Tuesday, March 9, 2004

Arlington, Virginia

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

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Kevin Carroll, the Army�s program executive officer for enterprise information systems.

Good morning, Kevin.

Mr. Carroll: Good morning. Thanks for having me.

Mr. Lawrence: And joining us in our conversation, also from IBM, is Brian Dickson.

Good morning, Brian.

Mr. Dickson: Good morning.

Mr. Lawrence: Well, Kevin, that was a mouthful. Could you describe the mission of the Army�s program executive office of enterprise information systems for us?

Mr. Carroll: Yes. Basically what we do, we�re an Army organization who provides program management support for both DoD programs, Department of Defense programs, and the U.S. Army programs. We focus in the business system area, which is like finance, personnel, medical systems, and the IT infrastructure that supports that; the communications, the computers, the servers that would support those business applications. And these aren�t just applications that work in the office -- they do that -- but they�re also applications that go into Iraq, into Afghanistan, and they handle a lot of logistics, medical, financial traffic that our soldiers use overseas. So they�re critically important in the combat service support effort to our war effort in Iraq. And we provide reach-back, meaning that the ability for the soldiers to dial back on web-based systems back to their post to get the information they need to do their job as well as providing reach-back for issues of morale, talking back home to their families, things like that, are a part of the information technology solution we provide.

Mr. Dickson: Kevin, can you share with our listeners the role of the PEO in producing these systems?

Mr. Carroll: Yes. I mean basically, our role is really to deliver results. Basically, we have to provide the acquisition oversight and review with our partners in industry, the contractors, the quality contractors that we bring to bear on the problems and solutions that we have. And then our job is really to make sure that we get products delivered on time, within cost, we get the performance that we need for the soldier. And we kind of do all that in the area of setting a climate or an environment that allows both the industry partners to do the things they need to do to make things successful and for our own employees, the program managers, who have to oversee those programs and are ultimately responsible for those deliveries. And my job basically is to try to help create that enterpreneurish environment within my government organization to get those things done and deliver results for the soldier.

Mr. Dickson: And what�s the total size of your budget to accomplish this?

Mr. Carroll: Well, we spend a little over $2 billion a year. About a billion of that is out of our program planning, you know, how we plan for programs over time; and about another billion a year comes in from reimbursable customers, people within the Department of Defense, people within the Army, who like what we�re doing and bring money to acquire more of those services or more of those products that we have.

Mr. Dickson: And how large is your organization in terms of manpower, and what kind of skills do your people have?

Mr. Carroll: We have an organization of about 600 civilian and military people, and we�re scattered pretty much along the West Coast. We have a program office in Germany that supports the European theater, but pretty much we�re East Coast-bound. It�s really a pretty exciting mixture of people that we have in our organization. We have engineering people, you know, people that are in electrical engineering, computer engineering. We have computer scientist types. We have business people, people that understand accounting and understand how to do analysis of systems. We have acquisition managers, people that understand and went to school and were trained on managing programs, how to get things done to deliver a product that we have. We have people even with some contracting background, you know, knowledge of how to contract -- the government contracting process. So we really do mix those people together in a sense to create an organization that works.

And those skills that we don�t have, that�s where we do contract out and get a program management support effort to come help us -- as well as within the government, there are organizations that exist that we pull engineering talent from, like CECOM, which is an organization out of Ft. Monmouth and Ft. Huachuca, Arizona, where we pull skills out of.

Mr. Dickson: I understand there�s been a reorganization within the Army that�s affected the PEO EIS. Can you tell you tell us about it and what are the implications for the way you do business?

Mr. Carroll: Sure. I�d say approximately three years ago, we were reorganized, all the PEOs in the Army. And really, I�m in a program executive office really just for -- and the IT business arena. There are other PEOs that do missiles and tanks and, you know, the normal things people think about in the Army. All of us were combined under the Army acquisition executive, Mr. Claude Bolton, and he�s the political appointee in charge of that organization. And that�s still true, he�s still my, in essence, my senior rater in doing things, and that hasn�t changed. But at the three-star level, Gen. Yakovac�s in charge of the PEOs and was in charge of us up until just recently, where then we moved in under the CIO of the Army, a three-star general, Steve Boutelle. And Steve�s now our -- my immediate rater that I go to, and then back up to Mr. Bolton.

The important thing in doing this, the reason their alignment occurred, you know, why we went back under the CIO, was the relationship between what Gen. Boutelle�s doing in consolidating the Army enterprises and bringing a network-centric kind of Army in the business application area in particular as well as what he�s trying to do for the tactical side, in the war fight. And by having us under him, we�re going to provide that technical backbone in support of him directly and our functional customers like logistics personnel and medical. We�ll be able to bring all that together and it really will help in the integration effort of the Army, I think, of tying the IT piece, the information technology piece, with the business piece. And I think it�s a lot better fit, and that was the purpose of it.

Mr. Dickson: Can you tell us a little bit about your previous experience and how you got engaged in this line of work and became the PEO?

Mr. Carroll: Sure, yeah. It was kind of interesting. I really, funny enough, was drafted during the Vietnam era draft. And I went to the Army, got drafted in the Army and served there. And so I went out of the Army, learned I should go to college out of that experience; went back to college; took the PACE exam, which was a government exam at that time where you qualified for -- if you got the high score you qualified and you could get accepted in the government. And I applied for that because having a job was very important back in those days with the economy the way it was.

In applying for that, I circled �procurement� or �contracting� because that�s what I did at the University of Maryland, where I went to college. I was acquiring for a cyclotron machine, which is a particle accelerator that was actually in the building, the physics building of University of Maryland. And I acquired semiconductors, diodes, all those kinds of products back then. When I checked that box, then I got selected by the federal government to come in the Department of Transportation and procure -- again, procurement or contracting.

And I kind of specialized, I went to the Coast Guard and specialized in IT. And the Coast Guard was one of the first organizations really that was heavy buyers of enterprise kind of solutions for information technology. That led me on to the Army, where a guy named Dave Borland, who was really responsible for moving the Army and the information technology and had a reputation for being one of the best contracting people in the field; led me to that area.

I grew up through the contracting ranks, worked in an organization called ISSAA and became an SES there, a senior executive there. And then I moved from there to CECOM up at Ft. Monmouth in the acquisition arena still, procurement arena. Then I went to Army Materiel Command and broadened my experience beyond just contracting, much more in the acquisition program management, a little in research, a lot more in the technology industrial base. And then I really moved from there to this job at Ft. Belvoir that I currently have, which is overseeing program managers.

So it was a little different makeup. It�s a crossover, and I think it�s occurring more and more in government now, but we�re having crossover specialists, so you don�t necessarily have to grow up as a program manager to manage program managers, you can come from different professions that have a relationship to that field. And so I was able to cross over. And I�ve noticed more and more people are doing that, like people that are engineering-focused, but have leadership skills and have management skills, they�re starting to move over and manage not just technology, but manage people and providing more of a service solution instead of a technical solution or -- you see more and more of this in life. So for me it�s been a good experience, and I�ve really enjoyed it and, you know, it�s been fun.

Mr. Lawrence: Was there a point in your career or a job in particular where you began to realize you�d be shifting from a subject matter expert, your own skill, to a leader of teams that you described, you know, pushing the leadership skills?

Mr. Carroll: Yeah, you know, really I was sort of -- well, first thing off, I always got assigned jobs it seemed like that were hard ones, that were systems in -- programs in trouble, systems in trouble. And I was lucky enough to get people working with me who were motivated to really get those kind of things done, so I was always had kind of a good team of people around on these various projects that I had experienced in my career. So I sort of was always in a pretty good position to be able to get things accomplished and done that helped me personally and then helped us help the Army get those jobs back on track and moving again. So that ability to effect change and lead teams and get relationships going among people that maybe weren�t having such a good relationship at the time, all those things I think kind of led to it being -- led to me actually getting more into management and leadership than just being a technical expert in a particular field and, you know, I enjoy it.

I mean, I like people and I think all people, no matter if they�re industry or government, you know, that everyone has the capability of doing things and wants to do the right things. And if you can motivate people to where everybody is contributing, then you�ll get that performance and you�ll get that need. And open communications, if you can get people to talk and share and express their fears and frustrations and get all that out there and get it focused, I think there�s more chance that you�re going to be successful, you know, in any job really.

Mr. Lawrence: That�s an interesting point, especially about expressing our concerns and frustrations.

How does technology affect the service members who are currently deployed overseas? We�ll ask Kevin Carroll, the Army PEO for enterprise information systems, when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I�m Paul Lawrence, and this morning�s conversation is with Kevin Carroll. Kevin�s the Army program executive officer for enterprise information systems.

And joining us in our conversation is Brian Dickson.

Mr. Dickson: Kevin, what are some of the key information technologies that are changing the way the Army does business?

Mr. Carroll: Well, there�s -- the Army right now is really undergoing a massive transformation. And that�s not just in my area, but across the Army as we try to become a lighter, more agile, more module force. And, you know, we have plans for the future, like future combat system is a big Army initiative, where we can bring Net-centric platforms that can really improve the ability to hit our targets, the ability to save lives, the ability to move quickly. And all those are big technology efforts that have information technology included in them. Actually at the core of a lot of it is the ability to see, know where your enemy is at, know where you�re at, and the ability to be able to strike quickly and get out of there quickly, too.

So all that future technology that the Army�s working on, mostly in the labs today and with industry, is trying to move the Army forward. And so there�s a whole push to kind of do that future combat system effort in the future.

What�s happening right now is there�s a big push for technology implementation in the current structure that we have, because everyone coming back out of Iraq and Afghanistan knows that we have to solve problems today. We can�t be waiting another 5 years or another 10 years, we have to move today. And so there�s been a big push on creating the ability to do that. And in our world, in our particular world, that really is in the communications area, the technology to improve bandwidth.

You know, we still have a problem in our world of getting the bandwidth we need in the isolated places we go in the Army. To get that -- the ability to do our web-based application stuff, we have to have bandwidth or we�re not going to be able to operate effectively. So we need the bandwidth, so communications is going to be a technology that�ll continue to be pushed over the next couple of years for us. It�s going to be pushed forever really, but over the next couple of years for sure, we�ll spend some money to do that.

Information assurance. We continue to, as you all know, continue to get attacked on the information infrastructure. We have some great people that are really working really hard to protect the network from intrusions and attacks. And I think that whole information assurance area, the technology in that, is going to continue to be needed and to be a big growth area for us.

We�re also doing enterprise resource planning tools, ERPs, the SAPs, the articles that people saw, those kind of solutions across the Army, because we really do want to change the way we do business. We practice in pretty much all of our areas, personnel, logistics, medical; we�re still practicing old business practices, some coming from World War II that have not really made that big dramatic change. And we want to change the way we do business. We want to be more business-like in how we conduct those applications -- how we conduct those business processes. And so this movement towards the ERP solution, like industry did, is a big thing on our plate for the next couple of years. And for us, that�s a growth area I think that you�ll see continue across all of our programs.

And then the other issue�s training. We�ve really trained -- it�s not so much a technology issue, but what we�re finding is that we can create great software products, we can take them out to the field. We do conduct training on the actual application, but what we don�t really conduct training on is the business process change that�s going on. And we�re going to have to spend more time and more money in training and making sure that the soldiers that touch our equipment really can understand what they�re getting and how that changes what they�re doing in their business-day lives every day and really make our systems more effective as a result of that, more user-friendly to them, much more capability than they have today. And so I think those areas are going to be big over the next couple of years while we continue to work for the big future, and that�s more along the lines of how does all this get tied together in a big network-centric manner?

Mr. Dickson: As you said, much of your effort is focused on modernizing the Army�s business systems, the so-called back-office systems. What kinds of impacts will these efforts have on the soldier, especially the deployed soldier in Iraq and other forward areas?

Mr. Carroll: Well, actually on some of the systems that we have in Iraq and Afghanistan today, it actually saves lives. Interestingly enough, you wouldn�t think that for a business system or a combat service support service, but we -- for example, we field a system called movement tracking system, which a is global positioning system, but it also allows you to do two-way messaging from the truck back to headquarters, back to the States actually, and it provides some visibility of asset management -- of your logistic stuff.

And we have had cases in Iraq where when we were moving -- the logistics guys were following the war fighters towards Baghdad. And in those moves, we had the ability for people that had the units, there were some that didn�t have the units, but the people that had the units had the ability to -- we knew where they were at, we could direct them away from the fight. When they were in trouble, we could redirect them, the Jessica Lynch kind of story, you know. We don�t know this for sure, but we know they didn�t have a movement tracking system. They were in a logistics group. If we had had that capability in that truck, we might have been able to notice they were going the wrong way and try to redirect them. That has happened. People have called in support when they�ve been attacked because of that system.

So some of these business systems are crossing over into really that area of lifesaving that you would expect normally from the other PEOs, my sister PEOs, that are really focused more towards survivability and destruction in a sense. And so for us, that�s a big thing.

The medical, the MC4, we have a medical system that�s in Iraq that�s patient care, where the medic has the handheld medical record of the soldiers in their unit, and they�re able to use that system. And that�s helping to get quicker action and get a soldier keyed up for being redeployed back to a hospital, to, say, a MASH unit, where they could really get support with all that data collected at the time of the injury or the time of the initial examination of the patient. So that�s a big system.

And of course, logistics. I mean, as you know, without fuel, without the ammunition, without food and water in particular in Iraq and Afghanistan, you know, you�ve got to have that or you�re not going to win. And our logistics systems have taken on much more of a visibility into the fight now than ever before. And so for us, I mean, there�s no better really payoff in our world now than today for the war fighter and how we affect the war fighter.

So our whole view of being an installation-based, you know, taking care of the people in the office that do supply and maintenance and personnel, all that�s out the window now. We really are focused on how does all this benefit that war fighter and that soldier, the man and the woman on the ground that�s doing the fighting for our country. How do we get the stuff that they need from our systems to help them be successful?

Mr. Lawrence: You talked about Iraq. I�m curious, you know, how many of your employees are actually stationed in Iraq? And then what are the logistics of sort of managing this global team?

Mr. Carroll: Yes, it has been a challenge. Actually, we have about 135 people in Iraq and Afghanistan today. Interestingly enough, the large segment of those are contractors that support our information technology systems. A lot of them are in communications because that�s obviously an important thing for us, but they�re also in the medical system, logistic system, you know, we�re involved across the spectrum.

What it�s done to us lately, though -- when the war came about, not only with the planning for it, but then in execution, it obviously reprioritized what we�re doing. Everything�s focused on the Iraqi OIF, Operation Iraqi Freedom and Enduring Freedom. That�s kind of our priority. We�ve realigned our money along those lines. We�ve realigned our efforts, our focus. Those are the things that we�re really doing, and that�s forced us to really balance what we want to do for the future because we don�t give that up, you know, move into business process, change for the future of the Army. But at the same time, we want to take care of the immediate needs of the soldiers overseas, and that�s kind of been a priority issue.

It�s been a little juggling that has to occur as to how much goes for the current fixes and how much for the future. And so it�s not an easy decision for our customers who really make those decisions for us as to where they want to put their money and what they want to invest in. The supplemental that Congress gave us really has helped in that manner, because that provided money that really allowed us to do some of the current efforts that are ongoing today in Iraq and Afghanistan. So that really did put a spark into doing stuff currently without too much of a disruption to the future.

Mr. Lawrence: As I understand it, you�re also involved in Iraq with rebuilding the commercial infrastructure.

Mr. Carroll: Yes. We have a program, it�s called KICC, Kuwait-Iraqi Communications Center, that we�re working to put really infrastructure for three groups, communications infrastructure for three groups. One is our U.S. forces. We just finished the build-out of a fixed communications. So we�re taking what the Signal Corps officers in the Army took over to Iraq. We�re in there today now making that permanent, putting better equipment in, making it a better performance, and then turning it over to a contractor-run facility so that those soldiers can come back. And we�ve actually already had a brigade that has come back as a result of that effort, so we�re spending a lot for the U.S. Army to get the fixed communications infrastructure in place.

