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THE IBM CENTER FOR
THE BUSINESS OF GOVERNMENT
THE BUSINESS OF GOVERNMENT HOUR
ADMIRAL THAD ALLEN
United States Coast Guard
Speakers: Albert Morales, Courtney Bromley, Admiral Thad Allen
>> ALBERT MORALES: Welcome to another edition of The Business of Government Hour. I’m your host, Albert Morales. With more than 218 years of service to the nation, the U.S. Coast Guard is a military, multi-mission maritime organization that safeguards the U.S. economic and security interests. From the oil platforms of the northern Arabian Gulf to the interior rivers, to an increasingly open and accessible Arctic, the Coast Guard ensures the safety, security, and stewardship of our maritime domain.
Facing new challenges has required it to organize more efficiently and manages business practices more effectively. With us today to discuss the critical missions of the organization he leads is our very special guest, Admiral Thad Allen, commandant of the United States Coast Guard.
Admiral, welcome to the show. It’s a pleasure having you again.
>> THAD ALLEN: Thank you for having me.
>> ALBERT MORALES: Also joining our conversation is Courtney Bromley from IBM’s Public Sector Homeland Security Industry Team.
Courtney, welcome. Good to have you.
>> COURTNEY BRAMLEY: Thanks, Al.
>> ALBERT MORALES: Admiral, before we get started, could you share some of the rich and proud history of the United States Coast Guard, especially now as you celebrate its 219th anniversary?
>> THAD ALLEN: I’d be happy to. In fact, we’re kind of a unique product of the American revolution. Shortly after the revolution was over the country was mired in debt, and when the new government was established after the Constitution was ratified in 1789, Alexander Hamilton, the first Treasury secretary, found himself with a significant number of problems, huge debt, and not enough money to run the country.
The only revenue stream we had at that time were tariffs and duties being paid by goods that were being important into the country. And that was mostly British, and they weren’t paying, and they were smuggling.
>> THAD ALLEN: So being a very practice man, Alexander Hamilton thought the best way to combat that would be to create a fleet of very small, fast ships with what they called swivel guns at the time. They could go into shallow waters and run down British smugglers. So on the 4th of August, 1790 -- and we celebrate that this month -- a law was passed by the Congress that authorized the construction of ten Coast Guard cutters. They were cutters at the time. There was no Coast Guard, ‘cause that wasn’t created ‘til 1915, and that really was the beginning of our service, and we take that as our birthday.
>> ALBERT MORALES: That’s an incredible story. So even from its beginnings, the Coast Guard has had a -- is a unique organization in both a military and a law enforcement mission. So with this type of a broad mission, how do you optimize the organization to fulfill these roles, and can you perhaps give us an example of your ever-expanding mission suite?
>> THAD ALLEN: Sure, and you’ve really hit on the basic operational essence, or I would call -- the organizational genius of the Coast Guard, although I didn’t create it. And that’s the fact that we have what we call a dual character. We are at all times a law enforcement organization and a military service. And that really stems back from the post-revolutionary period. We disbanded the continental Navy after the revolution, and we almost had a quasi war with France in the 1790s. Those cutters that were built were the only ships, naval warfare ships that the country had. The Navy was reestablished in the late 1790s.
So from our early customs duties and our role as a military service, that has evolved for over 200 years, and that is the basis that makes us so valuable to the country. We have a peace time mission that is enduring, and we can operate with the Navy in times of war, and, in fact, in World War I and World War II we were shifted to the Navy for those combat operations.
>> ALBERT MORALES: So given these various roles, can you give us some of the core facts about the organization, perhaps the scale of the operations today, how you have it organized, size, budget, number of personnel, your geographic and global footprint?
>> THAD ALLEN: We have almost 42,000 people in uniform. We have about 7,000 civilian employees. We have a little over 8,000 Reservists. And one of our well-kept secrets -- and I’d like to probably publicize a little more -- is our over 30,000 volunteers of the Coast auxiliary who donate their platforms and time to help us. That said we have a rather large mission set. We have 11 statutory missions.
And while we hear a lot about border security and it’s very important, I am not sure it’s really well understood that if you take the rivers that provide access to the interior of the country, the Great Lakes and the coast, including Alaska, we’re dealing with 95,000 miles of Coast line, of which you can gain access to the United States. So if you spread 42,000 people across 95,000 miles, that’s still pretty thin.
That said, I think we provide an extremely high value to the country for the size of our force, so we are a multi-mission organization. Instead of having five ships to do five things, we have one ship that can do five things. But inherent in that is a little bit of a risk management process ‘cause you can’t do five things at once.
>> COURTNEY BRAMLEY: So admiral, within your specific responsibilities as the 23rd commandant of the Coast Guard, how does that relate and split your time between specific U.S. Coast guard responsibilities as well as the DHS mission?
>> THAD ALLEN: Well, I don’t think I would distinguish them. If you look at homeland security -- and the way I like to describe it is there are five domains that we have to protect to make this country safe, air, land, sea and space, and they’re all surrounded by what I would call cyberspace. And we have threats to our nation that move through those. We just happen to work in the maritime domain portion of that larger set that the department has to worry about.
So we’ve got the waterside portion of it, and it’s very, very important that we keep a balance between all of those domains because if you’re talking about threats to this country, whether it’s a terrorist attack or whether -- or germs, they don’t respect organizational boundaries, and there’s always a maritime slice to them.
>> COURTNEY BRAMLEY: So as you look to transition within the responsibilities between the Coast Guard and DHS proper, what are the three top challenges that you’re seeing that your agency’s facing and that you face as its leader?
>> THAD ALLEN: Well, I think the challenges I face as one of the components in DHS are the same challenges that all the component leaders would face as you put together an organization like this. I think the first one is when we transition for us out of the Department of Transportation, it’s to make sure that you’re able to continue to do all your statutory responsibilities.
And the fact of the matter is we have a lot of mission requirements that are probably considered by most Americans to be outside the scope of what they would consider homeland security. For instance, ASA Navigation on the Mississippi River, breaking ice in New England in the winter, and providing access to polar areas with ice breakers -- not considered homeland security, but part of our mission set. So being able to sustain all the statutory responsibilities we have by -- while also being effective in a department -- focuses on security as a challenge.
The second one is bringing a lot of mature organizations into a new department and then starting to integrate how they work together. And the first part of that is operations. And so you have Customs and Border Protection. You have Coast Guard. You have Immigration and Customs Enforcement, creating a process where we have a one DHS approach, or a whole of department approach, how we work, I’d say would be the second, and the third is integrating -- and you guys are really well aware of this -- integrating all the backroom processes, human resources, financial management and so forth.
>> ALBERT MORALES: Certainly not an easy thing to do with an organization of that size, plus the 30,000 volunteers, which I didn’t know -- that’s almost about the same size as the organization.
>> THAD ALLEN: They’re a tremendous asset to us, Coast Guard auxiliary.
>> ALBERT MORALES: That’s great. Now, admiral, the Coast Guard obviously has a very strong reputation for leadership development. Could you give our listeners a sense of your career path and how the Coast Guard has helped you develop your leadership skills, but more importantly, how critical are the concepts of strategic intent and mission focus to your leadership approach?
>> THAD ALLEN: Well, I think my journey through the Coast Guard is not materially different than a lot of folks, and it’s indicative of how we raise our young and grow leaders. We try to give responsibility as early on in someone’s career as we can do that, and it doesn’t matter if you’re an officer or an enlisted person.
My first command in the Coast Guard was as a lieutenant junior grade in 1974 in a Loran transmitting station. That was an electronic transiting station. It was located 500 miles north of Bangkok in the Golden Triangle in Northern Thailand. We were providing navigational assistance for military operations in Southeast Asia.
I was in my early ‘20s, and I had 35 people working for me. You know, I was 500 miles from my nearest commander. That’s about as close as you can get to (laughter) complete autonomy. And it makes you make decisions about whether you’re going to follow or lead, what kind of leader you’re going to be. And I think we cultivate that in the Coast Guard.
And for an enlisted person, it would be no different. We have third class bosun mates and second class bosun mates as boat coxswains that are operating -- they’re not even 21 years old -- that are doing search and rescue cases out there that -- we put an immense amount of responsibility on their shoulders. So I think it’s engrained in our operational model to give people the opportunity to have those experiences early on, and it pays off benefits later.
Your second question about concepts of strategic intent and mission focus -- as I’ve evolved my own leadership style over the years, I’ve tried to move away from talking about specific strategies or plans, ‘cause the minute you write them down, especially if you put a date on them, they become shelf ware (laughter) and they have a half life to them. What I try and get my people to understand is what is it we’re trying to do.
And then every day when you go out, whether you’re conducting operations or making business decisions or investment decisions -- to act with strategic intent. And if you get everybody focused that way where they’re all acting in the same type of lanes, focusing on what the organization needs to do, you don’t have to really reduce it to paper, but it has to reflect commonly shared values and goals.
>> ALBERT MORALES: And is that a concept which is easily understood by your staff?
>> THAD ALLEN: It’s the one that I’ve been hawking since I became commandant.
>> THAD ALLEN: When I became commandant in 2006, I laid out where I wanted the service to go. I didn’t tell them exactly how we needed to do it because, frankly, the details need to be sculpted by the people that have the responsibility if they’re going to have buy-in and be able to execute it. So I kind of said here’s where the organization needs to be and needs to go. You tell me the best way to do, and I may give you some course corrections, but frankly, the new, modernized Coast Guard that we’re building right now is being built by the people in the Coast Guard, and that’s the way it should be.
>> ALBERT MORALES: What about the Coast Guard’s modernization efforts? We will ask Admiral Thad Allen, commandant of the U.S. Coast Guard, to share with us when the conversation about management continues on The Business of Government Hour.
>> ALBERT MORALES: Welcome back to The Business of Government Hour. I’m your host, Albert Morales, and with us today and in this segment discussing the Coast Guard’s modernization program is Admiral Thad Allen, commandant of the U.S. Coast Guard. Also joining our conversation from IBM is Courtney Bramley.
Admiral, your effectiveness as a military multi-mission and maritime service depends in no small part on some of the idea ideas about the way you operate. Could you briefly outline for us the Coast Guard’s principles of operations?
>> THAD ALLEN: I’d be happy to. Actually, we have them codified.
>> THAD ALLEN: We actually have a publication. We call it publication one, and it’s what we call our doctrinal pub, and it’s intended to be a summary of how we’ve evolved as a service with some of our history, but also how we operate. And I think there’s probably no better example of how we demonstrated our principles of operation probably than during Hurricane Katrina. One of the principles of operation is on scene initiative. And we expect people that have the capability and capacity to do something -- whatever the problem is. It could be search and rescue, law enforcement, or environmental response -- to apply everything they can on scene until they’ve exhausted all their means to do anything about it and then ask for more if they need it.
There are a couple other things that are involved in that too. We partner we stakeholders very well. And included in that is something we call the principle of restraint, and that goes clear back to the original tasking by Alexander Hamilton to the revenue officers that were created in 1790, and that’s understanding that when we’re working offshore boarding vessels we’re dealing with our fellow citizens, and they deserve to be treated with dignity.
And there was an admonition that he sent out to everybody to make sure that American citizens are always wary of government interference, and so we try and balance our need to conduct boardings into what we need to do out there with the fact that we are dealing with citizens and they do have rights. And so the principle of restraint’s very important to us.
>> ALBERT MORALES: So publication one -- there’s no doubt where that sits in the priority.
>> THAD ALLEN: That’s the reason it’s number one. Absolutely.
>> ALBERT MORALES: Now, the increase in maritime threats and the utilization of the maritime domain has required you to be more adaptive and responsive to threats and hazards. Could you give us an overview of some of the core areas of modernization, and what are the fundamental objectives of this modernization program?
>> THAD ALLEN: When I became commandant in 2006, actually, before that in the fall of 2005 when I was interviewed by Secretary Chertoff to be the commandant, I proposed to him that if he proposed to the president to nominate me for commandant that I was going to undertake some sweeping changes in the Coast Guard.
That ultimately has become known as modernization. I started out by outlawing transformation --
>> THAD ALLEN: -- ‘cause I thought it was used too many places and I’m not sure I knew what it meant. But we finally through exclusion came up with the term modernization, and it involves a couple of things. It involves taking a look at our command and system and whether or not that’s effective enough to support mission execution. And then it looks at mission support, and these are the business processes to make sure that they are enabling mission execution.
And for many, many years we’ve wrestled with some very, very tough problems, both in command and control and in logistics and maintenance and mission support, and my goal was to put that all together in a comprehensive plan on how to reposition the Coast Guard so we’d be more flexible and agile moving into the 21st century. And also, to be capable of sensing more nuanced changes in mission demand and demands for our services, which I think we had lost a little bit after 9-11 with the focus on security. So it really is an effort to create a change-centric organization that’s more adaptable.
>> ALBERT MORALES: Admiral, it’s clear that your strength is in your historic culture and the character of the Coast Guard that has made it simper paratus, or always ready for the past 219 years. It would be interesting to know -- how have you leveraged the rich tradition and history of the Coast Guard to maximize the effectiveness of your modernization effort today?
>> THAD ALLEN: Well, there have been many times in the history of the Coast Guard where we have adapted to change and made significant changes in reaction to our operating environment, our introduction to technology. And I think sometimes after a couple of generations we forget it. And as I told my people, sometimes we lose the courage to believe ourselves.
And I’ll give you a couple of examples. One was in the late 19th century when we had a fundamental decision to make basically to shift from sail to steam. New technology. It was not well understood. A lot of people weren’t in favor of it. We kind of pioneered shifting the patrols off this coast from sail to steam.
Probably the biggest game changer short of what’s happened in the last 20 or 30 years with information technology was the introduction of wireless telegraphy. A lot of people don’t realize it, but we were the first to use wireless ship to shore telegraphy in support of law enforcement operations, and that was done in the late 19th century up in Puget Sound against the opium in Chinese illegal migrant trade.
We know how to do this. We have to create an organization in the future that continually remembers it and doesn’t have to reinvent it and lose a generation.
>> ALBERT MORALES: That’s interesting. So you’ve always been at the forefront of some of the major industrial shifts in our country.
>> THAD ALLEN: We tend to organizationally get comfortable in laps. You know, what I’d like to do is create a Coast Guard where we continually remember that are continually sensing our environment and changing incrementally rather than gathering it all up into every ten or 15 years, have to do chainsaw surgery.
>> COURTNEY BRAMLEY: So admiral, to that point, with most modernizations that have been successful, the reason they’ve been successful is because the success criteria has been defined up front and in the beginning so that people know which direction they’re going. What’s the definition of success for you with your modernization effort, and are you -- how are formally tracking that in terms of the organization’s performance and progress?
>> THAD ALLEN: That’s a great question. I kind of used a nautical metaphor when I became commandant. I proposed what I wanted to do to Secretary Chertoff. He understood that. I was nominated by the president and confirmed, and when I became commandant -- when a new commanding officer comes on board on ship, he usually issues what’s called a commander’s intent.
And so I kind of used that metaphor. I issued ten commandant intent action orders that cover everything from looking at our acquisition program and how we’re managing the Deep Water project to achieving a clean financial audit, to taking a look at our reserve program. And I issued those ten intent orders to establish the top-level goals or framework that we needed to drive towards.
That ultimately was transformed into four basic organizational changes we had to make in the Coast Guard, had to do with our command and control system, our mission support system, and how we organize a Coast Guard headquarters support to field. So all that has been laid out with goals and milestones, and we’re well on our way to achieving it.
>> COURTNEY BRAMLEY: You mentioned Deep Water, commandant. For our listeners’ benefit, the Deep Water program is the effort to upgrade an overhaul the Coast Guard’s Deep Water sea and air vessels. And as we know, with any contract for complex products, they are risky for both buyers and sellers in the acquisition of those products, such as ships, planes, helicopters. They require very sophisticated contracting approaches.
To that end, are there key lessons learned from such a large, complex contracting effort as Deep Water?
>> THAD ALLEN: Oh, I think there are a number of lessons to be learned. If I could give a little bit of a historical context, in the early 1990s we understood right then that we were looking at block obsolescence of a number of our assets and platforms in about ten or 15 years. This has to do with the age of our cutters, the current state of technology of our sensors and communications equipment and the aircraft that we were operating.
After a lot of thought and knowing that we were working in a very constrained fiscal environment regarding new capital investment, we came up with the idea to use a systems integrator and purchase an operating system, as opposed to a specific platform. And the term we used at the time was system of systems. And we said if you’re going to operate more than 50 miles offshore, there’s going to be some kind of a mix of sensors, aircraft and surface craft. If we gave you the problem statement of what we had to do out there, what would you build, they didn’t presume a one-for-one platform replacement.
And to that end, we ordered a contract-integrated Coast Guard systems, which was basically a joint venture of Northrop Grumman and Lockheed Martin. I don’t believe the concept was bad. I think we failed a little bit in execution. In fact, we failed in some cases very badly in execution.
One of the things that I learned out of this -- and I was a -- I was on staff at the time -- was in making decisions -- was that if you’re going to have an integrated Coast Guard systems and a lead systems integrator to do that for you, you really have to have an integrated Coast Guard. You can’t have stovepipes.
And what we -- what happened was we weren’t able to interface with the contractor the way we should have and put the proper controls over -- and we are now changing that contract feel and kind of splitting it apart and becoming the lead systems integrator ourselves, which is in kind of keeping I think with the current political oversight we’re getting, and I don’t have any problem with that. And I think we’ve learned a lot from it, but a lot of the lessons from Deep Water are what I incorporated into those (indiscernible) and ten action orders are how I thought we needed to reorganize and modernize the Coast Guard.
>> ALBERT MORALES: So as a follow-up, how have these lessons informed your efforts to reorganize and reform the Coast Guard’s acquisition enterprise, and specifically, to what extent does the recent Sentinel project become a model for current and future Coast Guard acquisition programs?
>> THAD ALLEN: Well, I’m glad raised you the Sentinel contract award. That’s what we call our fast response cutter, which is going to be the place -- replacement for our patrol boats. Originally, under the Deep Water contract we were going to extend the life of our current patrol boat fleet in the -- some point by patrol boats in the future. That particular portion of extending the life of our patrol boat fleet did not work for some technical reason. We didn’t have performance out of the hulls, and actually, I terminated the program and laid the ships up.
That meant we had to accelerate the patrol boat replacement and do it rapidly, do it quickly, and do it correctly. We took the award of that contract back into the Coast Guard and basically assumed the role of the systems integrator ourselves and how that patrol boat would fit into the larger system. We recently awarded that contract, and it actually stood up underneath a protest to the general accounting office and actually a judicial review too, so we think we’ve got it right. We did it right. It was openly competed, and we’re in the process of building the first ships. So we think we’re moving on in the right direction.
>> ALBERT MORALES: Excellent. And when’s the first ship going to be put to sea?
>> THAD ALLEN: In about a year.
>> ALBERT MORALES: Oh, excellent. Good. Admiral, one of the persistent set of challenges across government has been the recruitment development and retention of highly qualified people in the workforce, and specifically in the acquisition area. How are you addressing these challenges, and what are some of the core strategies being employed to enhance your acquisition workforce?
>> THAD ALLEN: You’re hitting on a real key challenge and not just for the Coast Guard, but I think for the entire government. If you hear what’s been discussed with the new administration and the 2010 budget leading -- including the Quadrennial Defense Review and the 2011 budget. A lot of focus on how well acquisition systems are performing, what we’re doing about programs that have cost overruns and requirements that have not been checked. And a lot of that contributes to some of the earlier problems with Deep Water.
One of the things we had to do was basically change our human resource system related to our acquisition programs, and we’ve done that. And that includes a lot of things, first of all, includes just plain resourcing, putting enough people in there to do it, getting the people certified at the right program management levels, technical certification where you actually have acquisition professionals doing this. You’re not assigning people with good intentions and a lot of experience.
But retaining that workforce is very, very difficult because with the changes in the Department of Defense and elsewhere, everybody’s going after the same people in town. And you have the potential in some cases of having a bidding war for people. So you’ve got to do a couple things. First of all, you’re going to keep them if they have a good work environment and they have rewarding work, and I think we’re there with our acquisition directorate. The second thing is expediting some hiring authorities, and we’ve had some regulatory relief within the Department of Homeland Security that’s allowed us to do that.
