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.
* * * * *

Originally Broadcast Saturday, November 11, 2006

Washington, D.C.

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

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

Good morning Admiral.

Mr. Allen: Good morning.

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

Good morning, Dave.

Mr. Abel: Good morning.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Intermission)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Intermission)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Intermission)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Mr. Morales: Great, Admiral, thank you.

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

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

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

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

Tuesday, June 26, 2001

Arlington, Virginia

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

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

Mr. Burk: Hi, Paul.

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

Mr. McCloy: Thank you, good afternoon.

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

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

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

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

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

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

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

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

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

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

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

Mr. Lawrence: And tell us about your careers.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Intermission)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Intermission)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Intermission)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

See you next week.