application or r�sum� to actually have it so they will know who's looking at their r�sum�, and what the next step in the hiring process is. This is a significant step forward into fixing the hiring process, which is a very high priority with the U. S. government and the director of the Office of Personnel Management. Where we are now is we're trying to have the site integrated more fully with what I call back-end systems in the agencies. Namely, they have systems that asses the applicant r�sum�, and the more we integrate their assessment systems with the r�sum�s produced by usajobs, the more you'll speed up the time it takes to hire somebody and the more you'll improve the federal hiring process.

Mr. Morales: That's a very impressive transformation. Two years ago, we also discussed your efforts to improve the federal government's security clearance process. Could you describe how the E-Clearance Initiative has transformed this approach to granting security clearances in the federal government?

Mr. Enger: This is a very, very major area -- topic area -- especially after 9/11, when the awareness of security really intensified across the country. There are several aspects to e-clearances, the initiative which we're talking about now. It's one of the original five. The first thing that we did is we built a system called the Clearance Verification System. This system -- it's the first time this was ever established -- this system holds 98 percent of all active security clearances. This covers all of the civilian workforce, the DoD workforce, and also all contractors. So one of our major accomplishments here is to build a central database or a central system whereby authorized people can put a name in and rapidly find out their clearance status and who granted that security clearance.

Also under this initiative we have moved forward to automate the forms people use to apply for a security clearance. One of the more common forms is called the SF-86; there are several other forms. What we have done is we have built electronic versions of all of these forms whereby it simplifies the process of filling out the application and also transferring the information to the appropriate investigative agencies.

The third element to this is to develop the specifications, to image background investigation information, the paper files that are produced by the investigators to do the background investigation. So the three pieces of this were the Clearance Verification System, the automation of the forms -- it's called E-hyphen-Q-I-P or e-QIP -- and also the imaging standards to image background investigations.

So in effect, what we've done here is we have moved from a paper-driven security clearance process to an electronic process. A very significant act was the 2004 Intelligence Reform and Terrorism Prevention Act. Based upon the mandate of this very important act, and based upon the progress in e-government, we are now looking that 80 percent of all background checks will be finished within 90 days by the end of 2006. As I said earlier, at this point in time, OPM is doing 90 percent of all the federal government's personnel background investigations. At the present time, we're conducting over one million investigations a year.

Mr. Shaw: Norm, one aspect of the Human Resources Line of Business is skill development, employee skill development. Could you share an update on the E-Training Initiative and the usalearning.gov website?

Mr. Enger: Essentially what this was to accomplish was to build a web-based learning site where people could obtain from the Internet, from a website, courses, books, mentoring, the various things required to develop competencies and skills. We launched, in July of 2002, a very, very simple site. It was extremely basic; at that time, Mark Forman was in charge of e-gov -- now it's Karen Evans. Mark Forman was there, and in effect, we launched the site. We had a handful of courses, maybe 30 or 40 courses; we had a handful of books. It was a very, very humble beginning.

Since July of 2002, it's really grown very, very rapidly. We now have four providers of web-based training services under the E-Training Initiative. We have golearn.gov, which is operated by OPM, which is the site that I mentioned that we brought up in July 2002. We have FasTrac, F-A-S-T-R-A-C, a site operated by NSA. We have a site operated by Department of Commerce, NTIS. And our newest web provider is Department of State, the Federal Service Institute. They all are working with us under the E-Training Initiative, and we have, in effect, an advisory council that works with all of these providers.

And what's happened is now we have 1.3 million registered federal people using the courses and materials under the E-Training websites. These courses -- we now have thousands of courses, not 30 courses, but thousands -- we have hundreds of books, we have collaboration on the site, we have mentoring. The site keeps on getting richer and richer, and it's become a primary vehicle to educate and help the federal workforce build knowledge, skills, and also competencies. The site keeps on expanding in terms of what it's offering.

A very significant aspect now is we're moving into career planning or pathing on the site. We worked with the Chief Information Officer Council and we developed, basically, a career path for people in information technology. We mapped out what they should know from an entry-level position in IT to becoming a chief information officer. A person can go into this site and see at every step in their career in IT what they should know in terms of knowledge areas, skills, abilities, and they're able to, in effect, plan a curriculum and using our USALearning, they're able to, in effect, start taking courses, and the site will help them to track their training and their curriculum. So, in effect, you've moved now from just having courses and materials to actually helping people move forward in a well-defined career. This really is improving competencies. We plan to follow this model of building competencies. We're now working with the HR community, the acquisition community, and the financial community to, in effect, add to this web-based training, career pathing, or planning facilities similar to what we did with the IT community.

Let me also add that we have established a council. It's called the Learning and Development Advisory Council. Now, we have 23 agencies, and we have these four service providers all working with us on this council, which, in effect, as a government, is looking together, saying, how can we better use web-based training to improve and help the federal workforce. This ties very, very much into the whole move to pay-for-performance because you have to have people properly trained to do their job in order to be able to have them able to give the results you want, which ties to their performance on the job.

Mr. Morales: How is OPM supporting electronic payroll? We will ask HR Line of Business director Norm Enger to explain this to 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 HR Line of Business director Norm Enger. And joining us in our conversation is Don Shaw.

Norm, another e-government initiative that you've led is the E-Payroll Initiative. Could you provide some background for our listeners on this program and what's the current status of the payroll provider consolidation and agency migrations?

Mr. Enger: When I joined the government in 2002, I learned that there were 26 agencies paying the 1.8 million federal employees. Coming from the private sector, where efficiency is very important, I was wondering why do you have 26 places paying the federal workforce. It turns out that the same question was asked many, many times by OMB and other parts of the federal government, and in effect, this initiative was to consolidate and standardize civilian payroll processing. What happened is, starting in 2002, we've moved forward, and what we have done is we have gone through a process in establishing 4 of the 26 agencies to be payroll providers, and we are finishing now the consolidation of civilian payroll into those four providers' sites. The four are the National Finance Center, which is part of Agriculture. It's based in New Orleans. You have the National Business Center, which is part of Interior, based in Denver. You have GSA, which is based in Kansas City. And you have, of course, you have DoD, something called Defense Finance Accounting System of services, payroll also.

Now, where we are in this process is we now are 85 percent complete. We now have 1.5 million of the 1.8 million people in the workforce being serviced by these four payroll providers. I think this is a very, very great success in e-government. We've done this in a relatively short space of time, and we've had no significant problems in terms of somebody getting the wrong paycheck or whatever.

Let me also add that one of our sites, the National Finance Center in New Orleans, they actually were shut down, essentially, during Katrina. They were able, through their planning, to be able to operate at other locations. They were able to continue processing pay for roughly 600,000 federal employees, which I think is a real tribute to how robust and how well this E-Payroll Initiative has progressed. From my point of view, the great success of E-Payroll, which has saved large sums of money and led to a more standard and more coherent civilian payroll system, really was one of the main reasons why the government thought of the Lines of Business. A major part of the Lines of Business is moving away from stovepipe installations, moving to more sharing and, in effect, offering modern, robust solutions at these service centers.

Mr. Morales: We know that OPM, GAO, and the OMB are encouraging the link between employee performance, organizational outcome, and pay. How is your office supporting the development of performance-based organizations?

Mr. Enger: Part of the Human Resources Line of Business, we have a task force of 24 agencies that meets every month to talk about direction, progress, for the Line of Business. But in addition to which, we've established something called the requirements board. This requirements board consists of OPM management, but also we have on the board, for example, we have Defense, Homeland Security, and other parts of the civilian workforce. They are looking at the legislation and requirements that drive information systems.

One of the main areas here is compensation management, which deals with payroll and also the various HR systems. What's happening is that they are developing the requirements which, in effect, become the IT structures, if you will, that will be running at the Federal Service Centers. What I'm saying here is that we now are, through the HR Line of Business, we're putting in place the infrastructure, we're putting in place the data centers or the service centers, and also we're putting in place the requirements for the new personnel payroll systems that'll run at those centers. And all of that supports the new pay-for-performance systems, which are now being implemented at DoD, the National Security Personnel System, and you have a new system at DHS -- Homeland Security -- MAX HR, and they're also talking about a new system for the rest of the civilian workforce in the Working for America Act.

In addition, I said earlier that many aspects of my early initiatives, like the E-Training and such, are really key to building competencies necessary for the workforce to perform properly.

Mr. Shaw: Norm, we've been discussing the coming wave of Lines of Business: Human Resources, Financial Management and Grants, and Information Security. We understand that agencies are planning centralized service providers for these functions. What role does your office have in supporting Human Resources shared service centers?

Mr. Enger: When the business case for the HR Line of Business was finished by our task force in 2004 and delivered to OMB, there were essentially two main recommendations in the business case, one of which was the government should move toward establishing shared service centers that would offer quality modern systems to support HR professionals that manage the civilian workforce.

The second major thrust was there should be more standardization -- where it makes sense -- in the HR business processes. What happened is that in roughly September of 2004, OMB asked agencies who would like to volunteer to be a federal shared service center, as we call it in the HR Line of Business -- namely a provider of these services. At that time, five federal agencies submitted proposals to be these centers. There was a proposal from Defense, a proposal from Agriculture -- the National Finance Center, a proposal from Interior -- the National Business Center, a proposal from Health and Human Services, and a proposal from Treasury. OMB reviewed these five proposals and in February of last year, they announced that from their point of view, from a budgetary and managerial point of view, they passed the OMB review. They were called candidates.

At that point in time, the proposals were turned over to OPM and the HR Line of Business, and we formed a number of panels, a technical and also an advisory board, and we spent many months analyzing these five proposals. We asked for more information from these five proposed providers, we met with them, et cetera. In September of 2005, the director of OPM, Linda Springer, and OMB announced that these had also passed the criteria, if you will, to be certified by OPM. So, in effect, as of September of 2005, you had five established, certified, federal shared service centers. And right now, these centers are in business to, in effect, offer agencies solutions, and they're following all the guidelines of the HR Line of Business, and they're also taking and looking at and moving toward meeting the requirements that we're publishing all the time relative to what they should be offering in terms of modernizing the IT systems that support the federal government.

Let me also add that beyond the IT services, they can offer other services also, but essentially, we're looking at moving routine, back-office type of work from the agencies to these centers.

Mr. Shaw: We understand the Human Resources Line of Business is a significant collaborative effort across multiple agencies. How would you characterize this collaboration, and what lessons learned can you share with us?

Mr. Enger: Well, we established the HRLOB task force in March of 2004, and it meets every month. And the task force is very, very active. We have very, very strong participation. The task force, of course, developed the business case for the line of business, the task force reviews all of the requirements we're putting out in terms of what should be offered at our shared service centers. And what we have now, we have established -- I think there are four poles to the HR Line of Business. One is we have the governance structure, which is the task force of 24 agencies with many, many sub-working groups. We also have established a shared service center advisory council, which consists of the four new HR service providers. And on the same council we also have the earlier four payroll providers, so there are nine components there. Then we also have as part of the task force, we have a group of 11 agencies that represent the voice of the customer.

So we have now the governance structure. We have the voice of the customer, which is a part of my task force, to speak for what the customers want, and they'll develop service-level agreements and performance metrics whereby they'll say what they want from the service centers. Then we have the voice of the service centers, or providers, which is this advisory council I mentioned before. And the last piece, the fourth piece, is we're publishing and making available to both the private sector and the federal government what we want in terms of the modern business systems. We're defining exactly what those systems should do and how they should operate and what their functionality should be. So we're actually telling the private sector and these centers, here's what those systems should do in terms of responsiveness, functionality, and also, you know, various performance criteria. So those are the four poles, if you will, of the HRLOB.

Now, to answer your question, though, what I've learned from this is that you can never do too much communication. You really have to outreach as much as possible to, in effect, make people understand what you're doing and why you're doing it. I've learned, if you will -- it's reinforced what I guess I understood earlier -- that you've got to make an effort, go out to meet whoever wants to meet with you in Congress or an agency, who wants to know more about what you're doing and why you're doing it, and make the presentations. And in that way you build the support which is really critical to moving ahead with these initiatives.

Mr. Shaw: Norm, can you briefly describe the technology that will support the HR Line of Business solution? Are you planning COTS software, or will custom software development be required?

Mr. Enger: Well, essentially, the federal government very much wants to learn and use the private sector as much as possible. There's a real movement away from the federal government building its own systems. So a major thrust here will be to, as much as possible, use commercial off-the-shelf software. Wherever possible, turn to the private sector, bring in their commercial software, and contract with them to, in effect, use that software and benefit from all the evolving technology they've put into that software. A major thrust also is to use the private sector wherever it makes sense, and contract out where it makes sense, and then, in terms of technology, it's really no different from what the private sector is facing in moving toward XML, Java, moving more and more toward Internet-based systems, moving away from the client server toward the Internet-hosted and -based systems. In terms of technology, it's really the exact same technology any large American corporation would be looking at and assessing at this point in time.

Mr. Morales: What does the future hold for the HR Line of Business? We will ask OPM director Norm Enger to discuss this 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 Norm Enger, HR Line of Business director at OPM. Also joining us in our conversation is Don Shaw.

Norm, what are the specific plans for the HR Line of Business in fiscal year '06? How many agencies do you anticipate will migrate to the HR Line of Business Shared Services Center?

Mr. Enger: I mentioned earlier that we now have in place five federal HR service centers. We anticipate that in fiscal '06 three agencies at least will migrate major HR functions to these Shared Service Centers. I anticipate that the numbers will accelerate in the next fiscal year, so we'll see over the course of the next year more and more of the back-office work moving from the agencies to these service providers. In the course of this year, we'll continue our meetings with the task force, we'll meet every month with these five providers -- we have a council of five providers -- we also will continue the work we're doing to, in effect, define the solutions that we want to run at these service centers.

I think that the work we've done in defining solutions is really key to the future because for the first time, the government is defining what do we want these federal HR systems to do, and these are coming out in published specifications available to the private sector so they can build systems that meet those requirements.

So we have a lot of activity this year to, in effect, move forward defining solutions, and I might add also in defining solutions, that we anticipate that at some point in time, we'll actually be able to certify solutions. So if a vendor says, I have a new HR system that does this and this, we'd be able to take that and match it to our requirements, and then if it passes the requirements testing, we could certify that as a certified federal HR system. And that, of course, would wind up running at one of our shared service centers.

Mr. Morales: Norm, we spent a fair amount of time talking about commercial best practices, and certainly, you have a perspective coming from the private sector. What emerging technologies hold the most promise for improving the federal management of human resources?

Mr. Enger: Well, from a technology point of view, I think we're looking at knowledge management being one broad area. I think open architectures being another one. Web-based services, XML -- I mentioned this before. I think that the technologies that let us integrate systems more and pass information more easily and seamlessly between systems, all of this -- which is really the keynote of the open architecture -- will let us have more flexibility in how these service centers operate, how they communicate with each other, and how they're able to add new functionality, in terms of new vendor software becomes available, and they can plug this in, if you will, and offer this to the federal agencies.

Mr. Shaw: Norm, if we can ask you to look into the future now, what types of human resources concerns will face the federal government in 10 years and then even further out in 25 years?

Mr. Enger: Well, the federal government, as Linda Springer, our director, has said several times now, we're facing the fact that roughly 60 percent of the federal workforce can retire within five years. So you're looking at a very large potential for retirement from a 1.8 million civilian workforce. This puts great pressure on the federal government to do succession planning -- namely to be training people, hiring people to replace these people who leave. Because they leave with many years of knowledge about certain activities and functions, so you have to have in place people who are able to understand that functionality and replace these people.

So we're looking at that, which ties into the very important task of attracting talented young people into the federal workforce. It's very key that we have the ability to attract these young people. One step forward has been this usajobs site that I mentioned. We have to make the federal government more attractive to young college graduates and people looking for long-term careers. The federal government right now has an aging population and in effect, we now really need some new blood and quality -- talented young blood to enter our federal workforce.

Looking forward, we're looking at a more diverse population, a more diverse federal workforce which reflects the American population. The federal government tries to, in effect, represent the U.S. population, which is becoming more diverse. I think we're talking about what I call a blended federal workforce. We find that, in reality, most of your major operations or programs are a blend of both federal people and contractor. We're looking at a realization that we can't just look at a federal workforce, but we have to realize that it's a federal workforce totally supported by a competent private-sector workforce. So you really have to look at the whole picture -- the blended workforce is what I call it. I think this requires a little bit of assessment as to the best way to deal with the blended workforce.

The other issues, I think, are more general, like globalization. You know, there are jobs going overseas, software is being built in India and elsewhere. This does have some impact upon the long-term view we have as to what we're doing in the federal sector.

Mr. Shaw: How will OPM need to evolve to respond to these significant challenges in the future, Norm?

Mr. Enger: Well, the OPM, as I mentioned earlier, is really the guardian of the civilian workforce. Essentially, OPM has as a goal to have agencies adopt human resource systems that allow them to build a competent workforce. A second goal of OPM is to create a work environment so that people want to stay with the federal government or join the federal government. So OPM puts in place the policies, the guidance, to agencies that lets them establish this positive work environment so people can, in effect, do their job properly and, in effect, be results-oriented.

And the third part of OPM's goal here is to deliver services that are both efficient and quality. OPM has major, major roles in benefits, retirement systems, health benefit systems, and also investigative service systems. So OPM wants to deliver its services to the U. S. public very effectively and efficiently and cost-effectively. And also to pass on this view to the agencies that in turn have to service or are servicing both U.S. public and the civilian workforce.

Mr. Morales: Norm, on this theme of guidance, you spent most of your career in the private sector. But you've obviously successfully transferred to public service. What advice could you give a person who's interested in a career in public service?

Mr. Enger: Well, I think we have a significant situation now in terms of the federal government wants to be more like the private sector where it makes sense. The whole idea of pay-for-performance whereby every year you put in place a plan which specifies your goals for the year and ways to measure your achievement of those goals, this is very much a private-sector mentality. I think this will attract many young people who are looking for challenges, who are looking for accomplishments. The federal government offers individuals a chance to work on systems and projects that are much larger than most private companies can offer. I mean, you're talking about systems that affect millions of people, that involve billions of dollars in many cases, and the scale here is quite attractive, I think, to many young professionals coming out of college.

This is a good time for a person to join the federal government. Hopefully our usajobs website has been able to show people some of the benefits of working for agencies and working for the federal government. We have, on usajobs, numerous aids to help people who might have interest in the environment, interest in law enforcement, intelligence, military, whatever -- there are numerous guides on the site that let a person put in their desires, what they'd like to see in the job that'll guide them to what jobs are available in the federal sector. I encourage young people to go to this site and explore the site.

We also have on the site a special area for student jobs. In effect, someone who wants to work part time for the government can go to Student Jobs and find these part-time jobs. We also have something called a Presidential Management Fellows Program, designed to attract young people into the federal service, a special program to motivate and incentivize these young people.

So in summary, I think that this is a very, very good time for a young person looking for a positive career to consider federal service.

Mr. Morales: That's great advice. Norm, we've unfortunately run out of time, and that'll have to be our last question. First, I want to thank you for fitting us into your busy schedule today. Second, Don and I would like to thank you for your dedicated service to the public and our country in the various roles you've held at the Office of Personnel Management and in the information technology industry.

Mr. Enger: Yeah, I would suggest that people go to the opm.gov website. There's much more information about the Line of Business at the site. And also I mentioned the usajobs.gov website where a person can locate and apply for a federal job. Thank you very much.

Mr. Morales: This has been The Business of Government Hour featuring a conversation with Norm Enger, director of the Office of HR Line of Business at the Office of Personnel Management. Be sure to visit us on the web at businessofgovernment.org. There you can learn more about our programs and get a transcript of today's conversation. Once again, that's businessofgovernment.org.

As you enjoy the rest of your day, please take the 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.

Bert DuMars interview

Friday, January 13th, 2006 - 20:00
Phrase: 
"There’s huge demand on e-filing and e-services that we hardly knew about. All of a sudden customers are using the information we put on the web all the time. So, electronic services are something we're really going to focus on in the future."
Radio show date: 
Sat, 01/14/2006
Guest: 
Intro text: 
Missions and Programs...
Missions and Programs
Complete transcript: 

Thursday, June 9, 2005

Arlington, Virginia

Mr. Kamensky: Good morning and welcome to The Business of Government Hour. I'm John Kamensky, a senior fellow with The IBM Center for The Business of Government. We created the Center 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 www.businessofgovernment.org. The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business.

Our special guest this morning is Bert DuMars, director of the Electronic Tax Administration at the Internal Revenue Service, which is in the Department of Treasury. Good morning, Bert.

Mr. DuMars: Good morning.

Mr. Kamensky: And joining us in our conversation also from IBM is Jeff Smith. Good morning, Jeff.

Mr. Smith: Good morning.

Mr. Kamensky: We all have heard of the IRS when it comes to the April 15th deadline as individual taxpayers but can you tell us more about the overall mission and the vision of the IRS?

Mr. DuMars: Our overall mission and vision are really focused around people, processes, and technologies and how we actually administer the tax code as handed to us by Congress. So what we're trying to do is make sure it's as fair as possible and administer it in that way and then also driving from a paper process, it's been a traditional paper process, to an electronic process, which we think actually benefits the taxpayers both going from individuals all the way up to major corporations. So those are the types of things we're trying to work on in that area.

Mr. Kamensky: Can you tell us a little bit about the Electronic Tax Administration and its e-file programs?

Mr. DuMars: It's interesting. Electronic Tax Administration is broken up into three parts. One part is our strategy, policy, and marketing group, another part is our development services area, and our development services area focuses on things like our next generation of e-file or what we call modernized e-file and also our electronic services, and then our third group is our Internet development services group, which focuses on our portals, portal strategies, and then also irs.gov and where we're going to go with that.

And then, going back to our strategy, policy, and marketing group, it's really interesting that no matter what you do if you change a policy you end up having to change technology to support the policy. If you change technology you have to do the other thing. You have to make sure the policies support the technology change. So it's things that we think of that are fairly simple or easy to do in a technology world when it gets to the policy side become very complex and sometimes things that we think on the policy side are very simple when we get to the technology side become very complex. So there's this balancing act that we always have to play and that's why that third part of ETA or Electronic Tax Administration is so important in our group. So that's how we break up the focus areas that we have.

Mr. Kamensky: In the case of the e-filing what are the benefits of doing that for both the taxpayers as well as for the IRS?

Mr. DuMars: A couple things. For the taxpayers, especially the individual taxpayers, if you have a refund it is the fastest way to get your refund and the majority of all individual taxpayers actually do get a refund. It's well over three- quarters of them. So they will do it and they'll get their refund quicker, in as little as eight days, but more than likely between about a week to three weeks and that's if there's no problems.

The other thing that they get is they actually get an acknowledgement, which is really critical. I can't tell you how many times I've run across people who've said I mailed it in and I never hear back from you in the first place but then all of a sudden I get a notice and it never showed up. And they don't know why and the Postal Service doesn't know why, just something happened.

And then a lot of people also will do certified mail thinking well, that'll guarantee it, right. All certified mail does for us is it really guarantees the envelope showed up. So we'll get stacks of envelopes show up. They got ripped somehow, just something happened along the way. So those are some of the benefits you get. The refunds are faster and then you get the acknowledgement.

And the acknowledgement also becomes critical for the people who actually owe and that are actually our fastest growing segment. That's growing faster than e-file. E-file overall is growing at about 10.7 percent a year. The people who actually owe are growing at 38-plus percent per year. And what they like is they like getting an acknowledgement because then they can come back to us and say yeah, I got it to you, I paid what I owed, so I shouldn't have to owe any penalties and I shouldn't have to pay any additional interest. So it's really important to that group, too.

Mr. Kamensky: Well, what are your roles and responsibilities as the director of the Electronic Tax Administration?

Mr. DuMars: One of my key roles is actually being the spokesperson for the IRS regarding electronic filing so that's a key role. Actually I meet with the press. I work with industry partners, software industry. I also work with the tax professionals. So it's this outbound role. And then on the inward side, facing into the IRS, it's really to help promote and push processes that we can automate, so one of the things that we've been looking at is how does it all work. How does it all work? What's the life cycle from end to end? And one of the key things we keep finding is sure, we could add another form, make another form available, electronically and sure, we could add another electronic service on irs.gov. But oftentimes what really causes most problems of all is some policy that says you have all these electronic policies and there's some policy sitting there right in the middle that says but you have to sign a document and keep that piece of paper. And that will slow down electronic file growth faster than anything else.

Another thing we're looking at is we're looking at the back end. Where does the whole process start for most taxpayers, when they get their W-2 or their 1099 or their 1098? Today those come mostly in paper. And they wait for those to show up and that's when they start their tax return process.

So what is that hurdle of I'm collecting paper and either I'm going to buy a software package and do my return or I'm going to go to my tax preparer, CPA, and do my return or I'm going to go online and do it and I'm starting with paper. Now I'm going from paper to electronic and it's like there's this hurdle that they have to cross over. Now, a lot of people have successfully done that but a lot of other people go if I'm starting with paper I'll just do it on paper, just finish it up. And so I think those are some of the challenges we have going forward and some things I'm trying to work on and fix and that's a big part of my role.

Mr. Kamensky: Well, that raises the question of what's your prior experience before you took this job in April 2004?

Mr. DuMars: I have a rather eclectic background and the reason I say that is because I was a history major undergrad who went to work at a nuclear power plant, actually the Southern California Edison San Onofre Nuclear Generating Station. I started my first year in the management training program in contracts administration and purchasing and then got hooked on computers. Now, that probably should have been natural. As my mom would tell me, she said when you were in college you used to tell us how much you hated computers. But actually all my roommates ended up getting their masters in computer science. That's like, three of my best friends. But I didn't. I was a history major.

And then all of a sudden I become the computer guy at the nuclear power plant and learned it really well just by reading lots of books and on the job training. And then I applied for a position in network engineering with the nuclear power plant and joined a group of people that ended up being leaders in Novell NetWare networking. In fact the guy I ended up working for wrote seven books on it. His name is Bill Lawrence and he wrote multiple books during the eighties and early nineties.

So I worked there for 10 years, gained a lot of experience. I got so good at computer networking I actually ended up teaching for Learning Tree International for a couple years part-time. And then I decided you know what, I've done what I needed to do here and I've had a great career. I want to get my master's degree. I always had this dream of getting my master's degree and my MBA.

And so I applied to several schools and got into the University of Michigan and went there for a couple of years and then I was a customer so I knew a lot of people at Intel and I went to Intel Corporation after my graduate degree and moved into product management marketing. And it was that network engineering piece that fit with what Intel was trying to do in the systems management space.

And then from there I had an opportunity to go to Dell and take it up from systems management for individual products and move to systems management marketing across the entire corporation. And then, of course, this was the late nineties and the dot-com boom and well, I got hooked, too. So I went and did a startup and yes, I succeeded and yes, I failed so I did both.

And then I went back to Intel and went into a division. They were trying to do a big startup called Intel Alliance Services and that was managed web hosting services and was part of that effort. I think Intel invested almost a billion dollars, had data centers all around the world. I was doing the operating support systems and then also services marketing. And then the person I worked for who I'd worked for before at Intel moved to become the chief marketing officer at a company called Trend Micro and was anti-virus and content security and I went there with him and was the global director for the e-business group.

We got to the websites and we implemented new content management systems and so on and was doing online marketing, e-commerce, e-business. It was funny. Things there just started not working out after a while for a variety of reasons and this job at IRS came at the exact same time. And what ended up happening was I read this position. I read all the points. I kept going that's me, that's me, that's me. They were looking for all these different skills that I had and other jobs I had looked at and applied for were always looking for one part of what I was able to bring. And this job allowed me to bring a lot so it was fun. It was interesting.

Mr. Smith: Certainly an eclectic background, like you said.

Mr. DuMars: Yes, my background is very eclectic. But in this role you need that because in the ETA role you go from policy strategy marketing to development services where you're looking at XML technologies and how you would actually change an industry to Internet development technologies where you're looking at well, how would you run websites better and so on and so forth. So it spans all the things I've worked on in my career.

Mr. Smith: Well, I know when you came on board to the IRS the IRS Commissioner Mark Everson said that you bring a variety of talents from the private sector to help lead us through the next stage of our e-file strategy so, hearing that background, how do you apply those experiences to what the commissioner just said there?

Mr. DuMars: Well, it's interesting. I mean, I can take some simple things. Like when I came in, for instance, irs.gov, we know that irs.gov is heavily used. Already this year we've had over a billion page views, just this year. That is more than we had all of last year. So, I mean, it's just grown dramatically. I think we're up over almost 70 percent in growth, which is incredible for websites in this day and age. They usually don't grow this fast any more. I mean, we've been around for a long time. But I have people come up to me and they go your website is great. I am really good at using your website. And that's exactly the wrong thing I want to hear them say. I want them to say your website is so easy to use it makes my life easier, I can find the information I need, and I can do what I need to do.

And so what we're trying to do now is change it from where it's very popular and there's lots and lots of information to it's very popular and it's easy to find the information you need. At one point on April 15th this year we had 80 searches a second. And some people might say well, 80 searches a second, wow, you can really handle the capacity. But on the other side you might say why are people doing that many searches? I mean, is it because our navigation is weak? Are they having a hard time finding things? So those are the types of questions and I bring that background to look at that and help that out.

The other thing, too, is just trying to really understand the customer life cycle and in essence IRS has a channel to the taxpayer because we have the tax professional community. So really understanding how they work, what they need from us, how the software industry works, what they need, and then the taxpayer, what they need, what services, how we can help make this all a much smoother process.

Mr. Kamensky: That's really fascinating. It's a terrific background that you've got that you bring to this to make the IRS e-filing popular and easy to use. What are the factors contributing to the high rate of e-file usage? We'll ask Electronic Tax Administration Director Bert DuMars to explain this to us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Kamensky: Welcome back to The Business of Government Hour. I'm John Kamensky and this morning's conversation is with Bert DuMars, Director of the Electronic Tax Administration at the IRS. Joining us in our conversation is Jeff Smith.