But in the long run, I think what you have to do is have -- procure -- career progression, offer training opportunities, and make them feel they’re apart of a team. We’ve been successful in getting some very, very seasoned professionals that have been in the ship building community for quite awhile, and our Senior Executive Service in the Coast Guard in my view have been the major key to the turning around of our acquisition program and the maturation to the point where we can do things like the Sentinel contract award.
>> ALBERT MORALES: So do you see some of these lessons and practices extending to the other components within DHS?
>> THAD ALLEN: Well, I think across the acquisition programs -- I think you’re going to see it across government, ‘cause there’s a real premium being placed right now to bring a lot of contracting in-house, to take a look at the different acquisition programs and how well they’re being done.
But moreover, we’re seeing this across programs inside the Coast Guard. We’re having a similar issue right now with our Marine safety program where you really need technically qualified people to do ship inspections and make sure that ships and waterfront facilities and so forth are being operated properly. And we’ve -- developing a similar human resource plan to help us source that as well.
>> ALBERT MORALES: Great. How is the U.S. Coast Guard employing social networking tools to collaborate? We will ask Admiral Thad Allen, commandant of the U.S. Coast Guard to share with us when the conversation about management continues on The Business of Government Hour.
>> ALBERT MORALES: Welcome back to The Business of Government Hour. I’m your host, Albert Morales, and with us today and in this segment discussing the Coast Guard’s successful use of social networking tools is Admiral Thad Allen, commandant of the U.S. Coast Guard. Also joining our conversation from IBM is Courtney Bramley.
Admiral, I understand you’ve been at the forefront of using Web 2.0 and social networking technologies to improve cooperation across government and to solicit greater public feedback on opportunities. Can you give us an overview of the Coast Guard’s social networking efforts, and how would you assess the organization’s use of these media tools?
>> THAD ALLEN: Well, I’ve been kind of following the evolution of both social networking theory and information technology for quite awhile, and a little over a year ago it became very apparent that our new digital natives were coming into the Coast Guard, were coming from a different social atmosphere, if you will. And I had a long talk with my staff, and we decided to start a series of -- I would say experiments that kind of took hold and became permanent operations.
A year ago -- April -- we actually set up a Facebook site for me just so I could experiment with what was going on. That became so popular that I needed an official face, not a personal face of the Coast Guard to do that. So we created an official commandant’s Facebook site where you sign on as a fan rather than a friend so we could manage that a little better.
The real breakthrough, though, came last fall when we completely changed the webpage where I’m representing -- they call it Commandant’s Corner, and we actually established a commandant’s blog called I-Commandant. And we’ve been up and operating on that, and we have well over 300 posts that have been made to that to date.
It is a way I can communicate with the general public and my own people on strategic issues while I’m traveling, trying to focus on things that are important, have guest people come in and post, and try and experiment myself and that prove to people that you can risk going out and doing that, and it really doesn’t kill you. I wouldn’t say it wasn’t much to the chagrin of some of my staff and probably my wife at the time, but --
>> THAD ALLEN: -- we found out that it’s been a terrific way to expand the discussion, create more inclusiveness about what we’re doing, solicit stakeholder input, and move well beyond some of the traditional homepages that we had seen in the past. It’s still a work in progress. It’s still going to evolve.
But we’re very encouraged by where we’re at right now.
>> ALBERT MORALES: So you used the word risk. From your perspective, to what extend does -- these -- do these tools, such as a Facebook and/or a Twitter perhaps introduce new issues in terms of how they’re used or the policy implications of their use?
>> THAD ALLEN: Oh, there are a couple of different facets to that. One of them is when you have these tools, how does it apply to people in terms of ethics, what you can legally talk about, protecting personal information? And then there’s a separate issue related to information systems technology and security in how you want to protect your systems.
Regarding the former, in the Coast Guard we have generally had a policy in the past that -- where we’ve said if you know about it, you can talk about it. And that means that if you walk off of a small boat and you’re a coxswain, you just did a search and rescue case and somebody wants to interview, you’re good to do that. You’re not good to talk about the budget in Washington because --
>> THAD ALLEN: -- you don’t know about that.
>> ALBERT MORALES: Sure.
>> THAD ALLEN: And the same thing with all of our people. That’s pretty much the way we do a social media. There’s a couple of differences though. The Internet is forever. It’s like plastic. It doesn’t biodegrade. Once it’s there, it is there. And there’s a premium placed on anybody that gets on the Internet. The responsibility for validating the veracity of what you’re seeing lies with the reader. You really don’t know how this stuff gets on there. And so there’s a -- there’s some differences about how you deal with it.
We put out some guidance to our people. We have not stopped them from using social media. The only time they’re constrained about using social media are the business rules associated with it, and you can’t use, you know, personal names, identification and so forth. There are some operational security issues. There’s some things you can’t talk about.
The real issue in the Coast Guard right now, the one I hear about most, is they can’t to places like Facebook from their work stations at work. And the fact of the matter is we operate in the dot mil domain, not the dot gov or the dot com domain. And because of that, we have some significant security issues about malware being introduced into our operating networks. And so there are going to be some places where we’re never going to be able to sit at our computers and go directly to Facebook, but we can create ways to do that and still have -- people have access to that.
So the way I do it is -- you can find my content inside the dot mil domain, but we also roll that over and post it on Facebook so you can see it both places.
>> ALBERT MORALES: Interesting. So you really -- you’re not restraining its use at all. You’re actually embracing its use and putting some business rules around it.
>> THAD ALLEN: Business rules and then the whole issue of network security.
>> ALBERT MORALES: Now, along those lines, you’ve recently released your C4-IT strategic plan for 2009 to 2013. And it highlights a number of challenges. Included among them is increasing threats to networks and information. Could you tell us more about your efforts around cyber security and the protection of your network and information assets?
>> THAD ALLEN: Sure, I’d be happy to, and it kind of relates back to the earlier statement about social media and the ability to access those. We have a very efficient, well organized and well operated network operation for the Coast Guard, and we manage that ourselves. And again, it’s in the dot mil domain. Having said that, with the issues we have with cyber security right now, the entire Department of Defense is actually moving towards an integrated approach to cyber security, and we’ll be establishing a separate command to focus on cyber security under the U.S. Strategic Command.
We have to follow the lead because we are part of that organization, and that includes taking our points of presence on the Web and making those what we would call trusted Internet connections and also make sure that we’re providing a level of security that is commensurate with everybody else, ‘cause if you get in one place, then you’re in everywhere. And we are doing that as well.
That holds us probably to a higher standard than other folks that are working on the Internet, but it’s necessary to maintain the security of our systems, and we’re focused very much on that and aligning with -- this is one of those cases where we’re aligned with the Department of Defense because we are in the dot mil domain.
>> ALBERT MORALES: Sure.
>> COURTNEY BRAMLEY: Admiral, switching gears -- the Arctic region’s a prime example of the importance of the world’s oceans. Could you tell us more about the Coast Guard’s efforts in the Arctic region, and specifically, what value does the Coast Guard operating in that region bring to the country?
>> THAD ALLEN: Well, we’ve traditionally operated in Arctic regions, but the requirement for our services is changing dramatically. The biggest change we’re seeing right now is the retreat of the ice in the summer -- is retreating further to the North Pole than it ever has in recent history. And in the winter it’ll freeze back down through the Bearing Straight, but we’re seeing more open water where there didn’t used to be, and there’s significant implications to that for the Coast Guard.
First of all, we have authorities and jurisdictions in the territorial sea and the exclusive economic zone. To the extent that those are up there and no longer ice covered, any problem we would have down in the lower 48 we would have up there as well. And that includes things like managing fish stocks and enforcing fisheries laws, search and rescue, environmental response, law enforcement and so forth.
So the challenges we’ve seen in the last three years is a more expansive, open water up there in the summer and the need to be able to have some kind of a way to respond. And what we have done for the last two years -- and are doing it this year for the third year -- is moving helicopters, small boats and cutters up to the north slope of Alaska to provide not only a presence, but to start testing the capability of those platforms in that environment to see whether they’re the right ones.
And we’re finding out that what we’ve got that operates down in the lower latitudes isn’t necessarily what we need up there. So this is an ongoing process, and it’s also going to inform us about where we need to go with our ice breaker fleet. We operate three ice breakers for the United States. We are the only ones that operate them. Two of them are over 30 years old, and there’s a public policy question looming about what to do with the current status of those ice breakers or whether or not they should be replaced.
In addition, our ice breakers that operate up there are supporting scientific research that ultimately will be used to support claims on the continental shelf for oil and gas for the United States.
>> COURTNEY BRAMLEY: So I understand, you just came back from a trip to that region with members of the administration. Could you tell us what you’ve learned?
Over the past three years we've been deploying units to the North Slope of Alaska and over into Nome to test the capabilities of our platforms, our aircraft and our small boats because we have open water up there in the summer and we also have our statutory responsibilities that we have to carry out.
This summer was a little unique in that we had an extraordinary opportunity on two accounts. I was able to engage members of the new administration and got on qualified interest in going up and learning more about the Arctic. And that was combined with the fact that the President in June signed a memorandum that created an interagency task force on ocean policy. And the two kind of came together as we planned our trip to the Arctic.
It actually came about when I had met Carol Browner at a social event in town and we started talking about the need to go to the North Slope. The people that went on the trip with me were Nancy Sutley is a chairman of the council on environmental quality; David Hayes, a Deputy Secretary of the Interior; Jay Reich who is the Deputy Chief of Staff to the Secretary of Commerce; Jane Lubchenco who's under Secretary of Commerce and administrator of NOAA; and Heather Zichal who's a Deputy Advisor to the President for energy and climate change. To be able to get those people in one aircraft, get them up there and have a concentrated week to be able to look at the implications of climate change and what's going on in the Arctic was an unprecedented opportunity.
Well we'd already known a couple of things from our prior deployments, about some of the limits of our operating assets up there. Helicopters that don't have deicing capability, small boats that are hard to launch and point barrel and things like that. This time we learned some new things and I think it was a very eye-opening experience for all of us.
Went out to some very small isolated villages in Alaska where we had been deploying them by helicopter and bringing in physicians, a dentist, veterinarians to take a look at some of the animals that were there, and the impacts of erosion on some of these coastal communities where they were previously protected by ice are now subject to large wave heights and wind-driven waves clear from the top of Siberia to Alaska to the point where it's threatening villages along the Bering Sea and the Chukchi Sea.
>> COURTNEY BRAMLEY: As we know, the Coast Guard must combat the potential threat of hostile watercraft coming close to the U.S. ports. How is the Coast Guard tackling these types of threats in securing our ports, and what technologies factor into this threat remediation?
>> THAD ALLEN: You’re talking about one of the really daunting challenges I’ve had as commandant. When I became commandant, I kind of told Secretary Chertoff at the time -- and I’ve told Secretary Napolitano as well -- we need to have a discussion about what constitutes an adequate maritime security regime for the country. We talk a lot about the land borders and we understand that. We talk about container security.
But if you take a look at the water-borne portion, we have immense amounts of coastline that are basically unsurveilled and are open, and how are even to tackle the problem? We’ve done it sequentially since 9-11 in a couple different ways. Prior to 9-11, if you were a commercial vessel calling on the United States, you had to give a 24-hour advance notice of arrival. That would allow us to take a look at the crew list, the cargo, vet it, and see if we needed to do anything like boarding offshore. Customs was doing that too.
Following 9-11, we created a requirement for a 96-hour advance notice of arrival, and simultaneously now the crew list, the cargo, the manifest, and all the information about the vessel and its cargo and crew have to be submitted and are screened between Coast Guard and Customs, and we can actually target vessels for boarding offshore if we think we need to do that.
The problem is this really only applies to vessels that are greater than 300 gross tons ‘cause that’s the cutoff for international regulation of shipping. And we’re talking about vessels that are somewhere -- anywhere between 65 to 75 feet in length. And they are governed under -- by the International Maritime Organization, which is a subset of the United Nations.
The challenge -- in my view, the biggest challenge we have right now is what to do with the vessels that don’t fall within that category. They’re required to carry transponders, tell us where they’re at, and give notice of arrival. And those are classic small boats, and they come in three categories: recreational boats; fishing vessels; and small, unexpected tow boats and work boats.
We’ve been having a conversation for the last two years with the American public about what to do about that, and this is probably one of the most vexing and complicated issues I’ve dealt with as commandant because these are communities that are not used to having regulations or constraints put on their operations, and this is a very, very fundamental issue for them freedom of movement on the water.
>> COURTNEY BRAMLEY: So a follow-up, will you tell us more about your efforts to develop that comprehensive, small vessel safety aspect, and specifically, how does it factor in to your efforts at enhancing the Marine safety program?
>> THAD ALLEN: Well, the discussion is how to create awareness of who’s operating in and around our waters, and then be able to sort and determine if there are any targets of interest out there that you want to deal with ‘cause they present a threat. If you look at the concentration of recreational vessels around let’s say the Port of Miami on a summer day, or even up in Great Lakes off the upper peninsula of Michigan, the challenge to understand what is out there, if there is a problem and deal with it, is fairly daunting.
And again, I talked earlier about the principle of restraint that goes clear back to Alexander Hamilton and respecting the rights of our citizens. So we’re trying to have a balance there. One way you can do that is talk about -- should you carry locator beacons? And there’s been significant resistance by these communities to doing that because it’s -- they feel it’s an invasion of their privacy and their autonomy on the water.
You will find other countries in the world that have carriage requirements for transponders, very much the same way we would for small aircraft, other parts of the world, but that is a very, very tough issue to talk with out recreational boating community about. But the other areas about -- other areas where you shouldn’t have small boats at all because there’s reason to recreate there.
And I think those are the conversations we need to have moving forward. I would tell you also there’s an enduring issue about the safe operation of recreational boats. We don’t have uniform licensing standard between states, and in some cases, there are no licenses required. And I think it would be very, very -- a good idea to have the same type of standards applied to all the states and territories about who can operate a boat and how they should be certified to operate a boat.
>> ALBERT MORALES: I would imagine there’s a cost component of this also in terms of -- when you talk about the locator beacons, that folks are resisting the incremental costs associated with that.
>> THAD ALLEN: The cost is raised, but I think ultimately, just like GPS receivers, which are now embedded in our phones and everything else, I think if there was a requirement -- develop a -- I don’t think cost would be an issue. I think the real issue is privacy, the ability to move on the water, and people want to go out and be by themselves on the water, and it’s a strongly held value in this country, and I understand that.
>> ALBERT MORALES: So earlier we talked a little bit about the modernization of the Deep Water vessels. We talked a little bit about the in-shore boats and the ice breakers. It’s been said that the Coast Guard has become over the years an aquatic holding company with many facilities dating back to the 1915s. What are your plans to evolve and transform the shore-based infrastructure and forces?
>> THAD ALLEN: Well, that’s an interesting question, and the first time I ever heard aquatic holding company, what you obviously have found as well was -- a consulting company did a review of the Coast Guard on what to do with all the vessels we had after prohibition was lifted. (laughter) It was a fundamental transformation the Coast Guard had to go through ‘cause we had taken Old Navy to storage. We were doing everything to stop rum-runners, and all of a sudden there wasn’t a mission anymore.
The fact of the matter is no matter what needs to be done on the water, if it’s not defense related and it’s wet, we usually get it.
>> ALBERT MORALES: Mm-hmm.
>> THAD ALLEN: And the issue is to create multi-mission capability that can be applied in different operating scenarios to produce mission effects for the country. And what we’ve tried to do is keep maximum flexibility in our operating assets. And as I said earlier, we like to have cutters, people, aircraft and sensors that can do more than one thing, that can be diverted to a new mission, should we need to do that, or a higher priority.
So we put a very high premium on designing in to our platforms no matter what they are. The capability would be used across a wide range of mission sets. And that is a hallmark not only of our ships and aircraft, but our people.
>> ALBERT MORALES: Switching gears a bit, but somewhat related to this topic of flexibility, how has the integration into DHS impacted the Coast Guard, and specifically, what have been some of the critical macro issues related to this integration? But I’d be more curious on -- how has the unique leadership style of the Coast Guard influenced the broader DHS?
>> THAD ALLEN: Well, I think it’s a really great question. When you talk about the Coast Guard and where we’ve been over the lifecycle of our organization, we’ve actually been in three departments. We were created in Treasury in 1790 and stayed there until 1967 when we moved to the Department of transportation and then moved from transportation to Homeland Security in 2003.
What we have found out in the course of our history -- and I can go -- you can go back and read this in the history books. We’re never a perfect match. If you took our mission set and put it in a VIN diagram -- and then our department -- there’s always -- there’s never going to be two concentric circles sitting on top of each other.
I believe, however, in homeland security is the closest fit we have found in the history of the organization to the bulk of what we do out there. But it has not been without some controversy. A lot of folks feel that the transportation related work that we do for the maritime transportation system, our marine safety mission, things we do to make sure that commerce moves in and out of this country somehow might not be addressed properly with a focus on security.
That’s the reason we recently instituted a marine safety improvement plan to take a look and make sure that we weren’t losing connection with our stakeholders, and we -- done a lot of work on that in the last couple of years. But I think one of the great benefits -- and I was actually asked this in a hearing a year or so ago. I was openly questioned by a member of Congress so what was so good about being in the Department of Homeland Security? And I looked -- I say up to my full height. I looked at him. I said, well, we get our budget on time.
>> THAD ALLEN: Now, that may seem like a small thing, but in the past there’s been a political premium to be paid by not funding the Department of Defense, and Homeland Security has been there. And we have gotten our budget on time more often in the Department of Homeland Security than we have any time that I’ve been in the Coast Guard. So there is a benefit there.
I would say the other thing is I think we bring a lot to the table in terms of the maturity of our organization. I was asked after Hurricane Katrina at a hearing one time about FEMA, and what I say is FEMA is a better organization ‘cause they’re in a department with the Coast Guard, and the Coast Guard is a better organization ‘cause they’re in the department with FEMA, and I think there’s a tremendous amount of synergy.
>> ALBERT MORALES: What does the future hold for the U.S. Coast Guard? We will ask Admiral Thad Allen, commandant of the U.S. Coast Guard to share with us when the conversation about management continues on The Business of Government Hour.
>> ALBERT MORALES: Welcome back to The Business of Government Hour. I’m your host, Albert Morales, and with us today and in our final segment discussing the future of the Coast Guard is our very special guest, Admiral Thad Allen, commandant of the United States Coast Guard. Also joining our conversation from IBM is Courtney Bramley.
Admiral, I’m sure collaboration is critical to the Coast Guard’s mission. So with this, how is the Coast Guard enhancing coordination and collaboration among the components of DHS and DOD and, in particular, with the U.S. Navy?
>> THAD ALLEN: Well, I can tell you unequivocally that there’s no finer partner in the world to operate with than Gary Roughead, the chief in Naval Operations. And I would tell you the same relation existed with Admiral Mike Mullen before he became chairman of the Joint Chiefs of Staff. We’ve had an evolving relationship with the Navy for over 200 years, but I would tell you in the last ten or 15 years it has never been stronger.
A lot of it had to do with my predecessor, Admiral Jim Loy and Jay Johnson when he was the chief of Naval Operation coming up with something they call the national fleet concept, which -- when you look at the naval forces of the United States, you don’t look at a Navy and a Coast Guard and a Marine Corps. You look at all of them as a combined naval force. And so you need to look at high-end Coast Guard cutters and low-end combatants, and how does that all come together in a national fleet concept?
That has played out over the years. We have routine meetings with the Navy -- I mean, with Gary Roughead -- quite a bit, but we’ve actually expanded that now, and it’s not only Gary Roughead, but it’s General Jim Conway, commandant of the Marine Corps, and we have -- actually have a -- three-way conversations. That culminated, at least on my watch, in the fall of 2007 at the International Seapower Symposium in Newport, Rhode Island where the three of us stood on a stage and rolled out a 21st century maritime strategy for the country that for the first time had all three signatures on it, and that was a first -- that was a precedent in the history of the United States.
>> ALBERT MORALES: So staying with this theme regarding your international partnerships, how does the Coast Guard bring unique value to this collaboration?
>> THAD ALLEN: Well, in two ways. First of all, we’re in high demand from the geographical combatant commanders to assist them in what’s called theater security cooperation. And what I would say there is that when you get down below the ten or 15 largest countries in the world, most of those nations aren’t trying to project naval sea power. Most of those nations’ national security concerns -- at least in the maritime area -- have to do with fish stocks, illegal migration, drug smuggling, oil and offshore oil, gas exploration offshore.
