Contracting

 

Contracting

Obama's FY 2011 Management Initiatives

Tuesday, February 2nd, 2010 - 18:23
Most of the news media focused on the size of the budget and which agencies gained or lost.  However, the budget also included an overview of the Obama Administration’s management initiatives, as well. The overall emphasis of these initiatives is on achieving defined mission-oriented results.  It de-emphasizes (but still addresses) improvements to mission-support functions and the reporting of performance information.

Cutting Contractors

Monday, December 21st, 2009 - 21:53
 OMB released a report today, “Acquisition and Contracting Improvement Plans and Pilots:  Saving Money and Improving Government,” which follows up on its July 2009 directive that agencies trim 7 percent – about $40 billion -- from their contracting budgets over the next two years by improving their buying processes.

Signs of Procurement Revolution

Wednesday, November 25th, 2009 - 0:51
The Senate confirmed Dan Gordon as the administrator of the Office of Federal Procurement Policy in the Office of Management and Budget.  He comes highly recommended by Steve Kelman, a former holder of this job who was acclaimed as an innovator.

Acquisition 2.0

Wednesday, October 28th, 2009 - 20:36
OMB yesterday released its latest guidance on federal acquisition.  This new guidance, Increasing Competition and Structuring Contracts for the Best Results, provides guidelines for agencies to move to more competitive and lower risk types of contracts, along with semi-annual reports on progress.

Bottom-up Procurement Reform

Tuesday, October 13th, 2009 - 20:04
There has been flood of memos and guidance on procurement reform coming out of the White House and OMB in recent months.  But an open call for ideas was launched earlier this month via a collaborative project being undertaken by the General Service Administration, the National Academy of Public Administration, and a joint government/industry group called the American Council for Technology/Industry Advisory Council.

The Insourcer's Apprentice

Thursday, October 8th, 2009 - 15:31
 Jeff Liebman is the Obama Administration’s point person for its efforts to cut service contract spending by 7 percent – about $40 billion a year – in part by insourcing work that has been outsourced to conractors, according to Federal Times’  Elise Castelli.  Liebman is an executive associate director at the Office of Management and Budget.

A Conversation with Admiral Thad Allen: Commandant, United States Coast Guard

Wednesday, October 7th, 2009 - 14:46
Posted by: 
With more than 218 years of service to the nation, the U.S.Coast Guard is a military, multimission maritime organizationthat safeguards U.S. economic and security interests. From

Admiral Thad W. Allen interview

Friday, October 2nd, 2009 - 20:00
Phrase: 
"I think the Coast Guard has got it right in our core values of honor, respect, and devotion to duty."
Radio show date: 
Sat, 10/03/2009
Intro text: 
Admiral Allen was selected by U.S. News & World Report as one of the 20 best leaders in 2005 for its America's Best Leaders issue.In this radio show interview, Allen discusses the: History and mission of the U.S. Coast Guard; U.S. Coast Guard's integration...
Admiral Allen was selected by U.S. News & World Report as one of the 20 best leaders in 2005 for its America's Best Leaders issue. In this radio show interview, Allen discusses the: History and mission of the U.S. Coast Guard; U.S. Coast Guard's integration into the Department of Homeland Security; National strategy for maritime security; Assessment of post-Katrina New Orleans; The future of the Coast Guard; and his Career in public service. 
Magazine profile: 
Complete transcript: 

THE IBM CENTER FOR
THE BUSINESS OF GOVERNMENT

THE BUSINESS OF GOVERNMENT HOUR

ADMIRAL THAD ALLEN
Commandant
United States Coast Guard

Speakers: Albert Morales, Courtney Bromley, Admiral Thad Allen

>> ALBERT MORALES: Welcome to another edition of The Business of Government Hour. I’m your host, Albert Morales. With more than 218 years of service to the nation, the U.S. Coast Guard is a military, multi-mission maritime organization that safeguards the U.S. economic and security interests. From the oil platforms of the northern Arabian Gulf to the interior rivers, to an increasingly open and accessible Arctic, the Coast Guard ensures the safety, security, and stewardship of our maritime domain.

Facing new challenges has required it to organize more efficiently and manages business practices more effectively. With us today to discuss the critical missions of the organization he leads is our very special guest, Admiral Thad Allen, commandant of the United States Coast Guard.
Admiral, welcome to the show. It’s a pleasure having you again.

>> THAD ALLEN: Thank you for having me.

>> ALBERT MORALES: Also joining our conversation is Courtney Bromley from IBM’s Public Sector Homeland Security Industry Team.

Courtney, welcome. Good to have you.

>> COURTNEY BRAMLEY: Thanks, Al.

>> ALBERT MORALES: Admiral, before we get started, could you share some of the rich and proud history of the United States Coast Guard, especially now as you celebrate its 219th anniversary?

>> THAD ALLEN: I’d be happy to. In fact, we’re kind of a unique product of the American revolution. Shortly after the revolution was over the country was mired in debt, and when the new government was established after the Constitution was ratified in 1789, Alexander Hamilton, the first Treasury secretary, found himself with a significant number of problems, huge debt, and not enough money to run the country.

The only revenue stream we had at that time were tariffs and duties being paid by goods that were being important into the country. And that was mostly British, and they weren’t paying, and they were smuggling.

>> (laughs)

>> THAD ALLEN: So being a very practice man, Alexander Hamilton thought the best way to combat that would be to create a fleet of very small, fast ships with what they called swivel guns at the time. They could go into shallow waters and run down British smugglers. So on the 4th of August, 1790 -- and we celebrate that this month -- a law was passed by the Congress that authorized the construction of ten Coast Guard cutters. They were cutters at the time. There was no Coast Guard, ‘cause that wasn’t created ‘til 1915, and that really was the beginning of our service, and we take that as our birthday.

>> ALBERT MORALES: That’s an incredible story. So even from its beginnings, the Coast Guard has had a -- is a unique organization in both a military and a law enforcement mission. So with this type of a broad mission, how do you optimize the organization to fulfill these roles, and can you perhaps give us an example of your ever-expanding mission suite?

>> THAD ALLEN: Sure, and you’ve really hit on the basic operational essence, or I would call -- the organizational genius of the Coast Guard, although I didn’t create it. And that’s the fact that we have what we call a dual character. We are at all times a law enforcement organization and a military service. And that really stems back from the post-revolutionary period. We disbanded the continental Navy after the revolution, and we almost had a quasi war with France in the 1790s. Those cutters that were built were the only ships, naval warfare ships that the country had. The Navy was reestablished in the late 1790s.
So from our early customs duties and our role as a military service, that has evolved for over 200 years, and that is the basis that makes us so valuable to the country. We have a peace time mission that is enduring, and we can operate with the Navy in times of war, and, in fact, in World War I and World War II we were shifted to the Navy for those combat operations.

>> ALBERT MORALES: So given these various roles, can you give us some of the core facts about the organization, perhaps the scale of the operations today, how you have it organized, size, budget, number of personnel, your geographic and global footprint?

>> THAD ALLEN: We have almost 42,000 people in uniform. We have about 7,000 civilian employees. We have a little over 8,000 Reservists. And one of our well-kept secrets -- and I’d like to probably publicize a little more -- is our over 30,000 volunteers of the Coast auxiliary who donate their platforms and time to help us. That said we have a rather large mission set. We have 11 statutory missions.

And while we hear a lot about border security and it’s very important, I am not sure it’s really well understood that if you take the rivers that provide access to the interior of the country, the Great Lakes and the coast, including Alaska, we’re dealing with 95,000 miles of Coast line, of which you can gain access to the United States. So if you spread 42,000 people across 95,000 miles, that’s still pretty thin.
That said, I think we provide an extremely high value to the country for the size of our force, so we are a multi-mission organization. Instead of having five ships to do five things, we have one ship that can do five things. But inherent in that is a little bit of a risk management process ‘cause you can’t do five things at once.

>> COURTNEY BRAMLEY: So admiral, within your specific responsibilities as the 23rd commandant of the Coast Guard, how does that relate and split your time between specific U.S. Coast guard responsibilities as well as the DHS mission?

>> THAD ALLEN: Well, I don’t think I would distinguish them. If you look at homeland security -- and the way I like to describe it is there are five domains that we have to protect to make this country safe, air, land, sea and space, and they’re all surrounded by what I would call cyberspace. And we have threats to our nation that move through those. We just happen to work in the maritime domain portion of that larger set that the department has to worry about.

So we’ve got the waterside portion of it, and it’s very, very important that we keep a balance between all of those domains because if you’re talking about threats to this country, whether it’s a terrorist attack or whether -- or germs, they don’t respect organizational boundaries, and there’s always a maritime slice to them.

>> COURTNEY BRAMLEY: So as you look to transition within the responsibilities between the Coast Guard and DHS proper, what are the three top challenges that you’re seeing that your agency’s facing and that you face as its leader?

>> THAD ALLEN: Well, I think the challenges I face as one of the components in DHS are the same challenges that all the component leaders would face as you put together an organization like this. I think the first one is when we transition for us out of the Department of Transportation, it’s to make sure that you’re able to continue to do all your statutory responsibilities.

And the fact of the matter is we have a lot of mission requirements that are probably considered by most Americans to be outside the scope of what they would consider homeland security. For instance, ASA Navigation on the Mississippi River, breaking ice in New England in the winter, and providing access to polar areas with ice breakers -- not considered homeland security, but part of our mission set. So being able to sustain all the statutory responsibilities we have by -- while also being effective in a department -- focuses on security as a challenge.

The second one is bringing a lot of mature organizations into a new department and then starting to integrate how they work together. And the first part of that is operations. And so you have Customs and Border Protection. You have Coast Guard. You have Immigration and Customs Enforcement, creating a process where we have a one DHS approach, or a whole of department approach, how we work, I’d say would be the second, and the third is integrating -- and you guys are really well aware of this -- integrating all the backroom processes, human resources, financial management and so forth.

>> ALBERT MORALES: Certainly not an easy thing to do with an organization of that size, plus the 30,000 volunteers, which I didn’t know -- that’s almost about the same size as the organization.

>> THAD ALLEN: They’re a tremendous asset to us, Coast Guard auxiliary.

>> ALBERT MORALES: That’s great. Now, admiral, the Coast Guard obviously has a very strong reputation for leadership development. Could you give our listeners a sense of your career path and how the Coast Guard has helped you develop your leadership skills, but more importantly, how critical are the concepts of strategic intent and mission focus to your leadership approach?

>> THAD ALLEN: Well, I think my journey through the Coast Guard is not materially different than a lot of folks, and it’s indicative of how we raise our young and grow leaders. We try to give responsibility as early on in someone’s career as we can do that, and it doesn’t matter if you’re an officer or an enlisted person.