This tax season the IRS received approximately 50 percent of its 2004 tax returns through e-filing and it's been reputed to be the smoothest tax season ever. Can you tell us about the factors that contributed to this high rate of e-filing usage and why this tax season was the smoothest ever?

Mr. DuMars: Well, that's a really interesting question because I always get asked that, what was the one thing, and I can tell you there was no one thing. There were lots of things that contributed to why this is growing. There are lots of people, too, that I should probably mention along the way. I mean, one person that really made this go for years was Terry Lutes and is actually the person I work for today, and he's the associate CIO in the IRS information technology services group.

And another thing is all the other IT people surrounding this and make it actually flow and then work on the processes. That's what helped make it smooth. Ad actually I've heard this from several of the software vendors as well that this was the smoothest filing season they've experienced in a long time. So a lot of credit needs to go to that side.

Another thing that we looked at is there's been a lot of marketing efforts over the years. We've had TV advertising, we've had online advertising. That has helped contribute to the knowledge and building up the education. The brand e-file is a well-known brand. It's been going on for several years now it's been available.

Another thing that helped contribute was our Free File program and our Free File alliance members. There are 20 software companies involved with that. They contributed more than 5 million returns this year to the federal program. They also helped promote it and helped us promote that program so that helped e-file grow as well.

And then overall the tax professional community, I mean, the tax professional community actually handles at least 60 percent of the tax returns and they have a big part in contributing to the overall growth of e-file. And finally the one thing that we don't talk about as much but it actually has a big impact are the mandates that the states have put in place on the tax professional community. So we had several mandates this past year. They've built up over a couple years. We have at least one or two more that are going to come on next year and that's also helping the growth of e-file. So it's a whole bunch of different things that actually make it come together and grow fast.

Mr. Smith: That's great. I understand that the IRS has a goal of 80 percent of electronic filing for taxpayers by 2007. So what are your additional plans to reach that 80 percent goal now that you've just crossed 50? Are there any incentives that you're providing taxpayers in that regard or the practitioner community?

Mr. DuMars: With regard to the 80 percent goal we've got two years left and we've just crossed 50 percent. And we can tell you it's very difficult. But we're using the model that Tim Allen used in one of his movies never give up, never surrender. We're going to keep trying until the bitter end.

From an incentives point of view there really isn't a lot the IRS can do to incentivize this. It's been discussed in the past to give them an additional credit or to extend the filing date. These things Congress would have to pass a law to do that so we can't do that unless they decide to do that.

But the one thing that is happening, and I go back to what we talked about in the first segment, is getting those refunds faster, getting their acknowledgements on time, getting those acknowledgements, know they have them, and people who owe needing those acknowledgements all come together are driving it.

And the other thing that's really increasing e-file, another piece that we haven't talked about as much, is just the word of mouth. If your neighbor's e-filing it's like oh, well, this is what my neighbor does, this is what a friend of mine does, it becomes just the common thing to do. So that's helping us as well. For us to grow beyond the 10-11 percent that we've been growing in the last couple years is going to be difficult but we're going to do everything we can.

Mr. Smith: Switching gears a little bit, let me ask how are you addressing some of the taxpayers' fears that credit card or bank account information would be used for data collection or for some other purpose by the IRS? I mean, I know that may have a part in some of that goal that you're trying to achieve.

Mr. DuMars: This year's been a tough year and not necessarily that we've had a tough time this year but it's been a tough year in the overall data collection or financial services industry. There have been a lot of disclosure issues this year. Surprisingly enough, most of those disclosure issues were not around someone hacking into someone's database. They were around really more social engineering where someone said they were someone else and then got the information or information was lost in transit from one place to the other.

What we're trying to do is we're focusing on working with the industry to make sure that disclosures don't happen. We actually have a Regulation 7216 that if a disclosure does happen we actually have teeth behind that. But we think working in a partnership is really going to work better. So we actually had what we called a protecting and securing taxpayer electronic data summit last fall. We met with industry partners, we met with the states and other government agencies, and we talked about what things could happen, what issues could occur, and how we'd work together to solve those problems.

The one fear that we have most of all is that a perceived problem happens and the press takes it and there's a headline. And all of a sudden whether it was real or not or whether the impact was large or small we've got fear and mistrust in the taxpaying community. So we're working on what types of communication strategies we need to put together to help maintain that trust because that's the one thing with e-file we can't lose is the trust of the taxpayer.

And this is another thing that we do looking back at our own systems internally. How do we make sure that our systems are safe and secure? We have to be vigilant about it. The person who comes out in the security area and says I win hasn't won anything. The battle is never-ending, the battle never stops. The people who want to break in are constantly evolving and we have to be vigilant about protecting data no matter where it is either within our systems or in transit to our systems. We have to keep looking at that and make sure that we protect it and work with the industries so they protect it too. So those are the things we're working on together.

Mr. Smith: You mentioned a second ago the role of tax practitioners and they clearly play an important role in making sure that returns are filed electronically. How are you partnering with this community to increase this rate of e-filing?

Mr. DuMars: One of the things we do there is we actually run tax fora through the summer and we invite them in and it's a way for them to get continuing education credits but it's also a way for us to talk to them and hear about their issues. So we want to make sure we're listening to them as well and then coming back with solutions to their problems.

We also meet with them on a regular basis. We have our different groups within IRS. Our national public liaison group actually brings them together into different fora and groups to meet and talk with us and give us feedback. And then for the Electronic Tax Administration we have the Electronic Tax Administration Advisory Council, which consists of tax professional associations, it consists of reporting agents or payroll companies as well, and the software industry with us and states. And we all talk together about what types of issues are going on, what types of things do we need to work on together to make this much easier to do.

The biggest thing that we've had to overcome is showing them that it actually is good for their business. Telling someone e-file is not the same as saying hey, if you e-file and make your total office electronic you actually are going to win in this business space. And what we do, we actually give out awards during the tax fora to those who have actually gone to all-electronic and have done it very successfully with high quality and good customer service. And they actually end up being examples to all the other tax professionals.

People have told us once they cross and they get over and they do all e-file they make money and it actually helps their business and they grow their business. So we know there are a lot of positives for them. It's really educating them and helping them get there.

Mr. Smith: Well, we've talking a lot about the e-filing as it relates to individual filers. Switching to the business community, I know in January the IRS requires now that certain large corporations and tax-exempt corporations have to file either their annual income tax or annual information returns beginning in 2006. So what is the IRS doing to address the other community in the business which is the small businesses? What are you doing to target that population to increase their filings since they're not mandatory at this point?

Mr. DuMars: It's actually pretty amazing what comes from the small business space. There's pent-up demand there. So until the last year when we actually brought out our next generation of e-file or what we've been calling our modernized electronic filing they couldn't e-file. There wasn't really a solution there for them. And now it's available and the biggest problem we have now is actually making sure all the software companies make sure it's available. Now that we have it available and about half the software companies that sell into the space have it available we're already exceeding all expectations for e-filing from the small business community.

What we're expecting next year as all of the software companies come across the finish line is that we're going to see it probably triple in growth again and we saw triple what we thought we'd see out of the small business community. But it's still in the thousands and we have a long way to go because the number of small businesses is actually in the millions. So we'll have a long way to go but I think because they were waiting for it whereas in the individual space it's actually been going since the mid- to late eighties electronic filing has been available. So I think this is a good opportunity for us to really grow in that space and educate. And the other interesting thing there is we have to focus on the tax professional community again because in the individual space it's 60 percent of them use a tax professional. In the business space it's 87 percent. So it's a much higher percentage and really we have to, again, win.

The interesting thing about it is that many tax professionals will do an individual return, they'll do a nonprofit, they'll do a small business, and they may even be doing some medium-sized businesses. So a lot of times you'll run into a professional who's doing an across the board and if we get him in one it's a lot easier to convert them in the others.

Mr. Kamensky: Well, that's interesting because earlier you were mentioning that you are really trying to move forward in reaching the 80 percent goal. What are some of the strategies or approaches that you've got in place over the next couple years to try to get there to increase the usage of e-filing?

Mr. DuMars: One of the things that really became clear to us this past year was that we'd probably run through the cycle of what television and radio ads were going to help us to in the space. We have high awareness; that's not the issue any more. The issue is really more around educating them when they're interested in learning about it.

And the other thing we found and as I was saying with irs.gov, as its growth has dramatically gone up, I mean, it's going faster than it did for the past two prior years, is we've got them coming to us. So that's why this year we're looking at redesigning irs.gov and actually focusing in on its opportunity. The opportunity's there to touch them when they want to be touched.

So that's always your best thing when it comes to marketing. If you can touch them when they want to be touched that's a great way to get them to come across. If we're trying just to reach them when they're not ready to be reached or they're not sure that they want to be reached that's a little more difficult. But we're now getting millions of people coming to our website and we're going to take full advantage of that and really help to guide them to why this is the best solution. So that's one thing, really focusing in the online space. And we're going to continue working with the tax professional communities and we're going to continue working actually more with the tax software communities because if you think about it what is the user interface that a taxpayer or tax professional sees? They go to irs.gov to get information but the user interface that they're doing the preparation is their software package, the one they chose, and they chose it for whatever reasons it makes sense to them, it works for them, it's the usability model that they've chosen.

That's what we want to focus in on is working with them because that's where they're going to either be able to touch the professional or the taxpayer directly. So we're keeping our partnerships and our agreements with them going and working hard to whenever they talk get them to say e-file too just like when we talk with them or we talk by ourselves. So those are some of the tactics we're trying to use.

Mr. Kamensky: That's interesting because it sounds like you're beginning to take the things that you developed when you were in the private sector and bringing those strategies into the public sector space for my guess is the first time.

Mr. DuMars: And the one interesting thing is that everyone thinks you're in the private sector, you have all this money to market. In reality you may have less or you may have none. And in the government because we do have budget deficits and we're trying to be more frugal in the way we spend money we don't have as much money to spend on advertising as we've had in the past. So what do you do? You just take what's worked in the private sector when you don't have a lot of money and you use the same thing in the government and it does work. I mean, there are certain rules that we have in the government that we have to make sure we stay within but besides that sometimes this guerilla marketing effort actually works better than even full-blown advertising.

Mr. Kamensky: For encouraging a greater use of e-filing. How is IRS improving the performance of its programs? We'll ask Bert DuMars, Director of the Electronic Tax Administration at the IRS, to explain this to us when our conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Kamensky: Welcome back to The Business of Government Hour. I'm John Kamensky and this morning's conversation is with Bert DuMars, Director of the Electronic Tax Administration at the IRS. Joining us in our conversation is Jeff Smith. So, Bert, what role do you see electronic filing and e-solutions playing in helping taxpayers?

Mr. DuMars: I think the next steps that we're going to start seeing you actually started seeing in our electronic services which just launched last year. And what this allowed was is really electronic transactions to occur directly between the tax professional or the person representing a taxpayer and the IRS and it speeds the process.

So, for instance, we have electronic account resolution, we have transcript delivery systems, we have the way to check Social Security numbers to validate the Social Security number's accurate. And what it does is instead of them having to send us a letter and we send a letter back and forth and there's paper going back and forth which can take days, weeks, months they can do a process that takes minutes, hours, maybe a day to do. And we see that actually expanding. So as we add more services in the future the tax professional and then the taxpayer will get full benefits of that where they can come directly to us get quick access to services.

A very simple example is our service called "Where's My Refund?" We launched that a couple years ago and everyone thought well, maybe a million people would use it and just check on their refund and we ended up getting 20-plus million. And then this past year we even got more. Tens of millions of people use it and want to see where their refund is, want to see when it's going to show up. I mean, there's a lot of interest there.

And so there was this huge pent-up demand that we hardly even knew about. We just knew people were calling in for the information. We put it on the web and all of a sudden they're using it all the time. So there's obviously a place there for more of these electronic services and this is something we're really going to focus on in the future.

Mr. Smith: So the success of the e-filing is certainly helping the IRS meet its goals and measures. Can you describe how electronic filing has helped the federal government in its overall E-Gov program?

Mr. DuMars: Well, I think when you look at E-Gov with regard to the IRS one of the things with electronic filing, the big benefit, is the cost savings. There's a big cost savings between what a paper return costs to process and what an electronic-filed return costs to process and we've actually over the years have closed down service centers where we process paper and consolidated those down to a couple majors. And that's a good thing because if you think about it from a taxpayer's perspective you don't want us wasting dollars on the least efficient processing method. You want us spending our money most efficiently because that's your tax dollars at work. And that's where electronic filing really pays off in a big benefit.

And also again with the paper process your refunds are going to take much longer to get back to you. If you owe you won't get an acknowledgement. So there's a lot of downsides to the paper process versus the electronic process. So there are really benefits on both sides.

Mr. Smith: Switching a little bit to performance metrics, IRS must track a number of performance metrics for e-filing. Which do you track to see if your goals are being met and then what role do third parties or other stakeholders whether it's agencies with the government help in defining what those metrics are?

Mr. DuMars: What I look at are a couple different things and I focus in on a few. One area is I look at the total, how many electronic returns, and so far this year, we've gotten 66.7 million returns. It's a huge number and that's out of about 133 million returns that we expect. So we're already above 50 percent and growing. And we still have two extensions to go through which will probably give us at least another million, million and a half returns, maybe even more.

A couple other metrics we look at are how are the tax professionals doing, how is their growth, and this past year they grew at 10.7 percent. And then also the online, the self-prepared, the people who are coming across and doing it on their own, that grew at 17 percent. So we're seeing a lot of growth in that space. And then, of course, we keep a close eye on Free File because Free File is a program that it's aimed at a variety of different groups including the poor and underprivileged but also other people that need access and are underserved. And it grew dramatically this year, almost 46 percent. So there are some key metrics in there that we keep an eye on.

The other thing that we've been focusing on quite a bit is our modernized e-file and its growth and that's because we had really underestimated what was going to happen there and it far exceeded our expectations. And so we have several thousand returns that we've gotten in through that process and we're expecting a lot more next year as all the software companies come on. So those are several of the different metrics that we look at. I mean, as you guys can see, I've got tons more but we don't have all day.

Mr. Smith: Well, we've talked today a lot about the strategic relationships IRS has with tax practitioners, with software developers, I know electronic returns organizations, agencies, state governments as well as, of course, the taxpayer and I've heard you refer to this as somewhat of an ecosystem. What are the challenges that you face dealing with this ecosystem or partnership with these?

Mr. DuMars: Let me describe what this ecosystem looks like. When I came into the IRS, and this is the one thing coming from the private sector and most people don't realize this, when you come into the Service it's like getting the fire hose effect. There is so much going on, there's so much new information, and having to deal with Treasury, Congress, the commissioner's needs, your own executives, and the public it's just a lot coming at you all at once. What I was trying to figure out is how does this whole thing work?

I mean, we've got all these different players. We've got software developers, we've got other government agencies, we've got states, and so on and so forth and, as my staff would say, I just started drawing pictures because I'm a visual guy so I'm trying to see how it works instead of just trying to read about how it works. So I was drawing pictures about how the pieces all fit together and that's when I started coming to the realization that there are so many different pieces and parts and so many different pieces work together or work in tandem or work in parallel or cross each other's paths that I thought well, this is some sort of an ecosystem where one group lives off another group and so on and so forth.

So payroll is a big key player and tax software is a big key player. On our end we have vendors that actually help build all the applications behind the scenes like IBM helps us with the modernized e-file and we have a whole bunch of other prime contractors that help us. We have vendors that help us with irs.gov and so on. So all these things come together and make it so the process works.

And the ecosystem has been there for a long time. It was there when the paper process was the primary and it'll be there when it's all electronic some day in the future. And so by understanding that, understanding the ecosystem and that life cycle of how the information flows through, we can start pinpointing what are the problems. Is it a policy issue that's preventing e-file from growing? Is it we're missing a form? Is it we're missing something else? Is it we're missing the fact that 1.4 billion information returns all come in paper to the taxpayers mostly and half of them come in paper to us which is a huge problem. We call it the final frontier because it's the next place we need to fix.

So looking at that we're trying to think about what kind of ideas could we put in place that would help grow e-file more? One of those we keep looking at is a clearinghouse concept for information returns and we're trying to figure out what would that be and how would that work so we're looking at other examples that are out there today. There are examples in the health medical records space, there are examples in student data and transcript space, and there are also examples in transportation and licensing space. So we're trying to understand how they work today and a lot of those have been going for many years and see what we could possibly do in our space.

Is something we want to do a clearinghouse, a nonprofit? Is it something we want to build in the IRS? Is it something the industry would want to build? Don't know what the answer is but we're trying to understand this and by understanding it it will set the direction for where we go in the future.

Mr. Smith: We talked earlier this morning about security as it relates to the data and some of the issues that are surrounding that. But as we bring it back to the ecosystem what is the IRS doing to work with this tax industry community around protecting their critical infrastructure, things that are outside of the IRS's direct control, and what measures are you taking to help them with that?

Mr. DuMars: That was one of the key things when we came to the summit and we all came together. And we sat there on day one and we looked at each other and we said IRS, we're doing a lot of work in security and disaster recovery. Then you talk to another big player like H&R Block and they go we're doing a lot of work in disaster recovery, and Intuit would say the same thing. And we had some smaller vendors there and they say yep, I'm doing a lot of work in protecting myself.

And then we all came to the realization but no one's working to protect the whole thing. We're all looking at each other and we're saying we're all going to protect ourselves but there's a lot of pieces in the middle. And then there's also the taxpayer and the small business owner who's at the end of this line of the ecosystem and how are they protecting themselves and do they fully realize what's going on? And there's been lots of statistics and studies done and 40 to 50 percent of small businesses don't keep their anti-virus software up to date. They don't have personal firewalls on their computers. And if a tax professional is a small business, which a lot of them are, they probably fit in that category. They just forget out it. Oh, I forgot to pay my $19 a year or whatever their cost is for their software.

So how do we educate and outreach in that space? And what things do we do in the event something happens? Four hurricanes in Florida… who would have thought? It happened. It was a statistical anomaly but it occurred. And there are data centers that line up under where those hurricanes were. They could have been impacted. There could have been tax returns floating through there. What would we have to have done as a group, as an industry, to protect ourselves? Because the thing we also came to realize, if one of us has a problem, all of us are having a problem. It's not just one of us has a problem and the rest of the industry gets to skate away from it. We don't get to any more. We don't get a free ride.

Mr. Smith: You're very connected, right.

Mr. DuMars: We're all extremely connected and we all need to work together. So we're actually working right now on different plans for how we would do an industry-wide business recovery plan and what types of communication efforts we work on, how would we keep in touch with each other. Take away the fact that there are terrorist attacks or other types of disasters or cyber attacks it may not be anything associated with it. It could be something completely that we don't expect and it's something we'd work have together on to resolve and fix and, as I say, the thing we can't lose is trust.

Mr. Kamensky: That's really fascinating. It's really interesting to hear your description of a tax ecosystem. What are some of the lessons learned on customer service? We'll ask Bert DuMars, Director of Electronic Tax Administration at the IRS, to explain this to us when our conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Kamensky: Welcome back to The Business of Government Hour. I'm John Kamensky and this morning's conversation is with Bert DuMars, Director of the Electronic Tax Administration at the IRS. Joining us in our conversation is Jeff Smith. Well, what are some of the lessons learned from your experience as Director of Electronic Tax Administration and what advice would you share to government leaders and executives who work on customer service issues?

Mr. DuMars: Well, I think some of the lessons learned in this space have been making sure you've got everyone at the table you need to have at the table if you're going to talk about something, if you're going to talk about, for instance, security in the industry, if you're going to talk about a policy change. Some of the things that we're working on, we're working on some major regulations this summer that we're hoping to go public in the fall so they can comment on it.

We've needed to get feedback and the feedback's been coming in actually even before I got in but it's bringing everyone together and making sure that you can get some consensus. Another thing when I came up with this ecosystem concept a lot of it was based on a reporting agent summit we had when I first arrived at the IRS. And we actually had, again, states and payroll and credit unions and banks and financial services firms all in the room.

And the way I came up with this clearinghouse concept wasn't because I was brilliant and had this great idea. It was because we sent them off in four groups and they all came back and said boy, wouldn't it be cool if we had something like this, a data warehouse somewhere that we could use that would be available to the taxpayer, would be available to us to give data to you, and then they could give data to the government and do that in a safe and secure manner protecting privacy and everything else. So it's really working with them and listening to the industry. And the same thing would go with customer service, listening to their issue, listening to the problems they're having. Sometimes, as I told you earlier, they say boy, I'm really good at using your website. Well, okay, that person's really good at using my website. Well, the other person who maybe just started in the tax industry or has been there for a while is having difficulty using my website. So that says hey, sure, we're meeting the needs of a good group of people but we also need to meet the needs of other people and how do we improve our service that way.

So it's really how do we all work together in bringing the right people together at the table to talk about these things. And that's the interesting thing with the Electronic Tax Administration Advisory Council. We get that opportunity. And they don't always agree. In fact it's hard to get consensus but we get to drive in a very similar direction.

Mr. Smith: Well, technology has certainly also played a part in how the IRS is progressing and how you've dealt with customer service. How do you see information technology as we move forward helping the IRS and helping your office, the Electronic Tax Administration?

Mr. DuMars: I think the real key thing with all the technology direction is, number one, providing more services through the Internet to taxpayers, tax professionals, and businesses that are actually doing their own, they're going to manage their own tax preparation process, and then also providing more automation internally to the IRS itself. How do we make sure our employees are more efficient? At both ends of that scale you see where the taxpayer dollars are being used more efficiently both for internal and external processes. And anywhere where we can do process innovation in those two spaces will make our overall operational excellence improve dramatically.

So how do we make sure that even our customer service agents are much faster, they can answer the phones quicker, they can get the information to the taxpayer quicker? And then how can we make it so the taxpayer can just get it themselves? I think we're going to always have to have multiple channels but the more we can put more automation in and more technology in its place to make those channels faster and more efficient the better off the public is going to be in the long run.

Mr. Smith: So aside from managing this challenge you have with serving varied customers because you have a variety of customers you deal with can you describe other challenges that the IRS faces now that you're dealing with a lot of electronic interaction with taxpayers?

Mr. DuMars: I really think because of all the issues that we had this past year in Chief Security Officer magazine they called it March Madness with all the disclosure issues in the different financial services firms that happened. That is going to be our big issue going forward, how do we maintain that trust? The one key thing about e-file which I haven't mentioned yet is that e-file is a voluntary process. There's nothing that says a taxpayer, a tax professional, a small business, has to e-file their return and if we lose that trust we can't afford for them to go back to paper. So that's a real key point. So we have to make sure we keep that trust and we keep those benefits that they're getting out of the program now and keep those going into the future. And one thing that we're hopeful to have in a few years down the road is the ability for the taxpayer or the tax professional to really go in and have more of an account with the IRS where they can look at their information and they know what they've done in the past and what they need to do for the next filing season. So that's really one of the goals we're trying to strive for as well.

Mr. Smith: So looking forward 5 to 10 years from now, where do you see your office, Electronic Tax Administration, in the IRS overall?

Mr. DuMars: Well, it's funny. Electronic Tax Administration has a role of really pushing the IRS, pushing it along, looking for new opportunities to move our processes in the electronic space. A good example is this information return area. There's a good opportunity there to do more in that space. There's a good opportunity to advance in more of our electronic services.

I'm hopeful that someday instead of having 50, 60, 70, even 80 percent of e-file returns hopefully we're banging closer into the mid-90s and maybe even higher. Who knows? We'll see where things are in 5 to 10 years from now. But if we have an all-electronic process from end to end starting with think about you're getting your paycheck and money's being distributed to the state and federal governments, Social Security, and then when you get at the end it's an all- electronic, you get all your information in an account format and you start your preparation process either yourself or with a tax professional and then it's all done electronically. You get your refund or you make your payment electronically. It's this total electronic process and you know it's done, it's all secure, it's all safe, and that's really where we want to be. We want to see that whole process end to end all electronic, all secure, and all safe.

And I think that by doing that and making it easier and safer and securer that it'll actually allow the taxpayer to pay their fair amount and know that they've done that and know that their neighbor's doing that as well so that they won't feel like hey, someone's getting away with something. It'll all just work. It'll be seamless.

Mr. Kamensky: One last question we always ask our interviewees, what advice can you give to a person who's interested in a career in public service given that you've come here for the first time from the private sector?

Mr. DuMars: Well, I'll tell you coming from the private sector the one thing you have to be is patient. The process is a long process. If you want to go into the IRS or any of the agencies you have to go through a lot of background investigation. You have to give them time to go through the interview process and go through the approval process to hire you. So one piece of advice is if you want to go for a federal government position give yourself six months to make it happen because it's going to take at least that long. That's one thing.

And don't get frustrated. The people that are trying to get you in, they're working hard but there are processes in place and they're in place for a good reason, to make sure that they're getting the right employees. The other thing to consider is when you're in there you will never get more exposure than inside the federal government because if you're working on a high profile or a low profile there's a lot of oversight. There's more oversight than there is in the private sector. So you need to understand that going in.

And it's not that people are going to be beating you up or they're looking to take down your program or anything. It's just part of the process of the checks and balances. It's the oversight from one agency to the other. It's the oversight from Congress over the agencies or even within the Treasury over the IRS and OMB over IRS. So those are the things you just have to be aware of when you come in. Not get too frustrated, understand the processes, and understand how to communicate within those boundaries.

Mr. Kamensky: That's really fascinating. Jeff and I want to thank you for fitting us in your busy schedule and joining us this morning.

Mr. DuMars: Oh, well, thank you and thanks for having me. And if anyone wants to get more information about our programs in the IRS please do go to www.irs.gov.

Mr. Kamensky: This has been The Business of Government Hour featuring a conversation with Bert DuMars, Director of the Electronic Tax Administration at the IRS. Be sure to visit us on the web at www.businessofgovernment.org.

There you can learn more about our programs and get a transcript of today's fascinating conversation. Once again, that's www.businessofgovernment.org. For The Business of Government Hour I'm John Kamensky. Thank you for listening.

Nuala O'Conner Kelly interview

Friday, September 23rd, 2005 - 20:00
Phrase: 
"Our operation is to include privacy in all major decisions and to make sure that privacy is considered and is codified. It is built into programs, taught, and brought to our personnel in meaningful ways."
Radio show date: 
Sat, 09/24/2005
Intro text: 
Nuala O'Conner Kelly
Complete transcript: 

Monday, August 29, 2005

Arlington, Virginia

Mr. Morales: Good morning and welcome to The Business of Government Hour. I'm Albert Morales, your host and managing partner of The IBM Center for The Business of Government. We created the center 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 www.businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Nuala O'Connor Kelly, chief privacy officer at the Department of Homeland Security. Good morning, Nuala.

Ms. Kelly: Good morning, Al. Pleasure to be here.

Mr. Morales: And joining us in our conversation, also from IBM, is Paul Hempstead. Good morning, Paul.

Mr. Hempstead: Morning.

Mr. Morales: Nuala, please tell us about the mission of the Department of Homeland Security and the mission of your office within DHS.

Ms. Kelly: I think many people -- although not everyone in the country -- knows right now that the Department of Homeland Security is largely a protective agency. I think -- obviously, we were created in the aftermath of September 11th and the tragedy that occurred around the country, and people think of us as an antiterrorism agency, but that's -- I would consider it a part of the larger mission of the department, which includes everyone from FEMA, as well as the Secret Service and the Coast Guard and the border protection services, and all of the parts of our former immigration services.

So we are a service agency, we are about protecting the homeland, but we are also about making an accessible and protective and safe space for citizens and visitors to this country. And I think that recent events that -- and recent changes Secretary Chertoff has made to the department really reflect that, with the appointment of chief medical officer, for example, to counteract medical threats, bioterrorist threats, and also to look for biohazards across the country, patterns and emerging trends. We're dealing, you know, with everything from local outbreaks of the flu, really, to kind of national and international epidemics that might be a threat to our homeland as well. So it's not just the terror cells that we -- you know, we think about and we hear about on television, but it's man-made and natural disasters, it is medical threats, it's bio threats, it's every kind of imaginable thing that we want to prepare for and be aware of and hopefully both act to prevent but also act to mitigate. So it's a very -- it's a wonderful mission, and I'm incredibly honored to be a part of it. I've been here since, really, almost day one. I was appointed two weeks after the department opened its doors under Secretary Ridge and the team that was in place at that point, and I've just been incredibly honored to be a part of that team and the current team as well.

The mission of the Privacy Office within the department is a unique one. Again, I'm honored to have been chosen to be the first statutorily required and appointed chief privacy officer for any federal agency. And that's not to say there aren't incredibly talented and excellent privacy and Freedom of Information Act specialists and personnel and leaders across the federal service because they already are. This is just a unique amalgamation of those responsibilities and those requirements in one office, and I can just tell you a few minutes about the office and what it does. First, our statute has five main components, and they include everything from overseeing all Privacy Act -- privacy impact assessment requirements, the Freedom of Information Act compliance across the entire department, legislative and regulatory proposals that might impact personal privacy, and interestingly enough, a reporting relationship, which is fairly clear, that we must report on complaints and concerns to Congress and to the public, which gives us a little bit of an outside kind of ombudsman feel to the office. But it is really largely -- and obviously it is intended to be a helpmate of the department. I hear people define us as what we are not. We're not the general counsel. We're not the inspector general. We're not a number of things. And all those things are true -- we don't pretend to be any of those things.

We are operational, and our operation is to include privacy in all major decisions and to make sure that privacy is considered and is codified, is built into programs, and is educated, is brought to our personnel in meaningful ways. We have done everything from videotaped learning modules to on-site classes for all of our new employees at headquarters. You know, any way we can reach our employees, we'll do it. And privacy, of course, means a lot of things to a lot of people. It means not just personal data -- what information the government knows about you and when and why, but also what kind of pat-downs are you getting at the airport and who's looking through your baggage and all the different ways that the department comes into contact with people. So we try to instill a sense of respect, a sense of dignity for the individual. So our role is a little bit of everything; it's policy, it's technology, it's legal, but every person -- including me -- that works in our office wants to be at the Department of Homeland Security to help our overall mission, which is to keep our country safe.

