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Monday, November 1, 2004
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 ways to improving government performance. Learn more about The Center by visiting us at businessofgovernment.org.
The Business of Government Radio Show Hour features a conversation with a government executive who is changing the way government does business. Our special guest this morning is Dr. Ron DeHaven, administrator of the USDA's Animal and Plant Health Inspection Service.
Good morning, Dr. DeHaven.
Dr. DeHaven: Good morning. Thank you for having me on your show.
Mr. Lawrence: And joining us in our conversation, also from IBM, is Mike Wasson.
Good morning, Mike.
Mr. Wasson: Good morning, Paul. Thank you for being here.
Mr. Lawrence: Well, Dr. DeHaven, let's start by learning more about APHIS. Could you tell us about the Animal and Plant Health Inspection Service, and its role within USDA?
Dr. DeHaven: Certainly. Our motto within APHIS is "Safeguarding American Agriculture," which I think really speaks to what we do. We're responsible for ensuring safe and healthy agricultural products, both on the plant and animal side. Indeed, Secretary Veneman at one point had made reference that if she were starting to rebuild the USDA all over again, she would start with the foundation, that being APHIS. We have several program units within the agency -- veterinary services, plant protection quarantine, biotechnology regulatory services, wildlife services, international services, and animal care -- all of which speak to the specific roles we have in a very broad mission area.
Mr. Lawrence: How do you describe the size? I mean, you've gone through a wide range of programs. Could you tell us about the budget, and even the skills of the people on your team?
Dr. DeHaven: In terms of the budget, it's actually grown quite dramatically. In Fiscal Year '01, we had an appropriation, or appropriated budget, of $445 million. The President's budget for Fiscal Year '05 is $828 million. That, taken along with the frequent apportionment of monies for emergency purposes, which in the last few years have averaged at about $250 million a year, we're basically a billion-dollar agency.
In terms of numbers of people, there again, the numbers vary depending on what you're looking at. In terms of full-time permanent employees, we're somewhere in excess of 4,000 employees, but when also including Foreign Service national employees around the world and temporary employees that we hire, we're in excess of 7,000 people.
Mr. Lawrence: And the skills of these folks?
Dr. DeHaven: Wide variety, as you might guess, given the program units that we have in the agency. On the plant side, we have plant pathologists and botanists. On the animal health side, veterinarians and epidemiologists. We employ wildlife biologists, biotechnologists, program analysts, economists. We have a public affairs staff with several public affairs specialists and writer/editors, and then also, because of the monies that we involve, contracting specialists and financial managers.
Mr. Wasson: Well, Dr. DeHaven, can you share with us your roles and responsibilities as administrator for APHIS?
Dr. DeHaven: I look at my job as providing the vision and leadership for this agency; ensuring that we have the resources, both human and financial, to carry out our mission; and then represent the agency in a variety of situations, both internally and externally.
Mr. Wasson: In April of 2004, you became administrator of APHIS. Can you tell us a little bit about the background before you became administrator?
Dr. DeHaven: Well, I graduated from veterinary school, Purdue University, in 1975, and actually went to school with the intent of being a small animal, dog and cat practitioner. I did four years with the Army Veterinary Corps, which I found very rewarding, and during that period also gained some clinical practice experience. But at the end of my tenure in the Army, I was intrigued by government service, and actually then took my first job with the government in APHIS in 1979. I spent the first six years of my career, which I think was very valuable, in the field as a field veterinary medical officer dealing with primarily livestock disease issues.
From there, I moved into a middle management position as the assistant area veterinarian in charge in our state of Mississippi. And then, four years after that, started a 12-year stint in our animal care program, overseeing administration of the Animal Welfare Act and the Horse Protection Act. It was then about four years ago that I came back to our veterinary services unit as the deputy administrator of that organization and, of course, have been the administrator now for two years.
So I think what I find most interesting is that I went to veterinary school with the intent of being a dog and cat practitioner, now find myself as a Washington bureaucrat with far more reaching implications and responsibilities when it comes to both animal and plant health, and enjoying myself as a Washington bureaucrat, something that back in 1975, I would never have imagined happening.
Mr. Wasson: You have an interesting background, where you have both a doctor of veterinary medicine and an MBA. How did you combine your two degrees for maximum effectiveness in the work environment?
Dr. DeHaven: As I mentioned with my veterinary degree, I think that degree has opened up a wide array of opportunities, both from clinical medicine to being a Washington bureaucrat. The master's in business administration came at a time when I had made the career decision that I wanted to stay with government and focus on management of programs and people. I realized at the time, and actually fully came to realize during the course of obtaining that degree, that we need to market ourselves and run our government agencies like business runs itself. And so I think through both degrees, the doctor of veterinary medicine and the MBA, I've had the technical background, the technical experience, but also now the management experience to provide oversight and leadership for a government agency and focus on running government like a business.
Mr. Lawrence: I'd like to pick up on that point where you talked about getting an MBA, when you began to understand the importance of management. What was it like as you were transitioning from a doer, when you were describing, you know, providing services to animals as a veterinarian, and to becoming a manager? Could you take us through that?
Dr. DeHaven: I think before that, Paul, I even realized that while the private veterinary practitioner certainly has some strong and influential impact on families and individual animals, by working with a government agency, we actually have tremendous impacts on population of animals. And so that's where I wanted to take my career was in veterinary medicine, but looking at a broader picture, recognizing that animal agriculture has tremendous implications for our economy and for the health and well-being of a large number of animals as well as the basis for employment of many people in this country. So I recognized the potential there; had also had a taste as a middle management of managing people and managing programs and enjoyed that as well.
Mr. Lawrence: Well, tell us about some of the differences in terms of your training as a veterinarian and then what you began doing as a manager. One of the things I'm drawn to is sort of the size of the groups of people you dealt with. I imagine, from having animals, that a veterinarian experiences one-on-one, and generally, the customers don't complain very much, I imagine, and now you're with much broader teams of people that you have to influence. Tell us about some of the differences in the training.
Dr. DeHaven: You know, ultimately, Paul, it comes down to dealing with people one-on-one and having interpersonal skills, whether you're dealing with that pet owner or a herd owner whose herd of cattle has just been recently diagnosed with brucellosis. From there, you take it to my current position, where typically, I'm working one-on-one with individuals who represent larger, broader constituencies. At the end of the day, it's interpersonal skills and working one-on-one with people. It's just the stakes on different -- whether we're talking about an individual animal or an individual herd of animals versus populations of animals. At the end of the day, it's a matter of employing good common sense and having the interpersonal skills to explain your situation and your position.
Mr. Lawrence: And how about the speed of decisions and the things you can make an impact on? I imagine it must have been very rewarding to you to work one-on-one in a small setting and solve a problem with an animal, and see that work its way out, and now to think about solving something in a population seems much hard and would take more time.
Dr. DeHaven: I think that for the most part is very true. When you're dealing with an individual animal, oftentimes, it's life-and-death situations and decisions need to be made very quickly. On the other hand, when you're dealing with populations and diseases and disease programs that have broad implications for a large population of people and a larger population of animals, typically that decision-making process is much slower, requires a transparent and open process that allows the public and all stakeholders to have an input on that decision. That's how government does work and should work, and we certainly emphasize having an open and transparent process.
Not everyone is cut out for that kind of work. Bureaucracies are intended to be somewhat inefficient, so that they provide that opportunity for everyone to have input. It's something that you develop a skill and ability to work within our system, which, again, by some accounts is intended to be somewhat inefficient in that it does provide for broad constituencies to have input.
Mr. Lawrence: That's interesting. As I think about you getting an MBA and your point about, you know, making government act more like a business, and you talked about the need for inefficiencies, are there any other places that you've noticed where it almost shouldn't run like a business?
Dr. DeHaven: Well, we don't have a bottom line, per se, to worry about in government in terms of having to generate revenue. Rather, making the best use of taxpayers' dollars that are appropriated by Congress or otherwise made available to us. But whether you generate a revenue or have an appropriation, it's getting the most bang for your buck, making sure that how you use that money is used efficiently and effectively. In our case, it's for the public in general as opposed to private business, where you have that customer that you're trying to give them the most benefit for their dollar spent.
Mr. Lawrence: That's an interesting point, especially about the need for openness and transparency.
We're all aware of mad cow disease. How are we tracking and testing for this disease? We'll ask Dr. Ron DeHaven of the Animal and Plant Health Inspection Service to tell us about this when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Dr. Ron DeHaven, administrator of the USDA's Animal and Plant Health Inspection Service.
And joining us in our conversation is Mike Wasson.
Well, Dr. DeHaven, let's talk about mad cow disease. And with the scare of the disease entering in the United States, how is APHIS able to track and test cattle for the disease?
Dr. DeHaven: Well, we have actually been testing cattle for bovine spongiform encephalopathy, or BSE, since 1990, increasing every year the number of animals that we test. In 2002/2003, we tested some 20,000 animals. And these are animals for what we consider to be the high-risk or target population, meaning that if we do have the disease, these would be the animals that would be most likely to test positive, some 30 times more likely than the average adult cow in our population.
Because of the recent cases in North America, both of them native born in Canada, but one found in the U.S., we have entered into an enhanced surveillance program beginning June 1st of this year. Since June 1st, we have tested somewhere in the neighborhood of 98,000 animals in this high-risk or target population. And of course, all of them thus far have been negative.
Our goal is, during a 12-month period, we want to test a statistically significant number that would, if we have the disease in the U.S., even at a prevalence as low as 1 animal out of 10 million that's positive, that we would find the disease. So our goal is, during this 12-month period, to test somewhere in excess of 250,000 animals, and then can say with some degree of statistical significance whether or not we have the disease, and, if so, at what prevalence.
Mr. Lawrence: Take our listeners through the process of testing. You describe statistics, so I have a picture in my mind of sampling, much like we would anything else, and then running the tests. And so I'm curious, is that right? And just what does the test entail?
Dr. DeHaven: That is correct, Paul. We, unfortunately, don't have any live animal tests available to us at this point in time. There's no blood test. In fact, the test involves getting a piece of tissue from a very specific section of the brain, in the brain stem. So we're collecting these samples from animals that have died on the farm, have gone to slaughter, or otherwise would be animals that have died or are destined to be slaughtered.
We're picking these samples up off of animals that die on the farm. Typically, they're sent to a rendering plant, and we collect the tissues at rendering. Some animals that become nonambulatory at slaughter, they go down, if you will, and are not allowed into the human food chain, we test those animals as well, but also animals that are going to public health laboratories and state diagnostic veterinary laboratories, animals that are showing some central nervous system disorder.
So after the animal dies or is otherwise selected for testing and is euthanized, this portion of the brain, a small piece of tissue, is taken from that section of the brain and then it's subjected to one of half a dozen different tests that we've approved for this purpose. These are rapid screening tests.
So the samples are collected at slaughter plants, rendering plants, diagnostic laboratories, and then that sample is shipped to one of seven laboratories around the country where this testing is done. If any of the animals or tests come up anything other than negative on one of those screening tests, then it goes to our national reference laboratory, that's our National Veterinary Services laboratories in Ames, Iowa, for confirmatory testing.
Mr. Lawrence: Are there steps to implement measures and risk assessments for better effectiveness of tracking disease? As we were preparing, I was reading about the animal registry program.
Dr. DeHaven: The animal registry, I assume, Paul, you're talking about our National Animal Identification System, which is the system that we are currently developing that would provide for some kind of electronic identification on every animal, livestock species of animals, in the country. It's almost ironic in that because of the recent finding of the BSE case in the state of Washington, we're on an accelerated path to implement this national animal identification. And ironic in that BSE is a non-contagious disease, so it's one that we have the luxury of a matter of days or even weeks to trace animals.
On the other hand, if we were to have a highly contagious disease enter the United States, such as foot-and-mouth disease, we would need to be able to track animals in a matter of hours in order to be able to contain and, hopefully, eventually eradicate that kind of disease that might be introduced into the United States. So while certainly animal identification on every animal in the country would be useful for a number of domestic disease programs that we have ongoing, certainly in terms of our BSE testing program, it would be critical to have that kind of system in place were we to have the introduction of a highly contagious foreign animal disease.
he system that we're implementing would then involve electronic identification on the animal, and there's a number of different technologies that can be used, such as radio frequency, ID microchips. But the idea would be that in a maximum of 48 hours, we could trace animals that were infected or had been exposed to infected animals.
Mr. Wasson: Well, Dr. DeHaven, recently APHIS partnered up with the Food and Drug Administration and the Environmental Protection Agency on developing a single portal on agricultural biotechnology regulations, which is usbiotechreg.nbii.gov. Can you tell us how this came about and what this site offers?
Dr. DeHaven: Well, the three agencies that are involved in regulating agricultural biotechnology APHIS, Food and Drug Administration, or FDA, and EPA, the Environmental Protection Agency all have very distinct and different roles. But the public really wants one site where they can go to to answer all of their questions, regardless of which agency might have specific regulatory authority. So we worked with our colleagues at FDA and EPA as well as the White House's Office of Science Technology Policy to develop this website. As with all of our regulatory programs, our goal is to be open and very transparent in the process so that we can have a coordinated and risk-based approach.
I think biotechnology represents some unique challenges, in that we walk a very thin tightrope in terms of ensuring that we have adequate regulations to ensure protection of the public and the environment, but, at the same time, not over-regulating to the extent that we unduly restrict growth in an industry that has so much to offer to society.
Mr. Wasson: Well, earlier this year, USDA and APHIS will prepare an evaluation of its biotechnology regulations and several possible regulation changes, including the development of a multi-tiered risk-based permitting system and the enhancements of the deregulation process to provide flexibility for long-term monitoring. How is this process coming along, and what impacts does this have on the stakeholders?
Dr. DeHaven: Mike, you're right. In January of this year, we published a notice of intent in the Federal Register and said in this notice that we plan to prepare an environmental impact statement, or EIS, to consider possible changes to our biotechnology regulations. Through the EIS and a change in regulations, it would provide for a multi-tiered system that would provide some flexibility in the commercialization process for biotechnology products, genetically engineered products, and provide for new policies in field testing, for example, for pharmaceutical plants, plants that are genetically engineered to produce pharmaceutical compounds or other industrial compounds, as well as providing a mechanism for dealing with adventitious presence. That would be the presence of genetically modified organisms in organisms that are thought to be or expected to be non-genetically modified.
Before even starting this process, however, we met with stakeholders and got their input and, through this notice of an intent to prepare an environmental impact statement, received over 3,000 public comments. We've reviewed and considered those comments, and we are currently in the process of writing this environmental impact statement, the impact that new regulations might have. The public will once again have an opportunity to comment on this EIS. And then ultimately, we would be publishing a proposed rule, once again for public comment. So again, emphasizing our open and transparent process in developing any new regulations.
Mr. Wasson: In the wake of terrorist attacks against the U.S., bioterrorism has been of a great concern. For instance, the Bush Administration passed the Agricultural Bioterrorism Protection Act of 2002 and the Homeland Security Act of 2002. What is APHIS's part against bioterrorism?
Dr. DeHaven: It's been part of our responsibility in APHIS to respond to the introduction of foreign animal, plants and plant diseases, and pests as well as animal diseases. So we have considered ourselves for several decades to be first responders when there is an accidental introduction of a plant disease or a pest or an animal disease.
What has changed obviously with the recent times, most notably since 9/11, is the recognition or realization that we not only are vulnerable to an accidental introduction of pest or disease, we've vulnerable to an intentional introduction, an introduction that could have far-reaching implications for the economy of the United States. So we have renewed and emphasized our role not just in dealing with domestic disease programs, but in terms of response to the introduction of a foreign animal disease or a plant pest and disease, recognizing that that could be an intentional introduction.
We have worked closely with FEMA to develop what's called an emergency support function for agriculture, ESF-11. APHIS has the lead in that, meaning that just like FEMA has a responsibility to respond to natural disasters like earthquakes or hurricanes, the FEMA function would also apply to an agricultural emergency such as an unexpected or intentionally introduced foreign animal disease or a plant disease. So through this emergency support function and working with FEMA, APHIS would have the lead in responding to an agricultural emergency, but through FEMA would have all of the resources of the federal government at our disposal to deal with that kind of situation.
APHIS is also the lead agency for the agricultural component of the Bioterrorism Protection Act of 2002, where we have worked very closely with CDC in coming up with a program to ensure that university laboratories and private laboratories that are dealing with agents that could have a bioterrorist use, that there are proper controls and inventory of those kinds of agents. We refer to them as select agents.
We actually have a liaison person with APHIS who works at CDC, who works with them on issues that would affect both animals and plants, zoonotic disease, if you will, as well as any bioterrorist agent that would have not just human health, but also animal health implications.
Mr. Lawrence: How is e-government being used to streamline processes at APHIS? We'll ask Dr. Ron DeHaven, its administrator, to tell us about this when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Dr. Ron DeHaven, administrator of the USDA's Animal and Plant Health Inspection Service.
And joining us in our conversation is Mike Wasson.
Well, Dr. DeHaven, the scope of APHIS's protection has expanded beyond pest and disease management. APHIS has assumed greater roles in the global agricultural arena. What management challenges has this presented for the leadership of APHIS?
Dr. DeHaven: Paul, thank you for the question. And we're realizing more since 9/11 than ever before that our first line of defense, speaking from an agricultural perspective, is not at our ports and borders, but rather overseas. We don't want to wait until potentially harmful diseases, agricultural diseases, or pests are at our borders to exclude them, but rather have people offshore who realize and are our eyes and ears in terms of what threats are out there, and keeping those kinds of things from ever entering our ports and borders. That's our first line of defense, is offshore.
But APHIS is always walking a tightrope in terms of safeguarding American agriculture, but also facilitating trade. Agricultural trade is critical to the economy of our country. So our role is to ensure that those products that we import from abroad as well as our agricultural exports are safe and don't represent any risk to our trading partners. As we enter into more and more trade agreements with our trading partners where historically trade has been restricted by quotas and tariffs, now what's becoming a limiting factor is what we call the sanitary/phytosanitary issues, those issues that represent potential health and pest risks.
And so APHIS is becoming front and center in terms of -- it's those technical issues, the issues that are involved in safeguarding American agriculture, are the same ones that are limiting trade. So there's increasingly more and more emphasis and pressure on APHIS to resolve those technical barriers so that trade can continue unrestricted, but doing so in such a way that we don't jeopardize the health and safety of agriculture in the United States.
Mr. Wasson: Well, Dr. DeHaven, in the last segment, we have learned that APHIS has worked with many different agencies to develop informational websites and protecting U.S. agriculture. Are there any lessons learned and advice you would give on working and managing interagency?
Dr. DeHaven: I think there's one overriding thing, and that is that the administration, our Congress, and, probably more importantly, the public expect there to be interagency cooperation. They're not really concerned with whether there are two or three or four agencies that are involved in some area of oversight. They want to make sure that government agencies that have a role are working together and that there's a coordinated approach.
I was talking a minute ago about trade issues. And so APHIS has a critical role in facilitating trade, to the extent that there are technical issues, to make sure that we don't unintentionally export or import disease or pests. But to do that, we work very closely with the Foreign Agricultural Service, an agency within USDA, in establishing those trade policies and working with our trading partners around the world.
I think the BSE, or mad cow, situation is an excellent example of the need for interagency coordination. APHIS has a role in terms of surveillance of our live animal population. Food Safety Inspection Service, another agency within USDA, has a responsibility to ensure that the food produced from those animals is safe and wholesome. And our colleagues in FDA have some responsibility as relates to animal feed as well as cosmetics and other products that would be made from those animal products. The public, the department, indeed the Congress expect us to work very closely together in dealing with those issues that cross agency boundaries.
Mr. Wasson: Well, early in 2001, APHIS launched an e-gov initiative that streamlined its permit process and application online. What are some of the challenges with this launch?
Dr. DeHaven: In the context, Mike, of ensuring that we are user-friendly to our public, we want to provide the option for that public to request our services either through the traditional paper methods or electronically. For example, both our plant protection quarantine and veterinary services units have a permit process where one can apply for a permit that would allow for the movement of otherwise restricted materials into or out of the United States. Our biotechnology regulatory services unit also receives requests for permits for permitting the use or testing, field testing, of potential biotechnology products.
The challenge for us was to develop one coordinated system that met the needs of all of these different purposes and do so in a way that is user-friendly and not create a three separate system. So we have that traditional bureaucratic issue of getting the funding, getting approval for the system that we're developing, selecting a contractor, and then working closely with that contractor. But all of those things are coming together, and we would hope to pilot a project for this permitting system early next year.
Mr. Wasson: Are there any other e-gov initiatives on the way within APHIS?
Dr. DeHaven: Actually, there are several that we have underway, and our intent is to provide an electronic mechanism of any interaction that we would have with our public. Another example is that we license and register facilities under the Animal Welfare Act. This is primarily facilities that are involved in research or exhibition or the commercial sale of animals, and those types of facilities need to be either licensed or registered with us under the Animal Welfare Act. So rather than, here again, submitting a paper application for that kind of license or registration, we're developing a system to do that all electronically.
Mr. Lawrence: This naturally leads into a discussion of the President's Management Agenda. And could you tell us about APHIS's plans to action to implement the agenda? For example, one area of interest is the integration of performance and budget information.
Dr. DeHaven: Our mission goals in APHIS, Paul, are safeguarding American agriculture and facilitating trade. And as I've alluded to, those two goals can be a little bit of a conundrum in terms of competing interests; in terms of safeguarding agriculture, but at the same time facilitating trade and, in doing so, potentially running the risk of accidental introduction of pest or disease. So having said that, our pest and disease programs very readily lend themselves to a cost-benefit analysis. What's the program going to cost? What's the potential export or market that might be out there, or what is the value of that commodity to our own economy? And then doing a cost-benefit. Is the cost of that program going to yield potential benefits that will exceed those costs?
Here again, we also know that by instituting various plant and animal disease programs, we can improve our export markets. We can improve the exportability, if you will, of certain markets. And so is that potential market from a cost-benefit analysis greater than what the cost would be of implementing some of our programs? APHIS has actually scored very high within the Department on the OMB process to review program assessment, if you will, where we have scored high in terms of the value of our programs versus the return on that investment.
Mr. Wasson: How is APHIS making the adjustments on the move of its port-of-entry inspectors to the Department of Homeland Security?
Dr. DeHaven: We've gone through a very difficult transition. It was in March of last year that we transferred somewhere in the neighborhood of 2,600 agricultural quarantine inspectors to the new Department of Homeland Security. These 2,600 inspectors are the people at our ports and borders whose job it is to ensure that we don't inadvertently allow into the country prohibited products that might also harbor plant diseases or animal diseases. So it's been somewhat of a difficult transition for us to lose those inspectors while at the same time ensuring that they continue to have a very active role in performing that agricultural mission at our ports and borders.
We found newfound friends with our colleagues in the Customs and Border Protection, one of the major units within the Department of Homeland Security. And we think that through the creation of this new department and overseeing all of the inspection activities at the ports and borders, not just agricultural, but Customs inspections and immigration inspections, that there is ample opportunity for improvement, and at the end of the day, having a far better system. Our role is to continue to provide the policy and training for those inspectors at the ports and border, making sure that the agricultural mission remains very high on their priority list. And in order to do that, we've had a couple of initiatives underway.