And then another piece of that that we�re spending with the coalition partners, you know, the English, the Polish, all the people that are over and helping us in war and making sure that that backbone that we�re putting for the Army, that they are connected with that effort. So we�re spending time with the coalition.

And then recently, we took over for the CPA, for the Coalition Provisional Authority, working with the State Department and DISA, which is the DoD communications infrastructure. And we�re working right now to build up the coalition infrastructure, both in the embassy and in what they call the Green Zone, the safe zone, sort of except shots come in there every day, but the Green Zone area, too, to build that infrastructure up for the authority to be able to do their thing.

So we have a really big effort, people that are really working long hours and taking risk, both contractors again and government, who are really trying to get that infrastructure in place. So that program will continue this year, and our belief is it�ll even continue into next year. We�re trying to build up that infrastructure and commercialize it.

Mr. Lawrence: That�s a fascinating point. I didn�t realize you were doing so much overseas.

The latest acronym is ITES. What is it and why does it matter? We�ll ask Kevin Carroll, the Army�s program executive officer for enterprise information systems, when The Business of Government Hour continues.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I�m Paul Lawrence, and this morning�s conversation is with Kevin Carroll. Kevin�s the Army program executive officer for enterprise information systems.

And joining us in our conversation is Brian Dickson.

Mr. Dickson: Kevin, we�re hearing more and more about the importance of joint combat operations involving all the various services. What are you doing in your work to ensure greater interoperability between the Army systems and those systems of the other services?

Mr. Carroll: That�s a good point, Brian. These last couple of years in particular have been -- we the Army have really spent a lot of time working in the joint community. We realize that the joint community really does call the shots. We want to be interoperable with where the whole Department of Defense is moving and to include with our coalition partners. And so in the design of our systems today, we�re not doing anything that does not get the approval of what we call the domain owner, which really is the DoD responsible party for their architecture.

So for example, if we�re doing logistics work in the Army, which we are, the architecture we�re using within the Army, we take it to DoD, to the DoD logistics organization and get its blessing that we are fitting within that architecture from the DoD perspective. So as the Navy and the Air Force are building their solutions for logistics and our solution, we all interoperate within a common architecture. And we�re doing that in personnel, we�re doing that in the finance, and we�re doing it in the information technology arena.

So we�re really spending a lot of upfront architectural time that we used to not do years ago to make sure that we have interoperability occurring, and that�ll help us do a couple of things. One is to reduce systems, get rid of duplication that we do have. Within the Army, we have it. Within DoD, we have. So we�re hoping that�ll help on that issue.

It�ll provide the visibility that the joint commander needs today. And a lot of that came out in Iraq, the ability to see supplies between services, for example, in our area; the ability to access, you know, not only ammunition, but the food and the fuel and parts for -- you know, we had a big issue for tracks, remember, for the -- we were breaking and not getting the production out of tracks for our tanks, and that was a big issue that we needed -- we were finding -- anyplace we could find a track, we wanted to see that and the joint commander wanted that. And so by having our information technology systems where they�re able to go view that, hey, that�s in Germany, let�s get it over to Kuwait or Iraq immediately, really was a big payoff. And so all of that having the systems tied together so that the commander can direct the troops is very, very important. How we ensure that we�re doing all that stuff, like I mentioned, is architecture.

We also have an interoperability, joint interoperability requirement in all of our programs. And that requires us that prior to deploying a program, we have to get a blessing from the joint community, the J6, we call them; but basically, it�s the information technology part of the Army at the Joint Staff, that our system is interoperable with their architecture and the things they want from a technical perspective. And we test for that as part of our testing process, and we have to get their blessing that they�re satisfied that we�re meeting the standards, the goals, and the architecture for the IT information system stuff. And that really helps bring about what we all want, which really is when it comes time for the fight, it doesn�t matter what service, what uniform you have on, we�re together, one unit, and the commander can direct and not have to play around with 10 or 12 information technology systems to get the answer that he or she needs to get the job done.

Mr. Dickson: I understand that the Information Technology Enterprise Solutions, or ITES, initiative is an important focus of your organization. Could you tell us about ITES?

Mr. Carroll: We started a while back. In the Army, we�ve had a number of contracts that we�ve been doing through the Army, small computer program, which is under us. And basically, they were commodity contracts. So either commodity for products or even commodity for services, for labor. And that was kind of the approach that we had been taking in the past. And that allowed all the users within the Army open to the Department of Defense and even open to outside services, like GSA and places -- other government agencies, and they could order what they needed to create something. But as we started within the Army having this need to consolidate our information technology systems and to begin approaching things in an enterprise manner, it really led to us to start thinking we really don�t want commodities.

What we�re really looking for is solutions to problems that we face and that industry has already faced in their consolidations within their corporate structures, and so kind of we�re doing the same thing. And so the idea was how can we create a contracting vehicle that would help us to begin focusing on solutions to a problem and let industry have more choices when they propose to us on how they could go about solving a particular solution based on their experiences that they�ve had with other corporate and government customers? And that led to this idea of an information technology enterprise service contract.

And we still -- it�s broken into two pieces. One piece still deals with the commodity area: the servers that are needed for consolidation, a lot of the technology, communications equipment, the things that would be needed to consolidate, let�s say create a web server form, for example, that kind of technology. And we award it to some real high-quality vendors on that piece of the contract. And that�s open forwarding, and anybody can order off of that.

The kind of the more interesting piece is the second piece, which is the solutions contract piece. And again, we spent a lot of time, took our time selecting contractors that we felt could bring the value we needed to give us creative solutions to our technology problems. So we went through a detailed selection process and picked the vendors we felt very comfortable with. And the whole idea of this is that then we can write statements of objectives, kind of high-level mission needs with some of the performance expectations that we in government have, come out to industry, industry can come back using the technology off of the other contract, but using their brains and their services to put together a solution that really will, hopefully, move us quicker to the consolidation and help us really reduce cost, get performance up better on the systems that we have, and really lead us to this enterprise connection across the Army where we�re really trying to create one network, one virtual network, but one network across the Army.

Mr. Dickson: What are the major challenges that you see to achieving this vision?

Mr. Carroll: Well, actually, interestingly enough, the hard parts -- I mentioned about the statements of objectives. Getting us in the government to think through what we really are after at a high level is a bit challenge. We were better at actually kind of writing out what we know, like from a technical viewpoint, and these are the kind of things we want. And of course, that automatically and in industry�s case, they usually want to give us what we want, so they�ll do what we kind of tell them to do and the creativity gets squashed. And so we�re trying to really raise that up and have our guys sit through, think through exactly what we�re trying to accomplish here.

What would be a big payoff for our customers through these contracting vehicles once we got delivery of that services or that solution? And so that�s a big challenge, just to -- you have people step back, think big picture, try to write out the objectives, and really try to write out the how we would know if we�re successful or not, what would be our metric for success. And that isn�t an easy thing to do. It�s easier to give briefing charts about how to do it. It�s harder to actually do in your particular environment. And it requires that you get the right people there that can do that. Help -- I mean, we�ve turned to outside industry actually, a couple of consulting kind of organizations to come and help us think through that our ourselves, an outsider that can kind of work as that liaison between our players to help do that. I�d say that�s probably the one big challenge.

The other one is that assuming we get through that, and let�s say that we pick up -- a good example would be portal technology. Let�s say that we -- industry has outsourced a lot of their own web-based portal efforts. And so we could go out with some help and get the smart thinking and try to figure out what are the important metrics for running a portal and outsource that, let the vendors take it over, and then, you know, get better performance and better and lower cost even. So we can do things like that.

Historically, we in the government have been better at putting that at the start of a contract. We�re not so good at monitoring them, you know, and determine if we actually made the results over years or not. And part of it�s very difficult. The challenge is like people. A lot of times, our business case analysis of doing this kind of stuff says we�re going to lose X-number of systems administrators. And that�s true; in the real world, that is what happens. But in the Army, who owns those systems administrators is everybody. I mean, there�s tons of people that own them, they�re not under one hat. And so the ability to determine if that system administrator really went away or did they get reutilized for other priority mission stuff, it�s very difficult sometimes to capture the savings and verify the facts. So that�s the challenges.

Mr. Dickson: So are you attempting to tackle that problem?

Mr. Carroll: Yes, we are. We�re trying to really learn from industry, I mean, the experiences, because, I mean, industries have the same problem. And we�re trying to learn of what they�ve experienced as well as the other government agencies who have tried this and learn and trying to build a way into capturing that a lot better, to use a process where we really are finding a way to measure over time to determine if we�re doing it. Unfortunately, though, we�ve only been able to get through the decentralization of the government organization on how it manages money and people.

That�s still the big challenge for us is to really be able to -- we can determine -- I think we feel more comfortable now that we can determine where with 20 people running the system and now it�s being run with 4, as an example, we feel comfortable with being able to track that that�s true and we can measure that. We don�t know, though, if the Army the budget people would not be happy because we can�t really show them that there�s 16 peoples� worth of savings that went somewhere. And that still is a challenge and I haven�t figured out -- I or the -- I don�t think the Army has figured out a way to kind of solve that problem as of yet.

Mr. Lawrence: There�s much talk these days about performance-based contracting. However, our guest has actually been a leader in this area. So what is it and why is it important? We�ll ask Kevin Carroll, the Army PEO for enterprise information systems, for his perspective when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I�m Paul Lawrence, and this morning�s conversation is with Kevin Carroll, the Army�s program executive officer for enterprise information systems.

And joining us in our conversation is Brian Dickson.

Mr. Dickson: Kevin, we�ve been talking about the importance of ITES, the Army�s enterprise information technology initiative. I know it�s early in the program, but do you have any lessons learned to date that you could share with us?

Mr. Carroll: Yes, Brian. I�d say the big thing that we learned was how important it was that the effort not be done in a vacuum, and that we really work as a partner with the Army CIO, which we did for the ITES program; Netcom, which has recently stood up under the Army CIO as the network operators. They�re basically going to be responsible for operating the network for the whole Army; a big job. And we knew that whatever we would build as an acquisition organization, they would have to run, so it was very important that we brought them in with us earlier on and help us with the requirements, help us with the source selection, and help us with the evaluation. So it was critical that we got their involvement with it as well as the contracting organization.

We used ITEC4, which is basically an information technology E commerce group within the Army, and they really helped us get the contracting strategy put together and make things happen from the contractor viewpoint. And then, of course, our relationship with CECOM again, our engineering effort, the guys at Ft. Huachuca who helped us write the requirements, really helped us get things going. So that was within the government, very important that all the players be together through that process.

And then another key part as we went through that was going out to industry as we developed pieces of what we were doing with our strategy and the requirements, and to really go out and get industry feedback back into that process so that we made sure. And we did modify our procurement strategy based on a lot of that kind of input, and that was really key to do. And so that helped us I think get procurement tools put in place in a good manner and helped ensure that we got the right guys to do the job from a contractor perspective. And now our next step is to actually deliver the results and show that that vehicle will assist us in getting the program things we want done at an enterprise level completed.

Mr. Dickson: Kevin, you�re known within the Army and within DoD as a very strong proponent of performance-based contracting. Could you explain to us what this concept is and what are the benefits to the Army?

Mr. Carroll: Well, thanks for that compliment. The truth is every -- I think in performance-based contracting, everyone�s a pioneer and there�s very few settlers, because it�s a tough, tough area to do. And we want to do it. We certainly have the motivation in our organization to do more performance-based efforts, because we think it�s rewarding to the contractor community, it�s rewarding to us, things get done faster for the soldier in that regard. So we are proponents of it.

The definition of performance-based contracting is kind of all over the place. I mean, you know, there�s actually courses where everyone has a different definition depending on who�s teaching it on what performance-based contracting means. But basically it�s risk, shifting risk over and letting control go to -- that�s the hard part for the government -- control go to the industry to be able to deliver the results that we have. And it can be any type of -- it can be a fixed-price contract or seat management approaches, paper delivery, paper service kind of contracting. So there�s a whole bunch of different ways of doing it, but none of that is as important as this idea of how do we allow the freedom for innovation, allow the freedom for delivery of the services so that industry can do its thing in their best business way that makes sense to do it, and then we the government can monitor those end results that we�re looking for in order to ensure that we�re getting it, and pay or not pay for those end results when they�re contractually due. And so we really want to try to change the way we�re doing it.

I�d like to be able to tell you that we have tons of successes that I can point to. We�ve been learning. We�ve had some successes, we�ve had some failures on our contract mechanism using performance-based contracting techniques. And there�s a lot of factors to what�s successful and not. Part of it is the way the contract was written. Part of it was the government players involved, the government people involved. Part of it were the industry guys, how committed they were to really doing that. Were they willing to live up to it when they got in trouble to what they committed to? All those things are factors that have -- like I said, sometimes we�ve risen to the occasion and it�s paid off, and sometimes it hasn�t. So it�s a very tough area, but we�re committed to doing it in our program office and we�re going to continue to push to make that happen, and we believe to the benefit of all.

Mr. Dickson: Kevin, what do you see as the future of the business in the combat support services area in the Army?

Mr. Carroll: We believe we�re a growing business. We�re in business. We know our revenue�s increased quite a lot over these last couple of years because we have more customers that are interested in doing enterprise things. And so what we see as critically important now is -- which we mentioned before, was the joint flavor to everything we do. And I think that the combat service support area is going to become more and more joint solutions, you know, the inoperability issue we talked about, all those are critical that we do that. So I think that�s going to be a big push.

We�re going to continue the web-basing and the commercialization of our products. And as you know, in the Army, and this is true in the Marines as well, less so in probably the Navy and the Air Force, but we always have to have the ability that we�re not going to have communications. So we always have to have some ability to keep our functions going without comms, communications, because when we�re running somewhere, like Baghdad, we�re not always going to have communications on the move, although that is a desire for us in the future to do that. So we have to do a little bit of design outside the normal commercial manner, but basically we want to be more commercial-like, web-based-like, and be able to use those systems. And I think that�s going to grow across all those combat service supporters. The need for communications is going to continue to grow for our area.

The Army�s actually working right now in the LAN warrior (?) network effort that Gen. Boutelle has underway, working with the logistics community on a connecting and logistician program that will allow us the ability to get more communications out not just to the logistician, but really to the medical community and the other CSS world, and that�s an important area for us. Some day, we do want to be able to be on the move and have satellite communications, and I think that�s going to be a big growth area in the future.

And cross-functional integration; in other words, the logistics community, the personnel community, the finance community, the procurement community, they�re under -- integrating within their stovepipe or within their community today. My job is to help our customers look actually beyond that and how they interrelate to each other, because they all take data from each other to do that job, and we don�t want them recreating data. We want to have a single source for that data and then have these -- and integration occur across those platforms. And that�ll be a big thing for us, to get to that big issue where the data the soldier looks at is believable, is accurate data, timely, to where it�s data they believe that when we say Part X is in that warehouse, it�s actually in that warehouse; or we say, like, we need people of a certain skill to come to Iraq to do something, we can find that soldier at Camp Such-and-Such with our systems, because that reliability would be so high.

And that�s been a difficult challenge for us, because a lot of people don�t believe the data. And like in logistics is a good example of this, people over-order only because they�re not sure if what they looked at was right. And as we�re tracking in-transit visibility, as we�re looking at parts coming in, which we�ve really done a lot better job, but a lot more to do on tracking parts coming into theater and being distributed within theater, we want the people looking at that data to believe it, that it�s true. And we�re getting there, but there�s still more growth to occur within that community. So I think they�re going to be the biggest things in the combat service support area: the jointness, the web-basing commercialization, and improving the cross-integration.

Mr. Lawrence: Kevin, you�ve had a very interesting career in public service and I�m curious, what advice would you give to someone interested in coming into government?

