Originally Broadcast July 12, 2008

Washington, D.C.

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

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

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

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

Good morning, David.

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

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

Good morning, Marty.

Mr. Wagner: Good morning.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Intermission)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Intermission)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Intermission)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Originally Broadcast 8, 2008

Washington, D.C.

Voice-Over: 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. This is Albert Morales, your host, and managing partner of The IBM Center for The Business of Government.

Today, our nation's ability to sustain a growing economy and a rising standard of living depends in part on continued advances in science and technology. With one of the richest and most diverse missions in the federal government, the U.S. Department of Energy also represents the single largest supporter of research and the physical sciences seeking to enhance America's leadership in science and technology in the 21st Century.

In recognizing it cannot do this alone, Energy follows a solid acquisition and procurement strategy to meet its varied and complex missions.

With us this morning to discuss DoE's acquisition strategy is our special guest, Dr. Frank Spampinato, chief acquisition officer at the U.S. Department of Energy.

Good morning, Frank.

Dr. Spampinato: Good morning, Albert. Thank you for having me this morning.

Mr. Morales: Also joining us our conversation is Pete Boyer, director in IBM's Federal Civilian Industry Practice.

Good morning, Pete.

Mr. Boyer: Good morning, Al.

Mr. Morales: Frank, let's start off by learning a bit more about the Department. Many of our listeners are generally familiar with the U.S. Department of Energy, but could you give us a sense of the history and mission of the Department?

Dr. Spampinato: Sure. Our history can of course be traced back to the Manhattan Project in a race to develop an atomic weapon during World War II. And over time, as energy needs change and we went through a number of energy crises, it was realized that the numerous energy programs and agencies should be merged into a single agency, which created the Department of Energy, which was established in 1977. A combining of all these programs and agencies into one department not only enabled a better focus, but also allowed the Department to operate in a more dynamic manner, to shift its emphasis and focus on the needs of the nation as the nation changed, and over time, our energy needs have changed dramatically.

Just a short note about our mission, some of our priorities, DoE's mission, first of all, scientific and technological innovation, and driving U.S. competitiveness and maintaining scientific facilities. Another point to mention, nuclear security, this is the National Nuclear Security Administration, and they deal with non-proliferation and nuclear deterrence and threat prevention. Another facet of our mission is energy security, developing nuclear power and solar and biomass development, clean coal, hydrogen, and of course, last by not least, environmental stewardship. Environmental clean-up, and managing the legacy -- post-closure responsibilities.

So, that's basically in a nutshell our mission.

Mr. Morales: So with such a broad mission, Frank, can you give us a sense of the scale of operations over at DoE? You know, how you're organized, size of the overall budget? Perhaps in rough numbers in terms of full-time employees and contractors.

Dr. Spampinato: Well, DoE is principally a national security agency, and all of its missions flow from the core mission to support national security. These various missions are managed by program offices such as the Office of Environmental Management, the Office of Science, the Office of Energy Efficiency and Renewable Energy.

And after more than 30 years in existence, the Department now operates 24 research labs and facilities and 4 power-marketing administration, and manages the environmental clean-up from approximately 50 years of nuclear defense activities, and this impacts roughly 2 million acres in communities across the country. And of course, I'm part of this, the DoE Staff and Support Offices, which provide administrative management and oversight support to the DoE's program offices and assist them in successful accomplishment of the respective missions.

We have a budget of approximately $24 billion, with about 116,000 employees. Now, of that 116,000, roughly 16,000 are staff employees, 100,000 are contractors. And geographically, of course, we're a highly decentralized organization, with operations throughout the country.

Mr. Boyer: Frank, with that overview of the broader department, could you tell us more about your area and role within the Department? What are your specific responsibilities and duties as the chief acquisition officer, and could you tell us about the areas under your purview, how you're organized, the size of your staff, and your budget?

Dr. Spampinato: Well, I was created, in a sense, by the Services Acquisition Reform Act of 2004, where chief acquisition officers were created. And some of my duties in a more general sense are monitoring and evaluating performance of all acquisition activities and programs, increase in use of full and open competition, increasing the appropriate use of performance-based acquisitions, and managing the direction of acquisition policy. Basically, I am the top acquisition policy official in the Department. Some of the things that I've spent a considerable amount of time on are things like understanding and working on our removal from the GAO High Risk Series, helping facilitate the relationship between contract management and project management, working with the Department's Office of Small and Disadvantaged Business Utilization in facilitating opportunities for small businesses, reengineering the processes, the business processes and acquisition, and of course, working acquisition workforce issues.

I've seen my role over the past roughly 20 months largely as a catalyst for change, and what I will say with virtually all these issues, if it wasn't for the support of the Department's two top-notch professional senior procurement executives -- it's Ed Simpson, and in the NNSA, it's David Boyd -- if it wasn't for their support, I wouldn't be able to do what I do. You know, when I need resources or I need to look at something closer or need something explained to me, these two professionals take care of my every need.

Mr. Boyer: Regarding your responsibilities and duties, what are the top three challenges that you face in your position, and how do you address these challenges?

Dr. Spampinato: Some of the top challenges that I'm looking at now and while I've been there, first of all, of course, the acquisition workforce. Thinking about retention, recruitment, recognition. Being able to train people up, get them certified, determining what we have and what we need. You know, we only talk about numbers. We need more people, more people. What we really have to do is determine what we have, especially when we're a highly decentralized organization, and see what we have in the field in terms of competencies and what kind of skill gaps we have in the field and at headquarters.

The second item that I've been working on specifically is the GAO High-Risk Series, and our approximately 15-year existence on that particular list. For those who aren't familiar with the series, it identifies programs or projects that are high-risk due to vulnerability to fraud, waste, abuse, and mismanagement.

Specifically, we've been cited as "inadequate management in oversight of contractors and a failure to hold contractors accountable."

So when I came to the Department, I looked at what we had and what the Department had been doing in respect to measuring performance, and I really became a little frustrated because I believed then, and I still believe now, that we've really come a long way over time. We have a relatively robust, balanced scorecard program, which includes contract initiatives and appropriate measures and business process reengineering we've been doing, and we've been making a lot of progress. So I really had to kind of step back and take a look at it and see how an external person might look at what we had there.

So the first thing I did was I opened up a dialogue with OMB, the Office of Management and Budget and the Office of Federal Procurement Policy and General Accountability Office. And I was excited about the prospects, because it's always been my contention that too much policy is written without involving the stakeholders.

So I got an opportunity to do this. I've enjoyed engaging external stakeholders, and I enjoy a good working relationship with several fine and knowledgeable people from these organizations. I've also had the assistance of some of the best and brightest programming and contracts people in the Department to assist me.

We're still making significant progress. I really believe that we're looking at probably 2011 where we can actually be removed from that list.

And last but not least, I want to mention my small business advocacy role, and outreach in reporting with small business. Of course, the biggest part of my job involves acquisition-specific issues, but one of the most enjoyable parts of my job is working with small business.

I have a small business in my family, and I know how very hard they work. And incidentally, a small business in my family, that they don't hold any government contracts at DoE. I just want you to know that beforehand.

But a couple of things I do with small business: I do outreach, helping small businesses connect with customers through the business opportunity sessions we have, the small business conference which we hold each year, and just making individual contacts with the program.

By the way, we have a small business conference coming up this year in San Antonio June 23rd through the 26th, just in case anybody's interested in that. The other thing we do is reporting and accountability in terms of small business. We evaluate each program's performance, with quarterly reviews, and everybody is held accountable in terms of how they meet their program goals, whether they meet them or not.

The third part of this whole thing is education. We have to educate small business on the structure and the strategic direction of the Department and the contracting model, of course, and we have to basically educate Congress on everything also, because we got to keep -- like I say -- all stakeholders in the loop.

Mr. Morales: I understand that prior to this role at DoE, you had spent some time over at the CIA and DoD.

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

Dr. Spampinato: I graduated a long time ago with an undergraduate degree in accounting, and I worked for five years in the private sector, and I just realized that I didn't really want to work in the private sector; I really wanted to kind of focus my professional life toward public service, and I always had desire to serve the publics, and I even ran for public office back in 1980, which seems like ages ago.

I didn't win, but I decided to enlist in the Marine Corps, and I was like the grand old man of the Marine Corps at the time. I was 27 years old. This was kind of a turning point for me, and started my public service life in a sense. After that, I just applied to a handful of federal entities, and was fortunate to wind up at the CIA for about the next 16 years, serving in mostly administrative positions. And of course, the other positions, I can't talk too much about.

to know about contracting, and did some work in other areas to gain a better perspective as to how everything fit together. After 16 years or so, I just wanted to do something a little different: different mission, different focus.

I had a good friend who served in the first four years of the Bush Administration, had a great experience. I had another friend who worked DoE, and had heard they were looking for a high-level acquisition-type to fill a political position. So I kind of got the White House personnel and the DoE liaison together, worked that over a couple months, a little while, and it's funny how things come together and finally did come together.

I'm exploring a handful of options out there, and I've thought about private sector, but in all likelihood, and in some capacity or another, I'll probably continue to serve the public. For the immediate future, it'll probably be as a career civil servant. But what I really want to do in the mid- to long-term is go back to New York, my home state, and serve the public as an elected official in some capacity. I'm not sure whether it'll be local, state, federal, but I would like to go back and have another run at office. I always said back when I did run for office in '80 that I would be back, but I didn't know it'd be 30 years from then.

Mr. Morales: We only have about a minute left, Frank, but I want to ask you: so as you look across that wonderful career, are there one or two experiences from that period that perhaps are informing your current leadership style and management approach?

Dr. Spampinato: You know, with all the training and all that I've had, that's all well and good, but one thing I did want to emphasize here is one of the biggest things I've learned over my career is it's not what or how much you know that's always important. It's taken a while to learn this, but like I say, it's probably a clich�, but life is all about relationships and how you relate to those around you. You know, the degrees, the big programs, the organizations, the positions you've held, that's all fine and good, good r�sum�, good calling card, but once you get into an organization, you have to produce, and your production will soar if you develop the business relationships you need to develop with your subordinates, your peers, and your superiors. And I think the position I currently sit in has really driven this point home for me.

Mr. Morales: That's a great lesson.

What about Energy's acquisition strategy? We will ask Dr. Spampinato, chief acquisition officer at the U.S. Department of Energy, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Dr. Frank Spampinato, chief acquisition officer at the U.S. Department of Energy.

Also joining us our conversation from IBM is Pete Boyer.

Frank, you gave us earlier an overview of your office and role, but could we go back and could you provide us a bit more details around the procurement function? Specifically, what are the key elements of acquisition management from the front-end solicitation to the post-award, and how does the procurement function fit into that process?

Dr. Spampinato: What I would like to say -- mention a couple of critical components in acquisition, and all the acquisition people out there are going to know exactly what I'm talking about, but a couple of things that are critical: first of all, a requirements definition. I mean, this has been a sore point I think forever in acquisition.

Requirements just do not get vetted as well as they have to, as they should, and we end up going back into acquisitions and extensive changes and cost growth, because we didn't work the requirement issues up front. We're under a lot of constraints these days, and one of those is time, and sometimes we just have to get things on the table and get them out the door, and sometimes we just do that in haste and it doesn't work. So, you know, a requirements definition is one of those real important things.

Another critical component is the program and the acquisition people working closely as a team.

Most of the organizations I've seen work hand in glove together, and that's when you get a good result from a procurement, but I've also seen program offices and contracting officers who work at odds, and I'm telling you, it makes the job real difficult, the program office doesn't get what the customer wants and it's just a real mess. So that's critical. That's another critical thing.

I recently worked with a lot of professionals, a lot of fine professionals in the Partnership for Public Service, putting out some tools for better contract management, and there has to be a lot more attention paid to managing, actual managing the contract.

Mr. Morales: It certainly is a challenging environment.

Now, I understand that you have over $20 billion each fiscal year in contracts and over 10,000 contract holders on GSA schedule contracts alone.

Could you elaborate on your Department's overall acquisition strategy? Specifically, can you tell us about the composition of your procurement portfolio and the ratio of prime contracting to maintenance and operations contracting agreements, and is this portfolio similar to what you might see in another federal agency?

Dr. Spampinato: Well, I don't think I could say we have one overall acquisition strategy because of the diversity and the differing complexity of the programs and acquisitions at DoE, but any contracting organization should have an overall philosophy as to how they are going to service the program offices, of course, and that philosophy should be one of realizing that we are a support function, and the reason for our existence is that we have customers, period.

I think this is a mistake that that's made out there amongst some organizations because of the fact that in the public sector a lot, we have a captive customer, which means that they don't have another service provider to go to. I had the opportunity to work in one of the few areas in government one time where the customer did have a choice. To me, it's amazing what competition will do to an organization's performance and innovative capacity. We knew we had to win these customers, and we did that. We went about doing that. So, I think it's more of a philosophy than really being able to talk about one strategy.

Now, if you want to talk about the procurement portfolio or the ratio of prime contracting to maintenance and operation contracting agreements, I think it's important to know that anywhere from 80 to 85 percent of our roughly $20 billion budget goes to our big management and operations contracts, our facility management contractors.

You know, when I first came onboard, I heard the words M and O, and I thought, oh, maintenance and operations, you know? Basically a contract with some base operations and contractor support. Well, to my dismay, I was wrong.

We even have a special place for management and operations contract and the FAR, and FAR Part 17, it's a contract under which -- for those who aren't familiar, it's a contract under which we have a government-owned contractor-operated facility, but the contractor is actually performing the mission of our agency instead of just providing support to run those facilities.

So it's easy to see that our predominant contracting model sets us apart from our fellow agencies and departments in the federal sector.

I love the opportunity to go out there and talk about the contracting model and how different it is for most.

Mr. Boyer: Frank, as noted, DoE is one of the largest civilian contracting agencies in the federal government, and in the first segment, you mentioned the GAO High-Risk List.

Could you tell us what you're doing to respond to GAO's concerns about delays in awarding contracts, and more importantly, can you expand on what you're doing to successfully remove DoE from GAO's High-Risk List?

Dr. Spampinato: Yes. I think these are kind of separate issues, even though the delays in award do probably contribute to our existence on the High-Risk List. We've taken many, many hits from external and internal stakeholders on our failure to award efforts in a timely manner. And rightfully so. I mean, even though we're looking at some efforts with a very high degree of complexity and sometimes in the billions of dollars, we need to do a much better job in awarding these in a timely fashion. And not only that, but we've got to make these things as much as we possibly can, these efforts more visible to the bidding public. And the other thing I always mention about this is, delays have a high impact on small businesses especially. You know, large businesses, big companies can kind of tread water sometimes for an amount of time and kind of wait until something comes out, until an RFP hits the street. But small businesses are really time-constrained and resource-constrained all around, so they're really impacted by this. Just another reason for us to take this really seriously.

Over the last 18 months or so, we've taken a closer look at the whole process. You know, we did a lot of interviews, talked to people, took the processes, tore them apart, looked at them. I mean, we've done a lot of work over the last 18 months, and we're in the final phases of communicating and implementing a corrective action plan that will move us toward awarding efforts in a more timely manner, and also providing more visibility to the public.

Now, on the high-risk front, just to mention that, we just completed a root cause analysis, which we received encouraging comments from our external counterparts, and at this point, we are also working on a corrective action plan to make sure that we do a better job in facilitating that relationship between project management and contract management. Fostering that relationship will help us get off of the high-risk list.

Now, I want to make it clear that the objective is not to get off the list. The objective is to work to make our project management and contract management processes work better and work better for everybody, but I think that will eventually help us get off the list.

Mr. Boyer: Terrific. Now, in an effort to increase the transparency and accountability in small business contracting, the U.S. Small Business Administration, the SBA, issues the Small Business Procurement Scorecard.

Now, we discussed the small business contracting as one of your challenges in the first segment.

Could you tell us more about this scorecard and what it tracks, and would you elaborate on DoE's performance in this area and the lessons you've learned?

Dr. Spampinato: Yes. The SBA scorecard tracks the actual achievement against the goal for each federal agency with regard to small business and socioeconomic businesses.