We're working with our colleagues at DHS to have a quality assurance program to ensure that that inspection is happening as it should, but also that we've got good communication. Current issues, is there a new outbreak or a new situation that would cause us to send an alert to the ports and borders to be on the lookout for a particular commodity or a disease that might be presenting itself? Changes in policy -- and we continue to, again, provide the training for the agricultural inspectors, including the new agricultural specialist within the Department of Homeland Security. So we're developing a newfound friendship and relationship with our colleagues at DHS. And, again, I think that at the end of the day, there's a potential to have a much more effective system.
Mr. Lawrence: That's interesting, especially all the technology described that underpin the programs.
With all the technology being used today, how are skilled IT professionals being recruited and retained? We'll ask Dr. Ron DeHaven of APHIS to tell us about this when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Dr. Ron DeHaven, administrator of the USDA's Animal and Plant Health Inspection Service.
And joining us in our conversation is Mike Wasson.
Mr. Wasson: Well, good morning. Dr. DeHaven, in the future what changes of shifts do you see in APHIS's role in protecting U.S. agriculture?
Dr. DeHaven: Mike, I think we're already seeing some of those shifts. We're seeing more new and emerging diseases in the last few years than we've ever seen before, and I think that's reflected in the apportionment of monies that we've received to respond to some of those new emergencies and emerging pests and diseases. During the eight-year period from 1993 to 2000, we spent some $475 million in responding to those kinds of plant and animal emergencies. In the last four years, that number has soared to $1.1 billion. So in half the time, we've spent twice the amount of money responding to some of the new and emerging plant and animal pests and diseases.
We've touched base already on the fact that as we enter into more trade agreements with our trading partners around the world, some of the technical issues to safeguard American agriculture are becoming those issues that are limiting trade, and so increasing pressure on APHIS to resolve those technical issues in a way that applies appropriate safeguards, but doesn't unduly restrict trade.
And then as we mentioned before, with the events of 9/11, the anthrax situation here in Washington, D.C., with the recognition with the foot-and-mouth disease in Europe that we, too, are vulnerable, we have an increasingly important homeland security role within USDA in general and APHIS in particular. I think we're realizing as an agency that emergencies are part of our norm. As we go about our day-to-day business, that's going to include responding to whatever the current emergency is, either on the plant or animal side or, heaven forbid, both of them.
Mr. Wasson: How does APHIS plan on integrating and protecting its science and technology infrastructure?
Dr. DeHaven: Mike, I think the credibility of our whole agency is that we are a science-based organization. We need to stay science-based and keep that as part of our roots. We have expanded, in fact, that science base in our agency, and I'll give a couple of examples.
Within our plant protection quarantine unit, we've created a Center for Plant Health Science and Technology. So as we're dealing with the domestic disease programs and coming up with new science-based ways of dealing with them, or have a trade issue that requires a science-based resolution, it's those scientists at CPHST, Center for Plant Health Science and Technology, that are responsible for coming up with those kinds of science-based resolutions. And on the animal side, a similar organization is called the Center for Epidemiology and Animal Health.
Clearly, when it comes to regulating biotechnology, we have to be science-based there. It's an evolving industry; the potential benefits are huge. We have to understand the science and ensure that our regulations are science-based.
Our wildlife services unit has gone from an organization that managed damage control on livestock to one that is really a wildlife disease management organization, employing a number of wildlife biologists to ensure that where there is interaction between wildlife and domestic livestock, we're appropriately managing the disease concerns there. So we are science-based, and our future credibility is dependent upon ensuring that we're employing the best science in our programs and activities.
Mr. Lawrence: Throughout our conversation this morning, you've talked an awful lot about very complicated programs: technological, statistical, and scientific. So let me ask you just about the employees who support you. Let's start with technology. How is the agency recruiting and retaining skilled IT workers?
Dr. DeHaven: Indeed. With all the program activities I've talked about, Paul, we couldn't carry out all those activities if we didn't have an excellent support staff, and we do, and that runs the gamut from our IT specialists to our financial managers. On the IT side, especially in the last couple of years, actually recruitment of good quality IT specialists has not been an issue for us. Typically when we put out an advertisement for a vacancy, we get a good number of applicants. And so I'm proud of the caliber and expertise of our IT specialists within the agency.
Having said that, I think that there is a couple of things that we can do, or several things that we can do if that becomes an issue in terms of providing financial incentives to attract some of those IT specialists. But I think even more fundamental than that is within APHIS, we have an organizational culture that values our employees and places high value on family values. So I think we're a family-friendly, employee-friendly organization, but we can also provide those kinds of financial incentives if need be.
Mr. Wasson: How is APHIS supporting agriculture trade between the U.S. and its trading partners?
Dr. DeHaven: Within our international services unit, we have a separate team we call the trade support team, which is really the interface between APHIS, our Foreign Agricultural Service, and the U.S. Trade Representative's Office, where we are collectively working on agricultural trade issues. I think especially in the last decade, trade has become increasingly important as we enter into all of these trade agreements. And the technical barriers to trade that APHIS is responsible for are becoming increasingly important. So we have this team of individuals with geographical responsibility around the world that deal specifically with those issues from a technical standpoint, but also serve as our liaison between other parts of government that are dealing with agricultural trade issues.
But we're also expanding our presence overseas. We have APHIS employees in 29 countries that are working on not just facilitating trade, but being our eyes and ears in terms of the agricultural threats that are out there in terms of what potential threat might be coming to us from different parts of the world because of the animal and plant disease situations around the world. So I think we have an increasing role, and we certainly have had over the past decade an increasing role in trade, and I don't see that doing anything in the future except expanding.
Mr. Lawrence: Dr. DeHaven, if I've done my math right, you've dedicated your career to public service, almost 30 years if I remember the dates from our first segment. So I'd like to ask you to be reflective and talk to a person who's maybe interested in a career or just starting out in public service. What advice would you give to them?
Dr. DeHaven: I think one of the most frustrating experiences of my 30-year career in government was getting that first job. There was no good process to tap into the system, get your questions answered, and effectively compete. So while I think we've made some tremendous inroads and are much more user-friendly today than we were in the past in the perspective, and there's ample opportunity to get information from the Internet, I would encourage folks to be patient and persistent.
I would also say, at the end of the day, certainly for me it's been worth it. Certainly don't come to work for government if you just want to draw a paycheck and sit back and look forward to a retirement. Plan on working, working hard, but also plan on the rewards being substantial. I think the impact, for example, that APHIS has on American agriculture is tremendous. And so while the work is hard, the hours can be long, the rewards are equally as large.
I would also encourage those that are interested in coming to work for a particular agency learn what you can about the agency before you go for a job interview. I can't tell you the number of people that I've interviewed for prospective jobs that know next to nothing about the agency. And indeed if you are truly interested in working for that agency, it just makes common sense that you would have done some background and know what that agency does and what kind of position that you would be interested in.
Mr. Lawrence: Well, I'm afraid we're out of time. That'll have to be our last question. Dr. DeHaven, Mike and I want to thank you for squeezing us in your very busy schedule this morning.
Dr. DeHaven: Well, thank you, Paul, it's been my pleasure, and Mike as well. I appreciate the questions and the opportunity to explain to the public the wide variety and important functions that the Animal and Plant Health Inspection Service plays. We've got a great group of dedicated employees who work hard day-in and day-out.
And for those of you that are interested in knowing more about our programs, I would encourage you to visit our website. That website is www.aphis.usda.gov. And we've got a comprehensive website that will explain to you more about what we do in our various programs as well as provide mechanisms for you to get answers to your questions if you need services from our agency.
Again, Paul and Mike, thank you very much for having me on your program.
Mr. Wasson: Thank you.
Mr. Lawrence: Thank you, Dr. DeHaven.
This has been The Business of Government Hour, featuring a conversation with Dr. Ron DeHaven, administrator of the USDA's Animal and Plant Health Inspection Service. Be sure and visit us on the web at businessofgovernment.org. There you can learn more about our programs and research and get a transcript of today's fascinating conversation. Once again, that's businessofgovernment.org.
This is Paul Lawrence. Thank you for listening.
Tuesday, August 17, 2004
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 about the center 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 Lieutenant General Steven Boutelle, Chief Information Officer and G-6 of the Department of the Army. Good morning, sir.
Lt. Gen. Boutelle: Good morning, Paul, great to see you this morning and I appreciate the opportunity to talk about what we're doing in our service.
Mr. Lawrence: Great. And also joining us in our conversation from IBM is Chuck Prow. Good morning, Chuck.
Mr. Prow: Good morning, Paul.
Mr. Lawrence: Well, General, perhaps you could begin by describing the mission of the Department of Army's chief information office, G-6?
Lt. Gen. Boutelle: That's a great question. The CIO and G-6 of the Army really has multiple roles. As the CIO we hold that traditional role, which is providing IT services across the force. Now, when we say "across the force" for the Army that's significantly different in some corporate worlds, that is, global requirements for IT wherever you are in the world, any time, any place. And generally and quite often in today's environment that is in a place where there is no infrastructure.
Under the G-6 role we actually provide the soldiers, the young men and women who operate many of those services, be it in Afghanistan or Djibouti, Horn of Africa, South America, or here in the continental United States.
Mr. Lawrence: Tell us about the people on your team, especially the skills.
Lt. Gen. Boutelle: The skill set is a varied skill set but they do have a common core and that is somewhere they're involved in the IT industry. We do have those people that are in the resourcing business but really in the IT industry and that is all the way from software and computers up to transmission systems via satellite, tropospheric scatter, microwave, or hand-held tactical radios.
Mr. Lawrence: And how about the size of what you're taking place in terms of a budget, don't want any secrets but it's always interesting to put what's going on in the service in the context of other Fortune 500 companies?
Lt. Gen. Boutelle: Our IT budget is about $6 billion and that runs over our palm so it's a significant budget in the size of business.
Mr. Lawrence: And then you were describing how combat operations in Iraq and Afghanistan and the like are involved. How do they affect the budget?
Lt. Gen. Boutelle: We have the normal budgets that we have in peace time although our budget doesn't significant change although it's increased with the current supplementals in the war in Iraq and Afghanistan. So those are usually supplementals on top of our normal budget where we buy and push services be they leased services of satellite services or information services or actually buying systems, commercial systems, to put on the ground in Pakistan or Afghanistan or Iraq or other places.
Mr. Lawrence: A while back we interviewed Kevin Carroll, the program executive for Enterprise Information Systems for the Army and he talked to us about how his organization was now falling under the CIO/G-6. Could you talk to us about the reorganization?
Lt. Gen. Boutelle: Sure. The Army has, like many of the services, program executive officers. Those are the acquirers. They award the contracts for research and development and eventual production, whatever the system is, be it an airplane or a helicopter or in Kevin Carroll's place it's enterprise services. Most of the work that Kevin Carroll does in PEO EIS, and he would tell you 50 to 60 percent of the work is resourced or funded by my organization, those are large-end satellite systems in Baghdad or enterprise systems around the world.
Mr. Lawrence: So by putting it under the CIO does that make things more common?
Lt. Gen. Boutelle: Makes it much more common. There are about 12 program executive officers in the Army, one for aviation to buy helicopters, one for ground combat systems that buys tanks, another one for missiles, and it was a natural fit for Kevin Carroll and EIS to roll underneath the CIO/G-6. The other 11 PEOs currently work under Lieutenant General Joe Yakovac and he's responsible for providing those services.
Mr. Prow: Good morning, General. As CIO and G-6 for the Army what are your chief roles and responsibilities?
Lt. Gen. Boutelle: Well, several chief roles and responsibilities separated. As the CIO I do provide the enterprise services and the direction and the guidance and that is to ensure that the user at whatever level, be it the tactical level, the young soldier in the field, or back in the United States, whether he's operating at a depot or an office or behind a desk, has the appropriate IT services. That means bandwidth to the desktop or to the soldier moving across the battlefield or to the attack helicopter, provide all of those services. Some of those are leased services, some of those are products, and some of those are buying at an enterprise level.
Mr. Prow: Can you share with us a few of the highlights prior to you becoming CIO and G 6 of the Army?
Lt. Gen. Boutelle: It's a long road to be the CIO/G-6 and I will tell you if you look at my predecessors each one of them has had a different path. My immediate predecessor was Lt. Gen. Pete Cuviello. He came up pretty much more of a traditional communications role. But in my case I started out as an inductee back in 1969 and elected to join the Army and started out in nuclear weapons electronic repair.
At one point in time I went to artillery officer candidate school, probably because I had reasonable math scores, and in the wind-down of Vietnam I also had a background in electronics and electrical engineering and was shifted over into communications and electronics, spent quite a few years in that. Most of us spent a lot of years initially in combat divisions and I was in the 3rd Infantry Division, the 8th Infantry Division, and 5th Corps, 7th Corps in the United States, in Korea, and, of course, various places around the world.
At a certain point I went into the acquisition business and that is looking at buying products from the commercial world. And when you get into that business you make a shift. You're no longer primarily working communications. You're more working general electronics, software, computers.
And probably the defining event was about 19 -- probably about '87 when the PCs first started to hit the market and I worked in an organization where they were coming in. And I came home one day and I said I think these new things called personal computers are going to go somewhere and spent many nights and evenings doing some very, very basic programming and rebuilding and building computers and have been at it ever since.
Mr. Lawrence: When you look back at those experiences are there any one you talk about when you talk about your career that prepare you for where you are today perhaps from going from a doer to managing a doer or understanding the role that you would play as a higher ranking officer?
Lt. Gen. Boutelle: Well, I think that's a great question and one of the most difficult things we do, as our chief says, is build a bench and that is identify those people who need to take your job should you depart that job or who your replacement's going to be. And I don't think we do that all well or as well as we could both in industry and in government. And one of the things we do as senior officers is we look out across the landscape of those people who work for us or who are around us and try to identify those young people who are starting to broaden their horizons and no longer looking down at just doing the function that they're trained to do but start looking at where the Army is going, where the nation is going, where the world is going, looking at the geopolitical environment and how to start to apply the technologies to where we need to go, not where we are today but where do you need to go in the future. And so identifying those people is one of the things we as leaders need to do and then mentor those people.
We seldom want to send our superstars off to school for a year or six months. We want to keep them close to us. And we need to make those hard calls and send those people out and make sure they get the right experience, they get the right schools, they get the right exposure so we can bring them up to take our job and hopefully do a better job of it than we've done.
Mr. Lawrence: I have a pretty good idea from your description of what drew you to public service but what's kept you in? I imagine from time to time you might have thought about going into the private sector. What's kept you?
Lt. Gen. Boutelle: I think a combination of two things. You go along for a certain period of time and you do it strictly because you really enjoy the feeling of accomplishment. And in my business on a day to day basis and some days are better than others but you generally feel that you've accomplished something and you're pushing this technology the right direction. And I think probably over the last few years it's probably been a knowledge that since I have been in this business for a long time, I've been a program executive officer, I've been a project manager, I've built systems, that I thought that I had a bench of knowledge where I could apply those or help apply those to the young soldiers in the field and in the current war and what I believe will be the future wars on terrorism.
Mr. Lawrence: Tell us about some of your personal style in managing and leading, for example, communication. A lot of people talk to us on this show about the importance of getting your message out and communicating to your team but yet you have a big team and it's spread all over the world. How do you do that?
Lt. Gen. Boutelle: One of the things we do and one of the things I've tried to do is right up front have a very narrow set of objectives that everyone can understand, six or seven things that you want to accomplish in the period of time you're going to be there, two or three years or whatever it may be, and don't change or adjust those unless absolutely necessary. And then you will find that if you put that out to the senior leaders that you'll find that everywhere around the world globally they all understand what you're trying to do and where you're trying to go and be consistent. You need to know where the boss is trying to go. You may not agree with him but you need to know where he's trying to go.
And the second thing is visit them as often as possible. I don't believe we need to micromanage these professionals. They know how to do good work and make things happen. Draw the white lines in the road and give them the objective and the direction, surround yourself with some really good managers and senior people, and I have a superstar staff, and periodically check on them and praise them when they do a good job and give them guidance if they don't. But I am extremely pleased where the Army people are going around the world.
Mr. Lawrence: How do you think about the speed of decision-making in government? Is it fast enough? Is it slow enough? I know we've talked to a lot of people who've come from the private sector who joined government and are somewhat surprised at the speed by which decisions are made. How do you think about that?
Lt. Gen. Boutelle: I think we're in a hybrid right now. In peace time we build very strong armed forces but we do it very methodically and we do it within the system. The exponential growth in the IT world, specifically in IP, XML, web services, that's happening around us does not lend itself to making decisions and putting those systems in the field as quickly as we want. Every circuit board I buy for a system in six months is outdated and there's a new one to replace it. Our process does not support that.
Having said that, in the current war and with the nation in the state it's in today and still in national emergency after 9/11 we are able to do things very, very quickly based upon supplementals and a wartime environment and bring systems in very quickly, replace old systems. So I would suggest today we can make a decision today and make things happen in a matter of sometimes hours or days. That is not true in a peace time environment and that's okay. In a peace time environment you want that structure, you want to build that underpinning and that base to have a stable Army or a stable Navy or Air Force. But right now we can make decisions very, very quickly and execute very quickly with industry.
Mr. Lawrence: That's an interesting point about the speed. What does the term "network-centric operations" mean and why are we hearing so much about it these days? We'll ask General Steven Boutelle of the US Army to explain this to us when The Business of Government Hour continues.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence and this morning's conversation is with Lieutenant General Steven Boutelle, chief information officer and G-6, Department of the Army, and joining us in our conversation is Chuck Prow.
Mr. Prow: General Boutelle, can you tell us about some of the IT lessons learned from Iraq and Afghanistan and how those lessons are affecting Army technology?
Lt. Gen. Boutelle: I'd be glad to, Chuck, and, as you can imagine, Afghanistan and Iraq have many lessons that we've learned. Probably the one lesson I've learned, and I just returned from the theater, is where there's a vacuum today or something doesn't exist today with the pervasiveness of the tools that we all use somebody's going to fill it. And what I mean, if I don't take and provide a particular IT tool, a radio, a computer, a wireless network, to a certain organization within, say, Afghanistan in a very short period of time to meet their needs with the availability of those things off the commercial network they will buy their own, they will install it themselves. These young men and women are just like the kids here. They know they can buy a router and a switch. They know they can buy a wireless network and a bunch of cards and build their own network. If you don't provide them the right tools quickly and a vacuum appears they will fill that vacuum out of their discretionary funds.
Mr. Prow: Interesting. Has the evolution of technology affected the evolution of war fighting?
Lt. Gen. Boutelle: I would say absolutely. Two things, one is when you make IT pervasive as it is today and information pervasive as it is today you tend to flatten your hierarchy of management much as is happening in the commercial world. Let's face it. Today in the commercial world as well as in the Army if a young soldier or sailor or airman decides to launch an e-mail message to his boss or to his wife back in the United States it goes at the speed of light minus switching time and that information flow is so quick and the ramifications of it flow very quickly. No longer do you have the point where you have someone at the bottom part of the architecture or the hierarchy who has to manually put something on a piece of paper and send it through maybe his boss and his boss's boss and his boss's boss and over a period of time get a decision. It's near instantaneous so you flatten the management hierarchy.
What that's caused us to do in the Army is relook at how many levels we have. The Army basically has four major levels of hierarchy. We have brigades, divisions, corps, and army. We're in the process of removing one of those levels and in that process when you move a level you start parsing out and sharing those management responsibilities. So when we finish this process we will have three levels. We know that. We know we're going to have brigades; we've already announced that. Divisions, corps, and armies, at the end of the day only two of those will continue and you'll parse those functions. And you can do that because of the information technologies.
Mr. Lawrence: How long will it take to resolve which two of the three?
Lt. Gen. Boutelle: I think that'll probably resolve within 12 to 18 months. We've already decided that the lowest level, the brigade, will still survive, but what we've done is we've enhanced that brigade with IT technologies to allow it to be able to operate within other services, in other words take an Army brigade and nest it in a Marine division. We can do that as we're building IT services in. So the brigades the brigade is our basic fighting unit today as we evolve, as we're building today, where in the past it would have been a division but we're going to make those brigades very autonomous and independent and we are able to do that with a lot of command and control communications, satellite systems, IP-based networks.
Mr. Lawrence: We've heard you speak about the importance of reading and understanding the Chief of Staff and the Secretary of the Army's paper, "Serving a Nation at War: A Campaign-Quality Army With Joint and Expeditionary Capabilities." Could you summarize the key messages one should take away from this paper?
Lt. Gen. Boutelle: The key message in that is we need to make a dramatic change in the structure of our Army. The Army is primarily and has been designed for many years to fight on the East German plain-North German plain against the Soviet Pact or in the Korean Peninsula and it's a very structured Army. We knew the battle space, we knew the ground, we knew the cities and the mountains, we knew exactly where we were going, and we knew what we thought we were going to do when we got there. In today's contemporary environment with the war on terrorism and the radical fundamentalist groups that we're going face they are a nonnation state. They don't belong to a nation. They don't wear a uniform. They move back and forth between countries and they move globally. To be able to address that threat appropriately you need to have small mobile organizations that can quickly move around the world and perform whatever mission we assign to them.
So the Chief's and Secretary's paper says look, the brigade will become our combat fighting unit. We're going to call them brigade combat teams. There will be many of them. We're going to increase the number of them. We're going to enable them by satellite-based networks because so many of the places that we have found the al Qaeda and other organizations are in nation states that have failed or Third World nations where there is no infrastructure. So to enable those organizations takes lots of satellite capability, lots of IT capability, a heavy reliance on intelligence, and providing that to those organizations. So I think the Chief and Secretary's paper is you've got to dramatically change this Army and you need to do it now.
Mr. Lawrence: What does it mean to the individual soldier?
Lt. Gen. Boutelle: There's a couple of pieces in there. One piece of the Chief's paper says look, we're going to be a campaign-quality Army and we're going to be joint. The Chief would like us to have home station operation centers and project force out of the United States and in doing that he will stabilize the force. Right now and in the past we've moved people about every three years, sometimes more often. Do we need to do that if we're going to be a force-projection Army?
A young man or woman can come in the Army and really spend three, four, five, six, even up to seven years at the same place, have his family buy a home there, settle into that community and use that environment. And if he gets promoted move him around that post, camp, or station. There's no good reason in today's environment to move him automatically every three years just because the clock ticks off three years. When the Chief says I want your families in the same place let's have them in a home station. Let's have a good quality of life there and spend some resources on making that a very powerful quality of life and project force out of that place when we need to.
Mr. Lawrence: The paper talks about a lot of big change and I'm curious. It doesn't really talk about how long it will take to achieve this point, the change?
Lt. Gen. Boutelle: Good question. The 3rd Infantry Division, which returned from Iraq this spring, which is the division that actually went into Baghdad, will be radically changed by the end of this year. It will not have three maneuver brigades. It will have four maneuver brigades. It will have the new IT system, the new satellite system, the new voice-over IP systems, all the new networking, all the new Red Switch and CIPR and IPR and all those types of things. We have started delivering that last week. Soldiers are already training on it. We will completely outfit that division, turn it around, and have it ready to deploy again after the first of the year. We will do three more divisions in calendar year '05, the 101st Airborne Division, the 10th Infantry Division, and the 4th Infantry Division, all before the end of calendar year '05.
Mr. Prow: General, we often hear of the concept of network-centric operations. Now, what is N-CO and how does it apply to the Army?