Those all call for the requirements of a Coast Guard or a Coast Guard-like organization. I have never seen the relevancy of the Coast Guard or Coast Guard-like agencies hire globally than I do right now. And there’s a great demand for us to go out and work with nations that have emerging requirements to create Coast Guard-like functions.
The second issue would be -- we have over the years developed two very, very successful collaboration foray. One is the North Pacific Coast Guard Forum. The other one is the North Atlantic Coast Guard Forum. The Pacific Forum is over ten years old. It includes the United States, Canada, Russia, South Korea, Japan and China. We recently hosted the -- a meeting last fall in San Francisco. It was our turn to host.
Through that foray, we collaborate multinational operations. I’ll give you a good example. Last year we actually seized a vessel that was illegally fishing in the Pacific, long gill nets that are basically outlawed internationally. That was accomplished by Japanese and Canadian aircraft patrolling, queuing up sightings, passing that to a U.S. Coast Guard cutter that had a Chinese ship rider on board that was empowered to enforce Chinese law that resulted in the detention of the ship and escorting it to China.
>> COURTNEY BRAMLEY: Admiral, I know you’re a proud graduate of the United States Coast Guard Academy. Can you talk about how valuable you believe these service academies are in building the strong and competent future leaders that we have across the military services and their training to meet the challenges and threats of this ever-changing world?
>> THAD ALLEN: Well, I think academies have a great role to play in all the services, and, in fact, we have a good collegial relationship. As you know, there’s a lot of rivalry between the service academies, but in general -- they were originally established, frankly, as engineering schools to produce engineers for the services. West Point was originally established to create Army engineers.
We draw a lot of talent in the engineering fields from our academies. Now, that said, I think we have a larger challenge today, and that’s the diversification of our officer corps. And when I talk about diversity, I’m talking about ethnic and gender, but I’m also talking about -- by backgrounds and accession points.
So we need the Coast Guard academy to produce people that have a strong background in engineering disciplines, but we also have an officer candidate school. We take direct commissions for lawyers and so forth. And we have some programs with universities where we take folks that are entering their sophomore year and we actually bring them into the Coast Guard as enlisted people, pay for the last two years of school, and then bring them into the Coast Guard.
What that creates overall is what we like to call cognitive diversity, and that’s a variety of viewpoints that can be brought to bear, increase fidelity and the robustness of what you’re trying to do as an officer corps. And the other part of it is the fact that we are trying very, very hard to increase the diversity at the Coast Guard Academy.
We are doing well at increasing minority representation. We’re doing very well with the representation of women, anywhere between 25 and 30 percent, any particular year there. But the under represented minorities at the Coast Guard Academy are a challenge for us right now, and we have taken that on as a significant cause, that we need to increase the number of minorities at the Coast Guard Academy.
>> ALBERT MORALES: Now, admiral, I understand that your four-year term expires in May of 2010. How would characterize the evolution of the Coast Guard and envision the Coast Guard over the next few years, and what would you like your legacy to be as you look beyond your tenure?
>> THAD ALLEN: Well, it really relates to repositioning the service to be more flexible and agile in our current operating environment. And as I mentioned earlier, the modernization that we’re going through right now is not intended to achieve a specific goal, although there’s a set of objectives that has to do with maintenance and logistics, command and control, finance and so forth.
Those are only the work items at hand. What I’m really trying to do is create a change-centric organization that continually adapts to its environment.
And that really is a much more daunting task that what it would appear. You can go through a work list and complete it, but to take an organization, say we’re going to change how we think, how we act, how we interact with our environment, and fundamentally change our business processes is really what we’re doing right now.
If there was an enduring -- any legacy that I would like to have in the Coast Guard, it would be that we moved substantially towards creating a Coast Guard that was capable of sensing changes in demand signal and reacting to that and being proactive and out in front in not dealing with latent indicators that need us to realign our resources and do what this country needs us to do.
>> ALBERT MORALES: So admiral, you’ve enjoyed a long and distinguished career serving our country. What advice would you give to a person who’s out there perhaps thinking about a career in public service, but in particular, maybe a young person who may be interested in the Coast Guard?
>> THAD ALLEN: Well, for public service in the Coast Guard in particular, I think there are a couple of things. First of all, in public service you have to have a propensity to serve. That may sound like a trite statement, but you have to have an orientation where the satisfaction you’re going to get in life moves beyond just the salary, which is always going to be modest in public service, but extends to something where the psychic income you’re getting is because you’re attached to something that’s much larger than yourself.
That’s not to say you can’t do that in the private sector, but particularly in the Coast Guard it only takes one time reaching down to that hand that’s sticking out of the water and pulling that person onto a boat and you’re pretty much hooked at that point on our mission set, running the gamut from law enforcement to search and rescue and what we call all threats and all hazards.
The profile of our mission set added to a pre-disposition to -- for public service really, really is a significant draw. We’ve had a couple of really good years in recruiting. People really want to get in the Coast Guard ‘cause they understand this notion of public service and being connected to something larger than yourself, and then moving that into a maritime environment with a propensity to operate on the water and having a -- you know, a -- just liking to be on the water I think is very, very important. You put those two together, the Coast Guard makes a very, very, very attractive career.
I didn’t think I was going to stay in. I was going to do my five years and get out. I just kind of kept hanging around and you never know what’s going to happen.
>> THAD ALLEN: But -- well, you hang around because of the mission. And it doesn’t take too many of those successful search and rescue cases, and even the ones that don’t come out the way you want to -- when you talk to families that are putting so much on the line in hopes that you’ll be able to do something and create the art of possible where none exists for their family -- it doesn’t take too much of that to hook you.
>> ALBERT MORALES: Admiral, unfortunately, we have reached the end of our time. I want to thank you for fitting us into your busy schedule, but more importantly, Courtney and I would like to thank you for your dedicated service to our country over your 38-year career at the U.S. Coast Guard.
>> THAD ALLEN: Thank you. We were talking about social media earlier. If anybody wants to keep involved and understand what’s happening, there are two places you can do it. My blog is I-Commandant. If you just Google that, it’ll come up. And we also have a commandant of the Coast Guard, Thad Allen, Facebook account that automatically feeds over through an RSS feed what’s on the blog. So we’re out there on the Web.
>> ALBERT MORALES: That’s great. Thank you. This has been The Business of Government Hour featuring a conversation with Admiral Thad Allen, commandant of the U.S. Coast Guard. My co-host has been Courtney Bramley, leader within the IBM Public Sector Homeland Security Industry Team.
As you enjoy the rest of the day, please take time to remember the men and women of our armed and civil services abroad, who may not be able to hear this morning’s show on how we’re improving their government, but who deserve our unconditional respect and support.
For The Business of Government Hour, I’m Albert Morales. Thank you for listening.
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Originally Broadcast August 8, 2009
Mr. Morales: Welcome to another edition of The Business of Government Hour. I'm Albert Morales, your host and managing partner of the IBM Center for the Business of Government. One of today's greatest challenges is protecting the country from terrorists and the instruments of terror, while at the same time, fostering the country's economic security through lawful travel and trade. U.S. Customs and Border Protection operates at the nexus of national security and American economic security. In meeting this challenge, CBP has unique challenges and requires a focused procurement and acquisition strategy. With us this morning to discuss his efforts in making this happen is our special guest, John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection. John, welcome to our show. It's a pleasure having you.
Mr. Ely: Thank you. It's great to be here.
Mr. Morales: Also joining our conversation is Solly Thomas, associate partner in IBM's public sector consulting practice. Solly, good to have you as always.
Mr. Thomas: Good morning Al and good to see you again John.
Mr. Morales: John, let's start by providing our listeners some context around your organization. Can you tell us a little about the mission and this history of the U.S. Customs and Border Protection, otherwise known as CBP?
Mr. Ely: Yeah, I'd be glad to. I think that the best way that I can articulate that is just to read the CBP mission statement because it's very well-crafted and I believe it says everything that CBP needs to say in a statement. The mission statements goes like this: "We are the guardians of our nation's borders. We are America's frontline. We safeguard the homeland at and beyond our borders. We protect the American public against terrorists and the instruments of terror. We steadfastly enforce the laws of the United States while fostering our nation's economic security through lawful international trade and travel. We serve the American public with vigilance, integrity and professionalism."
A little bit of history about Customs and Border Protection, I'm going to keep it really brief. The customs component of CBP was created in 1789. It is extremely old organization. The U.S. Border Patrol was created originally under the Department of Labor back in 1924 and then INS, Immigration and Naturalization Service was created in 1933. And customs, border patrol and some component of INS was pulled together in 2003 when CBP was created as a component of the Department of Homeland Security.
Mr. Morales: So John, obviously a very powerful mission and a very broad mission. Can you put a finer point on the scale of operations over at CBP? Perhaps you could tell us a little about, you mentioned border protection, how many miles of borders are covered? How many ports of entry might exist? And how many people and items pass in and out of these borders?
Mr. Ely: I've got some statistics and some information that I find fascinating. I look at this information quite regularly because it amazes me when I see the mission the CBP undertakes everyday. And I've got some statistics. We protect 1,900 miles of border with Mexico. We protect 5,000 miles of border with Canada. We have 327 official entry ports and we have 144 CBP border patrol stations. In terms of what we process daily, and this is a daily set of numbers, 1.09 million passengers daily. We process 70,451 truck, rail and sea containers. We execute 2,895 apprehensions between the ports for illegal entry and 73 arrests of criminals at ports of entry.
Our seizures, 7,621 pounds of narcotics and seizures of 4,125 agricultural items and 435 pests at ports of entry. And again, those are daily figures.
Mr. Morales: That's certainly a heck of a day. (Laughter--)
Mr. Ely: Sure is.
Mr. Thomas: John, would this description of the agency and its incredible responsibilities, perhaps you could tell our listeners a little bit more about the specific mission and scope of your office. I'm curious to hear what the size of your budget is and how many employees work in your organization to support the agency.
Mr. Ely: First of all, I'm absolutely thrilled to be part of this organization and the important mission that they have been entrusted with and I feel that our acquisition procurement organization is truly a big part of bringing success to that mission. We are in the acquisition business and that is our job. We acquire the products and services to continuously improve the operations of U.S. Customs and Border Protection.
I have about 177 employees. They're located all over the country. I have people strewn along the southern border co-located with border patrol stations. I have people on the northern border. I have a fairly large office in Indianapolis, Indiana and a large office in the Washington D.C. area. Our annual spend is approximately $3.3 billion dollars and that's the money that comes through my procurement organization. That's pretty much a summary of the operation.
Mr. Thomas: And John, continuing to drill down on the responsibilities, talk to us a little bit about your role as CBP's Executive Director of Procurement. What are your official responsibilities and how do you support the mission of CBP?
Mr. Ely: While it doesn't sound official, my belief that my primary role is a facilitator to the employees, customers and the commercial business partners that are all involved in the procurement area and supporting the mission of customs and border protection. I'm responsible for managing the spend that supports our organization as efficiently, as effectively as possible and representing our American taxpayer by being prudent in the way that I spend their dollars; yet being effective in supporting the mission of the organization.
With that said, I'd like to emphasize that this is the operating principles for all of the heads of contracting activities in the Department of Homeland Security components. We all have the focus and we all have that function. I, as a senior procurement professional, I'm very familiar with CBP's mission and I understand the challenges that my customers face and it makes my organization better in terms of standing up the support that they need to be successful in their operations.
As a strategic leader, my goal is to full integrate the procurement process with a customer environment that delivers the required results while complying with law regulation and ensuring prudent expenditure of taxpayer's money. The point there is my goal is to continuously make our process, which at times can be viewed as a bureaucratic process, transparent to my customers so that they don't see the things that aren't really pertinent to them getting the goods and services that they need.
Mr. Morales: Now John I understand that you have some 30 years with the U.S. Federal government. Tell me a little bit about your career path. And how'd you get started?
Mr. Ely: Started very early in my life. I've got 34 years as a federal employee. Pretty much all of my 34 years has been in the procurement or acquisitions environments. I actually started as a summer hire when I was in college. I worked for the Department of the Army. And when I got out of school, I became an Army intern in a contracting shop and I stayed in that contracting shop at the Pentagon for 15 years.
Mr. Morales: That's a long summer.
Mr. Ely: It was a long summer.
Mr. Ely: It was an incredible place to learn procurement. It was an incredible mission supporting the Department of Defense. After that, I moved on to the Internal Revenue Service which was a very different environment where I started off as a branch chief; basically, my first significant supervisory experience. I was promoted later to Division Director and then Deputy Head of Contracting Activity. And I was there for 12 years mostly engaged in the information technology acquisition business, which while it might sound kind of mundane, is a very exciting field because it's very competitive and the technologies that we used and that were acquiring are very important, especially in the tax collection business.
Now I'm at CBP as the Head of Contracting Activity and I've been there for 5 years and I'm absolutely thrilled in this position and very much challenged and excited every day that I come to work.
Mr. Morales: So, John as you reflect back on your 15 years with the Army and the 12 years over at IRS, how have these experiences prepared for you for your current leadership role and perhaps have shaped your management approach and your leadership style over the years?
Mr. Ely: I want to start off with the very beginning. I'm an Army brat. My dad was an Army officer. My grandfather was an army officer. My father was very much loved by his troops and I watched him and I tried to emulate a lot about him that I saw as driving his success. And his success was in genuinely caring about his people and they in turn, delivered for him. He saw himself as facilitator to the success of others and I try to emulate that style.
When I first started working in procurement, I learned the business first. And I always work with the goal of balancing the customers' needs along with properly managing taxpayer dollars. During my career, I worked with a wide range of managers and executives and I tried to develop my style as a combination of what I saw as the best of both. During the latter part of my federal career, I spent lots of time with people who were experts in continuous improvement. And above and beyond the procurement field, I started getting into the concept of continuous process improvement.
I'm not the most organized person in the world but I do recognize the value that predictable processes, improvement processes, being imbedded in organizations and I try to capture that through a process improvement program. So, I worked with process improvement experts that have helped me get in place documented repeatable processes that make my organization extremely efficient and effective.
Mr. Morales: What is CBP's acquisition and improvement initiative? We will ask John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection, to share with us when the conversation about management continues on The Business of Government Hour.
Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and today's conversation is with John Ely, Executive Director of Procurement at U.S. Customs and Border Protection. Also, joining us from IBM is Solly Thomas. John, much like finance or information technology or human resources, you lead one of CBP's core business functions. Could you take a moment to describe in a bit more detail the procurement function? And tell us a bit about some of the key elements of acquisition management.
Mr. Ely: I'll give you the basic process. It involves early definition of requirements by the customer. That's a little more complicated than it sounds because articulating what your needs are for a government customer sometimes can be difficult. But, we seek to get a good solid definition of the outcomes or the products that our customers are looking for. And then we secure the funding associated with those requirements. There's a collaboration between the procurement organization, the contracting officer and the customer over a strategy for acquisition. There are multiple ways to acquire things and the best fit for the customer and the particular product is something that we arrive at in collaborative way.
At some point, we release a solicitation or a request for proposals for pricing and descriptions on supplies and services that we're looking for. We take those products and we give them to our customers to do an evaluation. And evaluations are either for compliance and award to the lowest cost or we also have what's known as best value awards, where there is technical merit associated with an offer's proposal and those technical merits are evaluated. And then a balance is drawn between the offered price and the technical merit and what we call a best value acquisition can be awarded.
That is very much different than a low cost award because you can actually pay more for something if the government team's perception of the value warrants that extra payment. Then comes the notice to the contractors and the debriefing of unsuccessful offers. What I think is really important is that debriefings to unsuccessful offers are not just I'm sorry, you didn't get the job. We are required to give meaningful, helpful information to companies as to why they did not receive the award of the contract without giving away proprietary or trade secrets for the winning offer.
Finally, we initiate contract performance and contract management activities that in and of itself, is a very important complex process. And then at the end of contract performance, or delivery period, there's a contract closeout where we double check and make sure everything was provided to the satisfaction of the government customer, the contractor's been paid and then at some point we close the contract out completely.
In terms of success in procurement function, I'll give you some ideas about what I view as steps in ensuring procurement success. That mutual understanding between the customer and procurement personnel regarding the procurement process, the roles and responsibilities of the different parties and building a solid, trusting, working relationship between the government procurement personnel and the mission individuals that are representing the customer needs is absolutely critical.
Good contracting organizations have people that are not just buyers, but they're good business specialists. They understand their customers. They seek to engage both the customer and ideas from contractors throughout the lifecycle of whatever product or service is being ordered. Good procurement organizations are involved in all aspects of the lifecycle. We know about our customer. My border patrol buyers are very familiar with the border patrol function. My legacy customs support buyers, they know customs; they know what custom officers do. And all of our buyers are very close to the functional needs of our components and it makes them very good at what they do because they're continuously involved in the mission and the needs of the organization.
In most organizations, weaknesses are found in contract management. And to be honest with you, I think that's a problem with government contracting in general. There aren't the people out there and the emphasis. Even though we've been trying to place the emphasis, it's still not there in terms of what happens once the contract is signed. The government in general needs to be more attentive to what happens after the contract's signed because you've only just begun. But shortage of federal contracting personnel still keeps us in the hole that we're in and not as able to manage contracts after they're awarded.
Mr. Morales: Now John, on that note, in our earlier segment, you made a reference to continuous improvement and you used the word repeatable. So, tell us a little about CBP's acquisition improvement initiative. Where does it focus and how is this program defined, developed and deployed these customer-focused solutions that you reference?
Mr. Ely: When I first started working at IRS, I ended up working with some information technology specialists who were focused on software development and one of the people that I worked very closely with was a certified process improvement expert. And I soon came to find out that these people are out there and they're very good at articulating and stringing together processes so people understand how you get from point a to point z when you're trying to develop and build an end product. In this case, it was software, which is pretty complex. But, the concept behind these process improvement experts is they articulate the process, they make it as efficient and effective as possible and they stick to standards where they repeat the process and you should be able to get the same exact outcomes in terms of your desired results.
In meeting and getting engaged with people like that, I started realizing we could apply this to the procurement process. And I eventually hired a process improvement expert and brought them on as senior staff in looking at the procurement process. One of the problems that we had is our customers felt that every process or every procurement was run differently. And what I basically did is I implemented a very structured environment where we very clearly outlined the process, outlined the outcomes and the roles and responsibilities of all the people that were involved in the procurement process.
It's actually done a lot for me in terms of being able to be predictable in terms of results to my customers. In terms of the acquisition improvement initiative, that is what we've stood up at customs and border protection procurement. And again, I have a full-time process improvement expert responsible for that. In CBP's AI2 program, we focus on four broad areas: assets, business, customer and data. We call it the ABCD model. The asset piece is our people, it's our systems. The business piece is our customers; what they do, what they acquire to achieve. The customer is our customer themselves, you know, who is that customer? What is it that they're looking for? What do they stand for? And then data, which to us, is probably one of the most important things. We strive to collect and understand data relative to what our customers need, what we've bought in the past. And that data helps us optimize how well we do in the future in terms of performing the acquisition function.
The bottom line is all of our efforts in AI2 are geared to supporting customer's needs and mission success in creating a work environment where people can grow and thrive. AI2 generates improvement opportunities from both top down and bottom up. And what is real exciting to me is that with a lot of the new entry-level people we have working in the procurement organization, we have some people that have just walked in the door and they have been with us more than a year, that are coming up with some fabulous ideas because of their fresh perspective. They're not mired in the federal process. And we're starting to listen to those ideas and actually build some improvements in the program based upon somebody who's just walked through the door saying, hey, why not? And that's been very, very good for us.
We have participation goals in acquisition improvement. I have expectations of all my directors on their folks and what percentage of those people will continuously be involved. That hasn't been a problem because what has happened is when people in my organization see that they really can change the direction that we're taking and deliver better results for our customers as a result of their efforts, they participate. And they don't have to be asked to participate because they see that they're making a difference.
I'll give you an example of some of the teams we have because AI2 is broken down into some teams, different teams, and that's how we control memberships and outcomes. We have the quality of life team. The quality of life team really does focus on how are things going for the people in the organization. What's the work life like? What do people like, don't like? How can we make the quality of life from 9-5 better for our people and therefore, make them more productive and effective as federal employees.