My first command in the Coast Guard was as a lieutenant junior grade in 1974 in a Loran transmitting station. That was an electronic transiting station. It was located 500 miles north of Bangkok in the Golden Triangle in Northern Thailand. We were providing navigational assistance for military operations in Southeast Asia.

I was in my early ‘20s, and I had 35 people working for me. You know, I was 500 miles from my nearest commander. That’s about as close as you can get to (laughter) complete autonomy. And it makes you make decisions about whether you’re going to follow or lead, what kind of leader you’re going to be. And I think we cultivate that in the Coast Guard.

And for an enlisted person, it would be no different. We have third class bosun mates and second class bosun mates as boat coxswains that are operating -- they’re not even 21 years old -- that are doing search and rescue cases out there that -- we put an immense amount of responsibility on their shoulders. So I think it’s engrained in our operational model to give people the opportunity to have those experiences early on, and it pays off benefits later.

Your second question about concepts of strategic intent and mission focus -- as I’ve evolved my own leadership style over the years, I’ve tried to move away from talking about specific strategies or plans, ‘cause the minute you write them down, especially if you put a date on them, they become shelf ware (laughter) and they have a half life to them. What I try and get my people to understand is what is it we’re trying to do.

And then every day when you go out, whether you’re conducting operations or making business decisions or investment decisions -- to act with strategic intent. And if you get everybody focused that way where they’re all acting in the same type of lanes, focusing on what the organization needs to do, you don’t have to really reduce it to paper, but it has to reflect commonly shared values and goals.

>> ALBERT MORALES: And is that a concept which is easily understood by your staff?

>> THAD ALLEN: It’s the one that I’ve been hawking since I became commandant.

>> (laughs)

>> THAD ALLEN: When I became commandant in 2006, I laid out where I wanted the service to go. I didn’t tell them exactly how we needed to do it because, frankly, the details need to be sculpted by the people that have the responsibility if they’re going to have buy-in and be able to execute it. So I kind of said here’s where the organization needs to be and needs to go. You tell me the best way to do, and I may give you some course corrections, but frankly, the new, modernized Coast Guard that we’re building right now is being built by the people in the Coast Guard, and that’s the way it should be.

>> ALBERT MORALES: What about the Coast Guard’s modernization efforts? We will ask Admiral Thad Allen, commandant of the U.S. Coast Guard, to share with us when the conversation about management continues on The Business of Government Hour.

Part B:

>> ALBERT MORALES: Welcome back to The Business of Government Hour. I’m your host, Albert Morales, and with us today and in this segment discussing the Coast Guard’s modernization program is Admiral Thad Allen, commandant of the U.S. Coast Guard. Also joining our conversation from IBM is Courtney Bramley.

Admiral, your effectiveness as a military multi-mission and maritime service depends in no small part on some of the idea ideas about the way you operate. Could you briefly outline for us the Coast Guard’s principles of operations?

>> THAD ALLEN: I’d be happy to. Actually, we have them codified.

>> (laughs)

>> THAD ALLEN: We actually have a publication. We call it publication one, and it’s what we call our doctrinal pub, and it’s intended to be a summary of how we’ve evolved as a service with some of our history, but also how we operate. And I think there’s probably no better example of how we demonstrated our principles of operation probably than during Hurricane Katrina. One of the principles of operation is on scene initiative. And we expect people that have the capability and capacity to do something -- whatever the problem is. It could be search and rescue, law enforcement, or environmental response -- to apply everything they can on scene until they’ve exhausted all their means to do anything about it and then ask for more if they need it.

There are a couple other things that are involved in that too. We partner we stakeholders very well. And included in that is something we call the principle of restraint, and that goes clear back to the original tasking by Alexander Hamilton to the revenue officers that were created in 1790, and that’s understanding that when we’re working offshore boarding vessels we’re dealing with our fellow citizens, and they deserve to be treated with dignity.

And there was an admonition that he sent out to everybody to make sure that American citizens are always wary of government interference, and so we try and balance our need to conduct boardings into what we need to do out there with the fact that we are dealing with citizens and they do have rights. And so the principle of restraint’s very important to us.

>> ALBERT MORALES: So publication one -- there’s no doubt where that sits in the priority.

>> THAD ALLEN: That’s the reason it’s number one. Absolutely.

>> ALBERT MORALES: Now, the increase in maritime threats and the utilization of the maritime domain has required you to be more adaptive and responsive to threats and hazards. Could you give us an overview of some of the core areas of modernization, and what are the fundamental objectives of this modernization program?

>> THAD ALLEN: When I became commandant in 2006, actually, before that in the fall of 2005 when I was interviewed by Secretary Chertoff to be the commandant, I proposed to him that if he proposed to the president to nominate me for commandant that I was going to undertake some sweeping changes in the Coast Guard.

That ultimately has become known as modernization. I started out by outlawing transformation --

>> (laughs)

>> THAD ALLEN: -- ‘cause I thought it was used too many places and I’m not sure I knew what it meant. But we finally through exclusion came up with the term modernization, and it involves a couple of things. It involves taking a look at our command and system and whether or not that’s effective enough to support mission execution. And then it looks at mission support, and these are the business processes to make sure that they are enabling mission execution.

And for many, many years we’ve wrestled with some very, very tough problems, both in command and control and in logistics and maintenance and mission support, and my goal was to put that all together in a comprehensive plan on how to reposition the Coast Guard so we’d be more flexible and agile moving into the 21st century. And also, to be capable of sensing more nuanced changes in mission demand and demands for our services, which I think we had lost a little bit after 9-11 with the focus on security. So it really is an effort to create a change-centric organization that’s more adaptable.

>> ALBERT MORALES: Admiral, it’s clear that your strength is in your historic culture and the character of the Coast Guard that has made it simper paratus, or always ready for the past 219 years. It would be interesting to know -- how have you leveraged the rich tradition and history of the Coast Guard to maximize the effectiveness of your modernization effort today?

>> THAD ALLEN: Well, there have been many times in the history of the Coast Guard where we have adapted to change and made significant changes in reaction to our operating environment, our introduction to technology. And I think sometimes after a couple of generations we forget it. And as I told my people, sometimes we lose the courage to believe ourselves.

And I’ll give you a couple of examples. One was in the late 19th century when we had a fundamental decision to make basically to shift from sail to steam. New technology. It was not well understood. A lot of people weren’t in favor of it. We kind of pioneered shifting the patrols off this coast from sail to steam.
Probably the biggest game changer short of what’s happened in the last 20 or 30 years with information technology was the introduction of wireless telegraphy. A lot of people don’t realize it, but we were the first to use wireless ship to shore telegraphy in support of law enforcement operations, and that was done in the late 19th century up in Puget Sound against the opium in Chinese illegal migrant trade.
We know how to do this. We have to create an organization in the future that continually remembers it and doesn’t have to reinvent it and lose a generation.

>> ALBERT MORALES: That’s interesting. So you’ve always been at the forefront of some of the major industrial shifts in our country.

>> THAD ALLEN: We tend to organizationally get comfortable in laps. You know, what I’d like to do is create a Coast Guard where we continually remember that are continually sensing our environment and changing incrementally rather than gathering it all up into every ten or 15 years, have to do chainsaw surgery.

>> COURTNEY BRAMLEY: So admiral, to that point, with most modernizations that have been successful, the reason they’ve been successful is because the success criteria has been defined up front and in the beginning so that people know which direction they’re going. What’s the definition of success for you with your modernization effort, and are you -- how are formally tracking that in terms of the organization’s performance and progress?

>> THAD ALLEN: That’s a great question. I kind of used a nautical metaphor when I became commandant. I proposed what I wanted to do to Secretary Chertoff. He understood that. I was nominated by the president and confirmed, and when I became commandant -- when a new commanding officer comes on board on ship, he usually issues what’s called a commander’s intent.

And so I kind of used that metaphor. I issued ten commandant intent action orders that cover everything from looking at our acquisition program and how we’re managing the Deep Water project to achieving a clean financial audit, to taking a look at our reserve program. And I issued those ten intent orders to establish the top-level goals or framework that we needed to drive towards.

That ultimately was transformed into four basic organizational changes we had to make in the Coast Guard, had to do with our command and control system, our mission support system, and how we organize a Coast Guard headquarters support to field. So all that has been laid out with goals and milestones, and we’re well on our way to achieving it.

>> COURTNEY BRAMLEY: You mentioned Deep Water, commandant. For our listeners’ benefit, the Deep Water program is the effort to upgrade an overhaul the Coast Guard’s Deep Water sea and air vessels. And as we know, with any contract for complex products, they are risky for both buyers and sellers in the acquisition of those products, such as ships, planes, helicopters. They require very sophisticated contracting approaches.

To that end, are there key lessons learned from such a large, complex contracting effort as Deep Water?

>> THAD ALLEN: Oh, I think there are a number of lessons to be learned. If I could give a little bit of a historical context, in the early 1990s we understood right then that we were looking at block obsolescence of a number of our assets and platforms in about ten or 15 years. This has to do with the age of our cutters, the current state of technology of our sensors and communications equipment and the aircraft that we were operating.

After a lot of thought and knowing that we were working in a very constrained fiscal environment regarding new capital investment, we came up with the idea to use a systems integrator and purchase an operating system, as opposed to a specific platform. And the term we used at the time was system of systems. And we said if you’re going to operate more than 50 miles offshore, there’s going to be some kind of a mix of sensors, aircraft and surface craft. If we gave you the problem statement of what we had to do out there, what would you build, they didn’t presume a one-for-one platform replacement.
And to that end, we ordered a contract-integrated Coast Guard systems, which was basically a joint venture of Northrop Grumman and Lockheed Martin. I don’t believe the concept was bad. I think we failed a little bit in execution. In fact, we failed in some cases very badly in execution.

One of the things that I learned out of this -- and I was a -- I was on staff at the time -- was in making decisions -- was that if you’re going to have an integrated Coast Guard systems and a lead systems integrator to do that for you, you really have to have an integrated Coast Guard. You can’t have stovepipes.

And what we -- what happened was we weren’t able to interface with the contractor the way we should have and put the proper controls over -- and we are now changing that contract feel and kind of splitting it apart and becoming the lead systems integrator ourselves, which is in kind of keeping I think with the current political oversight we’re getting, and I don’t have any problem with that. And I think we’ve learned a lot from it, but a lot of the lessons from Deep Water are what I incorporated into those (indiscernible) and ten action orders are how I thought we needed to reorganize and modernize the Coast Guard.

>> ALBERT MORALES: So as a follow-up, how have these lessons informed your efforts to reorganize and reform the Coast Guard’s acquisition enterprise, and specifically, to what extent does the recent Sentinel project become a model for current and future Coast Guard acquisition programs?