Lt. Gen. Boutelle: Network-centric operations which we are trying to achieve I think is an end state, and I'm not sure quite what the end state is, but we have tremendous amounts of information that we generate and that we store. The question is how do you get that information readily to all the decision makers, be that decision maker at the lowest level or somewhere back at a depot on a sustaining base in the continental United States.
Most of us are primarily circuit-based and have been circuit-based for many years; that is, a data stream flows from point A to point B. Network-centric operations presume that you can make that data centrally stored, you may cache it elsewhere, and it's available to everyone. And as we do that we start to get the synergism that has been promised to us for so long. The tools that will make that happen are really the web services, a combination of XML and SOAP and UDDI, lots of the web services protocols that will start to allow us to leverage these terabytes and in some cases petabytes of information we have stored.
Mr. Prow: On that topic can you also describe LandWarNet and how it will impact the business of war fighting within the Army?
Lt. Gen. Boutelle: Yeah, Chuck, LandWarNet is an attempt we've made with the TRADOC commander, General Kevin Byrnes, and Headquarters, Department of the Army, to try and bound and define what these networks are. I mean, most of us grew up that have been around for a few years where we had a separate network at the low end and it really wasn't a network. It was a voice capability at the lowest level. It was a tactical voice capability on tactical radios. And as you moved up in our infrastructure you got into what we call mobile subscriber equipment. Yes, you had a network, primarily circuit-based. It was locked on mountain tops; it was not mobile. And then when you got back in the United States you got into other circuit-based networks that tie together depots, the corporate world, the Army corporate world, and the other services. You've merged these now together with TCIP becoming the de facto standard. And now you've merged the lowest level to the highest level to the sustaining base in the continental United States with a TCIP backbone. It's a router-based network and we've all joined that network.
But as we've merged these into a single network we had to name them. And so what we're saying is LandWarNet for the Army is the network that goes from the lowest soldier all the way back to our sustaining bases and depots be they in Europe, in the Pacific, or back in the United States. It's the network plus the applications that ride on that network.
Mr. Lawrence: As you talked about this discussion of technology I hear a story of change and you talked about how change flattens the Army. And I'm curious. What's happening to in the civilian world what are called middle-level managers, people who were trained for a certainty in the world and now it's all changing? How's their life changing?
Lt. Gen. Boutelle: I think dramatically and to some people it probably is a terrible awakening because that information does flow so quickly. But it's a double-edged sword. On one side it flows very quickly. On the other side if we're not careful we leave out the middle-management level where they are there to make decisions and make recommendations and in some cases it'll flow directly from the bottom of the organization to the top of the organization without much massaging, staffing, and thought process in it. And so the good side is the information flows very quickly. On the other side in some cases you tend to lose the influence and the richness that is added by the staff. So as you trim down and eliminate some of that staff we're trying to be very careful to keep a very strong group of people in there that still add the richness to that raw information and data as it comes forward for decision making.
Mr. Lawrence: That's an interesting point, especially about the staffing. What is knowledge management and how is the Army using it? We'll ask General Steven Boutelle, CIO of the Army, to take us through this when The Business of Government Hour continues.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence and this morning's conversation is with Lieutenant General Steven Boutelle, Chief Information Officer and G-6, Department of the Army. Joining us in our conversation is Chuck Prow.
Mr. Prow: General Boutelle, we know that systems interoperability, particularly in the joint arena, is key for you. What are some of the ways that your office seeks to promote coordination within the Army and across the services?
Lt. Gen. Boutelle: Great question, Chuck, and that, as you know, has been a continuing issue and although we do have interoperability issues I think sometimes we don't give ourselves credit for all the things we should.
Interoperability applies at many different levels. One is just at the communications level or radio level. Will one radio talk to another? And so you have to solve that problem first to make sure they both talk to each other be it on the same spectrum, same frequency, and so you solve that one first.
Then you move to the next level and say what do I want to pass between the two systems and you'd have to talk about the application. What application am I going to have on one side versus the application on the other side? Are they designed to talk to each other? Are you trying to make a logistic system talk to an intelligence system? Obviously they probably will not interoperate. So you have to map and architect what those systems are.
And if you assume the applications are designed to talk to each other then you have to take it to the next level and say what messaging am I using. Am I using the same type of messaging across the network? Is one of them operating at a VMF bit-oriented message and the other in a character-oriented?
So then when you line up and get that correct then you say what's in the message. And when you define what's in the message you may both be operating on character-oriented message or bit-oriented message but then you need to get down to the data element level and align the data elements to make sure that you're passing data that you want to pass to the other application.
And once you get the data passing back and forth the next step in interoperability is how do you display it. In other words are you displaying it on a graphic screen? Have you come to an agreement on the symbology? Is it mil standard 2525B that I'm on and you're on FM 101-5? So you've got five or six different areas.
We do pretty good, pretty good, at the radio level, not perfect, of being able to talk to each other or, say, one satellite system to the other. We do pretty good when you get down to some of the other levels. And where we usually run into issues is taking the applications over time and say what is it that we really want to do. What are you really trying to do from one end to the other? And yet we tend to throw it all into one basket and say we're not interoperable and try to solve all of those things when many of those things are already solved and we need to get down at the application level and say what is the thread of information we're trying to pass and what are we trying to do when we get there.
Mr. Prow: We understand that Information Technology Enterprise Solutions is one of the Army's recent efforts to centralize IT programs. How is ITES benefiting the Army?
Lt. Gen. Boutelle: As you probably know, ITES1 is run by a program executive officer, EIS, Enterprise Information Services. Mr. Kevin Carroll runs that program and ITES1 is primarily a services- or support-based contract. I think we've awarded so far probably about $157 million worth of work off that contract but it provides services, everything from wide area network services to LAN services, IT support, programming/database support, services type contract; very powerful, allows anyone in the Army to come to a single place to get those types of services.
Mr. Prow: How will ITES2 be different from the current ITES?
Lt. Gen. Boutelle: We're running out of overhead on ITES1. We've almost awarded all the dollars we're allowed to award against that. ITES2, we will increase the amount of overhead in that or the top end, how much money we can put against that contract, significantly.
Mr. Lawrence: Let me skip subjects here and talk about knowledge management. Could you describe the Army's vision for knowledge management?
Lt. Gen. Boutelle: I'd be glad to, Paul. First of all we all are collecting tremendous amounts of data. You've got tremendous amounts of data and information and documents probably on your computer and on your hard drive today and over time that becomes not only megabytes and gigabytes but pretty soon terabytes and petabytes and, believe it or not, we can talk in petabytes in information we have in storage today and that information is pretty much static unless you have ways to access it and sort it and provide it to the right person at the right time.
That's the process we'll working right now, a combination of two things, all the information, and that information can be in the form of video, imagery, documents, messaging, translations of information that we've got around the world, open sourcing. How do you take all that information and how do you access the piece you want for one thing, to be able to make a decision in a rapid time in order to action something and have some successful event take place? When we get into Army knowledge management it is really taking data and being able to massage that data and facilitate that data to get it to the right person someplace globally to make a decision.
Several ways you can do that. One is you can just do searches on it like you do on Google or Yahoo! or Excite or something else with a search engine. What you really need to be doing right now and what we're beginning to do and what the Department of Defense has directed, which I think is absolutely the correct way to do it, is employ a lot of the XML standards to sort that information for content and intent and as we start to convert that to XML then you will start to really get the power that we're all after in this knowledge-based world.
Mr. Lawrence: Tell us about tracking progress as you move towards those goals.
Lt. Gen. Boutelle: One is to be able to convert tremendous amounts of information into those protocols, into XML and those family of protocols, and that's going to be one part of it. The second piece is just start to apply that to the many, many, many hundreds, if not thousands, of systems that we have across the Army. Look, it's pretty easy to fix one system or mod one system or build one new system. But when you get a large organization like the Army, the Navy, the Air Force, the Marines, we have tens of thousands of applications and so we need to parse those applications and decide which we want to attack first.
We do have a requirement now that all new systems coming on board will use an XML back plane as part of that and we broke it out by domains. We have war-fighting domains, we have business domains, we have domain owners, and we are now assigning those domain owners responsibilities to modify those systems to operate within the XML environment. The larger environment is what we call the NCES environment, which is a Network-Centric Enterprise Services environment, which really the DISA organization is administering.
Mr. Lawrence: Let's take it down a level lower to the individual soldier. Could you tell us about Army Knowledge Online and how it affects their lives?
Lt. Gen. Boutelle: AKO or Army Knowledge Online, which is the largest portal in the Department of Defense, has several pieces to it. It has an unclassified portion which we operate, what we call the NIPRNet or the unclassified for day to day operations within the Army. It has a piece of it, the CIPR, which is the secret side, which is primarily used by our intelligence community, our war-fighter community, and our operations people, and then there's another side of it that are the websites open to the public.
For the individual soldier and family we have a tremendous amount of things that are going on. First of all, for any deployed soldier we offer the opportunity for him to provide guest passwords and access and collaboration sites to his family and kids. So a deployed soldier today can go to one of the many Internet cafes we have throughout the region in South America or other places and actually exchange e-mail and messaging and pictures and other things of their family and their kids and different events that take place within the family. That's on the personal side.
On the professional side if you go on Army Knowledge Online like I do every morning and I boot that system it provides me instant messaging to the people I work with around the world but it also provides me role-based things. Today when I boot on it's got a series of stoplights and said your physical is green but you didn't take your flu shot so it's amber or red. Go take your flu shot, you need a dental checkup, those types of things. So it is tied to many databases and systems throughout the nation.
Effective in October we'll really be role-based. Not only will it tell me that I need to take my physical or I haven't taken my flu shot but when you log into the system it'll be role-based. It will not only know about my physical and my flu shot but it will know what my role is in the Army and present information to me that's based upon who I am, what my age is, what my specialty is, what part of the world I work in, what my organization is, and start to provide role-based information for that individual. If he's up for promotion it should come up and tell him, okay, you have an opportunity for promotion here. You need to do these types of things to get ready for it.
Some of those are available today but we're going to pure role-based shortly. That gives us two things. It focuses information on the individual but it also makes sure that he or she does not have access to information that she does not need or is sensitive information that she should not have access to.
Mr. Prow: On the subject of knowledge management can you describe the Army's Battle Command Knowledge System and how this evolving knowledge management system will affect the Army's ability to fight wars?
Lt. Gen. Boutelle: The BCKS or the Battle Command Knowledge System is one of our very, very powerful stories. It's grown out of a couple young soldiers who decided that probably the big Army was not receptive and adaptive enough to do what they wanted to do, and they referred to it when I talked to them. They said we built the website companycommander.com, which was the original website, as if a bunch of company commanders were sitting around on somebody's front porch talking about how they operate every day and what works and what doesn't work as a company commander. And these young soldiers decided that a great thing to do would be put it on a website and they found that there was such a demand for sharing of information from company commanders in Korea and Alaska and Hawaii and South America and Europe it was an overwhelming success, exponential growth.
But they thought that because they did it on their own with their own servers that that was the only way to do it. And we worked with them for many years and we've now rolled that into a bigger program and that bigger program is BCKS. It does reside on Army Knowledge Online. It is now in the dot-mil domain. We're extremely pleased. We not only have the companycommander.com on the mil domain now. We've expanded that to platoon sergeants and battalions so that information is shared.
And when you start sharing that information and hopefully tacit information you have very, very powerful results. And so the young soldier who has an IED problem and a solution in Afghanistan when he was a company commander is now sharing that with a young soldier who's in Fort Riley and about to go to Afghanistan or Iraq. And so we're seeing all the sharing and collaboration of information; very, very powerful, very useful in our business.
Mr. Lawrence: Fascinating, especially the sharing part. Are military IT programs different from IT programs for civilian agencies? We'll ask General Steven Boutelle of the US Army for his perspective when The Business of Government Hour continues.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence and today's conversation is with Lieutenant General Steven Boutelle, Chief Information Officer and G-6, Department of the Army. Joining us in our conversation is Chuck Prow.
Mr. Prow: General Boutelle, you are considered a pioneer in the area of tactical communications. Can you explain the importance of tactical communications to our listeners and what innovations you expect to see that will positively affect the Army?
Lt. Gen. Boutelle: Great question, Chuck. The tactical communications world is a little bit different. In previous times prior to 1989 tactical communication was pretty much tethered to infrastructure within Europe, within Germany, where we thought we might have to fight a war with the Warsaw Pact.
Tactical communications today in a fight against a group of terrorists that have no alignment to a particular state or nation requires you to go into many of these fallen states or Third World countries or very poor countries, Afghanistan probably the third poorest country in the world. There is no infrastructure. There's no electricity. There's no potable water. There are no places to buy batteries for your radios. You have to bring it with you. There are no telephone systems, no cell systems, although they are starting to evolve cell systems in the bigger cities like Kabul, but you have to bring it all with you.
So when you bring it all with you and you have no electricity to plug into you get into the tactical world very quickly. And that is I have to be able to talk to someone either across the street, on the next mountaintop, or in the next valley and the way you do that are usually systems that are not readily available in the commercial market. They must be able to withstand the tremendous temperatures and weather environments that we operate in and that drives you to the tactical arena, usually it at the lowest level of FM voice and usually secure FM voice, and you move up for longer distances to what we call tactical UHF satellite.
That whole world of tactical arena is only somewhat applicable to the commercial world and usually pretty much customized to the work we do although we're seeing much more use of things like the 802.11 protocols b and g and some of the other protocols. We're starting to see a little bit of inroads to the commercial protocols. That's primarily the tactical world and it's really a stand-alone, sustaining, power it yourself, carry it on your back, or carry it in a vehicle if you can get a vehicle into a type of type of communications.
Mr. Prow: Information technology has and will continue to play a vital role in current operations around the world. What can industry to improve IT for the benefit of the Army and its evolution into overseas conflicts?
Lt. Gen. Boutelle: A couple things we need to think about. One, at the higher level, and this is really across the entire network, is information assurance piece. Let's face it. We're out there and we are an information-based Army and we are an information-based Department of Defense and federal government and that's a strength but it is also a weakness. And so tremendous amounts of resources and effort are being put into things like firewalls and anti-virus packages and packages that will push the IAVA updates across the battlefield to every computer. That's one piece that we really need industry's help on and it's a continuing thing. We can secure all of our networks today but the enemy has a vote be that a script kiddie or a local hacker or maybe a determined enemy on the 'net. So even though we secure our nets today that enemy will continue to try to attack and have better techniques and better tools in the future so you must continue to improve those information assurance things.
And the other piece is we need to push the envelope. When you're pushing people out in strange places in the world in a mobile and harsh environment the commercial product as it stands probably will not do the job. Much of the mobile computing came early in the armed forces. We were running mobile computers in helicopters and airplanes and tanks significantly before we had it probably in our house or were carrying out PDAs around. So as we continue to push that envelope we find higher demand for more bandwidth, to have higher resolution imagery, to see unmanned aerial vehicle streaming video. Those types of things will continue to push the industry on providing protocols and standards to give us those products in a timely manner.
Mr. Lawrence: Let's take a step back and think about IT projects in general. How would you compare and contrast, say, creating technology solutions in the military versus civilian agencies and the federal government?
Lt. Gen. Boutelle: In the military today, unlike 20 years ago, we don't create a lot of IT solutions. There was a time when the Army held and we still hold many patents but we actually created devices, we created radios, we created things. Now we rely heavily and we leverage the commercial community to do that. So I think you'll find that across the federal government that the Army by law is very much restricted and bounded by some things we do. We fight and win the nation's wars and so we focus primarily outside the continental United States.
Now, the National Guard under Title 32 does have a role within the different states and that's pretty much codified. So we focus outside. The National Guard focuses inside unless we activate and mobilize them and bring them with us. And the Reserve, of course, is part of the active Army in direct support.
So we really focus a little different, each federal agency, be it the Department of Homeland Security, the FBI, the CIA, really, which enclaves they focus in. The FBI is very centric to the United States. The CIA is outside the United States. The Army and the armed forces focus outside the United States. We have some role in certain occasions within the United States.
Mr. Prow: How do you see the Army's CIO/G-6 evolving in the years ahead?
Lt. Gen. Boutelle: The CIO role, as you know, has become increasingly more active in the last few years. A lot of that is because of the Klinger-Cohen Act. The Klinger-Cohen Act gives each agency very strong roles for the CIO, the chief information officer, to perform and that's codified in law. But I would suggest, and some of my CIO counterparts and brethren may not appreciate it, that at the turn of the century we had a vice president for electricity as we brought electricity into manufacturing plants. And so the CIO today will probably be here for 10, 20, 30 years but as IT becomes the common backbone of everything we do that will be an evolving role. I have no idea what that role will be 20 years from now but it will be significantly different today when we are initially bringing on IT services versus getting into knowledge management and where that goes. It may be more of a knowledge management officer than a CIO.
Mr. Prow: More generally where do you see the Army's movement over the next five to ten years?
Lt. Gen. Boutelle: I think the Army's movement is really networking the force to the lowest level. We can provide the transport network anywhere we want to today by brute force and resourcing. The issue we still have to solve and we have on the books and we're working on it very hard, and I believe it'll be solved in the next three to five years, is networking in the soldier at the lowest level or the special forces operator. That's the hard part. He needs a lot more bandwidth and he needs it in places where there is no infrastructure on this globe. That's the hard part, that's what we're working on, and battery technologies support it. It takes a tremendous amount of battery technology and lots and lots of batteries to support just about anything we do so power technologies to support those things in getting that large bandwidth out to the individual soldier or special operator.
Mr. Lawrence: You've spent the bulk of your career serving our country. What advice would you give to a young person interested in a career in public service?
Lt. Gen. Boutelle: I think the first thing I would do is it's like any other thing you want to do. If you want to get into something be good at what you do. You can take that niche, whatever niche you decide you have an interest in, and become the expert in that niche be it IP services, XML, whatever that may be. It's significantly different.
When I look across our population that we have in the Army, civilian and military and contractor, all three, I find a seam there age 30-35. If you're under 30 or 35 you probably grew up with IT technology, maybe just as a tool around the house. If you're over 30-35, if you've taken an interest in it or it was part of your job, you may become very good at it. If you're not into that business you need to make a concerted effort to learn some of these basic technologies about the web and IT services.
Great opportunities to do great things. It's very fast-moving. There are opportunities when you deal within the Department of Defense to get access very quickly to high-end systems, technological systems, systems used globally, technologies that are far beyond what you might be able to do in the public sector.
So I would suggest that a lot of this force is self-schooling, a lot of reading, a lot of time visiting different organizations and how they do business, but there are great opportunities in the civilian sector, in the Department of Army civilian sector, and also in the military sector in these technologies. It's in demand. It is something the Army needs and it is something our nation needs to empower those war fighters to do the things that are important for our nation in the future.
Mr. Lawrence: Well, that'll have to be our last question for this morning. Chuck and I want to thank you very much for joining us, General.
Lt. Gen. Boutelle: Thank you, Chuck. Thank you, Paul. It's been a pleasure.
Mr. Lawrence: Thank you. This has been The Business of Government Hour featuring a conversation with Lieutenant General Steve Boutelle, Chief Information Officer and G-6 of the US Department of Army. Be sure and visit us on the web at businessofgovernment.org. There you can learn more about our programs and research into new approaches to improving government effectiveness and you can also get a transcript of today's fascinating conversation. Once again that's businessofgovernment.org.
This is Paul Lawrence. Thank you for listening.
Monday, June 21, 2004
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. Find out more about the Center 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 today is with Rodney Bent. Rodney�s a professional staffer on the House Appropriations Committee. But perhaps more interesting, he�s just come back from six months in Iraq, where he�s been the director of the CPA�s Office of Management and Budget and also served as a senior adviser to the Iraqi Ministry of Finance.
Good morning, Rodney.
Mr. Bent: Good morning.
Mr. Lawrence: And joining us in our conversation also from IBM is Jonathan Breul.
Good morning, Jonathan.
Mr. Breul: Good morning.
Mr. Lawrence: Well, Rodney, let�s start at the beginning. Could you begin by describing for our listeners how the resources were allocated for the reconstruction of Iraq?
Mr. Bent: Certainly, absolutely. There were three pots of money. Perhaps the most important pot of money is Iraq�s own resources, the oil money that it earned both currently and then previously under Saddam, under the Oil for Food Program. That�s about, in terms of the �04 budget, $21 billion.
In addition, there was 18.4 billion that was appropriated last year, and prior to that, a couple of billion, 3 billion that Congress also appropriated. Finally, there was the about 12-, $13 billion that other countries had pledged to help Iraq in its reconstruction in a Madrid conference in October of 2003.
Mr. Lawrence: Now money was allocated through the supplemental. And I�m curious, is there precedent for allocating money this way?
Mr. Bent: There is. The President requested something over $21 billion, I think, originally. And he presented his request in a format with about 10 or 11 sectors, about 60 line items, such as power generation or potable water. But he really was requesting a large amount of money that would be similar -- that he could use in a flexible manner similar to what had been done with the Y2K fund or the supplemental immediately after the September 11th tragedy.
Mr. Breul: Rodney, the Coalition Provisional Authority, or CPA, was the name of the temporary governing body which has been designated by the United Nations as the lawful government of Iraq until Iraq assumes sovereignty. What role did the CPA play in managing the fund?
Mr. Bent: Oh, a huge role. Ambassador Bremer was essentially the fiscal steward for the Iraqi funds, and he was also, if you will, the person who was allocating the American supplemental. What he and the CPA did essentially was to try and put together a budget and a resource plan for the reconstruction of Iraq.
Mr. Breul: Well, what are the critical skills required to manage and provide oversight for the reconstruction funds?
Mr. Bent: Good question. I think that when I got out there, I discovered that I had a staff of 10 or 11 people who were enthusiastic, young, intelligent, but had never worked on budget issues before. And so one of the skills, and we can talk a little bit later about this, is sort of that fundamental analytical perspective, how to listen, how to ask the right questions. What kind of options do you prepare? Who�s doing what? What are the consequences if you do it a certain way? Can it be done? What are the practical questions?
Mr. Breul: Well, what was your role and what were your duties then while you were in Iraq?
Mr. Bent: I had a bunch of them. I was the head of the CPA Office of Management and Budget. I was the senior adviser to the Ministry of Finance. And I was also the senior adviser to the Ministry of Planning and Development Cooperation, and other duties as assigned.
Mr. Lawrence: How do you get three jobs?
Mr. Bent: Well, essentially the titles were meaningless in the sense that we were sort of inventing as we went along. It wasn�t structured. You went you there and you essentially would see things that needed doing, questions that needed to asked, or problems that needed to be addressed. And so a lot of times, you know, we were working on things that would have been well outside the purview of what you would normally think of. For example, we worked on the pay structure for Iraqi civil servants, you know, who gets paid how much, how they�re defined. That is not something that usually a Ministry of Finance or an OMB would look at, but there, it was essential. And then you add in things like reforming the pension system or handling food subsidies, oil subsidies, electricity subsidies, building electric power plants. It was just a huge range of activities.
Mr. Lawrence: What does a typical day look like when you�re doing these kind of things?
Mr. Bent: Well, it was intense. Generally people were in the office by 7:00 in the morning and we would go until 10:00, 11:00, midnight, 1:00, or 2:00, 7 days a week. The only time we theoretically had off were Friday mornings between about 9:00 and 12:30, where I say �theoretically,� because no meetings were supposed to be held, but, in fact, people tended to go to the office because that�s where the computers were, that�s where you could get things done. Well, it was tough.