This goal is negotiated beforehand between the agency and the SBA, and I'd like to take a second, as a matter of fact, to talk about that. I want to commend SBA. They work very closely with us and take a real interest in understanding the model and the constraints we work under, so I really applaud their work with us.

To get back to actually what the scorecard is, to achieve a green, the Agency must achieve 100 percent of its small business goal, and meet at least three of the socioeconomic goals. To achieve yellow, they must achieve between 95 and 99 percent. They must also achieve 100 percent on progress as graded in 9 specific areas, such as senior level support, strategic plans, outreach efforts, et cetera.

I can proudly state that the Department was one of the seven agencies receiving a green on the initial SBA scorecard for FY 06.

A couple lessons learned that I've learned from this process, being involved in it.

First, you have to have a good detailed strategic plan for your program detailing the nine specific areas that you'll be judged in. Our OSDBU Office, under the direction of Ms. Theresa Speake, does an exemplary job of this. That strategic plan is a good plan, great plan.

Second, work very closely with the program offices, which includes helping educate them and holding them accountable.

Now, the other side of that is, we often say we have to educate them. We also have to become educated by them, because we have to understand their programs and any constraints or issues or acquisitions that have been delayed or canceled -- we have to understand also. So the education is kind of a two-way street. We educate them and help them, and they educate us also.

And, third, you just have to attack this effort on several fronts. I mean, outreach, monitoring, accountability, subcontracting. I like to say it's the big picture approach. You know, there's a lot of focus on just the prime number. What are your prime contracts, your percentage of prime contracts? But I think when you're dealing with --in subcontracting, we do maybe $2, $3 billion dollars per year in subcontracting for small business in the Department, and I don't think that's looked at sometime, and I really think we have to paint the total picture.

Mr. Morales: Right. So Frank, changing subjects just slightly, the environment is taking center stage these days, as it should, and the federal government has the ability to create and stabilize markets for recycled content products and other environmentally preferable products.

To that end, could you tell us more about the Green Procurement and the Federal Green Procurement Preference Program? Specifically, what could you tell us about what you're doing in this area?

Dr. Spampinato: Just to mention a couple of things, a couple of big things that are going on at Energy: first of all, the Department developed something called the TEAM Initiative, which stands for the Transformational Energy Action Management Initiative. And this was created by the Secretary, because he decided, rightfully so, that the Department of Energy should and would take the lead energy conservation, trying to be more environmentally-friendly.

So this imitative basically focuses on things such as reducing our energy consumption across the complex, across the Energy complex by 30 percent, having all new DoE construction or major renovations achieve a leadership in energy and environment design gold rating, a Leed's gold rating, as designated by the U.S. Green Building Council, and meeting or exceeding the Energy Policy Act requirement of having 7.5 percent of DoE's electricity provided by renewable energy by 2013.

Now, I guess you could call -- this one aspect of this initiative which involves contracts or acquisition is something called an ESPC. They play a major part in this. And ESPC is an Energy-Saving Performance Contract. This is another topic that could be a very extensive briefing. An Energy-Saving Performance Contract is a no upfront cost contracting method. A contractor incurs the cost of implementing energy conservation measures and is paid from the energy water, wastewater, and operational savings resulting from the measures. So basically, the contractor will come in, survey the facility, the entire facility, put forth a proposal, obtain financing, and then over the long run, will be paid from the cost savings out of that whole effort.

Now, as you can imagine, these are very long-term contracts, like maybe 20 years or so. Also, they require a large investment from the contractor, but these are just two items where the Department of Energy is really taking the lead on the Green Procurement efforts.

Mr. Morales: That provides some very powerful incentives.

How is Energy recruiting and retaining procurement professionals?

We will ask Dr. Frank Spampinato, chief acquisition officer at the U.S. Department of Energy, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Dr. Frank Spampinato, chief acquisition officer at the U.S. Department of Energy.

Also joining us in our conversation from IBM is Pete Boyer.

Frank, in recent years, the size of the acquisition force has remained somewhat stagnant while procurement spending has certainly increased. Now, it's pretty well-known that agencies have had the ability to rehire retired acquisition personnel, but only a few agencies have really sought to formally use this authority.

Could you elaborate on the benefits as well as perhaps some limitations in pursing this type of strategy? But more importantly, do you have plans to use this authority to fill some of the staffing needs you may have?

Dr. Spampinato: First of all, I'd like to say I think the solution to our workforce crisis is not going to come through one big idea, I think it's going to be a lot of smaller ideas. I think it's a good strategy and it'll accrue substantial benefits in the area more of mentoring and training.

I learned contracts from the ground up and I had a lot of good people teaching me that. These days, we don't have those people, we don't have the 7 to 10 years, 7 to 12 years experienced people in the numbers that we need to teach the new contracting officers.

So if we hire the new ones who want to come in and just knock out contracts, I mean, that's fine, but I think the biggest gains are the gains that we'll accrue through knowledgeable, experienced mentors, and we're currently working to try to develop policy on this, and I think we're definitely looking to utilize this in the future.

Mr. Morales: So, as you say, it's really just one of perhaps a portfolio of different strategies that you guys can take?

Dr. Spampinato: I think they're going to be a lot of things, things that we haven't probably even invented yet, unless you're stealing them from another agency or department.

Mr. Morales: Well, it's interesting you mention that, because along those lines, I understand that some of the acquisition staff doesn't necessarily leave to go to the private sector, but in fact, there's a fair amount of movement in between agencies as people are chasing more attractive pay.

So what issues does such a situation present for federal agencies, and what can the acquisition community do to devise a common set of incentive for all agencies that will help share this limited wealth of acquisition talent?

Dr. Spampinato: I think that's a great question. You see this all over the government. Agencies and departments are able to offer differing levels of benefits, like relocation, tuition reimbursement, those types of things, and since every agency needs people, we sometimes find that, at DoE, we'll get people in, get them all trained up, and see them leave for someone who can offer some of these amenities.

The two concerns for me in this area are, first, we often aren't one of those agencies who can offer some of these nice perks. Second, and more important I think are the long-term implications for the acquisition career service. When I entered the career service 20 years ago, promotions happened, but we had more of an opportunity to learn before promotions came, I think. I learned different types of contracts, programs, how we interacted with other administrative functions, all types of contracts. So by the time I got to GS-15, I had a real good foundation. And not just training-wise, but kind of boots on the ground training, the everyday trials and tribulations of contract administration and that type of thing.

But, today, our newer entrants into the workforce are very bright, and I like to see these young colleagues promoted just as much as anyone else does, but my concern is that I think we're moving some of them on too fast, moving them along, filling where we desperately need people in slots, we're filling them. But I'm concerned in the long-term, some of these COs will be called to step up to leadership positions in the career service, and I'm afraid that they'll be at a bit of a deficit, because they haven't had some of that foundational training that others have had.

Mr. Morales: It is a riskier approach, both for them individually as well as the organizations they serve.

Mr. Boyer: Now, Frank, given the complexity and importance of DoE's numerous unique and complex multi-million-dollar projects, from an acquisition management perspective, how has your Department sought to improve its project management discipline and structure for monitoring project performance?

Dr. Spampinato: This area is very critical to the Department, especially project management, because over time, if I might mention, the GAO High-Risk Series has evolved from a heavy focus on contract management to a heavy focus on project management with a little bit of a focus on contract management. So this is critical to the Department, and in that vein, we've brought in a top-notch director of the Office of Engineering Construction Management, Paul Bosco; has a lot of DoD experience in this area. Top-notch guy, and we do a lot of -- I'm not intimately involved with the processes so I can't specifically say, but we do a lot of independent project review. If it's a highly-complex effort, we do a technical independent project review. We do external independent reviews.

So I think what I'd like to stress is that we do review these major complex projects, and these reviews are independent reviews, okay? Just focus on independence, which of course is a good thing. I think we're really making some great changes in this area, and as a matter of fact, Paul has taken the lead on our root cause analysis that we're putting together right now. I'm really encouraged by the direction that we're taking in this area.

Mr. Boyer: Balancing the appropriate number of DoE contracting officials with the growth of your portfolio is always a challenge.

To that end, what changes have you made to your recruitment process to attract quality employees who possess critical competencies?

Dr. Spampinato: While my eye is more focused on the acquisition workforce, I think it'd be fair to say that this question should also mention how the portfolio might have changed in complexity, not only in how big the portfolio has become. So this would tell us not only that maybe we need more people. We do need people. But the skills mix of the people that we do need might be quite different from the skills mix we needed 5, 10, 15 years ago.

For instance, in acquisition around the 1990s, the Department had roughly twice the number of M and O contracts as they have today. So in the early '90s, it might be appropriate to say we needed fewer government contracting personnel to administrator contracts because they just weren't needed at the time.

Now, fast-forward to 2007, the number of M and O contracts is about half of what it was in the '90s, and most of those contracts have been replaced with performance-based vehicles, incentive vehicles, and we've also seen an increase, a big increase in prime contracts over time to small businesses.

So this might tell us we'll need more government personnel, but in addition to how many, again, we have to think what type of personnel do we need. This is where the competency surveys and the gap analyses that are currently going on out there, this is where they come into play, and this is currently an ongoing effort. Now, in terms of compensation strategies, my take is that while we have the ability to do some of these things, and we do, they're often not fully funded, so therefore, even though you have the ability, they're just not going to happen.

Breaking good news is that this year, we've been able to put an additional considerable amount of resources into our Acquisition Career Development Program, and this is very encouraging for us, especially when you have a workforce that you have to have certified and recertified and it's very training-intensive, as you know, the acquisition workforce. So we're very encouraged by the additional money that we've retained in our budget for this.

Mr. Boyer: That's terrific. In a similar vein, we understand that it's critical to keep your procurement and acquisition staff engaged.

Could you tell us more about the Department of Energy Procurement Executive Award Program, and in what ways does it seek to recognize innovation and overall excellence in the DoE acquisition community?

Dr. Spampinato: That's a great question, keeping the acquisition workforce engaged. This specific program was set up to recognize employees, contractors as well as staff in acquisition and property management workforce who go above and beyond the call of duty in their jobs, promoting such things as innovation, excellence, efficiency, being creative. I mean, recognition is always a great way to keep personnel engaged, and I believe the procurement executives at DoE recognize that and do a great job of it.

But in addition to this, I might add also something I've learned throughout my acquisition positions throughout the government, another way to keep the acquisition professionals engaged is to keep them close to the mission. I've seen this both at DoE and in my days in the intel community, especially if you're operating at a procurement function which is geographically removed from the mission, and you might be purchasing relatively small and seemingly insignificant items -- you know, visits to customer sites.

We used to have things, mission tapes that would show exactly what was going on, what we were supporting, space vehicles we might be supporting, what was going on out there. Something that just reflected the end results of our efforts, and people would look at that and say wow, they purchased something for that satellite? You know, this is also kind of multi-faceted thing to keep acquisition workforce engaged, and I think it's critical to keep them close to the mission.

Mr. Morales: Frank, I want to go back to your description from an earlier segment of the Department workforce. I believe you characterized it as about 116,000 employees across DoE, and about 16,000 of those were government employees.

Could you tell us how managers can effectively manage this ever-increasing blended workforce? What are some of the key differences intrinsic to these two groups, and how do you manage this, especially as it relates to the work that you do at the labs?

Dr. Spampinato: Personally, I can't speak for the entire organization, but one thing I do believe is that the DoE contracting model will and must remain intact. Even though there are definitely areas which can withstand reform and the Department has been slowly but surely doing this, as evidenced by a huge increase in the number of incentive-type performance-based contracts over time, I don't see in the near future where the resources will become available to achieve the Department's mission in a different way.

But regarding the blended workforce, I think this is a discussion that seems like it's been around for awhile, but I think serious discussion on the blended workforce has really started, and I think it's got to take place in another context that I'd like to mention.

There was talk a while back about taking a fresh look at the term "inherently governmental." I think this is more important than most think. If we don't receive the resources or types of resources that we need in the near to mid-term, my question is, what work do we stop doing? Understandably, we're not going to resolve this workforce issue, workforce crisis, like tomorrow, but if we don't start to solve this thing, okay, what are we going to stop doing?

There's always talk of cutting staff here, cutting contractors there, while acquisition budgets continue to rise. So who's going to do the work? While we must determine how many and what type of people we need, maybe we have to take a serious look at what is inherently governmental. The situation has changed drastically since this was first defined, and I know the General Accountability Office has been talking about this a bit and looking at it, and I think we have to really take a serious look and decide who's going to do the work out there.

Mr. Morales: It's certainly a challenge.

What does the future hold for the U.S. Department of Energy's acquisition function? We will ask Dr. Frank Spampinato, chief acquisition officer at the U.S. Department of Energy, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Dr. Frank Spampinato, chief acquisition officer at the U.S. Department of Energy.

Also joining us in our conversation from IBM is Pete Boyer.

Frank, since acquisition is a fiduciary responsibility, the federal government business must be conducted with complete impartiality.

Could you elaborate on efforts being pursued to ensure procurement integrity, making sure that proper standards of conduct, ethical and legal requirements, are being followed by the federal acquisition staff?

Dr. Spampinato: My position on this point is not a mystery since I talk about this probably every time I speak. Eventually, people get tired of hearing it, but frankly, I truly believe that we have enough regulations and laws to appropriately protect the American public and catch those who would act criminally.

People are always attempting to clean up contracting or to make contracting officers competent. I don't believe that contracting needs to be cleaned up or contracting folks need to be made competent. In fact, with my level of education and training and that of the people I've worked beside, I sometimes take a little bit of offense to some of these efforts to make us competent.

You have to have a thick skin around here. You had Katrina and the war, and they really tax the system, and people made mistakes, and plenty were made, believe me, but mistakes are a far cry from criminal conduct, and those criminally inclined are eventually caught up with and prosecuted. But to look at all acquisition professionals as potential criminals - sometimes it seems like that. I think it's wrong and it's counterproductive to what we're trying to accomplish.

We're never going to solve this workforce crisis if the rules, the regs, and the oversight keep on coming. I believe in appropriate oversight, but these days, it just keeps coming and coming, and sometimes, it just doesn't seems there's any logical reason for it.

Mr. Boyer: What kinds of partnerships are you developing now to improve operations or outcomes at DoE, and how many of these partnerships change over time?

Dr. Spampinato: First of all, I think you're going to see more collaboration in the future amongst everyone, and I think the continuing workforce crisis will be a huge factor in this respect.

Even though we haven't had much time to work on this lately, I've begun building a relationship with the intelligence community via the DNI's procurement executive, Theresa Everett. She's a great person to work with, and I really think that even though you've got that veil there, you've got to be careful, but there are a lot things that can be shared between them and us. We've talked about -- she's been very gracious to include me in goings on in the IC, and she's had conversations with some of our people in grant management, and so I think we're sharing across those lines.

And I also believe that, over the past 18 months, I've played a part in building stronger relationships with our external customers: OMB, GAO, SBA, Capitol Hill. I think this is an effort that really has to be nurtured and continued over time, and it's very easily overtaken by events. But it should take priority, and over time, I believe we'll become more open and more willing to share information. Maybe that's just a hope, but I'm hoping, though I'm not sure it will happen, that we'll not only dialogue, but we'll attempt to understand each other in terms of some of the capabilities and the constraints of some of our organizations.

Mr. Boyer: Now, looking into your crystal ball and transitioning more to the future, would you give us a sense of some of the key issues that will affect acquisition and procurement offices government-wide over the next couple of years?

Dr. Spampinato: I think the workforce crisis is going to continue to be an issue. We're going to have to work hard to repopulate the 7 to 12 years of experience segment of the workforce. We're going to have to be more creative, innovative. I don't think there's a silver bullet here to solve this, but it's going to consist of a combination of solutions, so I think the crisis is going to be with us for a while.

The second thing is, additional regulation oversight will become a bigger issue, especially as it interacts with the workforce crisis. I believe there's an inverse relationship there, and I think as regulation oversight increases beyond what is perceived to be needed -- I mean everybody's got a different view of that -- this is eventually going to have a negative impact on our efforts to rebuild and modernize our workforce.