>> THAD ALLEN: Well, I’m glad raised you the Sentinel contract award. That’s what we call our fast response cutter, which is going to be the place -- replacement for our patrol boats. Originally, under the Deep Water contract we were going to extend the life of our current patrol boat fleet in the -- some point by patrol boats in the future. That particular portion of extending the life of our patrol boat fleet did not work for some technical reason. We didn’t have performance out of the hulls, and actually, I terminated the program and laid the ships up.

That meant we had to accelerate the patrol boat replacement and do it rapidly, do it quickly, and do it correctly. We took the award of that contract back into the Coast Guard and basically assumed the role of the systems integrator ourselves and how that patrol boat would fit into the larger system. We recently awarded that contract, and it actually stood up underneath a protest to the general accounting office and actually a judicial review too, so we think we’ve got it right. We did it right. It was openly competed, and we’re in the process of building the first ships. So we think we’re moving on in the right direction.

>> ALBERT MORALES: Excellent. And when’s the first ship going to be put to sea?

>> THAD ALLEN: In about a year.

>> ALBERT MORALES: Oh, excellent. Good. Admiral, one of the persistent set of challenges across government has been the recruitment development and retention of highly qualified people in the workforce, and specifically in the acquisition area. How are you addressing these challenges, and what are some of the core strategies being employed to enhance your acquisition workforce?

>> THAD ALLEN: You’re hitting on a real key challenge and not just for the Coast Guard, but I think for the entire government. If you hear what’s been discussed with the new administration and the 2010 budget leading -- including the Quadrennial Defense Review and the 2011 budget. A lot of focus on how well acquisition systems are performing, what we’re doing about programs that have cost overruns and requirements that have not been checked. And a lot of that contributes to some of the earlier problems with Deep Water.

One of the things we had to do was basically change our human resource system related to our acquisition programs, and we’ve done that. And that includes a lot of things, first of all, includes just plain resourcing, putting enough people in there to do it, getting the people certified at the right program management levels, technical certification where you actually have acquisition professionals doing this. You’re not assigning people with good intentions and a lot of experience.

But retaining that workforce is very, very difficult because with the changes in the Department of Defense and elsewhere, everybody’s going after the same people in town. And you have the potential in some cases of having a bidding war for people. So you’ve got to do a couple things. First of all, you’re going to keep them if they have a good work environment and they have rewarding work, and I think we’re there with our acquisition directorate. The second thing is expediting some hiring authorities, and we’ve had some regulatory relief within the Department of Homeland Security that’s allowed us to do that.
But in the long run, I think what you have to do is have -- procure -- career progression, offer training opportunities, and make them feel they’re apart of a team. We’ve been successful in getting some very, very seasoned professionals that have been in the ship building community for quite awhile, and our Senior Executive Service in the Coast Guard in my view have been the major key to the turning around of our acquisition program and the maturation to the point where we can do things like the Sentinel contract award.

>> ALBERT MORALES: So do you see some of these lessons and practices extending to the other components within DHS?

>> THAD ALLEN: Well, I think across the acquisition programs -- I think you’re going to see it across government, ‘cause there’s a real premium being placed right now to bring a lot of contracting in-house, to take a look at the different acquisition programs and how well they’re being done.

But moreover, we’re seeing this across programs inside the Coast Guard. We’re having a similar issue right now with our Marine safety program where you really need technically qualified people to do ship inspections and make sure that ships and waterfront facilities and so forth are being operated properly. And we’ve -- developing a similar human resource plan to help us source that as well.

>> ALBERT MORALES: Great. How is the U.S. Coast Guard employing social networking tools to collaborate? We will ask Admiral Thad Allen, commandant of the U.S. Coast Guard to share with us when the conversation about management continues on The Business of Government Hour.

Part 3

>> ALBERT MORALES: Welcome back to The Business of Government Hour. I’m your host, Albert Morales, and with us today and in this segment discussing the Coast Guard’s successful use of social networking tools is Admiral Thad Allen, commandant of the U.S. Coast Guard. Also joining our conversation from IBM is Courtney Bramley.

Admiral, I understand you’ve been at the forefront of using Web 2.0 and social networking technologies to improve cooperation across government and to solicit greater public feedback on opportunities. Can you give us an overview of the Coast Guard’s social networking efforts, and how would you assess the organization’s use of these media tools?

>> THAD ALLEN: Well, I’ve been kind of following the evolution of both social networking theory and information technology for quite awhile, and a little over a year ago it became very apparent that our new digital natives were coming into the Coast Guard, were coming from a different social atmosphere, if you will. And I had a long talk with my staff, and we decided to start a series of -- I would say experiments that kind of took hold and became permanent operations.

A year ago -- April -- we actually set up a Facebook site for me just so I could experiment with what was going on. That became so popular that I needed an official face, not a personal face of the Coast Guard to do that. So we created an official commandant’s Facebook site where you sign on as a fan rather than a friend so we could manage that a little better.

The real breakthrough, though, came last fall when we completely changed the webpage where I’m representing -- they call it Commandant’s Corner, and we actually established a commandant’s blog called I-Commandant. And we’ve been up and operating on that, and we have well over 300 posts that have been made to that to date.

It is a way I can communicate with the general public and my own people on strategic issues while I’m traveling, trying to focus on things that are important, have guest people come in and post, and try and experiment myself and that prove to people that you can risk going out and doing that, and it really doesn’t kill you. I wouldn’t say it wasn’t much to the chagrin of some of my staff and probably my wife at the time, but --

>> (laughs)

>> THAD ALLEN: -- we found out that it’s been a terrific way to expand the discussion, create more inclusiveness about what we’re doing, solicit stakeholder input, and move well beyond some of the traditional homepages that we had seen in the past. It’s still a work in progress. It’s still going to evolve.

But we’re very encouraged by where we’re at right now.

>> ALBERT MORALES: So you used the word risk. From your perspective, to what extend does -- these -- do these tools, such as a Facebook and/or a Twitter perhaps introduce new issues in terms of how they’re used or the policy implications of their use?

>> THAD ALLEN: Oh, there are a couple of different facets to that. One of them is when you have these tools, how does it apply to people in terms of ethics, what you can legally talk about, protecting personal information? And then there’s a separate issue related to information systems technology and security in how you want to protect your systems.

Regarding the former, in the Coast Guard we have generally had a policy in the past that -- where we’ve said if you know about it, you can talk about it. And that means that if you walk off of a small boat and you’re a coxswain, you just did a search and rescue case and somebody wants to interview, you’re good to do that. You’re not good to talk about the budget in Washington because --

>> (laughs)

>> THAD ALLEN: -- you don’t know about that.

>> ALBERT MORALES: Sure.

>> THAD ALLEN: And the same thing with all of our people. That’s pretty much the way we do a social media. There’s a couple of differences though. The Internet is forever. It’s like plastic. It doesn’t biodegrade. Once it’s there, it is there. And there’s a premium placed on anybody that gets on the Internet. The responsibility for validating the veracity of what you’re seeing lies with the reader. You really don’t know how this stuff gets on there. And so there’s a -- there’s some differences about how you deal with it.

We put out some guidance to our people. We have not stopped them from using social media. The only time they’re constrained about using social media are the business rules associated with it, and you can’t use, you know, personal names, identification and so forth. There are some operational security issues. There’s some things you can’t talk about.

The real issue in the Coast Guard right now, the one I hear about most, is they can’t to places like Facebook from their work stations at work. And the fact of the matter is we operate in the dot mil domain, not the dot gov or the dot com domain. And because of that, we have some significant security issues about malware being introduced into our operating networks. And so there are going to be some places where we’re never going to be able to sit at our computers and go directly to Facebook, but we can create ways to do that and still have -- people have access to that.

So the way I do it is -- you can find my content inside the dot mil domain, but we also roll that over and post it on Facebook so you can see it both places.

>> ALBERT MORALES: Interesting. So you really -- you’re not restraining its use at all. You’re actually embracing its use and putting some business rules around it.

>> THAD ALLEN: Business rules and then the whole issue of network security.

>> ALBERT MORALES: Now, along those lines, you’ve recently released your C4-IT strategic plan for 2009 to 2013. And it highlights a number of challenges. Included among them is increasing threats to networks and information. Could you tell us more about your efforts around cyber security and the protection of your network and information assets?

>> THAD ALLEN: Sure, I’d be happy to, and it kind of relates back to the earlier statement about social media and the ability to access those. We have a very efficient, well organized and well operated network operation for the Coast Guard, and we manage that ourselves. And again, it’s in the dot mil domain. Having said that, with the issues we have with cyber security right now, the entire Department of Defense is actually moving towards an integrated approach to cyber security, and we’ll be establishing a separate command to focus on cyber security under the U.S. Strategic Command.

We have to follow the lead because we are part of that organization, and that includes taking our points of presence on the Web and making those what we would call trusted Internet connections and also make sure that we’re providing a level of security that is commensurate with everybody else, ‘cause if you get in one place, then you’re in everywhere. And we are doing that as well.

That holds us probably to a higher standard than other folks that are working on the Internet, but it’s necessary to maintain the security of our systems, and we’re focused very much on that and aligning with -- this is one of those cases where we’re aligned with the Department of Defense because we are in the dot mil domain.

>> ALBERT MORALES: Sure.

>> COURTNEY BRAMLEY: Admiral, switching gears -- the Arctic region’s a prime example of the importance of the world’s oceans. Could you tell us more about the Coast Guard’s efforts in the Arctic region, and specifically, what value does the Coast Guard operating in that region bring to the country?

>> THAD ALLEN: Well, we’ve traditionally operated in Arctic regions, but the requirement for our services is changing dramatically. The biggest change we’re seeing right now is the retreat of the ice in the summer -- is retreating further to the North Pole than it ever has in recent history. And in the winter it’ll freeze back down through the Bearing Straight, but we’re seeing more open water where there didn’t used to be, and there’s significant implications to that for the Coast Guard.

First of all, we have authorities and jurisdictions in the territorial sea and the exclusive economic zone. To the extent that those are up there and no longer ice covered, any problem we would have down in the lower 48 we would have up there as well. And that includes things like managing fish stocks and enforcing fisheries laws, search and rescue, environmental response, law enforcement and so forth.
So the challenges we’ve seen in the last three years is a more expansive, open water up there in the summer and the need to be able to have some kind of a way to respond. And what we have done for the last two years -- and are doing it this year for the third year -- is moving helicopters, small boats and cutters up to the north slope of Alaska to provide not only a presence, but to start testing the capability of those platforms in that environment to see whether they’re the right ones.

And we’re finding out that what we’ve got that operates down in the lower latitudes isn’t necessarily what we need up there. So this is an ongoing process, and it’s also going to inform us about where we need to go with our ice breaker fleet. We operate three ice breakers for the United States. We are the only ones that operate them. Two of them are over 30 years old, and there’s a public policy question looming about what to do with the current status of those ice breakers or whether or not they should be replaced.