Mr. Hempstead: Nuala, that is certainly a broad set of issues. Could you provide some context for our listeners and describe the size and budget of your office?

Ms. Kelly: Our headquarters office right now numbers probably around 30 professionals, and we have a headquarters budget that's somewhere in the neighborhood of 5 or $6 million. We also oversee and have kind of a dotted-line reporting relationship -- or policy oversight over an additional 400-some personnel who practice Privacy Act, privacy impact assessment, and the Freedom of Information Act work across the department with a combined budget there of -- I want to say over 35 million. So those sound like big numbers, of course; when you think about the context of homeland security, that's actually a fairly small office. But I think we have a big impact considering our size. Not only, obviously, do I report directly to the secretary, but we're involved in management and decision-making and policy and program decision-making at all levels, at the very lowest level right on the front lines of what Homeland does, at the border and at airports and the like, and at the highest levels as well, about where we're going to put our resources and what directions we're taking major programs.

Mr. Hempstead: We understand your appointment was announced in April of 2003. You've been over there for over two years. You say you have a staff of 30. Do you do any investigative kind of work? And as being Congressionally mandated, do you also report to Congress from time and again?

Ms. Kelly: Thanks for that question. I know people at the department shudder when the word "investigation" is used in association with my office. I would say we review programs. We've certainly said publicly we had some concerns about a number of programs and have worked successfully with those programs to talk about what the right of privacy frameworks are and what the best practices are for personal information. So yes, we do review when the public raises concerns or when Congress raises concerns, or when, you know, concerns are raised even within the department. We'll go to various programs, and we'll say, listen, we're going to sit with you side-by-side. And it probably feels from the receiving end a little bit like an inspector general audit, although we like to be a little friendlier and a little more in-house. And we do report the results publicly; we've issued a number of public reports on the status of, say, for example, the use of personal information in the airline context, which is of great concern publicly, but also has a great validity in our homeland security work.

We are -- I think in the Fall, you'll see reports on the Matrix program, which, again, was incredibly worthwhile program about law enforcement sharing of information across state lines. Again, I think most people think that happens already, so -- but there were concerns about who was going to have access to the information, for what purposes, where it was going to be housed, and most importantly, the security of information. Something you've seen over and over again in the private sector in the last year, people are, I think, going to be increasingly concerned about their government having and being able to secure their personal information as well. We've got to demonstrate that we respect personal information; if we're going to require it for use for -- even the most valid purposes in the government space -- which I think are for homeland security -- let's just show that we can do this right, we can do this thoughtfully.

We do report to Congress at least annually and we've actually been asked to report more frequently than that through specific legislative direction and through coming in for hearings and testimony and the like. So again, this was a Congressionally mandated and created office, and a number of our godfathers and godmothers are still in Congress; a number actually have left and are still looking over us with great pride from the private sector as well. But we do go up to meet with both members and staff frequently, and we've been very grateful for their support. You know, I probably sound like an incredibly na�ve Washingtonian, but I really do believe that the support is very bipartisan. There isn't anyone I can think of walking down the street who'd say I don't really like privacy. You know, I think that's something everyone can get behind, and it's just a question of doing it right and thoughtfully and again, not impeding the mission of the Department of Homeland Security, but really strengthening it.

Mr. Hempstead: You described your role as being partly within, partly without or outside the department. Given this duality of roles, how do you ensure collaboration with your colleagues across DHS?

Ms. Kelly: I think by showing, first of all, a fundamental respect for what the mission is. You know, I was just -- I was doing some research online for a personal trip this weekend, and I came across some of the coverage of some of the folks on airplanes on 9/11 -- and I have a little girl named Nora, and one of the women who died had a one-year-old daughter named Nora. And these stories, again -- I mean, even four years later, still resonated with me, and I actually had family members and friends -- I'm from New York, I had just moved down a couple weeks before 9/11 -- who were in the World Trade Center, some of whom were injured and lost their lives. And so, you know, we all at this department support this mission and remember why it is we came and what it is we're about doing. I'm sure there are people at the department who sometimes think we're making their lives harder -- and that's probably true, we are probably making a few more steps to their getting their program out the door -- but again, it's with the thought that we are doing the tough scrub inside the department to make sure we have made the right choices about the use of personal information and about the impact on the individual because, you know, what we're about, again, is not only preserving our safety and our security, but preserving our way of life with a minimal intrusion by our government. And so when I say I'm partly within-without, I mean within, we are a helpmate, we are an educator, we are, again, assisting the operations; outside the department, we're a listener, we're there to hear the concerns of the public, we're there to bring them in and again, to operationalize them, to make them real, to make them hearable to departmental leadership. I think so many times the discourse in this country becomes so intolerant of the other side, and I really see our role as a translator, someone to say, you know, we have respect, we are privacy professionals. Every person I've hired, they are profoundly someone who cares about personal privacy and is educated in fair information and principles, not only domestically, but internationally as well.

So we come from that framework, but we're also Americans, and we also care about this country, and we also care about this department. So I think we sit on the fence, we sit on the line between, you know, those who would criticize the department and those who would defend it at all -- you know, with no ability to hear criticism. So I hope we've done that, and I think we've done it to greater and lesser, you know, success depending on the day.

Mr. Morales: How is DHS building Privacy Office? We will ask DHS Chief Privacy Officer Nuala O'Connor Kelly 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 Nuala O'Connor Kelly, chief privacy officer at the Department of Homeland Security. Also joining us in our conversation is Paul Hempstead.

Nuala, we understand that you file an annual report directly to Congress. Can you tell us more about this reporting relationship?

Ms. Kelly: It's an unusually drafted provision, our statutory authority, in that most reports issued by the department, obviously, are issued by the secretary. So it's a little quirk of drafting, but I think it was intended to be, frankly, actually, much more than that, and I've talked to some of the staffers, and they intended for this office to have, as I was saying a little earlier, kind of an ombudsman-like quality and ability to report in a kind of an unconstrained manner about concerns and about their -- the response of the department to public concern and outcry about privacy invasion or privacy complaints. We've reported a number of times, not just in our annual report, but in specific instances, we've been asked to investigate or analyze, really, the use of the no-fly list in the airline context. We've been asked to review the use of commercial data by the department to make sure that it's meeting public expectations. And we see these, really, as constructive ways to tell the public what the department's doing, but also to tell folks at the department here's the right way to be doing these things, and you know, here's the way to succeed with our programs, but also keeping privacy in mind at all times. And so we've been lucky to have just a really good relationship with the members of Congress who oversee our office and who've expressed concerns about these issues at the department. And again, they fall on both sides of the aisle. I think privacy is a universal issue, really, more than a Republican or Democrat one.

Mr. Morales: Nuala, many of the organizations within DHS have very long histories and well-formed cultures. How is your office contributing to the culture at DHS?

Ms. Kelly: I am fascinated -- absolutely fascinated -- by organization culture because I came from a high-tech company that was five years old, and it was run by -- I think at the time, a 37-year-old billionaire, and at 32, I was probably the second-oldest person in the company, so you know, it was really a fun, fun job, and a great place to work and a great entrepreneurial environment. That's a very different culture from any government organization, almost. There are parts of the Department of Homeland Security that date back to several centuries ago. It is hard to make change in cultures that are that old and that well-established. And we have other parts of the department that are brand new, that were created in the department's enabling statutes, so we've got two-year-old departments and 200-year-old departments within the Department of Homeland Security.

I think the challenge for all of us is to create a unified culture, and I'm so incredibly impressed by some of the language that Deputy Secretary Michael Jackson has used about creating one DHS where employees understand that their career trajectory is tied to the department, that they can succeed, you know, as a Coast Guard agent who does a -- or a member who goes to do a detail in the Secret Service or in the Customs and Border section, or in enforcement agencies, that there is respect for professionalism and growth and opportunity across the department that isn't tied to any one subset of the department. I have a lot of respect for the organizations like the Customs Service, for example, that date back, I think to the Constitution. I think people have mentioned that a number of times. But they have developed a career personnel track that is among the most professional, I would say, in the federal service. It attracts a terrifically high caliber of employee and promotes employees for their best work. I think we want to look across the department and build on what's already working and build those structures out and then also take this opportunity as a brand new two-year-old agency to be a little entrepreneurial, to be a little more open to new ways of doing things.

You know, I think people have been talking about -- for decades now -- bringing a private-sector kind of ethos into the government space. There are terrifically talented people; I think I've been more than impressed by the folks I've been able to hire and that I work with at DHS and across the service. Let's train and manage and promote them in a way and with the speed and with the benefits that you can see in the private sector. There are certainly benefits to being a government employee, but there are downsides in some of the inflexibilities as well, so let's kind of clean those weeds out of the way of the good folks who are trying to get work done.

Mr. Morales: Nuala, you touched a little bit upon collaboration. What are some of the other critical success factors or challenges in working across an organization the size of DHS?

Ms. Kelly: I think translating, making sure that our mission is explained within the department in a way that people understand that it's part of supporting the overall DHS mission. You know, we're not just there to put a rubber stamp on a program, to say, yeah, it's great, it's super, it's a terrific idea. We are going to ask the hard questions, but in asking the hard question, it's to get to the endgame, which is to get a worthwhile valid idea out the door and in a manageable timeframe and in a manageable way that respects the individual, respects the citizen. Often, folks are so focused -- and sometimes, I'm sure that the same criticism could be levied of my office -- we're so focused on our own mission, we can't necessarily conceive of how important others' missions are as well. And so just making sure we all understand it's really -- it really is one team, one fight, as Husband said, that we all have our part to play in the larger drama of DHS, but that it's about getting to the finish line.

Mr. Hempstead: Nuala, DHS interfaces with several different federal agencies. Many of them do not have chief privacy officers. How do you ensure that privacy issues are handled according to DHS standards and other applicable laws to people like the intelligence community and other civil agencies?

Ms. Kelly: Well, thanks for making me sound so important that I get to tell everybody else what to do, but that's not exactly the case. But in fact, there are more and more chief privacy officers that are statutorily required. We've had statutory mandates for a number of other federal agencies that have exactly followed our statutory language and in fact, enhanced it and expanded on it. We've got a great new person over at the National Intelligence Director, a privacy and civil liberties officer. We've got statutory language that encourages or, in fact, requires every federal agency to name a senior government official who is the overseeing person for privacy policy for each federal agency. I think you're seeing federal agencies come to that view that you need a senior person with a lens on privacy, and you know, I'm joking when I say that it was because of our office. It's really largely mirroring or imitating the private sector, which has had great success. Really, one of the leading chief privacy officers in the country is Harriet Pearson at IBM, who I think actually has a much bigger title, but she was one of the early leaders of the viewpoint that you can have a successful privacy practice within an organization.

I don't know if you guys want to get into international, but our way of looking at privacy is a little different in structure, but not necessarily in principle, to the rest of the world in that we have embedded privacy officers within our federal agencies and within our companies. You know, other parts of the world have free-standing offices that are separate and apart from their federal agencies -- you know, there are different ways to do it, but I think the proof is in the pudding -- you know, what's the outcome, do we see good and thoughtful programs and policies and new business products coming out of these institutions, and I think the answer is yes. I think you've seen great success with privacy officers in the private sector, and I think that the federal government is really following that lead and realizing, also, that the use of personal information has become one of the most compelling concerns about any organization that has information and that needs information to do its job, whether it's a bank, a hospital, or a federal agency.

Mr. Hempstead: Well, you mentioned international partner agencies. What about other partnerships? What are critical to the privacy office where you are? Perhaps private sector, advocacy groups, individual citizens?

Ms. Kelly: Absolutely. And let me run down the list with -- starting with our own agency first, actually. We work every single day with our Office of General Counsel and our various other leadership offices, our policy office, our international shop, you know, the program officers across the department. So partnering with the leadership, but also partnering at kind of a mid and lower and all throughout the levels of our agencies are the right way to do the job and to make sure the job's getting done across the federal service, obviously, with privacy offices, but also with our partner agencies, Justice and Defense and the intelligence community as kind of one, you know, operational force. And I think the idea, really, after 9/11 is to break down the walls, make sure that the information is going where it's supposed to be going and not where it's not supposed to be going. Our mission is to make sure that information is used legitimately and thoughtfully and in a limited fashion, but not that no information is used because information really is one of the lifebloods of our War on Terror.

I think we're forgetting our state and local partners here in this conversation, that they are our crucial -- and you see that again in any number of front-line activities, any kind of natural or man-made disaster is going to require our state and local, our first responders, and they are, you know, the people who are on the front lines of this, and we need to make sure that they have timely information in a manner that can save lives. So, you know, good and thoughtful and fast and effective information-flow is going to be essential to making sure people are moved to the right parts of the country or deployed in a way that's going to be helpful. So we are very much in favor of technologies that can both assist, but also constrain the flow of information. With good thoughtful rules at the outset, we can do that.

Mr. Morales: Nuala, you mentioned earlier that education is core to the mission of your office. Can you describe the steps that the Privacy Office is taking to educate others on the privacy concerns?

Ms. Kelly: Within the department, we have education programs, really, almost in every part of the federal service already. There are requirements under the Privacy Act and FSMA and a number of other laws to make sure our employees have been trained in Privacy Act requirements and, really, privacy policy. We've undertaken a particularly robust training program at headquarters, where we sit, to make sure that every new employee has gotten a class from a member of the Privacy Office. We're really looking at what's being done already. Again, Customs has a terrific online privacy training program, INS has some terrific technologies about limiting information flow and access to certain kinds of information, and what we're trying to do from our standpoint is really be the champion of the programs that are working well and to say, hey, here's a really good idea, you guys might want to copy that. Or if a division comes to us and says, you know, we really want to implement this, we say we don't necessarily need to reinvent the wheel, although you're welcome to go out an look at what's being offered in the private sector and get people to compete for, you know, terrific resources, but let's build on what's already there, let's not be reinventing the wheel.

So within the department, we're both the champion, but also the actual teacher. And then outside the department, again -- you know, I didn't talk enough about our relationship not only domestically and internationally, but also with the advocacy community and the public. I mean, we really see ourselves as bringing in and making real the concerns of individuals and of organized advocacy groups and being ourselves educated and then turning around and educating others in the department about these concerns and why they're valid, and in a way that can be heard.

Mr. Morales: How are privacy concerns impacting investigative technology? We will ask DHS Chief Privacy Officer Nuala O'Connor Kelly to explain this to 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 Nuala O'Connor Kelly, chief privacy officer at the Department of Homeland Security. Also joining us in our conversation is Paul Hempstead.

Nuala, you've described yourself -- and please take this term lightly - as a geek at heart. What is the promise of technology in the privacy arena?

Ms. Kelly: Oh, no worries. I'm the one that said it, and I remember distinctly having said it. I came from a high-tech company, so I am a geek to a certain extent, and I do believe that there is tremendous potential in a number of the technologies the Department is considering using and is already using, both to strengthen identification and identity management, but also to put limits on the use of personal information by this department and other parts of the federal service. The promise of technology, I think, is greater accuracy. For example, many of the watch lists really seem to run off name and date of birth, and our airline tickets obviously are named, and so everyone who's got that name is going to match that individual. So, you know, that's just one kind of data management tool that people are considering is, what's the limited amount of information that's necessary to prevent those kind of mismatches and misidentifications?

But in a more robust way, the use of technology like biometrics and RFID and other kinds of identity management tools, I know they strike fear in the hearts of many who say, oh, I don't want my picture taken, I don't want my fingerprint taken -- and I understand the cultural concerns not only in this country, but in many other parts of the world. We do want to be sensitive and thoughtful about not only the concerns of our own citizens, but really the impact we're having internationally as well in programs like, for example, US-VISIT that is engaging in and meeting visitors to this country at the border. But we also do want a greater strengthening at our border of who's coming in and out, and I think the VISIT program, for example, is a tremendous success story in not only the use of technology, but in building in privacy principles and privacy practices into its foundation.

So I think the answer, really, is there are ways to do the things we need to do to make our country safer, but in a way that is thoughtful and respectful of individual privacy, and that technology can be one of the tools. I think the promise of technology, particularly biometrics, is greater accuracy and therefore cutting down on mismatches and misidentifications at the airport, at the border, wherever, but also through that, allowing our employees to focus on the issues that are really of concern, the people who really might be a correct match with a watch list or some other law enforcement activity, and really focus those resources. And again, I go back to VISIT just because it's a great real-life case study, but they've been able to arrest felons and folks who are wanted domestically and internationally on very, very serious violent crimes, as well as visa and border infractions. And so, you know, I think this is a powerful example of technology done right and our ability to protect ourselves and to create a strong border.

Mr. Morales: We understand that your office drafted a policy notice that covers access and redress opportunities for all persons, regardless of their country of origin. Can you tell us more about this notice and how your office is implementing this policy?

Ms. Kelly: As a principle, we in our office have very much tried to model our thinking on really universal fair information principles. And when you look at privacy law elsewhere in the world, you'll see that those privacy laws cover you when you're visiting that country or having any interaction with the Italian government or the French government or the like. And so to the extent that we have many international agreements that are reciprocal, we have tried very hard where we can to encourage the department to allow for and create access and redress programs that allow any individual, regardless of their citizenship or country of origin to access their information and correct it.

Now, let me be perfectly candid that I'm not inventing something new here. Our CIS -- our Citizen Immigration Service -- has had a fairly similar policy for some time, and that is really because the Freedom of Information Act allows for a person of any country of origin to see their own data through a FOIA request and access it and see what is known about them. This is really a practical principle because so many of our files of citizens and non-citizens become commingled in the process of folks becoming citizens that it just makes sense, it's more practical, it's more doable to cover the systems as they're known by -- systems of records notice under the Privacy Act or through FOIA protections. And we've just tried to encourage the department to think about those protections as really linked.

In a recent negotiation we had with the European Union on release of passenger name records, again, we relied heavily on the strength of our Freedom of Information Act, which I will argue is really second to none internationally. I think folks don't realize that we're constantly getting calls in our office from privacy and information commissioners from other countries saying, how do you do it and what do you do and, you know, what are the principles that you engage on. And I think you're seeing a growing trend of accountability and concern, and it's a way that citizens can -- in our country can petition our own government for correction and in the most minute sense, a correction of their own record. So it is a policy that combines the strength of Privacy Act and FOIA and really just says there's not practical difference between what we're doing for our own citizens and what we're doing for citizens of other worlds -- other countries. It's something we haven't gotten credit for enough internationally, and we should.

Mr. Hempstead: Let's see: you mentioned before your interaction with -- and, in fact, your impact upon -- the US-VISIT program. I did want to ask you about another program because we understand that your office recently completed a privacy assessment review of TSA's registered traveler pilot program. Could you tell us about the review process and some of the privacy issues that you evaluated?

Ms. Kelly: Certainly. And, of course, the review process for RT -- or registered travelers -- no different than the same PIA -- Privacy Impact Assessment -- process that every major program -- really, every program that has personal information in the department goes through very routinely now, and I give, you know, all the credit in the world to our staff that works on PIAs in our office, led by Becky Richards, our chief compliance officer in the Privacy Office, who came from a terrific organization called TRUSTe, the online seal program that really did compliance and auditing and training of online companies, and I'm just tremendously delighted that we're able to bring that kind of lens of operational efficiency and really just routine analysis of privacy and fair information principles to the DHS framework. Any program -- RT and any other program that's a new idea, a new pilot, has to do a PIA by law, and the idea behind a PIA is simply -- like an environmental impact assessment or any other paperwork reduction notice -- to consider what the impact is of this new program on the individual and on that individual's personal information. The PIAs -- we've really drilled down on the program folks that they are responsible for drafting the initial PIA and that's because they understand better than anyone else what the program does, and it makes sense for the program folks who take ownership of privacy as a principle and a practice for their own program. It's not something that we from headquarters, down from above, say you must do it this way; it's got to be something that's really learned and lived by the program personnel.

Now, that's not to say that the first year, we weren't sitting there side-by-side helping them write every single word because we sure were, but it's the old adage, teach a man to fish -- you know, I think this year we've had a smoother program, and next year, again, you're going to see more completed and more fully fleshed-out PIAs coming into our office at a later time in the evolution because the folks writing them will have done them before and be more comfortable doing them. So it's really a bottom-up division of labor, really, where the folks running the program, this is part of their tool kit, it's part of their to-do list, really, they're -- the PIAs are scrubbed by the CIOs for the various divisions because, obviously, it's a technology-heavy requirement. The E-gov Act requirement is particular to the new uses of technology or new technologies that impact personal information. The DHS-wide PIA requirement's a little bit broader for new programs, generally, and new use of personal information.

You know, in a perfect world, they come to our office a little further baked, you know, and closer to being done, and are reviewed by our office. And what we're looking for, really, is have you considered what the impact is on the individual. When you're asking for, you know, name and date of birth, do you really need it? Is that all you need? Do you need more, are you going to come back to us six months from now and ask for more? You know, if you're asking for 16 different things, is that all really, really necessary, or could you do with less? And sometimes the answer is, we really need all 16 things, and that's okay if you can really show a demonstrable law-enforcement or counterterrorism reason. Or, you know, have you considered other technologies that might work better.

A perfect case -- and we get a lot of press about the use of various technologies for screening at the airports or for screening for drugs or contraband or weapons, and what we're asking in those cases -- and again, I have not personally looked at that technology in a little while -- but the analysis I went through with both CBP -- Customs and Border -- and TSA when they first started looking at them was, what is the functionality you need, what do you need to look for, metal or plastics or explosives or -- you know, what are you looking for, and then what's the least invasive version of that that you can look for. And you know, by simply asking those questions, I think we've seen a great evolution both because of the great ingenuity in the private sector responding to those concerns, but also because of our folks saying, you know, guys, we really need to go back to the drawing board and look at something that's not going to show people's personal parts when they're walking through some screening, you know, program at the airport, but really just finds the bad stuff. And we've -- you know, we've seen great movement in the technology sector to say, okay, there are ways to look at this technology that will find the metal or the explosives or the this or the that but not be so kind of personally revealing about someone's physique. You know, just by asking the questions, I think we've started a very good conversation, a very good dialogue that's been very much responded to by the private sector as well as our employees.

Mr. Hempstead: Many of these programs use biometrics. Perhaps you take a minute to explain what biometric technology is, how it's playing a role at DHS, and what are the privacy concerns, and how DHS is approaching those concerns.

Ms. Kelly: Biometrics is a big word that people use to mean a lot of things, but kind of in a nutshell, it's any unique identifier that is kind of attached to your person. Whether it would be a picture or a fingerprint or a retinal scan or iris scan or even -- some people have seen the hand geometry access controls to various buildings which will measure the shape or the size of your hands or your relationship of your various body parts. There are facial geometry as well that shows the relationship of your various kind of -- you know your cheekbone to your chin, that sort of thing. So there are lots of different biometrics. And I know, again, they really -- to use a technical term -- they creep people out, and so we need to really dial down the dialogue, is what I keep saying. Let's talk practically what are we talking about, what are people's fears, and how do we resolve them. And -- case in point -- and we're not the lead agency on this, obviously, the State Department is -- but the use of biometrics in passports really has increased not only in this country, but elsewhere as well, and I'd like to say, you know, guys, listen, we have two biometrics already on your passport. You've got a photograph, and you got your signature. So we've had biometrics in this country for a long, long time.

Now, this is not to be na�ve or, you know, or disingenuous about the fact that the ability to store, to transmit, to translate, and to amalgamate biometrics has certainly changed profoundly. You know, your signature and your photograph were not heretofore storable in some, you, know, distant computer somewhere that you didn't know about. And so we need to be concerned and vigilant about those changes, but the reality is biometrics have historically always been used to identify you. I mean, signatures have been around for I don't know how many centuries now, but you know, before that, it was mark your X here. So this is not unusual and nor should it be considered a terrible, terrible development; if anything, it can be a very, very positive development, as I was saying before, and a way to correctly identify that you're you, that somebody else hasn't stolen your identity, that someone else hasn't appropriated your passport, and that you are the legitimate holder of these travel documents, and you have the right to move about this country or some other country. You know, I think this is a great strengthening of our -- not only our ability to have our own border, but to allow people across it for legitimate means, which is every country's right, really, but also to facilitate travel, to make things faster and easier and better at the airport, and I think we're all in favor of shorter lines. But part of what my office is concerned about is not only saying when things are going wrong, but also when things are going right. Let's talk about the good technologies and the good uses of them. Let's not jump on every bandwagon for every brilliant new idea, but you know, let's evaluate and be thoughtful about them. But we can be a champion, I think, for good and responsible use of technologies in the private sector and the government space as well.

We do need to be vigilant, as I was saying, about the amalgamation and the creation of the -- you know, what people call the big brother databases and these kinds of things. By creating good rules -- and you know, the Privacy Act, I think, is one of the most overlooked statutes in the federal government. It requires every federal agency to say upfront what it's going to do with information, where it's going to store it, and how it's going to secure it, and all sorts of things that I think the federal -- the government should be explaining to its citizens. And by having those conversations again early on, by simply enforcing the law as it's written, we are able to really have the dialogue at the front end about, okay, we've got now a fairly good-sized database, US-VISIT, with finger scans and biometric -- digital photographs. How are we planning on using these, what are the legitimate public policy purposes for which we are using them, and thinking very seriously about -- you know, there are concerns and issues always about once you've got the data, you're going to turn around and use it for something else, and I think we -- our office needs to be vigilant, as does the public, about those concerns. But it is not, again, the technology itself that is the concern, it is the public policy and the forces driving change that we need to, you know, have the dialogue with. No technology by itself is good or bad, but many of them can be very, very helpful to strengthening our identity management and our ability to know who's crossing our borders and who's coming in and out of the country.

Mr. Morales: What does the future hold for the DHS Privacy Office? We will ask Chief Privacy Officer Nuala O'Connor Kelly to explain this to 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 Nuala O'Connor Kelly, chief privacy officer of the Department of Homeland Security. Also joining us in our conversation is Paul Hempstead.

Nuala, what are some of the biggest challenges for privacy that you will face in the near future, and how do you plan on overcoming these challenges?

Ms. Kelly: I think that the increased need and the increased speed of information flow. The increased need, again, very legitimate for our information-sharing efforts with not only the private sector, but within the intelligence community and with our state and local partners. With that, I think, comes an increasing need for rules and frameworks to constrain that data and to make sure it's only used for legitimate purposes. And again, I think there are good rules we can build on already; for example, some of our agencies have auditing mechanisms where they can see what employees have accessed what data and who's gotten into what database -- incredibly important and strong. But we've got to create, I think, a level playing field where everybody kind of knows what the rules are, that -- and there are agencies have done this already -- IRS has a great culture, they've had a privacy advocate for a long time. Folks know that, you know, your IRS files are sacred, and they shouldn't be looked at by anyone but the agents working on those cases. We've got to make sure we've got that same kind of environment and culture at DHS.

Mr. Hempstead: Nuala, we are focusing on the future here, so we can't let you get away without talking some about Secretary Chertoff's reorganization, what the impacts are, the Chief Privacy Office, and any good or bad points that you want to say about him.

Ms. Kelly: Everyone at the department -- at least, you know, the folks that I've worked with closely and have talked to about this -- are really delighted and all the major developments are very positive, including the new personnel that have come into the department. We are delighted with the support that we've gotten from Secretary Chertoff and Deputy Secretary Jackson. We also have a great working relationship with Stewart Baker, who's the new assistant secretary for Policy Designate, who I think we will be working incredibly closely with in the coming years and have in the past already. So from my office's standpoint, we're delighted by the support, we're delighted by, you know, all the public and private statements we've gotten from our leadership on the privacy office, but also speaking, you know, on a more global basis, all of the changes that were made, I think, largely were incredibly welcomed, not only by folks in the department, but members of Congress who were supportive -- you know, I thought, gosh, if there's anyone who's going to be offended, it might be members of Congress because they created the department and the structure that it was. But it was incredibly appropriate after two years to take a look, take a step back, and say, what's working, what can we do better. You know, nothing had been too set in stone, so two years into it was a good time to take on that review and say what might work a little better, what might streamline some, you know, reporting relationships and make this department achieve its mission even more fully. I am thrilled with the time I've spent at the department, and, you know, I don't know what the future holds, I don't know if more change is in the works, but we've been very grateful so far for the support we've gotten.

Mr. Hempstead: And what are some of the lessons learned from your first two years as chief privacy officer? What would you share with a new counterpart in another agency?

Ms. Kelly: Hire the best people -- of course, you can't have any of mine -- but go out and find some really stellar people because they will A, make you look really good, but also the work is hard, but it's incredibly enriching, incredibly rewarding. And I wake up in the morning, and I'm astounded by the quality of people and the caliber of people I've been able to attract to this office, and it has nothing to do with me and everything to do with the work and the mission of the overall department. We have begged, borrowed, and stolen the best people from the federal service -- I mean, just name a -- I shouldn't name a few names because I will not be able to name all 30 of them, but my chief of staff, the number two person in our office, Maureen Cooney, who came from the Federal Trade Commission, who was really one of the number one international privacy specialists in the federal service. And Toby Levine, who followed her, our senior policy advisor from FTC. As I mentioned, Becky came from TRUSTe. Peter Sand from a state agency in technology and privacy -- this list could go on and on.

That was just a few examples of folks from other federal agencies, folks from the private sector, and folks from state and local agencies, and folks from within the department who we've lifted up and brought to headquarters as well. So we've looked to where the talent is and brought together a team that I think really works, and then everybody's got their slice of the pie, and they are in charge of it, and that has worked really tremendously well. It's not all lawyers, it's not all technologists, it's not all government people, it's people who bring a variety of different viewpoints, but who are willing to, you know, to do the hard work and to also sell internally. I think -- and the number one -- the number two issue is really don't underestimate how many times you're going to have to explain what a privacy officer is and does because I still seem to be doing it even today, two years later, and that's just because it's something new, and we need to -- you know, the onus is on us to demonstrate that we have some added value for the department. And I think we have demonstrated that.