Mr. Morales: So Frank, just drilling down a bit more, what are some of the major opportunities and challenges that your organization specifically will encounter in the future, and how do you envision your area will need to evolve over the next couple of years?

Dr. Spampinato: In terms of just a couple of opportunities, and I think we've mentioned these, but first, I think we should continue to work as one community as often as we can to share creative and innovative practices with each other. I not only look at this as a great opportunity, but it'll be a must to really move this profession and the government forward and better serve the American public. This includes, like I said, working with the intel community and working with as many people as we can get out there, working closely with industry, getting ideas, giving ideas, working closely.

The other thing is wherever I go, of course, after this, I'm going to try to continue to work with the people that I have met, and the CAO Council and Department of Energy and the intel community -- I still work with people back there, so I think that's how incrementally, we solve some of these issues we have. We just keep working with each other.

Right along with that are the continuing opportunities to bring in young, bright talent into our agencies. We have the opportunity today and have to remember that even though we really have the deficit in the middle ranks, we can't lose sight of bringing in the best and brightest of today. This will foster our first opportunity really to work together, because frankly, I think new workers are more prone to working across agency boundaries, and will look at this kind of thing as almost a given. So I think we're going to gain from that.

In terms of the challenges, first, the time it will take to populate the middle ranks, 7 to 12 years of experienced, it's going to be a while. We've got to be patient, we've got to move deliberately on this thing. But we've got to be patient with solving this problem.

The second, oversight must be done. Don't get me wrong. Sometimes we don't look at the value added. We have the mentality that more is better, and to me, that's just counterproductive. More is not better. We really have to look at it and see what we're gaining from the whole process, especially when we're trying to solve a workforce crisis.

Think about it. Would you want to work somewhere where people were constantly looking over your shoulder just waiting for you to do something wrong? Especially where we have such a highly-educated and highly ethical workforce.

Mr. Morales: Frank, you've had, obviously, a very successful career within the public sector, and you've conveyed a very strong passion for the work that you do.

So I'm curious, what advice might you give to a person who's out there thinking about a career in the public service?

Dr. Spampinato: I think what really keeps me motivated and working in the acquisition field specifically is the nature of the workforce and the dynamic nature of acquisition itself. First, regarding the workforce, I feel like I work beside some of the most highly-educated, professional, and ethical people in the federal government, and in my 20 years, the members of this workforce continue to inch the bar higher and higher.

And secondly, it's a dynamic profession. The only thing constant, as they say, is change. And a lot of this change is self-imposed to better acquisition. We're always changing, we're always trying to make things better, so it's a profession that doesn't stand still. I really love doing it. Bottom line, if you want to work with a highly-professional workforce in a field that welcomes change, acquisition is the place to be.

Mr. Morales: That's great. Thank you.

Frank, unfortunately, we have reached the end of our time. I want to thank you for fitting us into busy your schedule today, but more importantly, Pete and I would like to thank you for your dedicated service to our country and the acquisition community.

Dr. Spampinato: Thank you very much, Al. I appreciate that. And thank you, Pete, for being such great hosts. Just a couple of things I'd like to mention here. For more information on what I talked about, and there's a lot more great information for you on DOE's website, which is www.doe.gov.

The second thing I want to mention is again the Small Business Conference is going on in San Antonio June 23 through June 26. If you're interested in that, please contact our Small Business Office on the website.

And last, but not least, please feel free to contact me at any time. It's very easy to find my contact, frank.spampinato@hq.doe.gov, and I'll answer any questions I can or just direct you to the right person.

Mr. Morales: Great, Frank. Thank you.

This has been The Business of Government Hour, featuring a conversation with Dr. Frank Spampinato, chief acquisition officer at the U.S. Department of Energy.

My co-host has been Pete Boyer, director in IBM's Federal Civilian Industry Practice.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who 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.

Voice-Over: 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 Saturday, November 11, 2006

Washington, D.C.

Mr. Morales: Good morning, and welcome to The Business of Government Hour. I'm Albert Morales, your host and managing partner of The IBM Center for The Business of Government. We created the Center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the Center by visiting us at the web at businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Admiral Thad Allen, commandant of the U.S. Coast Guard.

Good morning Admiral.

Mr. Allen: Good morning.

Mr. Morales: And also joining us in our conversation, also from IBM, is Dave Abel, director of homeland security services.

Good morning, Dave.

Mr. Abel: Good morning.

Mr. Morales: Admiral, perhaps you could share with us a bit of the rich and proud history of the United States Coast Guard as it celebrate its 216th anniversary as one of the oldest U.S. government agencies. Can you tell us who founded the Coast Guard, and how has it evolved into the critical component of the U.S. Department of Homeland Security?

Mr. Allen: Well, the Coast Guard was really the brain child of Alexander Hamilton. And you can first find a reference to a Coast-Guard-like entity actually in the Federalist Papers, where he states that a few vessels stationed at the entrance to our rivers and bays would at very small expense be useful sentinels of the laws.

When the first Treasury Department was formed in 1789, and he was the Secretary of the Treasury, he envisioned a fleet of cutters that would enforce the new tariffs that were being applied to help us pay off the war debt. There was a lot of British smuggling going on at the time. So on August 4, 1790, there was legislation approved that would authorize the building of the cutters, and we take that as the starting date of the Coast Guard. We were the first Customs officers, and during the period in the late 1790s when we had disbanded the Continental Navy we were the only maritime force that the country had. And so we when had a quasi-war with France, our cutters were the line ships for the fledgling government. So right at the earliest possible time in our history we really started out as a dual character service. We were a member of the Armed Forces, the Naval Service. And we were also a federal law enforcement agency, and we are unique in the world in that regard.

Mr. Morales: Admiral, you talk about this uniqueness of having both the dual military and law enforcement status. Could you elaborate a little bit on the scope of your multi-mission agency? How is it organized, and tell us how large the Coast Guard is, and give us a sense of the scale.

Mr. Allen: Well, we're not very big. With our military members and our civilians we're anywhere between 45,000 and 50,000. We have 8,000 selected reservists. We have about 36,000 volunteers, the Coast Guard Auxiliary, which are terrific and help us out a lot. But the basic -- I would call it the organizational genius of the Coast Guard is the fact that without having to have a bunch of different agencies do different jobs, we have one agency that can shift its focus and its people and its capability and its platforms to do a specific job one day, and then a different job the next day.

I recently visited Canada, and we had a summit with the Canadian Coast Guard, and they do search and rescue and law enforcement up there. But to meet all the different entities that do the jobs that we do down in United States, we had to meet with Transport Canada, the Department of Public Safety, and their military. So if you can imagine being able to cover all those different types of roles in a single agency, you don't have to build all those different agencies. That's our economic model that we offer to the government. We think we're pretty good value.

Mr. Morales: At first brush folks may think of the Coast Guard as having a domain immediately around the United States, but in fact you have a worldwide purview.

Mr. Allen: Especially as it relates to defense operations and our law enforcement capabilities. For instance, we have authority and jurisdiction over U.S. flag vessels anywhere they might be in the world for the purpose of enforcing U.S. law. And as we speak this morning we have patrol boats deployed in the Persian Gulf that are protecting the oil platforms off of Iraq which are their major source of revenue right now.

Mr. Morales: Admiral, let's talk a little bit about your specific responsibility as the 23rd Commandant of the Coast Guard. Can you tell us a little about your role within the organization?

Mr. Allen: Well, I'm the Chief Executive Officer. This is more like an aquatic holding company in some regards. We do search and rescue law enforcement. We deal with Homeland Security issues. We do polar ice breaking. Managing that portfolio and making sure you have the resources to be ready to do that and also to be mission effective is probably my number one job. And it takes a little bit of understanding, as far as how you run the organization, to know how to balance those various mission requirements that are on you, and make wise decisions on the allocation of resources as our field commanders have to do when they're deciding where they're going to put their cutter patrol hours. But I would say managing that portfolio of all of the tasks we have on the water is probably job one.

Mr. Morales: The Coast Guard is within the Department of Homeland Security. So you also have a relationship with the leadership in the departmental over all. Can you tell us a little bit about the nature of that role as well?

Mr. Allen: Sure. The way the department is organized, they have what they call operating components. And that would be like the Coast Guard, Secret Service, Customs and Border Protection and so forth. And then they have departmental entities like the under secretary for science and technology, the under secretary for management. So there are two lines that report to the deputy secretary and the secretary. The deputy and the assistant secretaries, and then the component commanders, there are seven of us. We call ourselves the gang of seven. And we have a direct reporting relationship with Deputy Secretary Michael Jackson, and Secretary Chertoff.

Mr. Morales: That's great. Admiral, the Coast Guard has a strong reputation for leadership development, a long history of being in to develop strong leaders in government. Can you give the listeners a sense of your career path, and how the Coast Guard helped you to be able to develop your leadership skills?

Mr. Allen: Well, I think every job I've had in the Coast Guard has involved increasing responsibilities and exposure to leadership opportunities. In a way, the best way we can help the Coast Guard is to grow leaders, because we put people in leadership positions much, much earlier than a lot of the other services do. Junior officers coming off their first assignment on a ship can be assigned as commanding officers of patrol boats. We have pilots qualified very, very young; they're out there flying. And we put a lot of responsibility on folks' shoulders early on in their career. That's good, and that's bad. It's good in that we get them seasoned early on, and by the time they mid-grade and senior officers they've had a lot of operational experiences. The bad part is we've got to make sure that the organization is doing its part in preparing those folks to meet those responsibilities, and that's a tremendous challenge for us. The way we do that, we've developed 21 basic leadership competencies, and whether we're talking about enlisted personnel or cadets at the Coast Guard Academy or officers coming in through OCS, we try and train and teach to those 21 leadership competencies.

Mr. Morales: So how critical are the concepts of strategic intent and mission focus in this leadership approach?

Mr. Allen: Well, one of the things I'm trying to do as commandant is trying to get us to focus a little bit more strategically, and kind of look up over the dashboard to the horizon a little bit. One of the things I tell my folks -- and it's very, very easy to fall into this trap in Washington, as we get caught up in what I call the tyranny of the present. Those are the data calls, the questions for the record, the preparations for hearings, all the budget submissions that just pervade our daily life around here. And you get so caught up in the annual budget cycle, the annual hearing cycle, that it's hard to kind of lift your head up, look over the horizon, and see where you're going.

Since I was a one star Admiral back in 1998 and 1999 working for Jim Loy, who ultimately became the commandant, we have been trying to create a way to have officers think more strategic about the context the Coast Guard is in in government, what we are trying to do, and make decisions with strategic intent. If you think about it, when you enlist somebody in the Coast Guard, you're potentially making a 30-year decision. And I don't think we always realize that day with everything else that's going on, that we're laying out, where the organization is likely to be that far down the line. And I think when you take a small step, you ought to know the general direction we're moving towards. So I've stressed to the greatest extent possible to my flag officers and the folks who work for me that we have to develop the competencies in our senior leaders to think more strategically, and then when you're dealing with budget or anything else, you need to source the strategy or act with strategic intent.

Mr. Morales: Admiral, how have your experiences as previous chief of staff of the Coast Guard, and more recently as the principal federal official during Katrina, shaped your outlook and prepared you for your current role as commandant of the Coast Guard?

Mr. Allen: Well, first as chief of staff, I was the chief operating officer of the Coast Guard as opposed to the chief executive officer of the Coast Guard. So I handled most of the business end, and that included budget, the management of headquarters -- I was also the commanding officer of headquarters. And as part of my portfolio of duties there, since when I came into the job we were actually part of the Department of Transportation, I was the departmental executive who was responsible for transferring the Coast Guard from DOT to DHS, all the various line items of support, and services that we shared with DOT, and how that transition took place was my responsibility.

So I gained a great deal of insight into the structural underpinnings of the Coast Guard that had to be transferred from one department to another. I think that helped a lot in understanding our organizational context within the department. My assignment as the principal federal official to Katrina probably gave me the same type of insight, but in the operational dimension of the department, in that how FEMA, Coast Guard, Customs and Border Protection all work against the larger problems that are mission tasking, and how that all comes together, and that informed a lot of my thinking when I was interviewed by Secretary Chertoff to be the commandant on where I thought the Coast Guard needed to go under his leadership.

Mr. Morales: Fantastic. How is the Coast Guard partnering with other Homeland Security agencies? We will ask Coast Guard Commandant Admiral Thad Allen to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I am your host, Albert Morales, and this morning's conversation is with Coast Guard Commandant Admiral Thad Allen. Also joining us in our conversation is Dave Abel, director of IBM's homeland security services.

Admiral, how has the integration into DHS impacted the Coast Guard, and what have been some of the critical macro issues related to this integration, as well as the benefits?

Mr. Allen: Well, I think our integration into the department has been a great thing for the Coast Guard. We've had a hard time over the years finding a home because we're so diverse and multi-mission you don't find a perfect fit in any particular department. In 1967 we were moved from Treasury, our original home, and put in the Department of Transportation when it was formed, and then in 2003 moved from Transportation to Homeland Security. I think the integration is going along very nicely. We feel like we're a contributing member in the department. We think we add stability and maturity, because we were basically transferred over without any impact on our mission set or our resources, and I think we bring a lot of stability to the department.

I think that we're working very, very well with our component partners in the department. We always had relationships with Customs and FEMA, but those are stronger than they ever before. I tell a lot of folks I think that FEMA is better off because they are in a department with the Coast Guard, and I think the Coast Guard's better off because we are in a department with FEMA.

Mr. Morales: Admiral, we talked earlier about the deep culture and the leadership within the Coast Guard. How has this leadership style influenced the broader DHS?

Mr. Allen: Well, I think in a lot of ways. The example we set through our delegation of authority and putting responsibility at the lowest levels in the organization is something that I think everybody would strive to do, and hopefully we are an example in the department to do that. One of the things that allowed us to be successful during the Hurricane Katrina response is that we expect that our operational commanders will exercise what we call on scene initiative, and when we were cut off from higher echelons and communications weren't working down there everybody knew how to do their job, and they did the right thing, and they did what was expected of them. And I think in the long run, I think that's what the American public and the secretary would like to see out of this department.

Mr. Morales: Great. The Coast Guard has developed its maritime security strategy. Can you tell our listeners about this strategy, and how does it directly support the national strategy for maritime security, NSMS, and the Maritime Transportation Security Act of 2002?

Mr. Allen: One of the things that we've been working very, very hard on in the Coast Guard since the attacks on 9/11 is what this means in the maritime environment. And we were very, very pleased last year when the president issued the national strategy for maritime security that lays out an overall umbrella concept on how they intend to look at maritime security issues. We've never had an overarching umbrella document like that before, and we are very pleased with it. There are several supporting plans that are required under the strategy that directly either impact the Coast Guard or we are responsible for executing. The first one is maritime domain awareness. And that's creating a system by which you're able to sense what's going on offshore and create the ability to act so you can defeat a threat as far offshore as you can before it gets close to the coast. But to do that you need to have information about what's operating out there and you have to be able to know which vessels are legitimate and which ones aren't. So maritime domain awareness is a very big part of that national strategy for maritime security. The other one is maritime operational threat response. And that's how you actually put forces together and go out and deal with the threat that's out there.

And then global maritime intelligence integration, which is taking all the different pieces of information and putting them together into what we will call a common intelligence picture so you know why you're acting and you have good intelligence on which to base your operations, and finally there's a requirement for a maritime recovery plan. We hope we never have an incident in our ports, and we're going to try and prevent them, and then we're going to try and respond as best as we can if there is an event. But the reality is, if there's an event in a port, how you restart the waterway, how you deal with the impact on commerce is going to be very, very important. And there's requirement for us to develop a plan for that also.

Mr. Morales: I'd like to go from the very strategic topics that we just talked about in maritime security to one very tactical one, I think is at the forefront of the issues that you face. The Coast Guard must combat the potential threat of watercraft coming close to U.S. ports with IEDs, improvised explosive devices. How is the Coast Guard tackling this issue?