In addition, our ice breakers that operate up there are supporting scientific research that ultimately will be used to support claims on the continental shelf for oil and gas for the United States.

>> COURTNEY BRAMLEY: So I understand, you just came back from a trip to that region with members of the administration. Could you tell us what you’ve learned?

Over the past three years we've been deploying units to the North Slope of Alaska and over into Nome to test the capabilities of our platforms, our aircraft and our small boats because we have open water up there in the summer and we also have our statutory responsibilities that we have to carry out.

This summer was a little unique in that we had an extraordinary opportunity on two accounts. I was able to engage members of the new administration and got on qualified interest in going up and learning more about the Arctic. And that was combined with the fact that the President in June signed a memorandum that created an interagency task force on ocean policy. And the two kind of came together as we planned our trip to the Arctic.

It actually came about when I had met Carol Browner at a social event in town and we started talking about the need to go to the North Slope. The people that went on the trip with me were Nancy Sutley is a chairman of the council on environmental quality; David Hayes, a Deputy Secretary of the Interior; Jay Reich who is the Deputy Chief of Staff to the Secretary of Commerce; Jane Lubchenco who's under Secretary of Commerce and administrator of NOAA; and Heather Zichal who's a Deputy Advisor to the President for energy and climate change. To be able to get those people in one aircraft, get them up there and have a concentrated week to be able to look at the implications of climate change and what's going on in the Arctic was an unprecedented opportunity.

Well we'd already known a couple of things from our prior deployments, about some of the limits of our operating assets up there. Helicopters that don't have deicing capability, small boats that are hard to launch and point barrel and things like that. This time we learned some new things and I think it was a very eye-opening experience for all of us.

Went out to some very small isolated villages in Alaska where we had been deploying them by helicopter and bringing in physicians, a dentist, veterinarians to take a look at some of the animals that were there, and the impacts of erosion on some of these coastal communities where they were previously protected by ice are now subject to large wave heights and wind-driven waves clear from the top of Siberia to Alaska to the point where it's threatening villages along the Bering Sea and the Chukchi Sea.

>> COURTNEY BRAMLEY: As we know, the Coast Guard must combat the potential threat of hostile watercraft coming close to the U.S. ports. How is the Coast Guard tackling these types of threats in securing our ports, and what technologies factor into this threat remediation?

>> THAD ALLEN: You’re talking about one of the really daunting challenges I’ve had as commandant. When I became commandant, I kind of told Secretary Chertoff at the time -- and I’ve told Secretary Napolitano as well -- we need to have a discussion about what constitutes an adequate maritime security regime for the country. We talk a lot about the land borders and we understand that. We talk about container security.
But if you take a look at the water-borne portion, we have immense amounts of coastline that are basically unsurveilled and are open, and how are even to tackle the problem? We’ve done it sequentially since 9-11 in a couple different ways. Prior to 9-11, if you were a commercial vessel calling on the United States, you had to give a 24-hour advance notice of arrival. That would allow us to take a look at the crew list, the cargo, vet it, and see if we needed to do anything like boarding offshore. Customs was doing that too.

Following 9-11, we created a requirement for a 96-hour advance notice of arrival, and simultaneously now the crew list, the cargo, the manifest, and all the information about the vessel and its cargo and crew have to be submitted and are screened between Coast Guard and Customs, and we can actually target vessels for boarding offshore if we think we need to do that.

The problem is this really only applies to vessels that are greater than 300 gross tons ‘cause that’s the cutoff for international regulation of shipping. And we’re talking about vessels that are somewhere -- anywhere between 65 to 75 feet in length. And they are governed under -- by the International Maritime Organization, which is a subset of the United Nations.

The challenge -- in my view, the biggest challenge we have right now is what to do with the vessels that don’t fall within that category. They’re required to carry transponders, tell us where they’re at, and give notice of arrival. And those are classic small boats, and they come in three categories: recreational boats; fishing vessels; and small, unexpected tow boats and work boats.

We’ve been having a conversation for the last two years with the American public about what to do about that, and this is probably one of the most vexing and complicated issues I’ve dealt with as commandant because these are communities that are not used to having regulations or constraints put on their operations, and this is a very, very fundamental issue for them freedom of movement on the water.

>> COURTNEY BRAMLEY: So a follow-up, will you tell us more about your efforts to develop that comprehensive, small vessel safety aspect, and specifically, how does it factor in to your efforts at enhancing the Marine safety program?

>> THAD ALLEN: Well, the discussion is how to create awareness of who’s operating in and around our waters, and then be able to sort and determine if there are any targets of interest out there that you want to deal with ‘cause they present a threat. If you look at the concentration of recreational vessels around let’s say the Port of Miami on a summer day, or even up in Great Lakes off the upper peninsula of Michigan, the challenge to understand what is out there, if there is a problem and deal with it, is fairly daunting.

And again, I talked earlier about the principle of restraint that goes clear back to Alexander Hamilton and respecting the rights of our citizens. So we’re trying to have a balance there. One way you can do that is talk about -- should you carry locator beacons? And there’s been significant resistance by these communities to doing that because it’s -- they feel it’s an invasion of their privacy and their autonomy on the water.

You will find other countries in the world that have carriage requirements for transponders, very much the same way we would for small aircraft, other parts of the world, but that is a very, very tough issue to talk with out recreational boating community about. But the other areas about -- other areas where you shouldn’t have small boats at all because there’s reason to recreate there.

And I think those are the conversations we need to have moving forward. I would tell you also there’s an enduring issue about the safe operation of recreational boats. We don’t have uniform licensing standard between states, and in some cases, there are no licenses required. And I think it would be very, very -- a good idea to have the same type of standards applied to all the states and territories about who can operate a boat and how they should be certified to operate a boat.

>> ALBERT MORALES: I would imagine there’s a cost component of this also in terms of -- when you talk about the locator beacons, that folks are resisting the incremental costs associated with that.

>> THAD ALLEN: The cost is raised, but I think ultimately, just like GPS receivers, which are now embedded in our phones and everything else, I think if there was a requirement -- develop a -- I don’t think cost would be an issue. I think the real issue is privacy, the ability to move on the water, and people want to go out and be by themselves on the water, and it’s a strongly held value in this country, and I understand that.

>> ALBERT MORALES: So earlier we talked a little bit about the modernization of the Deep Water vessels. We talked a little bit about the in-shore boats and the ice breakers. It’s been said that the Coast Guard has become over the years an aquatic holding company with many facilities dating back to the 1915s. What are your plans to evolve and transform the shore-based infrastructure and forces?

>> THAD ALLEN: Well, that’s an interesting question, and the first time I ever heard aquatic holding company, what you obviously have found as well was -- a consulting company did a review of the Coast Guard on what to do with all the vessels we had after prohibition was lifted. (laughter) It was a fundamental transformation the Coast Guard had to go through ‘cause we had taken Old Navy to storage. We were doing everything to stop rum-runners, and all of a sudden there wasn’t a mission anymore.
The fact of the matter is no matter what needs to be done on the water, if it’s not defense related and it’s wet, we usually get it.

>> ALBERT MORALES: Mm-hmm.

>> THAD ALLEN: And the issue is to create multi-mission capability that can be applied in different operating scenarios to produce mission effects for the country. And what we’ve tried to do is keep maximum flexibility in our operating assets. And as I said earlier, we like to have cutters, people, aircraft and sensors that can do more than one thing, that can be diverted to a new mission, should we need to do that, or a higher priority.

So we put a very high premium on designing in to our platforms no matter what they are. The capability would be used across a wide range of mission sets. And that is a hallmark not only of our ships and aircraft, but our people.

>> ALBERT MORALES: Switching gears a bit, but somewhat related to this topic of flexibility, how has the integration into DHS impacted the Coast Guard, and specifically, what have been some of the critical macro issues related to this integration? But I’d be more curious on -- how has the unique leadership style of the Coast Guard influenced the broader DHS?

>> THAD ALLEN: Well, I think it’s a really great question. When you talk about the Coast Guard and where we’ve been over the lifecycle of our organization, we’ve actually been in three departments. We were created in Treasury in 1790 and stayed there until 1967 when we moved to the Department of transportation and then moved from transportation to Homeland Security in 2003.

What we have found out in the course of our history -- and I can go -- you can go back and read this in the history books. We’re never a perfect match. If you took our mission set and put it in a VIN diagram -- and then our department -- there’s always -- there’s never going to be two concentric circles sitting on top of each other.

I believe, however, in homeland security is the closest fit we have found in the history of the organization to the bulk of what we do out there. But it has not been without some controversy. A lot of folks feel that the transportation related work that we do for the maritime transportation system, our marine safety mission, things we do to make sure that commerce moves in and out of this country somehow might not be addressed properly with a focus on security.

That’s the reason we recently instituted a marine safety improvement plan to take a look and make sure that we weren’t losing connection with our stakeholders, and we -- done a lot of work on that in the last couple of years. But I think one of the great benefits -- and I was actually asked this in a hearing a year or so ago. I was openly questioned by a member of Congress so what was so good about being in the Department of Homeland Security? And I looked -- I say up to my full height. I looked at him. I said, well, we get our budget on time.

>> (laughs)

>> THAD ALLEN: Now, that may seem like a small thing, but in the past there’s been a political premium to be paid by not funding the Department of Defense, and Homeland Security has been there. And we have gotten our budget on time more often in the Department of Homeland Security than we have any time that I’ve been in the Coast Guard. So there is a benefit there.

I would say the other thing is I think we bring a lot to the table in terms of the maturity of our organization. I was asked after Hurricane Katrina at a hearing one time about FEMA, and what I say is FEMA is a better organization ‘cause they’re in a department with the Coast Guard, and the Coast Guard is a better organization ‘cause they’re in the department with FEMA, and I think there’s a tremendous amount of synergy.

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

Part D

>> ALBERT MORALES: Welcome back to The Business of Government Hour. I’m your host, Albert Morales, and with us today and in our final segment discussing the future of the Coast Guard is our very special guest, Admiral Thad Allen, commandant of the United States Coast Guard. Also joining our conversation from IBM is Courtney Bramley.

Admiral, I’m sure collaboration is critical to the Coast Guard’s mission. So with this, how is the Coast Guard enhancing coordination and collaboration among the components of DHS and DOD and, in particular, with the U.S. Navy?

>> THAD ALLEN: Well, I can tell you unequivocally that there’s no finer partner in the world to operate with than Gary Roughead, the chief in Naval Operations. And I would tell you the same relation existed with Admiral Mike Mullen before he became chairman of the Joint Chiefs of Staff. We’ve had an evolving relationship with the Navy for over 200 years, but I would tell you in the last ten or 15 years it has never been stronger.