Mr. Morales: Nuala, you've had just a fantastic career, and I'd love to hear a little bit more about it and also what advice could you give a person who's interested in a career in public service?

Ms. Kelly: I was lucky to get into public service, as I mentioned, right around 9/11, and that really has shaped my career as a New Yorker, and, you know, as someone who really believes in creating a safe space. But I can't underestimate the opportunity that I think public service, particularly DHS, holds. You know, it really gets you up in the morning to know that you're helping and that you're helping make the country safer and that you're helping make the department better in its treatment of privacy and the protection of the individual. So, you know, that can take you a long way in your energy level.

I think it's hard to break into the government. I think -- you know, I see people trying to apply from the outside, and it's an onerous process, but it's well worth getting into. You know, I've kind of accidentally found my niche, but finding something you love to do and -- whether it's public or private sector -- has been lucky for me and hopefully will work for others as well.

Mr. Morales: Well, Nuala, your energy and enthusiasm certainly shows.

We've reached the end of our time, and that will have to be our last question. First, I want to thank you for fitting us into your busy schedule today. Second, Paul and I would like to thank you for your dedicated service to the public and our country, starting with your work at the Department of Commerce and now at the Department of Homeland Security.

Ms. Kelly: Well, thank you both so very much for your time. I'm delighted to be here. And if people have other questions for me or want to learn more about the office, we do have our own little slice of the DHS website; it's www.dhs.gov/privacy.

Mr. Morales: This has been The Business of Government Hour featuring a conversation with Nuala O'Connor Kelly, chief privacy officer of the Department of Homeland Security. Be sure and visit us on the web at www.businessofgovernment.org. There you can learn more about our programs and get a transcript of today's fascinating conversation. Once again, that's www.businessofgovernment.org.

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.

Dr. Linda M. Combs interview

Thursday, August 25th, 2005 - 20:00
Phrase: 
"In the financial management line of business, one of the things I've learned is whether you're using procurement vehicles, systems implementation, or schedules, make it clear, make it consistent, keep it simple."
Radio show date: 
Fri, 08/26/2005
Intro text: 
Dr. Linda M. Combs
 
Complete transcript: 

Friday, August 26, 2005

Arlington, Virginia

Mr. Morales: Good morning and welcome to The Business of Government Hour. I'm Albert Morales, your host and managing partner of The IBM Center for the Business of Government. We created the center 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 www.businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Linda Combs, controller of the Office of Federal Finance Management at the U.S. Office of Management and Budget. Good morning, Linda.

Ms. Combs: Good morning.

Mr. Morales: And joining us in our conversation, also from IBM, is Debra Cammer. Good morning, Debra.

Ms. Cammer: Good morning, Al.

Mr. Morales: Linda, please begin by telling us about the history and mission of the Office of Management and Budget.

Ms. Combs: The Budget and Accounting Act of 1921 actually created the Bureau of the Budget in the Department of the Treasury. The Bureau of the Budget later moved to the Executive Office of the President in 1939. And the Bureau of the Budget was actually reorganized into OMB in 1970. It serves, actually, a couple of primary roles, Al: the budget itself and management. The budget responsibility of OMB is to assist the president in overseeing the preparation of the federal budget and actually to supervise its administration in the executive branch agencies. And the "M," or the management part, of OMB, is responsible for helping to improve administrative management, such as coordinating many of the administration's procurement, financial management, information systems, and various regulatory policies.

Mr. Morales: Linda, would you tell us about your office within OMB, specifically the Office of Federal Finance Management?

Ms. Combs: The Office of Federal Financial Management, as we call it, OFFM, was created by the Chief Financial Officers Act of 1990. We are responsible for implementing the financial management improvement priorities of the President, carrying out financial management functions of the CFO Act, and overseeing federal financial management policies such as taxpayer dollars not being wasted, making sure that the government books are in order, and making sure that our government decision-makers have access to accurate financial information.

Ms. Cammer: And Linda, you were recently appointed controller. Congratulations.

Ms. Combs: Thank you, Debra.

Ms. Cammer: What are you responsibilities as controller at OMB?

Ms. Combs: I'm actually head of the Office of Federal Financial Management, and the responsibilities entail providing government-wide leadership for strengthening financial management in the federal agencies and programs government-wide. In December of '04, for example, we issued some revised internal control financial reporting requirements relating to the Circular A-123. Now, those are requirements that are similar to requirements of internal controls that many of us have heard about that private or publicly traded companies are required to do through the Sarbanes-Oxley requirements. We also require management to implement a strengthened process for assessing the effectiveness of their own internal controls throughout government over financial reporting. And these are based on widely recognized internal control standards. We also lead the improved financial performance criteria. We have, as our responsibility, an initiative for eliminating improper payments, and a federal real property initiative that's part of the President's management agenda as well.

Now, these specific initiatives set out to improve financial management practices across government, and we're trying to ensure that managers have all the accurate and timely information they need for appropriate decision making. We're setting out to see if we can't reduce the number of improper payments. We actually have $45 billion a year that the federal government makes in improper payments. We hope that we can reduce that by more than half -- by $25 billion -- by 2009. And the real property initiative -- we're trying to see if we can't dispose of excess property that's no longer needed and that would be, of course, costly to maintain. Our projections indicate currently that the size of the federal real property inventory could certainly be decreased by 5 percent, or $15 billion by 2009, so you can see we have some long-term goals that we're shooting for that we believe are very realistic and very doable.

Ms. Cammer: What were your previous positions before becoming a controller?

Ms. Combs: Immediately before becoming controller, I was the assistant secretary for budget and programs, and chief financial officer, at the U.S. Department of Transportation. Prior to that, from 2001 to 2003, I was the chief financial officer at the Environmental Protection Agency. During the first Bush administration, I was the assistant secretary for management at the Department of the Treasury, and in the Reagan administration, I was deputy undersecretary for management at the Department of Education. Before I actually came to the federal government, I was manager of the National Direct Student Loan Division for Wachovia Corporation. Before coming back into government in 2001, my husband and I owned our own company, and I served on some corporate boards and have actually been an elected official back in Winston-Salem, North Carolina, which has been our home for about 30 years.

Mr. Morales: Linda, I noticed in your background that you spent approximately 10 years working at the Winston-Salem/Forsyth County School District. Can you share with us your experiences in that role with what you currently do today?

Ms. Combs: You know, I think in every single position that I've been involved in, somehow financial management in one shape or form has come to play in those various positions. And in the school system, while I was beginning as a teacher, when I moved into the administrative roles of assistant principal in the various schools in which I served, it seemed to me that budgets seemed to come my way, or helping to streamline things seemed to fall into my bailiwick. And I truly enjoyed my experience with the school system. And even though that was a very long time ago, I think one of the things that I learned from that experience was that if you can manage a classroom with 26 students, you probably can manage just about any other management role anybody throws at you.

Mr. Morales: Do you find yourself still using some of the techniques from back then?

Ms. Combs: Oh, absolutely. They come in quite handy.

Mr. Morales: That's great. How are shared services changing government operations? We will ask OMB Controller Linda Combs 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 Linda Combs, controller of the Office of Federal Financial Management at OMB. Also joining us in our conversation is Debra Cammer.

Linda, in March 2004, OMB initiated a government-wide analysis of the five lines of business supporting the president's management agenda to expand e-government. Can you give us an overview of the five lines of business and the reasons for undertaking this analysis?

Ms. Combs: I think that the Lines of Business Initiative is a perfect complement to the president's management agenda. This administration certainly sees cost savings in standardization and consolidation of government business processes, and that is the way we feel like it's the most productive way to conduct the people's business. And it's similar to creating a draftsman's blueprint, as I would say, in the way that we are adjusting the blueprint right now to reflect these particular improvements. But the line of business concept is basically built around three premises: all agencies will use common solutions; the solutions focus not just on standardizing business processes -- although that's a huge part of it -- but in making them more efficient, more effective, and of course, more cost-effective as well; and that all of these solutions, the business processes, and the systems, will be developed using common architectural tools. The five distinct lines of business are: human resource management, grants management, federal health architecture, case management, and the one that I'm directly responsible for, financial management.

Mr. Morales: With respect to financial management line of business, what are the specific goals for this LOB?

Ms. Combs: The primary goal is, of course, to assist the agencies in getting to green on the President's management agenda, and of course, what that really means is that the financial management line of business is going to help come into the agencies the standardizing processes, improving those internal controls so that there won't be any negative findings as a result of the annual financial statement audit. I think the other goals would be things like reducing the likelihood that internal control weaknesses exist, because when we start consolidating and using common systems, that makes everybody more sure of what they're doing and being in more control. It also -- one of the goals is making sure that we can compare data across agencies, you know, common business processes, solutions, and common systems. Certainly creating cost savings opportunities for agencies is a primary goal for making it easier for agencies to take advantage of specific common solutions in financial management. We also think a goal is simplifying the procurement process. That, too, reduces the risk that agencies have and allows for greater contractor oversight. But the one primary goal that I think we will also see is the momentum that we're going to create as we continue to standardize and consolidate.

Ms. Cammer: Linda, you often hear people talk about shared services in the same breath with the financial management line of business. Would you define what you think shared services is for our listeners, and then also describe the concept and the history and the benefits of it?

Ms. Combs: You know, I think shared service, to me, means exactly what we've been talking about, where agencies share common systems and common business processes. The ones that we have found to be most effective in the financial management community are based on the concept of economies of scale. I think you go back to the model that's been demonstrated in industry over and over again of gaining process efficiencies through either mass production or through common procedures. That's a proven concept; it's one we need to continue to embrace in the federal government. If that means consolidating services, consolidating productions, and the kinds of work we do -- applying often a heavy dose of technology is important, but a business process that can be done faster and cheaper, regardless of whether it includes hardware, software, or supporting infrastructure, or whether it merely is just a tweaking of a process that somebody has found to be effective from one agency to another -- I think those are the very important things that we have to look forward to. We intend to gain many similar process efficiencies by this standardizing that we're embarking upon in our financial business processes.

Ms. Cammer: Do you reference this coming from private industry as a best practice? In private industry, you understand, the shareholders are motivating it, so for you, what's the big driver in government improving their financial management in this way?

Ms. Combs: Just as the private sector is interested in the motivators, we, too, are interested in getting the best we can for our shareholders, who are the taxpayers -- you and I -- as well as our audience today. We think they deserve these economies of scale. They deserve a situation where, in essence, we can buy once and use many times over, in federal government. Whether we were in our previous private sector enterprises, or whether we're here doing the work that needs to be done for our taxpayer-shareholders, the interests are the same: economies of scale, business processes changes that are productive for the entire enterprise, and our entire enterprise happens to be the entire federal government. We intend to gain these process efficiencies and standardizations for our shareholders as well.

Ms. Cammer: Now, I've also heard about this COE, or centers of excellence, concept in relationship to the financial management line of business. Can you describe that and how it relates, for our listeners?

Ms. Combs: The center of excellence concept allows our government agencies to meet some of the goals that we've set forward in the financial management line of business concept that we've put out. It emphasizes these common business practices, it emphasizes common systems solutions, and it emphasizes what I think is becoming somewhat of a term called "economies of skills" as opposed to, and in conjunction with, I should say, economies of scales. We have some very well trained experience systems accountants, for example, software and hardware technicians, and program managers in specific places in the federal government, but they may not be in the place that we need them to be at all times. So if we look at this shared service concept, we can take better advantage, I believe, of where these skills, these economies of skills, are located. I think we've often looked at hardware service centers or software in terms of economies of scale, we continue to look at the specialization of running one of the CFO council-approved financial systems, and how that is going to work for other departments. But it allows agencies not only to outsource, when they need to, their hardware and software, but I think it opens an opportunity for the centers of excellence to perform agencies' accounting operations. If they do a very, very good job of that, and they're approved as a center of excellence, we need to take full advantage of that and take the competition aspect into each and every department that needs to embark upon changes in their financial management systems.

For example, we have over 50 of our smaller non-CFO -- non-Chief Financial Officer -- Act agencies, of which there are 24 of the largest departments and agencies. But there are 50 smaller non-CFO Act agencies that are currently using centers of excellence. There are four government-managed centers of excellence currently within the CFO Act agencies, and that's the Department of Transportation, General Services Administration, Department of Interior's National Business Center, and the Department of Treasury's Bureau of Public Debt.

Mr. Morales: Linda, you made reference to the CFO council. Can you describe what this is and what the goals of the council are?

Ms. Combs: Well, I'm happy to talk about the CFO council because that gives me a great opportunity to brag on my fellow CFOs and deputy CFOs of the council, which are really the largest 24 federal agencies; they're actually named in the CFO Act of 1990, which I talked about earlier. But these are the senior officials of the financial community throughout the federal government and the career deputies who are very, very instrumental in working collaboratively with their fellow CFOs and with those of us in the Office of Management and Budget. And we're looking at improving financial management across the federal U.S. government enterprise. And the council has several committees, and these committees are led by chief financial officers or sometimes deputy chief financial officers. And the priorities that we currently have reflected in our subcommittees of the CFO council are a Best Practices Committee, an Erroneous Payments Committee, Financial Management Policies and Practices Committee, Financial Statement Acceleration Committee, Grants Governance, Performance Management, and Financial Systems Integration.

Mr. Morales: Linda, you mentioned Best Practices Committee. Is that best practices within government or do you also look to the private sector?

Ms. Combs: We actually do both. We have made it a point at all of our chief financial officer meetings, which we have probably seven or eight of those a year. We don't meet every single month, but we make it a point to share best practices, whether it's a dashboard, for example, that one agency has had good success with, or whether it's a best practice that people have embarked upon in internal controls or a best practice of looking at ways to improve our erroneous payments. It could be anything. We actually looked at some best practices early in -- when I was actually a sitting CFO in terms of whether or not we could have economies of scale and economies of skill. We've done a lot of searching within the CFO community to determine which CFOs have good best practices in many areas that they're working on. And we bring those to the council, and it's a good chance for the CFOs to showcase what many of their opportunities have been, and how they've successfully implemented good business practices.

Mr. Morales: What are the challenges of implementing government-wide financial systems? We will ask OMB Controller Linda Combs to explain this to 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 am your host, Albert Morales, and this morning's conversation is with Linda Combs, controller of the Office of Federal Finance Management at OMB. Also joining us in our conversation is Debra Cammer.

Linda, what are the concerns of agencies while converting to government-wide financial systems from previous agency-wide applications, and how is OMB addressing those concerns?

Ms. Combs: There are some concerns about changing the way agencies do business. I think there're also some concerns about continuing to have a flow of reliable and timely financial data that is needed to carry on day-to-day operations. One of the things we're doing at OMB to help ensure the flow of reliable data is that we are actually requiring the use of only those financial systems that are hosted by a government Center of Excellence or a private sector Center of Excellence that have been approved by the CFO council. Placing a larger share of implementation responsibility on contractors has also been a must, as we've implemented new systems, and we've increased the use of fixed-price and cost-sharing contracts as well. I think the real key here, though, is that we have continually tried and will continually make it our approach to work very, very closely with each and every agency and department as it moves through the entire implementation process by reviewing these strategies that are so important and ensuring adequate communication between us and all of the stakeholders that are involved in making these significant changes.

Mr. Morales: Linda, implementing government-wide financial systems across all agencies sounds like a monumental task. How do you address the competing priorities and agendas to achieve true collaboration towards a common goal?

Ms. Combs: You know, I think one of the things that we talked about earlier in terms of the CFO community coming together to address government-wide issues -- we've been able to create a number of partnerships between the CFO agencies in the CFO community. I think it's been important that we've involved other functional communities as well, such as the CIO community, the acquisition community, property managers, supply and inventory managers. It's been important for us to address the issues that the Hill has seen fit to be involved in, and these functional communities and their leaders are extremely important to all of our efforts. I think the processes that we have used and have been created throughout the CFO community to support the President's management agenda addresses a number of issues, and many of these issues overlap, and particularly in the areas of e-gov and financial management. We will continue to use our greater community to bring the necessary measures into focus that we need to focus on, that we need to address, and that we need to make sure not only we have collaboration in, but that we also have success in.

Ms. Cammer: Now, as you move more towards a shared services approach in the federal government, there's likely to be a lot of concern amongst the agencies, and I'm wondering what steps OMB is taking to address change management?

Ms. Combs: You know, I think those of us who've been in change management for a number of years have one word to say about change management, and that's communication, communication, communication. I don't think we can over-communicate, and we're constantly looking for ways to communicate, not only our vision, but our actual strategy in moving this forward. We work through a number of forums from time to time to ensure that government mangers can understand everyone's role and everyone's responsibility. And I can't say enough about our partners in the CIO and the acquisition communities, the meetings, the briefings, and the other discussion forums that many of our private sector partners bring to play, bring us all to the table, and serve a most useful purpose, along with things like what we're doing right now is a great way to communicate with our federal partners and people who are involved in our federal CFO community.

The president's management agenda, because it incorporates systems and business process initiatives -- we have various requirements of the PMA, but our policies and our guidance that modify and support and consolidate these standardized approaches probably have an awfully lot to do with making these changes happen, and making them happen in a positive way. But we do need to always continue to find forums, find better ways to communicate what kind of changes are expected, but we also need to find ways to make sure that people understand our vision, and where we're going to be when we finish. And we will finish some of these things during our tenure, and I want us to be able to look back and say, here's where we were in 2005, here's what we've accomplished by 2009, and say we've made a tremendous difference because we were all willing to embrace this change.

Ms. Cammer: That's great. You can obviously see that this work requires a great deal of partnership with shared services providers and customers and agency heads and the private sector and -- what are these types of partnerships important and how are you encouraging the federal government agencies to build them?

Ms. Combs: Because financial management touches almost every business and every business process in the federal government and outside the federal government, it is extremely important to get this right. And financial data, I think that is used by our outside accounting organizations, whether it's a human resource, property management, supply inventory management, or whether it's used by managers on a day-to-day basis to make better financial decisions -- all of those things are so important because I think the small amount of actual financial data that is used in the financial community is small compared to the huge amounts that mission area managers need in order to effectively manage their program. And I think it's really important to help mission managers understand that their mission is part financial management as well; it's just as much a part of their mission, and I know they want to embrace it that way. I think it's up to us as federal financial managers to help these mission managers accomplish their missions in a more productive way.

Ms. Cammer: We've talked about the challenges of transition leading to new systems and the change management involved in the challenges of a partnership. Could you talk about what other major challenges that agencies could encounter as they integrate their financial systems, and what are they doing to overcome those challenges?

Ms. Combs: I think some of the tenets that we're advocating to reduce implementation risk actually address significant challenges that agencies encounter when they're implementing new systems. And having done this as a sitting CFO myself, I know how important it is to develop the right simple strategy, and a strategy that actually supports and fits in well with the department's or the agency's overall approach to financial management. I think it's important to minimize the changes to the business process that is already certified; in fact, I would say don't change it. I think it's important to use phasing of projects; in other words, don't try to do too much too quickly. Implement one functionality at a time. If you're going to implement multiple functionalities, such as core financials, procurement, and asset management, I'm not sure I could have done all of those at one time myself, so we tended to concentrate first on the core financials. But using a simple contractual vehicle, introducing competition when you're selecting the right host -- agencies, I think, continue to have to take implementation risk, but we need to be very, very careful that we are simplifying our approach as much as possible, both from a technical and a procurement perspective, and we need to work very, very closely up front and all the way through with the end users of the data in our agencies and departments. It's really, really important to find out what managers actually need, but to focus them on the fact that we've got to have standardized business processes, and we have to change our processes rather than changing the product. That's where I think we have, in the past, had some difficulties, and I hope that my mantra of change the process, not the product, will become a standard throughout government.

Mr. Morales: Linda, we talked a lot about change management and collaboration, but I would imagine that another major component of these types of transitions is employee training and retraining. What can you tell us about the plans or implementation of training for government-wide systems implementations?

Ms. Combs: Training is extremely important. Hiring and retention of specific skill sets is extremely important, as well. And I think, as I talked earlier about the advantages of these economies of skills as we've embarked on the Centers of Excellence approach, that will continue to become an even more important element within our financial management component. Training cannot be overemphasized any more than communication can be overemphasized when you are changing processes particularly. That's why I think it's so important to optimize the skills we have within the Centers of Excellence because these are people who have not only gone through this already, they have the right skills in place, and we just need to be able to replicate and duplicate what has gone on there to take advantage of the skill sets that are already there with these specific communities.

Mr. Morales: What does the future hold for the OMB's Office of Federal Finance Management? We will ask Controller Linda Combs to explain this to 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 Linda Combs, controller of the Office of Federal Financial Management at OMB. Also joining us in our conversation is Debra Cammer.

Linda, what are some of the lessons learned in the government-wide analysis of the five lines of business?

Ms. Combs: You know, particularly in the financial management line of business, one of the things I've learned from personal experience that I hope to continue to pass on to my fellow CFOs and people in the CFO community is start simple and keep things simple. Whether you're using procurement vehicles, systems implementation, schedules and timeframes, make it clear, make it consistent, keep it simple. And the huge systems implementations that have been attempted, particularly in the financial line of business, I think a lot of people have learned some very valuable lessons from those, and it goes back to keep it simple and don't attempt to do too much at one time. Also, I think it's important for timing to be considered. If you're implementing a new financial line of business or a new financial system, you have to continue to keep control of your financial systems all during the year, regardless of whether you're changing systems or not. So developing a very good, viable, long-term strategy, and shorter tactical methods to know when you succeed, is an extremely important thing to keep in mind. I think you have to constantly reevaluate your strategy as you go along and make sure it's still being relevant to the community you're doing this for, communicate with the various leaders that touch your area, and certainly involving these end users in the design, the testing, and the awareness of making sure when we finish an implementation that we're going to be giving people what they feel like they need to manage better on a day-to-day basis.

Mr. Morales: Keeping it simple is certainly a well-learned lesson and often one of the most difficult ones for all of us to keep in mind. But specifically, what advice would you give a government executive today who will be implementing government-wide financial systems?

Ms. Combs: I think one of the things that I just talked about -- avoiding mid-year financial conversions -- is pretty important. We would hope that we could have our long-term strategy and even our short-term strategies to the point that we would be able to bring up financial systems early in the year rather than waiting longer and later in the year. We talked about simplicity already and developing a long term strategy and -- not just developing a long-term strategy, but keeping in mind what are we going to have when we finish, making sure that this design and the strategy that we've embarked upon is not just a simple strategy, but it's also a strategy that's going to help us to implement all of the financial management systems later on that we will need to add to that. I would say start with your core financial system and make sure that's tweaked to the point you want it and operating well, make sure you've got the processes worked out -- make sure you change the processes, not the products.

Ms. Cammer: How do you envision the use of shared services and its implementation in five to ten years?

Ms. Combs: I think if we look out five to ten years from now, we'll be closer to the end of the journey, whereas now we're probably closer to the beginning of this journey. I think that the shared services concept is being embraced. It's being embraced in the corporate world, and it continues to be embraced in the federal sector as well. But the applicability of the economies of scale and the economies of skill will drive us and help to drive us through technology, through training, and toward becoming as practical as we possibly can in the world of the service industry, as we are in heavy industry. We have a lot of guidance out there; we have a lot of best practices to look at in the private sector, and my hope is, as we go through this journey, continue to use the best practices that we possibly can and optimize utilizing the skills of our good federal employees to make these come about.

Ms. Cammer: We've been talking a lot about shared services as an operational change. Could you talk about how you see the future of government financial management and their statements being generated different in the future?

Ms. Combs: You know, one of the things that continues to drive people to better financial management is the indicators that we have, and our financial statements are really indicators of our ability to show that we have things under control. So achieving a clean opinion on our financial statements and using them fruitfully depends, in large part, I believe, on using common accounting standards throughout government, standardizing our business processes, and consolidating the systems that we need to help us bring this about. I think those are the things that we need to continue to look at, we need to continue to do anything we can to improve our processes, our internal controls, and all those things will help us build and publish our financial statements in a more timely and effective way.

Ms. Cammer: How do you plan to further expand the PMA's e-government initiative for the future?

Ms. Combs: You know, the federal financial e-gov proposal -- our financial line of business -- is very important in our CFO council work. The CFO council is committed to making positive experiences work for each one of our federal partners. Our agencies talk to one another, we continue to figure out ways to help agencies talk to one another even better, and I think working together with our CIO partners, working together with many of our other partners, is a very, very important element to bringing this about. I think we're definitely aware of what agencies have done and are doing. Having been a sitting CFO, even a couple of times already in this administration, I know what my fellow CFOs are going through, and having been through many of the things that some of them are just now going through and setting up a financial management system, it's very, very important to make sure that we now in OMB are great partners. Hopefully, we can be even better helpers in making agencies aware of what has been done and what other agencies and departments are doing to support the financial management line of business. We look for any and all ways that we can actively participate across the financial management community to generally and specifically support agencies as they go through changing their financial management systems.

Mr. Morales: Linda, you've had a fantastic career, and I wish we had another hour to talk about all the different jobs that you've held in government and the experiences we've had. But what advice could you give a person who's interested in a career in public service, especially in financial management?

Ms. Combs: I would say to anyone who's interested in public service to consider it strongly. It's an avenue that you cannot find anywhere else. The scope and responsibility of the decisions that are made on a day-to-day basis, whether you're in a department, or whether you're in OMB, are significant. And so significant that one would never have the opportunity to do that in any other place except in public service. Public service is definitely a public trust and added to the overall scope of responsibility, the public trust aspect of what we all do in public service is a leadership role that one can have and embark upon and have a wonderful career if they choose to stay there their entire career. But I would say to any person who's interested in a career in public service that they should prepare themselves and prepare themselves well for a leadership role, prepare themselves in financial skills in any way they possibly can because whether they're going to be working in a program area or in a financial area, these financial skills are going to become more and more important as we move through the next few years. But I would say work hard, be bold, and think big.

Mr. Morales: Linda, that's great advice.

We've reached the end of our time. That'll have to be our last question. First, I want to thank you for fitting us into your busy schedule this morning. Second, Debra and I would like to thank you for your dedicated service to the public and our country with your experiences at the county school district, at EPA, and now at the Office of Management and Budget, and all of the other organizations you've served at in between.

Ms. Combs: Thank you so much. It's been a great pleasure to be with you today. We appreciate this opportunity to get our message out there. And if people would like to know more about the things we've talked about today, I invite you to go to whitehouse.gov/omb or to another website called results.gov and learn more about financial management in the federal sector.

Mr. Morales: Linda, thank you.

This has been The Business of Government Hour featuring a conversation with Linda Combs, controller of the Office of Federal Financial Management at OMB. Be sure to visit us on the web at www.businessofgovernment.org. There you can learn more about our programs and get a transcript of today's fascinating conversation. Once again, that's www.businessofgovernment.org.

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.

Marion Blakey interview

Friday, July 1st, 2005 - 20:00
Phrase: 
"The FAA is providing an important customer service and we have to match the demand. As air traffic increases and as aviation is an enormous driver on our economy, we must invest smartly in infrastructure, technology and the service to match the demand."
Radio show date: 
Sat, 07/02/2005
Guest: 
Intro text: 
Missions and Programs; Leadership; Strategic Thinking; Innovation; Financial Management; Market-Based Government...
Missions and Programs; Leadership; Strategic Thinking; Innovation; Financial Management; Market-Based Government
Complete transcript: 

Thursday, November 4, 2004

Arlington, Virginia

Mr. Lawrence: Good morning and welcome to The Business of Government Hour. I'm Paul Lawrence, partner in charge of The IBM Center for The Business of Government. We created The Center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can learn more by visiting us on the Web at businessofgovernment.org.

The Business of Government Radio Show Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Marion Blakey, Administrator of the Federal Aviation Administration.

Good morning, Mary.

Ms. Blakey: Good morning. Nice to be with you, Paul.

Mr. Lawrence: Thank you. And joining us in our conversation, also from IBM, is Dave Abel.

Good morning, Dave.

Mr. Abel: Good morning, Paul.

Mr. Lawrence: Well, Marion, let's start by filling our listeners in on the FAA. Could you talk to us about its mission?

Ms. Blakey: Well, the FAA's mission is to ensure that the traveling public, when they're flying, can be assured it's safe and efficient. We run the largest, most complex aviation system in the world. Of course, Air Traffic Control is a big part of that. But we also do a great deal in terms of setting the regulatory standards for what aircraft operators must meet; new aircraft coming into the system, and we also work, of course, to make sure those operations day-in and day-out are inspected and overseen in a way that, again, ensures safety.

Mr. Lawrence: How do you describe the size of the FAA; the network, the people, the budget. How would you describe it?

Ms. Blakey: Well, it's an agency of about 48,000 people scattered all over the country and around the world, really, because, as you can imagine, aviation is a global business, and that's the business we're in. The budget right now is around $14 billion, so again, one that both ensures the ongoing operation of the system and makes investment in the modernizing of the system and the future generation of the system.

Mr. Lawrence: 48,000 people. Can you give us a little bit about the range, the skills these people have? I immediately think of sort of heavy technical engineers, and the aircraft and the like, but I suspect it's much broader.

Ms. Blakey: It is broader. You know, we have a wide variety of professions involved. Everything from highly technical people who are pilots and engineers; people who can go on board an aircraft and inspect for all the right things; people who know how to control traffic and who are able, in fact, to look at the most efficient ways to design our air space. And then we have people who are policy folks, who are out there looking at issues of congestion management; what should we do in the future in terms of designing the revenue streams for a system like the one we have. Obviously, people who are in international fields, working with our counterparts in other countries around the world so that we have a seamless global system that works. A lot of different things. If you're an economist, if you're in policy, lawyers, all those are part of the FAA's workforce.