Mr. Lawrence: Tell us about your experiences leading up to this role.
Mr. Bent: Sure. I�d been, for five years prior to doing this job, the senior career head of the international division at the Office of Management and Budget, and I�d worked at OMB for about 20 years. Before that I�d been a banker in New York and had worked at the U.S. Treasury Department in their international division.
Mr. Lawrence: And then tell us about, given your experiences, walk us through your decision to actually go to Iraq.
Mr. Bent: Well, it was a little spontaneous. I got a call from the Pentagon asking if I knew anybody who would be interested in working on budgets in Iraq, and I said I would. And they said, well, the search is over.
Mr. Lawrence: And when you got there, how would you compare and contrast your experiences sort of in Washington versus working there just in terms of, say, management skills and the kinds of things, you know, you would think about as an adviser?
Mr. Bent: There are a lot of similarities, especially given work at OMB, where usually there�s a lot of conflict: agencies want more money, the Congress wants more information, the President wants more flexibility. And some of those same conflicts play out -- or played out in Iraq as well, but there were just extra complexities in Iraq, there were extra challenges.
Take small things, like phones. Here, everybody�s got phones, faxes, E-mail. There, the phones, there were no land lines in Baghdad, so everybody had to use small cellular phones. The signals were erratic. In fact, I had -- used to have to stand on a chair at the Ministry of Finance to try and call back to CPA with the cell phone. Most people didn�t have phones, and so although the CPA provided cell phones to the Minister and his senior deputies, they weren�t always on, you couldn�t always find people. And so just basic communication was hard.
Plus, Iraq is a society that prizes that kind of personal relationship. Things that you might do here over the phone, there, they really required a face-to-face meeting. You had to sit down and you had to have tea, you had to talk about families, you had to talk about your personal relationship. It�s a very intimate kind of way of doing business.
Mr. Lawrence: Well, how about just continuing on the tactical? How about just languages?
Mr. Bent: Most of the Iraqis that we dealt with were quite fluent in English, to a greater or lesser degree. We did have interpreters and you�d use them in situations where it was important that you get the facts or the nuances exactly right. But by and large, we conducted business in English, and that was less of a problem than I thought it might be.
Mr. Lawrence: And then how about the speed of decision-making? As you were describing all the challenges in your different roles, I couldn�t help but think of sort of a desire to go fast and get things done. And when you talked about the relationships people needed, having tea, it seemed like go slow, so I�m sure it�s been a balancing act.
Mr. Bent: There was clearly a lot of cultural differences, if you will. Ambassador Bremer�s a very decisive guy. Anybody who�s been in a meeting with him, you know, he wants the facts, he wants your recommendation, he wants to know why you think this way. He�ll ask, frankly, a series of very probing questions and he makes a decision.
With the Iraqis, it�s a different cultural mode of handling things. There�s a great respect for I think elders. And so that means that when you have a conversation, you have to make sure that the oldest person in the room has a say. You have to make sure that there�s a traditional -- or terrific emphasis on coming to a consensus. It�s -- people might say what they think, but they always want to bring in other people. And so you found yourself frequently having to make sure that you talked with everybody and that you drew people out in a way, and did it in a respectful manner. It�s considered very rude to directly contradict somebody. It�s not that people don�t say no, but they would preface it by saying, well, with respect, I appreciate what you�re saying, but in fact, I must offer up an alternative suggestion as opposed to you�re an idiot. And that took a little while to get used to.
If you�re coming from a culture that kind of prizes decisiveness and get it done and do it now to a culture where you have to explain the context, people want to know what your motivation is, why are you doing this, what are the implications, what does it mean for them. And that just takes more time, but in some sense it�s worth it because once they�re persuaded, then they will do it.
Mr. Lawrence: How did all these things change your management approaches and styles while you were there?
Mr. Bent: The absolute importance of listening carefully. Before I went over, I asked a variety of people at the World Bank or AID or the State Department what it was like and what the issues were. And I think one of the best pieces of advice I got was to listen to what the Iraqis wanted, not just jump ahead and assume that they would want the same things that we would want. And so I spent, frankly, a lot of my time listening and then trying to summarize and then trying to present options that would reflect what they wanted.
Mr. Lawrence: Can you give me an example of where they would not want what we wanted?
Mr. Bent: In terms of basic personal security, the aftermath of the war was really a disaster, the looting, the crime. The Iraqis had this tremendous sense of personal vulnerability in which your kids could be kidnapped as they were walking to school; cars were taken. It�s impossible to project that sense of insecurity to, say, people here in Washington. You walk out your door, you get in your car, you drive off, you don�t worry about somebody taking shots at you, you don�t worry about your kids being grabbed while they�re being walked to school, you don�t worry about a ransom note, you don�t worry about roadside bombs or grenades or gunshots. And yet, that�s part of everyday life in Iraq. And so, you know, there�s that huge difference there, so security is one thing.
Basic infrastructure, electricity, communication, telephones, these are all things, employment, that are important to Iraqis. And yet, for the Americans I think when we were there, and I�ll just use this as an example, not to pass judgment, but security, sort of training the Iraqi police or training the Iraqi armed forces, and that clearly is part of dealing with that first problem I talked about, security. But it was such a long-term solution, it was something where, you know, by the time the police were trained and equipped, it was going to be months down the road. And yet, what the Iraqis wanted now was being able to walk out their door and not feel like they were going to be killed.
Mr. Lawrence: Interesting.
How has the economy of Iraq changed over the last two years? We�ll ask Rodney Bent to take us through the stages of the economy pre-Iraqi Freedom and what it�s like now when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I�m Paul Lawrence, and this morning�s conversation is with Rodney Bent. Rodney�s on the professional staff of the House Appropriations Committee.
And joining us in our conversation is Jonathan Breul.
Well, Rodney, in this segment, I�d like to talk about doing business in Iraq. Perhaps you could begin by telling us more about the political and social and economic contexts in the country. What were your observations about the people of Iraq in terms of their sense of history and the social cohesion?
Mr. Bent: I guess the starting point for Iraq is really the fall of the Ottoman Empire in World War I. And out of that wreckage the British, particularly for the history buffs, Richard Bell created an Iraq that previously was probably several parts. I mean, one would be Kurdistan, the third would be the Arab Sunni middle, if you will, and then there would be the Shia south.
Iraq has, you know, a huge history. I mean, you go back to Mesopotamia and Babylon, so it�s got 5,000 years� worth of history, but really only for the last 80 or 90 years as the country of Iraq. And so there are a lot of disparate groups. I mean, you categorize yourself by religion, by tribe, by ethnicity, by family, by clan, by whether you�re educated or not educated, rural, urban. There are just lots and lots of different ways of classifying yourself.
I was struck in some ways by how -- rigid might be the wrong word, but maybe class-conscious Iraqis were. Everybody knew sort of where you fit, that there wasn�t the kind of -- there was sort of a long history to families. And so people would say, oh, he comes from a good family. And the upper tiers of the Iraqi society are really both very well educated and everybody knows everybody. So for example, the Deputy Minister of the Ministry of Planning had a wife who worked as the director general of the Ministry of Finance, and everybody tended to be friends, to have gone to school with the other people. And so there was kind of, on the one hand, a whole series of divisions and, on the other hand, a kind of a cohesiveness. And it made for some strange interrelations.
Mr. Breul: Rodney, can you give us a sense of the state of the economy in Iraq before Operation Iraqi Freedom, and then what it was like when you were there?
Mr. Bent: The Saddam economy was essentially a disaster. The state ran everything. It was in a state of decay and decrepitude. It relied essentially on the Oil for Food Program to feed people. It�s -- if you drive down or go through Baghdad, even the nicer sections have a kind of a shabbiness, and I was just, frankly, struck by how rundown and decrepit and used everything seemed. Cars were all 10, 15 years old, battered, missing headlights, bumpers ripped off. It was a huge contrast to go to another Arab country, say Jordan and Amman or Abu Dhabi, and see essentially a complete contrast, with new cars, new buildings, paved streets, functioning electricity, everything. I think that the -- you know, Saddam obviously and his coterie of folks didn�t suffer from any of this, but you really felt the plight of everyday Iraqis.
Mr. Lawrence: And was it changing after Saddam or how --
Mr. Bent: I think just huge changes that you could see. I mean, there were probably a million additional cars on the street by the time I left. In fact, when I arrived in late October, you could drive through downtown Baghdad without too much trouble. I mean, the streets are broad, but there wasn�t a lot of traffic. By the time I left, people were complaining about the traffic. It would take an hour to get somewhere; everything was gridlocked.
You could see on some of the shopping districts just stacks of warehouse goods: refrigerators, air conditioners, TVs, satellites. There was an explosion in satellite TV, and you just felt like this society had opened up in some way from going -- from the closed Saddam period where, you know, you couldn�t own -- nobody had satellite TVs to a period where it seemed like every family who could afford one was out buying one.
Mr. Lawrence: Well, what are the types of challenges people like yourself face when you�re working in Iraq on a day-to-day basis?
Mr. Bent: Huge. I mean, the -- one challenge is communications. I talked about the cell phones, but that meant it was very difficult to get ahold of people. And Iraq, essentially, it was frozen in time. There was a Rip Van Winkle quality to, you know, pre-1991 and post-1991. So that, for example, in the medical schools, the journals stop in 1990, 1991. There are no recent journals.
People were not used to a computer. In fact, when I went to the Board of Supreme Audit, which was kind of a combination GAO and auditing firm, we talked about their use of computers and auditing processes. And they said, well, yes, of course we use computers. Let�s show you the computer center. Well, you go. Well, there are no computers in the computer center. What they meant by computers was essentially doing spreadsheets and very basic work as opposed what we might think of in terms of auditing.
Danger was clearly the second thing. Every time you strapped on your flak jacket and put on a helmet and drove out of the Green Zone, you were always a little bit nervous about, well, what might happen. The day before I left, in fact, one of my staff came in and very apologetically said, well, he�s sorry, but he�d wrecked the car. And, you know, I felt a little bit like, okay, I�m the dad and the teenage son has come back. And well, it turned out he�d been shot at by somebody driving a pickup truck with an AK and he�d just riddled the car with bullets, and it was just a miracle that the staffer wasn�t injured or killed. And I mean, that -- you know, one of my translators was blown up in a bomb on January 18th. You know, it was -- that gives a different perspective on things.
Mr. Breul: Let�s talk about the project implementation stage of the resources that were allocated for the reconstruction of Iraq. Can you describe the types of projects that the Defense Department, the State Department, and the U.S. Agency of International Development are implementing?
Mr. Bent: Sure. Broadly speaking, the Defense Department was doing two areas. One area was clearly security: training the Iraqi armed forces; training the ancillary groups, Iraqi Civil Defense Corps, the border enforcement. They were also, through the Project Management Office, handling a lot of the reconstruction of Iraq itself. The Army Corps of Engineers was heavily involved, so power plants, dams, irrigation, railroad, roads. Defense was involved in all of these things.
The State Department was working on training police on some of the democracy programs. AID was doing some of the reconstruction along with Defense on electricity, but they were also doing health, education, some other governance issues, trying to help the Iraqis establish what we would call a civil society.
Mr. Lawrence: The reconstruction has relied on a lot of private contractors, and that�s not without controversy in terms of pluses and minuses. I�d be curious sort of your perspective and some lessons learned on the use of contractors in this environment.
Mr. Bent: It�s one issue is using contractors to do what we�d call inherently governmental services. And, you know, whether you talk about the tragedy at Abu Gharib or, you know, clearly there�s been -- you know, that�s just horrible abuses. But really, contractors bring you a lot of things that you wouldn�t otherwise get. I mean, there are not many people in the U.S. Government that have sat around building power plants or looking at dams or being civil engineers. You get some, but they don�t generally -- they oversee, they don�t generally do. And so private contractors were essential.
I think it�s a little bit different when you talk about policing or some of the other things where there�s clearly a gray area in terms of what gets defined, who does what.
Mr. Lawrence: There�s a sense of one perspective that an awful lot of money�s being spent on contractors and, gee, you know, people are taking advantage of the system. There�s also a sense that, gee, this is a very high -- this is a very risky place, as you�ve indicated.
Mr. Bent: Yeah.
Mr. Lawrence: It probably does cost more to get people motivated. As the budget guy, how did you work that equation?
Mr. Bent: Well, it was an increasing part of the equation as we were ending. As I was leaving, I was listening to I think it was Mr. Waxman talking about trucks in Iraq and saying, well, people didn�t have -- they would abandon an $85,000 truck because it had a flat tire. And I don�t know this to be the case, but I was speculating in my mind, well, anybody who�s driven on a highway in Iraq knows that you�re not going to pull over and change a flat. I mean, that�s a sure way of getting killed. And so, you know, on the one hand it points out the risks of working in Iraq and just the extraordinary extra cost for security that you have to pay. On the other hand, you can sort of say, well, heck, why are we doing that if it�s going to cost, you know, for lack of a spare tire, we�re going to lose an $85,000 truck? Should we be doing that?
Mr. Lawrence: And how about the personal benefits when you see people interviewed now in the media? I mean, they do cite sort of, you know, sort of a Peace Corps kind of I should be there, I should go and help these people.
Mr. Bent: You know, I think that -- I never knew anybody over there who was in it for the money. And maybe truck drivers for Halliburton or whatever, but by and large, the folks at CPA were a pretty high-minded lot. I mean, it -- everybody went over there with a sense of purpose, with a kind of desire to help in any way you could.
I think that it was kind of interesting and contrasting sort of my experience at OMB with being over there. In both cases, you have talented staff, you have people who are motivated, but there was much more out there in CPA. There was a kind of a camaraderie; we�re all in this together. You know, whatever people felt about the war, and there were a range of people who actively didn�t support the war to people who were fervent believers, but that was essentially irrelevant. The war was, as far as I was concerned, was over and done with. We had to do what we could to help the Iraqi society.
Mr. Lawrence: That�s a fascinating point about the different perspectives on the war.
What types of management flexibilities are needed to manage funds in an ever-changing environment? We�ll ask Rodney Bent to tell us what he saw during his time in Iraq when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I�m Paul Lawrence, and today�s conversation is with Rodney Bent. Rodney�s on the professional staff of the House Appropriations Committee.
And joining us in our conversation is Jonathan Breul.
Well, Rodney, let�s talk about managing the fund in the section. The supplemental was set up to fund 10 priority areas. Could you talk to us about some of the key areas, and what was the strategy in terms of what to focus on first and prioritize?
Mr. Bent: Sure. The supplemental had, as you say, about 10 areas. The 60 line items, as we would call them, were things like training police or building electricity or electricity transmission. When the President requested it, the focus was clearly on what I�d call hard infrastructure: dams, power projects, that kind of thing.
What changed a little bit while I was there is that, well, first, in the middle of November, there was the announcement that we were going to give the Iraqis back sovereignty on June 30th, which meant that people suddenly started focusing on democracy and elections and all the things that go with a democracy, things that we take for granted here like organized political parties, a responsible media, a way of getting the message out. There, you know, you have dozens of parties, you have every tribe, every politician in some sense sort of mobilizes, and the media is just almost a cacophony of print and radio and TV. So it was -- you know, we clearly needed to put more money into helping Iraqis pull together what they were going to probably do anyway, which is organize themselves into competing groups, if you will.
Mr. Breul: We�ve talked about how the fund was set up to be as flexible as possible given the ever-changing environment in Iraq. Can you give us some more examples of when priorities changed and just how that changed the projects that were being funded?
Mr. Bent: Sure. Well, distinguish a little bit. The request would have had the fund be as flexible as possible. I think that Congress when they reviewed it said, well, we�ll give you essentially what you want, but we want to make sure you�re going to spend the money as you say you�re going to spend the money. And so they put restrictions on how you could move it around. In other words, they wanted to make sure that if you said you were going to train a certain number of police that you really trained a certain number of police, that you didn�t move that to a different area.
I think that tradeoff between flexibility on the one hand and accountability and oversight on the other, it�s kind of a creative tension, if you will. It forces people to decide what�s important and to think about if they want to move funding, you know, what it is that they�re going to be doing. What are you going to get if you move the funding?
Mr. Breul: How did you provide for that accountability? I mean, there wasn�t a large tracking system in place.
Mr. Bent: Not compared to what we have back here, no. Well, we -- Congress required quarterly reports, the first of which I worked on when I was in Baghdad that came back. It was well over 100 pages. It went through each of the major sectors, each of the line items, if you will, and talked about vocational training, micro credit, education, water, electricity, you name it, and explained what we were going to do with the money and how we -- the periodicity, the quarters, by which we were going to do the spending.
I think in some ways it was a good system. It was a useful discipline for thinking about what we wanted to do. And because the report is quarterly, you can change it over time. You can say, heck, you know, this is now less important than we thought it was three or six months ago. We need to spend a little bit more on another sector.
Mr. Breul: Tell us some more about the challenges inherent in managing such a fund. For example, how do you go about just estimating the cost of funding a project?
Mr. Bent: Sure. That�s a good question. The starting point was always working with the Iraqi ministries on what they wanted. And so, for example, if you were working in the water resources area -- and that�s hugely important in Iraq in a way that, you know, here you might, oh, well, that�s sort of water, that�s good, but there it�s dams, it�s irrigation, it�s canals, it�s, you know, essential to the functioning of the Iraqi economy.
And so the senior adviser for water resources would work with the Iraqi Ministry of Water Resources. They�d come up with a series of dams, canals, irrigation projects, and they would put a price tag on it. That price tag or that series -- that project would go over to the Project Management Office within CPA and they�d look at it and they�d say, well, how good are the estimates? They tended to add funding for uncertainty. You know, was it -- had it been engineered out? They added money -- or they added a cushion, if you will, for security costs. And so a project that might start off costing, hypothetical, $100 would cost $125 or $140 that same project when it was looked at by the PMO, not because the project itself had changed, but because they wanted to build in ranges for uncertainty. And the cost would change again when the actual contractor or construction company looking at it got in there and could say, oh, well, you know, we don�t have a road, we can�t get this particular piece of equipment, we�ll need to do something different here.
So all the way through there was kind of almost a loop in which you�d start with the Iraqi ministries, go to the PMO, and then as they call it, task orders get written and the construction firms begin looking at things.
Mr. Lawrence: Give us a sense � earlier, you talked about just sort of the different things that are going on. As you were describing developing the price estimate for the Iraqis for the first part of that, I just began to think about data collection and how that�s done in an environment that�s so very different.
Mr. Bent: Yeah. Well, good point. We were always operating in a -- like being a ship�s captain where you don�t have radar and you�re not entirely sure where you are. For example, when I got to Iraq, the common estimates of unemployment or underemployment were sort of in the 50 to 60 percent range. When we left, the Ministry of Planning, which was responsible for pulling together the statistics, said, well, they kind of reckoned the unemployment rate was, you know, around 20 percent and the underemployment rate was about 28 -- 25 to 30 percent. So -- but how did they get those statistics? Where did they come from? How good were they? How were they, if you will, annualized? All of that was sort of a work in progress. So you were -- we were forever hoping that we�d kind of gotten the basics right without really knowing if we had.
Mr. Lawrence: And also, how do you manage? There�s multiple sources of money, so we have multiple projects and multiple sources of money. I can�t help but think about duplication and just accounting.
Mr. Bent: Sure.
Mr. Lawrence: How did all that work?
Mr. Bent: Well, I think the primary emphasis was on getting stuff done. And so if you were looking -- if you were working with the Minister of Electricity on power projects, you clearly had a finite set of projects that you were dealing with. And whether those projects were going to be financed by Iraqi resources, by the development fund for Iraq, or by the supplemental, you�d clearly talk about it and you could work out that part of it.
But the follow-on part, and this is where I think the advantage of having people who�ve worked on budgets was important, the real question was not could you build more power plants or fly in generators, if you will; it�s the fuel for those generators and the pipelines and whether you�re going to use treated crude or whether their refined product was available. Those are the kinds of follow-on questions that we were struggling with.
And because I think the Iraqi body politic had been so dominated by Saddam and by the Baathist Party for 35 years, it was a top-down process. And so people we just used to getting orders and essentially following them without really talking about the dynamic. And so, you know, it was a little bit Stalinistic. I mean, if the Minister of Electricity was told build power plants, he�d build them. That didn�t mean that the Minister of Oil, for example, knew that he, therefore, had to supply, you know, how many thousands of metric tons in order to fuel those power plants.
And that�s the kind of give-and-take that, you know, we were sort of working towards, bringing that together. That was part of the challenge of the Program Review Board and part of the challenge of my job, and certainly that of Ambassador Bremer.
Mr. Lawrence: Was it hard for these folks who had not operated on that sort of system of learning and collaboration to get to that point?
Mr. Bent: Well, yes and no. I mean, there�s clearly, because of the, you know, the back and forth in Iraqi society, you know, a real tendency to talk about everything. On the other hand, you know, I think they were so used to following orders, there was sort of that tension. One of the things I�m proudest of was a moment in the Program Review Board, which used to look at all of the spending proposals. And the Minister of Finance had always been a member of the board, but we succeeded in getting the Minister of Planning to come and the Board of Supreme Audit to look at it. And I began to have ministries that wanted to do projects, like the Ministry of Electricity come in and give their proposals essentially directly. And then the Minister of Finance or really his staff would challenge, well, what about this? Did you consider that? It was really great. I mean, you could sort of see essentially how people were arguing over actual spending. They had some control, some empowerment over what they were doing in a way that, you know, would have been inconceivable five years before.
Mr. Breul: Rodney, who comprised the members of the Program Review Board and how did it sort through all the competing demands?
Mr. Bent: There were probably 10 or 11 different groups represented on the Program Review Board: Australians; the United Kingdom�s Department for International Development; members of the CJTF-7, which was the multinational force, if you will; various members of CPA; and then obviously the Minister of Finance, and then, as I say, we succeeded in getting other Iraqis to participate in the meetings of the board.
It would meet once a week, typically Saturday mornings, but there�d be staff meetings. There was a lot of interaction back and forth. We�d put the minutes up on the web so that if you had access to the Internet, you could at least see what was there. We arranged for translators to be there to make sure that we were really having, you know, full and open consultations.
Mr. Lawrence: That�s a fascinating point.
When the funds were provided to Iraq, quarterly reports were prepared, as Rodney described. He�s been one of the people who�s been there when the first reports were prepared, and now he receives them on the Hill. We�ll ask him what it�s like to review this reporting requirement from both sides when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I�m Paul Lawrence, and this morning�s conversation is with Rodney Bent. Rodney is on the professional staff on the House Appropriations Committee.
And joining us in our conversation is Jonathan Breul.
Mr. Breul: Rodney, what role did Congress play and does play in the distribution of the funds and the reconstruction efforts?
Mr. Bent: Huge role obviously in terms of the initial appropriation, but then also the subsequent oversight, both getting the reports from CPA, and presumably in the future, it�ll be the State Department on what�s being done, asking questions, looking at the components of the spending, making sure it all adds up.
Mr. Lawrence: You talked about the reports earlier and that you were there pulling together the first one, and now you receive it. Can you reflect on the process of pulling the report together and interpreting it from the different points of view?