A lot of it had to do with my predecessor, Admiral Jim Loy and Jay Johnson when he was the chief of Naval Operation coming up with something they call the national fleet concept, which -- when you look at the naval forces of the United States, you don’t look at a Navy and a Coast Guard and a Marine Corps. You look at all of them as a combined naval force. And so you need to look at high-end Coast Guard cutters and low-end combatants, and how does that all come together in a national fleet concept?

That has played out over the years. We have routine meetings with the Navy -- I mean, with Gary Roughead -- quite a bit, but we’ve actually expanded that now, and it’s not only Gary Roughead, but it’s General Jim Conway, commandant of the Marine Corps, and we have -- actually have a -- three-way conversations. That culminated, at least on my watch, in the fall of 2007 at the International Seapower Symposium in Newport, Rhode Island where the three of us stood on a stage and rolled out a 21st century maritime strategy for the country that for the first time had all three signatures on it, and that was a first -- that was a precedent in the history of the United States.

>> ALBERT MORALES: So staying with this theme regarding your international partnerships, how does the Coast Guard bring unique value to this collaboration?

>> THAD ALLEN: Well, in two ways. First of all, we’re in high demand from the geographical combatant commanders to assist them in what’s called theater security cooperation. And what I would say there is that when you get down below the ten or 15 largest countries in the world, most of those nations aren’t trying to project naval sea power. Most of those nations’ national security concerns -- at least in the maritime area -- have to do with fish stocks, illegal migration, drug smuggling, oil and offshore oil, gas exploration offshore.

Those all call for the requirements of a Coast Guard or a Coast Guard-like organization. I have never seen the relevancy of the Coast Guard or Coast Guard-like agencies hire globally than I do right now. And there’s a great demand for us to go out and work with nations that have emerging requirements to create Coast Guard-like functions.

The second issue would be -- we have over the years developed two very, very successful collaboration foray. One is the North Pacific Coast Guard Forum. The other one is the North Atlantic Coast Guard Forum. The Pacific Forum is over ten years old. It includes the United States, Canada, Russia, South Korea, Japan and China. We recently hosted the -- a meeting last fall in San Francisco. It was our turn to host.

Through that foray, we collaborate multinational operations. I’ll give you a good example. Last year we actually seized a vessel that was illegally fishing in the Pacific, long gill nets that are basically outlawed internationally. That was accomplished by Japanese and Canadian aircraft patrolling, queuing up sightings, passing that to a U.S. Coast Guard cutter that had a Chinese ship rider on board that was empowered to enforce Chinese law that resulted in the detention of the ship and escorting it to China.

>> COURTNEY BRAMLEY: Admiral, I know you’re a proud graduate of the United States Coast Guard Academy. Can you talk about how valuable you believe these service academies are in building the strong and competent future leaders that we have across the military services and their training to meet the challenges and threats of this ever-changing world?

>> THAD ALLEN: Well, I think academies have a great role to play in all the services, and, in fact, we have a good collegial relationship. As you know, there’s a lot of rivalry between the service academies, but in general -- they were originally established, frankly, as engineering schools to produce engineers for the services. West Point was originally established to create Army engineers.

We draw a lot of talent in the engineering fields from our academies. Now, that said, I think we have a larger challenge today, and that’s the diversification of our officer corps. And when I talk about diversity, I’m talking about ethnic and gender, but I’m also talking about -- by backgrounds and accession points.
So we need the Coast Guard academy to produce people that have a strong background in engineering disciplines, but we also have an officer candidate school. We take direct commissions for lawyers and so forth. And we have some programs with universities where we take folks that are entering their sophomore year and we actually bring them into the Coast Guard as enlisted people, pay for the last two years of school, and then bring them into the Coast Guard.

What that creates overall is what we like to call cognitive diversity, and that’s a variety of viewpoints that can be brought to bear, increase fidelity and the robustness of what you’re trying to do as an officer corps. And the other part of it is the fact that we are trying very, very hard to increase the diversity at the Coast Guard Academy.

We are doing well at increasing minority representation. We’re doing very well with the representation of women, anywhere between 25 and 30 percent, any particular year there. But the under represented minorities at the Coast Guard Academy are a challenge for us right now, and we have taken that on as a significant cause, that we need to increase the number of minorities at the Coast Guard Academy.

>> ALBERT MORALES: Now, admiral, I understand that your four-year term expires in May of 2010. How would characterize the evolution of the Coast Guard and envision the Coast Guard over the next few years, and what would you like your legacy to be as you look beyond your tenure?

>> THAD ALLEN: Well, it really relates to repositioning the service to be more flexible and agile in our current operating environment. And as I mentioned earlier, the modernization that we’re going through right now is not intended to achieve a specific goal, although there’s a set of objectives that has to do with maintenance and logistics, command and control, finance and so forth.

Those are only the work items at hand. What I’m really trying to do is create a change-centric organization that continually adapts to its environment.

And that really is a much more daunting task that what it would appear. You can go through a work list and complete it, but to take an organization, say we’re going to change how we think, how we act, how we interact with our environment, and fundamentally change our business processes is really what we’re doing right now.

If there was an enduring -- any legacy that I would like to have in the Coast Guard, it would be that we moved substantially towards creating a Coast Guard that was capable of sensing changes in demand signal and reacting to that and being proactive and out in front in not dealing with latent indicators that need us to realign our resources and do what this country needs us to do.

>> ALBERT MORALES: So admiral, you’ve enjoyed a long and distinguished career serving our country. What advice would you give to a person who’s out there perhaps thinking about a career in public service, but in particular, maybe a young person who may be interested in the Coast Guard?

>> THAD ALLEN: Well, for public service in the Coast Guard in particular, I think there are a couple of things. First of all, in public service you have to have a propensity to serve. That may sound like a trite statement, but you have to have an orientation where the satisfaction you’re going to get in life moves beyond just the salary, which is always going to be modest in public service, but extends to something where the psychic income you’re getting is because you’re attached to something that’s much larger than yourself.

That’s not to say you can’t do that in the private sector, but particularly in the Coast Guard it only takes one time reaching down to that hand that’s sticking out of the water and pulling that person onto a boat and you’re pretty much hooked at that point on our mission set, running the gamut from law enforcement to search and rescue and what we call all threats and all hazards.

The profile of our mission set added to a pre-disposition to -- for public service really, really is a significant draw. We’ve had a couple of really good years in recruiting. People really want to get in the Coast Guard ‘cause they understand this notion of public service and being connected to something larger than yourself, and then moving that into a maritime environment with a propensity to operate on the water and having a -- you know, a -- just liking to be on the water I think is very, very important. You put those two together, the Coast Guard makes a very, very, very attractive career.

I didn’t think I was going to stay in. I was going to do my five years and get out. I just kind of kept hanging around and you never know what’s going to happen.

>> (laughs)

>> THAD ALLEN: But -- well, you hang around because of the mission. And it doesn’t take too many of those successful search and rescue cases, and even the ones that don’t come out the way you want to -- when you talk to families that are putting so much on the line in hopes that you’ll be able to do something and create the art of possible where none exists for their family -- it doesn’t take too much of that to hook you.

>> ALBERT MORALES: Admiral, unfortunately, we have reached the end of our time. I want to thank you for fitting us into your busy schedule, but more importantly, Courtney and I would like to thank you for your dedicated service to our country over your 38-year career at the U.S. Coast Guard.

>> THAD ALLEN: Thank you. We were talking about social media earlier. If anybody wants to keep involved and understand what’s happening, there are two places you can do it. My blog is I-Commandant. If you just Google that, it’ll come up. And we also have a commandant of the Coast Guard, Thad Allen, Facebook account that automatically feeds over through an RSS feed what’s on the blog. So we’re out there on the Web.

>> ALBERT MORALES: That’s great. Thank you. This has been The Business of Government Hour featuring a conversation with Admiral Thad Allen, commandant of the U.S. Coast Guard. My co-host has been Courtney Bramley, leader within the IBM Public Sector Homeland Security Industry Team.

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

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

New Transparency: Recovery.Gov

Wednesday, September 30th, 2009 - 20:10
There were lots of complaints that the initial Recovery.Gov website was not very helpful.  That’s changed.  The newly-refreshed website now has lots of new ways of finding and looking at information that is due to pour in next month when the first quarterly reports are due from about 90,000 sources. Government Executive’s NextGov reporter, Aliya Sternstein provides a good review:

John Ely interview

Friday, August 7th, 2009 - 20:00
Phrase: 
Mr. Ely's organization is a core component in supporting the CBP mission of ensuring the security of our nation's borders.
Radio show date: 
Sat, 08/08/2009
Guest: 
Intro text: 
Mr. Ely's organization is a core component in supporting the CBP mission of ensuring the security of our nation's borders.
Complete transcript: 

Originally Broadcast August 8, 2009

Washington, DC

Mr. Morales: Welcome to another edition of The Business of Government Hour. I'm Albert Morales, your host and managing partner of the IBM Center for the Business of Government. One of today's greatest challenges is protecting the country from terrorists and the instruments of terror, while at the same time, fostering the country's economic security through lawful travel and trade. U.S. Customs and Border Protection operates at the nexus of national security and American economic security. In meeting this challenge, CBP has unique challenges and requires a focused procurement and acquisition strategy. With us this morning to discuss his efforts in making this happen is our special guest, John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection. John, welcome to our show. It's a pleasure having you.

Mr. Ely: Thank you. It's great to be here.

Mr. Morales: Also joining our conversation is Solly Thomas, associate partner in IBM's public sector consulting practice. Solly, good to have you as always.

Mr. Thomas: Good morning Al and good to see you again John.

Mr. Morales: John, let's start by providing our listeners some context around your organization. Can you tell us a little about the mission and this history of the U.S. Customs and Border Protection, otherwise known as CBP?

Mr. Ely: Yeah, I'd be glad to. I think that the best way that I can articulate that is just to read the CBP mission statement because it's very well-crafted and I believe it says everything that CBP needs to say in a statement. The mission statements goes like this: "We are the guardians of our nation's borders. We are America's frontline. We safeguard the homeland at and beyond our borders. We protect the American public against terrorists and the instruments of terror. We steadfastly enforce the laws of the United States while fostering our nation's economic security through lawful international trade and travel. We serve the American public with vigilance, integrity and professionalism."

A little bit of history about Customs and Border Protection, I'm going to keep it really brief. The customs component of CBP was created in 1789. It is extremely old organization. The U.S. Border Patrol was created originally under the Department of Labor back in 1924 and then INS, Immigration and Naturalization Service was created in 1933. And customs, border patrol and some component of INS was pulled together in 2003 when CBP was created as a component of the Department of Homeland Security.

Mr. Morales: So John, obviously a very powerful mission and a very broad mission. Can you put a finer point on the scale of operations over at CBP? Perhaps you could tell us a little about, you mentioned border protection, how many miles of borders are covered? How many ports of entry might exist? And how many people and items pass in and out of these borders?