Mr. Abel: Marion, when you were describing the mission of the FAA, there's a vast number of stakeholders, and they fit into a number of different groups. What's the relationship with a couple of these groups? Let's start first with the airlines. What's the nature of the relationship between the FAA and the airlines?

Ms. Blakey: We look at the airlines as our customers. I think it's fair to say that because they provide the service to the vast majority of the American public that flies, we want to make sure that the service we're providing, both in terms of air traffic control and the overall approach we're taking in terms of operations in the system, meets their needs. At the same time, of course, we also regulate their work. We oversee safe operations, and so we place requirements on our customers as well. So it's a combination of things, but I think it's important to stress that it has to be a strong partnership, because after all, they're out there every day on the front lines and we're trying to ensure that they do the best possible job for the flying public.

Mr. Abel: How about some other organizations within the federal government, say the Department of Defense. I know there's a strong relationship between FAA and DoD. What's the nature of that relationship as well?

Ms. Blakey: Glad you mentioned it, because, you know, when you really look at the domestic air space, a lot of it is also devoted to military operations. Needs to be -- particularly in these days after 9/11, when the safety and security and surveillance missions are all caught up together. So we work very closely, particularly with the Air Force, as you can appreciate. We have military controllers out there who control some of the airspace as well as our own federal employees. And we try very hard to make sure that all of the regulations we do and requirements also meet the needs of our military. And in some cases like commercial space, we also work on commercial space launches, whether they take place from a federal Air Force facility or a private sector facility now.

Mr. Abel: I would imagine there needs to be a relationship with the Department of Homeland Security as well?

Ms. Blakey: A very close one, as you can appreciate. A large part of the work force that initially went over to the Department of Homeland Security came from the Department of Transportation. That's our parent agency. And, in fact, a number of them were involved with security on the aviation front at the FAA. So we've worked very closely, because they're the ones who have to assess what the threats are; they obviously do all of the surveillance in the airports of passengers as people get on the planes, but we're the ones who control the airspace. So we work very hard to make sure that when operational changes need to occur -- when there are, for example, areas where flights are restricted -- as you can appreciate, we've had a number of those with big events that go on, certainly during the Presidential election, we had to be certain when there were areas where we really didn't want to have flights at a low level over those areas, we work very closely with Homeland Security to figure out how to do that well.

Mr. Abel: Let's talk a little bit about your role. Can you tell us a little bit about the job and the responsibilities as Administrator?

Ms. Blakey: Well, I would like to say that this job involves sort of both being a pitcher and a catcher. I think the pitcher part, of course, is that you do try to look at the needs of the aviation system over the long haul. And a part of what I've spent a lot of time on is developing a strong business plan for the agency that looks strategically at where the system is going to go. I'm very proud to say that we are in fact developing a plan now that will be going to Congress in December for the next generation system of our aviation system here in this country. So there's a lot of that that's involved. But, certainly, day-to-day manager, and being, as I say, a catcher of the issues that you never expect and come your way; all of that's a part of it. I think most important, fundamentally, it is strong management skills that are required for the job.

Mr. Lawrence: Let's take a little look at your experiences before becoming Administrator of the FAA. Can you tell us about some of the previous positions that you held before this role?

Ms. Blakey: Well, I can. Certainly recently, they were all involved with transportation in various stripes. But, I'll tell you, I'm also very proud of having been a civil servant for many years. I started as a GS-3 clerk. Wasn't even a clerk-typist, because I couldn't type. So you can imagine I was pretty far down the totem pole. But liked government for many reasons including the broad scope of issues, the feeling that you really do have an impact on the lives of people all over this country. So I worked in a number of departments and agencies and had some great opportunities. Worked in the White House, Department of Commerce, Department of Education many years ago. But became fascinated by Transportation, and had the opportunity to head the agency that regulates the automobile industry.

I had a firm in the private sector that was all focused on transportation issues, a communications and public affairs firm that I'm proud to say flourishes to this day: Blakey and Agnew. It was Blakey and Associates then. But worked on a number of public policy issues with a number of corporations, all focused on transportation. And then came back into government as the Chairman of the National Transportation Safety Board that investigates accidents. It gives you a very fine appreciation, of course, as you can imagine, for the safety issues of our system. And I was very surprised but delighted to be tapped by President Bush to be head of the FAA. So I guess that's the quick version.

Mr. Abel: You mentioned that one of the responsibilities and one of the areas that you need to manage now is reacting to things that happen on a daily basis. How have those roles prepared you for the responsibility in FAA of management, of reacting to events on a daily basis?

Ms. Blakey: You know, you have to again try to look at the broad picture, and every day, frankly, go in and say, how am I going to move the agenda that I believe is important on the two, three, four things that you really set in front of yourself as goals and objectives in that job? It's very easy to get caught up in all of the pressures of the issues, concerns, problems that everyone brings to you. And so I do think you really have to start out, as I say, with trying to see if during that day and that week -- I can't say I accomplish it every day -- but at least during that week, you feel like you have actually moved toward the goals that you're setting and at the same time, trying to be responsive and nimble. One of the things that I certainly found in my years in the private sector is you have an appreciation for how important it is to be able to react quickly, to size something up, to make decisions.

Government doesn't always engender the kind of culture that prompts good, strong and efficient decision-making. And so you try, I think, in the kind of role that I play as Administrator, to try to make those decisions on a basis that then people below you can be responsive and react in a way that's timely.

Mr. Lawrence: Let's continue along that path. You were just contrasting the public sector and the private sector, and having been in both those sectors. How about some other comparisons in terms of management approaches from all your experiences.

Ms. Blakey: In terms of management in the private sector, of course, you do have the feeling of being much more nimble, much more able to react to forces quickly, and frankly, decisions are not ones that you have to look at a variety of overseers before you can make them in a way that holds. That is all very refreshing. I will also say that many of us in the private sector look at ourselves fundamentally as salesmen, as people who are advocates, as people who are promoting an agenda in a very direct way. It doesn't hold true for all jobs, but certainly ones that I have had. And I have prized that.

I have to tell you that I've enjoyed the opportunities to really set a marker out there and go for it in a way that -- sometimes within government, it's much more of a process. So those are the things that I would say from a private sector standpoint you can appreciate and try to employ as you move in to the public sector and to public policy. But of course, public policy, as I say, the opportunity to work with a variety of organizations, whether it's the Congress, OMB, the Administration, more broadly, other agencies, is a genuine challenge that also is very reinforcing, because again, the impact and scope of what you can accomplish that way is enormous. And that's something that I think many of us who have enjoyed our tenure during our life in government, it is all about that kind of scope and impact.

Mr. Lawrence: That's an interesting point, especially about the contrast.

Air travel is up significantly in the last couple of years, returning to the point where many airports are close to their pre-9/11 volumes. What does this mean for FAA operations?

We'll ask Marion Blakey, the FAA's Administrator when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Marion Blakey, Administrator of the Federal Aviation Administration.

Joining us in our conversation is Dave Abel.

Mr. Abel: Marion, in the last segment, we talked a little bit about the size of FAA. I'd like to ask a little bit about the size of the FAA's mission. About how many people fly in commercial and private air carriers each year?

Ms. Blakey: Well, if you look at it basically in the area of commercial, because private is sometimes hard to know because a lot of those folks are out there flying VFR, and we don't tally them up each time they leave a small air field. But if we're talking about commercial passengers it is somewhat under 700 million. 689 million was the last figure that I had for the last year we were counting, which was, you know, pretty accurate.

Mr. Abel: Over the past two years since September 11th, we've started to see a significant increase again in the volume of people who are flying commercial aviation. What type of impact does that increase of volume or demand have on the FAA?

Ms. Blakey: Well, certainly, we have to stay up with demand, and since we are an operational agency, the more folks up there flying, typically, the more services we have to provide, the more people it requires to do it, et cetera. One of the interesting things that's a phenomena now in aviation is we have seen very different patterns of traffic since 9/11: much more point-to-point flying, much more use of regional jets. And so what that means from our standpoint is we have a high number of operations that we have to provide the air traffic control for, the services on the ground for, and yet they are not carrying as many passengers as they might have with the widebody's bigger aircraft that you saw more of before 9/11.

So there's a shift in the fleet. And as we're looking at some of the things that are coming at us, we're going to be seeing even more of that with what are called Microjets, the very small aircraft that are coming online in the next few years. And of course, then there's UAVs. So there's a lot out there coming at us.

Mr. Abel: So what are some of the things that -- in your strategy, what are some of the things that you're looking to be able to do over the course of the next couple of years to address this increase in demand of operations, in addition to the increase in passengers?

Ms. Blakey: It is to have the FAA be a very flexible agency in the sense of where we assign our work force, how we allocate our resources, because obviously, as there's a dynamic in the airline business and in aviation that's changing, we really have to stay up with it. As I say, we see ourselves as providing an important customer service, if you will, and so that means we have to match the demand. At the same time, we've also got to invest in the system, and a fair amount of time that I spend, of course, is looking at the way that we are investing in technology; are we getting a good return on that investment; are we modernizing our system. So that in fact, it's going to anticipate the requirements in the future, and frankly, use our air space and our airports and ground infrastructure ever more efficiently, because as traffic continues to increase, which it will, and as aviation is an enormous driver on our economy nationally and it will be internationally, we had better provide the infrastructure and the service that will match it, and that means we are going to have to invest smartly.

Mr. Abel: So if you think about it from a very simple perspective, in order to be able to manage the demand for air transportation, we have to look at flight delays and capacity. What are some of the things that the FAA is doing to be able to increase capacity at airports. Is it as simple as building more runways?

Ms. Blakey: Well, runways are a lot of it. I'll tell you, there's no substitute for pavement. And in fact, I am very pleased with the way our country is really stepping up and recognizing that, because it takes a lot of on the part of city fathers and communities to make the political headway and then the investment that's required to put in new runways. But we're seeing a lot of that. Over the course of the last five years, we've had eight major runways go in, and that's a big thing. You know, places like Houston, Orlando, Miami. We've got them coming in, you know, in places like St. Louis. It's a great thing.

And of course, Chicago O'Hare, one of the real challenges in our system, because so many of our flights go through Chicago -- they're planning a major modernization of O'Hare as well. So there's a lot of pavement that is involved in ensuring that we're going to have the infrastructure there to support the passengers that are coming through. At the same time, technology is a great part of it. We also need to really have a system that has new technologies there so that we can use the air space more efficiently. And we've worked pretty hard on that as well.

Mr. Abel: What are some examples of some of the potential new technologies that may help to be able to more efficiently manage the air space?

Ms. Blakey: One of the big things, basic. We have a change out going on on what we call the host, if you will, the central nervous system of our air traffic control system. This is a major thing. And as you can appreciate, over many years, that system was developed, the software was written. The software right now is still written in a language called Jovial. There aren't many people out there who write Jovial anymore. So we are changing all of that, and that is a big multi-billion dollar investment.

Another thing that we're doing is in the terminal air space. I'm sure some of our listeners have seen those round scopes; you know, the old air traffic control radar. You don't see that now. What you're seeing more and more is new, very impressive screens that look a lot like the big computer screens at home, full color; where we are not only able to fuse radar coming in from as many as 16 different sources, but we also are able to infuse weather information for the controllers. Other kinds of very critical information so that they're able to sequence flights and with greater and greater precision, control them.

Another thing that's going on which our listeners will begin to have the benefit of in January of this coming year is that we're reducing the vertical separation between flights in the air space. Now, I'm sure that might cause some concern for some folks. You know, lots of space is good, but the more efficiently we use the air space, obviously, the more we're going to be able to handle increased traffic without delays, with the kind of reliability people want. And the air space, the upper air space is now going to be used in thousand mile vertical separation rather than two thousand mile. It's done around the world. The United States is moving to that. And again, that's going to offer some real efficiencies.

Mr. Abel: You describe for us the increase in demand and the increased requirements on the FAA to be able to manage that demand. And the listeners may assume that that means that there's a lot more money to be able to manage the organization, but we certainly know that not to be the case. You've focused a lot recently on the efficiency and effectiveness of the Air Traffic Organization, or ATO. What is the ATO?

Ms. Blakey: The ATO is a new performance-based organization within the FDA that brings together several of our major, what were formerly lines of business, in an integrated streamlined way. The concept, of course, is to develop a organization that has layers, that is very service-oriented, and that operates to specific performance metrics. We have targets that we are setting for our organization that go to issues that reduce delay, on-time performance, using the infrastructure to the best possible capability there, and, of course, indications of safety and the kind of performance that we'll always require from that standpoint.

But we do believe that having those kinds of targets, and frankly, cost efficient measures. We are looking at cost accounting, being able to understand, really, for the first time, what it costs to undertake air traffic control of a given airplane. How much does it cost to control over an hour in upper air space the flight of an airplane? Because, obviously, as you're thinking about service and how you provide it and what things cost, you really do need to be able to get it down to unit cost. That's what the private sector does. And we can do it in government as well. It makes us much more accountable and transparent as to how we're using our resources. All of that is part of the air traffic organization.

Mr. Abel: What has been the impact of the implementation of the ATO so far. It's a relatively new organization. How's it going so far?

Ms. Blakey: Well, it's going well. We have been working very hard, for example, to streamline our operation at the top tier of management and in headquarters, dropping the number of layers from around 11 down to 5 or 6. We're doing a number of things to align the question of how you invest in new capital improvements in the system, with also the people who have to operate the system. It used to be that the FAA made research, acquisition investments in one part of the FAA and the folks who are operating the system were off in another part. When these new improvements, technologies, were then handed over to the operational folks, sometimes we found that they didn't align too well. Sometimes we found that the issues of how much it costs to maintain over time, how much it costs to really operate it, we did not have a good integration between those two sides of sound decision-making. So the Air Traffic Organization has now put those decisions again in the hands of people who have to both operate the system and have to think long-term about the return on investment. And by integrating that, I think we're going to get a much more efficient system.

Mr Lawrence: The FAA has several initiatives underway to better regulate and enforce safety standards, to include improving customer satisfaction. Could you tell us about these?

Ms. Blakey: Yeah, we have found all along that we needed to be more consistent in the way we provided interpretations of our regulations, the way we provided guidance on how those who are out there both developing aircraft, modifying aircraft, doing the kind of maintenance that's involved, what those standards and certification requirements were. And there has been the impression; certainly, that I think has been real in some cases that different parts of the FAA in different parts of the country operated differently.

The guidance was not always consistent, wasn't always as reliable as it needed to be. So what we've done is, we've provided to all of our organizations out there a required code that says these are the kinds of things that to be responsive to our customers, you need to do. And if someone comes in and believes that the guidance that they've been given, the decision they were given on a given issue problem, aircraft, they want to appeal it, it also provides the information to our customers on how you take it up to the next level, and guarantees a hearing, so that if there are issues of consistency from one place or another, as it moves up, we are able to address those and understand that they're there. That kind of accountability, I think, we're having good reactions from all those out there that the FAA touches and affects.

I'm also very proud of the fact that the customer satisfaction survey that we do has been consistently going up. We're getting good grades from pilots out there as to how well our Air Traffic Control is working, how we're touching a number of our customers now. And that matters to us.

Mr. Lawrence: Most FAA employees are in a pay for performance situation. What does this mean to the employees and its leaders?

We'll ask Marion Blakey of the FAA for her thoughts when The Business of Government Hour continues.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour, I'm Paul Lawrence, and this morning's conversation is with Marion Blakey, Administrator of the Federal Aviation Administration.

Joining us in our conversation is Dave Abel.

Mr. Abel: Marion, in our first segment, you talked about the need for you to balance between strategic planning and operations. We talked a lot in the last segment about the operations of the FAA and the increase in demand. Let's flip back and talk a little bit about strategic planning. How in the organization do you do strategic planning?

Ms. Blakey: Well, you know, it's pretty challenging in an organization that is really required to keep up with transactions, millions of them a day. In other words, unlike a lot of agencies of government, the FAA really operates a system, and both achievements and occasional mistakes are very public, so it's hard to pull back and then to say, nope, we're going to take a longer view, and we're going to set goals and then attach not only metrics to those goals so we can tell whether we are meeting them or not, but we're going to tie our budget to those goals and see what it's costing us, and see whether we can afford to do this and continue to keep up on it on a week-in week-out, month-in month-out basis.

The way we tackled it was that we decided that we would construct a flight plan for the FAA, a rolling five-year plan that was going to, as I say, be tied to performance measures and tied to our budget. That does, believe me, get the attention of all your executives in a hurry, because that means that everything is going to be run by a strategic plan, a business plan. As many of us know in government, I think there are probably strategic plans all over town that are gathering dust on shelves. You have one, you post it on your web site and that's the end of that.

Ours is one that we developed over the course of about six months. It was a very arduous process of really trying to determine what the kind of goals and initiatives were that would genuinely improve our system, that would genuinely advance safety, and how you would measure that; how you would measure our achievements internationally, because we wanted the FAA to be much more proactive internationally -- frankly, set the standards globally for aviation -- and how we were going to set standards of organizational excellence that really would put us first in government. That's the goal there, and we're not shy about saying so. But we work very hard internally, and then we had the plan in draft put out there for comment by all of our stakeholders, we hold town hall meetings, we encourage comments from our employees, and then we posted the plan on our web site and said we are going to be measured by this.

I hold meetings every month where all of our executive team comes together. We spend a full day together going over all of those metrics. Are we hitting it or we not? Are we making our numbers or are we not? And we are then accountable on a quarterly basis just like a corporation, for whether we're doing it or not. We use a simple system: red, yellow, green. For people who want to click into it, we have a good software-based system called PB Views that allows people to go as deeply as they want to into the specific initiatives and performance measures of the FAA, and see specifically how we're doing on those.

And because we do tie our pay at the FAA, the annual awards and bonuses that frankly are automatic just about everywhere else in government, in ours, we have to make our numbers. Last year, we didn't make all of our numbers, and as a result, we only awarded 85 percent of what is usually the annual increases, the quality step increases, all of that, which we combined for our organizational success increase. We only awarded 85 percent, because that was really what we made on our numbers. This year, for '04, I'm just doing the assessment right now with our executive team. We're going to do better than that. But we're still not hitting every goal, and that's because they're strict goals. But we intend it to be that way.

We have just published our new draft plan, we'll be rolling it out soon, and at this point, I'm pleased to say we've had over a thousand comments and suggestions on it. That's good, because that means both our stakeholders and, very significantly, our employees, 85 percent of the comments came from my employees; they've got ownership in it, and that makes a huge difference.

Mr. Lawrence: Who participated in the initial development of the plan?

Ms. Blakey: You know, it started out with executive-led teams. But then we worked it out through our facilities, and then we asked our customer base to come in and meet. The FAA is not short on having advisory groups and people we can count on to help us with good advice, and frankly, it really was a big group effort. I don't take any personal ownership in this. It's something that needed to be developed organically, and I think that's one reason why it's working.

Mr. Lawrence: Could you provide us with a couple of examples of things that you measure? What would be some example measurements that are in the plan?

Ms. Blakey: Well, I certainly can. One of them, for example, is to reduce the risk of runway incursions, two planes getting too close together on a runway, vehicles getting out there, and I'm proud to tell you that we set specific numbers that we were trying to drive down the numbers of those incidents, because we believe it has very fundamental affect on safety. Reduce the number of Alaska accidents. You might say why Alaska? Well, because, frankly, that was where we saw the greatest incidence of accidents and fatalities. Being a pilot in Alaska used to be a high-risk profession, largely because of terrain and weather. But we knew we could take on some of those issues with new technologies, and we did.

When I look at questions of how we operate the system, we looked at things like on-time performance; how are we doing from the standpoint of actually being within 15 minutes of the time passengers expect to arrive at the gate? We don't control it entirely. That's also a part of weather and the way the airline is scheduled. But we've got specific metrics. Frankly, that was one last year we didn't make. So I could go on, but that gives you some idea, you know. These are not soft goals.

Mr. Lawrence: You mentioned that a number of the employees; in fact, a large percentage of the employees, are rewarded based on being able to meet these metrics. Are they rewarded on meeting all of the metrics, or ones that apply to their specific job?

Ms. Blakey: We do it on two levels, if you will. I am proud of the fact that 75 percent of the FAA's workforce, and this includes our unionized work force to a very significant degree, is on a pay for performance system. We have what we call an organizational success increase, which means that out of the 30 goals that we have for the FAA, we're expected to meet 90 percent of those if in fact people are going to get the full OSI, as we call it. Then there are specific also awards that go for the more-detailed duties that each individual employee has. And those increases also are really tailored to their responsibility, so they vary from one part of the FAA to another.

Mr. Lawrence: As long as we're talking about the employees of the FAA, can you tell us a little bit about some of the human resources challenges you face in the organization today?

Ms. Blakey: Well, you know, I bet like much of government, from what I understand, we're dealing with an aging workforce, and that's not surprising, particularly for the FAA, because of two things. One is that when you think about the folks you want out there inspecting airplanes and providing oversight from the standpoint of certifying aircraft and all of that, needless to say, you draw on very experienced people. A lot of them come out of the industry. They're highly trained, but that means it is an older work force on the whole.

Another phenomenon was that for our air traffic controllers, the PATCO strike meant that large numbers were hired in the early '80s, because President Reagan fired over 10,000 air traffic controllers, and the need to replace those all happened within a few years. Those folks are reaching the maximum retirement age, which is 56, as the system is set up. So we're going to see large numbers mustering out over the next ten years. And that means we're going to be hiring lots of people, and we have to figure out a plan that both figures out how to begin to step that up, and how we can train highly efficiently so that you move people into the system well.

Mr. Lawrence: How long does it take -- when someone decides to become an air traffic controller, how long does it take before they can actually work in the system? Is it a long lead cycle or is it relatively short?

Ms. Blakey: It depends, of course, on the experience base that they bring. We recruit from the military, where they've been controlling live traffic; we recruit from schools around the country where they may have spent four years in an undergraduate degree learning a lot. But we also recruit people straight in. Average is three to five years to be a fully certified controller, particularly at the more complex facilities. Now, fully certified means that you can work all positions in some of our most complex facilities out there.

We think probably, as we need to step up the pace on this, we're going to use simulators, for example, which is something that has been highly successful, as you know, in the training of airline pilots. The FAA hasn't relied on it as much. We believe in simulating all sorts of circumstances that hopefully controllers will never see in their actual air space that they're going to control. We'll be able to bring people through the system more quickly, and that would be a good thing.

Mr. Lawrence: In 2002, the FAA won an award for the most improved government agency. I'd be curious about some other awards you've won as well, and I guess, sort of even, how you continue to improve to win these awards.

Ms. Blakey: Well, you know, we do focus on that a lot. I really do believe that it is important to have people recognize the excellent performance and the real steps that we're taking to be a performance-driven organization. For example, we were very pleased that we were, with the Department of Transportation, top agency of government in terms of the President's Management Agenda. Four out of five of the key scores, we were green on. So we were right up there in the very top tier, and the FAA drove a lot of that because we're a big part of the Department of Transportation.

The Association of Government Accountants, in this last year, gave us award for our performance in financial report. We're very proud of that. We're proud of the fact that we have had clean audits for the last three years, and believe me, we're working very hard to get another one this year. Customer satisfaction index, as I say, this continues to go up, and we're looking at expanding that so that we have the real measure of how people feel we are doing in terms of being responsive to their needs.

So all of these are the kinds of things that, you know, as I look at it, we're working very hard, I'll tell you this, to get off the GAO's high risk list. I'm sure there are folks out there who know government agencies are often targeted there. The FAA's financial performance has been there for a while, and I'm very hopeful that we're going to move off of that as a result.

Mr. Lawrence: That's interesting.

What are the implications for the FAA of things such as commercial space travel? We'll ask Marion Blakey from the FAA for her thoughts on what the future holds for the FAA when The Business of Government Hour continues.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Marion Blakey, Administrator of the Federal Aviation Administration.

Joining us in our conversation is Dave Abel.

Mr. Abel: Over the past ten years, most businesses have gone global, but none more than commercial aviation. What is some of the impact now of the international nature of air transportation on operations of the FAA?

Ms. Blakey: Well, you know, it is a global system, and it is very much in the interest of the American flying public that we encourage open skies, the ability of not only of our carriers to fly routes all over the globe, but also to co-chair with foreign carriers so that in fact, you know, you don't have to have expensive service everywhere, because you could link up with a lot of others. That drives the price of tickets down, but at the same time, we have to be sure that it is not only a seamless system out there, but a very safe system. And parts of the world, as you know, safety challenges in aviation are much greater than they are in the United States. So we're trying to raise the bar on safety in a number of places.

We're also very convinced that American technology, American safety, is something we should be exporting. It's one of the great aspects of the fact that the United States has been a leader in aviation since the Wright Brothers. So in markets like China, for example, we're working very hard on both air traffic control systems and procedures, satellite-based systems. We have a satellite-based system now that we believe uses our GPS system, that will extend all the way from India through, we hope, China. Certainly Japan has already committed to it, and around the globe into the United States. It's going to be a great boon for aviation.

So we're working hard to expand those benefits, and frankly, that also benefits the United States economy in a variety of ways, our companies and our passengers. It's a big part of our goal these days.

Mr. Lawrence: Does the FAA have a single counterpart in Europe, or are there multiple organizations?

Ms. Blakey: I'm glad to say that with the European Union's advent, they have now developed an agency that's brand new called EASA, the European Aviation Safety Agency, that actually is going to be officially opening its doors in Cologne before the end of this year. So that's a good thing, because that brings all those countries together for us to work with on a joint basis. We are also encouraging safety on a regional basis in a number of parts of the world. Because, especially less developed countries with fewer resources, if they combine forces and we can provide them technical assistance across national boundaries that will work well in Latin America, in Africa and other parts of the globe. So that's another thing that we're doing. But we work very closely with our European counterparts

Mr. Lawrence: Now a bit earlier, you talked about some of the things that are coming in the future of commercial transportation, and just to pick out a couple of fun ones, you were present as Spaceship 1 completed its second trip into space earlier this year. What was it like to witness that?

Ms. Blakey: Wow, I'll tell you, that was the longest period of sustained goose bumps I've ever had in my life. No, it was fabulous standing out there in the Mohave in the early morning, freezing cold, watching that flight. When Mike Melville took it up, really into space, really expanded what has happened in terms of a privately developed, privately piloted aircraft that all of a sudden can go, not only into space, but come back, and has the capability to carry passengers. I was there with Richard Branson, who has decided that Virgin Galactic is going to begin carrying passengers into space in the next couple of years. So you can imagine, from the FAA standpoint, I see a lot of challenges coming together. I believe, of course this is very exciting in the future of aviation and aerospace, and we need to enable it. But there are issues of risks to passengers, issues, of course that we have to protect the safety of folks on the ground. So it's a challenge.

Mr. Lawrence: Do you have an organization today that's focused on space travel within FAA?

Ms. Blakey: Absolutely, our commercial space organization within our organization actually has ensured the safe launch of 167 commercial launches already. Now that we're getting into the reusable vehicle area, of course, that's got new challenges. But we're very proud of that track record.

Mr. Abel: You also mentioned a bit earlier a new type of travel called Microjets. What is a Microjet?

Ms. Blakey: It's a small, high performance aircraft. There aren't any out there on the market, but there are two companies, Eclipse and Adam, and there are several others coming along, which are using composite materials and very high performance small jet engines, to provide transportation for four to six people typically, that can be right up there with commercial jets. Glass cockpits, all of the kind of safety and navigation features that you really see, you know, in a Boeing 777. And what that's going to do is it's going to allow air taxis to flourish. Service to a lot of smaller airports, because a small number of people on a cost efficient basis can go on a non-scheduled basis point to point. Over time, it is really going to infuse transportation in this country with a lot more flexibility and cost efficiency than you have right now, when you're restricted just to the large commercial jets.

Mr. Abel: So if we put a couple of these together: we have microjets, space travel, increased demand for commercial aviation today, even just based on these regional jets versus larger jets we were saying before, how long can the FAA continue to operate as it is today, or are there plans for a new way of being able to business in the future.

Ms. Blakey: Well, Dave, I'm glad you asked that, because it's one of the things I've really spent a lot of time thinking about with some smart people. The system is not infinitely scaleable. In fact, we're getting to the limits of it. When you think about the fact that we use active ground to air control, voice communications, you can appreciate, as the traffic gets more and more dense -- UAVs coming into the system, a lot of things -- we're really going to have to change this.

The next generation system, we are bringing out a plan, in fact, again, before the end of this year, that I think is going to address what a next generation aviation system, both in terms of air traffic control, much more emphasis on satellite-based, satellite to aircraft, aircraft to aircraft separation; much more on automation; much more in terms of controlling traffic as managing exceptions with automation; looking to ensure the safety routinely, and in point of fact, we are also going to have to see a much better use of our infrastructure in terms of airport infrastructure, where do we need them for the years to come?

You know, it's not all going to be where it is right now. And so, the "build it and they will come," we've got to build it and anticipate where it's going to be. And so we're working very hard on those kinds of things, as well as what will a really stepped-up safety system be all about. The Europeans have already developed such a plan. So we're going to be moving out on this because, again, we believe that the leadership of the United States overall, both for our domestic health as well as internationally, depends on it.

Mr. Abel: What is the timing of a plan like that? What type of horizon would you look at as far as the time that it would cover?

Ms. Blakey: It covers out to 2025. That sounds like a long way away, but remember that the aircraft that are rolling off the assembly line right now will be flying in 2025. It typically can take as long as seven to twelve years to build a runway, so this kind of planning, it's not so far out there. And what I will also tell you is that this is an inter-agency process, which we rarely see in government. We are doing this with the Department of Defense, Homeland Security, Commerce, because, of course, they have the Weather Service, and weather's a big factor in aviation, along with the White House, in terms of our science and policy shop over there, so we've got really a lot of folks who are working with the Department of Transportation and the FAA on this. And NASA is a big part, of course, of that partnership as well.