Mr. Allen: What we're tackling is part of a broader strategy on how to deal with maritime security regimes for the country. There's been a lot of focus on container threats, and container threats are important. I believe in the long run there is a technological solution to threats posed by containers either through tracking containers or non-intrusive inspection technologies, and all those are being worked right now. And I think you are going to see within a few years a fairly robust program that will address container security issues.

When you look at port security or maritime security, though, you have to look at the broad spectrum of threats and vulnerabilities that are out there, and you have to kind of allocate resources based on risk, and you have to try and mitigate the threats that are liable to cause the most damage. Based on the research that we've done since 9/11, and this includes extensive surveys of our ports regarding vulnerabilities and threats that exist, we do believe that more attention needs to be paid to improvised explosive devices carried by small boats.

And in general we need to look at the small boat population out there that is not as governed or regulated as well as the larger commercial traffic. This is in regards to how they're registered, how they're operated, what they might be carrying, how we can discern legitimate from illegitimate activities out there. This is anywhere from fishing vessels to small work boats to recreational vessels. And it's something that we're starting to engage in a conversation around the country, because I think we need to build a consensus about what constitutes a maritime security regime for this country that goes beyond containers and looks at a full spectrum of threats that we might encounter in our ports.

Mr. Morales: Let's shift gears from threats against assets to the assets themselves. The Coast Guard has embarked on a comprehensive recapitalization of its critical asset platforms through the integrated Deepwater System program. Can you elaborate a little bit on the Deepwater program?

Mr. Allen: I can. A few years ago, actually when I was a commander I was part of a program that extended the service life of our large cutters. And we engaged in a conversation way back then, that we did not have a good plan for when those ships ended their service life about what was going to replace them. As a result of those conversations we decided that it would good to take a look at our mission requirements in the offshore operating environment, and rather than going for a one-for-one replacement of these ship hulls to take a look at acquiring a system of cutters, aircraft, and sensors that were networked together, and focus on the entire performance of the system as opposed to a single platform. We thought if we did that we'd have more capable platforms, we'd have a more capable system, and we would be a much more intelligent acquisition of our capital plan.

Now, that ultimately evolved into our Deepwater System. We awarded the contract in 2002. We're into our fourth year of that contract. We recently launched our first major cutter, the National Security Cutter. Associated with that acquisition we recently have flown our first aircraft associated with that system. And what we're trying to do is build this architecture of platforms that are all networked together, and at the same time take the legacy platforms that are operating, the old cutters and the old aircraft, and backfit them with command and control systems that will allow them to integrate into the new stuff, and slowly phase the old stuff out as we build the new platform.

Mr. Morales: With the contract having been awarded in 2002, much of the requirements for Deepwater were developed prior to September 11, 2001. Has there been any impact from the post September 11th world to the requirements in Deepwater?

Mr. Allen: There was, and we were in quite a quandary. After the attacks of 9/11 we were faced with two choices, one was to withdraw the requests for proposals and start the acquisition over, or to go ahead and award the contract and then go back and look at our system performance specification, and go back and adjust the requirements for the platforms. A good example would be we had no capability in our cutters to survive a chemical, biological, or nuclear attack. Well, we know now, faced with the current threat environment, if you're going to operate in and around a port we may need a vessel that can go into a noncompliant or non-permissive environment and be able to operate in those environments. So we went back and we changed the requirements for the National Security Cutter, for instance, to include survivability against these threats.

When you do that, that changes the requirements that get rippled through, and there are some cost issues associated with that, and we're working through those now. But we generally have had those post 9/11 requirements validated through the joint requirements process at the department. We briefed up on -- it won't be in on the Hill, and everybody generally understands that; we rebaselined the program, and now our focus needs to be on mission execution.

Mr. Morales: Let's move from assets to talk a bit about people within the Coast Guard. In order to perform multiple missions, Coast Guard has developed specialized units that can be deployed on short notice. Can you elaborate on the plans to reorganize these units under a single command structure called the Deployable Operations Group?

Mr. Allen: I'd like to do that. That's a very important issue to me personally because I am vested in it, if you will. Over the years the Coast Guard has developed what I will call specialized deployable forces. But they've been developed within programs for specific program goals, and employed within a narrow stovepipe as far as operations go. For instance, we have oil and hazmat strike teams, and they're some of the best in the world. They can do level A entry. They participated in the anthrax attacks in the Capitol building. They have been employed traditionally only for oil and hazmat spills.

We also have port security units, which are reserve units that we have deployed to the Persian Gulf and other places that secure the ports of embarkation and debarkation to actually move military equipment in and out. Since 9/11 we've also been authorized to build maritime safety and security teams which are deployable into ports to provide on-water boat teams and then law enforcement tactical teams to lock down ports, and they include dive capability, K9 capability, and remote operated vehicles for searching underwater hulls.

All of those operated independently within different chains of command for different mission requirements. My intent is to bring them all together under a single command, not to move them, but to create a command structure by which we can optimize their employment and be able to what I will call adapt a force package. So if we have a particular event like a Katrina, taking down New Orleans, or a massive oil spell locking up a port, or an earthquake, let's say in San Francisco, you can take the elements you need for each one of those deployable teams, put them together, and deploy them through Coast Guard aircraft, and get the right force package on the ground, and be able to do that within four to eight hours, the flyaway package.

Mr. Morales: Admiral, earlier you used the term "aquatic holding company." And we understand that many of the Coast Guard's shore facilities date back to the 1915s. What are your plans to evolve and transform the shore-based forces in order to meet the new demands facing your agency in this post 9/11 threat environment?

Mr. Allen: Well, there are two issues. They are one of the shore-based forces themselves, and the second one are the facilities they occupy. We organized the shore-based forces into sector commands, and that was the right thing to do. And now we have shore-based commands that are capable of all-hazard response with a single commanding officer. Before, we used to have multiple commanding officers in and around our ports based on their mission assignment. We have done away with that and we have consolidated the command structure.

The challenge we have before us is we have very, very old shore facilities, we have search and rescue stations that date back to the -- some of them go clear back to the 19th century. And we have not done a good job keeping up with the recapitalization of what we will call our shore plan, or the actual physical facilities that our shore operators operate in.

There are three significant challenges that I don't think we have spent enough time assessing, estimating the impact of and then moving forward in the budget process, that I have to deal with as commandant. One of them is the condition of our shore facilities. The second one is the condition of our polar ice breakers. And the third one is, where are we going to go with our AIS navigation mission. And especially in a post 9/11 environment where we can be expected to try and reestablish AIS navigation in a port as we had to do following Katrina.

Mr. Morales: Great. What are some of the United States Coast Guard's key organizational priorities? We will ask Coast Guard Commandant Admiral Thad Allen to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Coast Guard Commandant Admiral Thad Allen. Also joining us in our conversation is Dave Abel, the director of IBM's homeland security services.

Admiral, can you describe to us some of your key organizational priorities for fiscal year '07?

Mr. Allen: I can. One of them is maintaining our legacy fleet while we build out the new deepwater fleet and making sure that it's supported. We have used our assets up faster since 9/11 than we'd anticipated. And the gap between our old equipment and the arrival of new equipment has created some problems, especially in air patrol hours and patrol boat hours for us down south. So I guess the number one priority would be to make sure we maintain our current fleet so we can execute our mission.

A second priority is to establish our new mission of air intercept for the national capital region which we started last week. Fiscal year '07 carries the resources for us to do that. And we'll be operating out of Reagan Airport, and we'll be intercepting general aviation aircraft that happen to stray into the national capital area. Continuing the deepwater project is important for us too to make sure we keep our capitalization on track. And we've had great support from the administration and Congress in that regard.

And finally, to make sure that we are sustaining our homeland security missions, there are also extra resources in the budget for us to increase our inspection of waterfront facilities and overseas ports.

Mr. Morales: Could you describe the Coast Guard's principles of operation as outlined in the publication America's Maritime Guardian? How do these principles empower and enable the execution of your critical missions?

Mr. Allen: Well, a few years ago we decided to boil down the essence of the Coast Guard, or quite frankly sketch out our organizational DNA, the doctrinal publication we call Pub 1, and it's very similar to what they do in the DoD side of the House. There is a joint staff Pub 1 that lays out this is what we expect, these are the principles by which we operate under. In the Coast Guard Pub 1 we have laid out principles of operation, and they include things like the principle of restraint. Since we are a law enforcement organization, when we're not operating with DoD we need to understand that the constitution applies when we're dealing with our fellow citizens, and so we need to treat them with respect. In fact, Alexander Hamilton wrote a great treatise admonishing his revenue cutter captains to make sure that they understood that they were dealing with fellow citizens in doing boardings.

Another one would be the principle of on-scene initiative that I mentioned earlier. That's the notion that if you're on scene, you have the resources, and you have the capability, and you're empowered to do that, we expect you to act, and do what you are supposed to do out there. And that was shown no better than in the skies over New Orleans.

Mr. Morales: Speaking of the skies over New Orleans, the Coast Guard received much praise in most post-Katrina assessments, rescuing over 33,000 lives. Is there something unique about the organization of the Coast Guard that allowed such an exceptional response to a complicated circumstance like Katrina?

Mr. Allen: Well, I think most folks in the Coast Guard would tell you that we were just carrying out our normal mission under our normal doctrine, but we just encountered an anomalous asymmetrical event that completely was off the scope in terms of scale. But we were able to get enough aircraft into the area to have a meaningful impact. We didn't rescue everybody down there. There were some wonderful people from Fish and Wildlife from the State of Louisiana and other folks that really contributed. But as a result of our air forces, our small boat forces in the evacuations of the nursing homes by our people there, we were able to save between 33,000 and 34,000 people.

The reason that was possible is that we have multi-missioned aircraft and we have multi-missioned people. We basically took every existing aircraft that wasn't being flown for search and rescue in the Coast Guard and brought it down to the New Orleans area, in excess of 40 aircraft. And in fact to the point where we asked the Canadians to come down and assume the Search and Rescue Guard in New England so we could take the helicopters and move them down there. Once we did that, because we train our people as multi-mission, we were able to intermix pilots, crews, and maintenance crews from all over the Coast Guards. One day I was flying on an 860 helicopter from Cape Cod with a pilot from San Diego, a co-pilot from Michigan, and a rescue swimmer from Mobile, Alabama, all in the same airframe working seamlessly because they operate under the same doctrine, and there's repeatable training and tactics that they use, and you can go to any aircraft, put the crew together, and they can fly.

Mr. Abel: One of the things that was very complicated in the overall response to Katrina was the necessity for communication and interoperability between federal, state, and local organizations. How has the Coast Guard's relationship with different levels of organizations changed or strengthened since the response to Katrina?

Mr. Allen: Well, I think it has changed and I think it has strengthened. This is not a Coast Guard issue, this is an overall federal issue, and there are two components to this. I testified recently on the Hill and I try to break this down into an organizational component and a technology component. The organizational component is interoperability at all levels of government, and then horizontally, and that's the ability to get into the same command center, share the same spaces, understand the doctrine, understand what you're trying to accomplish, and be able to work seamlessly across all the federal agencies and then down through the state and local governments. That's the organizational component of command in control.

There's a technical component to that, and that's interoperability of communications. And that's who's got what radios, what frequency they operate on, and who can talk to whom. That was probably the bigger problem in New Orleans than anything else. Number one, they lost the communications infrastructure in and around the city, and when they were trying to bring that back up, to have all the different first responders down there, sometimes operating on different radio spectrum was a problem, and it was identified as a problem. It's being worked right now as a result of the lessons learned, reports that came out of Katrina.

In relation to the Coast Guard, we operate under maritime mobile radio frequencies, and we have a coastal radio system that's set up to get the mayday calls when they come in. We were able to reestablish our system, but our system ultimately needs to be able to talk with the land first responders, which are in a different frequency spectrum. We're in the process right now of changing that, our Coast Guard radio system, under a project called Rescue 21, that will allow us to be more interoperable with state and local responders. And I would say that is an enduring challenge for the entire United States. And when the state and localities are buying radio systems they need to really think about the interoperability with the federal first responders.

Mr. Abel: You referred to the flooding of New Orleans as a weapon of mass effect unleashed on a city without criminality. It's an interesting view. Can you elaborate a little bit on that assessment?

Mr. Allen: I can. The reason I used that term is it invokes a different paradigm than normal hurricane response. And I think one of the failures in the Katrina response was the failure to understand that we weren't operating in a traditional mode against a traditional hurricane, as far as mounting a response, that something else had happened that made it more complex, that made it asymmetrical, that made it anomalous. And that was the breaching of the levees. If the levees had not breached in New Orleans, you would have found what I would call ground zero of the event to be Waveland and Bay St. Louis, Mississippi, which were almost wiped off the face of the earth by a 25- to 30-foot tidal surge. But with the flooding of New Orleans, you had a different degree of a problem set, and what you're really dealing with was the equivalent of a weapon of mass effect being used on the city without criminality.

And the reason that I say that's significant is if there had been criminality involved, we would have known what to do. There would have been a senior law enforcement officer in charge. We would have been trying to fight the thing as a crime scene. We'd have been trying to deal with the implications associated with criminality involved in that. But since there was none, there wasn't a cue for anybody to understand that it was something different. And in the absence of understanding that there was something different and anomalous about it, we treated it as a regular run-of-the-mill hurricane, which was not the right response.

Mr. Abel: You mentioned some of the things that we can do going forward technically, to be able to prepare ourselves for similar responses. Are there things that we need to do organizationally or operationally to be able to do that as well?

Mr. Allen: There are and we're already working on those. For instance, FEMA is the federal coordinator for what we call mission assignments. If there's something that needs to be done, FEMA is not expected to provide that particular service. They're expected to go find it and provide it to the state and local governments. They do that through what's called a mission assignment. And they can issue a mission assignment to the Coast Guard, to the Corps of Engineers, and that's how they handle things like debris removal with the Corps of Engineers.

Between FEMA and the Coast Guard over the last year since Katrina, we have come up with pre-scripted mission assignments. So we come up with a scenario on which you need let's say Coast Guard airlift or Coast Guard surveillance of a coastline, we write it out. With the exception of filling in the date and the time, we both hold the piece of paper. When the event occurs and they need to move us, it's a matter of filling in the blanks on the paper, and we're gone. And we can actually launch on verbal notification, which is what we would.

It's this pre-negotiation of mission assignments plus we have trained Coast Guard admirals to be principal federal officials similar to the duties I perform, and have jointly trained them with FEMA's federal coordinating officers. And we have deployed as teams, we have evaluated evacuation plans, and we have tested the deployability of this folks. And that's way far ahead of where we've ever been before.

Mr. Abel: Admiral, with the very broad mission that the U.S. Coast Guard has, collaboration must be critical to your operations. How is the Coast Guard enhancing coordination and collaboration amongst all the other components of the Department of Homeland Security?

Mr. Allen: Well, I think the first big example is something I've been involved in for the first three years at the department, until I went down to Katrina last year, and that's the Joint Requirements Council. That's an entity that takes a look at all the requirements of the department. And as major acquisitions are being looked at at the department, they review them, see whether or not there are commonality requirements so you're not buying two platforms when you can buy one. And this relates to everything from aircraft clear down to -- one of the most successful projects that they ran was a consolidated handgun buy for the entire department, where whether you were Secret Service, Coast Guard, or Customs and Border Protection, we were buying off the same handgun contract with a tremendous cost savings.

They've done also the same thing for IT licenses, software licenses and things like that. And I don't think there's probably any end to the particular partnerships that we can form that will achieve better efficiency and effectiveness inside the department. But the Joint Requirements Council would be one example of that.

Mr. Abel: Along the same lines of collaboration, how does the Coast Guard plan to better integrate operations and assets with the Department of Defense, specifically the U.S. Navy? And how does the national fleet policy assist in facilitating this integration?

Mr. Allen: Well, you know, we have great relationship with the Navy, it's never been better. And we have an enduring requirement to be interoperable with them in time of war, and when we're needed for a combatant commander. Admiral Mike Mullen and I have a great relationship. And we believe if you take the Navy's fleet and the Coast Guard's fleet and you put them together you have a national fleet. We have the world's best Navy, and we have the world's best Coast Guard; together they make the world's best maritime force. So he and I are working very, very hard to operationalize this concept. And a good example of that would be Littoral Combat Ship, which was just launched a couple weeks ago. It has a deck gun, a 57-millimeter deck gun. It is the same deck gun that we will use on our large cutters. And wherever we can, we're looking that where we have commonality of requirements, to have commonality of systems or platforms, and that would be a good example of that.