Mr. Carroll: Well, working in the government is one of the most challenging things that can ever happen to a person. I mean, I spent my life basically in it, so I�m a little biased, but there�s no place that I�m aware of, there may be a few companies, but there�s no place -- really if you come into the federal government and you have energy and you want to do things, you�ll be given authority to move out and go do things. I mean, we�re looking for people to empower and to move. And it�s -- you�re working on a mission that -- you know, it�s a mission focused on lives in the Army�s case, but really throughout the government, be it GSA or HUD or wherever you might work, I mean, it�s all focused towards service to the citizen. And I think you really can�t have a better feeling for what you�re doing and what you�re contributing to for the nation. So it�s very challenging.

Plus, my experience has been is it�s fun. I mean, it�s an enjoyable thing. You have good people that you work for. I�ve said always that you got to look for a job that you enjoy, where people trust you, and where you can move out and do things. And you�ll move up pretty quickly. You never make the -- maybe the big dollars that a lot of people believe they make in industry, but the fulfillment well makes up for that.

We still are a stable place to work. I mean, the federal government is still -- you know, there�s a good and a bad to that, but the good to that from a prospective is it does provide you a baseline where you can grow from and you don�t have to necessarily worry about the stock market or other things that might trouble other employees in the industry. So I think it�s a really good place to go. And I know we are always encouraged by people that want to come work in our organization.

Mr. Lawrence: Well, that�ll have to be our last question because we�re out of time. Brian and I want to thank you for joining us this morning.

Mr. Carroll: Yes, and thank you very much for taking the time and doing this for me and my organization and the Army. And if you�d like to learn more about our organization, if you go to www.eis.army.mil, m-i-l, you can find out about our programs and the people that run our programs. And so thank you very much.

Mr. Lawrence: Thank you. This has been The Business of Government Hour, featuring a conversation with Kevin Carroll, the Army�s program executive officer for enterprise information systems.

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

This is Paul Lawrence. Thank you for listening.

Friday, September 26, 2003

Arlington, Virginia

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

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our conversation this morning is with Jay Waite, associate director for decennial census, US Census Bureau, in the Department of Commerce. Good morning, Jay.

Mr. Waite: Good morning, Paul. How are you today?

Mr. Lawrence: Great, thanks. And joining us in our conversation is Tom Burlin. Good morning, Tom.

Mr. Burlin: Good morning, Paul. Good morning, Jay.

Mr. Lawrence: Jay, perhaps we could start by finding out more about the Census Bureau. Could you give us a sense of its purpose, mission, and programs, please?

Mr. Waite: Well, the Census Bureau is in the Department of Commerce, as you said. The main purpose of the Census Bureau is the conducting of the census once every 10 years. The census has been in existence since 1790. The main reason for conducting of the census is it's used for apportioning of the House of Representatives. It is the vehicle by which political power is distributed in the United States.

Mr. Lawrence: How do you think about the size of the Census Bureau in terms of its staff and the people? How do you describe it?

Mr. Waite: Well, the Census Bureau during noncensus periods is about 11,000 people. That consists of about 4,500 people in the field throughout the country in our regional offices that conduct interviews and surveys, about another 4,500 people in our headquarters in Suitland, Maryland, and about 1,500 people in a processing center we have in Jeffersonville, Indiana. Now, at census time during the actual time of the census we swell up to somewhere on the order of 800,000 people in actually conducting the census.

Mr. Lawrence: What are the skills of the 11,000 people? I want to think statisticians recording things.

Mr. Waite: Actually, the skills are very diverse. In the field itself the skills are people skills that you would get from a door to door surveying organization where there are people skills, getting into houses, talking to people, interviewing, getting information, managing a field staff, making assignments. Jeffersonville, Indiana, is much more of a processing center. They have clerical skills as well as computer programming skills.

In our headquarters in Suitland we have a diversity. We do have a number of statisticians that count things and write things down. We also have a large IT component because in today's world counting people and counting in the census is a big IT operation. We have maybe 4- or 500 people who would be considered mathematical statisticians and they worry about some of the details of the sampling and the interpretation of the statistics.

Mr. Burlin: Jay, a little bit about your roles and your responsibilities as the associate director of the decennial census and ell us a little bit about the activities of your office.

Mr. Waite: As the associate director of the decennial census I am the chief government person relating to the census. I am responsible for all of the people, the money, and the processes of the census, which is the largest peacetime activity that the federal government produces and conducts.

As the associate director I'm responsible to make sure that the budget is procured, that we've got the right budget, that we have the plan. I endorse the plan and take the plan to the various segments of government to make sure that there's a plan laid out, approved, and funded by the Congress to conduct the census.

Mr. Burlin: I happen to know from our relationship that you've spent your entire career at the census.

Mr. Waite: That's true.

Mr. Burlin: Can you tell us about the positions that you've held through your career and what the census was like when you first joined? What got you interested in joining the Census Bureau?

Mr. Waite: I've always been very interested in mathematics. I've been very interested in statistics. I'm a great sports fan and being a sports fan you get a lot of interest in statistics. What really got me interested in the Census Bureau was the birth of our second child. I was in graduate school and trying to keep from starving to death and my wife announced that we were going to have another child so I started looking very hard for a job.

The Census Bureau offered me a job as a computer programmer in 1971. So I left my home in northern Utah and traveled back to Washington, DC, which was quite a change in culture and in climate, and began working there as a computer programmer. In those days it seemed like the census was a pretty safe place and a good place to work. I have worked in several different venues since then. Although I did work as a computer programmer I had been trained in mathematical statistics so a short time after arriving I got a chance to work in a research program as a mathematical statistician which I did for several years.

I've had several other jobs in the Census Bureau. My current job, I took over as chief operating officer of the census in 2000. I started there in 1997 and I was in charge of all census operations. Then in 2001 I took over as the associate director, which is the senior director on the executive staff at the Census Bureau for the census.

Mr. Burlin: 1971, that's a while.

Mr. Waite: It is a while.

Mr. Burlin: There must have been some pretty dramatic changes in technology and techniques over that period?

Mr. Waite: Huge changes. Since talking to you from IBM one of the big changes I think about is I came as a computer programmer, as I said. Our computer programming at that time, we used to write code on a FORTRAN work sheet. We'd take it to a separate staff who would key it up on a punch card. That punch card would be transferred to a small 2A tape which they would update. Even reassembled programs were all done on a big mainframe with these steel tapes. Maybe two or three days later you would get back your code indicating that you'd left a comma out or you'd left a period out. You compare that with today when everybody has a computer on their desk and we don't think anything at all about on the spot editing.

So things have gone a lot different. They've moved a lot more. Our data dissemination program where we used to print volumes and volumes of books about the census, and that's the only way you could find out about the census, that's what it was like in 1970, perhaps books piled up the height of a human being, now we've turned that in 2000 into instantaneous Internet response of all that data in everybody's home virtually instantly, big changes, particularly, I think, in the IT part of life.

Mr. Lawrence: Let me ask you about your career from a management perspective. You began as a computer programmer but one day you became a manager of other computer programmers or the like. Could you tell us about your step to management and especially dealing with highly skilled people, what that was like?

Mr. Waite: Management was an interesting adjustment. It's one thing to be responsible for yourself and making sure that you're getting your own work done and when you have that job management always seems like an easy job. The manager doesn't have anything to do. He's just sitting there in the office. I've found managing and trying to learn to motivate people to be a big challenging of management, to try to help them figure out how to feel the same enthusiasm for a task that I did.

I didn't find too much of a problem managing highly technical people. I think I've been confident myself about my own abilities. I have a masters degree. I didn't have a PhD. I tend to approach people thing saying I don't really care what your degree is; I'm interested in what you know. I have found, however, that more educated people often times are more knowledgeable but I haven't really had a big issue with trying to motivate them and manage them from a technical or highly educated perspective.

Mr. Lawrence: How about the scale of what you're doing, especially when it grows to the 800,000 people, how do you manage such a large group?

Mr. Waite: It's a massive undertaking. The census itself is a set of relatively simple tasks but it's so huge. It's the massiveness of it. It isn't particularly hard for somebody to get a meeting together of 10 people at 2:00 o'clock in their office but to get a meeting together of 150,000 people at 2:00 o'clock in your office suddenly changes the whole structure of things.

We have a very good management team but clearly managing something as big as the census requires a lot of interaction with a lot of people. I have about 15 direct reports during the census time. But the big thing about the census is we are spending money at just unbelievable rates during the census. Twenty-four hours or forty-eight hours delay in something can cost us huge amounts of money. It's one thing to talk about a census where you say I'll get something from the field. Can we hire an extra person in each one of our offices? One of the first things I had to realize is sure, we can hire another clerk. I found that turns out to be 521 clerks because there are 520 local census offices.

So even relatively insignificant expenditures or what seem like they're insignificant turn into massive things in a hurry. If you decide everybody needs a PC you're talking about 800,000 PCs. It suddenly changes the whole complexion of the day.

Mr. Lawrence: How about just the frequency factor? Your analogy to sports is quite interesting in that you practice every day and in baseball you play a game every day. You only get to do this once every 10 years. How do you get a rhythm?

Mr. Waite: That is a big challenge. You really don't get a rhythm. You spend a lot of time testing and preparing to try to get everything worked out and tested as best you can. We have found that without extensive testing even relatively simple changes in procedures can be disastrous.

As an example in Census 2000 very late in the census process somebody had the great idea that if an individual wanted to have a questionnaire in a different language maybe we should put a little note on our advance letter that we send to every house in the United States in five or six different languages saying if you're interested in a questionnaire in this language please tear off this sticker and send it back to us. That was a change made late in the day. Everything was fine. We tested it and we thought it was great. It turned out we woke up on the morning of March 13, 2000, realizing that every address in the United States with the labeled advance letter on it had a leading 1 in front of the address. In other words if you lived at 51 Oak Avenue you now lived at 151 Oak Avenue. With that big of an operation when you make a little mistake like that you make it really big. Fortunately for us the post office was able to read the barcode which accompanied that address but we came to a very near disaster of having virtually every one of our advance letters undeliverable.

Mr. Lawrence: That's an interesting point especially given the size. What are the other logistics of running the decennial census? We'll ask Jay Waite of the Census Bureau when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence and this morning's conversation is with Jay Waite. Jay is the associate director for the decennial census in the US Census Bureau which is part of the Department of Commerce. Joining us in our conversation is Tom Burlin.

Mr. Burlin: Welcome back, Jay. The census has been called the largest peacetime initiative of the US government. Can you describe the logistics required to conduct the census?

Mr. Waite: Well, a little bit. The census is conducted mostly with rented logistics and facilities. Just to put that in a little bit of perspective, during a census we have 12 regional census centers, 520 local census offices. A local census office is about 16,000 square feet of rented space with communications facilities in it, four data capture centers which are basically shopping centers that we've bought and gutted and put data capture equipment in them. We printed over 20,000,000 paper maps in order to assist the enumerators in going out and doing the nonresponse follow-up part of the interview.

We had 10 major IT systems and several secondary systems. About 15,000 personal computers were purchased just for the census, about 13,000 servers, and over 16,000 telephone lines. We hired 860,000 positions for temporary six- to eight-week jobs. So we'd hire them, train them for three or four days, and send them out to do mostly nonresponse follow-up work, 860,000 people who we didn't know the week before, we trained them and who knew at the beginning they had a six- to eight-week job. Managing that staff was a bit of a challenge.

We conducted the census in 49 separate languages which meant we had to have different pieces of paper and different language skills on the part of our enumerators. We had 27,000 local questionnaire assistance centers, John's Barber Shop, Mary's Beauty Parlor, the 7-Eleven, the service station, where we put the questionnaire, we put a little staff there. You can walk in if you needed to and they would help you fill out the questionnaire, give you some answers about how to do the questionnaire.

We answered 5.8 million telephone calls in about nine days from questions that people were calling in about. It came all in one spike as we mailed out all these forms. We captured data from 1.5 billion pieces of paper from March through August. To put that into a bit of a perspective, a billion pieces of paper is 17 stacks of paper the size of the Sears Tower, and we had 1.5 billion pieces of paper that we processed from March through August 2000 in these four big shopping centers.

We printed over 400,000,000 questionnaires and within a year we tabulated data for 9,000,000 census blocks, 51,000 tracks, 39,000 governments. Our data capture centers that I talked about just briefly, they were basically very large shopping center kinds of places where questionnaires would come in by the truckload every day, several tractor trailer loads of questionnaires. They had to be opened, sorted, and captured with optical scanning characters.

We employed about 2,000 people per data capture center. As I've mentioned before, we processed about one and a half billion pieces of paper during summer 2000.

Mr. Burlin: So we're all drawing these mental pictures right now of huge stacks of paper and tractor trailers lined up for miles and miles. Most of us aren't thinking right now about 2010 but I'm sure you're thinking about that every day. What are you plans for the 2010 census and how will it differ from the 2000 census?

Mr. Waite: I'm glad you asked, Tom. The 2000 census was probably the best census ever. As far as coverage was concerned we believe that at the end of the day based on a lot of detailed evaluation we may have actually overcounted the population by less than one-half of 1 percent nationwide. It was a very, very high-quality census from a wide range of avenues.

But it wasn't perfect. The census design is that we count everybody on census day, and approximately one house in six gets what we call the long form. That's where we get the detailed data for journey to work, for education, for income. That data is the only source of very small area data about your block or about the building you live in and it's really valuable for local governments and businesses to plan to understand what does this community look like and what are its characteristics.

That data now comes out only once every 10 years. That's not often enough. If your neighborhood looks exactly the same as it did 10 years ago then once every 10 years is a great thing if you're a planner. But I used to say a lot of times in earlier discussions in 2002 the most recent data that the average mayor in America had about the details of their community was collected in 1990. That's just not cutting it.

So one thing we're talking about in the 2010 census, we're changing that paradigm. We're eliminating the long form from the regular census collection and we're collecting data in what we call the American Community Survey where every month we'll be talking to 250,000 households throughout the country. Rolling that data up over a five-year period will give us 15,000,000 long form sample cases which is a sufficient size to produce small area data every year with a five-year rolling average. People will no longer have to worry about having eight-, nine-, and ten-year-old data to make those kinds of decisions.

Another important thing we're doing is that we have a large database. Virtually every address in the United States is a part of our database for mailing our census. We have accompanying that an electronic map, basically a street center line map, called TIGER. Some of you may have seen or used TIGER/Line files which is the basis for Mapquest and many of the other commercial mapping processes that you see and use all the time.

That file is very useful and very good and we use it to produce these 20,000,000 maps as well as to provide mapping characteristics around our data but that data is not in true GPS alignment. It's proportionally correct, it's relatively accurate to one another, but it was drawn in many cases by hand and digitized. We have a process going on as part of the 2010 census to go through every county in the United States and align that TIGER with true GPS alignment. That's going to mean that the crown jewel is that when we're doing the short form only census this time when you don�t fill out your form and we need to come and do nonresponse follow-up instead of coming with a paper questionnaire we'll be coming with a small handheld PDA with a GPS transponder on it that will allow the enumerator to find your house with your GPS coordinate, conduct the short form interview, transmit the results of that interview back to our headquarters, eliminate the data capture of all the nonresponse part, and basically take care of what I like to say we're replacing electrons for trees.

We're trying to be responsive to figure out some way to save money. The American Community Survey is a wonderful survey but it's expensive. We think it will cost somewhere on the order of $1.7 to $2 billion during the decade. Realigning the map TIGER is a wonderful thing but it costs money. It's going to be on the order of $500- to $550,000,000 during the decade. So we need to save the money in the collection of the short form. Billy Sutton was asked one time why do you rob banks and he says that's where the money is. When I look to saving money I look to the field.

In 2000 the census cost $6.7 billion. About 70 percent of that money was spent in the field. So if you're going to save serious money you have to look to the field. The field spends money on three things, people, gobs and gobs of people, space, and paper. During the 2000 census we printed 400,000 questionnaires and listing sheets and addresses that they're supposed to go to and these 20 million maps. So you get this big volume of paper. Then you have to rent space to put that paper in and you have to hire people to move that paper around. So if you're going to attack the cost in the field you have to attack paper.