Mr. Lawrence: Is there participation of commercial entities as well, airlines or cargo carriers, or other users of transportation as well?

Ms. Blakey: Absolutely. Our stakeholders really have to be involved and say, yes, we see the system serving us in the future, and that's going to be a big part of it, and frankly, such a plan will be governing our federal investments. One of the things that I think is exciting in this is, as we all know, the tremendous advances that have occurred in the Department of Defense in terms of the use of satellite-based navigation, air control systems that can translate into the civil side and benefit all of us. So this kind of joint effort together for surveillance, navigation, communication -- it's going to yield real dividends, and it will begin to govern our investments, not only looking at 2025, but in the near years, because you've got to have a smooth transition.

Mr. Lawrence: Marion, in our first segment you talked about your career beginning as a GS-3 and now working up to the Administrator, and cutting across both the public and private sector. What advice would you give to someone interested in a career in public service?

Ms. Blakey: Well, I would certainly say that I've found it tremendously personally rewarding. The mission orientation of the opportunities that you often have in government service; the ability to get up in the morning and know that you genuinely make a difference in people's lives. That's a tremendous engine, I think psychically for all of us in terms of -- do you like to come to work, do you care about what you do? Do you feel like you're making a difference? I can tell you that my career in government has really given me the ability to answer that affirmatively every time, but never more so than at the FAA, because we obviously have a mission that touches everyone's lives.

Anyone thinking about careers broadly, but certainly in terms of public service, I think it's also important to be open to opportunity. I would never have projected that my career would have taken the turns it has. I could not have anticipated some of the opportunities that one career in one agency would then lead to another. And it's been very exciting to realize that sometimes, the way that mentors, the way people see you that are above you in government, may not be the way you see yourself. But in fact, that opens opportunities; that opens challenges that you rise to.

And I have found government to be a wonderfully supportive environment from that standpoint, of being able to move into arenas, that as I say, I wouldn't have anticipated, but it's been tremendously rewarding. I would also say this: that I would encourage anyone who is interested in public service to look at the FAA. I'd like to see them go to www.faa.gov, because there, they'll be able to see what we're doing. Look at our flight plan. See how we're doing on our performance. But they can also look at the careers we have at the FAA. I think they're terrific.

Mr. Lawrence: Thank you very much for joining us this morning, Marion. I'm afraid we're out of time. That will have to be our last question.

Do you want to mention the web site once again?

Ms. Blakey: The web site is www.faa.gov. And I'd love to have people go there. You can even get good information about how the system is doing on a given date. You can even access it from your wireless, from a PDA, to see how your airports out there are doing, if you want to know if there are delays in the system. It's a great site.

Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation with Marion Blakey, Administrator of the Federal Aviation Administration.

Be sure and visit us on the web at businessofgovernment.org. There, you can learn more about our programs and get a transcript of today's fascinating conversation. Once again, that's businessofgovernment.org.

This is Paul Lawrence. Thank you for listening.

Johnnie Burton interview

Friday, June 3rd, 2005 - 20:00
Phrase: 
"Deep water production of the Gulf of Mexico has been fantastic. It has surpassed the volume of oil that's produced in traditional shallower parts of the gulf. This shows that oil and gas reserves exist in areas where we never thought about going before."
Radio show date: 
Sat, 06/04/2005
Guest: 
Intro text: 
Missions and Programs...
Missions and Programs
Magazine profile: 
Complete transcript: 

Friday, April 8, 2005

Arlington, Virginia

Mr. Lawrence: Good morning, and welcome to The Business of Government Hour. I'm Paul Lawrence, partner in charge of The IBM Center for The Business of Government. We created the Center 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 www.businessofgovernment.org. The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Johnnie Burton, Director of Mineral Management Service of the US Department of Interior. Good morning, Johnnie.

Ms. Burton: Good morning, Paul.

Mr. Lawrence: And joining us in our conversation also from IBM is Steve Sieke. Good morning, Steve.

Mr. Sieke: Good morning, Paul.

Mr. Lawrence: Well, Johnnie, not many of our listeners might have heard of MMS or the Mineral Management Services. Could you tell us about its history and its mission and how it fits into the Department of Interior?

Ms. Burton: The Department of the Interior is really the department charged with being the steward of all public lands. So starting from that you can see how that department is going to have different bureaus that will specialize in different aspects of public lands.

The Minerals Management Service, as the name indicates, is charged basically with managing public lands off shore which sounds strange when you talk about lands off shore. They're submerged lands but nonetheless they are federal territory so we manage the submerged lands only in view of production of energy; that is, oil and gas production but there could be other minerals. We also handle sand and gravel, these kinds of things.

We also have a second mission which some people will argue with me is the main mission of the agency which is to collect for the American public the revenue that come from those lands and specifically the revenue that comes from minerals. So we collect rent, we collect royalties on all minerals produced on shore and minerals produced off shore.

This amounts to quite a bit of money, as you might imagine. We're one of the top agencies bringing money to the federal Treasury. Last year I think we brought in about a little over $8 billion to the Treasury from different revenue from minerals.

We also collect money, and I'm going to use a term here that may not mean the same to everyone so I'll define it quickly, from bonuses; that is, that on shore as well as off shore some of the public lands are put up for auction, if you will, for the right to exploit a mineral and that auction brings in a certain amount of money on the very front end. For example, we have several lease sales on the off shore per year and depending on which part of the off shore we are putting up for auction the money can vary.

The last sale we had was in Alaska in the Beaufort Sea off the north slope and it was somewhere around $46-47 million in bonuses alone. But then you compare that to the central Gulf of Mexico where the bonus is running to 3-400 million depending on the year, depending on the sale. So this is a considerable amount of money. Then we collect on those leases and then we collect royalty if the leases produce.

If I want to tell you how this agency came about because it really is by federal standard a very new agency, about 22-23 years old, it was created by an executive order. The people who did the jobs were scattered in different parts of the Interior Department, the USGS, the Geological Survey, the Bureau of Land Management, the Bureau of Mines. There were different bureaus.

In 1982 or so all these people were put together into one agency which is now the Minerals Management Service. It was created by executive order which means that it is the only bureau in Interior that does not have its own organic act, its own congressional statutes, if you will, legislative statutes, so it's a little bit different. But this is what we do. We're a small agency. We're a new agency. We have a very narrow focus.

Mr. Lawrence: Even though you have a narrow focus how would you describe the skills sets of the employees on your team as you were describing and I imagine engineers and geologists and then when you began to speak about the money I thought about such a wide range of skills.

Ms. Burton: You're correct. We have a narrow focus but we have a very broad set of skills that are required. Obviously in managing the offshore land we need a lot of scientists because besides just managing the land itself and the leases and the rights to drill and then the drilling operation and so on we do a fair amount of research and we do a fair amount of study of the marine environment.

So we have oceanographers, we have marine biologists, we have geophysicists, we have geologists, obviously. We have a whole slew of scientists at various levels that have very specific skill sets in some areas. We also have obviously lots of engineers because when a company wants to drill and later on if they find petroleum and they will have a production facility, a platform, we need folks that are capable of telling whether this is safely done and that means different kinds of engineers.

So we have people that watch what industry does, that set the standards, which help write the rules that industry will have to follow with the over-arching goal of keeping the environment safe, keeping the people safe. That's really a very important part of what we do. So we do have a lot of engineers.

And then when it comes to collecting the money we obviously have to check on what industry reports to us which means we have lots of auditors. We need to not only check that they reported what they really produced but we need to check that they reported the fair market value of what they produced and that in itself is a whole different area. We have to check on markets, we have to check on indices, we have to make sure that industry has deducted from its proceeds what it was allowed by rule or statute to deduct and that they paid the fair amount.

So we do a lot of valuation of minerals and a lot of auditing, obviously. Then we have to process all this data so we have a fairly good size IT-type group of people. Then we have to distribute that to the various recipients of that money and if it is on shore a lot of the money that comes from onshore mineral is split with the state.

In fact the states receive 50 percent of anything that is produced within their borders from federal lands except for Alaska, which gets about 90 percent. So we do have to keep books that are fairly complex. We also put money in various accounts within Treasury and we have to make sure this is properly done.

In order to make sure that we are doing our job correctly we ourselves are audited every year. We have a financial audit within the department and each bureau is audited and we have to reconcile all the accounts. So we have a fairly good financial group plus a technical group.

Mr. Sieke: Johnnie, speaking of employee skill sets, could you describe your own role and responsibilities as the director of the Mineral Management Service?

Ms. Burton: Well, you need to somebody to blame when things go wrong. That's what the boss is for. Each bureau at the Department of the Interior is led by a director who is an appointed person. It is a political appointment. We serve at the pleasure of the Secretary, the President, the Senate, whatever the setup is. Typically people that head bureaus have demonstrated some good administrative skills, not necessarily technical skills, although I can tell you from my personal experience that in this particular position it helps a lot to understand how that particular industry that we regulate functions and it's nice to have had some background in that industry. But basically what I must make sure of is that everything is done according to statutes, according to regulation, that the staff does what it's supposed to do, and that the train runs on time, so to speak.

I also have to make sure I have a good interface with industry. We regulate an industry but we're also very dependent on that industry to produce the energy this nation needs; therefore, we need to talk to them. We need to understand their needs as well as they need to understand how we expect them to do their job. So it's really a people's job. It's leading an organization in the direction the President wants it to be led, which in this case is produce more energy but do it extremely safely and be very sensitive to the environment and to the safety of the people. So that's what I do.

Mr. Sieke: You've had a really interesting career. I was wondering if you could share some of your past positions with us before you were appointed as the director back in March of 2002.

Ms. Burton: Well, before I was appointed to this position I served the governor of my home State of Wyoming. I was a member of his cabinet and was asked to run a department for the state. The department was the revenue department, which in Wyoming is the department that handles state taxes, sales tax certainly, which is a big part of the state. Now, the State of Wyoming does not have an income tax so it's a much smaller department than you would have in any state that has an income tax but we handled sales tax. We valued the property for property taxes and the major part of the job was mineral taxes which gave me a wonderful preparation for the job I do now. Although royalty and taxes are not the same thing I had to deal with valuation of mineral, with relationship with a company, with making sure everything was done correctly, with auditing companies to make sure they were paying their severance tax as well as their property tax on minerals, and that's what I did for seven years for the governor.

Mr. Lawrence: That's a very interesting background. What is deep-shelf gas and why is it important? We'll ask MMS Director Johnnie Burton to explain this to us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence and this morning's conversation is with Johnnie Burton, Director of the Mineral Management Service in the US Department of Interior, and joining us in our conversation is Steve Sieke. Well, Johnnie, could you describe to us the strategic goals of MMS?

Ms. Burton: The goals of the agency obviously have to be in sync with the goals of the department which are the goals of the President. The overwhelming goal of MMS is really to help production of energy for the nation and make sure that the public, since they are public lands, receive a fair return on its asset, which in this case happens to be oil, gas, and on shore there are other minerals, obviously coal, et cetera. So the strategic goal is to make sure fair market value is attained by those minerals and that the royalty on those minerals is the correct amount as decided by Congress and we need to produce as much energy domestically as we can.

Obviously we would like to hold the line on imports. This country has been importing more and more of its oil. It's a very difficult thing to do because we are a very mature province in terms of producing oil and gas and mature provinces decline. You exhaust your capabilities after a while; however, this is not entirely the case here. This country has lots of resources not being exploited; by choice at this point, but the areas that are open to exploration MMS is trying very hard to facilitate the work industry does so they can produce as much as possible.

There is a conservation, and the word is often misunderstood, component to what we do, conservation meaning managing the reservoir so they produce as much as they can. Sometimes if you produce a reservoir very fast you get a lot of production but you damage the reservoir and a lot will stay in the ground. We need to guide industry so they produce it at a level that will produce the most from what's available.

Mr. Lawrence: I understand that MMS' goals focus on two programs, the offshore mineral management program and the royalty management program. What are the goals of these programs?

Ms. Burton: Well, we call it the management revenue. The management of the revenue has to be done in such a way that we can assure the public that the minerals have been valued correctly, that the amount of royalty and the amount of rent, the amount of bonus received whenever we lease some area, is a fair market value amount and that the public receives its fair share. That's really the overwhelming goal of the Minerals Revenue Management Group.

The Offshore Minerals Management Group, their goal is to manage offshore land and we have submerged ocean land. Around the United States you have roughly 1.76 billion acres. Now, we're supposed to manage all of that but in fact most of that is off limits; we don't do anything there. So in fact we manage less than 10 percent of that total amount but that's still a very sizable amount, as you can imagine.

Right now I think in the Gulf of Mexico we have about 40 million acres that are under lease, active leases, and so our goal there is to manage the submerged land so that we will get good production if there is production to be had but at the same time we protect the marine environment we don't do any damage, the companies don't do any damage, so we have rules and regulations they have to follow. We make sure that the safety of the people is a consideration and safety in terms of the ruggedness, if you will, of the material they put off shore.

You get a hurricane like Ivan that we just had. We have to try very hard to make sure the standards of building that industry is going to follow are strong enough to stand that kind of a storm. That particular storm was like the 500-year storm. It did a lot of damage but it didn't do that much damage to the facilities. It did damage to pipeline mostly because we think there was a bottom wave that actually caused some super mud slides when it got to the mouth of the Mississippi and those mud slides literally dragged pipelines and buried them and disconnected them but because of the standards we set and the rules companies follow and the technology that they've come up with when something like that happens there are so many valves that automatically shut that even if the pipeline disconnects there's a little bit of oil coming out, what was in that segment of pipe, but there's no more oil coming from anywhere because the valves are shut. All the valves held beautifully. All of this is what we do and what we feel is the critical part of our job.

Mr. Sieke: Johnnie, there are several interesting initiatives going on now at MMS. For instance, one is the deep water gas and oil exploration being done in the Gulf of Mexico. Can you describe for our listeners what deep water oil production is and how it's done?

Ms. Burton: Deep water production is relatively new and by relatively they've been drilling in deeper and deeper water for the last 10-15 years but certainly the last four, five, six years have seen some tremendous progress in how they handle deep water. You have to sink.

Remember, drilling a well on shore, for example, you put the bit in the ground and you turn it until you get down to a certain level. You run into problems, certainly hard rock, pressures, temperatures, et cetera. You have all of those things when you drill off shore but you have one added component which is enormous. It's the water column that you have to go through.

All you need to do is go swim in the ocean to know there are lots of currents. They're not always in the same direction and they're not the same at all depths. So when you put a drill pipe into the water you're going to have to think on how to keep it straight to go where you want to go with all of the motion that you have to subject your equipment to.

When you drill in 20 feet of water it's not that big a deal; 200 feet, 400 feet, the deeper you go the worse it gets. Well, this last year, I think, or the year before we saw the record of water depths worldwide was obtained in the Gulf of Mexico. A company drilled a well going through first 10,000 feet of water. When they can do that and stay on target and drill another maybe 15-20,000 feet into the ocean floor, then you realize what technology has done in the last 10 to 15 years.

What that has shown us is that not only can they do fantastic things but it also has shown us that the reserves of oil and gas exist in areas where we never thought about going before. The deep water production of the Gulf of Mexico has been fantastic. It has now surpassed the volume of oil that's produced in the traditional part of the gulf, which is the shallower water part of the gulf. We think that the deep water production is going to really become almost three-quarters of all the gulf production and the gulf production is very substantial.

So this is a very important province and it shows that the Gulf of Mexico is not a dead area. A lot of companies had thought we need to move away from here; we've produced everything it's going to produce. Well, not so. Now that they have the capability of going deeper and deeper and further out we now have rigs drilling almost 200 miles from the coast.

Mr. Sieke: Another area of development is deep-shelf gas. Can you describe what deep-shelf gas is and what's the difference between that kind of production and deep water production?

Ms. Burton: Right, as I was saying a little bit ago, you drill certain depths in the earth but you have to worry about the column of water. In the deep gas that you're talking about it's the reverse. This is on the shallow shelf, shallow meaning shallow water, under 400 feet of water, but they never had drilled very, very deep in the floor of the ocean.

Now we think that there will be some substantive gas reserves in the very deep part of the shelf, and so that's where they are looking for natural gas. We've put in some incentive for them to do it. Since 2001 we've had an incentive to give them some royalty-free volume if they drilled below 15,000 feet in the shallow shelf. We think that our tally tells us that since then they've drilled about 26 wells; 20 of them are producing, which is a tremendous success, and the interest there is that there is all the infrastructure they need to take that gas to market because along side that shelf that has been developing for 50 years you have about 36,000 miles of pipeline so you can tie into a pipeline fairly quickly.

Mr. Lawrence: Interesting. How is MMS measuring the performance of its programs? We'll ask its director, Johnnie Burton, for her perspective when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence and this morning's conversation is with Johnnie Burton, Director of the Mineral Management Service at the US Department of Interior, and joining us in our conversation is Steve Sieke.

Mr. Sieke: Thanks, Paul. Johnnie, with the deep water and deep shelf initiatives there are certain risks involved. How are you ensuring the safety of your workers while at the same time reducing oil spill risks?

Ms. Burton: You are hitting here on a key goal of MMS, which is obviously safety. Safety of the environment, first, we have a fair amount of rules. The industry will tell you we have too many we have to be very concerned with the marine environment, the life in the marine environment. We do a lot of research and a lot of study in areas before we put the area up for sale to begin with.

Once an area is leased and a company intends to explore we really stay in very close touch with them. We have established a lot of standards that they have to follow and industry itself works together to establish some standards for safety. It costs them a lot of money if they don't do things safely anyway so they are concerned with safety.

So are we. We watch what they do. We give standards where we feel they don't have some that are sufficient. We have a lot of inspection. We have inspectors that are all along the Gulf Coast, for example, since the Gulf of Mexico is really where the offshore activity primarily occurs. We contract with a helicopter company and every day we have inspectors going off shore watching what companies are doing.

If they are in the midst of drilling we inspect their drilling activities once a month. If they are already producing and have simply a producing facility obviously we won't inspect as often. I believe last year we had probably something like 26,000 inspections off shore so that's one of the ways we ensure that it's as safe as it can be.

Before a company can drill they have to submit their plan in great detail. We spend several weeks, months, reviewing those plans, making sure that what they will do is safe. We look at the coastal state that is adjacent to the area and we make sure that what the company plans to do is in sync with the coastal management of that state and that it's consistent with their rules and regs. So we go to great lengths to make sure that everything will be done safely.

We have unannounced drills. The companies have to have planned for spills in case there is a spill but the fact is the record is fantastic. I think that the Academy of Sciences has done some research and in the last 15 years found that there was never a spill of more than 1,000 barrels from any place in the ocean. Although that may sound like a big number to you the natural seeps, earth has area where the oil and gas is really close to the surface and it seeps in the ocean all the time. This is particularly true of the California coast, for example. The seeps are about 10 times more than anything that has been spilled from exploration.

Another area that is more difficult is the tankers. There are more spills from tankers and more pollution in the water than there is from exploration and production domestically. We study all of those. We keep track of all of those. Whenever there is any kind of spill and I mean a gallon of diesel fuel on the platform, that's reported and that's counted. We think the record is really stellar.

Mr. Sieke: That's really outstanding. We're at a time now where I think everybody has the high cost of energy in this country on their minds. I'm just wondering what MMS plans to do to try to secure as much energy as possible for the United States and how you balance that with protecting the natural environment.

Ms. Burton: It's a difficult balance, as you can imagine, Steve. What the Interior Department and the Secretary are trying to do is to give enough incentive for industry to invest in this country rather than go to West Africa, Russia, or somewhere else, although they go to those places, obviously, but we're trying to give them an incentive to stay here and produce here. I don't think we'll ever be self-sufficient. We're consuming way too much to become self-sufficient but our goal is to hold the line so we don't import more and more and more every year.

We are now close to 60 percent imports on oil which puts this country in a very precarious position, as you know. We need to try and hold the line and decrease that import quota, if you will, if we can. So we give incentives. We talked a little bit ago about incentives to drilling deep water. We give them a certain amount of royalty-free products. We do the same for gas but we also try to have a regime of regulation that is certain, that is well-defined, so industry knows what it's going to cost them to drill here, they know what they're going to have to do to live with our standards and with our regulations, and I think that has helped a lot with keeping industry here.

The last sale we had in the gulf was a very good one. The sale we just had in Alaska was the best one in 17 years. Now, having said all of that, the primary driver for industry to drill is price of the commodity. With the price of oil and natural gas lately we have seen a renewed interest in drilling and producing.

Mr. Sieke: Johnnie, MMS is involved in many important programs. I'm just curious how you measure whether goals of those programs are being met.

Ms. Burton: Well, we are setting metrics. It goes through our whole MMS organization but then it goes through the department and they are approved by a lot of people. We try to keep measurement on everything we do and at the end of the year the department looks at the results and OMB looks at the result, and, as you know, the President has a management agenda that he's been very, very strict in enforcing with these agencies so we live by the red light, the green light, and the yellow light and we all try to get to the green light, obviously.

So we do measure our performance. We have studied metrics for every one of our objectives recently and I don't know whether you're familiar with it but the government takes in kind some of its royalties. Instead of taking money from the company it actually takes the barrels of oil or the MCF of gas and sells it on the open market.

We had questions about is this a good way to do business, do we make as much money as we would if industry would just give us a check, and for that we didn't have very good metrics. Two years ago, a little after I arrived at MMS, I asked that we do a study and that the study be done by an outside entity. I didn't want us to be accused of being biased in looking at what we do so we hired an entity that does that for the private sector and asked them to come in, look at what we do, and then help us develop that will tell us how we're doing.

That has been very profitable, very good. In fact this last year we found that the royalty in kind program, as we call it, what we sold on the market, we made about $18 million more than we would have had we followed the other method which is getting a check from the companies. That's simply because, frankly, when you get 12 or 16 percent as a share of what's produced you become one of the big owners. When you do that you can get better deals on the transportation, for example, on the processing of the product. So we essentially cut the middle man off and so we do a better job but we have to prove it. The General Accounting Administration needed some proof so we just put in some metrics in place that seem to be working quite well. That's how we measure.

Mr. Lawrence: You've talked about working with industry in a very unique way. You simultaneously partner and regulate. Could you tell us about some of the management challenges of this unique relationship?

Ms. Burton: It is a difficult balance at times. Let me give you an example. About a year ago some companies came to us and said your leases are five-year leases or eight or ten-year leases depending on how deep the water is. We give them more time when they are in very difficult terrain, obviously. They said that sounds well and good but we now have the technology to drill down to 30,000 feet; however, we have to go through salt sheets. The Gulf of Mexico has a very different kind of geology. It has some salt sheets that make it very difficult for seismic wave, if you will, to come back clearly. They can't quite see what's below the salt.

They said we run all kinds of programs but we have to really know what's below there before we're going to invest millions. A well down there can cost $80 million. They said it sounds like 10 years is a lot of time but in fact they gave us a time line and they said we barely make it. If we're going to go that deep we need to have time to run all the different tests, analyze them, write the computer program that can interpret what we get, the raw data, then we need to drill. That needs a special ship. It needs special equipment, special metallurgy, for example. We need more time.

And we said as government we lease, we get money. We don't want to tie up a lease for 20 years and nothing happens so it's in our interest to get them back on the market very quickly but on the other hand we need the production. So we said okay, give us all the information of why you need more time and we're going to try under certain conditions to extend the lease.

That's the kind of partnership that we want. We make the rules. They're tough but there are times when you need to look at your rule and say in the long-term interests of the nation maybe we need to tweak that, and we do it.

But none of that would happen if we didn't have and didn't keep a fairly good relationship with the industry we regulate. They need to trust us enough to come and lay it on the table. They need to trust that we will consider what they give us and that we will make a fair decision. Now, sometimes they don't like the decision but they know they're going to get a fair hearing. And that's really a difficult balance to keep but that's the one I aim to keep and that's what I've been trying to do for the three and a half years I've been there.

Mr. Lawrence: That's an interesting example. What does the future hold for MMS, especially as it continues to explore for ocean energy? We'll ask its director, Johnnie Burton, for her perspective when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Johnnie Burton, the Director of the Mineral Management Service at the U.S. Department of Interior, and joining us in our conversation is Steve Sieke.

Mr. Sieke: Johnnie, how do you envision MMS in the next 5 to 10 years?

Ms. Burton: I think MMS will have to continue to work with industry to produce oil and gas where we can but I think it needs to also go in a slightly different direction and it has begun the process of looking at how to encourage alternative sources of energy. The Secretary of the Interior is very, very interested in alternative sources of energy to try and shift the burden away from the petroleum into, let's say, biomass, wind energy, wave energy, and certainly MMS would play a part because off shore might be an ideal place to have wind farms, to have wave energy.

The technology is almost there. It certainly is for wind and for wave there are several mechanisms that can produce energy. I think that an agency of the federal government is going to have to be the lead agency to look at new sources. One of the sources that may be fantastic but it's not there yet is methane hydrates which exist in the Gulf of Mexico and in the permafrost of Alaska.

It's really natural gas, methane, which is trapped in frozen molecules of water. It's like big mountains of ice but if you let that ice melt the rest is gas. It compresses the gas so much that when it releases it's 600 times the volume it had in that crystal.

This is being studied by the Department of Energy, certainly, and by the Geological Survey, which is a bureau of Interior, and MMS also participates. All of these new sources of energy will have to be investigated and we need to figure out how to regulate that production when it occurs, again, for safety reasons mostly, safety of the environment and safety of the people.

I think that MMS is going to have to go more and more in that direction. Right now we don't have the authority to do that. We're hoping that Congress will take a good look at it and give Interior the authority to manage, to lead, that development because right now if you want to put a wind farm off shore you have to go probably first to the Corps of Engineers to get a license for traffic in the sea but there are lots of other things.

Who is studying the impact on the environment? Who is deciding how that's going to be decommissioned when it doesn't work any more? Who is watching over the safety of the people that work there? There are no answers right now so we're hoping that the Department of the Interior can make a good enough case with Congress that we would be given this authority.

If that occurs I suspect MMS is going to have to grow a bit. I know this is an anathema when you talk about growing a federal agency but we actually do what we do today with a fairly small number of people considering the way the federal system works and what we have to do. I think we're going to need more resources to do alternative resource management. I think in another 5-10 years I'll see a third program, if you will, because we need to do that, and we need to prepare for it now.

Mr. Sieke: Johnnie, you've talked about a lot of different promising technologies, things that might be surfacing in the near future. What are your thoughts around how you support new technologies? Do you place your bets on all those things? Do you go through a process to say no, we've got to pick a few of the most promising and invest our resources there? How do you see that unfolding?

Ms. Burton: The technology development is really done by industry. We do not invest in it. We do not choose. We let industry do the development, do the research, and come to us. Now, what we need at MMS are the tools to evaluate what they bring to us. For example, there's been tremendous progress in seismic survey but in order to really interpret what you see you need very special computer programs, et cetera. We need to have our people trained to do that and to have the tools, the computer systems, et cetera, that can look at what industry's bringing to us and say yes, that sounds safe enough or that sounds good enough.

But we don't choose. We have to be able to pass judgment on all the things that come to us which means we need to have a lot of training, a lot of specific skills. We constantly have to know what industry's doing and we stay on point with them. But essentially industry is going to make the decision of what is the most economical and most efficient and we have then to look at it and we look at the down side, this technology, what is the danger of it. We try to give them some guidelines about you could do it this way but we're worried about this, you might want to work a little more on that, et cetera.

Mr. Lawrence: Johnnie, you've spent a significant portion of your career in government service as a public servant. What advice would you give to someone interested in a career in public service?

Ms. Burton: First of all let me say that the last not even 15 years I've been involved in state government and then in federal government and prior to that I was in the private sector so I've had a feel for both. There is certainly some real rewarding aspect to serving the public. I think you need to want to serve the public. It is truly a service.

Having said that, I also can tell you that there are some really interesting things happening that government has to know about and to do -- such as all the technology, for example, which MMS employees are exposed to. For somebody who's a scientist it's real exciting. Somebody who's an engineer and sees those things coming at him, where else would he have the ability to see such a spectrum of different things? If you work in the private sector you tend to be focused on one particular type of technology, for example. Here you see it all so it's very exciting, I think.

Now, working for the government has its advantages. One of them is really a certain amount of safety and security. Chances are the MMS is not going to be dissolved tomorrow but when you work for a private company you never know how the stockholders are going to react or how the market is going to react and then you could be working for Enron. So I think there are lots of positive things working for government and I would encourage anybody who wants a fairly steady path to their career to start.

You shouldn't be afraid of starting at the bottom. There are many, many opportunities of promotions in government. I think that most staff we have at MMS are very, very knowledgeable people that seem to be happy with what they do which brings me to saying that we need to encourage people to come and work in government.

We seem to have an aging work force right now and I am concerned on how we're going to replace them when they retire. We have internships. We like people to come and detail with us, spend some time, see what you like, and then hopefully when you come out of school you come and serve an internship and we can interest you enough that you can stay with us. We'd like to do a lot of recruiting. We're trying.

Mr. Lawrence: Well, Johnnie that will have to be our last question. Steve and I want to thank you for fitting us in your busy schedule and joining us this morning.

Ms. Burton: You are quite welcome. I enjoyed it. Thank you very much.

Mr. Sieke: Thank you, Johnnie.

Mr. Lawrence: This has been The Business of Government Hour featuring a conversation with Johnnie Burton, the Director of the Mineral Management Service at the US Department of Interior. Be sure to visit us on the Web at businessofgovernment.org. There you can learn more about our programs and get a transcript of today's fascinating conversation. Once again, that's businessofgovernment.org. For The Business of Government Hour I'm Paul Lawrence. Thank you for listening.