Mr. Ely: I've got some statistics and some information that I find fascinating. I look at this information quite regularly because it amazes me when I see the mission the CBP undertakes everyday. And I've got some statistics. We protect 1,900 miles of border with Mexico. We protect 5,000 miles of border with Canada. We have 327 official entry ports and we have 144 CBP border patrol stations. In terms of what we process daily, and this is a daily set of numbers, 1.09 million passengers daily. We process 70,451 truck, rail and sea containers. We execute 2,895 apprehensions between the ports for illegal entry and 73 arrests of criminals at ports of entry.

Our seizures, 7,621 pounds of narcotics and seizures of 4,125 agricultural items and 435 pests at ports of entry. And again, those are daily figures.

Mr. Morales: That's certainly a heck of a day. (Laughter--)

Mr. Ely: Sure is.

Mr. Thomas: John, would this description of the agency and its incredible responsibilities, perhaps you could tell our listeners a little bit more about the specific mission and scope of your office. I'm curious to hear what the size of your budget is and how many employees work in your organization to support the agency.

Mr. Ely: First of all, I'm absolutely thrilled to be part of this organization and the important mission that they have been entrusted with and I feel that our acquisition procurement organization is truly a big part of bringing success to that mission. We are in the acquisition business and that is our job. We acquire the products and services to continuously improve the operations of U.S. Customs and Border Protection.

I have about 177 employees. They're located all over the country. I have people strewn along the southern border co-located with border patrol stations. I have people on the northern border. I have a fairly large office in Indianapolis, Indiana and a large office in the Washington D.C. area. Our annual spend is approximately $3.3 billion dollars and that's the money that comes through my procurement organization. That's pretty much a summary of the operation.

Mr. Thomas: And John, continuing to drill down on the responsibilities, talk to us a little bit about your role as CBP's Executive Director of Procurement. What are your official responsibilities and how do you support the mission of CBP?

Mr. Ely: While it doesn't sound official, my belief that my primary role is a facilitator to the employees, customers and the commercial business partners that are all involved in the procurement area and supporting the mission of customs and border protection. I'm responsible for managing the spend that supports our organization as efficiently, as effectively as possible and representing our American taxpayer by being prudent in the way that I spend their dollars; yet being effective in supporting the mission of the organization.

With that said, I'd like to emphasize that this is the operating principles for all of the heads of contracting activities in the Department of Homeland Security components. We all have the focus and we all have that function. I, as a senior procurement professional, I'm very familiar with CBP's mission and I understand the challenges that my customers face and it makes my organization better in terms of standing up the support that they need to be successful in their operations.

As a strategic leader, my goal is to full integrate the procurement process with a customer environment that delivers the required results while complying with law regulation and ensuring prudent expenditure of taxpayer's money. The point there is my goal is to continuously make our process, which at times can be viewed as a bureaucratic process, transparent to my customers so that they don't see the things that aren't really pertinent to them getting the goods and services that they need.

Mr. Morales: Now John I understand that you have some 30 years with the U.S. Federal government. Tell me a little bit about your career path. And how'd you get started?

Mr. Ely: Started very early in my life. I've got 34 years as a federal employee. Pretty much all of my 34 years has been in the procurement or acquisitions environments. I actually started as a summer hire when I was in college. I worked for the Department of the Army. And when I got out of school, I became an Army intern in a contracting shop and I stayed in that contracting shop at the Pentagon for 15 years.

Mr. Morales: That's a long summer.

Mr. Ely: It was a long summer.

Mr. Ely: It was an incredible place to learn procurement. It was an incredible mission supporting the Department of Defense. After that, I moved on to the Internal Revenue Service which was a very different environment where I started off as a branch chief; basically, my first significant supervisory experience. I was promoted later to Division Director and then Deputy Head of Contracting Activity. And I was there for 12 years mostly engaged in the information technology acquisition business, which while it might sound kind of mundane, is a very exciting field because it's very competitive and the technologies that we used and that were acquiring are very important, especially in the tax collection business.

Now I'm at CBP as the Head of Contracting Activity and I've been there for 5 years and I'm absolutely thrilled in this position and very much challenged and excited every day that I come to work.

Mr. Morales: So, John as you reflect back on your 15 years with the Army and the 12 years over at IRS, how have these experiences prepared for you for your current leadership role and perhaps have shaped your management approach and your leadership style over the years?

Mr. Ely: I want to start off with the very beginning. I'm an Army brat. My dad was an Army officer. My grandfather was an army officer. My father was very much loved by his troops and I watched him and I tried to emulate a lot about him that I saw as driving his success. And his success was in genuinely caring about his people and they in turn, delivered for him. He saw himself as facilitator to the success of others and I try to emulate that style.

When I first started working in procurement, I learned the business first. And I always work with the goal of balancing the customers' needs along with properly managing taxpayer dollars. During my career, I worked with a wide range of managers and executives and I tried to develop my style as a combination of what I saw as the best of both. During the latter part of my federal career, I spent lots of time with people who were experts in continuous improvement. And above and beyond the procurement field, I started getting into the concept of continuous process improvement.

I'm not the most organized person in the world but I do recognize the value that predictable processes, improvement processes, being imbedded in organizations and I try to capture that through a process improvement program. So, I worked with process improvement experts that have helped me get in place documented repeatable processes that make my organization extremely efficient and effective.

Mr. Morales: What is CBP's acquisition and improvement initiative? We will ask John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and today's conversation is with John Ely, Executive Director of Procurement at U.S. Customs and Border Protection. Also, joining us from IBM is Solly Thomas. John, much like finance or information technology or human resources, you lead one of CBP's core business functions. Could you take a moment to describe in a bit more detail the procurement function? And tell us a bit about some of the key elements of acquisition management.

Mr. Ely: I'll give you the basic process. It involves early definition of requirements by the customer. That's a little more complicated than it sounds because articulating what your needs are for a government customer sometimes can be difficult. But, we seek to get a good solid definition of the outcomes or the products that our customers are looking for. And then we secure the funding associated with those requirements. There's a collaboration between the procurement organization, the contracting officer and the customer over a strategy for acquisition. There are multiple ways to acquire things and the best fit for the customer and the particular product is something that we arrive at in collaborative way.

At some point, we release a solicitation or a request for proposals for pricing and descriptions on supplies and services that we're looking for. We take those products and we give them to our customers to do an evaluation. And evaluations are either for compliance and award to the lowest cost or we also have what's known as best value awards, where there is technical merit associated with an offer's proposal and those technical merits are evaluated. And then a balance is drawn between the offered price and the technical merit and what we call a best value acquisition can be awarded.

That is very much different than a low cost award because you can actually pay more for something if the government team's perception of the value warrants that extra payment. Then comes the notice to the contractors and the debriefing of unsuccessful offers. What I think is really important is that debriefings to unsuccessful offers are not just I'm sorry, you didn't get the job. We are required to give meaningful, helpful information to companies as to why they did not receive the award of the contract without giving away proprietary or trade secrets for the winning offer.

Finally, we initiate contract performance and contract management activities that in and of itself, is a very important complex process. And then at the end of contract performance, or delivery period, there's a contract closeout where we double check and make sure everything was provided to the satisfaction of the government customer, the contractor's been paid and then at some point we close the contract out completely.

In terms of success in procurement function, I'll give you some ideas about what I view as steps in ensuring procurement success. That mutual understanding between the customer and procurement personnel regarding the procurement process, the roles and responsibilities of the different parties and building a solid, trusting, working relationship between the government procurement personnel and the mission individuals that are representing the customer needs is absolutely critical.

Good contracting organizations have people that are not just buyers, but they're good business specialists. They understand their customers. They seek to engage both the customer and ideas from contractors throughout the lifecycle of whatever product or service is being ordered. Good procurement organizations are involved in all aspects of the lifecycle. We know about our customer. My border patrol buyers are very familiar with the border patrol function. My legacy customs support buyers, they know customs; they know what custom officers do. And all of our buyers are very close to the functional needs of our components and it makes them very good at what they do because they're continuously involved in the mission and the needs of the organization.

In most organizations, weaknesses are found in contract management. And to be honest with you, I think that's a problem with government contracting in general. There aren't the people out there and the emphasis. Even though we've been trying to place the emphasis, it's still not there in terms of what happens once the contract is signed. The government in general needs to be more attentive to what happens after the contract's signed because you've only just begun. But shortage of federal contracting personnel still keeps us in the hole that we're in and not as able to manage contracts after they're awarded.

Mr. Morales: Now John, on that note, in our earlier segment, you made a reference to continuous improvement and you used the word repeatable. So, tell us a little about CBP's acquisition improvement initiative. Where does it focus and how is this program defined, developed and deployed these customer-focused solutions that you reference?

Mr. Ely: When I first started working at IRS, I ended up working with some information technology specialists who were focused on software development and one of the people that I worked very closely with was a certified process improvement expert. And I soon came to find out that these people are out there and they're very good at articulating and stringing together processes so people understand how you get from point a to point z when you're trying to develop and build an end product. In this case, it was software, which is pretty complex. But, the concept behind these process improvement experts is they articulate the process, they make it as efficient and effective as possible and they stick to standards where they repeat the process and you should be able to get the same exact outcomes in terms of your desired results.

In meeting and getting engaged with people like that, I started realizing we could apply this to the procurement process. And I eventually hired a process improvement expert and brought them on as senior staff in looking at the procurement process. One of the problems that we had is our customers felt that every process or every procurement was run differently. And what I basically did is I implemented a very structured environment where we very clearly outlined the process, outlined the outcomes and the roles and responsibilities of all the people that were involved in the procurement process.

It's actually done a lot for me in terms of being able to be predictable in terms of results to my customers. In terms of the acquisition improvement initiative, that is what we've stood up at customs and border protection procurement. And again, I have a full-time process improvement expert responsible for that. In CBP's AI2 program, we focus on four broad areas: assets, business, customer and data. We call it the ABCD model. The asset piece is our people, it's our systems. The business piece is our customers; what they do, what they acquire to achieve. The customer is our customer themselves, you know, who is that customer? What is it that they're looking for? What do they stand for? And then data, which to us, is probably one of the most important things. We strive to collect and understand data relative to what our customers need, what we've bought in the past. And that data helps us optimize how well we do in the future in terms of performing the acquisition function.

The bottom line is all of our efforts in AI2 are geared to supporting customer's needs and mission success in creating a work environment where people can grow and thrive. AI2 generates improvement opportunities from both top down and bottom up. And what is real exciting to me is that with a lot of the new entry-level people we have working in the procurement organization, we have some people that have just walked in the door and they have been with us more than a year, that are coming up with some fabulous ideas because of their fresh perspective. They're not mired in the federal process. And we're starting to listen to those ideas and actually build some improvements in the program based upon somebody who's just walked through the door saying, hey, why not? And that's been very, very good for us.