We're attacking paper with what we call mobile computing devices, a small PDA, electronically transferring the map as well as the assignment of which particular house your assignment is back and forth, eliminating the use of paper except for the initial mail out and mail back. That is the main thrust of our cost containment activities that we're approaching with the 2010 census.

So we're already testing it. We're beginning the process of 2010 even as we speak. We're doing our first test of these mobile computing devices in the Borough of Queens, New York, and it's a fairly challenging place to take that process, find those addresses, and do that work. So this next spring we'll be having our first census test in Queens, New York, and in three counties in southern Georgia beginning that process.

So we're really excited about the upcoming census. We think it's going to be different in some important ways. We believe that in the future the census will look, act, walk, and talk a lot different. We want to continue our move away from paper and more toward technology and electronics.

Mr. Lawrence: How do you count people who just don't want to be counted? For example, they might have issues with the IRS, they don't want government intrusion, a host of reasons, but they just don't want to be counted?

Mr. Waite: That's one of our big challenges, of course, and we try to do it in a number of ways. We were very successful, we believe, in 2000 with a big outreach and partnership program. For example, people living in those communities that feel threatened in some sense by the government, perhaps they're here illegally or they're not too keen about the government knowing where they are, we tried to work with advocacy groups that knew them getting people that they knew to go into their communities and work with them and help them and help them to understand that we are not interested in whether they're citizens, we are not interested in whether the IRS is after them, we keep our confidential. We use partners throughout the country in a lot of ways, individual advocacy groups or others, to work with and try to encourage people to be counted.

We weren't perfect on that but we made big inroads on that and that was a big reason why we were able to reduce our undercoverage as much as we did and we expect to do that even a lot more. Our interviewers themselves we hire indigenously so that you're talking about people that live in the community are coming to your door. We don't have Jay Waite driving through a neighborhood where he's never been before in a US government car saying please come see me.

But we try to reach down and plus we spend a lot of time and money really on advertising to try and help people understand that a good count in your community is important to you. It will get you the resources or the statistics that you need for schools, for roads, and for other things. We had our advertising campaign for separate languages and for separate markets and for people that we thought were difficult to count.

Mr. Lawrence: How do changes in technology affect the census? We'll ask Jay Waite of the Census Bureau for his perspective when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and today's conversation is with Jay Waite. Jay is the associate director for decennial census in the US Census Bureau which is part of the Department of Commerce. Joining us in our conversation is Tom Burlin.

Mr. Burlin: Jay, you talked about the enormity of the task, but from a practical perspective it's almost impossible to count every single person. The success of the census is sometimes measured in how close the undercount of the minorities is to the population as a whole and you've already mentioned that 2000 was one of the most successful censuses in history. This undercount was the lowest ever. What does the Census Bureau do to reduce this differential undercount of the minorities?

Mr. Waite: Well, this is a big challenge for us, Tom, of course. When you conduct the census basically the census is a very interesting count of all the addresses and the people living at those addresses. If you have populations that don't live at the addresses the way you might think it makes it more difficult to count. Minorities are more likely than nonminorities to be living more than one family in a building, in an apartment, or in a house and you may or may not catch that. They may be living in several places and they're difficult to catch on any one might where they might be.

We've had a long history since we started measuring this differential undercount in 1940. Coverage has improved in every census but the difference between the minority and the nonminority populations has remained very persistent, about 3 or 4 percentage points difference in that coverage, and we've tried a lot of things. In 2000 we believe we made some really serious inroads. We didn't eliminate that difference but we cut that difference almost in half.

We did it by a large number of different initiatives. Number one, we pushed the language program very heavily. A number of minority people are not counted merely because they see a census questionnaire, they don't really understand what it's asking, they're not sure what is meant, and they don�t get around to answering or responding.

We heavily advertise. We had a fairly big advertisement campaign in 2000 targeted toward the minority populations in their languages by people they knew in their cultures. So we had television, radio, newspaper broadcasts focusing on those minority groups. We also worked with partners throughout the country in those minority communities trying very hard to encourage them to understand the importance of being counted and of trying to figure out how to count them better and how to include them in the census process. In the end we had a combination of these things which we know made a big inroad as we measured it in the count of the minority population.

There is still for a lot of reasons a difficulty in counting everybody and we don't count everybody. The goal of the census is to count everybody once and only once and in the right place. It is not a matter of just counting them but we need to put them in a very small geographic area. We do a very job of counting them but some people we count more than once and one of the big issues, one of the big stories, of the 2000 census is the number of people that were counted twice.

That happens because, for example, a child away at college gets counted at the university. His father who is paying the tuition bills says I don't care where he thinks he lives. As long as I'm paying the bills I'm counting him back here and we sometimes aren't able to link those two up. Children of divorced parents, in many cases both parents are counting those children. The snowbird population, we count people sometimes in Florida and in Michigan because we end up overlapping their trip.

But we have made progress in the minority population. Overall the national undercount or the national count was measured as a slight overcount of 49 hundredths of 1 percent. But some minority populations were still undercounted by as much as a percent and a half. So there is still that difference but we believe we've cut it dramatically. We expect to spend more time and more money and more effort in 2000 on this partnership, advertising, and pushing down to those communities to help them to understand that counting them is really in their best interest.

Mr. Lawrence: Let me shift to the people on your team and especially concerns with the federal retirement wave. I'm curious as to how you're worrying about that especially given the loss of experience and expertise.

Mr. Waite: This is a big problem, I think, in all federal government and a particularly big problem at the Census Bureau because we talked about some sports examples but we only play once every 10 years. It's very important that we have some kind of institutional knowledge from the previous time. That's what we always worry about. I'm one of them they're worrying about now, long in the tooth. Am I going to be around long enough to do the next census?

We have an active plan at the Census Bureau, succession planning, where we're lining up younger people to get training and to work. My immediate staff, I have eight people that work for me as immediate reports. Four of them are certain to be here in the next census and I'm working closely with them to make sure that they get in positions of experience and try and train them but this is a big issue.

Another piece of our aging work force that we have is that our enumerators that we hire during census time, five decades ago there was a large pool of very well-educated, reasonably young housewives that didn't work very much out of the home that a six- to eight-week job was something they could do and do very well and they were easily trained and they did a wonderful job for us. More and more we are now looking for that work force in the retired population and in the very young population because many of the people in the middle-age working groups are already working and really don't have the time to be able to get off to help us.

We're concerned a little bit as we look at this new technology that we're employing with the human factors about a PDA or a Palm Pilot or a program like that. Will that be a problem for older people that would be helping us with their finger dexterity and with their eyes and those things. So one of the issues. We're quite comfortable I think that the technology side of that will work but we're very interested in will the human factors become an issue. They do become an issue sometimes even with pencils and paper and if we put a small computer in front of them with a small screen and little buttons that require nimble fingers will that become an issue for our nonresponse follow-up activities? It's something that we're worried about even at that level as well.

Mr. Burlin: Jay, the Census 2000 was noted for its use of contractors in the operation of the census. What functions did they perform, was it successful, and do you plan changes to your 2000 practices in 2010 based on those experiences? Is the bureau addressing the president's management agenda in competitive sourcing requirements?

Mr. Waite: Yes, we are, Tom. You're right, 2000 was a big paradigm shift for the Census Bureau. We have for many years believed that we were the only people living or dead that actually knew how to do a lot of these things. We had an awful lot of in-house systems, we did everything ourselves, and we felt that the private sector could not possibly be able to figure out how to do this complicated and honorable job that we were doing.

For a lot of reasons we were encouraged and almost forced into a model that said we needed to contract out in some cases some of what we had considered before to be our core competencies. So we took a bit of a leap of faith. We hired contractors to do our data capture. For example, we invented the Fosdick machine, the early cameras, as so we had built all that inside and we felt surely this newfangled thing called optical scanning, newfangled for a government agency, they could never figure out how to read those 400,000 pieces of paper or 400,000 questionnaires in a few days. We contracted out for data capture and found that to be very, very successful.

We contracted out for our big telephone banks where we send out 110 million questionnaires one day and if 1 percent of the people receiving them have a question you've got a big phone line issue. We had tried to manage that in the past ourselves. We turned that over to a private contractor and to the call scheduling business and basically took over that business for a few weeks but, again, that was done by contractors.

In our data dissemination process we also had contractor help. Where before we had attempted to program and code a lot of tables and to produce a lot of data first in books and then in CD-ROMs we got contractor help in order to do that. We're able to do things that we had never done before. The census produces huge amounts of data and our eyes are always bigger than our stomachs. We always have hoped to produce all this data and never quite got around to it. In 2000 for the first time in the history of the census we produced all of the census data, short form, long form, broken out by the different race groups and by the Indian-nonIndian tribal groups. It's all completed as of today. The official census of 2000 ends September 30th. This is the first time in the history of the Census Bureau that we got all that done. We would not have gotten that done for sure had it not been for contractor support.

So it was really a good combination. I think that we learned, surprising to us, that it is possible for a contractor to hire people to do the work that we thought only someone with 80 years of government experience could possibly think about doing. I think some of our contractor friends learned that there was a little bit more to doing a census than they might have thought.

Based on that we're expecting to continue to move forward and probably do much more contracting in 2010 than we did in 2000. I spoke earlier about exchanging electrons for trees. We're almost certainly going to go outside of the Census Bureau to seek the expertise to develop those systems which will be passing the data back and forth electronically rather than to try to hire in-house expertise ourselves.

The cyclical nature of the census makes it very good to think about contracting. For a period of two or three years we need huge amounts of energy, expertise, and people. If you hire them permanently through the federal government you've got a big issue with RIFs or with long-term people and not knowing what to do with them. One of the happiest days of my life is when we finished the data capture centers, we closed down the data capture, and I went to one of the data capture centers we had in Baltimore and I told the contracting personnel get these people out of here. I didn't have to fire anybody, I didn't have to pay any payroll, I didn't have to move any desks. I just drove home smiling all the way home and somebody else took care of that problem.

But I think there's a lot more things that we'll be doing in contracting as we look forward. It was something that we went into with a little bit of hesitation. I think we came out of it not perfect, we're not great contract managers, and everything didn't work well and we learned from each other, but I believe in the end we had a very positive experience.

Mr. Lawrence: That's a fascinating point. Surely with all that data privacy is a concern. How is the census data protected? We'll ask Jay Waite of the Census Bureau for his insights when The Business of Government Hour returns.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence and this morning's conversation is with Jay Waite. Jay is the associate director for decennial census in the US Census Bureau in the Department of Commerce. Joining us in our conversation is Tom Burlin.

Mr. Burlin: Jay, the scope of the census has expanded beyond just the enumeration of people for the sole purpose of apportioning seats in Congress identified in the first article of the Constitution. What do you think about this trend?

Mr. Waite: Well, it's a great trend as far as information. The census becomes a great treasure trove of information about a lot of different subsets of our population. It does complicate the task of doing the census. For example, it's not sufficient any more that you just count a person once and only once and in the right place. You have to determine what their ethnicity is, what their racial background is, where their parents came from. You have to worry about whether they were housed in rented units or owned units, whether they have a house or they don't have a house, what their educational attainment is. It has become a form of identity. A lot of people use the census to establish who they are.

Just a couple of examples about that, it's very important to large segments of the Hispanic community that they are able to identify the origin from which they came. For example, you might be from South America but people in the Dominican community in New York would like to know how many Dominicans there are. Often times as in many groups the young people have long since lost any particular identification with the home country but their parents want them to be part of that. That complicates the process because it turns out that it's not one census. It's seven, eight, or nine censuses because you're trying to do different things.

Language is another big issue. There are clearly parts of the population who do not speak English well enough to do the census and they need language help. There are also groups in the population who really like the idea that a federal agency would have a questionnaire printed in their language. So that gives the census a great mosaic and a great picture of the United States but it does complicate the process. Counting people is difficult but counting them and labeling them and identifying them in the various groups that people want to be identified in adds to our challenge on a day to day basis.

Mr. Lawrence: Jay, no conversation about the census would be complete without talking about sampling. So I'm curious. In 2000 sampling was proposed rather than actual or in addition to actual counting and there was a belief that the sample would yield a more precise result but the Supreme Court got involved and struck this down. I'm curious. How should we think about sampling being used to determine the accuracy?

Mr. Waite: Well, actually to be clear there were really two separate issues with sampling. One was the sampling for nonresponse follow-up. In other words if I've sent you a form and you didn't answer rather than to go to every door that didn't answer maybe I could go to a sample of those doors and get enough information for the count. That use of sampling was primarily a cost savings. I spent a lot of money with people driving to your house and trying to find you home and making two or three trips there, finally getting you and getting the interview. If I only had to go to a sample of those places it would save money.

That's the part that the Supreme Court struck down, that the Census Act did not allow sampling for purposes of apportionment to decide how many congresspersons went to New Jersey or how many went to Ohio or how many went to Georgia. We were hoping to save money on that. The other piece of sampling which was much more contentious is a coverage measurement evaluation. What that really meant was that for about 300,000 housing units we went back after the census was conducted. Independent of the census we went back to those housing units and redid the census and then compared those results with the census results. When they differed we went back yet again to those houses and adjudicated those differences. From that we could estimate the proportion of white males between 18 and 29 that were missed or double-counted in the census.

So the idea was and has been for two or three decades now if you could estimate those proportions at the national level or even at some level smaller than the national level maybe you could then use those estimates of undercount to adjust the census count. In other words if you estimated you'd missed more black males between 20 and 39 than you had white males you might increase black males wherever you'd actually counted them, increase that count to make it compensate for that undercount.

That was not prohibited by the Supreme Court but it was very contentious and the Census Bureau spent a lot of time, money, and effort working on that. In the end we chose not to do that adjustment because we could not convince ourselves that the adjusted numbers were actually better. There is some error in the survey itself. The one big problem I talked a little about earlier about duplication, if you're the child of divorced parents and both parents count you the theory behind this follow-on survey is that if I come back to your house after the census and I explain real clearly who you should count and who you shouldn't that if you've made an error in the census you will see the error of your ways and you will tell me the truth and that difference then will allow me to find out that there was an undercount or an overcount.

What we found all too often is when we went back the second time they told us exactly the same thing they told us the first time. When the survey and the census agreed the survey was blind to the fact that there was duplication. So part of our evaluation of that survey we came to the conclusion that we could not in fact convince ourselves that adjusting was going to be better than not adjusting. That was a long and turbulent process and a lot of the issues associated with the census were colored by that as the different political parties were concerned about whether we did that survey or how we did it and what we used it for. But in the end we did not use it.

We used sampling extensively in statistics and we used sampling extensively in the Census Bureau. But in the end something that is so important as to say I need to count you ideally once and only once and in the right place and I'm going to use that for the distribution of political power, even the smallest amount of sampling error and uncertainty for these small levels just turned out in the end we were not able to compensate for it and we did not use it for those small areas.

Mr. Burlin: Jay, what do you say to the citizenry, the people who feel the census is just too intrusive? You've talked about the long form questions, asking everything about your income, your ancestry, all the way down to whether you have an indoor or outdoor bathroom facility, perhaps. How do you answer those folks about it being too intrusive to their lives?

Mr. Waite: I believe that the census clearly asks for a lot of information. We try very hard to make sure that we don't ask for information that is not really useful, number one, for government planning and, number two, we have an absolute fixed prohibition against disclosing any of that information about you to anyone for any reason for any purpose. Probably our number one article of faith in the Census Bureau is our confidentiality. Your data will never be shared with anybody, government or private, but we do need that data, what we collect, in order to determine where to put roads, where to put schools. That data, and people talk about the famous do I have indoor bathrooms or outdoor bathrooms, those statistics are the major source of data for the government on the quality of the housing stock, where in my county or where in my city do I have serious problems with housing. I don't believe the mayor cares whether we have plumbing, indoor or outdoor at 401 Elm Street but if there is a section of the community that has serious problems with housing conditions, has serious problems with transportation, if there are large numbers of people that are commuting to work and there's no bus line over there, those statistics can be used to your advantage as a citizen to be able to help make the case.