LTG James R. Clapper interview

Friday, May 13th, 2005 - 20:00
Phrase: 
"Both the National Security Agency and NGA have put great emphasis on bringing together geospatial intelligence and signal intelligence. It’s been particularly applicable and successful in the global war on terrorism. This is a great success story."
Radio show date: 
Sat, 05/14/2005
Intro text: 
Missions and Programs; Leadership; Strategic Thinking; Innovation; Technology and E-Government...
Missions and Programs; Leadership; Strategic Thinking; Innovation; Technology and E-Government
Complete transcript: 

Friday, March 29, 2005

Arlington, Virginia

Mr. Lawrence: Good morning and welcome to The Business of Government Hour. I'm Paul Lawrence, partner in charge of The IBM Center for The Business of Government. We created the Center 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.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Lieutenant General James Clapper, Air Force (Ret.), Director of the National Geospatial Intelligence Agency.

Good morning, General Clapper.

Mr. Clapper: Good morning, Paul.

Mr. Lawrence: And joining us in our conversation, also from IBM, is John Kamensky.

Good morning, John.

Mr. Kamensky: Good morning.

Mr. Lawrence: Well, General Clapper, let's start by getting our audience grounded in the National Geospatial Intelligence Agency. Can you tell us about its history and its mission?

Mr. Clapper: The National Geospatial Intelligence Agency, or NGA, was originally founded in 1996, and was then called the National Imagery and Mapping Agency. And it is the most recently formed part of the national intelligence community, and probably the least known. We are both a combat support agency within the Department of Defense and a component of the national intelligence community, and our basic mission is geospatial intelligence. What's that? It's basically what can be learned from studying the Earth, either natural or manmade activities and objects which have national security implications.

Mr. Lawrence: Can you give us a sense of the size of the organization and the skill set of the folks who work on your team?

Mr. Clapper: The agency is about between 14,000, 15,000 people; roughly half are government employees, and the other half are contractor full-time equivalents. And basically the operational, if I can call them that, skill sets which revolve around our analysis and production mission devolve from expertise on the Earth, and so we have what we call imagery analysts who look at photographs of the Earth and derive intelligence or information from that. And it isn't just a bold reading of the picture, it is looking at the picture in the context of what did it look like yesterday, the same scene yesterday, last week, last month, or last year, so it's put in context. So subtleties of change can be detected, from which you can glean important intelligence information.

We also have a mission we inherited from one of our predecessor organizations, the old Defense Mapping Agency, a navigational safety mission, so we provide aids to navigation for both aviators as well as the maritime community. We operate, for example, a 7 x 24 broadcast capability to warn anyone at sea of hazards to navigation. We have to account for every location of every drill rig in the world as a hazard of navigation. So again, the theme here in our skill sets devolve around expertise and knowledge of the Earth, starting with under the Earth, and that is an understanding of gravity, and we have people that specialize in that. And then our mission extends to both the terrestrial and maritime regimes.

Mr. Kamensky: What is your role and responsibilities as Director of NGA?

Mr. Clapper: Well, John, it would roughly equate to that of a CEO of a comparably sized company, and so my responsibly is the overall direction of the agency -- and of course, I have a cadr� of senior managers who work for me, assist me in carrying out the functions of the agency. So our largest organization is, as you'd expect, is our analysis and production organization. We also have, of course, a Chief Financial Officer, an Inspector General; we have a General Counsel; we have a large and capable human capital management organization which sort of does, bad metaphor, cradle to grave, from recruiting all the way to retirement, training education and all that.

So it is comparable, I think, to a large corporation, an international corporation, since we are deployed globally. We have people in virtually every time zone on the Earth. And I have an extended deployed force both overseas and elsewhere in the United States. So it is very comparable, I think, to a large company.

Mr. Lawrence: Can you tell us about your previous roles? How does one become Director of NGA?

Mr. Clapper: Well, I served for 32 years in the Air Force on active duty, and I retired in 1995, and my last assignment was as director of another intelligence agency, the Defense Intelligence Agency. And I have spent my entire career in intelligence; in fact, my whole family tree is in that business. I followed my father's footsteps, who was an Army intelligence officer, and my career was spent pretty much exclusively in the intelligence business, so I was fortunate enough to have a series or sort of career-building assignments that culminated in the assignment as Director of Defense Intelligence Agency.

And then I went to industry for six years, which I've worked for three companies, and then when I was asked to come back, I found that experience was invaluable in my current duties, particularly in light of the fact we're so heavily dependent on contractors.

Mr. Lawrence: Well, let me ask you about the contrast between the two sectors. I'd be curious in terms of sort of the management skills required to run an intelligence agency. You talked about being in a couple, and then to have you elaborate then on the skills required in the private sector and how those have been applicable.

Mr. Clapper: Well in the private sector, of course, the bottom line is the main thing, so you're always driven by revenue considerations and bringing in more business to the company and making a profit. We in the intelligence business are not in a profit-making context, and basically what we do is largely a free good. We support our many users -- consumers, customers, whatever you want to call them. But what we do is a free good. So there is a major difference in my mind when you do not have that common denominator incentive of the financial bottom line, and what you're trying to do is provide support for endeavors that often are attended to people in harms way. So, not to be melodramatic about it, but it can be a lifesaving proposition; that is what we do in intelligence. So that is a huge difference from the private sector.

Mr. Lawrence: How about in terms of just comparing things like speed of decision-making, in terms of -- I think a lot of people who have spent much more time in the private sector who come to government for the first time reflect on that, you know, surprise and then understanding of the difference in speed.

Mr. Clapper: Well, actually for my part, I think there are some parallels and similarities between the private sector and my experience with the government. This being the intelligence business, where there is a premium often placed on agility, and I think that's true as well in successful companies. And the companies I was with, all three of whom were good companies, were able when the time called for it to be agile. And I think that is certainly true in the case of intelligence. We're often accused of, being in the government, of being bureaucratic and all that sort of thing, but what we have found, particularly since September 11, is there is a very high premium being placed on agility and nimbleness and responsiveness, much more so than the 42 years I've been doing intelligence that I'd never seen before.

Mr. Lawrence: Well, you talked about going to the private sector; what drew you back to government service?

Mr. Clapper: Well, it was kind of a surprise. In August of 2001, I got a phone call from the Department of Defense, and I was asked to come in to interview to see whether I would consider coming back to serve as an intelligence agency director, and for me, frankly, it was kind of a no-brainer. I certainly enjoyed my time in industry, and the three companies that I worked for were great to me, but I never really got the psychic income that I got when I was in private service. And so when I had the opportunity to come back, and had the honor of being asked to come back, I jumped at it. And of course, this was about a month before September 11. In fact, I began my tenure at NGA ten days after 9/11, and it's been a pretty fast train ever since.

Mr. Lawrence: Earlier in this part of the conversation, you talked about changing the name from NIMA to NGA. Can you tell us a little bit about that?

Mr. Clapper: Right. The name NIMA, National Imagery and Mapping Agency, was somewhat of a compromise at the time because -- well, you may not appreciate this, but it was basically involved the marriage of two very disparate cultures; that is, imagery intelligence, imagery analysis on one hand, and mapping, charting, and geodesy on the other. And they had been organizationally and functionally separate for many, many, many, many years. So the notion of putting them together was somewhat of a radical thing at the time. And the vision of the founding fathers and mothers of the agency in the mid '90s was to amalgamate or synthesize these two previously disparate endeavors.

The name National Imagery and Mapping Agency really served to continue that separateness; that imagery analysis and mapping/charting geodesy is two separate endeavors. We, the leadership, had an off-site in January 2002, which was a fairly profound thing for us, and we decided we'd been singing "Amazing Grace" at the wake long enough, and that it was time to get on with what the intended vision of the agency was -- which was the melding of the two into what we call geospatial intelligence. Ergo, we need to change the name, so the name itself would not perpetuate that separateness, if you will.

So we prepared a legislative package which went through both houses of Congress, and amazingly enough, they both agreed, and so President Bush signed our name change into law as part of the National Defense Authorization Act for 2004, which thus renamed the agency.

Mr. Lawrence: Well, that's interesting. I didn't realize there was so much thought behind it.

What are the top priorities for NGA in 2005? We'll ask General Clapper, NGA's Director, to explain this to us when our conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Lieutenant James Clapper, Air Force (Ret.), Director of the National Geospatial Intelligence Agency.

Joining us in our conversation is John Kamensky.

Mr. Kamensky: General Clapper, can you give us an overview of NGA's top priorities for this coming year?

Mr. Clapper: Well, I guess the first priority would be to continue to and instantiate -- a 25-cent word there for "institutionalizing" -- the idea or the concept of geospatial intelligence. That's kind of priority one. We have put a lot of emphasis on what we call a performance-based culture, since in NGA we have had a pay-for-performance system for about six years now, which is a growing trend in the government. And this is quite a radical departure from the classic way that the civil service officers have been compensated in the past, where we attempt to make differentiation among employee performance, and then award them financially accordingly. So we will continue to refine that process.

When NIMA, as the agency was then called, was stood up in 1996, it inherited a pretty sick infrastructure, in that the antecedent infrastructures which were separate -- and by that I mean the communications and the computer capabilities, which were not compatible and all that sort of thing -- and we have spent a lot of time, energy, and money on rectifying that infrastructure so that we can cope with the volumes of data that we have to cope with. So that clearly is another instance. There's what we call convergence, which is meant to capture the notion of building a very robust, as we call it, TPED capability, which is an acronym for Tasking, Processing, Exploitation, Dissemination.

And what we are being confronted with is a rather substantial deluge of data that comes to us from many sources: satellites, be they government or commercial; airborne, and other sources of data, and that is going to increase exponentially. So we must absolutely, positively build ourselves a very robust, modernized infrastructure to accommodate and ingest all that material, and most importantly, convey it, do something with it so that users can make use of it. So those are I think big-hitters as we approach 2005.

Mr. Lawrence: Let me ask again about convergence, because I know you wrote a letter to the entire workforce, talking about its importance. I was hoping you could elaborate later a little bit more about that. And also, what's the role of the employees in convergence?

Mr. Clapper: Well, I have tried to convey the importance of this to not only the employees internally, but of course our Executive Branch overseers, as well as the Congress, so they understand why this is important. Typically and historically, the way we've approached this in the past has been, if we field a collection system; say, a satellite system or an airborne system, then somewhat as an afterthought, we will also then attend to the ground structure that has to accommodate or ingest the material that's collected from the collection platform, whatever it is. And then we do this, classically, on a one-off basis, so as our collection systems multiply, we just cannot continue this inefficient approach to having a TEPD structure that is done on a one-off basis, one per collection system.

The technology is such today that we can converge all these separate ground structures into one robust system, and then make it easier both for our analysts internally to use it, to ingest, and look at, and analyze this material, and also for our users to extract from the data, from our databases, what they need. So to us, to me personally, convergence is crucial to our future.

If we're going to keep up with what I call the four Vs: which are the volume, velocity, variety, and veracity, meaning the accuracies that are being expected of us; and if we're going to keep up with that, we have to build this robust TEPD, or Tasking Processing Exploitation Dissemination System. Employees have a huge role in this, because they're the ones that are going to make it work. So it's obviously important; it's crucial that I enlist their understanding of what convergence means, and their participation to make it work.

Mr. Lawrence: Along the lines of convergence, could you tell us about the National System for Geospatial Intelligence, NSG, as I understand it. Why is this important?

Mr. Clapper: The National System for Geospatial Intelligence is the compilation of, or the amalgam, I guess, of the people, the systems, the technology, the policies, and doctrine that comprise the enterprise of National Geospatial Intelligence. What that implies is not only the agency that I'm director of, the National Geospatial Intelligence Agency, but the larger community that we serve, since we of course engage with the military departments, the services, the warfighters, as well as partnerships that we have with the civil agencies, since we serve other Cabinet departments besides DoD. So it is the totality of this system, since we provide the workstations and the like, that support people who also draw on our products and services. So it is the stewardship of this larger system that it's kind of a second hat that I wear, in addition to that as Director.

Mr. Lawrence: And how about Geospatial Intelligence, or GEOINT, if I've said that right. Could you tell us about this?

Mr. Clapper: Well, Geospatial Intelligence is, as I say, represents this amalgam of imagery and imagery intelligence, so it is a picture on the ground in a geospatial or geographical context, and it is from that then you derive information of national security, that has national security implications. So for example, if the military is very interested in such questions as where are the bad guys, where could they move, and what it is the road network that might support their movement or mine, where are the bridges, where are the key infrastructures. So if all that data on the ground, on the terrestrial dimension, over which other forms of intelligence-oriented information can be overlaid, it gives, say, a military commander in the field the picture of the environment in which he or she is going to operate.

Mr. Lawrence: I know that NGA is also leading the way in terms of standardizing the sharing of geospatial information and I've been reading about the standards technical working group. Why is this important?

Mr. Clapper: Well as we try to serve as the leader; the steward, if you will, for this larger system, it's important that we and people looking to us to do this that we sort of prescribe the building codes, if you will, and that you've done that under a laboratory kind of seal of approval. So if you're going to buy a piece of equipment, a computer, whatever it is, that it's got to be compatible with the larger national system for geospatial intelligence. So that then implies sort of endorsement, or actually the description and prescription of standards. Now, this gets to be very complex, because we deal internationally, since we have many, many agreements with foreign countries or foreign counterparts. So there's a set of international standards; there are, of course, a set of commercial standards. And our approach, frankly, is if there's a capability hardware/software that can be procured off the shelf that will satisfy our need, that's what we should do. So you have the commercial standards, and then you have the military spec standards, and what we are attempting to do is to sort of compile those into a single directive, so that we've got all these geospatial intelligence standards in one place. Again, it's kind of the building codes, in order to promote collaboration and interoperability.

Mr. Kamensky: In addition to Geospatial Intelligence, NGA has had a role in supporting recovery from national disasters, like the World Trade Center, the Space Shuttle, the hurricanes in Florida. I understand that NGA is also helping the relief efforts in the Tsunami-impacted regions. How is NGA providing support there?

Mr. Clapper: John, it's a growth business for us, if I could use that term. It goes back actually to before the Agency was formed. And the predecessor elements of the Agency have always had a disaster relief mission, so if you have some natural disaster; say, flood, hurricane, earthquake, whatever it is, just domestically, the Agency and its predecessors would bring to bear either the national means, or more recently, commercial means to enable planners and responders to look at -- literally, no pun intended, the big picture. So you can look at a large area and see the extent of damage, you can see the impacts; for example, on road networks. You can see where you have to concentrate your relief efforts first; you can see what the impact has been on the infrastructure. So that FEMA at the national level, and in a domestic context, at the State level as well, we can provide them with these views or pictures that show the larger area of damage that's been affected, so they can use that as a planning aid, as well.

Now, this mission easily translates or transforms into support to Homeland Security. So we have an extensive effort to support our Homeland Security efforts, and all we've done here is apply the same tactics, techniques, and procedures; the same products, services, solutions, that we have long done in an overseas context, and just overlay them into a domestic context as well. So every special event in the United States: Super Bowl, political conventions, inauguration, whatever it is, we are there with a deployed team, and we provide that common operating picture on which the other agencies, federal, state, local, and regional, can all share, so they're all looking at the same map, if you will, the same geospatial depiction.

Similarly, in the Tsunami disaster, we were able to do the same thing, only overseas; for the eleven countries that were affected in the Indian Ocean littoral was -- an unbelievable magnitude of this disaster. And of course, it has had profound impact on the littoral environment around the Indian Ocean. So we will have to be redoing all the geospatial depictions, the maps and the like because of the change to the littoral; both maritime conditions, as well as terrestrial.

Mr. Kamensky: Littoral being coastline?

Mr. Clapper: Yes, right.

Mr. Lawrence: That's interesting; I didn't realize you had to redo the maps.

Many are talking these days about the need for intelligence agencies to collaborate and work more closely. What are the management challenges that need to be addressed to make this happen?

We'll ask General Clapper, NGA Director, about these when The Business of Government Hour continues.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Lieutenant General James Clapper, Air Force (Ret.), Director of the National Geospatial Intelligence Agency.

And also joining us in our conversation is John Kamensky.

Well, General, President Bush signed the U.S. Intelligence Reform Bill into law into December 2004. Could you tell us about what some of the key provisions are, and how this bill affects NGA?

Mr. Clapper: Well, this is, no question, the most profound piece of legislation affecting the intelligence community since the National Security Act of 1947, and I think the most profound feature of it, frankly, is the separation of what had been the Director of Central Intelligence from being dual-headed as both the DCI as well the Director of the Central Intelligence Agency; the DNI, as he will be called, assuming Ambassador Negroponte is confirmed, will be presiding over all the agencies, to include the CIA. So the implications of that I think are quite profound, and we're not actually going to know until we actually start doing this.

There's a lot of analysis going on right now of the legislation, which I personally think is interesting, but it isn't going to be terribly informative. I think the real test here is going to be the first acts of the DNI; that is, what he does and says the first hour, first day, first week, first month, first year, because that will be huge in terms of the precedents that will be set on how this position is actually going to perform and what it's actually going to do. So I think we're going to watch this space mode, frankly, as to how this all turns out and how this evolves, and of course, it's going to be very interesting.

As far as our agency is concerned, what I have told the work force is that it's my belief that what we do is so vital, so important to our users, our consumers, that I don't see, at least initially, a whole lot of change as a direct result of the onset of the DNI. I'm sure there will be changes, but I think the basic mission that we perform will continue.

Mr. Kamensky: Some say that a small revolution is underway in the intelligence service. For the first time, National Security Agency experts are working with analysts at NGA. What were the drivers for these two agencies to join forces now, and how are the National Security Agency and NGA working closer together than any intelligence organizations in history?

Mr. Clapper: Well, John, that's a great question, and I appreciate getting it because I think this has been a good news story. It's not been heralded too much. Obviously, all the intelligence community has been impelled by the tragedy of 9/11. There have been, even before the legislation, a lot of changes, for the good, in the intelligence community. General Hayden, who is the Director of the National Security Agency, and is the nominee to be the Deputy Director of National Intelligence, and I are long associates and colleagues and have known each other for many years.

I served on the NSA Advisory Board for four years while I was retired, and I basically grew up in the NSA system. I had a couple of assignments there and I'm pretty familiar with NSA. So when I came to NIMA, now NGA, I was frankly struck by the parallels and similarities between the two agencies. We basically operate in the same time zone, yet we don't compete. We are very complementary in what we do. And so it's almost a natural fit for the two agencies to get together and collaborate. So we've done a lot in terms of exchanging hostages, if you will. We are on each other's footprint big-time. We have senior executives that we have exchanged in each agency, which is a tremendous experience for them and both the agencies. I can't go into the details here because of the classification, but suffice to say that we have put a lot of the emphasis on bringing together our two disciplines, geospatial intelligence and signal intelligence, at the pointy end of the stick, if you will. It's been particularly applicable and particularly successful in the global war on terrorism, but to me, this is a great success story.

Mr. Kamensky: You and former CIA Director George Tenet and former NSA Director Michael Hayden commented together that speed and agility is the key to the war on terrorism, not more levels of bureaucracy in Washington. How are intelligence agencies speeding up this work flow?

Mr. Clapper: One thing we are doing, both -- everyone as an intelligence community, but particularly NSA and NGA is pretty representative -- experts from each of our agencies in the field, with the forces pursuing the terrorists in the global war on terrorism. This has been I think a tremendous success as well. There's no substitute for having our experts right there with the operators, with the warfighters, enduring the same privations, the same challenges, and most importantly, understanding the exact mission. And there is a time sensitivity involved here, and so we empower our folks who are forward-deployed with the warfighters to draw on or reach back to the home agency for whatever support is needed. So we've had to build up a cadr� of deployers to sustain this presence.

But there really isn't any substitute for having them out there embedded in a decision loop which can't come back to the Beltway and then back out there. They have to be a part of that process. And all the intelligence community members, all the agencies, are involved in rendering that sort of direct support up close and personal.

Mr. Kamensky: What are some of the challenges and what's being done to overcome them?

Mr. Clapper: Well, one of the challenges that we have is, of course, sustaining these deployments. It's one thing when, you know, the first emergency happens, but then when you get into a regime of sustaining these deployments for months and months, now years at a time, what we've done is raise a cadr� of deployers that we train and equip, and they're all civilians who volunteered to do this. And of course, we compensate them extra for that. But, you know, teach them how to fire an M-16 and drive a Humvee and all these other things that military people need to do, because that's then environment they need to operate in, so they get their shots up to date, and their wills up to date, and all of that, and then we deploy them, and that's a challenge.

There is the challenge of communications; staying connected, particularly in the business for imagery, which is widely known as a voracious bandwidth eater of communication. It takes a lot of communications capacity to move imagery around. So that's always a challenge, a connectivity for the people -- we have people in Afghanistan, Iraq, and other garden spots like that, and staying connected with them in such a way that we can respond to their needs, keep them equipped, keep them supported, is a big challenge. And then of course, having to do that in a secure mode, and complying with security policies and the like. So those are all some challenges that we're working, and by and large, I think pretty successfully overcoming.

Mr. Kamensky: Many intelligence agencies have expressed a need for more intelligence analysts. How's NGA approaching its planning on recruiting, training, and retaining?

Mr. Clapper: We, like the rest of the Intelligence community, are on the upslope. We were on down slope, personnel-wise, prior to 9/11. And of course, that has occasioned a growth spurt for us. And so all of us are out recruiting -- and I think it speaks well of the patriotism of our citizenry, and particularly our young people, because all of us collectively have thousands of r�sum�s of applicants who want to come work for us, which of course is good, because we can be selective. The mode we're in right now is, of course, one of the problems we have is there is a clearance requirement, background investigations and that sort of thing, and so we have people in the pipeline. And sometimes these clearances can take a long time, so we have the challenge of staying connected with our applicants, hopefully keeping them interested in what we offer to them.

So we are bringing in hundreds of people right now, which poses a real strain on our pipeline, particularly training. And what we've had to do is set up a mentoring system, where every new employee, particularly new analyst, is assigned a more experienced member of the analytic cadr� to sort of show them the ropes. And so we're having to do this. And of course, we have to continue our day-to-day mission, so that is a daunting challenge. But I've been on the obverse of that, where you're trying to reduce the workforce, and frankly, I'd rather be in the mode we're in today.

Mr. Lawrence: In the first segment when you were describing your team, you talked about the significant contribution of contractors. How is NGA working with contractors and making that link between business and government?

Mr. Clapper: Well, this is something that affected me. The six years that I was out of the government and in the industry, I worked as a contractor for the intelligence community, so I had that dimension, and I learned a lot from that experience. And that frankly has influenced me and the Agency accordingly. So we like to think that we're very contractor-friendly. My definition of what is what I would call the sacred trust of the government has actually gotten much smaller since I was a contractor, because there's a lot of work that contractors can and do do for us. In fact, if all the contractors didn't come to work tomorrow, we would be out of business. We are that dependent on them. They are a part of us.

I have tried to promote as much teamwork between and among government and contractor as possible, acknowledging though that we the government has a fiduciary and contractual oversight responsibility to ensure that what the contractors do meets the specifications of the contract. One of the processes I've established is what we call an industry interaction program, which is rather formalized, but what it is designed to do is to offer a contractor who has something to offer, something they want to show, they want to demonstrate, they want to brief us on, so we have a dedicated staff to systematically bring these people in and ensure they are exposed to the right parts of the NGA staff, and then we'll help them, to the extent that we can, ply what they might have to offer, if it is something that we need. So since half our workforce are contractor full-time equivalents, this is a hugely important segment of our workforce.

Mr. Lawrence: That's interesting about that formal interaction.

What does the future hold for NGA? We'll ask General Clapper, its Director, for his prospective as our conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Lieutenant General James Clapper, Air Force (Ret.), Director of the National Geospatial Intelligence Agency.

And joining us in our conversation is John Kamensky.

Well, General Clapper, can you tell us about the future of imagery and satellite technology, and the challenges NGA may face in the future?

Mr. Clapper: Well, the future for us, I think, is very bright. I think the idea, the concept, of geospatial intelligence, which I feel is quite compelling, is catching on. It is growing; I think people appreciate it. It can serve many customers, be they in the Department of Defense, which of course is our major customer, but, other Cabinet departments. We support the Department of State, Department of Justice, Department of Energy, and of course the Department of Homeland Security, with this notion of geospatial intelligence. What we're faced with in the future is greater and greater volumes of data as we acquire more collection capabilities, be they from satellites or from aircrafts or from terrestrial sources, so the challenge for us is going to be coping with the volume of data that we will ingest, the variety of sources and sensors that it will come from, and ensuring the veracity of what we produce.

The example I would cite is the ever-more exacting demands of precision-guided munitions. Today, the military places a very high premium on precision and accuracy. If they use a kinetic weapon on the ground, it must go where it was intended to go. So that places a very high premium on knowing the exact spot on the Earth where you're going to put that weapon. And as it turns out, NGA is the steward or reservoir for the master database to support this effort. So our challenge is going to be coping with this volume, the variety, and the velocity, the intervals during the day at which we will be taking a drink out of that fire hydrant, so to speak, and coping with it, so that's going to be our challenge in the future. Now, it's a challenge, but it's also a good news story, because I think that what that represents is the instantiation of the importance of geospatial intelligence.

Mr. Kamensky: How do you envision NGA in the next 5 to 10 years?

Mr. Clapper: Well, I think that, assuming we can continue with our program to converge and modernize, a lot of things that are done today kind of manually, we are still very much in the paper products mode. We produce millions and million of map products, for which there will always be a demand, but ultimately, we want to get to doing business with us the way you do business on the internet, in that you would come to use through our webpage, or whatever, and through a series of a few clicks -- not too many -- you'd be able to extract the layers of data that will support your particular mission, and that you can use that, manipulate it and tailor it to suit your own needs, you as a user, and so that we're not producing reams and reams of paper. So that I think is going to be our major transformation over the next five years, the modernization and automation of our processes.

Mr.Kamensky: And what advice can you give to government executives who face similar tasks of collaborating with other agencies and departments?

Mr. Clapper: Well, I think I'd look for the sweet spots. The approach that General Hayden and I took with the collaboration between our two agencies was basically to encourage those in each agency that this is something we wanted to see happen, and to look for good ideas on how we can collaborate, and the result has been where the sum is greater that the parts. And so I think looking for where there are complementary opportunities, and if there are policy barriers, or the like, that can be overcome through, in our case, the direction of the two agency directors, and then we do that.

The pattern that General Hayden and I have worked into is about once a quarter, we have a fairly formal meeting between the two of us, and we have our senior staff, and we alternate home and away, at his agency or ours, and we use the Huntley-Brinkley approach, where an agency senior from each of the agencies have to get up and brief together what they're doing in their particular area to promote collaboration, and it seems to work pretty well. There's always a flurry of activity two weeks before the next quarterly.

Mr. Lawrence: As I think about your description of your career at the beginning of our show, it's clear you've had a long and distinguished career as a public servant. What advice would you give to someone, perhaps a young person, interested in a career in public service?

Mr. Clapper: Well, go for it. I have done both, and in all, I spent the lion's share of my life and career in public service, and it is the what I call psychic income that I derive from the public service. To me, it's somewhat an ethereal or spiritual thing. It has not to do with making a lot of money, because you're not going to do that in the government. The government pays well, comfortably, you can make a comfortable living, but you're not going to be rich just working in the government. But there are certain satisfactions that come from the discharge of what I consider a sacred trust, particularly these days, because of the vital importance of intelligence in the war on terrorism. So I think it's a great place to be. It's very rewarding and satisfying to be a part of this national effort.

Mr. Lawrence: Well, I'm afraid that will have to be our last question.

General Clapper, John, and I want to thank you for squeezing us into your very, very busy schedule in joining us this morning.

Mr. Clapper: Well, John and Paul, I've enjoyed it. Thank you very much.

Mr. Lawrence: Thank you again, General.

This has been The Business of Government Hour, featuring a conversation with Lieutenant General James Clapper, Air Force (Ret.), Director of the National Geospatial Intelligence Agency.

Be sure and visit us on the web at businessofgovernment.org. There, you can learn more about our programs and research and get a copy of today's transcript of this fascinating interview. Once again, that's businessofgovernment.org.

For The Business of Government Radio Hour, I'm Paul Lawrence. Thank you for listening.

Ron DeHaven interview

Friday, December 10th, 2004 - 20:00
Phrase: 
"Agricultural trade is critical to our economy. Our role is to ensure that agricultural exports and products imported abroad are safe and not a risk to trade partners. Potential health and pest risks are becoming the limiting issues within trade."
Radio show date: 
Sat, 12/11/2004
Guest: 
Intro text: 
Missions and Programs...
Missions and Programs
Complete transcript: 

Monday, November 1, 2004

Arlington, Virginia

Mr. Lawrence: Good morning and welcome to The Business of Government Hour. I'm Paul Lawrence, partner in charge of The IBM Center for The Business of Government. We created The Center in 1998 to encourage discussion and research into new ways to improving government performance. Learn more about The Center by visiting us at businessofgovernment.org.

The Business of Government Radio Show Hour features a conversation with a government executive who is changing the way government does business. Our special guest this morning is Dr. Ron DeHaven, administrator of the USDA's Animal and Plant Health Inspection Service.

Good morning, Dr. DeHaven.

Dr. DeHaven: Good morning. Thank you for having me on your show.

Mr. Lawrence: And joining us in our conversation, also from IBM, is Mike Wasson.

Good morning, Mike.

Mr. Wasson: Good morning, Paul. Thank you for being here.

Mr. Lawrence: Well, Dr. DeHaven, let's start by learning more about APHIS. Could you tell us about the Animal and Plant Health Inspection Service, and its role within USDA?

Dr. DeHaven: Certainly. Our motto within APHIS is "Safeguarding American Agriculture," which I think really speaks to what we do. We're responsible for ensuring safe and healthy agricultural products, both on the plant and animal side. Indeed, Secretary Veneman at one point had made reference that if she were starting to rebuild the USDA all over again, she would start with the foundation, that being APHIS. We have several program units within the agency -- veterinary services, plant protection quarantine, biotechnology regulatory services, wildlife services, international services, and animal care -- all of which speak to the specific roles we have in a very broad mission area.