We have a contract administration team. Again, federal procurement organizations tend to sometimes award the contract, walk away from them because they've got the next thing they've got to focus on. When we, in fact, with our contract administration team are looking for ways to stay there with our customer, administer the contracts and assure them that they receive the desired products or services.
And then, my data and spend analysis team is probably one of the ones I'm really the most proud of. Although, I really shouldn't say anything about being the most proud. But, our ability to slice and dice the data has been one of the most rewarding things for me. You can ask me how many light bulbs we bought last year and I can tell you. You ask me how many mainframe computers we bought, I will tell you. If you ask me how many detainee meals we bought and where they went, I can tell you. What that has done for us is it gives us the opportunity to sift through our spend data and look for low hanging fruit or even high hanging fruit for our strategic sourcing initiatives. When we decided that we needed to start hitting strategic sourcing, we looked at the spend and it gave us a profile of where our CBP money is going all the way down to the day to day subsistent level.
And then, the strategic sourcing teams. And I also have a mentoring team which is a very structured program around bringing our entry-level people up faster up into operational mode.
Mr. Thomas: Now John, it's been my experience that agencies need to have an effective strategy for organizing and retaining its intellectual resources and its institutional memory. So, to that end, can you elaborate on your efforts to implement an effective knowledge management system. And I'm particularly interested in hearing more about your Acquisition Resource Management System and how it factors into this efforts and provides the one-stop shopping capabilities.
Mr. Ely: We have implemented ARMS. And ARMS is something I'm extremely proud of because we do have, in the organization, a fairly mature knowledge management system. With our aging workforce and the expansion of our headcount, it's imperative that we have that knowledge and that we share the information and this ARMS is a repository for information and also for exchanging ideas, communications across a large, geographically diverse work environment.
And really, one of the most important things that has come of our knowledge management system is connecting our broad customer base and a youthful workforce. We have people now that are attracted to technology and the ARMS system is something people tend to move towards and use because it's got data in it, it's got communications in it; and those are the things people need to communicate effectively.
ARMS is a way to both get knowledge into the repository and a better way to use and improve the knowledge and our collaboration for the betterment of the mission. Our documents, our announcements, our regulations, our memorandum are all posted through ARMS. And probably one of the most interesting things is the discussion threads. We have chat rooms and discussion threads where people can talk about the collaboration of improving a contract document or how to manage a contract better. We have a birds of a feather area in ARMS where people can gather and talk about areas that are of common interest. And we also have a message center and I have a blog now that helps me connect to a very geographically diverse organization. I log in and I can just say hello and talk to my people without ever having to worry about dialing or being in any physical place. And that's been a wonderful, wonderful benefit for me.
Mr. Thomas: Now John, you eluded to strategic sourcing a little bit earlier and of course, that's typically defined as a means to achieve benefits through an organized, systematic and collaborative approach, to acquire goods and services. Could you elaborate more on your strategic sourcing program? What types of opportunities have been identified and to what extent has it enhanced your coordination in strategic thinking across the department?
Mr. Ely: What I'd like to do before I get into the rest of that question, I'd like to talk a little bit about how I got into strategic sourcing in the first place because I think it's a fairly interesting story. When I was at IRS, I signed up for a course, and it had some mundane title and I don't even remember what that course was -
Mr. Ely: -- but a gentleman that I worked with and I went to this course. I believe it was in Dallas, and we ended up in this room full of people and not one of them was a government employee. And it turned out what this group was, and it had something to do with sourcing, sourcing was in the title. Basically, what it was, was a group of people who were part of the sourcing organizations for very large companies. If I'm not mistaken, TI was there, Ford Industries was there, IBM was there. Several other major companies were there. And all of these people had one thing in common and it struck us very quickly that this was going to be an interesting environment.
Every one of those companies were at one point on the brink of going out of business. And what those people in that room had done is through the sourcing of supplies and services into their production process or their delivery process in a service environment they turned to strategic sourcing and said, if we do business the old way we will be out of business. What is the new way of doing business? And I spent about three or four days with those people and I learned a whole lot about how you can adopt that mindset, the stay in business mindset. Even if we're government, let's pretend we could be sent home and fired tomorrow. Let's get lean and mean and look at ways we can be effective, efficient and save money all at the same time.
We came back to IRS and that's when we started realizing our capability in spend analysis; knowing where the IRS dollar was going. And knowing where that dollar was going, we started targeting commodity and service groupings and looking at how can we do business better. We brought in some people that consulted with us to talk to us about smarter ways of doing business and we took on strategic sourcing initiatives for cell phones, guard services, copiers, faxes and printers. And to give you a little bit of insight into the true strategic sourcing concept; copiers, faxes and printers, the idea to strategic sourcing those is not to get economy of scale on contracts. That's one objective. But the perception that we had was that there might be a better way to deal with copiers, faxes and printers.
Now, in a federal environment, a lot of times you'll see a copier, a fax and a printer. And in some cases, you'll see all three of those around an individual's desk and you'll see those all over the place around different individual desks. We started talking about multi-function machines, acquiring multi-function machines. A single machine that copies, faxes, prints. And having those machines in a central environment rather than dedicated to a given workstation. So, you think about how often your printer's humming or fax is humming on your desk dedicated to your work, you can start seeing how a multi-function machine might actually be economical and provide the services that everybody else needs at a significantly lower cost. That's where strategic sourcing comes in.
We changed the way we were doing business. We saved money, yet we delivered the same results. So, when I got to CBP after IRS, I instantly knew that I had to make a difference by standing up a very similar program at CBP and that is our acquisition improvement initiative. And that is the same process. It has a very similar approach where we want to stay in business. We want to take the stay in business mindset as a government entity.
I've already stood up a team that now has the spend analysis capability. I can look at any, every piece of everything CBP has bought and we're now focusing on how products and services are acquired. We've had a few near term hits on strategic sourcing. One of them is body armor. In the old days, we bought body armor, the body armor would be shipped, the employee would put the body armor on, measure his specific fit and then send it out to be tailored to fit him or her. We now have awarded a contract for body armor that has a film clip in the website where you're shown how to measure yourself for body armor ahead of time before you order it. So, you ship the order, you ship the measurements, the body armor's delivered and it goes right out of the box and onto your back saving your life sooner. That is a real good example of how strategic sourcing works.
Again, economy's a scale but also a significant improvements in how we utilize the commodities of services. We are looking at canines. We've had some success with puppies. We do a lot of buying of puppies. They're really cute and even when you buy them in quantity, they're really cute. But, we're looking at strategic sourcing of canines, industrial laundry and we're also looking now at our spend on detainee meals. An early glance tells us that there are different kinds of detainee meals that are being served up all over the southwest and actually in all the detention areas. And while they're all fairly low cost, we think that if we standardize that and bought large quantities of detainee meals that were not perishable or could be used over long periods of time, we could save significant amounts of money. So, there's just a few examples of that strategic sourcing environment.
Mr. Ely: Sure. We have an overwhelming workload as most procurement organizations do. We also have a young emerging professional workforce. Those two have come together for us when we started looking at technology. And there are reverse auctioning tools. We use a tool called FedBid, and basically, what tools do is it allows your contracting officials to post their requirements on an electronic forum and bidders will bid on the requirements electronically and then the buying activity can come back to the end of the day and look at the bidding history and make an award.
Basically, it is a seamless, automated process for running our competitions. Its usually done for commercially available items, but we've had a lot of success in the post and go. And again, we post it, we come back, we see what the natural bidding process that occurs through the system and we make awards to the low, responsible offers. Reverse auctioning has done so much in terms of our ability to load those smaller requirements, while we work on the more sophisticated requirements that require attention; where our employees need to develop their skills. At the same time, we're saving lots of money. And I have some statistics about what that automated reverse auctioning process has done for us.
Basically, it is a seamless, automated process for running our competitions. Its usually done for commercially available items, but we've had a lot of success in the post and go. And again, we post it, we come back, we see what the natural bidding process that occurs through the system and we make awards to the low, responsible offers. Reverse auctioning has done so much in terms of our ability to load those smaller requirements, while we work on the more sophisticated requirements that require attention; where our employees need to develop their skills. At the same time, we're saving lots of money. And I have some statistics about what that automated reverse auctioning process has done for us.
Mr. Morales: What about CBP's acquisition workforce management strategy? We will ask John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection, to share with us as the conversation continues on The Business of Government Hour.
Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and with us today is John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection. Also, joining us from IBM is Solly Thomas. John, the American Recovery and Reinvestment Act of 2009, otherwise known as the Recovery Act, provides some $680 million dollars to CBP for investment in aging infrastructure. First, could you tell us more about your procurement strategy and how the money will be spent. But, more importantly, what role does your office play in this area and how are you managing the procurements associated specifically with the Recovery Act funding?
Mr. Ely: Much of the ARRA funding is targeted for port modernization in both the northern and southern borders. We are very much engaged in writing contracts and facilitating that modernization effort. Our goal is to make awards in a timely manner while competing contracts as much as possible. We've stood up an FM&E facilities management and engineering contracting organization to meet this challenge we're working hand in glove with the CBP FM&E organization to implement. We're competing requirements for technology and construction directly with commercial sources, but we're also utilizing the services of the Corps of Engineers and GSA for construction contracting requirements.
Mr. Morales: It strikes me that balancing the appropriate number of CBP contracting officials with the growth of your portfolio is perhaps a challenging task. What changes have you made to your recruitment process and does CBP use flexible compensation strategies to attract and retain employees who possess what you would deem as critical skills?
Mr. Ely: Excellent question. Initially, when I first came to CBP, we focused on recruiting higher-grade personnel; but, it's really hard to find them. It's really very difficult to find them across government. So, we've moved to entry-level hires and we're supporting the rapid growth through mentoring, training and phased-in levels of contracting sophistication. So, we're trying to bring them up fairly quickly, but we are making sure they're ready for each phase. We think we've got a good plan for getting the entry-level hires up to speed faster than people were ever before by using technology, mentors, etc.
The DHS Chief Procurement Officer supports us through their Acquisition Career Program. They have a very sophisticated program and we are on the recipient list for the ACP interns. And that's born out well for us as well. We're still hiring higher-grade personnel for complex and critical procurements. And if any of you out there are the higher-graded, highly capable contracting types, just let us know.
Actually, on USAjobs, we have a great video clip from one of our CBP contracting officers and some information on job announcements. So, if you go to USAjobs, you'll probably find that icon to click on and see one of my folks with a lot of the products and services in the backdrop giving you some information about working for me. CBP offers flexible work schedules, tuition reimbursement for permanent status employees and in some cases, recruitment bonuses and/or payment of relocation services.
Mr. Thomas: John, staying on that topic, in recent years the size of the acquisition workforce has remained relatively the same while procurement spending has pretty much skyrocketed. For over a year, agencies have had the ability to re-hire the retired acquisition personnel, but only a few agencies have sought to formally use this authority. Could you talk a little bit about the benefits, as well as the possible limitations, of this particular strategy? And more importantly, what are your plans to use this authority as a tool to fulfill staffing needs?
Mr. Ely: Sure. Good contracting people are, as I've said before, are always in high demand both in government and industry. DHS has been successful in implementing authority to hire retired procurement personnel, known as retired annuitants. And we are pursuing the hiring of retired annuitants who offer a wealth of knowledge, skills and abilities and we're seeking to take as much advantage of that as we can. That is still a fairly small number, relatively speaking, of potential resources.
And the flipside of the benefits of that is also that these people will re-retire as some point in time. So, you can't really stake your future on retired annuitants, however, they do help in the near term.
Mr. Thomas: Now shifting from the recruitment discussion to developmental, what are you doing to ensure that your staff has the appropriate training and skills and how are you leveraging the resources from organizations like the Federal Acquisition Institute?
Mr. Ely: I'm very proud of our training program. It's extremely important in our line of business. Our training program is fairly well funded and we have a specific training curriculum in place. Employees can count on receiving specific, substantial training in the procurement business area. And there are training tracks associated with each level of procurement professional. We have a fully funded training. Each employee receives a minimum of forty hours per year. And we utilize FAI for both classroom and online training. And the DHS Chief Procurement Officers Organization has entered into an agreement with DAU to reserve seats in their classes for DHS procurement personnel, and that includes my folks as well.
Mr. Thomas: Now John, at last count, the federal government spends approximately $140 billion dollars on services to meet agency needs and the use of performance-based acquisition is the federal government's preferred approach for acquiring these services. Tell us about CBP's efforts in implementing performance-based acquisition strategies.
Mr. Ely: First, to comment, a personal comment on PBAs. I agree that they are the desired vehicle, but there is something complex about them that needs to be understood and that is that it is an outcomes-oriented acquisition approach. That's where we truly have to get away from the nuts and bolts of how you get from point a to point b when the outcome is articulated get me to point b. And you don't spend a lot of time talking about how you get there. It's the outcomes that drive a performance-based contract to success.
So, in this environment, the government personnel serve as facilitators for contractor success, which is a little different than some government folks you are used to, where they believe that they are supposed to be directing the activities of the contractor. In performance-based acquisitions, they're facilitators. They help the contractor get to the successful end. Again, acting as facilitators versus directors. In CBP procurement, performance-based acquisitions are now automatically the first consideration for service contracts. Every service requirement that we get in, we look for the applicability of performance-based contracting as a solution.
All of my people receive training in performance-based acquisitions and our CBP Acting Commissioner supports performance-based acquisitions, and has asked his assistant commissioners to develop metrics and measures for their contracts to make sure they're receiving value for their dollars. We have a long way to go to reach our PBA goals, but we're working hard and I think we're doing a pretty good job learning more and more as we move along about the unique method of contracting.
Mr. Morales: John, I talk with many of my guests about collaboration. And certainly, procurements and acquisitions are perhaps some of the more complex business processes within a large entity such as CBP. What kinds of partnerships are you developing now to improve operations or outcomes at CBP and how many of these partnerships change over time?
Mr. Ely: That's an excellent question. I think acquisition by definition is a collaborative process. If you're not collaborating with your customers or your contractors who are helping you deliver results, you're going to be surprised by what happens at the end of the day. Procurement's close relationship with our parent organization, which is the Office of Finance, has helped us become very collaborative in terms of working with the components of finance which is budget, asset management, facilities, management and engineering and our financial operations organization.
We work together with them to make sure that CBP's needs are met at a fair and reasonable cost and that taxpayer dollars are properly expended. Our partnerships within the parent Office of Finance have enabled us to leverage our financial management capability. And our relationships with the customers and industry help bring best value for the taxpayer dollars that are entrusted to CBP. I see the further positive change, we build a greater capability in the big A, acquisition arena. The big A, which is acquisition, will bring us closer to being worldclass acquisition organization that's forward-thinking and focused on return investment for the mission and the American taxpayer.
Mr. Morales: Now, since its inception, DHS has had some very large and complex procurements such as, the Coastguard's Deepwater Program and CBP's SBInet. What are some of the key lessons learned from these large acquisitions and how are they shaping and informing your operations today?
Mr. Ely: I'm going to give you a generic answer on that, because I'm not as specifically familiar with Deepwater. I have some familiar, but with CBP's SBInet program, but I'd like to keep it generic because it does apply I guarantee to both programs and probably other, most complex government programs. The key to success with these procurements is planning, proper planning. The formulation of strong acquisitions teams and efficient, effective and responsible source selection process. And most importantly, properly staffed and managed postwar program and contract management organizations.
Too often, we think we've hit the home run. The ball is out the park once the contract's signed, when in fact you haven't even swung yet. I think it's also essential that when managing programs, one must realize that detractors are natural and important part of a balanced government business environment. And while these detractors may be disheartening at times, their presence can help keep acquisition personnel focused on the proper outcomes of their programs.
Mr. Morales: So John, you've eluded a couple times to CBP's acquisition function and its relationship to the broader DHS organization. How does this alignment benefit CBP and DHS' overall acquisition strategy and do you think that DHS will be adopting a more centralized model going beyond just mere oversight?
Mr. Ely: That's an excellent question. I've felt this issue going back and forth. Naturally, the components would like to retain control over their procurement organizations. And it's understandable that DHS would like to centralize, capitalizing on economies of scale, ensuring a consistency in the way that we spend the DHS dollar. But actually, there is a dual accountability role right now at DHS. While, I report to Customs and Border Protections Chief Financial Officer, I have very specific responsibilities for which I'm accountable to the DHS Chief Procurement Officer. And the same holds true for the procurement executives and the other DHS components. They also have that dual accountability.
I would also like to state that the DHS Head of Contracting Activities Organization, that is all the HCAs for the DHS components, are a group that works collaboratively and embraces the authority and leadership of the DHS Chief Procurement Officer. We meet on a regular basis and are actually quite effective in helping make DHS procurement functions as efficient and effective as possible.
Mr. Morales: So what does the future hold for CBP procurement? We will ask John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection, to share with us as the conversation continues on The Business of Government Hour.
Mr. Morales: Welcome back to our final segment of The Business of Government Hour. I'm your host, Albert Morales, and with today's conversation is with John Ely, Executive Director of Procurement at U.S. Customs and Border Protection. Also, joining us from IBM is Solly Thomas. John, CBP's experience in applying innovative solutions to help address agency procurement issues has provided some valuable lessons and insights, many of which we've talked about. But, could you summarize some of these key lessons and some of these critical insights?
Mr. Ely: I'd be glad to. Number one, continuously improve. The American taxpayer deserves it. Secondly, get people involved in creating solutions. The old saying, two heads are better than one, holds true. Groups of individuals working with common goals will get you there a lot faster than individuals who are spinning off on their own path. Constantly seek to improve and get industry input on a regular basis. Industry must succeed or die and they're a good model to look at when you're looking at the best way to run your own government operation. Finally, communication is key. When you think you've done it or done enough, do more because trust me, you probably haven't.
Mr. Thomas: Now John, since acquisition is a fiduciary responsibility, the business of government must be conducted with complete impartiality. Could you elaborate on efforts being pursued to ensure procurement integrity, making sure the proper standards of conduct, both ethical and legal requirements are being followed by the Federal Acquisition staff?
Mr. Ely: Sure. First, I'd like to start by saying that I'm very proud to be a federal procurement professional. We've all seen situations where integrity has been an issue in procurements and it's inexcusable. And people that don't use integrity will get caught. But, I have faith in the federal procurement process. The vast majority of people that work in that environment are honest, hard working public servants that want to do good. Furthermore, all federal agencies have programs that emphasize standards of conduct and provide continuous training in the areas of procurement integrity.
Mr. Morales: John, I'd like to transition to now to the future. Could you give us a sense of some of the key issues that will affect acquisition and procurement offices government-wide over the next few years?
Mr. Ely: Sure. Shortages of contracting and program management personnel is a huge challenge. Balancing highly innovative ways of doing procurements within a highly regulated environment is another. Increased oversight and the need for transparency for large scale programs with congressional and public and customer scrutiny in how we do business is again, another. The constant pace of change and the scale of procurements that we're seeing as it continues to grow. And finally, the time constraints for planning large major acquisition initiatives.
Mr. Morales: So, then more locally, what are some of the major opportunities and challenges that your organization will encounter in the future and how do you envision your area will evolve over the next say three to five years?
Mr. Ely: I see significant opportunities in the future as CBP becomes more and more sophisticated in its view and management of investments for the good of its mission. I see an organization that's becoming more and more enlightened in ways to efficiently and effectively invest its resources. And I see my procurement organization as one of the best in government; fully integrated with the CBP customer and delivering the best value for the taxpayers' dollars.
Mr. Morales: So, John you've had a very extensive career with the federal government and you just had a wonderful story of how you got started. So, I'm curious what advice might you give someone who's out there thinking about a career in public service and maybe even perhaps a career in the acquisition community?
Mr. Ely: I've been there. I was there on the brink trying to decide which way to go and I will tell you that serving the American public is an honor and a privilege and has significant financial and personal rewards. The government pays well and the work is rewarding. There is an incredible satisfaction delivering good things to the American public. And our government works hard to take care of its people and public service is an incredible opportunity to be a part of that important task.
Mr. Morales: That's just great. Unfortunately John, we have reached the end of our time. I want to thank you for fitting us into your busy schedule, but more importantly, Solly and I would like to thank you for your dedicated service to our country across your 34 years of federal government service.
Mr. Ely: Thank you so much for having me both of you.