We don't believe it's overly intrusive. We don't ask everyone those long form questions, and we're now reducing ourselves down to 250,000 households per month, 3,000,000 households per year, out of a population of about 125- to 130,000,000 households. From that we believe we can get the information that local governments more than federal need for small area decisions and for small area data.

Mr. Burlin: You've talked about the focus on privacy and privacy protection. In today's era of focus on privacy is there increased pressure on the census to protect this data as it relates to such things as immigrants and other definitive data on folks?

Mr. Waite: I don't know if there's increased pressure. We have always considered that. In fact we collect data for the census under a law called Title 13 of the US Code which forbids by law from sharing that data with anyone for any reason. We've always taken that very, very seriously. People worry in the day of homeland security and other things whether there have been attempts at incursion in trying to find out about our data. I can tell you that nobody has asked us for any information so I don't see that as a big issue.

I believe that most places in the federal government realize that our ability to collect data is so critical that you don't want to compromise that by some short-term advantage. So we've not had any issues. We've not been approached and have not had any challenges at all to our ability to keep your census questionnaire and census data totally and completely confidential.

Mr. Lawrence: Jay, as we established in the first segment, you've had a long career as a public servant. I'm curious as to what advice you'd give to someone interested in a career in public service.

Mr. Waite: Well, public service is a very interesting and exciting field. It has been very good to me. I would say if you're a young person and you have talents and you have interest and you want to work on something that makes a difference you should consider public service as a career whether it be a career of two years, ten years. I'm an old codger. I've been around for over thirty years. There is a lot of interesting work. It's working with people. It's working on real things. The federal government is, I think, a great place for a young person to find out what they can do and for some of us old codgers we've made it a career out of our whole lives.

Mr. Lawrence: I'm afraid that will have to be the last question, Jay. Tom and I want to thank you for joining us this morning.

Mr. Waite: Thank you. The data from the 2000 Census is available. You can get on the website www.census.gov and click on the American FactFinder and that has all the data summarized that were collected from the census about your town, big or small, and you can learn a lot about where you live and the neighborhood in which you are and compare it with the rest of the country. I'd encourage you to look it up. It's there, it's free, thank you.

Mr. Lawrence: This has been The Business of Government Hour featuring a conversation with Jay Waite, associate director for decennial census in the US Census Bureau of the Department of Commerce.

Be sure and visit us on the web at businessofgovernment.org. There you can learn more about our programs and get a transcript of this very interesting conversation. Again, that's businessofgovernment.org. This is Paul Lawrence. Thank you for listening.

Arlington, Virginia

Thursday May 30, 2002

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

The Business of Government Hour features a conversation about management with a government executive who's changing the way the government does business. Our conversation this morning is with Mark Forman, Associate Director for Information Technology and e-Government in the Office of Management and Budget.

Good morning, Mark.

MR. FORMAN: Good morning.

MR. LAWRENCE: And joining us in our conversation is another PwC partner, Dave Carr.

Good morning, Dave.

MR. CARR: Good morning.

MR. LAWRENCE: Well, Mark, let's begin by talking about the Office of Management and Budget. And I'm curious. Could you describe for us the management side of OMB.

MR. FORMAN: Very rapidly, this administration is changing the whole notion of OMB. So, it's hard anymore to differentiate OMB budget from management. In essence, for the last decade, several decades, the Office Management and Budget has focused on budget. In the typical approach, we had a policy priority, money was spent on that policy, and then the agencies would figure out how to manage.

In this administration, largely because of the President's background and Mitch Daniels's background as the Director of OMB, we've inverted that. So the policy priorities are set. We figure out how to manage it, that priority. And then we figure out how much money do we need to manage that priority successfully. So, OMB management is now surfacing as the primary function is management of the budget. And of course, that does carry the traditional budgetary functions with it. But, basically, we're focusing on driving results. Out of programs. Out of the budget. Productivity is my key focus on the management side.

The management side is largely comprised of the focus on financial management, the focus on

e-government and IT, the focus on human capital. That's very integrated with the budget, obviously, because, as you know, in any organization, your money, your people, those are key parts of your assets.

And the last piece of the puzzle that's important to understand, past administrations have focused on government reform by trying to do several thousand initiatives. This administration is very focused on a five-part management agenda. And that's run out of the Office of Management and Budget.

MR. LAWRENCE: Can you tell us more about the office you lead, the Office of Information Technology and e‑Government.

MR. FORMAN: I think we all have realized over the last 10 years that government is information-intensive. And so all the revelations, all the newness in the way people do their work in information technology, deployments through the management of information, the way we drive productivity and the economy really can be brought to bear in the federal government.

We spend now -- this year, it will probably be about $50 billion. That's dramatically increased. Almost doubled over the last few years. In that realm, we're not seeing the productivity improvement. My office was created to manage that President's Management Agenda item called e-government, by driving the federal information technology investment so as to drive more productivity, more results for government programs and the mission of the federal government.

MR. LAWRENCE: Could you tell us a little bit about the office. I mean, you just mentioned huge numbers in the billions. How do you do all of that?

MR. FORMAN: We have a staff of roughly 30 people. And we rely heavily, in supplementing our staff, on detailing in people from different agencies and rotating them in. Basically, I was hired to put in place the governance structure, how are we going to manage this $52 billion IT investment? So we do that with a small cadre of very specialized expertise. And we work very tightly, very closely, with the folks more closely aligned to the agencies, that you would call resource management officers, the traditional budget examiners who now increasingly have a management role.

Last year, as an example, in the agency budget process, we received on September 10^th budgets from all the departments and agencies. Of course, there was an increase in IT. And that increase grew after September 11th. So, by the time that we looked across agencies and all the IT investments, we were able to do the first-ever IT strategy for the federal government.

In looking at that, we found a significant portion of large investments. And we had 2900 large investments. Did not have a business case. So we told the agencies we're sorry, but we made the policy fairly clear. No business case, no money. And the point was to drive IT investments to a clear audit trail; how was that IT investment going to change management, change the processes, the business processes of key programs so as to lead to an improvement in program performance.

When they were able to do that, and put that in their business case, we're willing to fund it. And so we told them no money, no business case. Six weeks later, 900 business cases showed up. Obviously, with 30 people in the time that we had to put together the budget, it was very difficult to go through that many business cases. But we have over 500 people at OMB.

And by working as a team between the specialized expertise in my group and the folks that work directly day-in/day-out with each of the agencies, we were able to go through those 900 business cases, the 2000 other major, what we call significant IT investments, and ensure that the IT money is aligned with the mission performance improvement in the agencies. It's very much team based.

Now, a key part of the government structure I've seen, not just in the U.S. federal government, but in the experience I had before I came into the government is, as others were trying to bring up their cadre of IT and change agents across the government, there was a need to get them to understand where the management philosophy was moving. So, we've used this detailee process as kind of an academy-style government structure, where people rotate in for 3 months, 6 months, they get involved in evaluating business cases. So, they understand where we're trying to go, what the criteria are.

They get involved in our architecture analysis. It's a component-based architecture analysis now. So, they understand a look across the agencies is a different view than you get if you're in one of the agencies. They can go back to their agencies, take back that view, carry with them that enterprise change management approach.

MR. CARR: Mark, what can you tell us about your specific responsibilities as Associate Director?

MR. FORMAN: I think there are five major ones that were laid out in the announcement for my job. I looked at them very briefly. One, I am the Director for the CIO Council. That comprises all the CIOs from the executive departments and agencies. Second, I'm responsible for the President's expanding e‑government management agenda items. So, I'm the e-Gov czar, if you will, for the federal government for the President. Third, I oversee all the IT spending in the federal government. And we base those responsibilities, essentially, on a GAO Best Practices Report. That's the General Accounting Office. And, for many years, they've done best practices work on how we should better do IT in the federal government.

So, essentially, I don't have the title of CIO. We don't have those kind of titles in the federal government. But, it's basically what you would see in a large enterprise as a corporate CIO.

MR. CARR: Mark, you've been in the legislative branch. You're now in the executive branch. You've been in private industry. Can you tell us a little bit about your career?

MR. FORMAN: I actually started out doing project or consulting-type work. And one of my summers in college, I had the opportunity to come to Washington to work at a Department of Interior agency on a project. And while I was there, I saw how they were doing budgeting. In school, we would have said, boy, that's erroneous. And, I thought, well, there's a career here; I could drive a lot of good reforms and do a lot of good things because I thought I had a good education.

So, I was lucky enough to get a second federal summer internship at another departmental agency. I went off to grad school. .Actually, I got my master's in public policy. I was going to stay in and get a Ph.D. and do tax policy and come back to the government and do tax and other economic policy, but while -- I went to school at the University of Chicago. And while I was there, we laid out very clearly in the economics training that you had to really want to get a Ph.D. Economically, it was not a good use of your time. You had to do it because that's what you really wanted for your career. And, so, I instead went more on an operations research track.

When I finished up at grad school, I was lucky enough to be offered a spot in what was called the Presidential Management Intern Program. And I went in to the General Accounting Office as one of the National Security Division Presidential Management Interns. That program gives you 3 to 6 month projects.

And you rotate through, generally, at a relatively high level. During that time, I worked on a number of major government planning acquisition reform-type studies. I stayed there for a little over 2 years. I left to go to a company called Task, which has since been incorporated two or three times over into other Defense consolidations.

But I was doing professional services operations research for the Defense Department. From there, I went to another Defense contractor. Did similar work for the Office of Secretary of Defense. And that was 1990. Peace was breaking out all over the world. And through my contacts from when I was at GAO, the Senate Governmental Affairs Committee and the Senior Republican, Senator Roth, was looking for someone who understood performance based management concepts and understood in a defense environment. I was heavily into that.

So for the next 7 years, that's what I did on the Hill. I went out into industry to help implement a number of management reform laws related to the Clinger-Cohen Act, also called the Information Technology Management Reform Act, the Federal Requisition Streamlining Act. A number of other bits and pieces of performance-based management concepts.  

While I was at IBM, the e-business wave hit the public sector. So, I led that for the public sector at IBM. I spent a few months at UNYSIS doing a very similar thing for them, when I got the call from the White House to come over and take this role.

MR. CARR: Big jobs and a couple of big companies before you came back in the government. Why did you come back to government?

MR. FORMAN: This was a once-in-a-lifetime opportunity for any good government reformer. As both of you know, the opportunity to have the senior policymaking position, to oversee and drive a lot of those reforms, is a once-in-a-lifetime opportunity. This is a new job. I'm the first person in it. And it is, I believe, a unique once-in-a-lifetime experience. And it has been, in the 11 months, today, that I've been there.

MR. LAWRENCE: That's a good stopping point. It's time for a break. But rejoin us in a few minutes as we continue our discussion about management with Mark Forman of OMB.

Do you know what e-Government is and why it matters to the President's Management Agenda? You'll find out when we ask Mark as 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 today's conversation is with Mark Forman, the Associate Director for Information Technology and e-Government in the Office of Management and Budget.

And joining us in our conversation is another PwC partner, Dave Carr.

MR. CARR: Mark, we've heard a lot about e‑government. How do you define the term? 

MR. FORMAN: Our definition is the use of digital technologies to transform government operations in a way that improves effectiveness, efficiency and service delivery quality.

MR. LAWRENCE: We've heard a lot about e-government as part of one of the five President's Management Agenda items.  How does your office help make that come to fruition? 

MR. FORMAN: Well, it's through a number of ways. Overseeing agency approaches and driving across agency approaches is at the heart of it. Each of the management scorecard elements, and there are five elements, have a scorecard. And, indeed, when the President talked to the Cabinet secretaries about their budgets back in January, he talked to them about the management scorecard. He didn't talk about the money; he didn't talk about programs. He talked about how they were managing their agencies and their scores. In e-government, we have what I would call, two categories of scores. The first category is how is the agency doing at becoming an e-government? And the second is, is the agency participating in cross agency e-government projects?

Now, the reason for that is some of the work that we did last summer, the strategy led us to understand that we had tons and tons and tons of e-government investments. We had more than 22,000 web sites, 33 million-plus web pages. We're already online. That's not the problem. The problem is how smart are we doing that? Are we doing it in a way to drive productivity? 

Some of that productivity, some of that value is going to come in terms of the agency improvements and achieving their mission. And the heart of that is a modernization blueprint. The focus is on results   the focus is on the customers and citizens that get benefit from that agency operations.

And the other thing that we found in looking at that, out of the 24 Cabinet departments and agencies, 19 are doing any one on a business. So, when you've got three quarters of the agencies overlapping; take customer relationship management as an example. If you have 19 agencies out of 24 that are improving their relationship with the customer, and five or six of them are dealing with the same customer, it's kind of like going online and walking around five or six different web sites, five or six different buildings. It's not customer-centered at all.  

I use the moniker of "simplify and unify" to describe what we're driving. At the end of the day, it's got to be simpler for a citizen to get service, to get their results or to see their results. And that means that we've got to operate in a way that unifies our investments. Some of us say consolidate our investments around the citizen. So we're driving that within agencies, across agencies. We're evaluating how agencies are doing on a quarterly basis in both categories, and we're reporting that to the President, and then he discusses it at the cabinet meetings.

MR. CARR: Mark, you did a task force around e‑government, I think, developing a vision, if you will, for e-government. Can you give us a little bit of background in the genesis of that task force and what it accomplished? 

MR. FORMAN: The issue that was raised, when I first came in the government, in fact, I raised it before I came in the government, is that under the Paperwork Elimination Act, and under just good business practices by the federal agencies, there were an awful lot of e-government initiatives underway. But there wasn't a clear implementation of the President's vision for government management and management reform.

The President laid out very clearly that government has to become citizen-centered and not agency-centered. And the government has to focus on producing results. You can't do that en masse across a $1-� -- 2 trillion federal budget. You have to pick priorities. You have to know what to focus on. And you have to focus on the customer, the citizen, to get this to work.

So we laid out a strategy and a vision that said that we are going to achieve an order of magnitude improvement in value to the citizens. You know, things like reducing the cycle time it takes to respond to a citizen. How long does it take us to make a decision? And we needed to flesh that out.

So we created a taskforce. Mitch Daniels, the Director of OMB, actually did it, to pick the priorities. And we wanted parties to be picked within four major groupings of citizens: individuals, government-to-citizens, government-to-business. One of the things that we realized early on when we looked at the transactions of federal government, the bulk of those transactions are in the government-to-business base and government-to-governments base.

So, government-to-citizen, government-to-business, inter-governmental affairs or

government-to-government was the third category. And, then, we have 3 to 4 million government employees, depending on how you call the Guard or Reserves. That's a large segment of the populace. So, there, too, in the internal efficiency projects, focused on government employees as a citizen-centered group for making it easier and better for government employees to do their jobs.

When we set up the taskforce, we identified change agents, strategic thinkers, generally, the GS‑13 through the first-level senior executive service. They were pulled together from the different agencies. They were brought together under the notion that they put on a government‑wide hat, that they lose their agency identity. And we adopted a traditional, or a modern, e-strategy approach, a commercial practice as an approach to e-strategy.

MR. CARR: Now, were the members of the taskforce largely out of the chief information officers' organization? Or, did they come from other parts of the organization?

MR. FORMAN: It was a very broad mix. I don't know exactly how many were out of IT organizations, but if it was half, I'd be surprised. These were change agents that came out of programs, they came out of strategic planning organizations; a lot of them came out of customer service organizations within the department.

MR. LAWRENCE: You're the chief of the CIO Council. What is the role of the CIOs in e-government?  

MR. FORMAN: Within each department or agency, some of them were picked as the

e-government leader, but regardless, under the Clinger-Cohen Act, they all are responsible for leveraging technology to improve the business practices of the department, overseeing the IT investments, laying out the architecture to do that, ensuring that IT is used in the way that improves mission performance of the agencies.  

Now, in our world, and you know in the private sector, everything has become enabled. So, their role is to do that in their departments and agencies. A number of them are political appointees, a number of them are career officials. And, unfortunately, we do have still a couple of lingering vacancies.  

MR. LAWRENCE: What are some of the challenges they're experiencing as they're trying to execute e-government?