We have participation goals in acquisition improvement. I have expectations of all my directors on their folks and what percentage of those people will continuously be involved. That hasn't been a problem because what has happened is when people in my organization see that they really can change the direction that we're taking and deliver better results for our customers as a result of their efforts, they participate. And they don't have to be asked to participate because they see that they're making a difference.

I'll give you an example of some of the teams we have because AI2 is broken down into some teams, different teams, and that's how we control memberships and outcomes. We have the quality of life team. The quality of life team really does focus on how are things going for the people in the organization. What's the work life like? What do people like, don't like? How can we make the quality of life from 9-5 better for our people and therefore, make them more productive and effective as federal employees.

We have a contract administration team. Again, federal procurement organizations tend to sometimes award the contract, walk away from them because they've got the next thing they've got to focus on. When we, in fact, with our contract administration team are looking for ways to stay there with our customer, administer the contracts and assure them that they receive the desired products or services.

And then, my data and spend analysis team is probably one of the ones I'm really the most proud of. Although, I really shouldn't say anything about being the most proud. But, our ability to slice and dice the data has been one of the most rewarding things for me. You can ask me how many light bulbs we bought last year and I can tell you. You ask me how many mainframe computers we bought, I will tell you. If you ask me how many detainee meals we bought and where they went, I can tell you. What that has done for us is it gives us the opportunity to sift through our spend data and look for low hanging fruit or even high hanging fruit for our strategic sourcing initiatives. When we decided that we needed to start hitting strategic sourcing, we looked at the spend and it gave us a profile of where our CBP money is going all the way down to the day to day subsistent level.

And then, the strategic sourcing teams. And I also have a mentoring team which is a very structured program around bringing our entry-level people up faster up into operational mode.

Mr. Thomas: Now John, it's been my experience that agencies need to have an effective strategy for organizing and retaining its intellectual resources and its institutional memory. So, to that end, can you elaborate on your efforts to implement an effective knowledge management system. And I'm particularly interested in hearing more about your Acquisition Resource Management System and how it factors into this efforts and provides the one-stop shopping capabilities.

Mr. Ely: We have implemented ARMS. And ARMS is something I'm extremely proud of because we do have, in the organization, a fairly mature knowledge management system. With our aging workforce and the expansion of our headcount, it's imperative that we have that knowledge and that we share the information and this ARMS is a repository for information and also for exchanging ideas, communications across a large, geographically diverse work environment.

And really, one of the most important things that has come of our knowledge management system is connecting our broad customer base and a youthful workforce. We have people now that are attracted to technology and the ARMS system is something people tend to move towards and use because it's got data in it, it's got communications in it; and those are the things people need to communicate effectively.

ARMS is a way to both get knowledge into the repository and a better way to use and improve the knowledge and our collaboration for the betterment of the mission. Our documents, our announcements, our regulations, our memorandum are all posted through ARMS. And probably one of the most interesting things is the discussion threads. We have chat rooms and discussion threads where people can talk about the collaboration of improving a contract document or how to manage a contract better. We have a birds of a feather area in ARMS where people can gather and talk about areas that are of common interest. And we also have a message center and I have a blog now that helps me connect to a very geographically diverse organization. I log in and I can just say hello and talk to my people without ever having to worry about dialing or being in any physical place. And that's been a wonderful, wonderful benefit for me.

Mr. Thomas: Now John, you eluded to strategic sourcing a little bit earlier and of course, that's typically defined as a means to achieve benefits through an organized, systematic and collaborative approach, to acquire goods and services. Could you elaborate more on your strategic sourcing program? What types of opportunities have been identified and to what extent has it enhanced your coordination in strategic thinking across the department?

Mr. Ely: What I'd like to do before I get into the rest of that question, I'd like to talk a little bit about how I got into strategic sourcing in the first place because I think it's a fairly interesting story. When I was at IRS, I signed up for a course, and it had some mundane title and I don't even remember what that course was -

Mr. Ely: -- but a gentleman that I worked with and I went to this course. I believe it was in Dallas, and we ended up in this room full of people and not one of them was a government employee. And it turned out what this group was, and it had something to do with sourcing, sourcing was in the title. Basically, what it was, was a group of people who were part of the sourcing organizations for very large companies. If I'm not mistaken, TI was there, Ford Industries was there, IBM was there. Several other major companies were there. And all of these people had one thing in common and it struck us very quickly that this was going to be an interesting environment.

Every one of those companies were at one point on the brink of going out of business. And what those people in that room had done is through the sourcing of supplies and services into their production process or their delivery process in a service environment they turned to strategic sourcing and said, if we do business the old way we will be out of business. What is the new way of doing business? And I spent about three or four days with those people and I learned a whole lot about how you can adopt that mindset, the stay in business mindset. Even if we're government, let's pretend we could be sent home and fired tomorrow. Let's get lean and mean and look at ways we can be effective, efficient and save money all at the same time.

We came back to IRS and that's when we started realizing our capability in spend analysis; knowing where the IRS dollar was going. And knowing where that dollar was going, we started targeting commodity and service groupings and looking at how can we do business better. We brought in some people that consulted with us to talk to us about smarter ways of doing business and we took on strategic sourcing initiatives for cell phones, guard services, copiers, faxes and printers. And to give you a little bit of insight into the true strategic sourcing concept; copiers, faxes and printers, the idea to strategic sourcing those is not to get economy of scale on contracts. That's one objective. But the perception that we had was that there might be a better way to deal with copiers, faxes and printers.

Now, in a federal environment, a lot of times you'll see a copier, a fax and a printer. And in some cases, you'll see all three of those around an individual's desk and you'll see those all over the place around different individual desks. We started talking about multi-function machines, acquiring multi-function machines. A single machine that copies, faxes, prints. And having those machines in a central environment rather than dedicated to a given workstation. So, you think about how often your printer's humming or fax is humming on your desk dedicated to your work, you can start seeing how a multi-function machine might actually be economical and provide the services that everybody else needs at a significantly lower cost. That's where strategic sourcing comes in.

We changed the way we were doing business. We saved money, yet we delivered the same results. So, when I got to CBP after IRS, I instantly knew that I had to make a difference by standing up a very similar program at CBP and that is our acquisition improvement initiative. And that is the same process. It has a very similar approach where we want to stay in business. We want to take the stay in business mindset as a government entity.

I've already stood up a team that now has the spend analysis capability. I can look at any, every piece of everything CBP has bought and we're now focusing on how products and services are acquired. We've had a few near term hits on strategic sourcing. One of them is body armor. In the old days, we bought body armor, the body armor would be shipped, the employee would put the body armor on, measure his specific fit and then send it out to be tailored to fit him or her. We now have awarded a contract for body armor that has a film clip in the website where you're shown how to measure yourself for body armor ahead of time before you order it. So, you ship the order, you ship the measurements, the body armor's delivered and it goes right out of the box and onto your back saving your life sooner. That is a real good example of how strategic sourcing works.

Again, economy's a scale but also a significant improvements in how we utilize the commodities of services. We are looking at canines. We've had some success with puppies. We do a lot of buying of puppies. They're really cute and even when you buy them in quantity, they're really cute. But, we're looking at strategic sourcing of canines, industrial laundry and we're also looking now at our spend on detainee meals. An early glance tells us that there are different kinds of detainee meals that are being served up all over the southwest and actually in all the detention areas. And while they're all fairly low cost, we think that if we standardize that and bought large quantities of detainee meals that were not perishable or could be used over long periods of time, we could save significant amounts of money. So, there's just a few examples of that strategic sourcing environment.

Mr. Ely: Sure. We have an overwhelming workload as most procurement organizations do. We also have a young emerging professional workforce. Those two have come together for us when we started looking at technology. And there are reverse auctioning tools. We use a tool called FedBid, and basically, what tools do is it allows your contracting officials to post their requirements on an electronic forum and bidders will bid on the requirements electronically and then the buying activity can come back to the end of the day and look at the bidding history and make an award.

Basically, it is a seamless, automated process for running our competitions. Its usually done for commercially available items, but we've had a lot of success in the post and go. And again, we post it, we come back, we see what the natural bidding process that occurs through the system and we make awards to the low, responsible offers. Reverse auctioning has done so much in terms of our ability to load those smaller requirements, while we work on the more sophisticated requirements that require attention; where our employees need to develop their skills. At the same time, we're saving lots of money. And I have some statistics about what that automated reverse auctioning process has done for us.

Basically, it is a seamless, automated process for running our competitions. Its usually done for commercially available items, but we've had a lot of success in the post and go. And again, we post it, we come back, we see what the natural bidding process that occurs through the system and we make awards to the low, responsible offers. Reverse auctioning has done so much in terms of our ability to load those smaller requirements, while we work on the more sophisticated requirements that require attention; where our employees need to develop their skills. At the same time, we're saving lots of money. And I have some statistics about what that automated reverse auctioning process has done for us.

Mr. Morales: What about CBP's acquisition workforce management strategy? We will ask John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection, to share with us as the conversation continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and with us today is John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection. Also, joining us from IBM is Solly Thomas. John, the American Recovery and Reinvestment Act of 2009, otherwise known as the Recovery Act, provides some $680 million dollars to CBP for investment in aging infrastructure. First, could you tell us more about your procurement strategy and how the money will be spent. But, more importantly, what role does your office play in this area and how are you managing the procurements associated specifically with the Recovery Act funding?

Mr. Ely: Much of the ARRA funding is targeted for port modernization in both the northern and southern borders. We are very much engaged in writing contracts and facilitating that modernization effort. Our goal is to make awards in a timely manner while competing contracts as much as possible. We've stood up an FM&E facilities management and engineering contracting organization to meet this challenge we're working hand in glove with the CBP FM&E organization to implement. We're competing requirements for technology and construction directly with commercial sources, but we're also utilizing the services of the Corps of Engineers and GSA for construction contracting requirements.

Mr. Morales: It strikes me that balancing the appropriate number of CBP contracting officials with the growth of your portfolio is perhaps a challenging task. What changes have you made to your recruitment process and does CBP use flexible compensation strategies to attract and retain employees who possess what you would deem as critical skills?

Mr. Ely: Excellent question. Initially, when I first came to CBP, we focused on recruiting higher-grade personnel; but, it's really hard to find them. It's really very difficult to find them across government. So, we've moved to entry-level hires and we're supporting the rapid growth through mentoring, training and phased-in levels of contracting sophistication. So, we're trying to bring them up fairly quickly, but we are making sure they're ready for each phase. We think we've got a good plan for getting the entry-level hires up to speed faster than people were ever before by using technology, mentors, etc.

The DHS Chief Procurement Officer supports us through their Acquisition Career Program. They have a very sophisticated program and we are on the recipient list for the ACP interns. And that's born out well for us as well. We're still hiring higher-grade personnel for complex and critical procurements. And if any of you out there are the higher-graded, highly capable contracting types, just let us know.