And that's needed because -- you talked about interoperability with DoD, we have negotiated as part of the national strategy for maritime security, protocols under which the Navy and the Coast Guard and other forces will work together, and whether or not it's a Homeland Security or a law enforcement issue, if you will, or whether it's a Department of Defense homeland defense type of a mission. And under the agreements and the protocols that we have negotiated, you could have Coast Guard forces working for a naval component or you could have Navy assets working for a Coast Guard entity in trying to intercept a boat offshore, let's say, and do a boarding.

Mr. Morales: What does the future hold for the U.S. Coast Guard? We will ask Coast Guard Commandant Admiral Thad Allen to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host Albert Morales and this morning's conversation is with Coast Guard Commandant Admiral Thad Allen. Also joining us on our conversation is Dave Abel, director of IBM's homeland security services.

Admiral, the role of the Coast Guard has evolved over the last five years. How would you characterize this evolution, and how do you envision the Coast Guard over the next five to ten years?

Mr. Allen: Well, I wouldn't say it's evolved so much as we've gone back and resurrected a mission that was given to us years ago that's become prominent again. A lot of people ask us about the maritime security mission we've got right now and how it impacts us, but frankly, we've had this mission since 1917.

There was a piece of legislation passed after a sabotage event by German saboteurs in New York harbor in 1915 resulting in something called the Espionage Act, which is some of the organic legislation that FBI holds right now. That is the original authority for our captain of the ports to be able to direct to close ports, protect facilities, and so forth. So, the port security mission is not new, it just emerges from time to time.

During World War II, the Coast Guard was over 200,000, and a good deal of our authorities then were to direct and control the ports. So it just happens to be a reemergence of a longstanding mission that we've had, that is what the American public needs from us now. And we're capable of diverting our resources, realigning them, putting them where they need to be, and be responsive to the American public.

Mr. Morales: What about the next 10 years, any major changes that you see in the next 10 years?

Mr. Allen: Well, I think the challenge before us is to come up with what the end state is for a maritime security regime in this country. We made a lot of changes since 9/11. We significantly improved port safety and maritime safety, but the question is what is the end state that we are driving to?

We have a very good example in aviation security where there's a 200-mile air defense information zone. If you penetrate that zone and you haven't called in or you're not using a transponder, you get met. We have never thought about the oceans in those kind of terms. And the water is very, very different. We have 95,000 miles of coastline with rivers, lakes, and everything else that are potentially -- have to be covered in this country. 95 percent of all the cargo moving from outside the hemisphere comes by vessel.

But we're not dealing with bright borders like we see in the land areas. What you see are layers of legal structures that overlap on the water because they developed quite differently. They have a 12-mile territorial sea. You have a 12-mile contiguous zone that allows you to enforce customs, immigration, and sanitation laws. Then you have an exclusive economic zone out to 200 miles.

We have never tried to manage the water like we do the air. But the question is how should the water be managed, and I don't think there's been a discussion in this country or an agreement on where we need to go. One of the things I'm going to try and do during my tenure as commandant is lay out what I propose would be a security regime for a costal nation state in the current transnational threat environment. And we're also going to have to make sure that we understand how to do this globally, because if we do it unilaterally and our other partners around the world don't, we're going to create an unlevel playing field, not only in terms of commerce, but in terms of reciprocity on how we're treated everywhere.

So the challenge I've laid down for my people in Coast Guard Headquarters is to start working on this, so when we deal with legislation, rulemaking, our agenda to the International Maritime Organization, which is where we handle international issues, our budget, outreach to stakeholders around the country, we can say here's what we're building to. Here's how we think we ought to regulate the waters, here's where we think people ought to carry transponders, and it's a discussion we need to have with the country. That's what we need to be doing in the next five to ten years.

Mr. Morales: You've been quoted as saying that your enduring goal is to lead a Coast Guard that is steadfast in character but adaptive in its methods. Can you elaborate on this, please?

Mr. Allen: I sure can. We don't want to lose that organizational DNA that goes back to 1790, that started with independent cruising cutters that has evolved into the principles of operation that we use right now, including on-scene initiative. We want to keep that always. But how those resources, how those capabilities are being applied in a different threat environment, what you have to understand, there's an entirely threat and political context that we're operating in right now, so we need to be adaptable.

For instance a few years ago, when Admiral Loy was the commandant of the Coast Guard, he made a very brave decision that was not always well received throughout the organization. He was bound and determined that we should arm our helicopters. That was something that was almost unheard of in some areas of the Coast Guard. But we did it. And it's been the single most effective drug interdiction capability we put out on the waters in the history of the organization. And last year we seized 150 tons of cocaine. Most of that was as a result of warning shots and disabling fire from our helicopters. So what you need is an organization that has the ability to keep those core values and that organizational history of being able to act and do the right thing but be adaptive enough to coming threats where you're able to bring in technology and manage change so the organization gets better every year, as far as dealing with the current threats.

Mr. Morales: Admiral, how does the Coast Guard grow and improve the competency of its workforce going forward?

Mr. Allen: Well, that's probably our biggest challenge, because the requirements are changing radically and we're inserting new technology all the time. And every time you hire somebody in the Coast Guard, you're potentially making a 30-year decision. Being flexible and agile in how you train people and how you develop competencies is extremely important.

I've got a team taking a look at our human resource strategy right now as it relates to the new mission set and where I'm trying to drive the Coast Guard. And within a couple months I've asked them to come back and tell me what the major changes we need to make as far as how we're managing accessions, how we're training them, how we track competencies.

A key thing for us right now is to get much better at training our junior people in law enforcement; we do a lot of that on the job, on cutters. We think a lot of that needs to be in the classroom. We need to have more of a professional certification for some of our folks that operate out on the water. We're closely aligned with what you would see with the CBP or other law enforcement organizations.

Mr. Morales: Picking up the discussion of the classroom, how valuable are service academies such as the United Sates Coast Guard Academy to your long term strategy?

Mr. Allen: Well, they're extraordinary valuable because you need a mix of officers, you need a diversity of background, and you need a diversity of education. One thing the academy does for us is it allows us to produce engineers. Engineers are in short supply; everybody's fighting for them, trying to recruit them and everything else. So there's a certain amount of capability and competency that you need to indemnify the organization against by home growing it, if you will. And the academy is one place where we can do that. It is also a place where we can take young people coming out of high school, give them a college education, but in the four years also imbue them with the history and traditions of the Coast Guard and create a nucleus by which we can build an officer corp. And then we can surge officer candidate school, which is much shorter, and we can vary the sizes of those classes to complement, to fill out the entire officer corp.

Mr. Morales: Admiral, earlier you described a relatively young workforce within the U.S. Coast Guard. But we do talk to many of our guests about some of the pending retirement waves and challenges within government. What are you seeing within the Coast Guard and how are you planning for the future?

Mr. Allen: In relation to our military personnel, we don't have the pending problem that a lot of people are going to see, and that is the retirement of the baby-boomer population and the loss of intellectual capacity and intellectual capital in organizations. I think we've done a good job on the military side. It's more of a manner of how do you manage competencies and reshape that workforce as you need to once you have them for a 30-year career. We need to do a better job in recruiting and retaining our civilian workforce. If you were to take a look at where our shortages are now in the Coast Guard, our major shortages are in our civilian workforce, and our ability to recruit, retain, and then provide promotional ladders for these folks is extremely important.

We're challenged in our civilian workforce in that we don't have as many as other agencies. And they are commingled with the military workforce, so making sure that they have career progressions is very, very important. Our challenge is we may not have a critical mass of those positions that will allow us to be able to promote them up and allow them the virtual certainty they can stay in the organization and still work in their specialty and be promoted. And that's one of our big challenges right now.

Mr. Morales: Admiral, you've had a very successful and distinguished career. What advice can you give to a person who is interested in a career in public service? And in particular for that young person who may be out there who is interested in a career in the Coast Guard?

Mr. Allen: Well, whether it's a career in public service or the Coast Guard, you need to understand that when you're involved in public service, in addition to the compensation that you get that may not be as great as you would be able to enjoy in the private sector, you're being compensated psychologically for doing something for your country. And there's a notion of a service in serving something that's bigger than yourself when you do that. And I think that's embodied in public service. It's particularly embodied in service in the Coast Guard.

And the advice I usually give folks is that, number one, you need to understand that you're serving the country. Number two, you need to get up every day and go to work and enjoy it, and if you're not, then you should do something else. And number three, if you're coming home from work and you're not enjoying it, then you need to look at yourself and what's going on in your personal life.

I think the Coast Guard has got it right in our core values of honor, respect, and devotion to duty. And when people are looking to come in the Coast Guard, I would just say they need to think about those three core values. And I think of them as concentric circles when I'm talking to young folks in the Coast Guard. The first one is honor. And that's a compact you make with yourself on how you're going to conduct your life and the principles you're going to live by. Respect, which is the next one, is how you're going to conduct your life in relation to those around you, the compact you make with your teammates, your officemates, the people in your own organization. A devotion to duty is a compact you make with your country.

So honor, respect, and devotion to duty I see as concentric circles that build the individual from their self out to that larger sense of duty that's related to the blue uniform we all wear.

Mr. Morales: Admiral, that's a great model and great advice I think for all of us. Unfortunately, we have reached the end of our time. I do want to thank you for fitting us into your busy schedule today. But more importantly Dave and I would like to thank you for your dedicated service to our country.

Mr. Allen: Well, thank you very much. I would just advice your listeners if they want to find out more about the Coast Guard, we do have a website, it's www.uscg.mil. You can also go to gocoastguard.com and you can find more information about our service.

Mr. Morales: Great, Admiral, thank you.

This has been The Business of Government Hour featuring a conversation with Commandant of the Coast Guard Admiral Thad Allen.

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

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 can't hear this morning's show on how we're improving the government, but who deserve our unconditional respect and support.

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

Tuesday, June 26, 2001

Arlington, Virginia

Mr. Lawrence: Welcome to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and co-chair of The Endowment for The Business of Government. We created The Endowment in 1998 to encourage discussion and research into new approaches to improving government effectiveness. Find out more about the endowment and its programs by visiting us on the Web at endowment.pwcglobal.com.

The Business of Government Hour features a conversation about management with government executives who are changing the way government does business. Our conversation today is with Dick Burk, Associate Deputy Chief Information Officer for IT Reform. Welcome, Dick.

Mr. Burk: Hi, Paul.

Mr. Lawrence: And Mark McCloy, Director Office of Information Technology Reform. Welcome, Mark.

Mr. McCloy: Thank you, good afternoon.

Mr. Lawrence: Both Dick and Mark are in the Office of the Chief Information Officer at HUD.

Well, as you can tell from our introductions, today's guests are going to talk to us about dealing with technology but first let's start by finding out more about HUD. Could you tell us about HUD and its missions?

Mr. Burk: Certainly. HUD is the cabinet-level agency that's charged with the responsibility for providing a decent home and a suitable living environment free of discrimination for every American and a relatively small federal agency, only 10,000 in number, compared to most other federal agencies but we have a fairly large budget, 32 billion a year, to carry out this mission.

We carry this out through alliances with state and local governments, with nonprofit community-based organizations, with about 3,400 housing authorities around the United States, and with several thousand lenders. So it's a large operation even though we're relatively small. So we partner a lot which has implications for the technology we utilize and for other management decisions that we make.

Mr. Lawrence: And tell us about the office of the Chief Information Officer.

Mr. McCloy: Basically the Office of the Chief Information Officer handles the technology at HUD. We run the systems. We build a lot of the software along with our contractors. We're responsible for the operating systems, the technology of the future for HUD, the technology of the present for HUD, and we still have a lot of technology in the past at HUD.

Mr. Lawrence: And let's bring it all the way back, then. What are the activities under the purview of the Office of IT Reform?

Mr. McCloy: I think that's probably easily summarized. We try to make sound business judgments for information technology investments, things like software, things like hardware, things like tele-communications networks. What is the best return on investment for the government? What is the best investment for HUG in general? You can look at a lot of dollars that we actually do spend but those dollar are in short supply because they're appropriated dollars and the idea is to get the best for HUD on any given year and get a project that can improve the general welfare of the people who use our services, the people who receive grants from HUD.

So it's a challenging job because we don't have enough money in any one to do everything that we'd like to do so we try to figure out what's best. A group of us get together often and analyze information technology, what we want to do, what can serve the public, what can serve our other business partners, other government agencies, and how we would get from one place to another in a short period of time with a reasonable return on the federal dollars that we invest.

Mr. Lawrence: Give us a sense of the order of magnitude. How many people at HUD are working on technology and what type of people are they? Are they just the stereotypic computer science folks or are there other disciplines?

Mr. McCloy: A lot of our folks are not the computer scientists. A lot of our folks are people who run contracts. We have an incredible amount of contractors within our organization so our job is to clearly understand a requirement from a user community and to build the system that would actually make that job profitable for the federal government. "Profitable's" not maybe the right word but when can we get a system deployed, when can we get an actual benefit to the people that we actually work with on a daily or a weekly basis?

Mr. Lawrence: And tell us about your careers.

Mr. Burk: Well, my career with the federal service actually started back in 1974 at HUD. I tell people sometimes, you know, I came to HUD when Nixon was in office. I tell that to some of the interns and they almost die thinking how early that was. But I was in the United States Peace Corps overseas and knew I wanted to spend some time in public service, came back, got a graduate degree in public administration, worked for the City of Columbus, Ohio, and anytime you're in the public sector you ought to spend sometime with the feds. So I came to Washington, D.C., and came to work at HUD, mostly in the program area.

The majority of my career is in running grant programs, housing rehabilitation. Housing finance is probably my deep skill. And coming into the information technology field, which I only really did about six years ago, mid-nineties, what you come to is you really bring the program side to this. And I have a bias, obviously, toward the business end of our endeavor.

So getting IT, information technology, to support the business area is properly what I bring to this and I got started several years ago with a geographic information system that we developed at HUD and it was very successful and then parlayed that into enterprise-wide systems and now into a cheap architect role at HUD.

Mr. Lawrence: And, Mark, how about you?

Mr. McCloy: A long time ago in a place far, far away at Social Security Administration I started to build the first COBOL programs for Medicare Part A and Medicare Part B. So a lot of my early experience was with large master files and in the federal service. I'm in the federal service because it's a good job. It's an honest day's pay for an honest day's work. There have been very many long days. I mean, most people say well, when was the time that you were at 3:00 a.m. in the morning on the job and I can remember some of those days at IBM running benchmarks on computer programs.

From Social Security Administration I moved into the private sector for a short bit of time and then back into the government at the Department of Commerce. One of the projects that I was involved in at Commerce had to do with the NEXRAD (?) radar. NEXRAD radar is the weather radar that's used throughout the United States and in our territories which actually brings us day to day weather.

I think that the crowning achievement of that was that we were able to forecast weather fairly accurately. Within four hours we were dead center on accuracy. We were able to predict tornadoes before they killed people. We were able to save lives. So that to me was probably one of the crowning achievements that I helped manage.

I was actually the program manager and fielded the first ten units for the NEXRAD radar. And the other 162 units fielded at that time were throughout the country while I moved onto another project.

Went back into the private sector and played IPO in a time that might not have been a good IPO time. So I had a very good offer from HUD to come in and help run the Office of Information Technology Reform, which is an interesting commodity in government because now you're applying business rules to the federal government and trying to make wise financial decisions when you're going to invest money.

That's something that when you're looking at an IPO and some of the different problems that you have are very, very similar in nature. So if you put the two together I'm a dead ringer for something called IT reform and how do you do a project, how do you build the system.

I was fortunate because I'm one of the older folks that have actually done a real web-type program. I've been involved with the Internet and we've made some money through the Internet in the company that I was involved in which at that time became a little bit difficult as the market did its topsy-turvy things.