Mr. Morales: This has been The Business of Government Hour featuring a conversation with John Ely, Executive Director of Procurement at U.S. Customs and Border Protection. My co-host has been Solly Thomas, associate partner in IBM's public sector consulting practice.
As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who may not be able to hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.
For The Business of Government Hour, I'm Albert Morales. Thank you for listening.
Announcer: This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m. And visit us on the web at businessofgovernment.org. There you can learn more about our programs, and get a transcript of today's conversation. Until next week, it's businessofgovernment.org.
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Originally Broadcast June 26, 2009
Welcome to The Business of Government Hour, "A Conversation about Management with a Government Executive Who is Changing the Way Government Does Business."
The Business of Government Hour is produced by the IBM Center for the Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving Government effectiveness.
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And now The Business of Government Hour.
ALBERT MORALES: Welcome to another edition of The Business of Government Hour. I'm Albert Morales, your Host and Managing Partner of the IBM Center for the Business of Government.
Federal Agencies have sought to identify new and smarter ways to do business and move toward a Government that is citizen centered and results oriented.
To be successful in this area, Federal Agencies require support and assistance, and the U.S. General Services Administration works to provide that support, staking a leadership role in reducing wasteful Government spending, encouraging the adoption of innovative solutions, and coordinating major Government wide management improvement initiatives.
With us today to discuss his efforts in this area is our very special guest, Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at the U.S. General Services Administration. Good morning, Stan.
STAN KACZMARCZYK: Good morning, Albert. Thank you for inviting me.
ALBERT MORALES: Also joining us today is Paul Kayatta, Partner in IBM's Public Sector, General Government Practice. Paul, welcome, good to have you.
PAUL KAYATTA: Thanks, Al. Good morning, Stan.
STAN KACZMARCZYK: Good morning.
ALBERT MORALES: Stan, before we get started, could you set some context by providing our listeners with an overview of the history and the mission of the U.S. General Services Administration or GSA? Tell us when it was created and what its mission is today?
STAN KACZMARCZYK: Sure. GSA was created in 1949. Congress passed the Federal Property and Administrative Services Act, which was signed into law by President Truman. And it basically consolidated all of the administrative service type functions that were being done in various agencies across the Government into GSA so that we could consolidate, centralize, and achieve efficiencies and lower costs.
Some of the historical achievements of GSA, in 1954 we created the first Federal Motor Pool. In 1957 we coined the phrase "telecommunication system" to describe phone service. And in 1963 we inaugurated the FTS inter-city phone system.
The Federal Buildings Fund was authorized in 1972 as a revolving fund which was used to maintain, operate, and renovate the GSA Federal Buildings.
And if we flash forward to 1995, that's when the Office of Government wide Policy was formed, and that consolidated all of GSA's policymaking, regulatory, and oversight functions into one office, enabling the GSA business lines to focus on delivering business services.
ALBERT MORALES: So, Stan, for some more specifics, how is GSA organized, and can you tell us a little bit about the size of the budget, number of fulltime employees, and perhaps how the organization is geographically dispersed across the country?
STAN KACZMARCZYK: Sure. We have two major business lines, the Public Building Service and the Federal Acquisition Service, and we have 12 staff offices, OGP, the Office of Government wide Policy is a staff office. We have 11 regional offices and two independent staff offices.
We have an annual budget of close to $25 billion, about 96% of that consists of reimbursements from our Federal customers for the services that we provide. We influence the management of over $500 billion in Federal assets with the work that we do.
We currently have a staff of 12,000 employees, that's down from a high of about 40,000 employees in the 1980s so we're very lean and efficient. We do contract out a lot of the work that we perform on behalf of the Federal Agencies. We have GSA employees in most parts of the U.S. and around the world.
The Partnership for Public Service recently published their poll on the best places to work in the Government, and I'm happy to say and proud to say that GSA finished number eight on the list of best places to work, and we were number one in the category of family friendly culture and benefits.
PAUL KAYATTA: So thanks for that overview. Can you tell us a little bit more now about the Office of Government wide Policy and your specific role as the Acting Associate Administrator?
STAN KACZMARCZYK: Sure. The office of Government wide Policy has always been led since 1995 by two Senior Executives, a leader of the organization and a deputy. In my real job I'm the Deputy. I'm called the Principal Deputy Associate Administrator, or as I like to call it PDA Squared. Right now, during this transition, I am the Acting Associate Administrator or the leader of the Office.
Prior to becoming the Deputy, which I did in May of 2006, I was one of the Senior Executives of one of the staff offices, and that was the Real Property Policy Office. And then came to be the Deputy of OGP, as I said, in '06.
As the leader or the Deputy I'm responsible for the leadership of the organization, for the allocation of resources according to priorities, and for overseeing our performance management system to make sure we're working on the right things and getting them done efficiently.
We have multiple stakeholders in the Office of Government wide Policy that we deal with. A lot of them at the Office of Management and Budget, at different offices of the Office of Management and Budget, stakeholders on the Hill, other senior leaders in GSA, other parts of the Government.
I could give you a lot of flowery words about what I do and what my role is as far as leadership, but basically I spend 90% of my day doing what I would call "relationship management."
PAUL KAYATTA: So every position comes with its challenges. Can you tell us your top three and what you're doing to address them?
STAN KACZMARCZYK: Sure. One challenge, and I think everybody will say this, is resources. The Office of Government wide Policy is actually a good sized organization, and we have 144 Federal employees and approximately 48 contract employees, and an annual budget of $71.8 million. So we're not real small but we're not real big, so we can get a lot of things done and we want to get a lot of things done, so there are never enough resources to accomplish everything that we feel we need to do.
Another challenge that we face and, again, I think you'll hear this across the Federal Government is the aging workforce and the wave of retirements. And we are trying to address that in several ways. We are hiring more interns these days, and trying to hire them before people leave so they can learn from senior people, taking advantage of a program called "Presidential Management Interns".
We've had good success with that, and one thing we're doing is using some of the new Web 2.0 technologies or establish a Wiki to capture the history of OGP and how -- and the polices and procedures internal to our own office. So it'll be the OGPpedia. But, actually, many other Federal Agencies are doing this, including the Department of Defense.
And, finally, kind of an ongoing challenge of our office is that we do have a Government wide scope but we are part of GSA, so we support GSA, we support the business lines, but we also, you know, we work for the whole Government.
And other Federal Agencies have their own Federal Buildings and their own procurement programs, and we have to provide policy and guidance and award best practices across the Government and not always, you know, pull for the home team.
ALBERT MORALES: So, Stan, I understand that you came to GSA back in 1991. Can you tell me a little bit about your career path? And I'm interested, how did you get started in public service?
STAN KACZMARCZYK: Sure. I was working in the private sector in New York City. I was working in the Wall Street commodities business for I think close to 10 years, and wanted to make a career change, and was interested in public service.
And I was hired by the GSA Public Building Service in the New York Region in 1991, with virtually no experience in real estate, just based on my qualifications and education they were willing to take a chance on me and train me in the business.
Despite that, I was ungrateful enough to move to the Central Office after about seven months in the Regional Office, for which the senior leader of that office I think never forgave me, but he's retired now. He actually retired and went to the private sector and retired again, so I'm double safe.
But I moved to the Central Office because I wanted to know how the Government works, and I figured you have to go to Washington, D.C. to find out. And God help me, I found out how the Government works.
In 1997 I joined the Office of Government wide Policy, which was formed in late '95, so I've been there for most of the history of the office. And in 2004 I joined the Senior Executive Service.
So I joined GSA in 1991 as a GS7 and in 13 years was promoted to -- up the ranks to the Senior Executive Service, so it was -- that's pretty rapid by most terms, a pretty rapid ascent, which I'm pleased with.
ALBERT MORALES: That's fantastic. So, Stan, as you sort of look back and reflect on your experiences going back to 1991 and even your experiences back in the private sector, how have they shaped and informed your current leadership role and shaped your management approach and style?
STAN KACZMARCZYK: Well, I think the diversity of my background in terms of my work experience and my education is a plus. I do have experience in both the public and private sectors. There are different ways of doing business in both those areas.
When you come into the Government from the private sector you learn right away there's a different way to get things done. You have to slow down and work more collaboratively with people.
I have a degree in psychology and a degree in economics, so the economics gives me a good analytical focus, and the psychology helps me to understand people and do that relationship management.
Most of my early experience has been in the real estate part of GSA, but then coming over to Government wide Policy, first as a member of the team and then as a member of the leadership team, I became educated in the IT side of the business and all the other programs that OGP is responsible for.
I give a lot of credit to the previous leadership of OGP. They had consistent leadership in Marty Wagner and John Sindelar, who led the office from its inception through early 2006. It's rare to have the same Leadership Team in place in any agency or office that length of time, and they put in a really good culture and management structure, which I basically took over and kept running with my own spin on it. So I give them a lot of credit.
But I think the diversity of background is good in two ways. It's good to know a lot of programs and a lot of businesses because it helps you manage a diverse organization like OGP, but it also helps to -- because it teaches you that no matter how different the mission or the business is that a lot of the issues with people and teamwork and managing people tend to be the same, so it helps you elicit the core issues, those common denominators of dealing with people and getting things done.
ALBERT MORALES: That's great. How does GSA's Office of Government wide Policy enhance transparency in open Government? We will ask Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at GSA to share with us when the conversation about Management continues on The Business of Government Hour.
ALBERT MORALES: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and today's conversation is with Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at GSA.
Also joining us today from IBM is Paul Kayatta.
Stan, transparency is certainly taking center stage today with the new Administration, but this really isn't a new concept. In fact, elements such as advisory committees have played an important role in shaping programs and policies from the earliest days of Government.
To better understand this, could you tell us more about the Federal Advisory Committees and specifically how does your Office support the efforts of these Committees and how do these Committees enhance the work done by the sponsoring Agencies?
STAN KACZMARCZYK: Sure. I'd be happy to. In fact, as a side note, when we were asked to help the White House on the new Open Government Directive we were assigned the GSA lead on that. The first person who came to mind was the person who was in charge of the Federal Advisory Committee, as the Committee Management Secretariat, because he was about transparency. In fact, it was about transparency before it was cool I guess is the expression.
But, yes, the Federal Advisory Committee Act was passed by Congress in 1972, and it basically governs the way that the Federal Government can get advice and develop policy from the private sector.
It delineates a formal process for setting up committees and getting recommendations and advice, and having discussions with the private sector, and it requires that it's done publicly so it's Government in the sunlight and not policy being made by certain companies and certain agencies in back rooms.
So there are about 900 Federal Advisory Committees currently. They consist of 65,000 members, and they hold about 7,000 meetings annually. And Advisory Committees influence over $100 billion in Federal Programs each year and they cost $350 million per year to operate these Committees.
Our Office has the role of overseeing the implementation and compliance with the Act, which we refer to as "FACA," Federal Advisory Committee Act. We develop guidance and policy and write regulations for how to conduct these meetings. We conduct an annual comprehensive review of all the Federal Advisory Committees to ensure that they are complying with the law properly.
We have developed performance measures and we track the performance of the Committees, the number of recommendations they come up with, a number of recommendations that actually get implemented, dollars saved as a result of them.
And we conduct an inter-Agency training program for the committee management officers across the Government to keep them up to date. Also, of course, to train new ones because of turnover. And those sessions are held several times a year here in D.C., occasionally outside of D.C., and they're always sold out.
Agencies get a lot of value out of Advisory Committees. They produce over 1,000 reports, addressing such diverse issues as nuclear safety, healthcare, transportation, counterterrorism.
Over the lifetime of the program there have been over 900,000 recommendations issued by these Advisory Committees, with a total impact on Government business of over $100 billion.
And I guess when you ask, "Are they worthwhile?" You have to keep in mind the time that's involved in setting up and running these committees. The cost that's involved, the dollars that are spent, and the fact that you're not required to do so. So agencies really wouldn't go through this if they weren't getting valuable recommendations and input from the private sector using this process.
ALBERT MORALES: So what is your Group's regulatory role and where does it get its authority to establish Government wide regulations? And, if I may, what are some of the sources used to help in the development of these policies?
STAN KACZMARCZYK: Sure. We have, well, OGP is a very diverse office. So we basically have policy responsibilities corresponding to all the different administrative service areas of GSA and a couple of other things, like the Federal Advisory Committee Act, that we just talked about.
So we have various regulatory authorities. In some cases, in the case of travel, transportation, fleet management, we issue actual Government wide regulations that the rest of the Government must comply with.
In other cases, such as real property, we issue regulations that only GSA, itself, has to comply with, but that the rest of the Government that owns and manages their own buildings can refer to as best management practices, and they often do so.We also have a role in overall Government wide regulatory process.
ALBERT MORALES: So as a follow-up, could you tell us more about your efforts to enhance citizen participation in Federal rulemaking? Specifically, how has the Regulatory Information Service Center provided opportunities for citizens to track Federal regulations?
STAN KACZMARCZYK: I'd be happy to. The Regulatory Information Service Center is the smallest office in GSA, but one of the most important. They work closely with the Office of Information and Regulatory Affairs at OMB to manage, to help OIRA manage the whole regulatory process.
We maintain a database, which is called ROCIS, which is actually an acronym made-up of acronyms. It's the Risk in OIRA, the risk in OIRA Consolidated Information System, and it tracks all of the regulatory activity ongoing in the Government.
Twice a year we publish what's called the "Unified Agenda," which enables the public to see what regulations are being developed in the Federal Government and at what stage different regulations are at. We also publish that information and historical information about regulations on the website called reginfo.gov.
Recently, it was in 2007 we used to print this semiannual regulatory agenda, and you can imagine the volume of it. And a very effective doorstop. In 2007 we went to something called the e-agenda, and the vast majority of it is put online and very little is printed out in the Federal Register. This achieved a substantial cost savings of $800,000 annually in printing costs.
We get a lot of traffic on our reginfo.gov. I sit through the management reviews of the program, and I'm amazed when they come in and they show me statistics saying that there are millions of hits on the website, and who is interested in all these regulations, besides the people in the Government who work on them. But you have academics, researchers, lawyers, and businesses who want to know what the Government may be thinking about doing that might impact their business.
So the way it works is we have this ROKAS system that tracks everything, produces the Unified Agenda, publishes it mostly on the web twice a year. Puts it on the web on reginfo.gov.
If a citizen goes into there and sees a regulation that they're interested in that's in process and if the public comment period is still open, they can click on a link which will take them over to a website called "regulations.gov," which EPA manages under the e-rule making initiative. And they can go right in and comment on the regulation in process.
So all that has already been put in place and enables transparency of the regulatory process and collaboration with the citizens. However, the technology behind that is all what we would call Web 1.0 technology.
So what we're going to be doing in the near future is upgrading the whole process using the new Web 2.0 technologies, which will enable citizens to feel more comfortable and it will be more effective in them collaborating in the rulemaking process.
PAUL KAYATTA: Switching gears a bit, could you tell us a bit about the Financial Management Line of Business, or FMLLB, as it's called, and how it seeks to improve Government wide financial management system modernization? And, if you can, tell us a bit about the challenges facing the initiative, and what's the status today?
STAN KACZMARCZYK: Sure. The Financial Management Line of Business seeks to streamline and consolidate the Federal financial management process. You had a situation some years ago where you had a different financial management system for every agency in the Government, so obviously this is not a very cost effective way of doing things.
So what we've been striving to do over the years, first of all, consolidate that down to a number of shared service providers, drive agencies more towards using one of those shared services rather than using their own legacy systems.
But the next step is really to consolidate and streamline and standardize even further so that we can hopefully one day all be using the same Federal financial management system. This involves coming up with standards.
A big accomplishment of this initiative was a couple of years ago to publish what we call CGAC, or the Common Government wide Accounting Code. We continue to go through the process of standardizing the different business processes within Federal financial management to drive greater standardization.
The Financial Management Line of Business works on the same team with what we call the "Financial Systems Integration Office," which years ago under the Treasury Department used to be known as the "Joint Financial Management Improvement Program," and those folks work to test software to make sure it is compliant with existing financial management standards in the Government.
The biggest challenge with any effort to standardize in any area is always each agency thinking that they're special and they have to do their things their way. And there are reasons for that, but I would say in the Federal financial management area, that challenge is about as steep as I've ever seen it.
And it's not just uniqueness from agency to agency, but the uniqueness of the way the Federal Government does its financial management compared to the private sector which makes it difficult for us to readily adapt a commercial off-the-shelf software for use by Government Agencies in financial management.
PAUL KAYATTA: One of the provisions of the American Recovery and Reinvestment Act is to provide economic opportunities and environmental improvements for citizens through the acquisition of motor vehicles. Does GSA manage indoor monitoring expenditures for this funding?
STAN KACZMARCZYK: Yes, we are. I'd like to talk about that particularly in the area of fleet management. It's actually a good example of the difference between OGP's policy role versus Federal Acquisition Service's service providing role.
The Federal Acquisition Service are the people who actually order the cars and deliver them to the agencies, but how that money that was put into the ARRA to upgrade the fleet is spent and how it should be spent is more or less a policy decision of Fleet Management.
So we worked hand in hand with FAS and with stakeholders in the Administration to figure out the best way to spend the $300 million that Congress allocated to upgrade the fleet.
There was a number of policy -- competing policy considerations versus we want to have a stimulus, we want to spend the money as soon as possible to stimulate the economy, versus the provisions that were in the Act to invest in new technologies, new fleet technologies in this case.
So currently there's a total of $300 million that have been allocated to upgrade the fleet. We've obligated $200 million of that already, mostly for hybrid vehicles, and we have another $85 million of orders projected.
But we've held back $15 million to buy plug-in electric hybrids. The reason we're holding it back is the vehicles are not available yet.
So, again, there was this tradeoff between we want to spend money now, because it's a stimulus, but we do want to invest in new technologies that are not quite there yet, so we want to be the leaders and encourage the industry to go down that path, so we worked pretty closely with everybody to come up with the best approach.
PAUL KAYATTA: As you know, Section 508 of the Rehabilitation Act requires accessibility tools to be provided to disabled citizens, to provide access to essential information.
Can you tell us a little bit about the technical assistance provided by your Office in this area and how does this effort improve the accessibility of Government information and technologies for citizens with disabilities?
STAN KACZMARCZYK: One of the areas where we do have responsibility for ensuring compliance with existing law is the Section 508 of the Rehabilitation Act of 1973, which requires the Federal Government to provide citizens with disabilities equal access to technology.
We're talking about things such as screen readers and brail devices. When people set-up websites everything works at lightening speed these days, and they're thinking about the content, they're thinking about user friendly. They're not necessarily thinking about people who need assistance with using that technology.
So and there are products that are 508 compliant and that will enable citizens of all types to be able to use these technologies, but you have to know they exist and you have to build that into your procurement otherwise you're not going to get it.
So one of the things that we do is we have a tool called "Buy Accessible Wizard," which can kind -- when you put it together your solicitation for technology, it will kind of walk you through the steps of how to make sure that what you're buying is going to be 508 compliant.
Another thing we've done is we've been monitoring agency use of that by going to Fed Bus Op and looking at the solicitations that have posted there and kind of examining them to see if they are 508 compliant. And we're pleased to say that over the last couple of years of doing that that the percentage of solicitations that are compliant has been rising.
ALBERT MORALES: Stan, as we talk about technology, it goes without saying that today it's critical to protect data and manage the access to electronic information.
Could you elaborate on your Office's efforts in providing an identity management infrastructure for the public? Specifically, can you address how this infrastructure provides a common and secure means for the Federal Government to authenticate the public and gain trusted access?
STAN KACZMARCZYK: Sure. Identity management is a very critical area in OGP and in the Government, and there are several levels of authentication. Just signing into a website with your user name and your password is one of the lowest ones, and then actually having -- using digital certificates to make sure that you really are who you are is one of the higher ones.
So we work with the various committees and agencies, such as NIST on developing the standards for authentication. We actually test products to make sure that they're compliant with those standards, and that they're compliant with what's called "FIPS 201," which is the Federal Information Processing Standards Publication 201, the latest from NIST.
And we actually operate what's called a "public key infrastructure," and this is a system comprised of hardware, software, and policies that enable people to authenticate themselves to the Federal Government when they do business with the Federal Government.
ALBERT MORALES: So switching gears a bit, could you tell us more about GSA's federal asset sales or EFAS initiative? What types of property are included in this initiative and how does it maximize the public's access to these assets that are for sale while increasing efficiency and reducing cost?