MR. FORMAN: Well, in a number of the departments, they still have not gotten control over the bureau-level IT spending. It's part of the preparations process in some cases, it's part of the management process in others. That's changed dramatically, I think, over the last 6 months. And, for my role, empowering them is a key part. 

One of the things that we've seen over the last couple of months operating the CIO Council as a body is zero transformation. We've done a lot of analysis using component-based architecture models to get a feel for the business architecture of the federal government. In other words, what are the similar processes, what are the similar lines of business, what are the similar functions of the federal government.

And, as a group, we've done that jointly between my office and the CIO Council, literally using this academy-style rotating people in, while my office has provided some consistency of resources. We've been able to understand that, as a group, the CIOs are quite powerful in driving a lot of the transformation and joining things up. That's going to perpetuate itself in the Fiscal Year �04 budget processing. 

In early September, we get the budgets. We get the business cases. For the first time ever, the CIO Council and the CIOs have agreed that we're going to see some joint business cases, agencies actually joining up around this business architecture to figure out how to transform the effectiveness and the efficiency of government.

MR. LAWRENCE: Let me just ask you a basic management question about how you work with the CIOs. What skills do you use in the relationship? They don't work for you directly. How do you make all this happen?  

MR. FORMAN: It's a mix of carrot and stick. The agencies that have career CIOs have gone through several months, with the new administration coming in, new deputy secretaries and secretaries, new assistant secretaries, new management. I'm essentially building a relationship with that career person. In that arena, it is an absolute role that I've had to play and that I should play, or whoever is in my role should play: A), to make sure that that CIO is capable of doing what needs to be done; and B), of making sure that the political official understands the role of that CIO. And the quality of that person and the ability of that person and the responsibilities of that person under the Clinger-Cohen Act.

On the other side, there are some core processes that CIOs have to set up under the Clinger-Cohen Act. And the agencies are just now at the cusp of really taking to heart those processes, as the new administration has become in control of those processes. I would say there are two, in particular, that we have focused on. And they show up, actually, in the scorecard as well is what we're leveraging by the budget process.

One is this concept of an enterprise architecture. Now the Clinger-Cohen Act talked about each CIO setting up an enterprise IT architecture. Well, we now know that that has to go way beyond IT if we're really going to drive performance improvement in the agency. It has to get into the business architecture. So, we've held the CIOs accountable for doing it. And we've seen anomalies. We've seen some very, very good IT architects that have put together an enterprise architecture, a detailed enterprise architecture, that is not aligned with the business in the agencies. The Treasury Department, where their enterprise architecture doesn't at all address accounts payables or accounts receivables. Or, I should say, didn't, before we engaged with that discussion.

Similarly, in the capital planning process, we want the IT architecture and the enterprise architecture to make the tough decisions and then the how, the risk management are supposed to be laid out in the business cases. And those can be embraced by our capital planning processes. The CIO has to enforce that to occur. They have to be involved in that process. And, again, it's a carrot and stick approach to getting that to occur.

MR. LAWRENCE: That's a good stopping point. Come back with us after the break as we continue our conversation with Mark Forman of OMB. We'll ask him to take us through the different categories of the e-government issues 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 today's conversation is with Mark Forman, Associate Director for Information Technology and e-Government in the Office of Management and Budget.

Joining us in our conversation is Dave Carr, another PwC partner.

MR. CARR: Thanks, Paul.

Mark, in the last segment, you talked about the Quicksilver Government Taskforce, which created a vision, if you will, for e-government within the current administration. Hundreds, probably, of projects were nominated. How did you narrow it down to just 24?

MR. FORMAN: Well, you're absolutely right. There were hundreds of projects, a little under 400 to be exact. What we found is that we had to look at the business architecture and use that as the guideline. And when we started overlaying it against the business architecture of the federal government, we found a redundancy issue of 19 out of 24 agencies doing each initiative. And it gave us a framework then to whittle it down.

We whittled down the 400 to 33 initiatives. We used a steering group to help make the decisions. And we used some criteria and a scoring algorithm. But the criteria were: first, did it have a large impact in terms of how it affected the citizens and how many citizens it impacted? Second, did it save us in redundant IT investments? Third, did it free up government resources? In other words, reduce the expenditure, the cost of government operations, or improve the quality of government operations? Fourth, did it reduce the burden on customers, paperwork burden, filing burden, et cetera? Fifth, was it doable in 3-month increments? We wanted everything to be done within 18 to 24 months. And, then, finally, the risk management; did we have manageable risk?

And we scored it on those criteria. Put it through the model. So, we did an initial downselect from 33 to 30. And we went off and did many business cases, using our business case methodology for the federal government. Came back, put that back into the scoring algorithim and met with our steering group, our deputy secretaries, and asked them to first take a look at the scores we had come up with, discuss them. And we wanted to get down to no more than 25 initiatives per segment.

When we met at our second steering group meeting, the deputies decided to take a couple initiatives and basically turn those into a business case initiative. So we ended up with five initiatives per citizen center group: government-to-citizen, government-to-individuals, government-to-business, government-to-government and internal efficiency and effectiveness. There was five in each of those. And then we added in the implementations, the 21^st, the two business cases, May 23.

After the taskforce ended, Mark Everson, who is the Comptroller for the federal government, the head of the Office of Federal Financial Management, and also the nominee to be the director of management for OMB -- he's the acting chair of the President's Management Council -- Mark and I looked at payroll processing as another issue where the same methodology could be applied. That became the 24^th initiative, because there was so much money. But at the end of the day, these were initiatives that we found could either be simplified to drive benefits by focusing on the citizen, or unified. In all of them, it turned out, could be unified. We had five to ten projects each that could be consolidated around the citizen, around the customer.

MR. LAWRENCE: Well, let's go through one category. You mentioned government-to-business. And one of the projects is one-stop business compliance information.  Can you tell us about this?

MR. FORMAN: We create somewhere between $350 billion to $500 billion per year in redundant reporting requirements. Government thinks in the paper world. Business has largely embraced e-business approaches and thinks about electronic data transactions or data exchange. So the business compliance one-stop is an initiative to take and aggregate dozens of agency initiatives that essentially would take their paper processes and move them online under the Paperwork Elimination Act.

It turns out we had 6600 transactions or paperwork processes to be put online. If we just web-enable those, that's going to continue that $350 to $500 billion reporting burden into the electronic world. E-business is all about collecting once and using many; making it easier for citizens to apply, or businesses, small businesses, to apply, to comply with, to get service from the federal government. So the business one-stop really leverages a collect once, use many. It leverages XML technology. It also simplifies government so small businesses don't have to hire, sorry to say, accountants, lawyers, lobbyists just to deal with the federal government. So, collect once, use many; simplify dealing with the government.

MR. LAWRENCE: Another one of the groups that was described was Internal Efficiency and Effectiveness. What changes are federal employees likely to see as a result of this in terms of their work?

MR. FORMAN: Well, there's no question that the President's Management Agenda items fit together. The Internal Efficiency and Effectiveness is where we see the leverage between, for example, financial management, human capital, performance-based budgeting and performance integration initiatives in e-government. If you take those as a whole, that's enterprise resource management, or ERP in the private sector. In the federal government, agencies are investing in ERP. But, it works this way: the human resources directors buy a copy of the ERP, the financial managers buy a copy of the ERP, the payroll processing centers buy a copy of the ERP. So, we're buying enterprise resource management. But, we're not doing it.

What that means for somebody working in the program, or somebody working in one of these back-office operations in the federal government, is it's just as hard to do their work as it was in the old paper world. It came out very clearly in the taskforce that the federal employees want that modern work environment. They want to be a knowledge worker. They are a knowledge worker, but the infrastructure doesn't support them. So, these Internal Efficiency and Effectiveness projects really provide for that human capital, management, the modern ways people do their work. And it starts everything from their recruitment process, how they come into government through how they're doing work. Things like, just simple things, like, getting reimbursed for travel.

When I came into the federal government, I was shocked. I filled out 15 or 16 different forms my first day on the job, just to become a federal employee. So, after about the eighth or ninth form, I started counting, how much different data was there. And, of course, there's just one or two different data items. But, I was filling that out 15 or 16 times. Of course, that continued on wherever you worked. But, it's a paperwork process and we don't leverage information that we've all ready got. You know, each of those 15 or 16 different forms was then being keyed in by somebody to 15 or 16 different information systems. So we would continue these redundant information systems, it makes it hard for the employees to do their work. These Internal Efficiency and Effective projects all are simplifying that and making it easier for the employees to do their work, giving them that modern knowledge worker environment.

MR. CARR: Mark, there's a lot of people that I think relate positively to the notion of citizen-centric government. Which of these initiatives do you think address that area most specifically, and what are your expectations about the future in that area? 

MR. FORMAN: Well, we know that there are a couple truisms about the federal government that are unique to other governments that are becoming an e-government. First is that most of our transactions are with businesses; then, state and local government; then, federal employees; and finally, with the citizens. We rely on state and local government to actually build that interface with the citizen. So, we have to work with them much better than we have in the past. And this is one of the things that's new about the Bush Administration. So, part of becoming citizen-centered, and we see this significantly in how we're moving forward in homeland security; part of being citizen centered is that delivery channel.

The other part, though, is how we deal directly with the citizens. And one of the things that has been amazing to us --of course, in being citizen-centered, you have to look at what the citizens want. So we rely on survey data and studies for that, web analytics and so forth. It's turned out that there's a tremendous demand for citizens to see the regulations, the rules that are being promulgated and to get control over that. We saw that first in the studies from the Council for Excellence in Government. They went more in-depth in that this year.

They found out citizens want to drive accountability in government by actually seeing, being able to comment, being heard on their comments as it relates to proposed rules and regulations, the processes of government. The Pew internet report that came out a couple of months ago said, indeed, 42 million Americans have gone online to look at proposed rules and regulations. Twenty three million Americans actually have commented on that. Now, a number of people have said, oh, that can't be right. Twenty three million, that's tens of millions of Americans. Maybe that's who's sending comments to members to Congress or to government agencies, but they can't really be looking at rules and regulations.

I had a conversation with John Carlin, the archivist. The Archives are where we collect all the data that goes into the Federal Register and the Code of Federal Regulations. And he said, yes, indeed, he's seen the same trend. Sixty five million Americans last year downloaded documents from the Federal Register. Now, compare that to 5 years ago, 1995, 1996. Twenty thousand people got that information by ordering a copy of the Federal Register. Those numbers actually dropped to 15,000.

When we actually look at the Code of Federal Regulations, it gets even more surprising. There was over 3-� million people in 1995 and '96 who were buying copies of the Code of Federal Regulations, physical copies. That dropped to a million last year. So somewhere between a third to 25 percent of the people are now doing this in the paper world. A hundred million downloads, a hundred million downloads, of the Code of Federal Regulations from the Internet. The people are online, and they are using that free democracy. The online rulemaking initiative is the one initiative that we started out to let business, small business primarily, be able to comment on rules and regulations without having to hire a lawyer or lobbyist or go to a $3,000 or $4,000 conference.

We've realized since then that this is a fast moving issue in e-democracy for American citizens.

MR. LAWRENCE: It's a good stopping point. It's time for a break. Rejoin us as we continue our conversation about management with Mark Forman of OMB.

We've talked a lot about what's taking place now in terms of e-government. But what needs to be done going forward? We'll ask Mark when The Business of Government Hour returns.

(Intermission)

MR. LAWRENCE: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and today's conversation is with Mark Forman, the Associate Director for Information Technology and e-Government in the Office of Management and Budget.

And joining us in our conversation is Dave Carr, another PwC partner.

MR. CARR: Well, Mark, in our last segment, you talked about the various e-government initiatives. And one of those initiatives, one of the family of initiatives, has to do with government-to-government. There's a lot of that discussion in that area now, especially around the issue of homeland security. Can you talk a little bit about that?

MR. FORMAN: As I mentioned, the government-to-government arena is so important to us because it is state and local government that really owns the delivery channel to the citizen. That's the same that we're finding in homeland security, and indeed, as we looked at the government-to-government initiatives, four of those were also incorporated in the budget as part of the homeland security initiatives.

Generally, the way I think you have to measure how well we're doing with e-government in the citizens' eyes is how responsive are we to their needs? As we looked at the homeland security arena and we look at e-government, one commonality came up, and it's the quality of decisionmaking across the various levels of government. Now, in homeland security, they call it vertical information sharing. In e-government, we just call it intergovernmental affairs.

But, basically, we have two key measures that we're focused on. One is that we're accelerating our response time. So it shouldn't matter if it's the response time for obtaining a benefit, getting unemployment insurance or some other safety net program, if it's the response time on a public safety issue, disaster assistance, law enforcement. If we can increase our response time, we know we'll be successful. And we know that we have to do that as a partnership. The collaborative tools, the knowledge management tools, and the workflow integration tools that have come out of e-business are tremendously useful to us in this arena of government-to-government. So they affect those projects.

Let me give you some specific examples, because the corollary to that, if this works, is to improve quality decisionmaking. One of the initiatives is the disaster preparedness one-stop; a portal, essentially, for working with state and local governments to prepare for and respond to disasters. This, too, like our other business architecture areas, is one where the federal government has lots of good silos of initiatives. But as a whole, we haven't done a good job in working together as a government with our delivery panels and our partners.

So when we had our partnership meeting in the disaster preparedness portal -- we had done this for each of the government initiatives -- we laid out a fairly clear set of objectives and goals on how we're going to better work with state and local government. And at that meeting, an emergency management director showed up. He laid it out very clearly. He told the departments and agencies in the federal government -- and we had roughly 50 to 60 people there -- he told them how difficult it was for the state and local folks to try to deal with a disaster. Fifty, sixty different initiatives. All good initiatives. But, they're making it so difficult on the state and local folks that have to respond to disaster that indeed, they may be hurting the ability to save lives and protect property.

He laid out very clearly and really motivated this group of federal employees to work together to define a very simple process and integrated approach for dealing with different elements of the disaster planning and disaster response delivery channel. So I think that's the type of thing that we see; obviously, that's about the homeland security function and e-government function. Because the way you do this now is you leverage mobile business or mobile-type technology. You leverage e-government, e-business-type approaches. And you leverage the workflow, the simple processes and so forth. And that's what you see in general as the nexus between homeland security in this vertical information sharing arena and the government-to-government portfolio.

MR. LAWRENCE: You've talked a lot about technology, but cyber security hasn't come up. So, I'm curious where it fits in these priorities.

MR. FORMAN: In an environment where we have so many services online that rely on the backbone of the Internet to perform the work of the federal government, security is tremendously important to us. In fact, it's important to us as a country. The President signed an Executive Order and created the Critical Infrastructure and Protection Board that many people call the Cyber Board, to focus on this issue. I sit on that Board and, indeed, chair a committee on that that focuses on executive branch information systems. But the bottom line is, for many years, we've realized that cyber-security is important for the economy, and it's important for the federal government and its role in the economy. We've adopted a five part approach for dealing with it.

First, through some recent legislation called the Government Information Security Reform Act, we've required the secretaries of the departments and agencies of the federal government to submit to us an evaluation of their security plan that's based on an independent evaluation by their inspectors general. Second, to put together an action plan that fixes the problems, the gaps identified in the current program. That, then, we worked in through the budget process for

FY �03. And we'll do the same thing in FY �04. Third, integrating into the business case process. So in these business cases, in these capital investment plans, we literally score each business case on how well they address security. Do they embed the appropriate security, because we don't want to pay for that after the fact. But we'd rather have that built in from the beginning.

Fourth, we've adopted something called "Project Matrix." And we've literally required each of the departments and agencies to do this assessment. It's a vulnerability assessment. It's a vulnerability assessment, a contingency operation and business continuity and planning initiative. It tells each agency what are the vulnerabilities for that department, how should they address that, what kind of contingency plan should they have in place, what kind of back-up. What we found is that we need now to look across the departments and agencies. I mentioned the redundancy. But we know that redundancy can be good if you have that integrated with your disaster recovery plans. So, indeed, we're doing a cross agency application of Project Matrix.