Mr. Lawrence: How do you describe the size? I mean, you've gone through a wide range of programs. Could you tell us about the budget, and even the skills of the people on your team?

Dr. DeHaven: In terms of the budget, it's actually grown quite dramatically. In Fiscal Year '01, we had an appropriation, or appropriated budget, of $445 million. The President's budget for Fiscal Year '05 is $828 million. That, taken along with the frequent apportionment of monies for emergency purposes, which in the last few years have averaged at about $250 million a year, we're basically a billion-dollar agency.

In terms of numbers of people, there again, the numbers vary depending on what you're looking at. In terms of full-time permanent employees, we're somewhere in excess of 4,000 employees, but when also including Foreign Service national employees around the world and temporary employees that we hire, we're in excess of 7,000 people.

Mr. Lawrence: And the skills of these folks?

Dr. DeHaven: Wide variety, as you might guess, given the program units that we have in the agency. On the plant side, we have plant pathologists and botanists. On the animal health side, veterinarians and epidemiologists. We employ wildlife biologists, biotechnologists, program analysts, economists. We have a public affairs staff with several public affairs specialists and writer/editors, and then also, because of the monies that we involve, contracting specialists and financial managers.

Mr. Wasson: Well, Dr. DeHaven, can you share with us your roles and responsibilities as administrator for APHIS?

Dr. DeHaven: I look at my job as providing the vision and leadership for this agency; ensuring that we have the resources, both human and financial, to carry out our mission; and then represent the agency in a variety of situations, both internally and externally.

Mr. Wasson: In April of 2004, you became administrator of APHIS. Can you tell us a little bit about the background before you became administrator?

Dr. DeHaven: Well, I graduated from veterinary school, Purdue University, in 1975, and actually went to school with the intent of being a small animal, dog and cat practitioner. I did four years with the Army Veterinary Corps, which I found very rewarding, and during that period also gained some clinical practice experience. But at the end of my tenure in the Army, I was intrigued by government service, and actually then took my first job with the government in APHIS in 1979. I spent the first six years of my career, which I think was very valuable, in the field as a field veterinary medical officer dealing with primarily livestock disease issues.

From there, I moved into a middle management position as the assistant area veterinarian in charge in our state of Mississippi. And then, four years after that, started a 12-year stint in our animal care program, overseeing administration of the Animal Welfare Act and the Horse Protection Act. It was then about four years ago that I came back to our veterinary services unit as the deputy administrator of that organization and, of course, have been the administrator now for two years.

So I think what I find most interesting is that I went to veterinary school with the intent of being a dog and cat practitioner, now find myself as a Washington bureaucrat with far more reaching implications and responsibilities when it comes to both animal and plant health, and enjoying myself as a Washington bureaucrat, something that back in 1975, I would never have imagined happening.

Mr. Wasson: You have an interesting background, where you have both a doctor of veterinary medicine and an MBA. How did you combine your two degrees for maximum effectiveness in the work environment?

Dr. DeHaven: As I mentioned with my veterinary degree, I think that degree has opened up a wide array of opportunities, both from clinical medicine to being a Washington bureaucrat. The master's in business administration came at a time when I had made the career decision that I wanted to stay with government and focus on management of programs and people. I realized at the time, and actually fully came to realize during the course of obtaining that degree, that we need to market ourselves and run our government agencies like business runs itself. And so I think through both degrees, the doctor of veterinary medicine and the MBA, I've had the technical background, the technical experience, but also now the management experience to provide oversight and leadership for a government agency and focus on running government like a business.

Mr. Lawrence: I'd like to pick up on that point where you talked about getting an MBA, when you began to understand the importance of management. What was it like as you were transitioning from a doer, when you were describing, you know, providing services to animals as a veterinarian, and to becoming a manager? Could you take us through that?

Dr. DeHaven: I think before that, Paul, I even realized that while the private veterinary practitioner certainly has some strong and influential impact on families and individual animals, by working with a government agency, we actually have tremendous impacts on population of animals. And so that's where I wanted to take my career was in veterinary medicine, but looking at a broader picture, recognizing that animal agriculture has tremendous implications for our economy and for the health and well-being of a large number of animals as well as the basis for employment of many people in this country. So I recognized the potential there; had also had a taste as a middle management of managing people and managing programs and enjoyed that as well.

Mr. Lawrence: Well, tell us about some of the differences in terms of your training as a veterinarian and then what you began doing as a manager. One of the things I'm drawn to is sort of the size of the groups of people you dealt with. I imagine, from having animals, that a veterinarian experiences one-on-one, and generally, the customers don't complain very much, I imagine, and now you're with much broader teams of people that you have to influence. Tell us about some of the differences in the training.

Dr. DeHaven: You know, ultimately, Paul, it comes down to dealing with people one-on-one and having interpersonal skills, whether you're dealing with that pet owner or a herd owner whose herd of cattle has just been recently diagnosed with brucellosis. From there, you take it to my current position, where typically, I'm working one-on-one with individuals who represent larger, broader constituencies. At the end of the day, it's interpersonal skills and working one-on-one with people. It's just the stakes on different -- whether we're talking about an individual animal or an individual herd of animals versus populations of animals. At the end of the day, it's a matter of employing good common sense and having the interpersonal skills to explain your situation and your position.

Mr. Lawrence: And how about the speed of decisions and the things you can make an impact on? I imagine it must have been very rewarding to you to work one-on-one in a small setting and solve a problem with an animal, and see that work its way out, and now to think about solving something in a population seems much hard and would take more time.

Dr. DeHaven: I think that for the most part is very true. When you're dealing with an individual animal, oftentimes, it's life-and-death situations and decisions need to be made very quickly. On the other hand, when you're dealing with populations and diseases and disease programs that have broad implications for a large population of people and a larger population of animals, typically that decision-making process is much slower, requires a transparent and open process that allows the public and all stakeholders to have an input on that decision. That's how government does work and should work, and we certainly emphasize having an open and transparent process.

Not everyone is cut out for that kind of work. Bureaucracies are intended to be somewhat inefficient, so that they provide that opportunity for everyone to have input. It's something that you develop a skill and ability to work within our system, which, again, by some accounts is intended to be somewhat inefficient in that it does provide for broad constituencies to have input.

Mr. Lawrence: That's interesting. As I think about you getting an MBA and your point about, you know, making government act more like a business, and you talked about the need for inefficiencies, are there any other places that you've noticed where it almost shouldn't run like a business?

Dr. DeHaven: Well, we don't have a bottom line, per se, to worry about in government in terms of having to generate revenue. Rather, making the best use of taxpayers' dollars that are appropriated by Congress or otherwise made available to us. But whether you generate a revenue or have an appropriation, it's getting the most bang for your buck, making sure that how you use that money is used efficiently and effectively. In our case, it's for the public in general as opposed to private business, where you have that customer that you're trying to give them the most benefit for their dollar spent.

Mr. Lawrence: That's an interesting point, especially about the need for openness and transparency.

We're all aware of mad cow disease. How are we tracking and testing for this disease? We'll ask Dr. Ron DeHaven of the Animal and Plant Health Inspection Service to tell us about this when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Dr. Ron DeHaven, administrator of the USDA's Animal and Plant Health Inspection Service.

And joining us in our conversation is Mike Wasson.

Well, Dr. DeHaven, let's talk about mad cow disease. And with the scare of the disease entering in the United States, how is APHIS able to track and test cattle for the disease?

Dr. DeHaven: Well, we have actually been testing cattle for bovine spongiform encephalopathy, or BSE, since 1990, increasing every year the number of animals that we test. In 2002/2003, we tested some 20,000 animals. And these are animals for what we consider to be the high-risk or target population, meaning that if we do have the disease, these would be the animals that would be most likely to test positive, some 30 times more likely than the average adult cow in our population.

Because of the recent cases in North America, both of them native born in Canada, but one found in the U.S., we have entered into an enhanced surveillance program beginning June 1st of this year. Since June 1st, we have tested somewhere in the neighborhood of 98,000 animals in this high-risk or target population. And of course, all of them thus far have been negative.

Our goal is, during a 12-month period, we want to test a statistically significant number that would, if we have the disease in the U.S., even at a prevalence as low as 1 animal out of 10 million that's positive, that we would find the disease. So our goal is, during this 12-month period, to test somewhere in excess of 250,000 animals, and then can say with some degree of statistical significance whether or not we have the disease, and, if so, at what prevalence.

Mr. Lawrence: Take our listeners through the process of testing. You describe statistics, so I have a picture in my mind of sampling, much like we would anything else, and then running the tests. And so I'm curious, is that right? And just what does the test entail?

Dr. DeHaven: That is correct, Paul. We, unfortunately, don't have any live animal tests available to us at this point in time. There's no blood test. In fact, the test involves getting a piece of tissue from a very specific section of the brain, in the brain stem. So we're collecting these samples from animals that have died on the farm, have gone to slaughter, or otherwise would be animals that have died or are destined to be slaughtered.

We're picking these samples up off of animals that die on the farm. Typically, they're sent to a rendering plant, and we collect the tissues at rendering. Some animals that become nonambulatory at slaughter, they go down, if you will, and are not allowed into the human food chain, we test those animals as well, but also animals that are going to public health laboratories and state diagnostic veterinary laboratories, animals that are showing some central nervous system disorder.

So after the animal dies or is otherwise selected for testing and is euthanized, this portion of the brain, a small piece of tissue, is taken from that section of the brain and then it's subjected to one of half a dozen different tests that we've approved for this purpose. These are rapid screening tests.

So the samples are collected at slaughter plants, rendering plants, diagnostic laboratories, and then that sample is shipped to one of seven laboratories around the country where this testing is done. If any of the animals or tests come up anything other than negative on one of those screening tests, then it goes to our national reference laboratory, that's our National Veterinary Services laboratories in Ames, Iowa, for confirmatory testing.

Mr. Lawrence: Are there steps to implement measures and risk assessments for better effectiveness of tracking disease? As we were preparing, I was reading about the animal registry program.

Dr. DeHaven: The animal registry, I assume, Paul, you're talking about our National Animal Identification System, which is the system that we are currently developing that would provide for some kind of electronic identification on every animal, livestock species of animals, in the country. It's almost ironic in that because of the recent finding of the BSE case in the state of Washington, we're on an accelerated path to implement this national animal identification. And ironic in that BSE is a non-contagious disease, so it's one that we have the luxury of a matter of days or even weeks to trace animals.

On the other hand, if we were to have a highly contagious disease enter the United States, such as foot-and-mouth disease, we would need to be able to track animals in a matter of hours in order to be able to contain and, hopefully, eventually eradicate that kind of disease that might be introduced into the United States. So while certainly animal identification on every animal in the country would be useful for a number of domestic disease programs that we have ongoing, certainly in terms of our BSE testing program, it would be critical to have that kind of system in place were we to have the introduction of a highly contagious foreign animal disease.

he system that we're implementing would then involve electronic identification on the animal, and there's a number of different technologies that can be used, such as radio frequency, ID microchips. But the idea would be that in a maximum of 48 hours, we could trace animals that were infected or had been exposed to infected animals.

Mr. Wasson: Well, Dr. DeHaven, recently APHIS partnered up with the Food and Drug Administration and the Environmental Protection Agency on developing a single portal on agricultural biotechnology regulations, which is usbiotechreg.nbii.gov. Can you tell us how this came about and what this site offers?

Dr. DeHaven: Well, the three agencies that are involved in regulating agricultural biotechnology APHIS, Food and Drug Administration, or FDA, and EPA, the Environmental Protection Agency all have very distinct and different roles. But the public really wants one site where they can go to to answer all of their questions, regardless of which agency might have specific regulatory authority. So we worked with our colleagues at FDA and EPA as well as the White House's Office of Science Technology Policy to develop this website. As with all of our regulatory programs, our goal is to be open and very transparent in the process so that we can have a coordinated and risk-based approach.

I think biotechnology represents some unique challenges, in that we walk a very thin tightrope in terms of ensuring that we have adequate regulations to ensure protection of the public and the environment, but, at the same time, not over-regulating to the extent that we unduly restrict growth in an industry that has so much to offer to society.

Mr. Wasson: Well, earlier this year, USDA and APHIS will prepare an evaluation of its biotechnology regulations and several possible regulation changes, including the development of a multi-tiered risk-based permitting system and the enhancements of the deregulation process to provide flexibility for long-term monitoring. How is this process coming along, and what impacts does this have on the stakeholders?

Dr. DeHaven: Mike, you're right. In January of this year, we published a notice of intent in the Federal Register and said in this notice that we plan to prepare an environmental impact statement, or EIS, to consider possible changes to our biotechnology regulations. Through the EIS and a change in regulations, it would provide for a multi-tiered system that would provide some flexibility in the commercialization process for biotechnology products, genetically engineered products, and provide for new policies in field testing, for example, for pharmaceutical plants, plants that are genetically engineered to produce pharmaceutical compounds or other industrial compounds, as well as providing a mechanism for dealing with adventitious presence. That would be the presence of genetically modified organisms in organisms that are thought to be or expected to be non-genetically modified.

Before even starting this process, however, we met with stakeholders and got their input and, through this notice of an intent to prepare an environmental impact statement, received over 3,000 public comments. We've reviewed and considered those comments, and we are currently in the process of writing this environmental impact statement, the impact that new regulations might have. The public will once again have an opportunity to comment on this EIS. And then ultimately, we would be publishing a proposed rule, once again for public comment. So again, emphasizing our open and transparent process in developing any new regulations.

Mr. Wasson: In the wake of terrorist attacks against the U.S., bioterrorism has been of a great concern. For instance, the Bush Administration passed the Agricultural Bioterrorism Protection Act of 2002 and the Homeland Security Act of 2002. What is APHIS's part against bioterrorism?

Dr. DeHaven: It's been part of our responsibility in APHIS to respond to the introduction of foreign animal, plants and plant diseases, and pests as well as animal diseases. So we have considered ourselves for several decades to be first responders when there is an accidental introduction of a plant disease or a pest or an animal disease.

What has changed obviously with the recent times, most notably since 9/11, is the recognition or realization that we not only are vulnerable to an accidental introduction of pest or disease, we've vulnerable to an intentional introduction, an introduction that could have far-reaching implications for the economy of the United States. So we have renewed and emphasized our role not just in dealing with domestic disease programs, but in terms of response to the introduction of a foreign animal disease or a plant pest and disease, recognizing that that could be an intentional introduction.

We have worked closely with FEMA to develop what's called an emergency support function for agriculture, ESF-11. APHIS has the lead in that, meaning that just like FEMA has a responsibility to respond to natural disasters like earthquakes or hurricanes, the FEMA function would also apply to an agricultural emergency such as an unexpected or intentionally introduced foreign animal disease or a plant disease. So through this emergency support function and working with FEMA, APHIS would have the lead in responding to an agricultural emergency, but through FEMA would have all of the resources of the federal government at our disposal to deal with that kind of situation.

APHIS is also the lead agency for the agricultural component of the Bioterrorism Protection Act of 2002, where we have worked very closely with CDC in coming up with a program to ensure that university laboratories and private laboratories that are dealing with agents that could have a bioterrorist use, that there are proper controls and inventory of those kinds of agents. We refer to them as select agents.

We actually have a liaison person with APHIS who works at CDC, who works with them on issues that would affect both animals and plants, zoonotic disease, if you will, as well as any bioterrorist agent that would have not just human health, but also animal health implications.

Mr. Lawrence: How is e-government being used to streamline processes at APHIS? We'll ask Dr. Ron DeHaven, its administrator, to tell us about this when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Dr. Ron DeHaven, administrator of the USDA's Animal and Plant Health Inspection Service.

And joining us in our conversation is Mike Wasson.

Well, Dr. DeHaven, the scope of APHIS's protection has expanded beyond pest and disease management. APHIS has assumed greater roles in the global agricultural arena. What management challenges has this presented for the leadership of APHIS?

Dr. DeHaven: Paul, thank you for the question. And we're realizing more since 9/11 than ever before that our first line of defense, speaking from an agricultural perspective, is not at our ports and borders, but rather overseas. We don't want to wait until potentially harmful diseases, agricultural diseases, or pests are at our borders to exclude them, but rather have people offshore who realize and are our eyes and ears in terms of what threats are out there, and keeping those kinds of things from ever entering our ports and borders. That's our first line of defense, is offshore.

But APHIS is always walking a tightrope in terms of safeguarding American agriculture, but also facilitating trade. Agricultural trade is critical to the economy of our country. So our role is to ensure that those products that we import from abroad as well as our agricultural exports are safe and don't represent any risk to our trading partners. As we enter into more and more trade agreements with our trading partners where historically trade has been restricted by quotas and tariffs, now what's becoming a limiting factor is what we call the sanitary/phytosanitary issues, those issues that represent potential health and pest risks.

And so APHIS is becoming front and center in terms of -- it's those technical issues, the issues that are involved in safeguarding American agriculture, are the same ones that are limiting trade. So there's increasingly more and more emphasis and pressure on APHIS to resolve those technical barriers so that trade can continue unrestricted, but doing so in such a way that we don't jeopardize the health and safety of agriculture in the United States.

Mr. Wasson: Well, Dr. DeHaven, in the last segment, we have learned that APHIS has worked with many different agencies to develop informational websites and protecting U.S. agriculture. Are there any lessons learned and advice you would give on working and managing interagency?

Dr. DeHaven: I think there's one overriding thing, and that is that the administration, our Congress, and, probably more importantly, the public expect there to be interagency cooperation. They're not really concerned with whether there are two or three or four agencies that are involved in some area of oversight. They want to make sure that government agencies that have a role are working together and that there's a coordinated approach.

I was talking a minute ago about trade issues. And so APHIS has a critical role in facilitating trade, to the extent that there are technical issues, to make sure that we don't unintentionally export or import disease or pests. But to do that, we work very closely with the Foreign Agricultural Service, an agency within USDA, in establishing those trade policies and working with our trading partners around the world.

I think the BSE, or mad cow, situation is an excellent example of the need for interagency coordination. APHIS has a role in terms of surveillance of our live animal population. Food Safety Inspection Service, another agency within USDA, has a responsibility to ensure that the food produced from those animals is safe and wholesome. And our colleagues in FDA have some responsibility as relates to animal feed as well as cosmetics and other products that would be made from those animal products. The public, the department, indeed the Congress expect us to work very closely together in dealing with those issues that cross agency boundaries.

Mr. Wasson: Well, early in 2001, APHIS launched an e-gov initiative that streamlined its permit process and application online. What are some of the challenges with this launch?

Dr. DeHaven: In the context, Mike, of ensuring that we are user-friendly to our public, we want to provide the option for that public to request our services either through the traditional paper methods or electronically. For example, both our plant protection quarantine and veterinary services units have a permit process where one can apply for a permit that would allow for the movement of otherwise restricted materials into or out of the United States. Our biotechnology regulatory services unit also receives requests for permits for permitting the use or testing, field testing, of potential biotechnology products.

The challenge for us was to develop one coordinated system that met the needs of all of these different purposes and do so in a way that is user-friendly and not create a three separate system. So we have that traditional bureaucratic issue of getting the funding, getting approval for the system that we're developing, selecting a contractor, and then working closely with that contractor. But all of those things are coming together, and we would hope to pilot a project for this permitting system early next year.

Mr. Wasson: Are there any other e-gov initiatives on the way within APHIS?

Dr. DeHaven: Actually, there are several that we have underway, and our intent is to provide an electronic mechanism of any interaction that we would have with our public. Another example is that we license and register facilities under the Animal Welfare Act. This is primarily facilities that are involved in research or exhibition or the commercial sale of animals, and those types of facilities need to be either licensed or registered with us under the Animal Welfare Act. So rather than, here again, submitting a paper application for that kind of license or registration, we're developing a system to do that all electronically.

Mr. Lawrence: This naturally leads into a discussion of the President's Management Agenda. And could you tell us about APHIS's plans to action to implement the agenda? For example, one area of interest is the integration of performance and budget information.

Dr. DeHaven: Our mission goals in APHIS, Paul, are safeguarding American agriculture and facilitating trade. And as I've alluded to, those two goals can be a little bit of a conundrum in terms of competing interests; in terms of safeguarding agriculture, but at the same time facilitating trade and, in doing so, potentially running the risk of accidental introduction of pest or disease. So having said that, our pest and disease programs very readily lend themselves to a cost-benefit analysis. What's the program going to cost? What's the potential export or market that might be out there, or what is the value of that commodity to our own economy? And then doing a cost-benefit. Is the cost of that program going to yield potential benefits that will exceed those costs?

Here again, we also know that by instituting various plant and animal disease programs, we can improve our export markets. We can improve the exportability, if you will, of certain markets. And so is that potential market from a cost-benefit analysis greater than what the cost would be of implementing some of our programs? APHIS has actually scored very high within the Department on the OMB process to review program assessment, if you will, where we have scored high in terms of the value of our programs versus the return on that investment.

Mr. Wasson: How is APHIS making the adjustments on the move of its port-of-entry inspectors to the Department of Homeland Security?

Dr. DeHaven: We've gone through a very difficult transition. It was in March of last year that we transferred somewhere in the neighborhood of 2,600 agricultural quarantine inspectors to the new Department of Homeland Security. These 2,600 inspectors are the people at our ports and borders whose job it is to ensure that we don't inadvertently allow into the country prohibited products that might also harbor plant diseases or animal diseases. So it's been somewhat of a difficult transition for us to lose those inspectors while at the same time ensuring that they continue to have a very active role in performing that agricultural mission at our ports and borders.

We found newfound friends with our colleagues in the Customs and Border Protection, one of the major units within the Department of Homeland Security. And we think that through the creation of this new department and overseeing all of the inspection activities at the ports and borders, not just agricultural, but Customs inspections and immigration inspections, that there is ample opportunity for improvement, and at the end of the day, having a far better system. Our role is to continue to provide the policy and training for those inspectors at the ports and border, making sure that the agricultural mission remains very high on their priority list. And in order to do that, we've had a couple of initiatives underway.

We're working with our colleagues at DHS to have a quality assurance program to ensure that that inspection is happening as it should, but also that we've got good communication. Current issues, is there a new outbreak or a new situation that would cause us to send an alert to the ports and borders to be on the lookout for a particular commodity or a disease that might be presenting itself? Changes in policy -- and we continue to, again, provide the training for the agricultural inspectors, including the new agricultural specialist within the Department of Homeland Security. So we're developing a newfound friendship and relationship with our colleagues at DHS. And, again, I think that at the end of the day, there's a potential to have a much more effective system.

Mr. Lawrence: That's interesting, especially all the technology described that underpin the programs.

With all the technology being used today, how are skilled IT professionals being recruited and retained? We'll ask Dr. Ron DeHaven of APHIS to tell us about this when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Dr. Ron DeHaven, administrator of the USDA's Animal and Plant Health Inspection Service.

And joining us in our conversation is Mike Wasson.

Mr. Wasson: Well, good morning. Dr. DeHaven, in the future what changes of shifts do you see in APHIS's role in protecting U.S. agriculture?

Dr. DeHaven: Mike, I think we're already seeing some of those shifts. We're seeing more new and emerging diseases in the last few years than we've ever seen before, and I think that's reflected in the apportionment of monies that we've received to respond to some of those new emergencies and emerging pests and diseases. During the eight-year period from 1993 to 2000, we spent some $475 million in responding to those kinds of plant and animal emergencies. In the last four years, that number has soared to $1.1 billion. So in half the time, we've spent twice the amount of money responding to some of the new and emerging plant and animal pests and diseases.

We've touched base already on the fact that as we enter into more trade agreements with our trading partners around the world, some of the technical issues to safeguard American agriculture are becoming those issues that are limiting trade, and so increasing pressure on APHIS to resolve those technical issues in a way that applies appropriate safeguards, but doesn't unduly restrict trade.

And then as we mentioned before, with the events of 9/11, the anthrax situation here in Washington, D.C., with the recognition with the foot-and-mouth disease in Europe that we, too, are vulnerable, we have an increasingly important homeland security role within USDA in general and APHIS in particular. I think we're realizing as an agency that emergencies are part of our norm. As we go about our day-to-day business, that's going to include responding to whatever the current emergency is, either on the plant or animal side or, heaven forbid, both of them.

Mr. Wasson: How does APHIS plan on integrating and protecting its science and technology infrastructure?

Dr. DeHaven: Mike, I think the credibility of our whole agency is that we are a science-based organization. We need to stay science-based and keep that as part of our roots. We have expanded, in fact, that science base in our agency, and I'll give a couple of examples.

Within our plant protection quarantine unit, we've created a Center for Plant Health Science and Technology. So as we're dealing with the domestic disease programs and coming up with new science-based ways of dealing with them, or have a trade issue that requires a science-based resolution, it's those scientists at CPHST, Center for Plant Health Science and Technology, that are responsible for coming up with those kinds of science-based resolutions. And on the animal side, a similar organization is called the Center for Epidemiology and Animal Health.

Clearly, when it comes to regulating biotechnology, we have to be science-based there. It's an evolving industry; the potential benefits are huge. We have to understand the science and ensure that our regulations are science-based.

Our wildlife services unit has gone from an organization that managed damage control on livestock to one that is really a wildlife disease management organization, employing a number of wildlife biologists to ensure that where there is interaction between wildlife and domestic livestock, we're appropriately managing the disease concerns there. So we are science-based, and our future credibility is dependent upon ensuring that we're employing the best science in our programs and activities.

Mr. Lawrence: Throughout our conversation this morning, you've talked an awful lot about very complicated programs: technological, statistical, and scientific. So let me ask you just about the employees who support you. Let's start with technology. How is the agency recruiting and retaining skilled IT workers?

Dr. DeHaven: Indeed. With all the program activities I've talked about, Paul, we couldn't carry out all those activities if we didn't have an excellent support staff, and we do, and that runs the gamut from our IT specialists to our financial managers. On the IT side, especially in the last couple of years, actually recruitment of good quality IT specialists has not been an issue for us. Typically when we put out an advertisement for a vacancy, we get a good number of applicants. And so I'm proud of the caliber and expertise of our IT specialists within the agency.

Having said that, I think that there is a couple of things that we can do, or several things that we can do if that becomes an issue in terms of providing financial incentives to attract some of those IT specialists. But I think even more fundamental than that is within APHIS, we have an organizational culture that values our employees and places high value on family values. So I think we're a family-friendly, employee-friendly organization, but we can also provide those kinds of financial incentives if need be.

Mr. Wasson: How is APHIS supporting agriculture trade between the U.S. and its trading partners?

Dr. DeHaven: Within our international services unit, we have a separate team we call the trade support team, which is really the interface between APHIS, our Foreign Agricultural Service, and the U.S. Trade Representative's Office, where we are collectively working on agricultural trade issues. I think especially in the last decade, trade has become increasingly important as we enter into all of these trade agreements. And the technical barriers to trade that APHIS is responsible for are becoming increasingly important. So we have this team of individuals with geographical responsibility around the world that deal specifically with those issues from a technical standpoint, but also serve as our liaison between other parts of government that are dealing with agricultural trade issues.

But we're also expanding our presence overseas. We have APHIS employees in 29 countries that are working on not just facilitating trade, but being our eyes and ears in terms of the agricultural threats that are out there in terms of what potential threat might be coming to us from different parts of the world because of the animal and plant disease situations around the world. So I think we have an increasing role, and we certainly have had over the past decade an increasing role in trade, and I don't see that doing anything in the future except expanding.

Mr. Lawrence: Dr. DeHaven, if I've done my math right, you've dedicated your career to public service, almost 30 years if I remember the dates from our first segment. So I'd like to ask you to be reflective and talk to a person who's maybe interested in a career or just starting out in public service. What advice would you give to them?

Dr. DeHaven: I think one of the most frustrating experiences of my 30-year career in government was getting that first job. There was no good process to tap into the system, get your questions answered, and effectively compete. So while I think we've made some tremendous inroads and are much more user-friendly today than we were in the past in the perspective, and there's ample opportunity to get information from the Internet, I would encourage folks to be patient and persistent.

I would also say, at the end of the day, certainly for me it's been worth it. Certainly don't come to work for government if you just want to draw a paycheck and sit back and look forward to a retirement. Plan on working, working hard, but also plan on the rewards being substantial. I think the impact, for example, that APHIS has on American agriculture is tremendous. And so while the work is hard, the hours can be long, the rewards are equally as large.

I would also encourage those that are interested in coming to work for a particular agency learn what you can about the agency before you go for a job interview. I can't tell you the number of people that I've interviewed for prospective jobs that know next to nothing about the agency. And indeed if you are truly interested in working for that agency, it just makes common sense that you would have done some background and know what that agency does and what kind of position that you would be interested in.

Mr. Lawrence: Well, I'm afraid we're out of time. That'll have to be our last question. Dr. DeHaven, Mike and I want to thank you for squeezing us in your very busy schedule this morning.

Dr. DeHaven: Well, thank you, Paul, it's been my pleasure, and Mike as well. I appreciate the questions and the opportunity to explain to the public the wide variety and important functions that the Animal and Plant Health Inspection Service plays. We've got a great group of dedicated employees who work hard day-in and day-out.

And for those of you that are interested in knowing more about our programs, I would encourage you to visit our website. That website is www.aphis.usda.gov. And we've got a comprehensive website that will explain to you more about what we do in our various programs as well as provide mechanisms for you to get answers to your questions if you need services from our agency.

Again, Paul and Mike, thank you very much for having me on your program.

Mr. Wasson: Thank you.

Mr. Lawrence: Thank you, Dr. DeHaven.

This has been The Business of Government Hour, featuring a conversation with Dr. Ron DeHaven, administrator of the USDA's Animal and Plant Health Inspection Service. Be sure and visit us on the web at businessofgovernment.org. There you can learn more about our programs and research and get a transcript of today's fascinating conversation. Once again, that's businessofgovernment.org.

This is Paul Lawrence. Thank you for listening.