STAN KACZMARCZYK: Be happy to. Federal asset sales, which is -- you can access through a website which is actually called govsales.gov is a one-stop portal that pulls together all of the surplus property that's for sale by the Federal Government.
As you know, when the Government no longer needs, and this applies to both real and personal property, the first thing we do is to look to see if another Federal Agency can use it, and then it goes, at least in real property it goes through state and local. And then eventually if nobody wants it, it goes -- it's surplus, and it goes for sale to the public.
So this portal pulls together everything that's for sale. It's, the concept is that everything is one place, makes it easy for the citizens to find what they're looking for, and it increases the competition by putting it on the internet so that the Government gets the best price for its surplus property.
It's a very successful effort. 2008 was the first year that we really have a full year's worth of data for. In 2008 we sold $4 billion of surplus real property, and $333 million of surplus personal property. The portal, itself, in 2008 had over a million unique visitors, generating 1.7 million visits.
This initiative has been very successful. It's won a number of awards, including Steve Rosen, who is the Manager, Project Manager of the initiative, was one of the winners in 2009 of the CIO Council Individual Awards, recently given out at IRMCO.
ALBERT MORALES: That's great.
How does GSA manage the adoption of Government wide policy? We will ask Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at GSA to share with us when our conversation about management continues on The Business of Government Hour.
ALBERT MORALES: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and with us today is Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at GSA.
Also joining us from IBM is Paul Kayatta.
Stan, GSA has long been a strong advocate for increasing the practice of telework across Government. Also, GSA is known for leading by example, and I understand that you're in your second year of an aggressive Agency wide initiative to increase teleworking.
Tell us a little bit about GSA's telework challenge? What is it, how is it progressing, and what's making it work, and what can other agencies learn from this effort?
STAN KACZMARCZYK: I'd be happy to talk about the GSA telework challenge. It's a GSA Agency Program to increase telework participation in our Agency.
In OGP we have a role in coordination with OPM to provide guidance for Government wide telework programs. This is an internal program, but we partnered very strongly with our internal folks because we were interested in practice, in having GSA practice what we preach, at least from a Government wide standpoint, and to really get telework up to speed in the Federal Government.
Plus I was making a lot of presentations on telework and I got tired of talking about the patent and trademark office and the Treasury Inspector General for Tax Administration case studies all the time. And I said, "We need another case study, let's do it ourselves."
So we came up with a very aggressive program where we were going to -- we set some goals and we wanted to increase the number of participation, number of people participating in telework who were eligible, whose positions are eligible for telework.
And at the time we started in 2007 our participation rate of our eligible folks was about 10%, so we set some aggressive targets and we said by the end of calendar year 2008 we want to have 20% people, of our folks participating. By the end of calendar year 2009 double that to 40%. And then by the end of calendar year 2010 or 2010, 50% of those people who are eligible to participate in the telework program will be teleworking at least one day a week.
Currently, and we're sitting here in calendar '09, the number is 43%, so we have well exceeded and almost closed the gap on our ultimate goal for the end of 2010.
I think the keys to our success in this area were top level leadership and support, which is not just talking about it but putting it right into our performance plans.
Using a strategy that a colleague of mine in the British Government calls "name and shame," every month we report on our internet the progress that the various staff offices and regions are making towards the goal, so you can see who is on track, who is behind. And that was very effective.
Another thing we did was used IT effectively to promote this, and by that I mean we replaced everybody's laptops during the normal IT refresh cycle with -- everybody's desktops, rather, with laptops.
And if you participate in the program you have documentation and you take the laptop home with you and use the same laptop, so that takes care of, you know, economics, you don't have to pay for two computers. It takes care of security, the same security is in place at home because it's the same laptop and you're going into your system or your LAN over the internet using a virtual private network.
So it solved a lot of problems, and I was kind of worried that people wouldn't want to take their laptop back and forth but it didn't turn out that way. They're making them lighter and lighter these days. I don't have to tell you guys that. And the cost has come down. So it's been a very effective program.
We've been promoting it for reasons of it's good for the environment. It's good especially in the Washington area to reduce traffic congestion. Its flexibility, continuity of operations. The more people that can telework, will be able to telework in the event that people cannot get downtown or get to the GSA building or something happens there. And it's a good work/life balance program, and people like it.
Down the road if we get to 50%, 60%, 70%, who knows where, I think we can actually do some stuff in our workplace to make it more effective or even to reduce our space holdings and reap some other economic benefits from it. So it's been a very successful program for GSA.
PAUL KAYATTA: That's real progress in an area I think that will have great dividends.
Hey, Stan, can you tell us a bit about how your office collaborates with Federal, State, local Governments on policy development and implementation? And to what extent do interagency working groups assist you in those efforts?
STAN KACZMARCZYK: We do quite a bit of that, in all of our program areas, our major program areas; we generally have some kind of Executive Steering Committee set-up with agency executives from across the Government to develop policy in a collaborative fashion with them.
Less so with the State and local Governments, but that ties back to the resource challenge, I said before, but we need to do more with them.
We do a pretty good job keeping track with the private sector as far as what are the best practices are. But, as we know, some best practices that work for the private sector may not work for the Federal Government.
So we -- but we definitely do a job, a good job with collaboration with the Federal Agencies because it's a lot easier if you get buy-in early on in the policy development process, it's a lot easier for the agencies to comply with them down the road.
PAUL KAYATTA: In your opinion, what have been some of the more innovative ideas and constructive solutions that you and your team have developed and implemented? And how does the OGP cultivate a culture of innovation and performance?
STAN KACZMARCZYK: Well, you always get in trouble here when you talk about the successes you're the most proud of, and I've got five staff offices and I don't know if I'm going to cover them all, but I just have really just a sampling of some of them, but some of the major conferences that we managed, the IRMCO conference and also the Fed Fleet Conference.
We actually stood up the first version of the website, which is Today at usa.gov, which is now operated by the Office of Citizen Services in GSA. We do tend to develop a lot of things upfront that then get spun-off into an operational area.
On the HSPD 12 initiative, the smartcards, we did all the upfront work on developing the standards and testing the products for compliance with the standards and then helped the Federal Acquisition Service set-up a managed service offering so they could actually provide the cards to Federal Agencies.
In the area of the Federal Fleet we talked about already, but the Federal Fleet is operated by the Federal Acquisition Service but we do all the policy for Fleet management and it goes back to that Fed Fleet Conference.
The e-travel initiative is also managed now by the Federal Acquisition Service but we developed that as a pilot. The Government, similar to the situation we talked about with the financial management, you had a different travel management system for every Government Agency in town, so now we have three, and they're commercial vendors.
We talked about the Federal asset sales, that's been a great success for us. We have a motor vehicle registration system that we put in for the Federal Government because if you get pulled over, somebody can look-up your license but not so yet with the Federal Government, but we're working on that.
Some of the work we've done in aircraft safety we're very proud of. The work that we've done with the Federal real property inventory to support the real property asset management initiative that was kicked off by Executive Order 13327 and the performance measures and the feedback that we've gotten and, again, the rightsizing of the Federal inventory that's occurred as a result of that, and various other things.
The thing about a culture of innovation is, and we do have a culture of innovation at OGP, is people get very excited and very motivated, and you're developing something new and it's important and it's innovative.
And once it gets developed and successful and it's up and running people get comfortable with it and they want to keep running it themselves. But our job is, like I say, if it's a success move it on somewhere else into its operational phase and then move on to the next thing.
So if you're busy holding on to what you've already innovated you can't innovate something else, so it's kind of sometimes a difficult management decision to wean people off of things, but if I don't do that then there'll be no further innovation.
ALBERT MORALES: There is certainly a life cycle there. So, Stan, you've mentioned IRMCO now a few times, and I understand that you've held the 48th Annual IRMCO Conference. What was the theme of this year's conference, and how does the conference promote partnerships, facilitate dialogues, and motivate collaborations across multiple disciplines and communities, both within and outside the Government?
STAN KACZMARCZYK: Well, we had a good opportunity this spring and IRMCO was sold out. IRMCO is held in April, and we had a new Administration come in, in January, and we had a theme of "Transformational Leadership, Steering a New Course."
So we were fortunate to get some of the new Administration people, such as Vivette Kunja and Beth Noveck to come speak, so there was a lot of interest, obviously, in hearing what the new direction is.
But IRMCO is the Interagency Resources Management Conference, and it pulls together what we call the "CXOs" in the Governments, the CFOs, CIOs, Chief Acquisition Officers, the Chico's, the Human Capital Officers. And this year some of the Inspector Generals, also.
It pulls together the senior leaders of the Government to share information, hear -- learn about best practices and hear about policy directions, both from us and from the Administration Officials.
This year, like I say, there was a lot of interest in the new directions that are coming, particularly in the IT area but actually across the Government and acquisition reform and things of that nature.
ALBERT MORALES: Are there other conferences or workshops in policy areas that you host?
STAN KACZMARCZYK: Yes, there are, particularly in the area of our biggest office is the Office of Travel, Transportation, and Asset Management. They have responsibility for about seven different administrative programs.
I mentioned Fed Fleet. We do the Government's policy for fleet management, and that's both in terms of the automotive fleet and the aviation fleet.
So Fed Fleet is a big conference, thousands of people. This year's conference is going to be held from July 28th to 30th in Chicago, and it is really the premiere event for fleet management in the Government. It offers training courses and networking opportunities, and the opportunity to learn from vendors and to exchange best practices within the Government and with the private sector. It really is a unique opportunity.
We also hold a Mail Forum every year, and we just recently held one this spring. And the GSA Mail Forum, some of the subjects we discussed were intelligent mail, digital mail, green mail, and mail security.
Now, mail management may not sound very sexy but in 2001 after the anthrax attacks it was -- mail security was a big issue, and it continues to be so. So we continue to hold that conference every year.
Every two years we hold the National Travel Forum because we do the Government's travel policy. In fact, we're the office that publishes the per diem rates every year, which is always of great interest, and Travel Forum is another well attended event.
ALBERT MORALES: So with so many programs, how does OGP reward Federal Agencies for their significant accomplishments and achievements and innovation? And can you give some examples of these awards and perhaps the process involved in achieving these awards?
STAN KACZMARCZYK: Sure. Our general areas and doing policy, you know, is guidance, there are regulations, there are performance measures, Government wide databases, and best practices.
And we determined early on that one of the best ways to find out what the best practices are and to disseminate them on the Federal Government is to run awards programs. And they generally set-up, usually annual programs, you get a panel of independent judges from across the Government and the private sector, they review the submissions and then we annually award, usually with monetary rewards associated with it.
We have a total of 12 awards programs that we run annually. We have the IRMCO Awards, given out at the IRMCO Conference for leadership across, leadership in the IT sector. We have the Donald L. Scantlebury Memorial Award, which is in financial management. We run a big Financial Management Conference every -- once a year, and Federal financial management professionals get continuing education credits for attending the day-long conference, and that award is given out at the conference.
We also have the CIO Council Leadership Awards, which are also represented at IRMCO. We have the Bob Baker Fleet Manager of the Year Award, which is presented at Fed Fleet. And the Federal Aviation Program and Professional Awards, also presented at Fed Fleet.
In the area of personal property management, which is another one of our policy areas, we have the Miles Romney Award. And we have mail awards and travel and relocation awards.
Our longest running award, I believe, I say with a sense of pride having come from that Office, is the GSA Achievement Award for Real property Innovation which has been given out annually since 1997.
ALBERT MORALES: Great. What does the future hold for GSA's Office of Government wide Policy? We will ask Stan Kaczmarczyk, Acting Associate Administrator for the office of Government wide Policy at GSA to share with us when the conversation about management continues on The Business of Government Hour.
ALBERT MORALES: Welcome to our final segment of The Business of Government Hour. I'm your host, Albert Morales, and today's conversation is with Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at GSA.
Also joining me from IBM is Paul Kayatta.
Stan, there is a lot in the press about new social networking models and technologies that are redefining the relationship of citizens and their Government.
In the past year many Federal Agencies and communities have launched their own versions of a Wikipedia or a blog and, in fact, I think you mentioned that this was a direction that GSA was heading in.
Could you talk about the efforts within OGP to leverage these new social networking ideas and technologies? And how can these tools support your operations and mission?
STAN KACZMARCZYK: We've done a number of things and we'll continue to do so. We've been a longtime supporter and contributor to a Government wide Wiki called MAX, which is hosted by OMB.
And, as I mentioned, we're developing an internal Wiki to -- from a knowledge management standpoint to capture all the processes and history of OGP before people walk out the door.
Another thing that we started is our own blog, and been trying to get people to participate and blog along with me. I actually had to order the middle managers to blog, they're the only ones I had control over, and they begrudgingly did it and found it was fun.
But we will continue to work with the Administration on developing policies for using social networking tools, such as Facebook, Twitter, and YouTube. I, myself, use some of these tools, so I shout out to all my Facebook friends and my Tweeples, and I have found them to be useful as far as business applications and making connections with people and also a lot of fun.
PAUL KAYATTA: As you certainly know, most work and accomplishments in the Government is a team effort, so with this could you elaborate on your approach to empowering employees? And how do you, more specifically, lead change and enable your staff and those within the organization to accept the inevitability of change, embrace it, and make the most of it?
STAN KACZMARCZYK: I consider myself a good delegator, but I'm a delegator who never forgets. So as long as it gets done you won't hear from me again, but if it doesn't get done I'll probably remember that I delegated it to you.
I believe in managing by our results, and my experience early on managing the Government wide Telework Program, which I used to do more directly, showed me the value of that because that's the only way you can manage people that are not in the office, you have to manage by results and not by what they're doing.
As far as change goes, I try to maintain a consistent structure and tradition within the Office of Government wide Policy, so that even though there are changes in the work or the programs that we're doing it's still the same place. I don't believe in making a lot of extraneous changes in the way we do things. I try to keep some consistent core structure there as far as the management of OGP.
A lot of people tend to react to what if scenarios I think way too strongly, so when change is in the wind I think it's good to discuss it. I think it's good to analyze it, but I don't think it's good to react to it emotionally as if it's already happening because a lot of times things are discussed and never happen and there's no point in investing all that emotion upfront over things that are just being discussed.
So if anything, if anybody was to reorganize GSA or OGP, all these things would have to be done anyway, they just -- and you lose all the efficiencies of having them in one place, so it's a good way of reminding people that change will come, change is inevitable but the office will go on.
ALBERT MORALES: So, Stan, let's transition to the future, can you give us a sense of some of the key issues that will affect GSA and Government wide policy over the next few years? And within these issues, how do you envision your office will need to evolve over these years?
STAN KACZMARCZYK: And as the leader of an organization that has five staff offices, it may not surprise you that I have a list of five challenges to discuss, each one corresponding to an office.
But I think in the information technology area, the biggest challenge is the tension between more transparency and more security. So as we open up more of Government process to the public and put more things on the web, at the same time we need to be securing that even more.
Then there's also the big picture, cyber security, all the stuff that's not open to the public, but everything is web enabled these days. Everybody is using the internet, and that includes, you know, the people who are protecting us and the military and security agencies. So it's a lot of vulnerability there, which I know the Administration, the last Administration and the current Administration are addressing.
In the area of transportation, travel, and asset management, the office that does the seven different administrative programs, that's the office that has real regulatory authority. You must, the rest of the Government must follow those regulations of fleet management and travel management, mail management, et cetera.
We have been moving slowly over the years to a mindset where we are going to be developing performance measures, collecting data -- I mentioned the vehicle registration system -- and providing, using that data to provide feedback and evaluation to the agencies, themselves. So this is a way of managing, self-managing kind of feedback loop, what's the best in class and how am I doing compared to it.
It's a completely different mindset from saying, "Okay, we're OGP, we're going to put the regulations in place in a collaborative manner, but here we're going to tell you how it's going to be done versus we're going to tell you how you're doing and let you compare that to the best in class and improve further."
So it's not just a matter of putting the technology in place to do it, but it's a matter of shifting the culture of the organization.
In the real property area there's been a lot of talk about the state of the Federal real property inventory. GAO has been upset with it. We're on the high risk list for a number of years. It's been a real property initiative under Executive Order 13327. A lot of stuff has been done under that initiative.
Recently, the Recovery Act allocated $5.5 billion for GSA to upgrade a number of its buildings, and it allows us to get through a lot of our backlog of renovation projects, which is good. There's other money floating around the Government under the Recovery Act, which is good.
Unfortunately, from where I'm sitting, looking at the whole 3.4 billion square foot Federal real property inventory that the problem is really big. We need to do more to renovate the buildings that we need, continue to have a need for.
We need to do more to dispose of the buildings that we don't need or that need too much money to fix-up, and we need to do more in employing alternative work strategies, such as telework and hoteling to reduce the amount of space that we need.
We need to do that as a Government, we need a Government wide approach. GAO calls this "a need for a transformation strategy in the Government". So that's the biggest challenge in that area.
In the area of the regulations and the Regulatory Information Service Center that we talked about, as I said, there has been transparency and collaboration in that area already. We're going to be employing more Web 2.0 technologies to increase that. As we do that, we're going to have the public growing in importance as stakeholders in the regulatory process.
And, again, it's a culture shift, and it actually is a theme here and that the technologies are tools but it's how they impact the way we do business and the culture shift that's needed to get from 1.0 to 2.0 is the real challenge.
And, in this case, you know, the folks in the regulatory arena are used to dealing with each other. This is kind of a technical, analytical process, and they're not as much used to dealing with the public as more active vocal stakeholders in the process, so that's going to happen as employees, new technologies.
In the area of the Committee Management Secretary, again, as I say, they've always been about openness and transparency but, again, as we modernize with the 2.0 technology we're going to have to learn how to deal with what I call the "gray areas".
The FACA was passed in 1972, there was no such thing really as the internet the way we know it today, but certainly Web 2.0, social networking back then. People are interacting using these tools right now, and I often look at it and say, "Are they doing something similar to an Advisory Committee or not and how do we put policy in place to differentiate that?"
So, again, it's kind of a culture shift, and maybe we need to modernize the Act, because 1972 was a different world from 2009.
ALBERT MORALES: So, Stan, that's wonderful, a wonderful perspective there. As you reflect on your career and your transition from the private sector what advice might you give to someone who is out there considering a career in public service?
STAN KACZMARCZYK: I would say particularly to the younger people, if you're considering a career in public service, do it now rather than wait till later. I know when you're younger you say, "Well, the starting salary is higher in the private sector." And you kind of take the short-term perspective. But I would say do it now, you can always go to the private sector later on when you get some experience.
And if it turns out you like the Federal Government, you make a career of it, that's where you'll reap the most benefit of working for the Federal Government with a long-term career and full realization of the benefits that are involved.
I'd also say to people that I think in my experience I find that you learn more from others that you work with than you learn from an organization, itself, and I've always found the quality of people that I deal with in the Federal Government to be impeccable, and particularly in GSA, I've worked with a number of wonderful people and smart people and dedicated people over the years. And you'll learn more from those folks than you will from any culture or from any school really.
Finally, I think the Government, especially GSA, in particular, is a place where you can be a generalist or you can move around, you can learn different things, and if you're not sure of what you want to do and if you're looking for a career change maybe that applies.
It's a good place to find yourself, if you just come in and be flexible and be open to different things and new ideas, and you can find your career.
ALBERT MORALES: That's wonderful advice. Thank you.
Unfortunately, we have reached the end of our time. I want to thank you for fitting us into your busy schedule, but, more importantly, Paul and I would like to thank you for your dedicated service to our country over the past 18 years in your role at GSA.
STAN KACZMARCZYK: Thank you. I'd like to take this opportunity actually to thank my Leadership Team at the Office of Government wide Policy.
We've had a couple of acting leaders over the last couple of years, including me now, and sometimes an organization can drift in that situation, and just waiting for the next permanent leader, but we have such a solid Leadership Team in place that that has not happened. We have continued to move forward and make great progress on behalf of the Government and the American people.
I'd like to thank my Acting Deputy, Jim Deans, who is doing a fantastic job. I didn't think I needed a Deputy and Jim proved otherwise. Now I couldn't live without him.
I'd like to thank Tony Butcher, who is my Chief of Staff.
Becky Rhodes is the Senior Executive in charge of the Office of Travel, Transportation, and Asset Management. She's kind of the heart and soul of OGP.