The final thing is to have an audit trail in place. So, literally, we focused the deputy secretaries of the President's Management Council, we're incorporating that into the scorecard to make sure that each of the agencies are addressing the gaps that they have and that they're continuing to identify and address those gaps.

People say, well, gee wiz, last year, you identified a number of gaps, but the gaps seem to be growing. We're at a point now where the gaps are growing because we're identifying them. And I think what's happening in industry and what we're bringing into government for this year's iteration of that approach is a 24 hour cycle time, the ability to respond quickly to vulnerabilities or threats as they are identified. So part of doing that is adopting a modern approach, a web services approach, for that. And we've set up at what's called FEDCRC, the Federal Critical Response Center, at the General Services Administration, that ability to have that 24 hour response time.

MR. CARR: Mark, we've talked about the Quicksilver initiatives, we've talked about the business cases that were developed in advance of these initiatives being funded. How are we going to measure success? I guess it's probably contained � the criteria is contained, identified within the business case. But how will you, how will I, as a taxpayer, know that things are different, things are better?

MR. FORMAN: Well, I hope you don't have any problems in your interfaces with the federal government right now. But, if you do, and there are quite a few programs and quite a few customers of the federal government, I have to say the state and local governments, especially in the post-9/11 environment, have been very vocal on where their problems, where their issues are. That is where we'll see some of the biggest change. So we are generally looking for some very simple measures. We're looking for an order of magnitude improvement.

But, we talk about things like the time it takes to get a decision. You know, in the past, even for benefits, it typically took the federal government months. We want to get that cycle time down to days or hours. Similarly, you know, if you look at homeland security and if you look at a lot of the government-to-government initiatives, we don't have weeks or months to make a decision. That has to be down to hours. Maybe, minutes, if possible. So cycle time is an often important criterion. The other is the measure of performance, and exactly as you said, these initiatives, whether they're cross-agency or within each agency, link back to actual program performance. So we're looking for the productivity improvement down to the level of that program. We have some other types of measures, and we're tracking this all via the scorecard. So my objective in how I measure the performance of my direct reports is in getting the federal agencies to green for that e-government score on their scorecard.

MR. LAWRENCE: We've got time for one last quick question. I'm curious, Mark. What advice would you give to a young person interested in a career in public service?

MR. FORMAN: Well, there's no doubt about it, this is an exciting time to come into government. I would say at this point, this year, be a little patient. We're in transition. We are rebuilding the recruitment processes for the federal government. All the departments are working on strategic human capital plans. They're understanding that the workforce is changing. It is a tremendously rewarding experience. But I have to say right now, you have to be persistent. You have to be willing to work via the USA Jobs Website, via other aspects of getting into government to get in. I think getting a master's and entering through the Presidential Management Intern Program is a tremendous way to come into government.

MR. LAWRENCE: Well, we're out of time. David and I want to thank you very much for being with us this morning.

MR. FORMAN: Thank you. And, it's a pleasure to be here. If you want to see more information about the e-government initiatives, I'd encourage people to go to the omb.gov website. Look at the budget, look at Chapter 22 of the analytical perspectives. It goes out into excruciating detail on how we did the first-ever IT strategy look at the federal government. As we go into the summer, you'll see a new-looking field for the omb.gov web site. You'll see the scores of the various agencies on e-gov as well as the other management agenda criteria.

MR. LAWRENCE: Great. Thanks so much.

MR. CARR: Thank you, Mark.

MR. LAWRENCE: This has been The Business of Government Hour, featuring a conversation with Mark Forman, Associate Director for Information Technology and

e-Government in the Office of Management and Budget.

Be sure and visit us on the web at endowment.pwcglobal.com. There, you can learn more about our programs and get a transcript of today's very interesting conversation. Again, that's endowment.pwcglobal.com.

This is Paul Lawrence. See you next week.

Arlington, Virginia

Friday, April 26, 2002

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

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business.

Our special guest this morning is Steven Perry, administrator of the General Services Administration.

Good morning, Steve.

Mr. Perry: Good morning. Thanks for having me.

Mr. Lawrence: Joining us in our conversation is another PwC partner, Steve Watson.

Mr. Watson: Good morning.

Mr. Lawrence: Good morning, Steve.

Steve Perry, let's start by learning more about the General Services Administration. Perhaps you could describe its mission and its roles >.

Mr. Perry: Sure. Let me begin by saying the General Services Administration was formed by Congress back in 1949. At that time, the purpose was to improve the efficiency of government by taking the procurement and property management activities which were then occurring in several different agencies and consolidating that all into one agency, thereby making it more efficient, eliminating the duplication that otherwise would have existed in the various agencies, and enabling GSA then to be the organization that developed expertise with respect to procurement, property management, understanding the supply base, and being able to do a better job and delivering best value for its customer agencies.

We still operate that way today. I think it's a great organizational design concept. Many organizations are organized in a similar way. Many private-sector organizations pool together their procurement and property management into one central part of the organization as opposed to have it overly dispersed throughout the organization.

Our major units are: one, the property management unit is our Public Building Service unit under the leadership of Jill Morvek (?), our commissioner for Public Building Service. Then we have a Federal Technology Service unit which provides telecommunications and IT technology for customer agencies, under the leadership of Sandy Bates.

Thirdly, we have a Federal Supply unit which provides virtually everything else that agencies need, a wide variety of supplies for their offices, equipment, vehicles. Virtually everything, again, that an office would need to operate are provided by our three services.

Then we have a fourth major part of GSA which is called the Office of Government-Wide Policy. This groups works with other agencies within the federal government to develop policies, particularly as they relate to procurement matters and to management issues. As an example, this is the group that works with other agencies in developing the procurement regulations under the federal acquisition regulation rules. So that's what we are.

We provide office space. We are one of the nation's � in fact, I suppose we are the nation's largest commercial real estate-type entity because we provide in total over 350 million rentable square feet of space, which houses 1.1 million federal workers around the nation. Of that space, of the roughly 8,300 buildings in which federal workers are housed, 1,800 are federally owned by the government, and the other 6,500 are owned by private-sector real estate forms, and we lease space. So providing space is one of the big things we do, and then technology, supplies, and policies are the remaining three.

Mr. Lawrence: That's a broad mission. How many people work with you at GSA, and what are their skills? I heard such different areas.

Mr. Perry: It is a very broad mission. Today we have about 14,300 people nationwide that make up the GSA team. It a few years ago was much larger; as a matter of fact, as high as 35,000 in the early 1980s, and that number has been reduced as we have been able to do more work through the use of technology, improved productivity, and some out-sourcing. We have a somewhat smaller organization, but still, at 14,300, that's among the largest of the federal government agencies.

Within our group, our areas of specialty would include clearly people with acquisition skills. As you know, the acquisition procedures and policies within the federal government are a little bit specialized, and those specialized procedures are there for a good reason, so that we make sure that all of the companies in the private sector who would like to interact or do business with the government have an equal opportunity to do so. But they're also there to make sure that our procurement policies enable us to procure best value for agencies in a way that's ethnical, with integrity, and so forth.

So my point being, acquisition is one of our key skills within our agency. Another one is real estate management. Obviously, again, in order to be able to negotiate real estate deals or to manage properties in which we house federal workers, we need people with those skills.

And like many other organizations these days, information technology is a big skill area for GSA. We use information technology in a wide variety of carrying out our operations, and we are working to continually bring in the new technology people that we need to carry out our operations. Those are three.

There are two others that are particularly critical to our mission. One is financial management skills, because we are endeavoring to enhance our ability in that area; not that we're not doing well. In fact, we are very proud of the fact that we've had 14 consecutive years in which we've gotten a clean audit opinion, which is pretty stellar among federal agencies. Nevertheless, we are moving to have a financial management system that provides timely and accurate financial information to our managers for decision-making purposes, and we are endeavoring to enhance our skills in that area.

Then lastly, the fifth of the skills that we're really focused on these days is security. Even prior to September 11^th, certainly following the disaster in Oklahoma in 1995, we've been working to enhance our security process and the people that carry out our security process to do two things, generally. One is to have them be people who can work with the other criminal intelligence-gathering informations of the government to understand what the threats are regionally and location by location, and then to apply their expertise in putting in place countermeasures to reduce those threats.

Countermeasures could include security guards. They also could include cameras, the magnetometers and other sorts of screening devices that we use as people enter public buildings. So enhancing our skills in the security area is a fifth major category of skill development for us today.

Mr. Watson: Steve, as the administrator of GSA, what are your responsibilities?

Mr. Perry: Well, they are varied and broad. Like in any major organization, and we are a major organization, a large, complex organization, I have a number of people who are part of the GSA team who have certain responsibilities, and I'll talk about that. But as it would relate to my particular responsibility, I think it is to assure that we have a really effective performance management process. What I mean by performance management process, it begins with understanding and having a broad understanding in the organization of what our agency's mission, values, and goals are. The head of the organization has a very responsible role to make sure that that is occurring, that there are in fact rich dialogues going on inside the organization as to why do we exist, what is our mission, what are we here for, why do we get up in the morning and come to this organization, what are we responsible to do.

Then once we're clear about our mission, we have talked a lot about what are our values: how will we work together; how will we incorporate ethics and integrity into everything we do; how will we foster teamwork inside this organization; how will we work in a way that illustrates our respect for our fellow associates; how will we act in a way that's professional; and most importantly, or equally importantly, at least, how will we be focused on achieving results; how are we result-oriented.

So we've defined our mission, which is to help other agencies better serve the public, and we've defined our values. I see it as the administrator's role to see that that process is occurring and occurring effectively.

After having established mission and values, our role then as the head of the agency was to help craft the goals for the organization. That is, what is it that we will achieve together. We've set for ourselves I believe some challenging goals, following the directives in the President's management agenda, and that's what we do. As the head of the organization, I spend most of my time making sure that this performance management process is in place and that it's working well.

There are a couple of other elements to it. After you get past having goals, then one of the things that you have to do is to make sure that you have the organizational capability that's necessary for success in achieving those goals. That means that you have people with the skills and competencies and personal characteristics and dedication that are necessary to achieve at that level, and we're working to make sure that's the case. Then, clearly, you execute the action plan, you work on measuring your performance so that you can know where you're achieving your goals and where you're falling short. You take corrective action as necessary to keep yourself on track. Then at the end of the day, you assess your performance and reward and recognize people accordingly.

So that whole performance management process, to my mind, helps to explain or define what I believe my role and responsibility is as the administrator at GSA.

Mr. Lawrence: That's a good point to stop on.

Come back with us after the break as we continue our discussion with Steve Perry of GSA. Do you know what e-government is? You'll find out in our next segment when we ask Steve about GSA's award-winning FirstGov website.

This is The Business of Government Hour.

(Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and this morning's conversation is with Steve Perry, the administrator of the General Services Administration.

Joining us in our conversation is another PwC partner, Steve Watson.

Steve, you were appointed to this position about a year ago. Can you tell us a little bit about your career prior to joining GSA?

Mr. Perry: Sure. I'm from Canton, Ohio, a wonderful little town in the middle of the state of Ohio. I was born and raised in Canton. My parents had moved there, they had 12 children, and I lived there. I had worked for what was one of the larger employers in Canton called the Timkin Company. Timkin is a worldwide organization with headquarters in Canton and manufactures tapered roller bearings and specialty alloy steel. I had worked at Timkin for 37 years in a variety of positions. The other thing Canton is well-known for that I'll mention is being the home of the Pro Football Hall of Fame. I also had the privilege of being involved with that organization as well.

My career at Timkin started in 1964 and ended in 2001 after 37 years when I joined the Bush administration in this present position. However, there was a period of 2 years, 1991 and 1992, when I was asked by then-governor George Voinovich of the state of Ohio to get involved in his administration running a GSA-type organization, actually at the state level, which was called the Department of Administrative Services for the state of Ohio, and I did that during 1991 and 1992. Then I went back to Timkin. At that point, I had taken the position of senior vice president for human resources, purchasing, and corporate communications. As I say, I'd remained there until 2001.

Mr. Watson: Steve, GSA oversees the FirstGov, website which is a one-stop Internet portal for the government. The site has received praise and a number of awards, and I understand it's been recently updated. Can you tell us a little bit about FirstGov and the recent updates?

Mr. Perry: Yes. FirstGov is a use of Internet technology that was sort of the government's first big step I think into expanding to what ultimately will become a ubiquitous use of Internet technology for government operations. It is a portal into the government.

When it was established, it was put in place as a search engine that enabled people to get information about government activities or government agencies at a very, very rapid pace. There were some 50 million pages of web pages from various government agencies. Then additional state pages were added subsequent to that. Despite the large volume of data that's in this file, the search engine technology that's used would enable you to make an inquiry and get a very, very split-second rapid response so that you could find out information about government activities and government agencies.

What we want to now in keeping with one of President Bush's management agenda items is to expand the use of electronic government, and this is one part of that. What we want to do is enable people in the private sector, either individuals or businesses, not only to be able to obtain information, but to be able actually to complete transactions with the government and with government agencies. So the FirstGov.gov website will be the portal through which people will come, and then that will link to other agency database files or web files so that information could be pulled through that portal or transactions could be completed through that portal. We're in the process of putting that in place as we speak.

Mr. Watson: As you mentioned, e-government is one of the President's key management agenda items. What role is GSA serving in helping to roll that agenda item out across government?

Mr. Perry: Actually, we have a pretty substantial role. We're working very closely with the Office of Management and Budget, who has a leadership role with respect to

e-government and impacting all agencies. We, in working with OMB, have been asked to be the lead agency on 5 of the 24 initial initiatives; e-government or FirstGov.gov being one of the 5. But others that we have been asked to take a leadership role in, one is called e-authentication, and what that means is that it's the development of the process by which individuals or businesses who interact with the government over the web will be able to have a confidential interaction, to protect privacy and confidentiality on both sides of that transaction. This e-authentication is an electronic signature technology that will enable that confidentiality and privacy to be properly protected. So we're working with that one.

A second one that we are involved is called integrated acquisitions. As we are a procurement organization, it makes good sense that we would have a major responsibility there. There are other agencies of the government that also are involved in procurement, and this is going to be a process to integrate together all of the acquisition or procurement processes that are used by various federal agencies into one system as opposed to having multiple systems. That will be beneficial in terms of efficiency from the government side. It will also be beneficial from the private-sector side in that vendors who want to do business with the government will have one basic approach to use in getting that interaction, transaction, or business opportunity completed.

A third e-government initiative that we've been asked to serve as the lead agency for is called e-travel. As you know, government officials do a fair amount of traveling on government business, and this will be a process of taking that travel as it relates to all agencies and again coming up with a consistent and uniform approach for authorizing travel, for handling travel reimbursements and all the record keeping that's associated with travel.

Mr. Lawrence: Let me ask you a question now. You said something interesting about taking the lead on an initiative. What does that mean?

Mr. Perry: In each of these cases, it will be necessary for a number of agencies, and indeed, in some cases all of the agencies, to participate. That is, e-travel is a good example; every agency will be impacted by that. Now, the way that we're structuring this is you have one agency that is designated to be the project manager or the managing partner for that initiative. Then you will have several other agencies that form the core team for development and implementation.

Now, not every agency that's impacted will actually be a part of that team, but many agencies would be a part of that team. Teams are typically made up of 6 to 10 agencies, and the lead partner is responsible for convening the meetings, developing the work plans, and keeping the project on schedule; serving, in effect, as the project manager for that project. So it's a very collaborative effort.

In fact, it in some ways is a new experience for many agencies to work collaboratively on projects, because historically, many of the agencies have worked independently. But the web technology and the use of the Internet really affords us the opportunity to have much, much greater intraagency or interagency collaboration so that we have multiple processes and multiple systems duplicated at every agency.

Ten years ago, the technology would have been such that we might not have been able to exploit those synergies that exist among agencies, but today we clearly have that technology. And this use of web technology or e-government as a way to exploit that synergy and efficiency is something whose time has come.

Mr. Watson: What benefits will the citizens see from e-government?