But smart business people can survive in any kind of a market. Why did I come into the government? It's a good job. Don't kid yourself. I mean, we make good bucks and we have a good time doing it and plus there's some incredible challenges in working with people and working with systems that are 20 years old and working with systems that are one minute old.

So it's an interesting place to be and the folks I work with are very interesting, also.

Mr. Lawrence: Well, it's time for a short break. When we come back we'll be talking with Dick Burk and Mark McCloy about innovation at HUD, find out more about the information technology that they're using when The Business of Government Hour continues.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and our conversation is with Dick Burk and Mark McCloy of the Office of the Chief Information Officer at HUD.

We know that HUD has completed an enterprise architecture plan in the last year. Could you tell us what this is and how you went about completing the plan?

Mr. Burk: Well, I might take just a second to say we didn't complete the plan. We've just begun, in fact. There isn't really a plan per se when you talk about enterprise architecture as much as it is a process for bringing all the relevant parties together to make sure that the information technology appropriately supports the business mission and does it in a way, as Mark points out, that we get a decent return on that investment.

That return is that we're able to deliver the message, get the information to whomever needs it at the right time, and get the right information there. So the architecture helps you do that in the sense because it's basically divided up into four layers as we characterized it.

You have the business architecture itself. What is HUD's business from a functional point of view? Then what information does it need in order to support those business lines? So you have an information layer, if you will, and that is architected in a particular way, then the applications that those data are manipulated by, and then the systems and the technologies that are utilized that those applications reside on.

And you want to be able then clearly to interrelate those four layers and so one of the processes that we were able to develop to help was a tool that we borrowed from the Customs Office, where it was initially developed, and this was a way to give us a picture of our current state of the architecture. And then you could go into any one of those levels and look up, let's say, if I went in the applications layer and I took a look at all of the applications that HUD has. We have 241 information systems at HUD. That tells you something, a little bit.

So you want to be able to look up to see well, what data do those systems manipulate and in support of what business line and then look down to be able to see well, what is the architecture that it resides on. And you can come in at any layer and take a look at those aspects.

So if you want to then go in to modify the systems or develop a new system or eliminate one of the systems or achieve other goals, end obsolescence, reduce redundancies where appropriate, or introduce new technologies you then have an ability to be able to say okay, I want to carry out that project. How does that now impact my whole architecture, and how am I now bringing that whole system along because this is a moving target, we have additional drivers, we have new laws that get passed, new policies by the new administration.

You want to be able to accommodate those and to accommodate them quickly because you cannot have these long 12-, 18-, 24-month window of opportunity. For most of the folks that come to HUD that are in political positions that's their term here and they want to get a response fairly quick.

So you have to be able to be able to respond quickly. You have levels of complexity here within, as anybody who deals in this field understands, so responding to both of those plus the changing technology really force you to need to do this with engineer principles, with architecture in mind, and not simply happenstance as perhaps it has been done in the past.

Mr. Lawrence: What are the implications of enterprise architecture on IT capital investment?

Mr. Burk: Anytime you want to make a decision with regard to a particular project, and Mark really heads up this area, you want to be able to say is this in conformance with where we as an organization, as an entity, want to go in information technology. And you need to be able to answer that question at a variety of levels.

It may be in support of the business line appropriately but it's not in tune with appropriate technology. We may be collecting a lot of that information. As you well know, as most people in large organizations know, we collect a lot of different kinds of information and sometimes we don't even know the data that we collect.

And so in a response to developing a new system we may say okay, let's develop a whole brand-new system and we'll go out one more time to the public and we'll ask those kinds of questions and get that data in when we are already doing that. So we need to know already what data that we have. And in every one of these areas, you want to be able to do it as intelligently as possible, in line with new technology, and at a cost that is reasonable.

Mr. Lawrence: What lessons have you learned from this process?

Mr. Burk: How tough it is to get everybody on the same sheet of paper because this is a collaborative effort. This is not a group of architects who sit in the room and decide by themselves and then come out with a set of standards or guidelines. If anybody attempts to do that we know that will fail.

So it must be a collaborative effort with the business side as well as the IT side and, as I was saying beforehand, coming from the business side I appreciate that very much and in order to get buy-in from the business area they need to participate in the development of the standards themselves and then approve them.

So I think that is one big lesson that you learn, plus it's very important to make sure that there is a process, again I go into that, for having the individual business areas come together and see the commonalities that they have. So at HUD we have public and Indian housing, we have the Office of Housing, which is single-family and multi-family, and we have community planning and development. Lots of times they operate in their own particular stovepipes. The systems get built appropriately as well.

So to afford them the opportunity to come together to see some of the same common issues that they're dealing with some of the same clients and need to be addressed and need to be supported in IT with the common platforms, the common data elements, with common systems.

Mr. Lawrence: We also know that HUD has recently completed an e-government strategic plan. Could you tell us about this plan?

Mr. Burk: What we've done is gone out and taken a look at both our business partners and the citizens and HUD folks themselves internally and say how can we better connect with them utilizing the Internet. We did a couple of things, took a look across the entire panoply of programs that we have and identified certain particular areas that were appropriate that worked for us and then tried to project out into the future what are some other things we could do.

For example, we sell 70,000 properties a year at HUD that come into our portfolio and we have a lot of people who come to our Internet page and say gee, I've had a life-changing experience. I've got divorced or just got out of jail or something along that line. Can the federal government help me in terms of does it have a house that I might be able apply to?

So having that connection with the public directly is part of our Internet strategy. As I mentioned beforehand, most of our business, though, is done through outside organizations, business partners. So the whole issue of how do we work with those business partners to serve citizens becomes critical for us.

So for us it becomes very much government to business or government to government and our e-strategy emphasizes those areas in particular.

HUD is very location-specific. We are in 90,000 locations every day. So knowing where we are working across the entire enterprise is critically important so one of the things that we have developed and we'll just be rolling out this month in fact will be a presence on the Internet on our home page, geographic information system, that ties together a variety of data sources within HUD and answers the question what is HUD doing in my area, in my congressional district, or my city, or even my neighborhood? And go in and zero on down to that, answer those kinds of questions across the entire range of HUD's programs. That's useful. Those are some parts and elements of the strategy itself.

Mr. Lawrence: HUD has also taken steps to improve its financial management of the IT capital investment process. Could you tell us more about these activities?

Mr. McCloy: I think I can help on that. Last year we really got into it heavy. My boss, Deborah Stoffer, actually was the leader in putting the programs together supported by our Chief Information Officer, Gloria Parker. But the idea in capital planning and what we've done over the past is we try to establish a baseline.

A baseline's established on schedule, a baseline's established on cost, and a baseline is established on risk and technical involvement. And effectively every quarter we sit down with about 200 different projects and their project managers and find out how folks are doing against those plans that they originally created and we use a term called "earned value."

The term "earned value" means where are you when you said you would be someplace in time and dollars expended. If you're behind schedule and have got some problems then we try to help by slowing the project down some. If you're ahead of schedule and you need more money then we're happy to try to move more money around within the organization so that you can make the day and your project a little bit better.

So it's an involved process. It's checked often through technical reviews and these control reviews, and we try to do what's best globally for HUD.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. Today's conversation is with Dick Burk, Associate Deputy Chief Information Officer for IT Reform, and Mark McCloy, Director, Office of Information Technology Reform, in the Office of the Chief Information Officer at HUD.

Well, let me follow up on our last segment. The Information Technology Reform Office supports the Technology Investment Board Executive Committee. Could you tell us about the Technology Investment Board?

Mr. McCloy: Yes, and maybe the way to describe it is through a process. I had mentioned on a quarterly basis we got together and reviewed projects and on a yearly basis we get together and review what is going to be funded. But after we review it we make recommendations to what we call the Technology Investment Board Executive Committee. This is the committee headed by the Secretary of HUD and all the assistant secretaries are members of the Board.

So once we've made technical decisions these folks can sit down and apply whatever decisions or priorities they wish. If they disagree with us then they change whatever they want to change.

It could be that the Secretary of HUD decides that he wants to put emphasis on Project X or bring in his own project and he wants to apply different funds for that. Obviously that is a go at that point but the issue would be we only have so many dollars. So we try to figure out where the dollars will be subtracted and how we can do a secretarial or an assistant-secretarial initiative at that point.

So we recommend to the Executive Committee exactly what we think is best for HUD and they either agree or disagree. Most of the time they do agree but, as I said, if they have some priority that they want to make happen or put more emphasis or more dollars on something then they do it.

And the system actually works. It gets a little difficult because there are limited dollars and on an average year we probably have 30 to 40 percent more requests for dollars than we actually have dollars so obviously we've got to figure out what is the best process to make this happen.

We try to do it. We recommend where the best returns on investment are and the Executive Board chaired by the secretary actually make it happen. Until their approval, nothing is real.

Mr. Lawrence: We understand that the Office of IT Reform is charged with developing and implementing an IT performance measurement program. Could you tell us about the program you're currently using?

Mr. McCloy: Basically we're in the process of developing the performance measurement program. That is the tail end of the process. When we put together an investment portfolio what we sit down and say is that we need X dollars and at some point in time something will happen. That something is measured after the system is delivered.

We're in the process of trying to put it together with other federal agencies, how you measure performance at the end of the process, but it really isn't the end. This is the many years, the operational dollars that are important to the government on a year to year time frame.

If we said that we're going to process 10,000 new housing applications in six months are we doing that? Does the system meet up to that? Does it need more dollars to do it? Is the system that we have in place the wrong system, meaning that it might have been aged technology because it takes a while to field some of the systems out there and we might need new technology.

Obviously there's new software released every day and we might have to upgrade it.

It continues the process through the entire life cycle by measuring it when we actually have an operational system and it's done by establishing a baseline and then reporting against the baseline that you've already established.

Mr. Lawrence: Well, let me skip back to the beginning of the process because the Office of IT Reform is charged with conducting economic and risk analysis of proposed IT projects. What lessons could you pass along to other government leaders about undertaking these types of reviews prior to committing to an IT project?

Mr. McCloy: First thing, pay attention to your mission. Don't go outside of the mission of the department. A lot of folks we talk about creeping requirements. Don't do that. I mean, do what the mission says.

If it's housing, stick with housing. If it's safe housing, stick within the parameters of safe housing. Understand clearly what your requirements are and don't go monkeying around with them and get user buy-in. Too many projects in the federal government we haven't had a clear understanding of what the user said and we chase the project all the way around the scoreboard and can't figure out what the actual requirement was.

You have to put those in concrete and you have to make sure that senior management has a positive buy-in, they understand what you're going to do, and then do it, and don't keep changing the requirements. So effectively the lesson learned is hold the folks to the task that they agreed on before they got the capital venture from the United States Treasury.

That's it. They made a deal with a requirement and you don't go changing it in the middle unless you get senior-level approval that you're going to pitch a different way. And, I mean, when you don't it doesn't work. I mean, we have too many projects in government that just don't work.

Mr. Lawrence: Other guests have discussed the difficult --

Mr. McCloy: Of course, we don't have them at HUD.

Mr. Burk: No, that's right. Yes, HUD to the contrary notwithstanding.

Mr. Lawrence: Other guests have discussed the difficulties in implementing large IT projects or even halting the momentum of an expensive project. How do you deal with those two issues?

Mr. McCloy: One of the things that we've learned about building software over the last ten years is small teams work very, very well; large teams don't work. To me if a project is off-track cut the dollars, slow it down, get different management running the project.

Bring in a superstar or two or a technical wizard or genius. They're few and far between but when you bring them in, I mean, there are folks that are gifted and talented in the government doing fellowships, et cetera, or you could bring in a Lincoln Lab. You can bring in a very, very credible organization that has faced the same problems in another place and let them help you and don't be so "prideful" is the right word that you won't listen to some of the advice that they give you.

Go back, make sure that your users are happy. If your user is unhappy, take a hike. I mean, it's the bottom line. Dick?

Mr. Burk: Well, I think experience is the key factor here that you're looking for. Even if somebody is terribly bright and understands a particular field, whether it be data warehousing or whatever it happens to be, but if they haven't walked through that once before, if they haven't walked through that in a pretty good-sized organization and understood not just the technology or it but the other side of it, how do you get and maintain user buy-in to the project at hand and extend it over a period of time?

Some people use it as terminology is marketing. I don't know if I would really talk about that but there's an educational process in it and there is a constant feedback loop back to the business owners and to the people affected that has to happen as you move through the development of the project in order to sustain that kind of support.

In those instances where the project is going South you can have the best policemen in the world but I will tell you that the end user, the project buyer, will let you know soon enough if that thing is going wrong.

Then what you need to have is a mechanism in place so that issues around that project can get surfaced and get dealt with. Some folks talk about having an enterprise-wide project management office, some office where you can go to say hey, I've got a serious problem here. I've had changing requirements or the user-owner has changed and therefore has a different set of requirements or we've run into a snag here technically and we need to get this resolved.

We either need to bring in somebody stronger or we need to reconfigure the integrated product team or a whole variety of other factors. We need to take a look at the new technology because something's gone wrong with the firm or something's gone wrong with the technology in a place where the project director can get that resolved and then move on and do it quickly.

So much of the real problems that I have experienced and seen, some firsthand, I might admit, have been simply that these things have let go and there's not a resolution of the issue quickly.

Mr. Lawrence: What's the relationship between strategy and IT modernization?

Mr. McCloy: I think when you're trying to do a strategy you're trying to look at a process that will get you to a location in time and place and equipment. Where IT modernization is you just might have to crank something up that actually is more compatible to the technology of the day. You really have to sit down and think before you act.

I learned something from NASA a long time ago. And what I learned is if you have ten seconds to solve a problem use the first nine to think about it and do it in the tenth.

Mr. Lawrence: That's a good point for a break. Coming up, we'll discuss the expected wave of retirements and find out whose going to be running HUD. More of The Business of Government Hour in just a minute.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. Today's conversation is with Dick Burk, Associate Deputy Chief Information Officer for IT Reform, and Mark McCloy, Director, Office of Information Technology Reform, in the Office of the Chief Information Officer of HUD.

One of the many challenges facing organizations is recruiting and employees, especially in the technology sector. How do you find this at HUD?

Mr. Burk: Yes, it is a serious problem, to restate it. We lost a large cadre of our technology folks several years ago as HUD moved from approximately 17,300 down to 9,300. Similarly, at that same time, as I mentioned earlier, you go from 3,400 loans per day to 5,400 loans per day. In an earlier time we were not making any homeless grants. We now make close to 5,500 grants a year.

So the work has gone up exponentially while the staff has been cut in half and if you really have IT supporting the business that means IT grows, the number of systems, the size, the complexity of them enormously, and the need to move quicker and at the same time you don't have the people around.

So we've relied heavily on contractors. We've made certain issues clear to the contractors who do come on board with us and that is that we are in a partnership role. We will try as best we can to define precisely what it is we want, the deliverable out of every task and contract, and hold contractors responsible.

We ask them to take a little bit broader view of the role. We can't write into every contract exactly this partnership role, although we try to articulate it, but, as one of the examples I used earlier, when you think about well, what is going to be the buy-in to this particular piece of technology that I am preparing and developing, how is that organization going to adapt accordingly, I expect a contractor to think through that. I expect a contractor to make suggestions to me with regard to all right, now would be an appropriate time now to begin to approach these levels. At HUD we see that they are responding or have the potential to respond or need to buy into the technology or buy into the solution right now and so that's what we do.

Mr. Lawrence: There's a lot of talk about partnership and even you talked about it broadly when you said think broadly. What does partnership mean to you?

Mr. Burk: Well, to understand HUD in its broader context, not just the 9,300 people in the 88 field offices, to understand our business and our business is working with these business partners and so when a contractor comes in I expect them to understand that concept.

It is a special relationship. I don't know if it is unique in the federal government but certainly working with state and local government folks we offer them maximum feasible participation in deciding where those dollars go and how HUD business is developed and worked. That is a critical piece to the way we work. Understanding that is part of being a business partner.