I'd like to thank or acknowledge Carolyn Austin Digs, who is the head of the Real Property Policy Office, the Senior Executive who took over that office behind me, enabling me to move on to the front office and not worry about the old shop.
Peter Altman is the head of our IT Policy Office.
John Thomas, the head of our Regulatory information Service Center.
And Bob Flack, who is the Committee Management Secretary.
This is an impeccable Leadership Team, and I couldn't get anything done without them.
ALBERT MORALES: That's great. Thank you.
This has been The Business of Government Hour, featuring a conversation with Stan Kaczmarczyk, Acting Associate Administrator for the Office of Government wide Policy at GSA
My Co-host has been Paul Kayatta, Partner in IBM's Public Sector, General Government Practice.
As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who may not be able to hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.
For The Business of Government Hour, I'm Albert Morales. Thank you for listening.
Announcer: This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m. And visit us on the web at businessofgovernment.org. There you can learn more about our programs, and get a transcript of today's conversation. Until next week, it's businessofgovernment.org.
Originally Broadcast July 12, 2008
Announcer: Welcome to The Business of Government Hour, a conversation about management with a government executive who is changing the way government does business. The Business of Government Hour is produced by The IBM Center for The Business of Government, which was created in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about The Center by visiting us on the web at businessofgovernment.org. And now The Business of Government Hour.
Mr. Morales: Good morning, I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government.
Challenged by the administration, federal agencies have sought to identify new and smarter ways to do business and move toward a government that is citizen centered and results oriented. To be successful in this area, federal agencies require support and assistance, and the U.S. General Services Administration or GSA works to provide that support, staking a leadership role and reducing wasteful government spending.
With us this morning to discuss his organization's leadership is our very special guest, David Bibb, acting administrator at the U.S. General Services Administration.
Good morning, David.
Mr. Bibb: Good morning, Albert. How are you?
Mr. Morales: Good, good, thank you. Also joining us in our conversation is Marty Wagner, senior fellow at the IBM Center for The Business of Government.
Good morning, Marty.
Mr. Wagner: Good morning.
Mr. Morales: David, before we get started, could you set some context for our listeners by providing a sense of the history and mission of the U.S. General Services Administration? Can you tell us when it was created and what its mission is today?
Mr. Bibb: Sure, we were created in 1949, and really we were an outgrowth of World War II in a lot of ways. The government had a lot of real property assets that it needed to dispose of, and there was also a perceived need to centralize the acquisition of basic common goods. So GSA was set up to do those two things from the start. Over the years, the mission has grown to the point that we're a very large business today, doing business to the tune of about $60 billion worth of sales to other federal agencies and in some cases state and local governments too each year.
From time to time, because we do change, we revise our mission statement, and we did that last year. So our mission statement starts out by talking about leveraging the buying power of the federal government, which we can do, because we, as a $60 billion business, we're buying a lot of stuff -- goods and services and buildings. But we've added to that over the years, maybe this one goes back to 1949 when GSA was set up, but part of the mission statement says we exercise responsible asset management.
In other words, we have many historic buildings that are held in trust for the American people from here on out. They are going to be here as long as there is the United States of America and we take that stewardship seriously, and that extends to other areas too. But then we talk about in our mission statement delivering superior work places, and you wouldn't have found that when GSA was formed. We believe there is a direct co-relation between the quality of the workplace and the performance of the people who work in the space.
So we're getting better and better at figuring out how to provide good work places both within the buildings that we manage, and if people want to work at home or work anywhere else. That's why we call them superior workplaces because they can be anywhere. We also talk about expert business solutions; we think we can talk with an agency and understand how they operate and come up with solutions that they might not have even thought about themselves.
And then finally, the last phrase of our mission statement talks about innovative and effective management policies. We do have a government-wide policy rule that didn't exist when GSA was formed. And we always want to be -- the word innovative is in our mission statement, because we just can't be stagnant, whether it's developing policies or thinking about how we provide, you know, what are the services and goods that federal agencies are going to need 10 years from now, we've got to constantly innovate.
Mr. Morales: Well, it's a very broad and sounds like a very evolving mission that you describe. Can you give us perhaps some more particulars about the organization itself, perhaps, the size of the budget, you talk about $60 billion organization, the number of full-time employees, how you are geographically organized around the country?
Mr. Bibb: Well, we have our headquarters and 11 regional offices, and because of our buildings being in virtually every community, we actually have field offices in about a 120 locations, primarily for people to manage those buildings through contractors. We are primarily within the United States, although our federal acquisition service, goods and services that they supply are actually provided worldwide. So we have some people in Europe, some people in the far East, but the majority of our employees are in the United States, and we have 12,000 employees.
I mentioned the annual business volume; our revenue is $60 billion, because when you talk about budget, only about one percent of GSA's operating funds come from direct appropriations, the rest come from the fees that we charge our users. And in many areas we are non-mandatory, so we had to be sharp as a business or federal agencies will take their business elsewhere, so 12,000 employees, about $60 billion worth of business per year, one percent of that is appropriated geographic footprint, all over the country with our 11 regional offices and the field offices plus some presence overseas too.
Mr. Wagner: And David, now that you have provided us with a sense of the larger organization, perhaps you could tell us more about your specific role what your specific responsibilities and duties are?
Mr. Bibb: Well, I view myself as being in the front office of GSA and one of the roles is to be a face of GSA for both our employees, and for the vendor community, for our customers. So a part of it is symbolic and that goes with anyone who is number one or number two at any federal agency or any institution. I also have some pretty specific roles that I've carved out for myself. I've been very interested in really developing a strategic marketing capability within the agency, so that we are more intentional. When I say marketing, we're not out to raise revenues just for revenues sake, we believe we're the best way you're going in the government.
So we need to intentionally target who looks to be a good customer who could benefit from GSA. Another thing that I've been working in is our relationship with the Department of Defense, which is by far our largest customer on the federal acquisition side of the business. And I didn't mention before when we were talking about organization, our two main business lines are the federal acquisition service, which provides just about any good and service you can think about, and information technology services. The other side, the other major business is the public building service, which builds the federal buildings you see all over the country, it leases space for federal employers.
But our relationship with DOD has been over the last three years or so improving, we went through a rocky period of time when working with DOD, I think we were both to blame in some ways, we simply were not making good contracts, and we were not handling their money correctly. So it has taken some time to rebuild some of those relationships with DOD. So I've been working very hard myself with a working group to build -- rebuild that business and it has grown. We are up 6 percent this year in DOD business versus last year; many of our interfaces with DOD are on the upswing.
I feel like part of my job is to set strategic direction for the agency that's one reason we updated our strategic plan last year and then our executives performance plans and our individual performance plan is tied to that strategic plan, and their bonuses, both rank and file employees and executives are tied to in part, how well they do against those performance measures, which dovetail back to the strategic plan. Another key part of my job is to monitor performance, and we have a very strong quarterly performance review program. I sit in on some of those, for example, with the federal acquisition service and the public building service, and our chief financial officer, to see what they said they were going to do for the quarter and for the year, whether it's revenue or responsiveness in terms of time to respond to a customer, and I sit in on those, and see how we're doing, and if we are not doing well in an area, I'll be asking questions about -- how come.
And then the other piece really is the intangible of leadership; I think people need to be lifted above themselves, and I think that's part of my role is to be out there doing that, not so much as a cheerleader, but when I acted as administrator back a couple of years ago, one of the first things I did was to put out a video, and I did a series of those for all employees, almost kind of a personal one on one, they could bring it up on their computer anytime just to reassure them that the previous administrator left, but he had some very clear goals and that I was there to lead them in continuing to achieve and improve. I think that's important; I learned a long time ago about myself that on the scale of introvert to extrovert, I'm more introverted than extroverted.
So then I took a course in leadership where the guy who was teaching was very good about moving beyond yourself, giving the employees, the people you work with, a kind of shoot for the stars feeling, this is fun, this is -- you can do this, and I think that's a very important role. It is just the leader role. And I might mention something that may get a little touchy feeling, but I believe it's important; there is something called a servant leader that you really -- you remember that you're there to serve the people who are working in the agency, you're certainly there to serve the customer, but I believe in treating people well, I believe in treating people with respect, and I believe when you do that that it filters on down through the organization.
Mr. Bibb: Well, we have -- being a competitive non-mandatory competition is always a challenge and one calls that as our personal cause; and with me it is the proliferation of acquisition vehicles that have sprung up around the government. Most people think of GSA as the supplier of goods and services, but when you start looking across the government, there are over 250 vehicles that agencies can use either within their own agency or on an interagency basis that directly competes with what GSA does.
Now, we don't mind competition, but 250 is too many, that's proliferation to a scale that is out of control. So you know, I don't expect that to be fully remedied during this administration, there is not enough time left to do that frankly, but we do have transition coming up. It's an issue that we have discussed over the last few months with some of the political leadership within the administration, and certainly an issue that I intend to discuss with the incoming administration also. That's a challenge; another challenge in any big organization is just staying on the same page. We have so many people and so many programs that it's a challenge to get us all going in the same direction.
I found it to be very effective to form working groups; I mentioned I had the DOD GSA working group. At the table we'll have our congressional affairs group, our public affairs group, federal acquisitions service, public building service, our any -- chief acquisition officers, so that we all are hearing the same thing and we'll make assignments, and so often, and we'll agree on due dates, and it just helps to coordinate and we can bring everybody together.
The third big -- big challenge we have is just the shortage of capital for infrastructure, that's not unique to GSA. GSA owns about, or hour leases about one tenth of the total federal inventory of real property, because there are lots of defense bases, VA hospitals, energy plants, Department of Energy plants. So when you add it all up -- post offices, we have about 10 percent, mostly general purpose office space, we're all on the same boat. And you read about it on highways and bridges and anything in the nation's infrastructure. Too many needs and not enough dollars and in our current budgets -- budget arrangement in the U.S. government, it's a cash-on-the-barrel arrangement.
There is no creative financing or mortgage financing that just can't -- in my opinion that just can't continue forever; there are going to have to be new tools to deal with that.
Mr. Morales: So David, I understand that you started your career back in 1971 as an intern over at GSA, could you describe your career path for our listeners and as you sort of reflect in your career, you talked a little bit about leadership, were there other moments in your career that perhaps have shaped your current management style and approach?
Mr. Bibb: Well, I began in 1971, as you said, and in our Atlanta regional office, and that was a good place to start, because being in the head quarters, it certainly helps to have had some regional experience, because they are the folks who get the job done on the line. We set the policies, set the budgets, provide some leadership, but they are where the rubber meets the road. So that was very helpful to me; in 1978 I had an opportunity to come to Washington and I've stayed. I feel like a Washington area native by now certainly and have enjoyed it very much.
There have certainly been people and opportunities that have impacted my career. The first one was moving up here, at some time, people have to make a decision if they are going to make a physical move. And I had help in Atlanta, mentors, I had help when I got here, various people through my career have appeared or I've sought out for advice and counsel, I've tried to apply the lessons I've learned from those folks. I remember early on, not long after I came to Washington, one of the senior executives I work for, made it a point to take me along with several others, just to watch him as he testified before Congress. And he would probably testify ten or twelve times per year.
He was an absolute master at it, I adopted a lot of his techniques, I probably testified a hundred times before Congress, and every time I go up there, I'm thinking about some of the things I saw in action. All of that has led me to one role I serve at GSA, which is the mentoring champion for the agency. Most of my mentoring was informal mentoring, to toss a bouquet at Marty, he came along at a time in my career when it was time for a change; he offered me the opportunity to make a change when he worked at GSA and I did. And Marty was a good man, Al, but a lot of that was informal mentoring. We have a very strong formal mentor prot�g� program at GSA, and I think I'm committed to that because of the help I got along the way.
Mr. Morales: That's great. What is the value of having a central provider like GSA? We will ask David Bibb, acting administrator at the U.S. General Services Administration to share with us, when the conversation about management continues on The Business of Government Hour.
Mr. Morales: Welcome back to The Business of Government Hour. I'm your host Albert Morales, and this morning's conversation is with David Bibb, acting administrator at the U.S. General Services Administration. Also joining us in our conversation is Marty Wagner, senior fellow at the IBM Center for The Business of Government.
David, can you review the value of a central provider like GSA, but more specifically, with more than 10,000 contract holders on GSA scheduled contracts, how does the agency streamline its e-procurement program and ease the administrative burden on your employees?
Mr. Bibb: Well, the value of a central provider is that we really and truly can buy goods and services at tremendous discounts versus what a single agency could do on its own. We do allow agencies the freedom, for example, we set up airline contracts between all the major U.S. cities, and they should look at those first, but if they can go on one of the search engines online and find a cheaper rate, that's okay, they can do that, but our contracts with the airlines allow you to book one hour before the flight leaves, you get that set price.
If you cancel, you can cancel right up to the time of flight, just all kinds of flexibilities as you can get with an Internet deal. We buy automobiles and provide them to the agencies at, at least 25 percent off what you could find anywhere else. When we are able to pool our requirements, we know that we can buy a software sometimes at 15 percent of what buying a single item would be, so central provider just can aggregate that buying power and whether we are guaranteeing a level of purchases, which we do in some of our programs.
In other programs, we simply give vendors the opportunity to make themselves available to federal buyers that's called our Multiple Award Schedule Program. Still, they know that when they are on schedule, they are obligated to offer their lowest -- at least their lowest commercial price or to their most favorite customer, and then agencies can negotiate a price below that, so that's the central agency value proposition. And the same goes for public buildings. It doesn't make any sense in Washington, D.C. for example, to have 25 different agencies out in the Washington real estate market competing against each other, and we can make better use of our inventory by assigning and reassigning people the space.
And I want to mention one more thing about being a central provider. We have the ability to channel a lot of these purchases to groups like small businesses, service-disabled veteran-owned businesses, women-owned businesses, and so on, and we do that, we do it very, very well. We are one of the -- one of the highest rate of contracts with those groups of any federal agency. And then talking about simplifying the process, we have, under our previous administrator, Lurita Doan, we made a real concerted effort to cut down the amount of time it takes vendors to get on the GSA schedule.
And we actually have succeeded in getting some on at 30 days or less, which is versus 6 months or more, so that's helped. We have a number of -- you've mentioned e-tools, we have things like, to help our customers, e-buy, where you can simply go in and go to our Multiple Award Schedules. If you are an agency that is required to get three bids and for a certain dollar volume contract you are, simply plug that into our tool it will evaluate the offers and pop out the best deals that we have on the Multiple Award Schedule.
We have a lot of tools to help our employees deal with the volume of work that they have to do from automated systems that lead you through making a contract, we are particularly strong on that and the Public Building Service, to upgrades in our financial system that make them much easier to work, but we couldn't do it without automation. We are basically -- I mentioned we have 12,000 employees. We are basically an agency of contractors and contracting officers who are seeking to pull all of these goods and services and buildings together, so that other agencies can either order against our contracts themselves or use our experts. We do have experts to assist them in putting together a set of requirements. So we are heavily dependent upon e-tools both for the vendors that we interface with, with our clients and to help people process-wise too.
Mr. Morales: Now, David, you mentioned briefly buildings and properties, could you tell us a little bit more about your work in policy involving real property and assessment management. What have you done to sort of enhance the efforts in this area?
Mr. Bibb: Well, a lot of what I did actually occurred before I became deputy administrator in 2003. I remain involved in it, because most of my career has been in real estate -- on the real estate side of GSA with the Public Building Service and then in -- for several years in the Office of Governmentwide Policy. But probably the most effective thing that I did while I was -- this occurred while I was in the Office of Governmentwide Policy was to put forth a comprehensive piece of legislation, which would have amended the 1949 Act for the first time in the real property area in 55 years or so.
We put forth to the Congress a whole series of changes asking every property holding agency to name a federal or property officer. They would then come together in a council; we had provisions for improving the database of federal real property. Many agencies had no idea what they owned at least worldwide. And we also had some creative tools in there that would have given the agencies the opportunity, not just GSA, but other agencies the opportunity to retain proceeds if they sold a building and to enter into contracts that would in effect, spread the cost of a project over time, and we were very careful at how we structured that.
The end result was, we got passage unanimously by two committees in the House, both they were unanimous bipartisan approval. We ran into some difficulties with the Congressional Budget Office on the -- how those were scored against the federal budget and a real difference of opinion with them, but it was serious enough that it led to the legislation being stopped in its tracks. But out of that came conversations with the Office of Management and Budget in which they said well, let's do what we can that was in your bill under executive order.
So the President did issue an executive order on real property management and that called for the naming of a senior real property official in each agency, the formation of federal real property council, the establishment of a governmentwide database, all of which have been done and all of which the Government Accountability Office has recognized as really good practices. What is still left to be done is this issue of how do we get the money to do the renovations that everybody needs to do, but I am very proud of some of the efforts that I was involved in there to make something happen and there are still discussions going on even with OMB now that I have participated in even within the last month about what can we do about this problem.
I am not having the cash on the barrel, none of us, you know, whether we have a mortgage crisis or not, I still don't see anybody going out and paying cash for $400,000 house. There's another way to do it and that's the position we are in, if we are going to renovate our home, we have to have the $200,000 in hand to do it, using home as a metaphor for the -- for a building. If we are going to buy a new house we would have to have the $300,000 cash in hand which of course is not the way the world really works, but that is the way the federal budgeting process works.
I've been very supportive of efforts in the Public Building Service to what we call tier their inventory -- t-i-e-r. Their inventory is layered into three levels, number one, are the real money-making buildings where we must reinvest. The scarce dollars we have that we collect from the agencies in rent, go into a fund and from that fund we allocate as much money as we possibly can to those tier one buildings. Then we have on the other end of the spectrum, tier three buildings, which there is just not much reason to keep them, and we will try to sell those or dispose them otherwise.
And then we have tier two in the middle, which with proper investment could become profitable and profit -- I am only saying profit, because we -- obviously we can't have a whole inventory of buildings that lose money. We have to make operating expenses off that inventory, so I've been very supportive of that and that continues today.
Mr. Wagner: David, GSA has made some significant management and financial changes to procurement operations over the last five years, would you elaborate on these efforts and how have these changes enhanced accountability, transparency, and delivery of services to customers?
Mr. Bibb: Well, Marty, in some parts of our business, we just didn't have any choice. We were doing some things -- I don't think anybody was intentionally doing anything wrong. but things for example, that were being bought under the information technology contracts clearly want information technology, and I won't go into details about that, but that was happening, so we had to go back about 3-1/2 years or so ago and make sure that everybody understood the rules and were buying proper things on behalf of other agencies through the proper vehicles on the proper account so we straightened all that out.
At that time we had a program called "Get It Right," which was another initiative that I chaired, another one where we brought everybody around the table, as I talked about, and the whole reason for doing that was we simply had no choice, but to contract correctly. There was even a legislation passed in the defense authorization bill that said start doing it right our defense won't do business with you anymore. And we were subsequently in that law, it called for review by the DOD IG and the GSA IG, so we had to get our act together.
At the same time, we weren't always handling agency's funding correctly. We have revolving funds; agencies generally have funds that expire at the end of 1 year. What we were doing was taking some of that 1-year money putting it into our fund and then it magically became multiyear money, which is not a correct way in our view, although there had been some legal opinions. At that I said, it was okay, its not-- we did not, no longer view that as okay, so we had to straighten that out.
In the middle of that, we lost our clean audit opinion after like 17 straight years of having a clean audit opinion. So we had to -- we had to change the way we were acquiring goods and services to be sure we were having competition, to be sure the statements at work weren't being written to steer work to a particular contractor and we don't do that anymore.
And we handle agency's money correctly now, and we regained our clean audit and all of those things were wrenching changes and caused us in some cases to lose some business, because agencies -- some agencies had grown used to tell GSA what you want, GSA will go buy it for you. And we had to make -- we had to change that, but I believe today, it's a value-add. It's a competitive advantage, I think agencies can trust us to do it correctly to handle their money correctly, which is important to them and to go through the procurement process, so we don't have protests and they don't have problems with their own inspector general, so major changes over the last 5 years particularly on the federal acquisition side of the house that made us better.
Mr. Wagner: Thanks. Now, David, what has GSA done to enhance and transform its customer service capability? To what extent, for example, has GSA one voice kept sure that the intent of your integrated approach to produce greater value for customers and bring your organization closer to its vision of one face to the customer?