Mr. Perry: One of the benefits will be that they will have an easier and more efficient means of interacting with their government, either, as I mentioned, for purposes of obtaining information, or ultimately for purposes of completing transactions with the government. All of us have probably had the experience at one time or another of unanswered phone calls or mail that took a long time to be returned or waiting in a line for government information or government transaction completion. I think a benefit that will derive here is that that will be become easier and more efficient. Then, of course, another indirect benefit that taxpayers will receive is a less costly way for the government to operate.

Mr. Lawrence: GSA has expressed a commitment to becoming more citizen-centric and customer-centric. I guess I'm curious, who are your customers?

Mr. Perry: Our most direct customers are the other federal agencies.  That's who we work with directly to provide space, technology solutions, supplies, vehicles, furniture, and things of that nature.

In a sense, our indirect customer is the American taxpayer, because again, two things happen: one, as we deliver those goods and services to other federal agencies in an efficient and effective way, we help them to improve the quality of their programs and their ability to meet the needs of the American people. So that's one benefit. The second benefit is that as we do those things well, we reduce the cost of doing it. So another benefit is the lower cost of government.

Mr. Lawrence: How will you become more customer-centric with so many people to serve?

Mr. Perry: Well, one customer at a time I suppose is part of the answer, and we're literally working on that approach. We have a strong commitment to customer service, and in order to be really good at customer service, it has to begin with understanding what the customer's needs are. So we've been working agency by agency to interact with them at the senior management level, at the mid-management level, at the regional level, and at the data-collection level, if you will, to understand what customer needs are; where are they moving programmatically; how can we support that move; what could we do in terms of providing facilities and/or supplies and so forth to support their missions. So we are doing that, as I say, one customer at a time.

Mr. Lawrence: Stick with us through the break as we continue our conversation with Steve Perry of GSA.

Managing one organization is often challenging, but managing across multiple organizations surely increases those challenges. In the next segment, we'll ask how GSA works across multiple government agencies and deals with these challenges. (Intermission)

Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers. Today's conversation is with Steve Perry, administrator of the General Services Administration.

Joining us in our conversation is Steve Watson, another PwC partner.

Mr. Watson: Steve, in the last segment, we were talking about the various

e-government initiatives that GSA is leading. You touched on three of them. Are there others?

Mr. Perry: Yes, Steve. I think I mentioned e-authentication, e-travel, and we talked a little bit about integrated acquisitions. In a general sense, we talked about a fourth one which is called USA Services, which we call our Office of Citizen Services, which has to do with the use of our FirstGov.gov website to become the portal for providing information, and then ultimately, the ability to conduct transactions with the federal government. That's the fourth one.

Then the fifth and final one that we've been asked to serve as the managing partner for is called Fed Asset Sales, and this is to make available to the public assets that the government no longer needs or can use and has available for sale. Some of those assets are personal property, vehicles, boats and things of that nature. Other assets are real property, land and buildings that may not be required for agency missions anymore. Then another category is security assets that the Department of the Treasury makes available for purchase by the public.

We are attempting to put into place a website which would be a one-stop shop for any individual or business that would want to purchase a government, that would be the way that that would happen, and those make up the five projects that we're working on.

Mr. Lawrence: GSA has expressed the desire not to let the human capital need become a crisis. What are your top HR concerns, and how are you addressing them?

Mr. Perry: Well, the issue of managing human capital has to do with building the organizational capability necessary to achieve the goals that an organization has set for itself. As we have set out goals, we are now in the process of assessing whether or not we have people with all the right skills and competencies to be successful in achieving those goals.

We have identified five areas where we know that we have to do some more work in terms of, first of all, additional training and development so that we can enhance the skills of existing people. Second, we will do some more work in understanding what our attrition will be, being prepared in the event of retirements and what-have-you. So we're working to make sure that we're prepared for smooth transitions in those cases.

Then thirdly, doing targeted recruitment to bring into the organization people who have skills that particularly needed. Some of those skills, obviously, will exist in the five mission-critical areas that I may have mentioned: IT, real estate management, security, which is a big one.

Mr. Lawrence: You're also taking a lead role in embracing teleworking for employees. What's teleworking?

Mr. Perry: Teleworking, or telecommuting, as some people call it, has to do with carrying out your normal work, but doing it outside of your normal office place. Sometimes that can happen at home if you have the computer equipment on the home end in order to interact with the network at your office, or other times, it can happen in a teleworking center where you would drive from your home to some other location closer to your home than your office and do the teleworking from there. We've built 15 such centers in the Washington, D.C. metropolitan area, including Virginia and Maryland, so that in some cases, people drive from their home to the teleworking center and then carry out their work from that location.

It has a number of benefits. One of the benefits is that it helps to improve the quality of life in some sense, quality of work life, in that people can use that as an approach to accomplish their work and be productive without necessarily having to drive to work. A second benefit area is that it reduces the transportation problems, snarls and traffic congestion that we have to some extent. And it may have a favorable -- or would have a favorable impact as well on pollution resulting from driving our cars in these congested areas.

Another area of benefit is that in the case of some individuals, they actually wouldn't be able to work if they didn't have the telecommuting as an option, at least for portions of their time. So you might take somebody whose personal life schedule is such that they really couldn't take on a 40-hour-a-week kind of a job, but if they could work some of that time from a telecommuting center, some of that time from their home, and then some of that time in the office, in some instances, it makes it possible to actually recruit that person.

Mr. Lawrence: What are the challenges of telecommuting?

Mr. Perry: One of the challenges initially was to be able to afford the cost of the equipment that would be necessary to carry it out, but that cost has come down dramatically in recent years, so that's not so much of an issue anymore.

Now the challenge becomes is the nature of the work such that telecommuting fits. For example, a receptionist can't telecommute from home because he or she has to be at a location to carry out the job. The same would be true of a maintenance person. They have to be physically where the assets are that they're going to be working on.

But there would be others who are, for example, involved in report writing or in report review or some other kind of activity where their interaction with other associates can be done electronically or over the phone. In those cases where the nature of the work is right, then telecommuting fits. So that's one issue.

The other issue is a little bit of a cultural issue. Telecommuting is relatively new for us in our culture, and so we are finding that managers and subordinates in the manager's office have to get used to this idea of not being in the same work space and nevertheless being confident that work is being achieved. They can get that confidence if they have developed together the performance expectations; you know what is to be done, you know what the time frames are, and as long as all those things are being achieved, whether the person is in the office or working from a telecommuting center, it becomes less and less of an issue.

Mr. Watson: GSA's mission requires it to work closely and cooperate with other agencies to get its work done. How hard is it working across an organization as large as the federal government?

Mr. Perry: Well, it does present its challenges, but you're absolutely right; in order for us to be successful in carrying out our work, we have to work with individual agencies and many times with multiple agencies together. That just requires us and the other agencies to adopt a spirit of teamwork.

In the aftermath of September 11th, I think we learned that we could do that, because although the terrorist attacks of September 11th are a memory that we don't like to keep reflecting on, one of the lessons learned from that was how our government agencies did in fact act very, very closely together. There are numerous examples of that.

I know in our case, GSA and FEMA, the Federal Emergency Management Agency, worked very closely, and we helped them locate space where they could operate in New York, and we provided them with materiel and so forth that they needed to conduct the search-and-rescue efforts and provide other assistance. The same was the case with the Department of Defense here in Washington, D.C. As you know, the airplane attack on the Pentagon caused them to be completely disrupted and they needed to be placed back into space and re-equipped with telephones and telecommunications equipment and so forth. So our two agencies worked night and day, literally, and very closely together to accomplish those things. It's just an example that it in fact can happen and we know that we can do it.

Within our agency, our three major services of technology, supply, and buildings, also found that we could work very, very closely together in providing total solutions to our customer agencies in a way that was closer than we had worked previously. So, yes, it has to happen, it can happen, it does happen. There are always challenges; the challenge of independence as opposed to collaboration. But we're learning in these days that collaboration is the route to high performance. We're doing it in GSA, and I think we're doing it more and more within the total federal government.

Mr. Lawrence: You've described a lot of successes. What were your lessons learned in terms of going forward about how to make this happen absent a crisis?

Mr. Perry: The issue of being clear in our mission and our understanding of our capabilities, that from a customer perspective, they expect GSA, as I say, to deliver a total solution. They don't necessarily look at us only as an entity that provides physical space or only as an entity that provides telephone service or telecommunications. They look at us as an agency that provides everything that they need for the successful operation of their agency other than the people themselves, and they bring that.

But as we look at ourselves in the way our customers look at us, it causes us to understand that we can better meet their needs by working collaboratively across all organizations or aspects of our GSA.

Mr. Lawrence: That's a good stopping point. Come back with us as we continue our discussion about management with Steve Perry of GSA.

What will the future hold for government in GSA? We'll ask Steve for his thoughts 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 today's conversation is with Steve Perry, administrator of the General Services Administration.

Joining us in our conversation is another PwC partner, Steve Watson.

Mr. Watson: In your fiscal 2001 annual report, it's reported that GSA met or exceeded 78 percent of the performance goals it had set forth. Were you satisfied with this outcome?

Mr. Perry: We know that we can improve upon that, and we know we need to improve upon that, and we know we need to improve upon that because our customer needs are increasing. We are setting for ourselves, or have set for ourselves for 2002 and beyond even more challenging goals than were set in 2001. So we will have to work harder and smarter to make sure that our performance continues to improve. Even though 2001 was a good year and it indicates that we have a strong foundation on which to build, we know that the future will require us to do more than that.

Mr. Watson: What are some of your top priorities for fiscal year 2002 and beyond that, looking forward to 2003?

Mr. Perry: Well, let's take our property management area first. As you know, we have 1,800 or so federally owned buildings. Unfortunately, the state of repair of some of those buildings is not what it should be. The General Accounting Office did a study that indicated that something over $4 billion of deferred maintenance needed to be addressed. We know that that is going to be a tough challenge, and at the same time, we know that we want our legacy to be that we addressed those issues as best we possibly could.

We're doing that by first of all in our portfolio management of our real estate assets, developing the priorities of which of those buildings will be addressed first, and we're looking at those priorities on a national basis. The second thing we're doing is that we're taking the resources that we have available in the appropriations from Congress in what's called the Federal Buildings Fund and giving a high priority to addressing the backlog of repair and alterations work or deferred maintenance.

Then thirdly, we are sponsoring proposed legislation that would reform the property management rules and regulations under which we operate to enable us to use more modern real estate management practices so that we could better address some of these issues. As an example, one of the more modern real estate management practices would be that each agency would be more involved, if you will, in developing an annual facilities management plan and making sure that that facilities management plan was consistent with that agency's mission. That would help to identify whether there are buildings that are excess to that agency's mission so that we could deal with that. It would also help to identify buildings that continue to be needed for the agency's mission, and so they would move up on the priority list in terms of attention for purposes of repair and alterations.

Another part of that reform would be to enable GSA to enter into public-private partnerships; in effect, find a way to be able to have private-sector investors invest in repairing existing federally owned buildings and then recovering their investment over a period of years by receiving a pro rata share of the rent. Today, we often find ourselves with inadequate resources. If we could tap private-sector developers who would be willing to make these investments for a return, it would be a way to help solve these deferred maintenance problem that we have. So that's a big priority for us in the property management arena.

In the procurement arena, what we've been endeavoring to do is find more and more efficient ways to enable agencies to be able to carry out their purchase of products and services needs. As you know, we have something called GSA schedules, a very efficient marketplace type of arrangement that we at GSA have put in place that enables agencies who need to buy certain things just go to that schedule and make the purchase. The terms and conditions have already been negotiated, the price and delivery items are already in place, and it makes it a very efficient process for agencies to use.

In addition to those sorts of unassisted schedules, we have some agencies who need additional assistance, particularly in the purchase of information technology types of items. In that instance, our Federal Technology Service provides additional assistance where it's needed to help agencies develop the scope of their process change, to help them review alternatives in terms of their purchasing options, help them make the selection, and provide for the delivery and implementation of the improvement. So that is an area as well where we are endeavoring to make that process work better so that agencies get even higher value when they use GSA for their procurement purposes.

Mr. Watson: We've talked about other aspects of the President's management agenda. Another agenda item is a better link to performance with the budget process. How effective has GSA been in being able to make that linkage?

Mr. Perry: That's an area that we will need to make further improvement. As a matter of fact, we have had some success in being able to identify parts of our performance agenda that are working well and identify parts that are not working well and then make the appropriate resource allocation changes as needed. What's meant by linking budget to performance is that you should not continue to devote resources to an activity that's not generating a highly desirable result. So that means that there may be low-value activities that agencies are involved in and we need to reduce the amount of time, money, and people that devoted to low-value activities and have a greater proportion of our resource budget allocated to the higher-value activities. So that's what we're attempting to do to a greater extent than may have been the case in the past.

Mr. Lawrence: You've worked in both the private sector and the public sector. I'm curious about your observations on the differences perhaps just in terms of culture.

Mr. Perry: Actually, there are a lot of similarities to me, as a person coming in, I find most people in the private sector would not have assumed. One of the things that is very prevalent I think in the public sector is it is populated by a number of people who are here largely as a result of their commitment to public service. It isn't that they couldn't be successful in the private sector, but they just made a choice to be involved in a public-service type of activity because of the satisfaction that that brings. So we happen to have, certainly at GSA, a number of people who are very capable, competent individuals who are doing what they do partially driven by this desire to be involved in public service.

Again, I see lots of similarities between the private sector and the public sector, but one area of difference perhaps is this area that the President has hit upon as he has announced his performance management agenda, saying that we can deliver good government to the people; good government being defined as citizen-centered and results-oriented. That's a very simple statement, but really a profound statement as well: citizen-centered,

results-oriented government. That's the definition of good government. But President Bush's agenda says that we can deliver that in part by improving on our use of good management practices. So that is an area where the private sector I think generally speaking is more diligent about using good management practices than is the case today in some public-sector agencies.

What I mean by good management practices, to make sure that you have a process of setting challenging goals; goals that are important from a customer perspective, goals that are challenging, goals that are measurable, and goals that are broadly communicated among the people who have to carry them out. That's a management practice. Some organizations don't do that as well as they might. I think as we at GSA and other federal agencies do our goal setting steps better, it begins to improve or offer the opportunity for improvement of the organization.

Similarly, other aspects of the performance management process beyond goal setting, developing action plans which are documented so that it's clear among everybody in the organization who is responsible to do what by when. Then moving on with execution of those action plans, and then measuring performance after the fact; measuring performance as a part of the effort to achieve accountability, but also measuring performance as a part of the effort of understanding where it is that we're on the right track and where it is that we're not on the right track so that we could take appropriate corrective action in terms of our processes.

So these are management practices which, as I say, most private sector organizations that I've been familiar with rely upon and execute in a very diligent and rigorous way. In the public sector, we are moving toward executing those kinds of management practices more diligently and more rigorously, and I think the result will be improved performance.

Mr. Lawrence: What advice would you give to a young person interested in a career in public service?

Mr. Perry: Well, I would certainly encourage it. Being involved in public service is necessary. When you think of what our country's infrastructure and activities would be like if we didn't have the services that are brought to us by federal agencies, it's necessary. It's a very worthwhile career, because you do have the opportunity to use your academic skills and your God-given talents to do very interesting work.

Mr. Lawrence: Well, we've run out of time, Steve.

Steve and I want to thank you for being with us this morning.

Mr. Perry: Thank you. It's been a pleasure. I really have enjoyed our conversation. I'll mention, if I may, if people want to get in touch with GSA, there's at least two ways to do it in terms of using the web. One is through gsa.gov, and the other is FirstGov.gov. That gets you in touch not only with GSA, but with all federal agencies.

Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation with Steve Perry, administrator of the General Services Administration.

Be sure to visit us on the web at endowment.pwcglobal.com. There, you can learn more about our programs and research, and you can also get a transcript of today's very interesting conversation. Again, that's endowment.pwcglobal.com.

This is Paul Lawrence. See you next week.