I think there are other aspects to it as well. I suppose maybe it's similar to other areas of the government where you really are sitting side by side at the table together and you ask them to participate, be critical. This is not just a one-sided relationship. I expect this is a two-way conversation. I will be critical of them but I expect them to also come back to us and say we don't see it that way at all. Here's the way we see it type of thing.

That's an honest relationship. That's an honest partnering relationship and we look for it. I might add I think that's exactly what we've gotten from PWC and other contractors.

Mr. Lawrence: Are you concerned as the skills of the technologists at HUD change from perhaps people who were hands-on doing all the work before to now the people who monitor contractors?

Mr. McCloy: Our skill base has changed. I mean, clearly I grew up in an environment where I was a programmer and now I'm having to give those instructions to a contractor and it's difficult because there's a ton of rules and regulations and codes that have to be followed and the penalty for not following some of those can be career-ending.

And it's important, this partnership, that you work with a team, that everybody understands the same general guidelines, the same general rules, that you have to play by and then you try to make it work the best.

I mean, I always try to explain it like the 4 by 100 relay. When you pass that baton the Olympic team's done it 1,000 times and when you're passing information, data requirements, hopefully you're passing it friendly to the contractor, the contractors are working in a friendly environment with you, and that it's a team effort.

And every once in a while I always like to say when I've screwed up something my team knows what to say. They say what Mark really meant to say was, and that's the indication, Mark, you just blew it. Let's try something else.

And it has to work that way. You can't be afraid to say if something is really off the wall or something is really good, and they don't want to be in a position when something's really good to let it go by the board. I mean, you don't want to have somebody in a meeting who's a dynamic super-star but out of his field for that day dominate a meeting. So it's interesting.

Mr. Burk: Getting back to that issue about the partnership, there are times when a contractor needs to come in and say look, for the dollars that you're asking for and for what you're looking for you're not going to get there, given our best experience. Now, that is very tough for a contractor, particularly because they're going to say well, the likelihood here is they may terminate the contract and I'll be out and I just spent a lot of money bidding on this thing.

So I fully understand the pressures on the both sides. There is another day and this is a relationship that is being built between a contractor and HUD and we want to maintain that and I think the contractor does, too.

The worst thing that can happen is for the contract to go forward, HUD not to be satisfied or the government entity not to be satisfied, and the thing falls on its face. And you go back to the contractor, the contractor says well, this is what you asked me for. You've articulated and you say well, okay, fine, we'll deal with someone else from now on, thank you.

Mr. Lawrence: What kind of advice would you give to a young person who's interested in a career in public service?

Mr. Burk: Oh, come in. It's very interesting. Everybody's talking about the dearth of folks who want to come into the federal government. I don't believe that's true at all. We announced 700 positions, I think, back in the fall or back last year and we had 27,000 applications. I mean, it was just phenomenal.

So I think people do want to come into public service. It's a challenge. Where else would you find this kind of breadth moving from all of the different fields that are represented even just in one agency like, HUD?

I've found it fascinating over the years as I've moved around within HUD from policy development and research to the program areas into IT, into the Office of Administration. And the ability to move around and move up and have increasingly challenging positions, I think, is very appealing.

Mr. McCloy: Let me sum it up maybe a different way. Federal employees led the mission to put a man on the moon and federal employees put thousands of people in homes along with our partners in government and in housing authorities have put thousands and thousands of people in homes. What an incredible challenge to make the planet a tad bit better.

Mr. Lawrence: What kinds of skills would you recommend a young person have or what were you looking for in those 27,000 applications?

Mr. Burk: Well, the breadth of capabilities. It's hard to be specific about that. I don't think it's any different from in the private sector. You're looking for some deep skill, some skill that a person feels associated with and comfortable with, whether that be budgeting or finance or IT in a particular area but some grounding and then the ability to remain flexible and the willingness to continue to learn because I hate to hear this but when I came into the federal service the thought that I would be in IT later on was the most foreign thing in the world.

And so the willingness to learn and the ability to then stay current, those are some qualities. I think you have to be creative and that's a funny word to use. A lot of people don't think about that in the federal government but I think you have to be creative, particularly, like, in the scenario I painted beforehand where you have twice the work and one half the people and you still need to make things work and work better than they had earlier. You have to be creative to be able to do that.

Mr. McCloy: And they would be working with dynamic personality people like Dick and myself and that is a real plus.

Mr. Burk: Oh, my gosh, we just lost thousands of people who potentially would come to HUD, Mark. Watch out.

Mr. Lawrence: Well, that's probably a good point to end because I'm afraid we're out of time. Dick and Mark, I want to thank you very much for our conversation today. It's been fascinating.

Mr. Burk: Thank you, Paul, very much.

Mr. McCloy: Thank you, have a good day, and Go, Redskins.

Mr. Lawrence: This has been The Business of Government Hour featuring a conversation with Dick Burk and Mark McCloy of HUD.

To learn more about our programs and research into new approaches to improving government effectiveness visit us on the Web at endowment.pwcglobal.com. And at the site you can also get a copy of today's transcript of this interesting and insightful conversation.

See you next week.

Arlington, Virginia

Thursday, May 10, 2001

Mr. Lawrence: Welcome to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers and the co-chair of The Endowment for The Business of Government. We created the endowment in 1998 to encourage discussion and research into new approaches to improving government effectiveness. Find out more about the endowment by visiting us on the web at endowment@pwcglobal.com. The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business.

Our conversation today with Marty Wagner, associate administrator for the Office of Governmentwide Policy at the General Services Administration. Welcome, Marty.

Mr. Wagner: Good to be here.

Mr. Lawrence: And joining us in our conversation is Steve Seike, another PwC partner. Welcome, Steve.

Mr. Seike: Good to be here, Paul. Thanks.

Mr. Lawrence: Well, Marty, let's start by finding out more about GSA and specifically the Office of

Governmentwide Policy. Could you tell us about its activities and its role?

Mr. Wagner: Okay, I think most of your listeners probably know about GSA. It's the government's big buyer of stuff. And we tend to do a lot through the Public Buildings, through the Federal Supply Service, Federal Technology Service. This is where about 14,000 employees set up contracts that are used by the government as a whole for all the goods and -- or for many of the goods and services that they do.

I don't do that. I have what's called the policy function, where we look at the overall system, not just the specific contracts that GSA does, but the $200 billion or so of government procurement, the $300 billion a year of grants that are issued, how those systems manage the way we travel.

I have the policy function at GSA. Now, the policy function used to be -- until about five years ago -- simply part of the different operational arms of GSA. But what we got into through some discussions with OMB and various reviewers is a sense that GSA was getting too much into the operations, and that frankly, there were some concerns that there was a conflict of interest between managing the policies for how the government bought everything and also being in the system of running contracts that then other agencies use.

So in fact, that's what we do in Governmentwide Policy. We've centralized all the management functions of government in one place. We look at the government as a whole and try to make things so that the government is better managed than it otherwise would be.

Mr. Seike: Marty, the thing that I'm curious about is how is the Office of Government Policy different than some of the other agency policy development units, like the Government Accounting Office or the Office of Management and Budget?

Mr. Wagner: Well, I think we probably have some parallels. General Accounting Office probably has more of an audit and oversight role than we would have. We're really not in the business of looking over the shoulders of agencies. We're more in the business of developing best practices and, frankly, the regulations and the guidance for how agencies ought to operate.

OMB tends to operate at a higher level. We work very closely with OMB, but we're not OMB. OMB has the budget; it has the management and the regulatory reviews. A lot of those areas have implications that are a lot broader than OMB can actually do itself, and that's where we get involved.

So, for example, OMB does the budget, but working with the other agencies on the federal acquisition regulations, the federal travel regulations, and the way the -- developing the government's internal processes, that's where we work.

We work also a lot with the agencies. One of the things that we found when we consolidated our operations is the government probably historically has had a top-down approach to policy. Something would go wrong, and we would develop a rule against doing that bad thing. And we found that that probably gets you a fair distance, but you're actually going to do better in developing your policies if you work with the community that is affected by those policies to develop approaches that solve the overall problem � not avoiding the bad thing, but doing the right thing. And we would work closely with the agencies and OMB to develop and then implement those policies.

Mr. Lawrence: How big is the Office of Governmentwide Policy, and what are the skills of the people who work there?

Mr. Wagner: We're about 300 people overall, and the skills tend to be management skills in all the management policy areas. So we find-- and I may miss a few as I go down the list, but for example, acquisition, procurement. The Federal Acquisition Regulations, the Federal Acquisition Institute for Training, acquisition professionals, we have those policy functions. So you have people who understand procurement. That's one community. The Federal Travel Regulations, those who understand travel management, travel contracting, procurement of travel services, per diem, when we set the per diem rates in different cities -- a function that makes us extremely popular in certain circles, he said, tongue in cheek. But there's that area. Mail management, management of personal property, management of real property, disposal of personal property, disposal of real property. And then one that I think is particularly important and has certainly been growing in importance: electronic commerce, information technology, all those areas. A lot of what the government is going through is using information technology to be more effective, and it cuts across all management areas and, frankly, is probably our key to productivity gains in the future.

Mr. Lawrence: GSA seems to have somewhat of a unique role. How would you describe the culture at GSA, perhaps in contrast to other parts of the government?

Mr. Wagner: Well, I think GSA's got a very customer-oriented culture, is embracing technology more avidly than many agencies, but certainly not as quickly as some of the real technology-focused agencies. Very much into using an e-marketplace.

I think part of that is driven by -- when we talked earlier about the policy function and the separation and all the

forces that led that to being -- one of the things that happened with GSA is we, as a matter of conscious policy, moved it from a mandatory source of supply to one where it was optional.

And that's got a couple of advantages. One advantage is human nature. People tend to run away from the thing they're told they must use. So that barrier to using the vehicles went away. But it also means that it's an enormous incentive on the services to be efficient and effective. And that also cuts through into the way they operate internally. So it's actually been a -- I don't want to say it's better than every other agency I've worked in, because all the agencies I've worked in have had a lot of advantages. But it does have a somewhat more customer-centric culture, and I enjoy that. And since I like technology, I like being able to have it on my desktop and use it to good effect.

Mr. Lawrence: Marty, let's spend a little time now talking about your career? What drew you to public service?

Mr. Wagner: I think my big drive to public service is that I wanted to make a difference. I wanted scope. I wanted some ability to change the world. Originally, when I finished graduate school; I had gone through as an aeronautical engineer; I did a bachelor's and a master's degree, but the first job I got was working for a consulting company doing the cost/benefit analysis of the space shuttle. And it was all under contract for NASA. And I just thought space was neat, and being a player in the decisions of how we were going off into outer space in a standard, effective, businesslike way was sort of fun.

So from that, I went back to graduate school, this time in public administration and was trained in economics and public policy and thought that's a way to affect things. And after that, well, where is the action?

At the time, the action was the Environmental Protection Agency. So I went and worked there. And after awhile, the action was in telecommunications, and I went to OMB and worked there. And then � you don't want to be too long at OMB. I think it's a very good place to work but I thought it was time to move on.

I went to Treasury and did telecommunications for Treasury. Then I left Treasury to go to GSA, where I did information technology -- computers. And I did that for awhile, and then I got into electronic commerce, and these days I'm doing management.

As I look back on my career, I say, "Gee, I kept moving around and doing different things and they were always interesting and they always broadened me and improved my skills." And where else but the federal government could I have done all of those things? So that's pretty much how I got into it.

Mr. Lawrence: We're talking with Marty Wagner of GSA. This is The Business of Government Hour. We'll rejoin our conversation in just a few minutes. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. And today's conversation is with Marty Wagner, associate administrator for the Office of Governmentwide Policy at the General Services Administration. And joining us in our conversation is another PwC partner, Steve Seike.

Marty, in your years of government service, what qualities have you observed as key characteristics of good leadership?

Mr. Wagner: That's a good question. I'm not sure I can give a complete answer, but I think one of the most important characteristics is to be able to see the big picture, to see the things that really matter. It's so easy to get caught up in the things that look really important but turn out to be not so important.

So, I'd say see the big picture, be ready to ask the right questions. I think you also have to be ready to work flat. Most of the things that really matter need you to get a lot of other people, who don't necessarily work for you, to do something that helps you achieve the goal that you want to get. Part of that, you ought to be able to articulate the vision; not just have it in your head, but explain it to other people. Better be flexible, be ready to deal with ambiguity, because there's an awful lot of ambiguity out there. And flexibility is, I sometimes think, the most important trait.

And finally, perhaps a silly one, but say "please" and "thank you." I once was working with an interagency group, and there were several folks that were there who really liked me a lot. And I'd like to tell you it was because I was wonderful, but it wasn't. It was I said "please" and "thank you," and they came from an environment where they basically had to deal with a lot of, it sounded like, not so nice managers, very directive. And just the basics of courtesy -- it's amazing what people will do for you if you just say "please" and "thank you." So that would be my closing thought. A lot of other things as well.

Mr. Lawrence: Let me follow up and ask you about working flat and what the management challenges are from doing that. We note in talking to a lot of government folks that they all would like to collaborate more, yet somehow it never seems to happen. So I'm wondering what the lessons learned might be from working flat.

Mr. Wagner: I think working flat, you've -- first, I think collaboration has worked pretty well. We've done a lot of it. Most of what we do is, in fact, collaborative effort. A problem may be working flat is not the same as working shallow. You've got to be not just talking to people, but moving toward some set of concrete results.

So working flat does require discipline, it requires focusing on deliverables, things that matter. It doesn't mean that you're getting together once a week to, sort of, talk about problems and issues. It means that you're each working towards getting something done. I think probably also it -- a lot of the important things -- an ecological metaphor is maybe not a bad way to think about it. You're doing something, but it keeps changing on you. The goals keep changing. The priorities keep changing. But if you recognize how that happens, you can use the fact that the world will be changing on you to get more done. Because you know something outside of your control is going to happen. You can even predict what a lot of those things are, and act accordingly.

That may be a bit obscure, but think of ecologies, and then think about how that metaphor applies to Washington, D.C.

Mr. Seike: GSA presents achievement awards for real property innovation. Could you describe some of these recent winners and what the impact this has had?

Mr. Wagner: First, let me briefly explain that what we do through many of our programs is that we create awards, which involve personal money going to government employees for things they achieve. Now, that's not altruism that leads us to do this. It's because if you want to find out what best practices are and disseminate them across government, an awards scheme is a pretty good way of doing it. The ones you mention are those for real property. We have them for travel, for mail management, and several other areas as well.

Recently, we gave one to the Department of the Army for privatization of Army utility systems; basically innovative ways of buying things like electricity cheaper.

Building Green went to GSA's Public Buildings Service; a lot of environmentally better ways of building buildings.

So because we make those awards, then we put them on our web page, and then people can learn about them. And we also work with other agencies, so that the average level of management starts rising to the level of what was the innovation of a few years before.

Mr. Lawrence: Now, we've been hearing a lot lately about FirstGov, which is a collaborative government Internet portal. And I'm curious as to what GSA's role in that is, and maybe you could share with the listeners a little bit more about FirstGov.

Mr. Wagner: Let me begin by first giving the URL. If you go to www.firstgov.gov -- and spell it out, f-i-r-s-t-g-o-v dot g-o-v -- although we also made sure to cover various misspellings of that as well; you're going to go to a search engine or a home page which searches everything that the federal government documents on the web.

Right now, that's up to about 33 million documents renewed every week or so. I'm sorry -- renewed every two weeks. And it's a very effective tool for finding out just what's going on in the federal government. It's arranged by category, so it doesn't require you to be an expert in the U.S. government's internal plumbing.

If you type in "passport" in the search box, you go to the place in the State Department, which has the passport office, where you find out about passports. You don't have to know that's how the government is lined up.

And it's, I think, a pretty good model of the transformation the government as a whole is going through. We're going from what I'll call inside-out government to outside-in government. Now, what do I mean by that? I mean that mostly, when we look out, working for the government, we work in our programs and we deliver those programs. We have an organizational view, and we deliver it out to customers.

Turns out that you can also look at it from the other viewpoint. A customer looking into the federal government, what I'm calling outside-in. FirstGov is one of the cuts at doing that. There are some others, which I could get into if you're interested.