Mr. Bibb: Well, we have done a couple of things to enhance our customer service capability; both our Public Building Service and our Federal Acquisition Service have put together very strong customer relationship groups both in the headquarters and in the field. They've both made major progress in scheduling visits for their customers, talking with them about their needs. A big problem I saw was the two groups weren't talking to each other, and we had two GSA's out there interfacing with our customers. So one thing I have been working very hard to do is to bring the Federal Acquisition Service and Public Building Services together where it makes sense.
It doesn't always make sense, but even when you are working on a contract for airline contracts, if you don't do a good job of that on the federal acquisition side of the house then someone in an agency is going to get a bad view of you as an agency and that could impact your public buildings business. But there are other cases where, particularly where agencies are in need of space and we provide it where we just have not done well in the past at integrating the building itself, the furniture systems, the information technology, even vehicles all that goes along with providing a workplace.
So we have now by having the Public Building Service and Federal Acquisition Service, come together, we now have a process by which automatically at certain points in the process, they will come together and they will talk about needs and they will deliver those seamlessly. At the same time, the two customer groups are working together for example, I've done a series of outreach visits to heads of other federal agencies and the two groups work together, FAS and PBS, Federal Acquisition Service and Public Building Service to put together a joint product that I then use as we visit secretary of veterans affairs, for example.
The public buildings plan will have a reference to the services at the Federal Acquisition Service as a reminder to all of our customer service reps in public buildings that they should be talking about FAS, federal acquisition programs and vice versa. So we've done a lot to promote this idea that we really are one big agency and there are lots of models in the private sector where you have a number of business lines, but you have the same set of expectations as far as service levels and various business levels working together when it makes sense and that's what we are trying to do in GSA.
Mr. Morales: Now, David, just transitioning here a bit, I understand that you are preparing to transition to a new government-wide telecommunications contract known as the networks program. I only have about a minute left, but could you elaborate on the networks program and how do the advanced technologies and services define within this program serve as a platform if you will, to transform the government's telecommunications infrastructure to something that's a bit more seamless and secure?
Mr. Bibb: We've come a long way from providing long distance service, which is what the ancestor of this program is to be. You can get anything under the networks contract, anything you can think of, and right now, the agencies there are so many offerings, there are 50 versus 15 under the old FTS 2001 contract. It was called under networks, there are 50 different services. IP voice over anything that is cutting edge, things that are in common use and things that we think are coming along are available under networks.
We think it has a potential to be transformative. Some agencies are moving a little slowly, they are a little hesitant to transform at the same time as they are switching from the old network to the new one, so some will probably just slide over the same thing they've been buying from us and put it under this new contract. Other agencies are using it to rethink the entire way that they organize their business and their way of operating. So what we have put in place can range from, well, just meeting the basic need to just being a very, very sophisticated set of communication tools that are available to all of the federal agencies.
Mr. Morales: That's Great. What about GSA's leadership role during the presidential transition, we will ask David Bibb, acting administrator at the U.S. General Services Administration, to share with us when the conversation about management continues on The Business of Government Hour.
Mr. Morales: Welcome back to The Business of Government Hour. I'm your host Albert Morales, and this morning's conversation is with David Bibb, acting administrator at the U.S. General Services Administration. Also joining us in our conversation is Marty Wagner, senior fellow at The IBM Center for The Business of Government.
David, as we begin to gear up for an administration transition here in a couple of months, GSA plays an integral role in making this transition as smooth and as seamless as possible. Perhaps you could give us a brief historical perspective on what led GSA to have such a critical role during these transitions and how has that authority evolved over the years.
Mr. Bibb: We have by statute, in the 1963 Presidential Transition Act, certain duties that no other agency has. That act was put into law in recognition that the Congress needed to codify this time when we would be changing governments. And it basically says that GSA will provide all the space, all the telecommunications, all the furniture, all the payroll services, all the travel services for the incoming administration. And that begins on the day after the election and continues through January 20th, with a little wind-down period after that.
So there is a little piece of trivia -- who is the only person named by law as being responsible for calling the winner of the presidential election prior to the convening of the electoral college, and of course the answer is the administrator of General Services. It actually says in the law that the administrator will determine the apparent winner and then the reason for that is so we can begin providing these services to the transition team. We hold the keys until a clear winner is apparent and then we turn over what will be 120,000 square feet of space for 600 people who will go about the duty of forming the new government.
We've gotten a lot more sophisticated about how we do that. We have a very good 40-person team that will be going 24/7 beginning about 3 months from now. We began preparing for this 6 months after the last election; we are in great shape. The team could -- transition team could move in tomorrow if they needed to, but on another front there is really nobody when you look at transition -- nobody in the federal government is responsible for telling the executive branch how to transition.
And we are finding that because we had this other role in transition and many agencies are calling upon us to kind of share best practices about what do you do, how do you treat the outgoing political appointees, what kind of counseling do you give them? How do you go about preparing briefing materials for the incoming transition team and for the presidential appointees who are going to be nominated? And there are some agencies that have had enough turnover that they just -- they don't know what they are supposed to do.
So our chief human capital officer, Gail Lovelace, and I have found ourselves on a traveling road show. We've probably spoken at least a dozen times over the last 2 or 3 months to other agencies and other interest groups who are just interested and want to know, are you doing it over there at GSA because you seem to know what you're doing. So that's -- kind of an informal role that's developed, but it's actually the thirst for information about what to do and how to do it during transition is pretty amazing.
Mr. Wagner: David, I'd like to maybe follow up on the specific activities that GSA does and maybe work through if -- you can maybe work out specific stories to illustrate the points that you've made and perhaps some of the best practices that you found work best in this situation.
Mr. Bibb: Well, the -- on our one -- on the duty I mentioned of providing all the facilities for the incoming administration, the best lesson we learned about that is to start early. If you start looking for office space in Washington, D.C., with 6 months left to go before the election, you're going to be in a lot of trouble. So that was one thing that we learned to do.
In transition, in general, I will say there -- whether it's GSA's special duties or we're talking about dealing with the -- what we call the parachute teams from the transition group that actually drop into the agencies to learn about what the agencies do and how they go about functioning and what their issues are.
But a couple of universal principles apply to both of those. One is to be prepared. We are certainly prepared on the provision of facilities. We are -- have already begun work on our briefing materials for the incoming administration and our issue papers, things that we want to lay before the incoming group. Another lesson learned is that the first impression is absolutely critical. That is one thing that we are ever mindful of with our folks.
We put on the transition support team, the 40 people I mentioned who work round the clock to support the transition activities. We put our very best people on that because not only are they representing GSA, but for many people who are forming the new government and will in fact work in the new government this is their first exposure to federal employees. So we are very mindful that on behalf of the entire federal government we need to be sharp and do a sharp job. But that also applies back to any agency when the transition team comes in. You've got to know what you are talking about; you can't be halfway prepared or wander around in philosophical discussions.
I think it's just important that people see professional people who know what they are talking about, have the issues nailed, and you only get one chance to make that first impression, so that's critical. I think it's critical and important to make it clear to the incoming folks who we work for, we work for them. And most federal employees know that very clearly, that we work for the president of the United States, we are part of the executive branch, and we are here to help you succeed with your agenda.
Now, we may have some issues that we think you ought to consider, but we want to convey that understanding upfront they we're not here to oppose you, fight you, carry our own hidden agenda forward. We're here to be part of your team because you're going to need us and we're going to need you, and then I think the last lesson is don't be afraid to advance ideas. I think the incoming groups will have ideas of their own certainly, but they're not going to have all the ideas that they'd like to pursue, so I think they're grateful to get the full spectrum of things as we see them. That's been my experience anyhow.
Mr. Wagner: Well, moving beyond the transition and to your biggest customer, the Department of Defense, their -- the amount they've been spending on services has been steadily increasing over the past decade and DOD is taking steps to improve how it buys those services. To that end, what is GSA doing to influence DOD's use of non-DOD contracts and what steps are you taking to foster GSA's working relationship with the Defense Department?
Mr. Bibb: As, Marty, I think you know, I've been -- and I mentioned earlier I've been chairing for a couple of years now a GSA-DOD working group which is an internal working group that meets biweekly with our sole function being to figure out how to be a better provider for our biggest customer. What we actually do coming out of those meetings covers a broad front after -- I mentioned earlier that both the DOD IG and GSA IG looked at our assisted acquisition program under the provisions of the Defense Authorization Act a couple of years back.
Out of their audits came some 20 action items that they felt like needed to be done. We sat down, formed a team to sit out with DOD, and went through -- fleshed those out in a almost a to-do list of things to get done and we have religiously worked that with DOD even when it's gotten hectic at DOD and sometimes they didn't have time. We'd be panting on the door saying it's time to sit down and talk about the MOA. And then we've reported back to the Congress, every month or every 2 months with a summary -- or quarterly of what we've done against that memorandum of agreement to make sure that we are both contracting correctly.
Beyond that we talk about pursuing business opportunities with DOD on every front at our meetings we will talk about now the commissioner of the Federal Acquisition Service is going to meet with the following people on the following schedule. Have you talked with e Army recently, when are you going to talk with Air Force? All the way down to what kind of visits our customer service representatives in the field are making. And the whole idea also -- things have changed with DOD -- within DOD some.
In the past, if a program officer or base commander wanted something he would just tell GSA he needs it. DOD has instilled more control within their program so that they are asking their contracting officers to sign off before DOD comes to GSA for services. That means our people have had to in addition to have a relationship with the base commander, they've also had to make -- establish a relationship with contracting shop in DOD because you need both of them to want to do business with you before the business will come your way. So our discussions are fairly wide-ranging, those were a couple of examples of the things we do.
Mr. Morales: David, there's been a fair amount of discussion and activity around a government-wide standard for secure and reliable forms of identification for both federal employees and contractors. Could you elaborate on Homeland Security Presidential Directive 12, commonly known as HSPD-12? Just real quickly, what are some of the key requirements of this directive and can you tell us about the services that your organization is offering in this area to agencies?
Mr. Bibb: It's -- it's was a concern of the President that we all have across the government identical and interoperable identity cards as government employees or as government contractors. There must have been 100 different systems before this presidential directive came out. The directive came out and GSA had a strong role in setting the standards for what that identity card would look like and that identity card is used both for admittance to federal properties and for logging into your computer system.
The idea is to make it a kind of one-stop identity card. It's strongly resistant to tampering, counterfeiting, has all kinds of built-in security features, got the photo -- your photo, fingerprint ID electronically embedded on the card, so that it's very hard to misuse it. So GSA, in addition to playing a strong role in developing the standards for that card which are now standard across the government, also is operating what we call a managed service office, in effect it is a business under the Federal Acquisition Service to provide credentials to some 800,000 federal employees and contractors.
Now, DOD is running its own system, but we have put in place 200 enrolment centers. So far it's not going as fast as I would like, we have something in the neighborhood of 100,000 employees and contractors, what we call sponsored, that is minimal information is available to get the process rolling and that's increasing at about 5,000 a week, but we need to issue 800,000 of these things. At the rate we're going we'll hit about 250,000 or 300,000 by the end of the year and we need to do a larger volume than that in order to -- we have assumed certain volumes of business in order to give a very inexpensive rate for each card and we're not coming up to those business volumes.
So we are working with the Office of Management and Budget, you know, get a little fire lit. Some agencies are not moving as fast as we'd like to see them move. It's a great thing though when. It's in place there will be background checks done before you can get your card whether you are an employee or contractor and it will just eliminate a lot of very bulky non-interoperable systems that we have now and replace it with a state-of-the-art tool.
Mr. Morales: What does the future hold for the U.S. General Services Administration? We will ask David Bibb, acting administrator at the U.S. General Services Administration to share with us when the conversation about management continues on The Business of Government Hour.
Mr. Morales: Welcome back to our final segment of The Business of Government Hour. I'm your host Albert Morales, and this morning's conversation is with David Bibb, acting administrator at the U.S. General Services Administration. Also joining us in our conversation is Marty Wagner, senior fellow at The IBM Center for The Business of Government.
David, most achievements in government are not solo acts, certainly some of the best programs are accomplished by teams of employees within the government. Could you elaborate on your approach to empowering your employees? How do you lead change and enable your staff within the organization to accept the inevitability of change and make the most of it?
Mr. Bibb: Well, Albert, there are a variety of methods that I've found to be effective. I do believe in consensus up to a point and will strive for that, not to the point of paralysis, because I've seen that in action too. I think you want to get a lot of people's viewpoint, if time permits. Other times you're going to have to move quickly and say this is the way it is and hope you can pick up support along the way.
I use a variety of techniques myself as a leader, one is, I've mentioned earlier, the videos. They are a great way to get out to everybody so that they can see you, get a feel for your personality as you have a -- what amounts to a one on one. It's not really a conversation but a talk with the person, and communication itself is vitally important.
I've probably said enough about the various working groups we have but a vital component of each one of those is a communication strategy and that's a communication strategy both we will talk about. Our own employees, our own executives across the country, congressional staffs we deal with, members of Congress, the vendor communities that we deal with, whenever we're thinking about doing anything of substance, we have to stop and think about each of those communities and how we communicate that change to them. So communication is vital, and that's part of making change happen, being sure everybody is well aware of it and not surprised by it.
We also manage very much by performance measures and personal performance plans across GSA to the point that -- and we've gotten much better at having a common set of performance measures now. Some regions do a few different tasks from other regions and we allow for that and the headquarters are a little bit different from the regions, but everybody knows that those performance plans make a difference. The strategic plan is done first, then the performances -- organizational plans are done, then the individual plans are done, and people know that their success depends in a large part on how well they're carrying out that cascade of things that start at the strategic level.
Mr. Wagner: David, we talk with many of our guests about collaboration. What kinds of partnerships are you developing now to improve operations or outcomes at GSA, and could you also speculate into the future, how may these partnerships change over time?
Mr. Bibb: We have everything from formal partnerships which are where we -- for example, I was asked to come out to Scott Air Force base to meet with the U.S. Transportation Command, TRANSCOM. This is co-headed by a four-star general. The four-star and I hit it off very, very well. Then he paid a visit to our headquarters and out of that we said, you know, we really have some things in common we can work together on. Why don't we memorialize that and enter into a memorandum of agreement that here is what Defense Logistics Agency will do, here is what GSA will do, here is what the U.S. Transportation Command will do. Let's put that down on a paper and we'll all sign it, and that's just worked terrifically well.
There are other cases where a formal memorandum of understanding or memorandum of agreement is not the way to go; you want a much more informal approach. And we try to do that, I mentioned earlier the customer visits we have which -- where I might go visit the secretary of a cabinet-level agency, take along our top leadership team, and they would have theirs. And lots of times the things we talk about -- we talk about basic services, we go in prepared to talk about issues they may have with some of the things we're providing. But we try to open their eyes to some of the things that might help them get their job done better than they are doing it now. And nearly always we come away from that with a new area of business to pursue, becomes pretty self-evident.
We are also working very hard to develop better partnerships with associations that represent our vendor community. We've been active in those for some time, but we want to look for even more opportunities. If there is an association of vendors that had been dealing primarily with the Department of Defense we are making it our business to become a part of that association, so that we're part of the conversation. Not to be in competition with Defense because that's not our role but sometimes there is an area that we can slide in nicely that might not be provided, but we need to know the people.
So we have a variety of partnership-type of arrangements, from formal, to informal, to outreach, to making it a conscious decision to be active in various associations.
Mr. Morales: So David, as we continue to sort of look into the future, can you give us a sense of some of the key issues that will affect GSA and government-wide procurement over the next few years and how do you envision your office will need to evolve to meet some of these challenges?
Mr. Bibb: I've mentioned a couple of them, some of the key issues. I mentioned the proliferation of contract vehicles. We now have another key issue that we're dealing with right now is how to be sure, you know, you mentioned we had 10,000 contractors, we have -- a lot of them are on our multiple-award schedules. We do $35 to $40 billion worth of sales of those schedules annually. And we want to be sure that the people who are ordering against those schedules are getting the best price.
There has been a lot of discussion about whether the clauses we use now to ensure that best price are the most effective clauses that we can possibly have. That's what we want, we're not making change for change's sake, we want a good clause in those multiple-award schedule contracts that will ensure the best possible price and value for the customer.
So Lurita Doan, our former administrator established a blue-ribbon panel to take a look at that. And it includes people from associations and it includes contracting officers from across the government. The Department of Defense is chairing it actually, a representative from the Department of Defense. When those recommendations start rolling those will be major issues for us to deal with unless of course they say, leave things as they are, in which case it won't be too earthshaking but they would reaffirm that what we have in place is the best way to go.
That is a key element in our ability to continue to -- that's our premier vehicle, you know, that's two-thirds of our $60 billion a year. So we need to be sure those are best value, those results, as I said, will be rolling out this fall.
I think the role of every contracting organization in the government is strapped for people and there is a continuing debate about how much you can do with in-house government employees versus hiring private sector to help with the contracting process. We think there is a role for the private sector in that contracting process and we do use contractors to help us. But they don't sign the contract; that's a government function. There are certain decisions they can't make.
There are others ,particularly in the Congress, who don't think that's a good idea at all. We were somehow to be barred from going down that route. We already have a problem with having enough contracting officers as it is. That would exacerbate that problem greatly, but it's an issue that's still out there.
So well, that kind of leads me to the last issue which is just the shortage of qualified contracting people and the people who're walking out the door. We've just got to find ways of bringing people in, getting them up to speed quickly, giving them the right training, presenting the contracting field as a desirable thing to do for a career and developing that.
Mr. Morales: So David, on that note, you've obviously had over three decades of a very successful career over at GSA. So what advice might you give someone who perhaps is out there considering a role within government and perhaps maybe even a role within the procurement community?
Mr. Bibb: Well, you know, it's -- my feeling on that is changing. I came onboard in the 1970s and by the 1980s it was a bad thing to be a federal employee. We were told time and again in the press and by the politicians that we were basically a bunch of bums who were sitting around with our feet up on the desk. And it got to the point that as my own children were growing up they would say, well, what do you think, Dad, do you think I should think about a government career? And I said, I don't think you should, I think, you know, you get no respect, people think we're loafing our way through life and I'd go for something else.
If I were advising them today, you know, I think the tide has turned a little bit. You look at some of the opinion surveys -- and you can't base it all on opinion surveys, but you know, there are a lot of federal employees who are doing a great job and the work can't be beat for interest. So I would certainly be less vocal in my steering my kids away and I might even steer them toward it, toward a career in public service. They've gravitated that way anyhow.
To others I really do think things have changed. The retirement system has changed, your retirement system is portable, you can take it with you. I would say to anybody who has any inkling of an interest in public service, give it a shot. Your pension is going to be portable; you can -- if you don't like it you can go elsewhere. I will say that for young people particularly there is nowhere you can go and get the level of responsibility and challenge that we offer at an early stage of a person's career.
And the sky is the limit as far as you can do as much as you want to do. As a matter of fact our recruiting material at GSA -- say you can do that here, because we have a job for just about everybody in GSA.
Mr. Morales: Let's say that's a wonderful perspective, thank you. Unfortunately, we have reached the end of our time. I want to thank you for fitting us into your busy schedule. But more importantly, Marty and I would like to thank you for the 36-plus years of service that you've given our country.
Mr. Bibb: It's been a pleasure, and I will say that as far as working for GSA it's a great place to work, tremendous organization, very sharp people, very dedicated people. We have a very distinct mission that's measurable, that at the end of the day you can look at what you've done and know that you've delivered great service and great price. And I would simply say to anybody who is interested in what GSA does, take a look at our website, gsa.gov. You can find out anything you want to about GSA there, or if you're interested listening to this and interested beyond GSA and want to know more about the federal government, visit a website developed by GSA, it's what Time magazine has identified as one of 25 websites you cannot live without. It's called usa.gov and anything you want to know about the federal government is right there.
Mr. Morales: That's great, thank you.
This has been The Business of Government Hour, featuring a conversation with David Bibb, acting administrator at the U.S. General Services Administration. My co-host has been Marty Wagner, senior fellow at The IBM Center for The Business of Government.
As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who may not be able to hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.
For The Business of Government Hour, I'm Albert Morales. Thank you for listening.
Speaker: This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m. and visit us on the web at businessofgovernment.org. There you can learn more about our programs and get a transcript of today's conversation. Until next week, it's businessofgovernment.org.