Mr. Bent: Sure. When I got out to Baghdad, I thought that I�d get out and find, you know, well-established routines, people who had clearly put together the first report and done I thought a very good job and could explain what was behind all of the assumptions. When I got out there, a lot of those people had already moved on in some sense. And so we were starting from not ground zero, but we were, in a lot of cases, reinventing what had been done. Who was going to carry something out? Why did we make these assumptions about the number of power plants or the number of police who were going to be trained or the number of staff? And you have to adjust that.
There was clearly, I think, as an example, a desire to spend more on security because that was more important. And so the Iraqi armed forces, which were initially conceived of as I think an agent against external aggression, sort of in the change I think became less relevant than, say, standing up the Iraqi Civil Defense Corps, which was part of the internal group that was helping the multinational force deal with the insurgencies.
Mr. Lawrence: When we think about reporting, of course, you get lots of money, you need reporting. And some would argue reporting is sort of this bureaucratic thing and it slows things down and causes more layers. What was your perspective?
Mr. Bent: Well, it -- I think it�s a useful discipline. It forces people to ask the questions that need to be asked. What�s the structure? Who�s going to carry it out? What are the reasonable expectations? What�s not? It�s what people do with the reports where I think that, you know, you can ask questions about, okay, do they have a role in asking tough questions. If you get to a level of questioning that really does slow things down, gee, you can�t answer who�s going to carry out this project in this governance, and so, therefore, you ought not to do it. Then you�re clearly impeding progress. But to ask questions about, well, who�s going to carry it out and what do you hope to achieve, that�s entirely legitimate.
Mr. Breul: Given the fact that Iraq has recently emerged as a sovereign nation, what are some of the challenges that you foresee for this new country?
Mr. Bent: Oh, huge challenges. One is going to be security, clearly. Second will be corruption, which under Saddam flourished at all levels. And Iraq, I think, previously was, and these are relative, a secular, humanistic culture in which honesty was prized. And yet, over the last 35 years or so, it�s moved to a period in which all sorts of rake-offs and kickbacks and corruption and influence-peddling is all part of the norm of doing business. I think, at least I hope, that more transparency, more accountability, more -- it�s not honesty, because that gives a value-laden term that I don�t think is appropriate here, but more transparent way of doing business, I guess, so that people can see that they�re getting full value for their dinars.
Mr. Lawrence: I�d be curious how you reflect on your time in terms of the expectations that have been placed on this whole process.
Mr. Bent: I think you can -- looking back on it now, the expectations of a year and a half ago were clearly way too high in terms of building a liberal democracy and a free market economy that was going to, you know, maybe not be on a par with Switzerland, but certainly up there. And I think those were absolutely unmeetable expectations. And so much more realistic would be to say can you get a functioning economy? Can you start a banking system? Can you get a government that makes essential decisions on behalf of its citizens? I think that�s possible.
I think the violence and, you know, the coming together that I hope will happen would prevent what would be a disaster, which would be a civil war and warring groups and everybody thinking that they�re entitled to take what they can take by force of arms.
Mr. Lawrence: In another aspect of your very unique experience has been working with people of different cultures, but also the military, the State Department. I wonder how you sort of reflect on all that.
Mr. Bent: Sure. I -- out there, I have just the utmost respect for the military. It�s -- setting aside Abu Gharib and whatever you think of that, I -- you know, coming back from meetings at the Ministry of Finance, and you�d see kids standing at checkpoints absolutely exposed and not knowing whether there was a sniper or whether they were going to be killed doing their job. But there was really a degree of professionalism that was -- I just found incredibly impressive. People were thrown into doing things that they had no training for. Civil affairs officers were working with the Ministry of Social Affairs on things like vocational training programs, and they kind of plunged into it. It was sort of a think outside the box, be innovative, what works, and, you know, they were sort of, you know, we�re in this. You know, we got to do something. What can we do? You know, what works? Well, if that doesn�t work, okay, let�s try something else. There was a real entrepreneurial kind of get-it-done feeling out there.
Mr. Breul: What about members of your budget team? How did they perform and how was their work environment?
Mr. Bent: Well, it -- we would leave the Green Zone probably six days a week, Friday being the holy day, and so people got out there. When I got out there, I think staff were young and talented and hard-working, but they didn�t really have a lot of experience in budget matters. And so, you know, part of it was throwing them into it and helping them as best you could. But it, I think, gets a little bit to, well, what kinds of skills were required and what kinds of folks should be out there.
The British and the Australians sent mid-level employees who worked for five or ten years on things like financial markets or budgets. And, you know, what is a little missing in the discussion back here is the contribution of the other countries to the civil reconstruction, if you will. And I will say that my Australian and British colleagues were absolutely invaluable, and they were huge important parts of whatever successes we did have.
Mr. Lawrence: Well, with that as a perspective, I�d be curious what advice, based on your career as well as your recent experience, what advice would you give to someone interested in a career in public service?
Mr. Bent: The challenges of public service are that you�re going to find a kind of a commitment and a desire to get things done that -- well, I�m not putting this very well, but I think what -- you�re going to find challenges that you�re just not going to find in the private sector. You�re going to be given awesome levels of responsibility that are going to be well beyond anything you might do as a 25- or a 30-year-old in a company. It�s on the one hand daunting and, on the other hand, it forces you to grow.
I think that if I were looking back on sort of, you know, my own career, I think that a lot of what you learn in the public sector, sort of analyzing choices, trying to bring a neutral, turn the coin and look at both sides perspective to issues, that�s important. You can�t go in and be a moralist and try to judge people�s motives. You�ve got to deal with the world as you find it. And I think that that and the camaraderie and the sense of purpose were what I most enjoyed about CPA.
Mr. Lawrence: Well, I know Jonathan and I could ask you many more questions, but I�m afraid we�re out of time. Rodney, we want to thank you for being with us this morning.
Mr. Bent: Thank you.
Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation with Rodney Bent. Rodney�s a professional staffer on the House Appropriations Committee, but for the past six months, he�s been the director of the CPA�s Office of Management and Budget a senior adviser for the Iraqi Ministry of Finance.
Be sure and visit us on the web at businessofgovernment.org. There, you can learn more about our programs and get a transcript of today�s very fascinating conversation. Once again, that�s businessofgovernment.or
This is Paul Lawrence. Thank you for listening.
Thursday, May 20, 2004
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 approach to improving government effectiveness. You can find out more about The Center 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 conversation this morning is with Mark Krzysko, the Deputy Director of Defense Procurement and Acquisition Policy e-Business in the Office of Undersecretary of Defense for Acquisition, Technology, and Logistics.
Good morning, Mark.
Mr. Krzysko: Good morning.
Mr. Lawrence: And joining us in our conversation, also from IBM, is Linda Marshall.
Good morning, Linda.
Ms. Marshall: Good morning.
Mr. Lawrence: Well, Mark, let's start by getting right to it. Could you tell us about the modernization of DoD's acquisition process?
Mr. Krzysko: Yes, I will. What I'd like to talk about is over the past several years, we've been moving forward and modernizing the acquisition business process. Last year, we took a major step within the Department of modernizing the acquisition process, and that is the 5,000 processes we call it there. This year, we're working on the defense acquisition regulation and attempting to streamline our regulations to make it easier for people to do business. That modernization is to remove a lot of the regulatory aspects of what we're trying to do so we can become more commercialized in the way we do business as a department.
Now, certainly, we can't be perfectly commercial as an entity because we are a federal government and have rules and regulations. But to ease that pain and move forward in the regulations through those two major initiatives, as well as other initiatives, that principally being what I have to do is work with the business modernization program on how we would reengineer the business process for the acquisition community, and that, too, is also another significant effort.
Mr. Lawrence: How do you ensure that what you're doing is supporting the war fighter?
Mr. Krzysko: I believe we begin and end always with the war fighter, because it's not about the business process; it's how we improve the business process and support the war fighter. Quite simply, it's getting goods and services to the war fighter in the field, and that's what our role is. We do that within the Department of Defense and we try to measure that in our goals of being sure that we meet the role of the war fighter, because in purchasing goods and services, it's the significant aspect of what we do.
Ms. Marshall: Mark, to give our listeners a sense of the magnitude of business that flows through DoD, could you tell us the amount of contracts awarded daily, monthly, annually by DoD?
Mr. Krzysko: I pulled to metrics, one from '02 and one for '03 in the fiscal year. In '02, we awarded 5.4 million actions that account for almost $180 billion worth of business. In '03, we had 5.9 million transactions for almost $220 billion. I did the math with that, and that's about 15,000 transactions daily, amounting to almost $500 million a day.
Mr. Lawrence: Is there an equivalent that people could think about in another sector in terms of the magnitude of those transactions?
Mr. Krzysko: I have not been able to find the one that can amass that amount of transactions. When we look across the federal government, the Department of Defense accounts for about 60 percent of the business either in transactions or in dollars.
Ms. Marshall: Can you describe the kinds of skill sets of the people that work for the Office of Defense Procurement and Acquisition Policy?
Mr. Krzysko: I'd like to answer that two ways: one within the Department and one within my directorate, as well as what we do within the acquisition community, because if you look at the acquisition community as a whole, we span the gamut, everything from systems engineering and engineers, logistics, contracting, financial management to the broad skill set even with the e-Business Directorate, which are principally programmatic skills, acquisition management skills, contracting skills. In the e Business Directorate we also had the other aspect of that. It's information technology and what that means to us. So it's connecting all the business process with information technology skill sets for us to move forward.
Ms. Marshall: What is your role as the Deputy Director of Defense Procurement and Acquisition Policy in e Business?
Mr. Krzysko: My role, as I see it, is to, one, lead and coordinate the services and components with leading the transformation to e-business, because it is about delivering technological solutions to our people, men and women and the field, that support the war fighter. The Army, Navy, Air Force, and the other components do the purchasing for the Department, but they need to find a place to look for, in terms of business processes, what systems we need to employ, how we need to employ them. So we really have that leadership coordination role for the Department as it relates to the acquisition business process.
Ms. Marshall: Can you tell us about your career and the positions prior to your current position?
Mr. Krzysko: My career really came in two segments. I worked in the private industry for about 11 years. I worked in retail. I started at Woodward & Lothrop, the department store that's no longer here in the city, and then I moved to Lord & Taylor. I worked at everything from a dock supervisor through the store comptroller to the operations administrator at Woodies at Chevy Chase, and then I moved on to Lord & Taylor, where I was the assistant managing director, and I was responsible for all the operations aspects of that as well as human resources.
I decided I wanted to move on with my career so I went back to school and I got a job with the government, and that job was with the Naval Air Systems Command, and I started again, my career, in my early 30s at the Naval Air Systems Command as a contracts specialist. I was a contracts specialist for the Unmanned Aerial Vehicle Department, then I moved over where most of my career was, as an F18 PCO. I was the foreign military sales PCO for that, moving on to F14, finally leading a BPR effort as it related to partnering with industry before this job, and my position there was the e-commerce solutions manager. My role there was to bring ERP. We were implementing an ERP and standard procurement system together, so I functioned as the business process manager for that effort.
Mr. Lawrence: You began in the private sector and then were drawn to the public sector. I'm curious, what drew you there?
Mr. Krzysko: Well, at that time it was 1990, and, if you realize, that market was pretty flat for middle management, and it was very difficult in the private sector. I thought when I wanted to grow up I was going to be a consultant in fact, and IT was drawing me at that time but I needed to move on with my career, and Naval Air Systems Command offered me an opportunity and I decided I was going pursue graduate school at the same time, so I landed a job in the public sector, didn't think I'd stay here, but loved it ever since.
Mr. Lawrence: Is there any particular experience that best prepared you for your present position?
Mr. Krzysko: I thought about that question for a while when I my answer is every one of them did, because I wouldn't be able to represent myself cross-functionally if I wasn't in a function involved in the Naval Air Systems Command. I wouldn't be able to understand finances and logistics as I did if I didn't work in an operation as a dock supervisor in receipt and acceptance, and I wouldn't understand the business process for reengineering if I didn't lead those efforts. So, bringing them all together I think has lead to the culmination of the skill set I have today, and I think it's important that if I didn't have that I wouldn't be able to function as well in this environment.
Mr. Lawrence: Leaders often have this moment in their careers where they move from being the doers of work to watching over people who do the work. I'm wondering about that point in your career and how you think about that.
Mr. Krzysko: Well, in moving forward with my career, I still believe I am a doer, and I think leadership is a doing position because you can't just talk about it; you have to do it. And you have to operationalize what the vision and what transformation needs to occur, and you have to oversee that in some fashion. I take a lot of pride in empowering the staff and empowering the people that we work with to go make that transformation happen. So, it's not only oversight. You have to participate, because leadership is not a distant position.
Mr. Lawrence: You've been around some, I'm assuming, very strong leaders in your career, and I'm curious, what were the characteristics of good leadership?
Mr. Krzysko: I've had the mantra for quite a long time, "It's vision along with detail." And that's understanding the direction you want to go as well as understanding what you need to do to get there. So often the leaders that have been successful not only had the vision but had an operational background to go make that transformation happen. Detail without vision or vision without detail makes you unsuccessful at both.
Mr. Lawrence: I'm sure as part of vision, one of the key things probably left unspoken is the need to communicate the vision. I'm just curious how you communicate how you communicate your vision in a large organization.
Mr. Krzysko: Communicating a vision at a large organization is you communicate it at a local level as well. You have to participate and build alliances with the members of your community so as you move forward they can help you realize that vision. You have to it's, quite frankly, a lot of selling techniques to ensure what you're doing, because no vision is perfect and execution is always lacking, so as you move forward you have to adjust and be sure that you're pursuing that correct direction. And you do that through partnerships, both organizationally, internally, with industry so as you move forward that vision becomes more real, more crystal every day.
Mr. Lawrence: What's the difference between acquisition and procurement? We'll ask Mark Krzysko, the Department of Defense, when The Business of Government Hour continues.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Mark Krzysko. Mark is the Deputy Director of Defense Procurement and Acquisition Policy e Business in the Office of the Undersecretary of Defense for Acquisition Technology and Logistics.
And joining us in our conversation is Linda Marshall.
Well, Mark, let's define some commonly used terms in the defense acquisition and procurement workplace for our listener. How would you differentiate "acquisition" from "procurement"?
Mr. Krzysko: That's a great question, and I think oftentimes we use those terms synonymously. In some cases we can; in some cases we can't.
Acquisition, the way we think of it in the Department of Defense, is a much broader construct for us to deal with. It deals with everything from buying major weapons systems, from concept to development, to the delivery of the systems, to sustaining it, all the way through disposal.
Procurement is a subset of that process. The interesting aspect of that is that at any given point of that process, whether you're in concept development, delivery, or sustainment, you're utilizing procurement to realize what you're trying to acquire, so procurement is much more the transactional, the contractual base where acquisition is a much deeper concept for everything from science and technology to systems engineering all the way through the disposal of those systems in the workplace.
Ms. Marshall: What is meant by the acquisition domain, Mark, and can you tell us about its current transition in the future?
Mr. Krzysko: Well, before I tell you what the acquisition domain is, let me tell you where the acquisition domain fits. The acquisition domain is one fit in the business management modernization program. We have other domains human resources, installation environment, strategic planning and budgeting, logistics, and accounting and finance as well as acquisition. This represents the leadership of those business process owners within the Department to realize the enterprise architecture of what we're trying to achieve. The acquisition domain is a subset of that, but a huge subset nonetheless. It is intended to govern the acquisition enterprise both the systems, the process, the technologies at an enterprise level. It's to enable data interoperability at the Department to realize a data structure for the Department of Defense for the acquisition domain.
Our goals are also to modernize and streamline the acquisition business process, manage our IT portfolio, and build a collaboration workspace for us to move from. And that's not only with us in the Department of Defense but that's at a federal level as well as our industry partners.
And finally, but certainly not least, what it does is that it represents the change management component of how does it touch our people, because with the institution of technology in business process reengineering, what will we do to affect our people and how will we train them in the future and what skill set will we need.
Ms. Marshall: Can you discuss the operating environment and the influences that impact the acquisition domain?
Mr. Krzysko: The operating environment is extremely complex. What we've tried to do, and I'll borrow a common phrase used around here, is connect the dots. The operating is very complex because we have everything from the President's management agenda to the Secretary of Defense's initiative to the business modernization program, balance score card; we have GAO audits. We decided, through our acquisition domain, that many of these things had an awful lot in common and how could we realize the synergy from all of our operating environment to realize what we were trying to achieve a simpler, less redundant IT infrastructure supporting the Acquisition Department. So, what we were doing was bringing this together, and we've aligned all the major initiatives within the federal government as well as the Department, in our view, from the acquisition community, so we could grapple with each one of them or report as efficiently as we possibly could to each one of them.
Ms. Marshall: The Acquisition Governance Board is an important component of what you do and work with. Can you describe the role of the Acquisition Governance Board?
Mr. Krzysko: The Acquisition Governance Board is a critical aspect of what we have been trying to achieve. It is comprised we began this about a year ago, and we began with the senior procurement executives from all the services and components. This past few months, we've changed that to move to the broader acquisition and involved all the component acquisition executives so we can tackle procurement as well as acquisition. We realized we were part of a major community. It is a collaborative body where we have the most senior leaders of the Department of Defense represented and working to establish the strategic vision for us as a department to move forward. It was important for us to have that collaboration environment not only dictate from above but realize where we could have opportunities to move forward.
The Governance Board is really at two levels the AGB, or the Acquisition Governance Board as we call it, is the most senior level, and then we take the next tier down, which we affectionately call the JBOB, the Joint Acquisition Business Oversight Board, one tier down from the senior leaders to make things happen.
We're not naive to believe that we live in a stovepipe in the acquisition community, so we've also invited and we have participated in the CIO, the CFO, as well as other components as necessary to help support our decision making as we try to move forward with the transformation.
Mr. Lawrence: You've described the governance structure that allows you to work with other parts of the organization, but let me ask you more about the management process. How do you go about collaborating with the folks like the CFO and the CIO?
Mr. Krzysko: We participate with the CFO, the CIO in their forums, as well as inviting them to our forums. I use the technical term of "managing in the middle," because you have to move to the middle of many of these initiatives because they are either technological or they're financial or they're acquisition so you have to bring the bodies together. Frankly, it's about putting yourself in that space to participate, to represent yourself and represent the interests of the Department and your business line as you move forward. If you could do that, you could find the correct balance between financial goals, technical goals, as well as acquisition goals to come out with a workable solution that you can implement very quickly.
Mr. Lawrence: What are some best practices or some lessons learned from actually going about and making that work?
Mr. Krzysko: Participate, participate, participate. It takes a lot of time, it takes a lot of energy to move forward in that. We moved out our business lane into many of those lanes whether it be in CFO forums or CIO forums or logistics forums to help and assist and bring our value from our side and bring our perspective so we could maintain a balance across the Department. Personally, I view that as one of the most critical aspects for success for any initiative. Oftentimes we forget what we need to go do when we become so focused on solutions that without that balance they fall short in many aspects because we failed to consider some of the important things that need to be considered from other viewpoints.
Mr. Lawrence: What are some of the other management challenges in trying to make the collaboration you described work?
Mr. Krzysko: It becomes a function of time. We have a very small staff within the Defense Procurement and Acquisition Policy e-Business Group, and they're very hard worked and participating in all those forums. Very early on when we were first standing up the office about a year and a half ago, we listed all the actions and forums and things we needed to participate in, and we listed eight, and the first challenge was what do we take off our plate, what do we go do? And the answer was "nothing," because everything was critically important, and my staff have been critically important in moving forward in each one of those lanes because as best we could you need to participate to make the difference, and we linked that back to it is important for us to execute our jobs in the most reasonable fashion, because we are trying to make a difference and transform the acquisition procurement community, because it is so critical to supporting the war fighter. We see that on the news every day, so that is a backdrop. It becomes our mantra to move forward.
Mr. Lawrence: Are the knowledge and skills of the employees changing? For example, as you're describing the collaboration, you're going through, I imagine sitting in my silo only having to be a specialist in my area. Now at any one moment I'm working with the CIO and the CFO and I'm going to have know a much broader range of information and, you know, capabilities. I'm curious, sir, are the employees changing the way I'm describing?
Mr. Krzysko: Certainly on our team, I think we have. I think we need to permeate that throughout the organization as we move to a more enterprise view of business processes. You have to be sensitive to financial opinions. You have to be sensitive to technological opinions. We get criticized a lot because sometimes we go in too far into those lanes and speak different languages from an IT perspective or from a CFO perspective, but you have to understand that to understand the trades and the points of view of others. And it's critically important that those skill sets are there. With the staff it is difficult for them because we joke, we find few people in those lanes, and they work through that. The come from it from a program management or a contracting background or an acquisition background. They really need to kluge all those skills together and understand the disciplines and why people are so concerned about business processes from their perspective. Bringing all them together is a difficult task, and it represents actually a promise for many of the employees because they love the dynamic because it's a continual learning environment and they can try to make a difference and learn more while they go.
Mr. Lawrence: That's very interesting, especially about the collaboration.
One of the biggest management challenges of any organization is dealing with the functional silos that exist. How are those being addressed in DoD? We'll ask Mark Krzysko for his perspective when The Business of Government Hour continues.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Mark Krzysko. Mark is the Deputy Director of Defense Procurement and Acquisition Policy e Business in the Office of the Under Secretary of Defense for Acquisition Technology and Logistics.
And joining us in our conversation is Linda Marshall.
Ms. Marshall: Mark, can you describe the process of developing a solution that was started within the Defense Department and then transferred to the civilian sector?
Mr. Krzysko: We've had a lot of solutions that have been transferred to the civilian sector, and it's principally under the integrated acquisition environment in the lane of procurement. A few of them that come to mind are the Central Contract Registry, CCR; the Past Performance System. We've also had FEDTEDS move up to a federal to provide services to that environment. Mark Foreman, when he was here, initiated the Quick Silver to try to find the low hanging fruit of initiatives that we could deploy federallywide. The Department had a few of them, and we were able to elevate them up and work them in the integrated acquisition environment.
Ms. Marshall: Is the federal technical data solution, commonly called FEDTEDS, a good example of this? You mentioned that.
Mr. Krzysko: Yes, FEDTEDS is a great example of that. FEDTEDS was developed out of the Air Force out of the Logistics Center. We found post-9/11 that the solution when we would put solicitations out on the street for bid, that information that we were putting out on the web was sensitive but not unclassified. We would have drawings of the Hoover Dam. We would have drawings of security systems that we wanted industry to provide solutions for. And we realized all of a sudden it was on an protected environment. Very quickly in the Department, what we initiated was to move that forward to protect that information, to control who and when they received that so we would understand who was getting that level of information on security.
The Department of Homeland Security was the first to pickup on this, and they tremendously led the effort in deploying it within the Department of Homeland Security. Since then, we've also extended that all the way through local governments in terms of New York City is employing that solution set. So, there we found a solution that was very small and very home-grown within the Department at the Air Force that could fill a capability gap within the procurement community very quickly and deploy nationally, and we're working on implementing that throughout the federal government now.
Mr. Lawrence: I understand the Department wants to organize the strategic acquisition at enterprise level and not a single system or component. Could you explain to our listeners what you mean by the enterprise level and why this is important?