First of all, though, it's a webpage that takes you to everything. Then it has taxonomies that lay out -- the information is organized in different ways. It's also consciously shallow. We're not building some sort of huge edifice in front of everything else that the government is doing. The government is too big, it's too important, too diverse to build one thing to be the front end for everything.

But what we can do is make it easier for folks to get to the place where it matters. So if the place you want, the information you want is at a NASA website or an EPA website or something like that, FirstGov will get you there in a fast and efficient way.

Mr. Lawrence: Telecommuting is a big issue, and I noticed that OGP has developed the Interagency Telecommuting Program Manual. I'm curious to know from your perspective, sort of, what's the state of telecommuting within the federal government?

Mr. Wagner: Well, the short answer is telecommuting has got a long way to go. It's going to be really, really a lot more important than it's been to date. It's where a lot of society is going. Because with technology, things like laptops and high-speed access and wireless access, you're a lot more able to work anyplace at any time. Now, the problem you get into is not all jobs fit that way of operating. In fact, we actually probably would prefer to say "telework" instead of "telecommuting." "Telecommuting" carries with it the idea of you really doing the same thing, but "telework," you can take a laptop, be on the road, be in a train, be in an airport, depot, you can do a lot of that work. We're doing more and more in that direction.

We in our own office are setting up hoteling arrangements by which people can more easily move around and do telecommuting that way. There are some real issues to work out. How do you manage a telecommuting work force? A lot of the people who telecommute, or telework, they get nervous about it because if they're not in the office, they're worried about being forgotten. How do you deal with those legitimate concerns and work through that? And frankly, there are a lot of issues in using the information technology, to make it standard and reliable, to work that out.

But we see that as pretty much the wave of the future. It's not going to be for everybody. And you've got true believers who somehow think that anyone can be a teleworker. I don't think that's the case. But an awful lot of us are going to be teleworking more and more.

Mr. Seike: I was interested as a follow-up to that in how many people currently are taking advantage of the program, and do you see that trend continuing over the next five to ten years?

Mr. Wagner: I'm afraid I don't have any good numbers about how many are actually teleworking at the moment, although those figures do exist. They're just -- I don't have them on the tip of my tongue. I'm pretty confident they're going to grow, and they're going to grow a lot. Because at least -- I just look at my own office, and we're just the tip of the iceberg as we start working out exactly how to do this and how to measure it and work more effectively. So the short answer is there's some going on and there's going to be a lot more numbers to follow.

Mr. Lawrence: It's time for a break. We'll be right back with more of The Business of Government Hour and our conversation with Marty Wagner. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner in PricewaterhouseCoopers. And today's conversation is with Marty Wagner, associate administrator for the Office of Governmentwide Policy at the General Services Administration. And joining us in our conversation is another PwC partner, Steve Seike.

Mr. Seike: Thanks, Paul. Marty, can you tell us how FirstGov came about?

Mr. Wagner: Well, I think I talked earlier about FirstGov when we were talking a little more about how that came about. It's an interesting project, because I don't think it fits the traditional mold. It didn't have any budget. It was interagency. It had no natural home. But it did have a presidential management directive that, sort of, told the government to go set up a portal for all its content.

And there had been the work that various folks -- for example, under the Chief Information Officers Council in the GSA � had been working. And so you had a push to do something. And then it went in a period of roughly three months from being an idea to actually being something up and operational -- maybe six months, if you count some of the precursor work.

And the way it kind of happened, I think, is an interesting model. I learned a lot of lessons from how FirstGov came about. You know, lessons -- these may be obvious lessons to the listeners, but sometimes we have trouble seeing the obvious.

The first was leadership mattered. FirstGov was something that people at the senior levels wanted to have happen and did the work cross-agency to get the money together, took a lead to make it happen. So we had high-level involvement: make this happen.

The second lesson is that if you want to get something done, you have to have ability to execute. And in fact, we had a cadre of people in various agencies, including GSA, who could actually get up and get something up and running quickly. We were able to use a lot of the acquisition reforms of the past several years to move very, very quickly to do a very competitive acquisition in a short period of time. We found the value.

Talking to everybody is really important. Communications matters. Even when you're moving quickly, you need to be talking to everybody.

Speed matters, too. We found that not only does speed help you get things done quickly and focus on the things that matter, it also means that your critics are criticizing -- they're behind you because you're already doing something different because you ran into the problems that the critics were pointing out and now moving into another area.

And then, I think, one that may seem a little silly, but it's nice to be aligned with the forces of history. I mean, what FirstGov is is an Internet portal, it's customer-centric, it ties the government as a whole to the people as a whole. And that's a lot of what the whole Internet is about. The Internet is turning a lot of companies inside out. It's changing the way we do business.

And by moving and using what this technology was doing, and moving in the direction of commercial off-the-shelf products stitched together to solve a problem, worked pretty well. And frankly, FirstGov is a model for a lot of the other things we're doing as well.

Mr. Lawrence: What I found interesting about your answer in terms of the lessons was none of them describe the technology; none of them involve technology. They were all management lessons about people, for the most part.

Mr. Wagner: I think that's true. I thought about that, and I thought I might be even overdoing not mentioning technology.

You tend to be in trouble when you're driven by technology, as opposed to technology being a catalyst to enable you to do something else. But you really do have to understand the technology. And when I talked about that middle-management cadre of people who understood stuff, it was really important to have people who understood what the web could do, what it couldn't do, who could weigh the different clouds as the vendors make their offerings and say what you're doing. So technology matters, but it doesn't matter as much as what you're trying to do.

Mr. Seike: What are the plans for the future of FirstGov?

Mr. Wagner: The biggie is, I think, it's less so much a FirstGov set of plans. The FirstGov plans really boil around we've got the search engine substantially improved now over the way it was in the beginning. We're improving the taxonomies. We're working more and more closely with the states on how to tie that in because in fact the states have many of the same issues we have. For example, the U.S. government has 30 million documents online, the states have about 14 million documents online. There's a lot of working through making it better.

But the really important, I think, ties back to the various other cross-agency efforts and, frankly, agency-specific web

portal efforts.

How do you get feedback to be better? We're starting to deliver services over the web. You want to run that closed loop, not open loop. By that I mean you listen to what's happening, and then you adjust accordingly.

So I think we need to do a lot more work with the feedback side and better links back into the other cross-agency portals, like students.gov, or seniors.gov, or disability.gov. I mean, there are various of these websites all built around presenting the problem from this outside-in perspective rather than the inside-out perspective, as well as all those really important agency-specific websites to which we are handing off traffic coming via FirstGov.

Mr. Lawrence: Let me continue this discussion about management by talking about another interesting topic, which is the balanced scorecard. We understand that you're using the balanced scorecard to manage the operations of the ten units under you. Could you tell us about this?

Mr. Wagner: Okay. Balanced scorecard is a pretty interesting approach. What has historically happened with many organizations is the focus on things like the bottom line misses a lot of other things that are important. And what balanced scorecard fundamentally tries to do is discipline yourself to look at more than just a few things.

And in fact, in our case, I think we're nontraditional. I think there are supposed to be four perspectives, but we have five perspectives. But when you look at the things you're going to measure your performance on, you don't just look at the one thing, like customer satisfaction. That's important, but you want more than that perspective.

So what are our perspectives? Well, first is what do we measure from a stakeholder perspective? Our stakeholders are all the folks who are interested in management across the government as a whole. So there are measures from that perspective. There are also the measures from a customer's perspective. We have customers too. If they're happy or unhappy, that matters a lot. We also have internal business processes. Are those processes working well or badly? Very much -- that's another balance scorecard. Budget, keeping track of the money � fairly important to do. And finally, something that I think tends to have been neglected and is going to matter more and more, is the learning and growth perspective. Do your employees know what they need to know? Do they have the tools that they need to know? Are they the right tools for the right job?

So, what are the measures? How do you make sure that you aren't so caught up in making customers happy that you don't deal with longer-run issues like making sure that people will be able to make them happy in the future.

Anyway, we're managing using those five measures. It's, I think, more difficult for a policy organization than an operational entity because a lot of our measures tend to be how do you measure the effectiveness of a policy. It's a somewhat trickier question than, you know, cost per item produced or something like that. But we're finding it a useful way of looking at it.

I will give a suggestion to those looking at it. This is a really good way to look at your programs, but don't get carried away with it. It should be a simple way to look -- it should be a simpler tool for looking at what you do. And this is one way of looking at things, and it's a way of keeping balance. You know, find things that work and be prepared to change. Because what we also find is what we were sure was the right way to do things a year ago, turns out to have been wrong. And that's not bad. It just means you adjust and start working as you evolve towards a better way of managing.

Mr. Lawrence: Let me follow up quickly. When you say use the scorecard to manage, and you describe the different areas, how actually do you use it to manage? Is it the scores or the results in those five areas or is it driven down to a personal level?

Mr. Wagner: We're not as far along as that, to drive it all the way down to every individual in the organization. But basically, you have five perspectives and you look at -- you find things to measure in those five perspectives.

They should be things that encourage the behavior you want. If you want a behavior that you want customers to be satisfied, find a customer satisfaction measure of some sort or another to measure, and that's one of the things doing. If you want your folks to be educated on what they need to be educated on, find something to measure that leads you in that direction.

Mr. Lawrence: Well, great. It's time for a break. We'll be back with more of The Business of Government Hour in just a few minutes. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. And today's conversation is with Marty Wagner, associate administrator for the Office of Governmentwide Policy at the General Services Administration. And joining us in our conversation is Steve Seike, another PwC partner.

Well, Marty, let me double back on some of the management issues we were talking about in the last segment. Could you tell us about the linking budget to performance program?

Mr. Wagner: I guess I'll begin, since you're talking budget to performance -- I think I'm quoting Mitch Daniels, the new director of OMB, who said something along the lines of, "If you're not keeping score, you're just practicing." And I think some of the stuff we talked about on balanced scorecard earlier is if you -- things you measure, you'll get more of. And I think that's the first important point -- trying to measure something, and then move in that direction; understand those measures as step one.

Now, there's been a lot of, I think, discussion that gets almost religious about things called outcome measures and output measures and things like that. I think there's something about outcome measures that may bring out the worst in some people. But this is my take on the way we have to go.

First, an outcome is something that you really want to achieve. It's not necessarily what you produce but it's some measure of programmatic effectiveness that is as far away from the nitty-gritty outputs -- it's the higher-level things.

I think what we ought to do is figure out what are the outcomes we want, and then try to measure them. Then we also will be going -- we'll have programs that are moving in the direction to get those outcomes that we want. Those would be outputs that we do measure. Frankly, outputs is things we've done a pretty good job of measuring across a lot of it. We can count what we spend to do X or to do Y, or how many of them that we built, whether they be regulations or sizes or things like that. You can do your outputs. The problem is linking the outputs to the outcomes. And what I would suggest there is, rather than get into trying to quantify it too exactly, tell the story, that people can either believe or not believe, of why the things you as an agency are producing help achieve the outcomes you want to achieve. In my case, the outputs I would have might be things like regulations or accounting best practices or number of visits to a website or something like that. The outcomes I might want, or that I do want, are better management at an agency level. Well, I can't prove that because some best practice came out or that we developed performance measures that they're really making a big difference. But I think I can make a case of why the regulations or the guidance or the performance measures then being used by an agency has led to better behavior.

And the important question is, people can listen to that case, and they can believe it or not believe it and make their judgments. And that's better than being in this well, I can't measure anything or any measure that I have has to be so purely perfect that I can never achieve that. So that's kind of my take on that.

Mr. Lawrence: Marty, let's turn now and focus a little bit on the future. We're hearing this a great deal about the upcoming federal government retirement wave and the impact that that's having on agencies. How big an issue is that for GSA and the Office of Governmentwide Policy? And are you doing some planning and working on some solutions around that?

Mr. Wagner: It's probably the strategic issue for GSA and, I suspect, for most agencies. We have this building retirement wave coming in. I think we've got 90 employees that are currently eligible to retire or will be eligible to retire in the very near future, a significant percentage of the work force. And it's going to continue for a while. It's not so much Armageddon, but it's this rising issue that we're going to have to deal with. So how do you deal with it? Well, one thing is you try to retain people. And there are some financial incentives that you can use in that direction. There are also, frankly, some quality of life, quality of work things that you can offer.

A lot of what we have to offer in the government, frankly, is not salary. We actually can offer scope and opportunity to do things that are really significant. When I was working at EPA, which by now is probably 15, 20 years ago, I was, I guess, down the hall from someone, a GS-11 maybe, GS-12, a key guy working on billion-dollar standards, air quality standards. And he was the person doing all the modeling work. He had a major impact on a multibillion-dollar decision that the government made. Now, that's EPA. I was recently talking to a fellow who worked in GSA's Public Buildings Service, who told me about a job interview when he was a couple years in government and was thinking maybe he'd go into real estate for a company. And the companies that he was interviewing didn't believe what he told them he was doing, because nobody that junior, that lowly paid, would be in charge of projects that big. That's what we've got to offer. We have really good opportunities to make a difference. In addition, I think we've got, you know, good salaries and benefits. And we can have discussions about which areas -- information technology would clearly have some areas of being able to recruit the folks we need and that's going to cut into more than just those areas.

Mr. Seike: Well, speaking of young people, what kind of advice would you give to a young person who's interested in a career in public service?

Mr. Wagner: Pursue things that interest you that you think matter. I think that what public service offers you is a chance to do a wide range of things. And my basic advice was if you're interested in the environment, you ought to be talking to EPA. If you're interested in energy, you know, you've got the Department of Energy. If you're interested in the Treasury Department. There's just a wide range of things that you can do. So the first thing is find something that interests you. Second is move around. Don't stay in just one agency or one office. You move around, you may find that you like government a lot and want to stay, and you may find that you want to go work for PricewaterhouseCoopers, I suppose. I mean, those are opportunities too. You know, but there are your opportunities to do interesting things. And you should care about what you achieve. At the end of the day, if all you do is you're putting in time, you're just doing the job and getting paid, life's too short to focus on that. You ought to be happy that you're achieving something, whatever that thing could be.

Mr.Seike: Would you recommend the development of any certain special set of skills?

Mr. Wagner: Well, I think the � whatever skills that you like. I mean, some people want to be accountants; some, economists; some, engineers; some, marketeers. I mean, there's sort of -- you'll have the skills of the things that interest you. So I'd begin with that. The thing that you may not have thought of, though, is you need to stay current. You need to have the skill to learn a new skill. Half the things I do today I had no -- I knew nothing about only a couple of years ago. And that just keeps happening. So the key skill to learn is the ability to learn new skills and adjust.

Mr. Lawrence: Marty, let's turn now to another really hot topic, and that's the one of Internet privacy. How much involvement do you think that GSA will have in regulating privacy issues in the government going forward?

Mr. Wagner: Well, we're certainly not going to be a regulator of privacy issues, but we're certainly going to be a participant in working through the privacy issues. Privacy is one of those issues that tends to be often mixed in with security, and they are different. When we move to a more and more electronic government, we need to guarantee that we protect the privacy of our citizens.

Frankly, there are some probably larger issues in how the Internet is evolving, when you look at some of the privacy issues there. Simple one; you have a right to be anonymized, unless there's some reason that you need to identify yourself. If you go and pull down a tax form, no one's going to collect anything about you if you're downloading a tax form because that's our duty, is to make sure that that's private. If you are, however, let's say interacting directly with a government agency through the Internet, we have to guarantee that it is in fact you that we're talking to because that's private information.

We're going to be working through a lot of how you actually make that work. We haven't worked out all the answers, but since we have a collaborative model, we've got OMB and all the other agencies that we'll be working together with on solving that over the next few years.

Mr. Lawrence: Marty, I'm afraid we're out of time. Steve and I want to thank you very much for the conversation today. It's been very interesting.

Mr. Seike: Thanks, Marty.

Mr. Wagner: Thank you. Appreciate it.

Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation with Marty Wagner, associate administrator for Office of Governmentwide Policy at the General Services Administration. To learn more about our programs and research into new approaches to improving government effectiveness, visit us on the web at endowment@pwcglobal.com. See you next week.