Actually, on USAjobs, we have a great video clip from one of our CBP contracting officers and some information on job announcements. So, if you go to USAjobs, you'll probably find that icon to click on and see one of my folks with a lot of the products and services in the backdrop giving you some information about working for me. CBP offers flexible work schedules, tuition reimbursement for permanent status employees and in some cases, recruitment bonuses and/or payment of relocation services.

Mr. Thomas: John, staying on that topic, in recent years the size of the acquisition workforce has remained relatively the same while procurement spending has pretty much skyrocketed. For over a year, agencies have had the ability to re-hire the retired acquisition personnel, but only a few agencies have sought to formally use this authority. Could you talk a little bit about the benefits, as well as the possible limitations, of this particular strategy? And more importantly, what are your plans to use this authority as a tool to fulfill staffing needs?

Mr. Ely: Sure. Good contracting people are, as I've said before, are always in high demand both in government and industry. DHS has been successful in implementing authority to hire retired procurement personnel, known as retired annuitants. And we are pursuing the hiring of retired annuitants who offer a wealth of knowledge, skills and abilities and we're seeking to take as much advantage of that as we can. That is still a fairly small number, relatively speaking, of potential resources.

And the flipside of the benefits of that is also that these people will re-retire as some point in time. So, you can't really stake your future on retired annuitants, however, they do help in the near term.

Mr. Thomas: Now shifting from the recruitment discussion to developmental, what are you doing to ensure that your staff has the appropriate training and skills and how are you leveraging the resources from organizations like the Federal Acquisition Institute?

Mr. Ely: I'm very proud of our training program. It's extremely important in our line of business. Our training program is fairly well funded and we have a specific training curriculum in place. Employees can count on receiving specific, substantial training in the procurement business area. And there are training tracks associated with each level of procurement professional. We have a fully funded training. Each employee receives a minimum of forty hours per year. And we utilize FAI for both classroom and online training. And the DHS Chief Procurement Officers Organization has entered into an agreement with DAU to reserve seats in their classes for DHS procurement personnel, and that includes my folks as well.

Mr. Thomas: Now John, at last count, the federal government spends approximately $140 billion dollars on services to meet agency needs and the use of performance-based acquisition is the federal government's preferred approach for acquiring these services. Tell us about CBP's efforts in implementing performance-based acquisition strategies.

Mr. Ely: First, to comment, a personal comment on PBAs. I agree that they are the desired vehicle, but there is something complex about them that needs to be understood and that is that it is an outcomes-oriented acquisition approach. That's where we truly have to get away from the nuts and bolts of how you get from point a to point b when the outcome is articulated get me to point b. And you don't spend a lot of time talking about how you get there. It's the outcomes that drive a performance-based contract to success.

So, in this environment, the government personnel serve as facilitators for contractor success, which is a little different than some government folks you are used to, where they believe that they are supposed to be directing the activities of the contractor. In performance-based acquisitions, they're facilitators. They help the contractor get to the successful end. Again, acting as facilitators versus directors. In CBP procurement, performance-based acquisitions are now automatically the first consideration for service contracts. Every service requirement that we get in, we look for the applicability of performance-based contracting as a solution.

All of my people receive training in performance-based acquisitions and our CBP Acting Commissioner supports performance-based acquisitions, and has asked his assistant commissioners to develop metrics and measures for their contracts to make sure they're receiving value for their dollars. We have a long way to go to reach our PBA goals, but we're working hard and I think we're doing a pretty good job learning more and more as we move along about the unique method of contracting.

Mr. Morales: John, I talk with many of my guests about collaboration. And certainly, procurements and acquisitions are perhaps some of the more complex business processes within a large entity such as CBP. What kinds of partnerships are you developing now to improve operations or outcomes at CBP and how many of these partnerships change over time?

Mr. Ely: That's an excellent question. I think acquisition by definition is a collaborative process. If you're not collaborating with your customers or your contractors who are helping you deliver results, you're going to be surprised by what happens at the end of the day. Procurement's close relationship with our parent organization, which is the Office of Finance, has helped us become very collaborative in terms of working with the components of finance which is budget, asset management, facilities, management and engineering and our financial operations organization.

We work together with them to make sure that CBP's needs are met at a fair and reasonable cost and that taxpayer dollars are properly expended. Our partnerships within the parent Office of Finance have enabled us to leverage our financial management capability. And our relationships with the customers and industry help bring best value for the taxpayer dollars that are entrusted to CBP. I see the further positive change, we build a greater capability in the big A, acquisition arena. The big A, which is acquisition, will bring us closer to being worldclass acquisition organization that's forward-thinking and focused on return investment for the mission and the American taxpayer.

Mr. Morales: Now, since its inception, DHS has had some very large and complex procurements such as, the Coastguard's Deepwater Program and CBP's SBInet. What are some of the key lessons learned from these large acquisitions and how are they shaping and informing your operations today?

Mr. Ely: I'm going to give you a generic answer on that, because I'm not as specifically familiar with Deepwater. I have some familiar, but with CBP's SBInet program, but I'd like to keep it generic because it does apply I guarantee to both programs and probably other, most complex government programs. The key to success with these procurements is planning, proper planning. The formulation of strong acquisitions teams and efficient, effective and responsible source selection process. And most importantly, properly staffed and managed postwar program and contract management organizations.

Too often, we think we've hit the home run. The ball is out the park once the contract's signed, when in fact you haven't even swung yet. I think it's also essential that when managing programs, one must realize that detractors are natural and important part of a balanced government business environment. And while these detractors may be disheartening at times, their presence can help keep acquisition personnel focused on the proper outcomes of their programs.

Mr. Morales: So John, you've eluded a couple times to CBP's acquisition function and its relationship to the broader DHS organization. How does this alignment benefit CBP and DHS' overall acquisition strategy and do you think that DHS will be adopting a more centralized model going beyond just mere oversight?

Mr. Ely: That's an excellent question. I've felt this issue going back and forth. Naturally, the components would like to retain control over their procurement organizations. And it's understandable that DHS would like to centralize, capitalizing on economies of scale, ensuring a consistency in the way that we spend the DHS dollar. But actually, there is a dual accountability role right now at DHS. While, I report to Customs and Border Protections Chief Financial Officer, I have very specific responsibilities for which I'm accountable to the DHS Chief Procurement Officer. And the same holds true for the procurement executives and the other DHS components. They also have that dual accountability.

I would also like to state that the DHS Head of Contracting Activities Organization, that is all the HCAs for the DHS components, are a group that works collaboratively and embraces the authority and leadership of the DHS Chief Procurement Officer. We meet on a regular basis and are actually quite effective in helping make DHS procurement functions as efficient and effective as possible.

Mr. Morales: So what does the future hold for CBP procurement? We will ask John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection, to share with us as the conversation continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to our final segment of The Business of Government Hour. I'm your host, Albert Morales, and with today's conversation is with John Ely, Executive Director of Procurement at U.S. Customs and Border Protection. Also, joining us from IBM is Solly Thomas. John, CBP's experience in applying innovative solutions to help address agency procurement issues has provided some valuable lessons and insights, many of which we've talked about. But, could you summarize some of these key lessons and some of these critical insights?

Mr. Ely: I'd be glad to. Number one, continuously improve. The American taxpayer deserves it. Secondly, get people involved in creating solutions. The old saying, two heads are better than one, holds true. Groups of individuals working with common goals will get you there a lot faster than individuals who are spinning off on their own path. Constantly seek to improve and get industry input on a regular basis. Industry must succeed or die and they're a good model to look at when you're looking at the best way to run your own government operation. Finally, communication is key. When you think you've done it or done enough, do more because trust me, you probably haven't.

Mr. Thomas: Now John, since acquisition is a fiduciary responsibility, the business of government must be conducted with complete impartiality. Could you elaborate on efforts being pursued to ensure procurement integrity, making sure the proper standards of conduct, both ethical and legal requirements are being followed by the Federal Acquisition staff?

Mr. Ely: Sure. First, I'd like to start by saying that I'm very proud to be a federal procurement professional. We've all seen situations where integrity has been an issue in procurements and it's inexcusable. And people that don't use integrity will get caught. But, I have faith in the federal procurement process. The vast majority of people that work in that environment are honest, hard working public servants that want to do good. Furthermore, all federal agencies have programs that emphasize standards of conduct and provide continuous training in the areas of procurement integrity.

Mr. Morales: John, I'd like to transition to now to the future. Could you give us a sense of some of the key issues that will affect acquisition and procurement offices government-wide over the next few years?

Mr. Ely: Sure. Shortages of contracting and program management personnel is a huge challenge. Balancing highly innovative ways of doing procurements within a highly regulated environment is another. Increased oversight and the need for transparency for large scale programs with congressional and public and customer scrutiny in how we do business is again, another. The constant pace of change and the scale of procurements that we're seeing as it continues to grow. And finally, the time constraints for planning large major acquisition initiatives.

Mr. Morales: So, then more locally, what are some of the major opportunities and challenges that your organization will encounter in the future and how do you envision your area will evolve over the next say three to five years?

Mr. Ely: I see significant opportunities in the future as CBP becomes more and more sophisticated in its view and management of investments for the good of its mission. I see an organization that's becoming more and more enlightened in ways to efficiently and effectively invest its resources. And I see my procurement organization as one of the best in government; fully integrated with the CBP customer and delivering the best value for the taxpayers' dollars.

Mr. Morales: So, John you've had a very extensive career with the federal government and you just had a wonderful story of how you got started. So, I'm curious what advice might you give someone who's out there thinking about a career in public service and maybe even perhaps a career in the acquisition community?

Mr. Ely: I've been there. I was there on the brink trying to decide which way to go and I will tell you that serving the American public is an honor and a privilege and has significant financial and personal rewards. The government pays well and the work is rewarding. There is an incredible satisfaction delivering good things to the American public. And our government works hard to take care of its people and public service is an incredible opportunity to be a part of that important task.

Mr. Morales: That's just great. Unfortunately John, we have reached the end of our time. I want to thank you for fitting us into your busy schedule, but more importantly, Solly and I would like to thank you for your dedicated service to our country across your 34 years of federal government service.

Mr. Ely: Thank you so much for having me both of you.

Mr. Morales: This has been The Business of Government Hour featuring a conversation with John Ely, Executive Director of Procurement at U.S. Customs and Border Protection. My co-host has been Solly Thomas, associate partner in IBM's public sector consulting practice.

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

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

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

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1 comments

Admiral Allen has done a wonderful job to date and he continues his service to the country. This conversation is very interesting and insghtful...so well put together and highlights a solid american leader....

please put me on your mailing list... j.dove10@yahoo.com

very well done, Mr. Keegan...tx

05/10/2010 - 16:55
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