Mr. Krzysko: Well, I think we need to recognize first that an enterprise level, what that really means, because in many cases in procurement it's what we spend our money on. We talked earlier about the magnitude of the money, and we have a tremendous amount of people that want insight as to what we spend our money on whether it's transparency for the citizen, whether it's transparency for the management of that, whether it's for the oversight communities to understand how and where we spend the money. It's critical information for the individual to understand where they're buying and what they are buying.
I have two good examples at an enterprise level that I think will crystallize this. One is we've initiated a spend analysis pilot within the Department of Defense. Based upon existing infrastructure, we're going to pilot the capability of pulling enterprise spend data from systems that are currently in place. The Army has the lead for us. The Air Force and the Navy are partnering on that to move forward and pull spend data.
Another initiative comes out of the federal solution side, out of the integrated acquisition environment. It's the federal procurement data system next generation. We are required to report all our contractual data to a system. In the past we would report it to the first generation FBDS, but this directly would move all of our business systems at an enterprise level so that a federal level we would understand who and what is spending their money on, and it would all be located in one system. It's critically important for us in the Department to do that. It's important for us in the federal sector to do that. But it's difficult to manage the transition because the technical infrastructure in the systems supporting those. When you establish single points, you have to actively manage the transition to those systems, and it's important for us to remember that it is not easy.
Ms. Marshall: What processes do you have to eliminate silos of information that may have existed, and also how does the department manager cross these processes or systems?
Mr. Krzysko: Well, silos of information we generally find that they come based upon the solutions and the technical infrastructure that's out there. We've created them because of our technological implementations. I really have a three-step process of how to think about that, and the first step of that is understanding what the process is and understanding what the business process, what the data and the information are. The way we're manifesting that in eliminating the silos is developing an enterprise architecture. Once you develop an enterprise architecture you've really managed yourself to the direction of where you want to go because you've settled on a process, you've settled on data; you've settled on the information that's needed. The next step is to assess the infrastructure and see what systems are meeting that architecture, because that will help eliminate the silos.
Eliminating the silos in and of itself is not the answer. You have to have a structure and disciplined approach because from assessing where your infrastructure is, you begin to transition your systems. In transitioning your systems, you decide whether you're going to retain them, retire them, refresh them, fix them. And you need to move forward in that lane.
We can realize, in many cases and that may sound like a long-term project but it doesn't have to be quite as long term as some would like us to believe you can realize quickly where you can implement technologies to homogenize the data, so to speak, now, but ultimately you want to have fewer, more capable systems and develop your transition plan off of that.
Mr. Lawrence: What performance metrics are you using to see how you're doing compared to those steps?
Mr. Krzysko: When I think of performance metrics at the highest level, it's always about saving time and saving money, and if you can't demonstrate that, you really don't have performance metrics. We think of it in three lanes. I think, one, we measure ourselves to see how well we're doing in terms of developing our business process, our data models, our transition plans and are we doing what we said we would do on time. We also need to assess the services and components and help them realize the transitions that they're trying to measure. So, you need to measure their progression to how well they're doing and how fast they are achieving their transformation goals because they are the supporting infrastructure by and large that are transitioning in support of us.
And, finally, you have to measure it at a process level. We need to move faster in terms of how we measure process, but we need to be careful to look at it in an enterprise level, just not at a typical segment of business. A good example of that in the past we used to measure procurement action lead time, and that would be from the moment you had a procurement request generated to the moment you executed. Oftentimes we wouldn't enter into the procurement request till we were ready to execute, so the metric always looked good, but did we really achieve the savings. You have to take a holistic measure and you have to measure as we mature, because we're not all there yet, so you have to keep moving forward and measuring yourself, measuring the process, and ultimately measuring what your technological footprint looks like. Fewer systems are, by and large, better because of the technological footprint and you can save yourself time and money.
We measured this and we had some very quick wins in the acquisition domain within our community because we were the first to step up. We moved FEDTEDS to the federal arena and didn't have a DoDTEDS anymore so we didn't need that capability internally. And we also retired the feeder system to FedBizOps. We had the Department of Defense Federal Business Opportunity system. We took that system down very early on.
I mentioned the Federal Procurement Data System. Moving to that, the measurement there culminates in two things. By our move to passing procurement data from our procurement systems to FBDS, the next generation, we not only will retire five business systems we had five feeder systems within the Department of Defense but we also business process reengineered the process because the contracting officers or the contract specialists would be passing the direct data from their contract award directly to FDBS, thus eliminating all the oversight and all the data movement within the Department. So, there you could see you measured the business process reengineered while we were reducing our technological footprint.
Ms. Marshall: Mark, I'm going to switch gears on you for a minute if you don't mind. I know your office is committed to integrating not just systems and technology but the people in the processes as well. Can you tell us why focusing on the people to achieve this vision of transformation at DoD is an important issue and what the main obstacles of achieving this are?
Mr. Krzysko: The main obstacles of achieving that and I'd like to I think you have to take all three. It's not that we solely focus on the people. You have to focus on technology, the process, the policy, the people all at the same time. Too often in the past we only focused on one, the technological aspects or the process aspects or just the people aspects. Taking as an entity, you can manage change faster if you accommodate for all three because technological solutions are not people and you need all things to change in the same fashion. The obstacles of that are principally communicative.
You need to get the communication out to the people of understanding what's changing from the technology or process perspective so you can lead them and teach them where we're going as a community. Moving as a community, the obstacles generally are that we can't reach everybody fast enough, and as the environment moves faster we will be challenged in the future to getting information out to the people to understand how the transition's occurring, what are we changing in terms of what systems we have providing solutions; how did we reengineer the process; how did we change the policy. Within the Office of Defense Procurement and Acquisition Policy, one of the things is that when we change, we get to the people and change them and inform that what we did, why we did it, and how we can help them complete their transformation.
Mr. Lawrence: Interesting, especially the integration.
Rejoin us in a few minutes when we continue our conversation with our guest, Mark Krzysko, of DoD.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Mark Krzysko. Mark is the Deputy Director of Defense Procurement and Acquisition Policy e Business in the Office of the Under Secretary of Defense for Acquisition Technology and Logistics.
And joining us in our conversation is Linda Marshall.
Ms. Marshall: Mark, how do you envision the Department conducting business with private contractors, including small companies as well as the large corporations?
Mr. Krzysko: Well, Linda, there's really two parts to that question. There's one, and everybody always wants to know how to do business with the government, and in the Department of Defense, one of the services that is offered is procurement technical assistant centers that help industry understand how to do business with the federal government. It's partially funded by the DoD, and I've participated in many forums where they help very locally of understanding how to do business, what steps you need to do, how you should prepare yourself to do business with federal government. But within the e-business world, there are also solution sets that directly tie to industry. Federal business opportunities, the single point of entry to understand what business opportunities exist in the federal government.
We have the Central Contract Registry where industry can register and must register to do business with the federal government. That's to ensure that they can get paid on time and that they could do business with us.
We have a new initiative out there, online reps and certs. We require representations and certs and a new tool is being stood up that industry can do that once and apply that to all the procurements, and that's being deployed now.
Finally, there's a solution within the Department of Defense that we're trying to permeate throughout the Department of Defense, and it's called Wide Area Workflow Receipt and Acceptance, and it's our intention to have that as the single invoicing point to the Department of Defense and hopefully at some point, maybe at the federal level, as a solution for how to take invoices from both the major contractors as well as small contractors. It's a web-based tool that will allow them to get paid and go through our processes faster and more efficiently.
Ms. Marshall: Can you tell us about your current relationship and future plans with the Defense Acquisition University?
Mr. Krzysko: Our current relationship with DAU is actually a great relationship. My former deputy for a year, Dr. Jim McMichael, has moved back to DAU and we have a great relationship working together, and I talked earlier about how people are so important. In our training, we need to realize that we need to train for the future here, and training is not just a component of how to do something but how we need to strategically think, how we need to move forward as a community. So, we need to train different skills. Any business that's not only training them on the system solutions but how to do business. Our goal is to become strategic acquirers or business brokers. So, what do you need to train individuals to do in the acquisition profession?
We're working with DAU to influence the curricula as it's developed. I participate monthly in one of our senior contract courses and go down and talk about e-business in everything we're doing. We really need to touch the people and tell them why and where we're going and what's going to affect them. So, we've had a great relationship with DAU and that will mature as we move on.
Ms. Marshall: What will the modernization of the DoD's acquisition process look like 5 to 10 years from now?
Mr. Krzysko: I think as technology solutions become more evident and we realize web-based services, we will be interconnected to work through the environment. Our acquisition process will be perfectly transparent to the entire community from the citizens all the way through the people doing the business. We'll be able to do business anywhere in the world. We will be able to connect with industry in a very efficient fashion. Not all the services of the technologies will be based within our home-grown organization. We will rely in a service-based architecture of others that provide those services, whether it's industry or whether it's someone else that interconnects, because as we realize the acquisition process and the data and what we need, we can better interconnect to cross that environment. The contracting officers will be able to work from their homes and supply the goods and services in the future.
Ms. Marshall: You mentioned strategic acquirers a few minutes ago. Can you explain to us what you mean by that?
Mr. Krzysko: Yeah, that's another great question. The strategic acquiring we sat down at one point and analyzed the skill sets of what a strategic acquirer would be and what that is. Much of that is found in data. We've realized that our environment is changing very rapidly. We're no longer local. We're global. We're no longer buying for someone down the hall, we're buying for someone across the world. We've realized that technology systems are not our own local systems. It's someplace else. We've realized that we need to work across teams and with teams. There's a variety of skill sets and services we provide, whether we buy them from GSA or get our goods and services through their instruments or contracting instruments or whether we buy them through ourselves. It is a global environment, but the real core of strategic acquiring is in realizing the information, and that's information at our desktop level which will help us make better decisions, that ultimately flow up to management decisions where they can, too, in turn make better decisions.
Mr. Lawrence: You had a significant career in the private sector, then you came to the public sector and you've been there ever since, and I'm curious, what advice would you have for somebody interested in a career or joining the public sector?
Mr. Krzysko: I have found I have been with the public sector for 13 years now. I have found it the most exciting place that I have ever worked, and I wouldn't have traded it for the world. It's given me the opportunity to make a difference, not only for myself but for the federal government to move forward. I've found that I have been empowered and working in cross-discipline opportunities, which I may have not otherwise had in the private sector. It's a very exciting time, and you can feel like you contribute very early on in your career. The training has been great, the environment, the people have been great. It is just a tremendous place to work and drive change home. The advice is to manage what you do. Do it well. Get good grades. Be sure you come with skill sets, and we can help make you better and apply those skills very quickly within the federal government to make a difference in a large scale.
Mr. Lawrence: Well, that'll have to be our last question, Mark. Linda and I want to thank you for being with us this morning.
Mr. Krzysko: Okay, thank you. It's been a pleasure to be here. One of the things I'd like to mention is we are up on the web in all of our information. We try to connect, so those who want to understand what systems are out there, what we're trying to achieve, our website is www.acq.osd.mil/dpap/ebiz/. It's the e business single point of entry and we're working on connecting it so everyone can understand what we're trying to achieve.
Mr. Lawrence: Thank you, Mark.
Mr. Krzysko: Thank you.
Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation with Mark Krzysko, Deputy Director of Defense Procurement and Acquisition Policy e-Business in the Office of the Undersecretary of Defense for Acquisition Technology and Logistics.
Be sure and visit us on the web at businesofgovernment.org. There, you can learn more about our programs and research into new approaches to improving government effectiveness, and you can also get a transcript of today's very interesting conversation. Once again, that's businessofgovernment.org.
This is Paul Lawrence. Thank you for listening.
Tuesday, March 9, 2004
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.
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.
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.
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.
Thursday, March 11, 2004
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 Norm Enger, E-government program director in the Office of Personnel Management.
Good morning, Norm.
Mr. Enger: Good morning.
Mr. Lawrence: And joining us in our conversation is Tom Romeo, also from IBM.
Good morning, Tom.
Mr. Romeo: Good morning.
Mr. Lawrence: Well, Norm, let’s start by sort of focusing on the mission and the activities of OPM. Could you describe for our listeners what OPM does?
Mr. Enger: The main job of OPM is to build a high-quality and diverse federal workforce based on merit system principles. To do this, OPM works with the President, the Congress, departments, and agencies to help them to develop and implement good human capital policies that in turn let the agencies meet their strategic objectives. OPM is essentially a consulting organization that guides the federal government, the civilian sector, to improve how it works with, manages, and guides development of human capital.
Mr. Lawrence: So you would characterize the relationship between OPM -- you use the word “guide.” What’s the relationship between OPM and, say, the rest of the federal government? How would you describe that?
Mr. Enger: Well, the OPM has the mandate, if you will, to give policy guidance to the civilian sector of the government, the human capital officers throughout the civilian sector, to properly manage their personnel and payroll systems, and all the systems that deal with the federal employee.
Mr. Romeo: Can you tell us a little bit about your role as the E-government program director for OPM?
Mr. Enger: My role is the E-gov program director, and the OPM received five of the 24 original E gov initiatives. The five E-gov initiatives, which we’ll talk about shortly, deal with human capital. The mandate of E-government is to transform government business systems. Therefore, in this context, the OPM initiatives seek to transform the human resource, the human capital systems, in the federal agencies. What is interesting in this context is that OPM, I believe, has been successful in this mission because we are the second agency to achieve green status, which is given by OMB to agencies that meet all of their criteria and milestones for E-government. So right now, we have just achieved green status in E-government.
Let me also add that E-government is a little bit unique in the sense that what we’re talking about is not minor Band-Aid changes to systems; we’re looking at transformational change, which means major, radical change to how the government does business. What’s also very relevant here is we’re talking about change in a very short space of time. E-gov has objectives to transform systems within 18 to 24 months. We wind up with a very, very ambitious schedule to accomplish these things.
I work very closely with the director of OPM, Kay Coles James, the OPM officials, and the agencies to, in effect, put into place and implement the vision of E-government. I also, of course, work closely with the CIO of OPM, because we have to work within the infrastructure developed by the OPM’s CIO.
Mr. Romeo: I know in other agencies, there are also E-government lead positions. Can you talk a little bit about some of those positions and the advantages of having such a role?
Mr. Enger: Well, there were, as I said before, 24 E-gov initiatives. Every agency that has an E gov initiative has assigned a project manager for the initiative. This is because of what I said earlier; namely, you’re looking a radical change in a very, very short space of time, 18 to 24 months. Therefore, to accomplish that, each of the 24 initiatives has a project manager, and each agency that is a managing partner, such as OPM, has assigned a manager for that purpose. These are really government-wide in scope, so just because an agency has an initiative, it means, in effect, the agency is responsible for working across the government to provide a government-wide solution. The perception here is not agency-centric, but government-wide. So as we’ll talk about in a few minutes here, what we have developed from OPM are used throughout the federal government, not just by OPM.
Mr. Romeo: Thanks, Norm. How many employees would you say work for the E government program at OPM, and what kind of skill sets do they have?
Mr. Enger: I have approximately 60 individuals working for me in the OPM E-gov program. These 60 individuals are a combination of full-time OPM personnel and contractors and detailees. The E-gov initiatives really require quite a spectrum of skills. We have IT specialists, human resource specialists, risk management specialists; a wide range, security specialists, privacy specialists. We really wind up with a mosaic and quite a spectrum of people required to effectively design, develop, and implement that E-gov initiative.
Mr. Romeo: Can you tell me a little bit about your career prior to joining OPM, and what type of skills do you think best prepared you for the E-gov program lead at OPM?
Mr. Enger: Well, my background has essentially been private sector. I ran my own computer system integration firm for many, many years, for over 20 years, providing basically systems and E-commerce solutions to federal and commercial clients. My firm was acquired about four or five years ago by Computer Associates, a very large system software and business software firm. And I therefore wound up running a smaller firm and then working as a vice president for a very large firm.
And then what happened is that approximately two years ago, I got a call from the chief of staff of OPM, asking me to come down and talk to them. I was quite unprepared for this. I went down, and essentially, the chief of staff and director asked me if I would be interested in public service. And I’d always had some interest in this, but never really focused upon where I would do public service. I met and talked to the chief of staff and the director, and was very impressed by their vision and their dedication to transforming federal systems, and I was asked to interview for the position. I interviewed, among other people, and I was selected to become the OPM E-gov program manager.
I must say that my prior many, many years in the business, and especially my private sector background with IT, information systems, for many, many years prepared me very, very well for the current position.
Mr. Lawrence: When you think about your days in the private sector, how would you compare the management styles used in the private sector versus the public sector?
Mr. Enger: Well, I was a bit surprised that in reality, the difference is not that dramatic. The senior executives in the federal sector are judged upon such qualifications as leading change, leading people, results-driven, business acumen, building coalitions. Well, these are very, very much the same criteria used to judge successful managers in the private sector. What has happened is that the government is more and more looking to the private sector for metrics and ways to improve its operations. I see more and more the transfer of solutions, metrics, and ideas from the private sector into the federal government. So therefore, in that sense, I don’t think at this point in time, you’re talking about a dramatic difference in the criteria or the mode of operation of successful federal people or private sector individuals.
Let me also mention that I was very, very pleasantly surprised to find when I joined the government that I had five project managers that were very, very talented. I was very impressed by the caliber of the people I had to work with, working for me. And I remain very, very impressed by the dedication and the hard work and the results of the people working for me in the federal sector.
Mr. Lawrence: Let me ask the question again, only this time focusing in on your technical skills, because you describe your experiences of leading technology organizations. How about comparing potential differences between creating technology solutions in the public sector as opposed to or compared to creating them in the private sector?
Mr. Enger: I don’t see a fundamental difference in the process of creating technology solutions in the public versus the private sector. In general, the private sector, though, is where you have the great breakthroughs in IT technology in terms of new software solutions, new hardware solutions, new communications solutions. So in general, the private sector is the leading edge, and the cauldron, in effect, where you have most of the breakthroughs in technology.
One goal of E-government is to look for the best solutions, whether they be public or private, and then implement the best solutions. What we do is we look carefully at a solution to a business problem in the government, and also outside. We do studies and then a cost/benefit analysis and then we determine where is the best solution, federal or private sector?
Let me add that my E-gov initiatives have very, very much used the private sector. We’ve outsourced a number of operations to the private sector. We’ll talk some more about this when we discuss USAJOBS E-training. But in effect, we have, under my five initiatives, used off-the-shelf commercial software and we’ve outsourced several operations from the public to the private sector.
Mr. Lawrence: That’s an interesting point, especially about the cost comparison.
What is golearn.gov and why was OPM recognized for this work? We’ll ask Norm Enger of OPM to tell us more about this when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I’m Paul Lawrence, and this morning’s conversation is with Norm Enger. Norm’s the E-government program director in the Office of Personnel Management.
And joining us in our conversation is Tom Romeo.
Well, Norm, could you describe the E-government vision and how the six OPM E government initiatives relate to the employment life cycle?
Mr. Enger: Well, what we have done is we took the five original E-gov initiatives, and the five which we can talk in more detail deal with recruitment of federal people, training federal people, their personnel systems, their payroll systems, their security clearance systems. The original five deal with those five discrete areas. And if we think about it, that frames the employee life cycle from recruitment and eventually into retirement. I should add also, our systems feed into the retirement system, which is managed and run by OPM. So we were able to effectively communicate a vision of the employee life cycle to the agencies and to the human resource people in the federal sector.
This is very important, because one of the difficulties IT people have is we talk in acronyms and jargon, and very often, we lose the audience for our vision. By framing the OPM initiatives into an employee life cycle, we’ve been able to very effectively convey what we’re trying to accomplish to the human resource officers in the federal sector.
We also have a sixth initiative, and that is called HRIS, Human Resource Information Systems. What that really is is going into a phase two, if I can use that term, of E-government, and that really now is looking at an enterprise solution for the entire human resource piece of the federal line of business. We’ll talk about that a bit more later.
Mr. Romeo: Let’s talk about the six initiatives in more detail. Since recruitment is at the beginning of the employment life cycle, can you describe the recruitment one-stop online service?
Mr. Enger: The recruitment one-stop initiative basically has a role or a mission to help the citizen find federal jobs. We want to simplify the process of locating and applying for federal jobs. When I came on board about two years ago, the OPM ran an old legacy system site called USAJOBS. The initiative has completely replaced and transformed that site. In August of last year, we brought up a brand-new actually outsourced site, using commercial off-the-shelf software; radically changed the old site. We actually shut down the old site.
I might add that this took place in August, August 4th, I believe, of last year. And I was apprehensive, because shutting down a complete site and then going live with a new one, there is some risk there. We shut down the old site on a Friday, went live on a Monday morning. And to my great surprise, on the Friday before, on the old site, we had 20,000 people a day on the site; on Monday, we had 200,000 people on the site. We increased the volume tenfold over that weekend from the old to the new site. I must say, to my great happiness and satisfaction, there wasn’t a glitch at all. The site went fully operational, and it’s simply grown in utilization. We now have 60 million citizens a year go to our USAJOBS site to locate federal jobs, put in résumés, and also to look and see what’s available relative to positions in the federal sector.
This has really improved the hiring process, because one of the real passions of Director Kay Coles James is to fix the federal hiring process. And what we’re doing here is we have replaced an old site with a brand-new site where a citizen can go, see what jobs are available, they can build a résumé. They actually now are able to track the application they file. They can see the status of the application.
We also have on the site here, we have all kinds of guides relative to helping them to determine what jobs they might be suitable for, help them with their career pathing. So in effect, we’ve gone and replaced an old legacy system with a very, very user-friendly, vibrant, and very successful new job site called USAJOBS. This site also is used by the agencies to -- we call it data mining. They can go in there and search for candidates for positions, and in effect, use that as a database, if you will, to see who’s applied for federal jobs.
Mr. Lawrence: Okay. So we just described the process of recruiting and hiring. So now once hired, a government employee is encouraged to build skills across a variety of subjects. And as I understand it, in 2003, OPM received a Distinguished Technology Leadership Award for the successful implementation of golearn.gov. Could you tell us what makes this a successful and innovative site?
Mr. Enger: Well, the concept behind the E-training initiative, and the website is golearn.gov, was to provide to the federal employee one-stop shopping for high-quality learning resources. Going back historically, in July of 2002, we launched a relatively humble site. I was standing with Mark Forman, and Director Kay Coles James gave the introductory remarks and we launched this site, which had at that time roughly 30 or 40 online courses, web-based courses. Since July of 2002, we have improved the site and it has evolved. So from a humble beginning, we now have well over 3,000 courses on the site. We have hundreds of E-books. As of last year, we had 30 agencies using this for their primary training. By the end of this year, we’ll have 60 agencies. It’s become a primary site for quality online web-based training for federal people.
The site itself is a -- it’s a virtual building with floors. And people can, in effect, go into classrooms and look at and take any one of these 3,000 courses. We have hundreds of books of all types, both technology and management and career-building and ethics, on the site. We have mentoring. People can have mentors help them to answer questions they have about either technology or about careers or whatever. We have resource centers that tie them to dictionaries, encyclopedias, libraries, et cetera. We now have over 1 million people a year actually come to this site and use this site. And actually, to my great surprise, the utilization is half civilian and half military. The site is running 24 by 7; it’s available full-time, 7 days a week. It’s used by federal people on every continent in the world.
And we have received numerous awards for this site. We received a very prestigious Gracie Award this year from our peers in the private and federal sector. So we’re very proud to, in effect, have a site which is delivering to the federal workforce an easy-to-use, available way to have continuous learning, to let the federal people continuously improve their job skills and make learning a process that is not difficult to reach, but becomes a part of their normal job pattern, per se.
Mr. Romeo: Norm, providing security clearances to federal civilian workers can be a very lengthy process, especially given the heightened importance of background checks since the September 11th incident. How does the government’s E-clearance initiative facilitate the security clearance process?
Mr. Enger: Well, this initiative, E-clearance, essentially wants to speed up and also improve the process whereby one gets a security clearance. When I first came on board two years ago, to my surprise, there was no central system whereby an authorized person could check security clearances across the government. What we did is, we at OPM, through this initiative, gathered into a warehouse all of the clearance information held by individual civilian agencies. We built this warehouse, and then in January of 2003, we linked this warehouse to a DoD system, called Joint Personal Adjudication System.
And the system I’m talking about, we call it the clearance verification system, CVS. And for the first time ever, you had a system which let a person who’s authorized inquire across the entire civilian and military sector for the status of somebody’s clearance. This system we built will hold 98 percent of all active clearances. To our great satisfaction, it was used by the new Department of Homeland Security last year to stand up and become operational. It used this system to do the background checks of the employees coming into that department from 22 different organizations. Roughly 160,000 employees were actually checked with this system.
A second part is moving all of the paper and forms for a clearance. For example, one form is the SF-86 you fill out. It’s a 13-page paper form to request a security clearance. We’ve made this electronic, and we’re making all the forms that people use for clearances electronic. By doing this, we’re moving from a paper system to an electronic system, and this cuts down the time it takes to get a security clearance, the time it takes to move information around, and in effect, the basic goal of E-clearance is to speed up and also to improve the whole process of security clearances.
Mr. Lawrence: This is a fascinating conversation of the life cycle, but we’ve got to go to a break.
Rejoin us in a few minutes as we continue our conversation with Norm Enger of OPM. This is The Business of Government Hour.
Mr. Lawrence: Welcome back to The Business of Government Hour. I’m Paul Lawrence, and this morning’s conversation is with Norm Enger, the E-government program director at the Office of Personnel Management.
And joining us in our conversation is Tom Romeo.
Well, Norm, we can’t talk about the employment life cycle without discussing one of the most important parts of employment, to the employees that is, the receiving of a paycheck, and that it’s current and consistent and timely. How does the E-payroll initiative help facilitate the government to do this in the most cost-effective manner?
Mr. Enger: Well, two years ago, when I took this position, to my great surprise, there were 26 agencies processing payroll for the 1.8 million civilian employees. I scratched my head, saying why are there 26 places paying these employees? The initiative essentially is to standardize and to consolidate civilian payroll processing. What we are doing is essentially we are consolidating civilian payroll processing from 26 down to basically two partnerships. We are collapsing from 26 down to two partnerships comprising four agencies, and eventually down just to two centers, if you will, that process civilian payroll. In the process, we’ll standardize payroll, but also, I might add, by shutting down these redundant operations, we’ll save the government, over a 10-year period, $1.1 billion. So in effect, we also don’t just achieve efficiency, but we also achieve significant cost savings by these initiatives. I might add that our partners here, the agencies that are in effect comprising the partnerships are Agriculture, Interior, Defense, and GSA.
Mr. Romeo: Norm, can you describe the vision, goals, and benefits of the Enterprise Human Resources Integration initiative? What is the EHRI’s relationship to the other E-gov initiatives?
Mr. Enger: Well, essentially, this initiative, EHRI, has several goals. Again, going back several years, I was quite surprised to realize that, from my point of view anyway, there really wasn’t a very rich corporate database on the civilian workforce. One part of EHRI, one goal is to build a corporate database or warehouse of real accurate information about the 1.8 million people in the civilian workforce.
Last September, September 2003, we actually brought up this new operation, this new website used by federal people. And what we have now is a richer and richer repository, describing in more and more detail the skills, the abilities, et cetera, of the 1.8 million civilian people. This is used for all kinds of workforce analysis, planning. We can look in there and determine retirement rates; we can do studies of age, sex, ethnic backgrounds, et cetera. So what we’ve done here is establish a corporate warehouse.
A second role of EHRI is to move away from paper personnel form. We call it the EOPF, Electronic Official Personnel Folder. What we’re doing is we’re leading the government in terms of showing the government how to get away from those voluminous and bulky personnel folders and move toward an electronic personnel record for the employee. Eventually when a person joins the government, there’ll be an electronic record created for them, a personnel record, and that will follow them through their federal career. So a second part of this is to, in effect, move toward an electronic personnel system.
To answer your question about its relationship, this initiative is defining all of the data elements that pertain to federal human resources and payroll. We have defined over 800 data elements that really comprise the standardization, if you will, of the information that is used in the federal personnel and payroll systems, and this also are the standards being followed by my other initiatives.
Mr. Lawrence: Norm, you’ve described the scenario where Executive Branch agencies may potentially invest in duplicative human resource information systems that perform core personnel transaction processing. For those of us who aren’t HR professionals, could you describe what a core personnel transaction process is? And then I’m curious, with this consolidation, you know, how you thought about, you know, the effect standardization will have on the government and others involved in the HR area.
Mr. Enger: The core personnel transaction processing is really the processing that updates the employee personnel record, the actions that update that record. This is called in the federal government the SF-5052 processing. This initiative, the HRIS, essentially is now moving toward an enterprise view of the human resource line of business.
Let me address it this way. We proved that the government could be transformed in a very short space of time. I think the original E-gov initiatives, the 24, have shown that there can be rapid change in the federal government. You can implement solutions in a very short timeframe. You can show tangible results, either dollar-wise or utilization. So in effect, this is really building upon the initial 24 and our five, I should say. And now we’re saying let’s look not just at those five points, if you will: training, recruitment -- look at the entire business itself of human capital in the federal government.
This HRIS is really using something that OMB has really pioneered called the Federal Enterprise Architecture. What that really says is that the OMB FEA is looking at the government as a business, just as you would look at a commercial private business, and what it’s done, looked at it across all of its operations and then defined lines of business: one being financial management, another one being human capital. And what we’re doing is we’re looking at the entire human capital line of business, what people do in the government relative to people and payroll. And what we’re doing is we are, within that context, looking at all the operations, all the business functions there. And now we’re looking to improve across the board, where we can, with better solutions and making the government more efficient and also to, in effect, improve how human capital operates in the federal sector.
Mr. Romeo: Norm, you just talked about the business processes and how they go across the federal government. All of the E-gov initiatives involve coordination of IT systems across the federal government, also. How is OPM working with other federal agencies to accomplish the goals of the different E-gov initiatives?
Mr. Enger: The agencies are right now all signing agreements to use wherever possible the 24 original E-gov initiatives. For example, we are on the Steering Committee, and we’re using E-authentication; another initiative. E-authentication essentially is used to credential or to identify who is on a terminal. That’s fundamental to all of E-gov, because E-gov depends on the Internet, on web-based services. So for example, in this one case, we’re on the Steering Committee and we plan to use the initiative.
The same thing goes with other initiatives. We’re using USA Services, an E-gov initiative, which provides help desk services to operations. So what’s happening here is that all agencies, including OPM, wherever possible, are incorporating and using other E-gov initiatives.
Mr. Lawrence: How much funding has been allocated to the E-gov initiatives?
Mr. Enger: Well, the OPM funding in 2004, we received approximately $10.8 million in appropriation. We also have fee-for-service operations for E-training and recruitment one-stop. So in effect, we have a combination of appropriations, and also, we have fee-for-service operations.
Mr. Romeo: What other critical success factors besides funding are needed to make these initiatives a success?
Mr. Enger: Well, when you have these initiatives, you obviously want agencies to shut down redundant systems and migrate to your initiative. Well, what happens here is you have to give tangible evidence that you have a solution. I think that a critical success factor is not just to say I have achieved success at E-training or USAJOBS or E-clearance, but you have to demonstrate and have a tangible, kick-the-tires proof that you have a solution. So step one in terms of a critical factor is you’ve got to be able to demonstrate a viable robust solution before people will shut down their old or redundant systems.
Another very important factor here is agency participation in the initiative. It’s very, very important that you outreach, that you work with agency partners. You go out and, in effect, you sell, you show what you’ve done and get buy-in from people that you’re asking to migrate to the initiative. So I think these two things: one, really have a solution, not smoke; and also to go out and really build up coalitions of support so people will use and migrate to your solution.
Mr. Lawrence: We left the conversation about E-payroll and the human resource information systems. The one thing I meant to ask was what’s the timetable for their implementation?
Mr. Enger: Well, for example, E-payroll, we have a target of September 2004, this year, for many of the migrations to be finished. We have at this point all of the agencies lined up for migrations, and we will pretty much meet the target of September 2004 for migrations.
Let me also add that in general, the plan of E-government is that by September 2004, the initiatives will graduate. And what that means, they’ll be operational. They’ll have achieved what the original goal was, is that from two years ago, the start, until September 2004, we have actually gone from concept to real operations. So the answer to you with E-payroll is, our target is September 2004, to, in effect, have finished many, many of the migrations.
The other one, HRIS, that you mentioned, this is really starting now. It’s a newer initiative, called a line of business initiative. And in fact, a task force for this is being formed for this as we speak, and I believe OMB and OPM will have an event on March 18th, this month, to announce the formation of this task force. And again, the task force and initiative, they’ll address enterprise solutions for the human capital line of business.
Mr. Lawrence: That’s interesting. It sounds like 2004 will be a busy year.
What’s the future of E-government? We’ll ask Norm Enger of OPM for this thoughts and perspectives when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I’m Paul Lawrence, and this morning’s conversation is with Norm Enger, E-government program director at the Office of Personnel Management.
And joining us in our conversation is Tom Romeo.
Mr. Romeo: Norm, we’ve talked a lot about the current E-government initiatives. In your opinion, what others do you think the future will hold?
Mr. Enger: Well, the vision of E-government is a government that is citizen-centered, not bureaucracy- or agency-centered, results-oriented, and market-based. The goal of E-government is to provide one-stop online access to the citizen to information and services. Citizens should be able to find what they want quickly, in seconds; not in hours or whatever, or days. A good example of this, for example, is the FirstGov website, where a citizen can go to a site and from that one site, they’re tied to all federal agencies; they’re tied to a variety of resources relative to grants, to national parks, to employment opportunities. So what we’re looking for here is to use the web, the Internet, to provide the citizen with very rapid -- three clicks or whatever -- access to a wide variety of accurate information that in effect provides them with first-quality service.
Mr. Romeo: How do you envision the government will conduct transactions across other federal agencies and/or state and local governments?
Mr. Enger: Well, what’s happening is that some initiatives are in effect dealing with the federal, state, and local situation. For example, one Homeland Security initiative is a secure portal that will deal with disaster management; in effect, dealing with disaster management and public safety, E-government is in effect developing systems and communications that link together federal, state, and local governments into one context, into one response to a disaster or public safety challenge.
Mr. Lawrence: Norm, you’ve been working in the field of E-government now for some time. What advice would you have for future leaders in E-government on how to be successful in this field?
Mr. Enger: I would advise future leaders in E-government to be aware that major transformations in federal business systems requires a full recognition of the need to build coalitions of support in affected agencies. Change management is a major factor in the success of E-government. Future E-gov leaders should not focus on technology solutions without recognizing the other dimensions of change necessary for success.
Mr. Lawrence: And how about in terms of a person considering a career in public service? You’ve been in both sectors, and you moved into public service after a long career in the private sector. What advice would you give to somebody interested in joining public service?
Mr. Enger: Well, I think this is a very exciting and challenging time for a young person to join the federal government. Our government faces challenges, even though we are the world’s greatest economy and have the world’s greatest and strongest military force. What is very exciting, and I think E-gov has made this possible, is that we have shown that you can transform government operations in a very, very short space of time. We can show that government can, in effect, reach out and, in effect, become more efficient, more effective, more responsive to the citizen population in a short space of time.
My advice to a young person considering a public service career would be to go and look at the OPM USAJOBS website. The site is www.usajobs.opm.gov. On this website, the person can locate a vast array of educational and job opportunities, all kinds of internships, grants, and job situations. Young people will be able to use the site. They can also on the site develop a job résumé to apply for a federal job.
Let me also add, there is also a Presidential Management Fellow program designed to attract into federal service outstanding young men and women from a variety of disciplines. Again, if the person goes to our site, USAJOBS, they will find more information about this PMF, this fellowship program.
Mr. Lawrence: Well, Norm, that’s our last question. Tom and I want to thank you for joining us this morning and being our guest.
And would you like to tell the people the website one more time, in case they’re --
Mr. Enger: Yeah, the website I mentioned earlier was www.usajobs.opm.gov/; g-o-v.
Mr. Lawrence: Thank you very much.
This has been The Business of Government Hour, featuring a conversation with Norm Enger, E-government program director in the Office of Personnel Management.
Be sure and visit us on the web at businessofgovernment.org. There, you can learn more about our programs and research into new approaches to improving government effectiveness, and you can also get a transcript of today’s very interesting conversation. Once again, that’s businessofgovernment.org.
This is Paul Lawrence. Thank you for listening.
Wednesday, December 10, 2003
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 special guest this morning is Hector Barreto, administrator of the U.S. Small Business Administration.
Good morning, Hector.
Mr. Barreto: Good morning.
Mr. Lawrence: Joining us in our conversation from IBM is Tom Burlin.
Good morning, Tom.
Mr. Burlin: Good morning, gentlemen.
Mr. Lawrence: Hector, perhaps you could begin by talking to us about the Small Business Administration. Could you explain its mission to our listeners?
Mr. Barreto: Sure. I'd be glad to. The U.S. Small Business Administration was created 50 years ago. In 1953, President Eisenhower signed the Small Business Act, and that really created the beginning of what we know today as the SBA. Interestingly, the mission really hasn't changed that much. The mission at the very onset was to aid, counsel, assist and protect all small businesses in the United States, and that's really what the SBA does through all of our programs and services.
Mr. Lawrence: How do you describe the size of the SBA, its budget, its number of people, the people it serves? How do you think about it?
Mr. Barreto: Well, it's approximately $800 million, but we leverage that $800 million in so many ways, with partnerships, with initiatives. Last year, we did pretty close to $17 billion in access to capital. We have a portfolio of loans that we manage, well in excess of $35 billion, and we literally train millions of companies every year, provide billions of dollars worth of contracts for small businesses. So we have really learned over those 50 years how to leverage the resources that we have.
Mr. Lawrence: What are the skills of the folks working at the Small Business Administration? You described so much financially, I began to imagine bankers.
Mr. Barreto: That's one of the great things about the SBA. Because of the folks that work for us and all of the people that are a part of our network, we truly have a cross-section of small business talent and expertise, everything from financial assistance, and that could be microloans, working capital loans, real estate. We even have a Small Business Investment Company Program, which is really our venture capital arm. So very sophisticated applications of that capital.
Entrepreneurial development is really the place that we touch the most small businesses. Last year, we figure that we helped about 2.1 million small businesspersons in the United States, everything from how do you put a business plan together, how do you put a loan package together, how do I do better marketing, how can I use technology in my business, international trade. And then of course, we have a number of contracting programs that help small businesses access that $230 billion federal procurement pie. So it really is a cross-section, a lot of talent and expertise, for the benefit of small businesses.
Mr. Burlin: What about the administrator's position? Could you tell us about the duties and responsibilities that go with that title?
Mr. Barreto: Sure. My responsibility is to make sure that the Agency is reaching more small businesses every year in all of those areas. I am a small business champion. I am an advocate. I like to think that what I do is find the best people for the job and then get out of the way and let them do what they do best. So it is very much an internal and external function. I'm passionate about it. I've been doing it now for a little over 2-1/2 years, and I'm very excited about what's ahead for the SBA.
Mr. Burlin: We know you had experiences before that 2-1/2 years. Could you tell us about that?
Mr. Barreto: Sure. I've been involved with small business all my life. My parents were small business owners, so I like to say that I was born into a small business family. I learned a lot about many types of small businesses. My parents had restaurants, they had a little construction company. They even did a little importing and exporting. So I got a lot of experience at a very early age.
Later on, I went to work for a large corporation in Texas. I worked as an area manager for Miller Brewing Company in Texas for about four years. Then later on, I moved to California and started my own business. I had an employee benefits agency, and then later on, a securities broker/dealer, specializing in retirement plans.
I also got very involved in the community. I was the chairman of the Latin Business Association in Los Angeles, which is one of the largest Hispanic business organizations in the United States, and that's really where I met the President when he was the governor of Texas and got involved with him, and the rest is history, as they say.
Mr. Burlin: That is an interesting background. How did that background prepare you for your current assignment?
Mr. Barreto: One of the things is, I've lived the experience of starting a small business from scratch. I know the trials and tribulations, but I also know the great satisfaction and opportunities that are available by being in business for yourself, and I think that's the reason the President asked me to do this. He wanted somebody that had small business experience leading the SBA. What a novel concept, to have somebody that's actually done it be leading an organization like the one that I have the pleasure and honor to represent. So it's a great opportunity for me because I get to work with my heroes, which are those small business owners all across the United States.
Mr. Lawrence: A lot of people go to work for large businesses, others open their own business. When you think about that choice people make, are there characteristics, or what distinguishes people at that point?
Mr. Barreto: Many, many people would like to be their own boss, but a lot of times, what prevents them from doing that is just really the knowledge, the resources, the tools to be able to do it. I tell people that the first thing they need to do is their homework, because a lot of times, people throw themselves into a new enterprise, they're excited, they're passionate, they've got a great idea, but they haven't thought through all the different stages of the evolution of that business and what types of tools they're going to need to succeed.
But small business people are visionary, they're very entrepreneurial, they're trendsetters. I like to think that they're very courageous and patriotic people who work very, very hard and really have a higher purpose in mind oftentimes when they go into that small business, because they know what they do is going to impact their community, their employees, and, yes, their country.
Mr. Lawrence: Your experiences have been in the private sector, and now for two years now, you're in the public sector. How do you compare the two sectors in terms of management style and approach?
Mr. Barreto: Well, it's very, very interesting. When we came into the SBA, we wanted to take a more entrepreneurial approach. One of the things that we felt was very necessary is to change the perception of what it means to do business with the government. We wanted our customers, which are those small businesses, to really think of us as a partner, not an adversary. We wanted them to think of us as an advocate. We also wanted them to know that we were going to be responsive, because we know that small business people can take a yes and they can take a no, but the maybes kill them. So that's one of the things that we've tried to preach inside of the Agency; we're not a business, but we can think more like a business, and in that way, being much more customer service-oriented, much closer to our customers, and really by that measure really measure our own success by the success of the people that we're serving.
Mr. Lawrence: How about the speed by which decisions are made now? I think a lot of people who have come from business before in this administration as well as previous administrations wake up surprised at the difference in speed. Have you found that to be true?
Mr. Barreto: Well, that's a big challenge, because in business, time is money, and so you want to be able to capitalize on the time that you have and move the agenda as quickly as you can. What you realize is that things are going to take longer. More people are going to be involved in decisions. You're not always going to have all of the resources that you need to fast-forward an initiative or an agenda. So I also tell our folks that it's very important for us to focus in on less things, do less things better. I like to think of the concept of low-hanging fruit, and there is a lot of low-hanging fruit if you can focus in on it and really execute on a good business plan.
Mr. Lawrence: One of the things people are often surprised to discover in the public sector is the scrutiny you get. How have you found that?
Mr. Barreto: There is a lot of scrutiny, but I think the reason for that is that there's a lot of passion around small business. When I first came to town, they told me look, small business isn't a partisan issue. There are just small business solutions. There is not a D solution or an R solution, and I've found that pretty much to be the truth. I think everybody wants the same thing. We might have different ways of getting there. And again, what we want to measure ourselves by is the results, not just the outputs, but the outcomes that come from the things that we are able to offer to small businesses.
Mr. Burlin: What drew you to public service? How did you end up here?
Mr. Barreto: In a way, I've learned about public service from my own parents. My father was the founder of a Chamber of Commerce in Kansas City, Missouri. And then later on, he was one of the founders of the U.S. Hispanic Chamber of Commerce. So I saw my father giving a lot back to the community and to other small business owners. I think he imbued me with that sense of responsibility.
Of course, when the President of the United States asks you to take on a responsibility like this, it's a true honor, and it's something that I wasn't necessarily thinking about. I like to say I was busy minding my own business, literally, when the call came. But I've been so honored to be able to do this work.
Mr. Burlin: As a constituent of the Small Business Administration in your entrepreneurial days, has your perspective changed now that you sit on the other side of the fence?
Mr. Barreto: What has changed is my understanding of what is available to small businesses. I had no idea of the breadth and the scope of the SBA. I felt like I knew a lot about it before I came on board. I had no idea that over those 50 years, the SBA has helped 20 million small businesses in the United States. We have facilitated something in excess of $200 billion. We've helped create some of the best-known names in corporate America that started off as small businesses, and all businesses start of small.
So I just had no perspective as to the kinds of results that the SBA has created on behalf of small business, and that makes me very proud to be attached with an organization like the SBA, and really for that matter very proud of the legacy of the SBA.
Mr. Lawrence: That's an interesting point, especially those numbers you cited.
Why is health care such an important issue for small businesses? We'll ask Hector Barreto of the Small Business Administration for his thoughts when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Hector Barreto, administrator of the U.S. Small Business Administration.
Joining us in our conversation is Tom Burlin.
Mr. Burlin: Welcome back, gentlemen. Hector, let's talk about the President's Small Business Agenda and his vision to create an environment where small businesses flourish. Could you begin by telling us about tax incentives that the SBA is promoting?
Mr. Barreto: Absolutely. This President is very focused on small business, because he understands that small business really isn't small when you consider that there are 23 million small businesses in the United States. They generate 52 percent of the gross output of the economy. And they also generate about three-fourths of the net new jobs and a lot of the innovation that's coming out of the economy. So they're critically important.
The President calls them the engine that fuels the economy, and that's why his Small Business Agenda included this very important jobs and growth package that was passed earlier this year. That really provided millions of small businesses some very necessary and important tax relief, because the President understood that most small businesses are not incorporated; they pay some of the highest tax rates in the country, and when you lower that marginal tax rate from where it was at 38.6 to 35, you return $10 billion into the hands of small businesses. In other words, 80 percent of the benefit of reducing the top marginal tax rate accrues to small businesses.
We didn't stop there. He also quadrupled the business deduction from $25,000 to $100,000. So a lot of the purchases that small businesses were delaying because they were worried about if the economy is going to turn around quick enough, they're making now, and that's something that's helping get the economy going again, and also helping those small businesses create a lot of those new jobs that we need so desperately.
Mr. Lawrence: Expanding and improving health care coverages for small business employees is also a part of the President's agenda. Health care insurance can be very costly for small businesses. How is the SBA thinking about this?
Mr. Barreto: It not only can be, it is very costly for small businesses. I travel all around the country and talk to small businesses every day, and this is high on their radar screen. They tell me oftentimes that they're getting double-digit increases every single year whether they have a claim or not, and they're worried about it. The majority of folks that don't have health coverage or are underinsured either work for a small business or have a spouse that works for a small business.
Sixty-five percent of small businesses that don't have health insurance coverage say that they would gladly buy it if they could get access to affordable health care. So the President has proposed Association Health Plans. That is legislation that's currently working its way through Congress that allows small businesses to pool together, to band together the way that union employees can, the way that large corporations do, and really negotiate the best rates and the best benefits. This is something very important. It won't solve the whole health care crisis, but it goes a long way to providing those small businesses with the kind of coverage and the kind of access that they desperately need.
They need it for themselves and their families, they need it to attract, and they need it to retain, employees. The Department of Labor believes that this could save as much as 25 percent off of the cost of insurance year one. The House of Representatives has passed it and we're waiting for the Senate to take it up, and we hope that they will and that they'll pass this very important legislation soon.
Mr. Burlin: Hector, I'm sure many of your constituents have the perception that Washington is synonymous with red tape. Can you tell us what the SBA is doing to cut red tape, to streamline the processes?
Mr. Barreto: Absolutely, Tom. We're doing a lot. We're using technology more now than we ever have before. We've streamlined the time that it takes for somebody to get a loan with the SBA. We're providing a tremendous amount of information now online so that people don't have to send us a phone book of forms just to get into one of our programs or to get registered, and it's really working. Time is money, especially for small businesses, and for a lot of our partners on the lending side. We work with over 6,000 lending organizations or banks, and we're also increasing the distribution channels, adding more partners to that. So we need to make sure that we can do it quicker, better, faster than we ever have done it before, and so that's really helping. It's one of the reasons that we're seeing the kinds of increases in our loans and our technical assistance and our contracting programs.
Mr. Burlin: You mentioned earlier that every business starts as a small business, and although they're household names today, I think many of our listeners would be surprised to learn that such firms as AOL, Staples and Outback Steak House all received in their formative years help from the SBA. Can you tell us what the SBA is doing to really empower these entrepreneurs of today?
Mr. Barreto: Absolutely. We don't want to rest on our laurels, and we're very proud of the fact that we helped those companies and many, many others, companies like Nike and Intel, Sun Microsystems, Compaq Computer, Ben and Jerry's Ice Cream, Callaway Golf, and many, many others. They all were very small companies that came to the SBA at a time when they needed some help. Either they needed some lending assistance, access to capital, if you will, a loan to buy a building. Some of these businesses received venture capital through the Small Business Investment Company Program. Some of them got technical assistance through our service corps of retired executives or small business development centers.
So we're very proud of that, but we want to make sure that we're helping the next generation of those companies, and as I said, all companies start off small. Coca-Cola and Ford Motor Company started off as small businesses, and they had some trials and tribulations before they were successful.
We also want to make sure that we're helping those companies that are coming from the emerging markets, which is really the fastest growing segment of small business; from women-owned businesses, which now represent 40 percent of all small businesses in the United States. So it's critically important. The three C's is what I call it. Small businesses have always needed capital, capacity, and contracts, and the SBA can deliver and provide all three of those.
Mr. Lawrence: You talk about the assistance. SBA provides small businesses with financial assistance, I think it’s capital under your three C's. But obviously, there are many more small businesses who would like assistance, so let's go through that process. How does the SBA figure out who gets a loan?
Mr. Barreto: We want to talk to any small business who is ready to take their business to the next level. Business is evolutionary. So, for example, a lot of times, people don't realize that we can do very, very small loans, microloans, which could be $10,000. We can do working capital loans, which could be hundreds of thousands of dollars, if not a million dollars, for fixed costs. We can do real estate loans, especially right now when interest rates are so low; a lot of businesses want to buy their building, expand their building, but a new facility. We can loan for heavy equipment and machinery. This is especially important in the manufacturing sector. We can connect them with venture capitalists so that they can expand their business across state lines and go national or international. So there are a variety of different loan programs that are available.
It's very easy. They can either contact us at their local district office, and we have a district office in every state in the union by law; we're in every major city. We work also with about 11,000 retired executives. Those are our SCORE volunteers that can help them. We work with 1,200 small business development centers that are in every county in the country. We have women business centers, business information centers. A very easy way to get information on all of this is just to go online to sba.gov, which gets 1-1/2 million visitors every single week to the website. So there's a lot of information out there. They can call us on the 1-800 number, 1-800 UASK-SBA. The bottom line is if you're a small business or thinking about starting a small business, we'd like to talk to you because we want to be your partner.
Mr. Lawrence: What are the management challenges of making sure that money is used as it's intended?
Mr. Barreto: If you're talking about default rates or improper usage of money, we don't see that a lot. We have a very good underwriting program. Oftentimes when a small business gets to the point where they're going to get an SBA guaranteed loan, they've already gone through a couple of levels of preparation. They've already done their business planning, they've gotten some counseling, they've worked with their lender. So a lot of times, by the time that small businesses are getting to the point where they're going to get that loan, they're already been taken through that paces. That doesn't have to take a long time. But what we know is that when a small business is prepared, when they get this kind of technical assistance on the front end, their chances of success multiply exponentially, especially in those first few years when they're so vulnerable.
Mr. Lawrence: One of the things that I was interested to learn as we were preparing for this was that another service SBA provides is disaster recovery assistance. I wonder if you could tell us about this program and how it was used to help the victims of the California wildfire.
Mr. Barreto: I was just out in California, that's my home state, and we were able to help many homeowners that lost their residences. A lot of people don't realize that the SBA provides loans not only to small businesses in times of disaster, but we also do loans for homeowners or even renters who have lost personal property. And the California fires were a major disaster. We lost close to a million acres of land, something in excess of 4,000 residences. We're not even sure how many small businesses may have been lost or affected by the disaster yet. As of a couple of weeks ago, we had already topped $100 million in loans, and we know that's going to climb a lot.
But we've been there. We were there during Hurricane Isabel. A lot of people don't realize that we also made a tremendous amount of loans after 9/11, not just in New York and around the Pentagon, but to small businesses around the country that were affected through no fault of their own because of something that happened around 9/11. Maybe it was a business in an airport or a travel and tourism company, or a small aviation company, or maybe they were doing business with somebody in the World Trade Center. We did about $1.2 billion and helped save over 10,000 businesses and literally tens of thousands of jobs that would have been lost if we wouldn't have been able to help them.
That's something that the SBA has always done. We really are America's disaster bank, and whether it's a flood, a fire or an earthquake or a terrible disaster like 9/11, the SBA is there to help.
Mr. Lawrence: That's an interesting point, especially about the loans around 9/11.
The management focus of this administration flows from the President's Management Agenda. How is the SBA doing with the issues called out in the PMA? We'll ask Hector Barreto of the SBA to bring us up to date on this when The Business of Government Hour continues.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Hector Barreto, administrator of the U.S. Small Business Administration.
Joining us in our conversation is Tom Burlin.
Hector, can you give us an overview of the SBA's strategic management goals and how these goals were developed?
Mr. Barreto: A lot of our goals are very consistent with the President's Management Agenda. We want to make sure that we're managing our human capital. That's so critically important for any organization. Small businesses deal with it all the time. In other words, what kind of succession planning do you need to do; what does the next generation of leaders inside your organization look like. And that's critically important, especially to an agency like the SBA, where the average age of an SBA employee is 49 years old with 20 years' experience at the Agency. That's a two-edged sword. We're very happy to have so much experience, knowledge, compassion and commitment. But we also know that folks will move on. They'll retire or they may move to another agency. So we constantly have to be concerned with that.
It's also very important, as I mentioned before, that we use technology to reach more small businesses. Government is not getting bigger. We're all asked to do more with less. Technology can be a great leveler of the playing field, a great tool for us. So our e-government initiatives are very important. Eventually, we'd like our clients to be able to access all of our programs online if they choose to, and not have to necessarily get in a car and drive someplace or fill out a bunch of forms.
The financial management of our agency is very important as well. Every resource is critically important, especially in this environment. So we need to validate how we spend those resources and validate the results that we get out of our programs. Our budget needs to be integrated with those kinds of results.
We also need to look and make sure that whatever it is that we're doing at the Agency is the most efficient and effective way possible. I mentioned to you that the SBA really learned to leverage its resources. In the good old days, which I'm not sure if they were the good old days, we did a lot fewer loans because we were doing those directly. We don't do direct loans anymore. We do those through 6,000 partners. In the good old days, if you wanted technical assistance of counseling, you had to go to an SBA office. Now you can go to 1,200 small business development centers, you can get counseling online, you can get all kinds of expertise and knowledge from our retired executives that work for us. So there are lots of opportunities to think outside the box and to get better results for our customers. So everything that we're doing is really aligned with those very key President's management goals.
Mr. Burlin: Hector, you talk about measurements and results, and this administration is strongly supportive of the need to accurately measure and record that performance. Can you tell us what the SBA is doing in the way of measurements and tracking that performance?
Mr. Barreto: Absolutely. It is true that you get what you measure, and we've been measuring everything that we do. That was a commitment that we made at the very beginning. We said look, there is not going to be anything that's off the table. We need to look at everything that we're doing, and we need to hold our people accountable and make sure that they also have the tools that they need to be successful, and that's what we've done.
One of the things that we were able to do is implement an execution scorecard. That's what we call it at the SBA. It was mirrored after some of the scorecards that's taking place, again, on the President's Management Agenda, but we try to take it a step further. There was a great book that we read about a year ago called Execution by Larry Bossidy. It was a wonderful book that that opened our eyes. There were a lot of things that were very applicable to the way that we were doing business.
The net results are that because we have been doing that, we have been able to accomplish a lot of great things. For example, when I first came into the SBA, the average-sized loan was a quarter of a million dollars. We know that most small businesses don't need a quarter of a million or a million. Many businesses are capitalized with as little as $50,000. So we worked with our lenders to get that average loan size down. It doesn't mean that we're not doing large loans. We still have a great program where we do a lot of multimillion-dollar loans, which is really our real estate loan program.
We're reaching more small businesses, as I said, online. Last year, we trained 700,000 small businesses online. So many, many things that have been accomplished through creating some very specific objectives that we measure every day on our scorecard have really yielded great results. Just again to touch on the loans, because that's what we're known for, we broke a record this year. We did more loans this year than we ever have in our 50-year history. We were up 30 percent. But what was exciting to me is we were up in every single category in every single demographic group. So we had a wonderful year and we're looking forward to raise the bar again this next year.
Mr. Burlin: That's interesting, you said you get what you measure. Setting those targets and determining where you need to be has to be challenging. I'm sure there are many demands on your agency. How do you go about setting those targets?
Mr. Barreto: We try to do it in a very collaborative spirit. We work very closely with the folks that are on the ground where the rubber meets the road, which are our district offices and our district directors. We have a goals team that's constantly meeting and making sure that the goals that we have are not only consistent with our strategic plan, but that are also feasible and doable. So there is a lot of exchange. At the end of the day, the goals teams makes recommendations. They need to be ambitious and "stretch goals," and then we approve those and we hold them accountable to them.
Mr. Lawrence: At the beginning of the show, we talked about the overall mission of the SBA, which is increasing the health of small businesses in America. How do you measure the success of that goal?
Mr. Barreto: We get a tremendous amount of feedback from our customers, which are those small businesses, and we like to say that we measure our success by their success, and it's very important. One of the things that we look at, for example, are a lot of the bottom-line indicators. Are these businesses growing? Are they hiring more people? Is their business longevity increasing? Those are all bottom-line indicators. I know that when I was in small business, those are the kinds of things that I looked at. So we're measuring a lot of that as well.
Again, doing a tremendous amount of outreach, asking for a lot of input, and really listening to our customers. I learned a long time ago that you learn everything that you need when you listen to your customers versus talking at them. Your customers are always going to tell you what they need to be successful. So we've done a lot of that. But not just that. We've implemented a lot of those recommendations, and that's one of the reasons that I think that the SBA is more visible than it probably has been in a while.
Mr. Lawrence: In terms of the goals, I think longevity is great and the profitability, but is also growing into a big business one of the things you look at?
Mr. Barreto: Not every business wants to grow into a big business. Every business has different goals. Some folks are pretty satisfied at the level of success that they've attained. They just want to maintain it. They don't want to lose it, or if they can find better ways of doing business. I a lot of times say small businesses don't know what they don't know, and it's not their fault. They're busy, so that's really where the SBA can come in and I think be a very important strategic partner for them.
Mr. Burlin: Hector, we're all limited in some way in our resources, whether it's human capital or it's financial. How do you link those resources and the use of those resources to the results, to the performance that you achieve?
Mr. Barreto: Again, what we want to make sure of is that we're doing more of everything. So it's very easy for us to measure did we do more loans this year, did we do more loans in the fastest-growing communities, are the kinds of services that we're providing to those small business owners what they want. Something that's very important for a small business, they tell me all the time I need the same thing that big business needs. I need more business, so help me get more business. So we've done a lot of things around that as well, trying to create that environment that you referenced.
I think the President says it the best when he says the role of government is not to create wealth. Government doesn't create wealth, Americans create wealth; small businesses create wealth. The role of government is to create an environment where entrepreneurs who are willing to take a risk, an environment where they're willing to risk capital, an environment where they're being heralded and celebrated. So we've spent a lot of time over the last couple of years making sure that the right environment, the right conditions are there for those small businesses to be optimistic about their future, and to also take their business wherever they want to take it.
Mr. Burlin: You come from that community, and you say a lot of your results and your feedback comes from the community. Both as the administrator and having come from that community, do your old friends call you and give you a report on your results?
Mr. Barreto: Every day. Small business people are some of the most passionate people that you're ever going to meet. They're not shy. They're going to tell you, if you're doing well, they're going to tell you what you need to be doing more of, and we try to listen to that as much as we can and again apply a lot of what it is that we have learned.
By and large, I think we're making some good progress. We're not satisfied. We're not again resting on our laurels. We think that the best of the SBA is yet to come. We want the SBA to be strong and very relevant in the lives of these small businesses for at least another 50 years. So I think the kinds of things that we're doing right now are very important to plant the seeds for the future.
Mr. Burlin: You talked about change and the importance of change. The buzzword is transformation, and we know that this is across government. Can you tell us a little bit about transformation in the SBA?
Mr. Barreto: Sure. It's very important. I tell our folks all the time that small businesses are constantly changing. They know that you're either moving forward or you're moving backwards. There is no such thing as staying in place. So as those small businesses have changed over those 50 years, and they have changed a lot and there's a lot more of them, we need to change too. The good news is that SBA has been changing a lot over the last few decades. There are things now that we do that we were never able to do before, and we need to keep doing that.
One of the things that we're looking at is the way that we distribute our programs and our services, especially out in the field. One of the things that we want to make sure that we're doing is that we're freeing up those SBA employees to be out there in those communities to reach out for more small businesses. Not wait for the small businesses to come to them, but for them to go out and find those small businesses, and that's what they're doing.
What they've told me many times is we're as passionate about small business as you are, but a lot of times, our hands are tied. There's a lot of process, there are a lot of responsibilities, there's a lot of bureaucracy that we're responsible for, and if we have to do that, we can't be out there developing these new partnerships and helping these small businesses. So we're looking at ways that we can take a lot of that away from them, and we've found some ways to be able to do that. So that's one of the things that we're very excited about.
There is not a recipe or a cookie-cutter approach to every district office. They're all in different parts of the country and they all have different approaches. But we've been able to be very flexible and work with them and really find some creative strategies on how we're able to reach more of those small businesses.
Mr. Lawrence: That's an interesting point.
The SBA is celebrating it's fiftieth anniversary. What do the next 50 years hold? We'll ask Hector Barreto of the SBA when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Hector Barreto, administrator of the U.S. Small Business Administration.
Joining us in our conversation is Tom Burlin.
Mr. Burlin: Hector, you've talked a couple of times about how technology is enhancing the effectiveness of the Small Business Administration, and computer network security is a critical issue, not just to large business but small business, and probably a challenge across the digital divide to many of your clients. Can you tell us a little bit about how you're educating your constituency in this very important practice area?
Mr. Barreto: We think it's very important. A lot of this education again happens through our technical assistance providers, our small business development centers, our retired executives, but we've also done some new things. For example, we're working closely with Tom Stemberg of Staples. Tom Stemberg was one of those small businesses that came to the SBA for assistance and of course now is a great success story. He is very interested in this issue, and we've been doing some town hall meetings in Staples stores around the country, and also producing a newsletter together to give small businesses some tips on how they can protect their business from cybertheft and from other problems that they may encounter.
There's an old saying in business that no small business plans to fail, but many small businesses fail to plan. So to the extent that they can have contingency plans and really understand where they're exposed, that is going to help them a lot. We saw that after 9/11. The businesses that were prepared, that had a contingency plan, could get back on their feet very quickly. Some that didn't never made it back. So this is a very important issue for a lot of small businesses, and a lot of times they don't realize how exposed they are.
Mr. Burlin: And they're highly dependent on it. As you've talked about having more and more access to the SBA through their electronic means, it becomes even more important. In the Small Business Administration, you talked about your geographic dispersion, the district offices across the United States. You maintain several resource partnerships. Can you describe a little bit about the resource partnership and how you plan to use that to leverage your presence?
Mr. Barreto: Absolutely. We're great believers in public-private partnerships. That's the way that we're able to leverage these resources. I mentioned to you all the things that we're able to do with all these partners by having the banks. This year, we also opened up our loan programs to credit unions. We'd never done that before. Many folks go to the credit unions to get small business loans. They are working, but they also have a business on the side, so that was a great thing. We're training more people, as I said, through the small business development centers, which are independent from us. There are 1,200 of them. We provide the financing and a lot of the best practices. We work with the retired executives. That's another partnership.
We're increasingly working with more and more corporations, because corporations are also very focused on the small business community, and they have partnered with us so that we can reach them together to educate them and inform them and really develop some success stories with these small businesses. So that's very important, and that's going to keep going on in the future, because it's critically important and it just makes a lot of good sense.
Mr. Lawrence: Earlier in our conversation, you talked about the SBA celebrating its fiftieth anniversary this year. What's your vision for the SBA over the next 5 to 10 years?
Mr. Barreto: We want SBA to do more. We want to reach more small businesses. As I said, there are 23 million small businesses. Many of those businesses weren't around 5 years ago or 10 years ago. In the cases where we need to, we want to reintroduce ourselves to small businesses, especially if they think that they already what SBA does, kind of like the way I did. I thought I knew all about SBA and I really didn't. In other cases, we need to reintroduce ourselves, so we'll do much more outreach than we ever have, and we do a lot now, but we'll do even more. We'll reach more people through the Internet. That's just a great way to reach people. As I mentioned to you, we're getting about 1-1/2 million visitors to that website every single week. We'll also make that a very effective tool for them so that they can apply for our programs. I think there will come a day when small businesses will be able to go online to get their loans. They're already going online to register for our major events, to register for our contracting programs, to get forms that they download. So there are a tremendous amount of things that we can do there.
Also, we want to do very impactful events across the country. This year, we've been doing regional events. We've also been doing some major procurement events, where we actually take the buyers out of Washington, D.C., and take them to Main Street. This has enabled us to set up more than 10,000 one-on-one procurement appointments for small businesses. It really takes the needle out of the haystack when you're talking about trying to do business with the government. That's been a very effective initiative. We want to continue those kinds of opportunities for small business.
Mr. Lawrence: Have the trends in the small businesses that are your customers changed over time? Was a small business 10 years ago the same people now?
Mr. Barreto: I just think that they're in more industries. There is not a particular sector where you find all the small businesses. It really cuts across the board. You have high tech companies, you have manufacturers, you have service providers, consultants, retail, you name it. Many more businesses are getting involved in international trade. People don't realize that. Ninety-seven percent of all businesses that do international trade are small businesses. That's over 200,000 companies. That wasn't the case 5 or 10 years ago, and so you're starting to see it.
Also, the growth that you see in different communities. I mentioned that the fastest-growing segment are the emerging markets, which are the minority communities. They represent 15 percent of all small businesses in the United States. Women represent 40 percent. Those weren't the same kinds of percentages when the SBA first started in 1953. So that's exciting. That's breathing a lot of new energy and enthusiasm into the small business sector.
Mr. Burlin: Hector, let me take you to the other side of the spectrum. I'm a little bit envious actually of your day, as least as I imagine it, because I know when I get to work with small business and get to sit in front of folks, you talked about their passion and enthusiasm for their business, are some of the most reinvigorating days that I spend at work. The question is, large companies, how can they engage to be more proactive in this process of engaging small business?
Mr. Barreto: Many of them are already doing it. IBM does a great job of focusing on business solutions for small businesses, and I know that they want to do a lot more. I think that small business is really on the radar screen more now than ever before. In some cases, I think SBA had a hand in putting the spotlight on the importance of small business, and many more people have gotten involved. Obviously, the SBA would love to be a partner with any organization that wanted to reach out to small businesses, and we hope that they'll give us a call. But there are so many opportunities to do this. There are so many organizations that represent small businesses, and so there is really no excuse for those that are really committed to helping small businesses not to be involved, especially now.
Mr. Lawrence: Hector, you've had an interesting career, primarily in the private sector, but now coming to the public sector. So I'm curious, what advice would you give to somebody interested in joining the public sector?
Mr. Barreto: The first advice is it's not about you. That's the first advice. When you come here, you really need to be coming from the place of wanting to serve, to wanting to make a contribution. I think it's also important to be passionate about your work. I would say that in any activity that you're involved with with regards to your career. But when you're doing it not so much as a job but as a higher purpose, you can get so much fulfillment out of it and your days can fly by, and it's a lot of fun. It's fun to work with the level of people that we get to meet and work with every single day. It's an exciting, exciting opportunity, and it is very fulfilling.
Mr. Lawrence: Hector, I'm afraid we're out of time. Tom and I want to thank you for squeezing us into your very busy schedule.
Mr. Barreto: Thank you very much. I hope that all that listening that are interested in the SBA will reach out to us at sba.gov, or you can also call us at 1-800 UASK-SBA. Paul and Tom, thank you very much for this opportunity.
Mr. Lawrence: Thank you.
Mr. Burlin: Thank you.
Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation with Hector Barreto, administrator of the U.S. Small Business Administration.
Be sure and visit us on the Web at www.businessofgovernment.org. There, you can learn more about our programs and research into new approaches to improving government effectiveness. You can also get a transcript of today's very interesting conversation. Again that's www.businessofgovernment.org.
This is Paul Lawrence. Thank you for listening.
Thursday, March 25, 2004
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 about the Center 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 Dr. Carolyn Clancy, director, Agency for Healthcare Research and Quality, which is in the Department of Health and Human Services.
Good morning, Dr. Clancy.
Dr. Clancy: Good morning.
Mr. Lawrence: And joining us in our conversation is Vernecia Lee, also from IBM.
Good morning, Vernecia.
Ms. Lee: Good morning.
Mr. Lawrence: Well, Dr. Clancy, I’m curious, could you describe the mission of the Agency for Healthcare Research and Quality for our listeners?
Dr. Clancy: I’d be delighted. The Agency for Healthcare Research and Quality, or AHRQ, as we call it, is a research agency that’s part of HHS, as you noted. And our mission is to improve the quality, safety, efficiency, and effectiveness of health care for all Americans. In other words, we conduct and support research and work with partners to use the findings to make sure that health care is itself made as good as possible.
Ms. Lee: Dr. Clancy, how does AHRQ fit into the Department of Health and Human Services?
Dr. Clancy: We’re one of the 13 agencies of HHS, which is a very large department, and one of a smaller number of research agencies. So we work very closely with a number of the other agencies in the Department, particularly the Centers for Disease Control and Prevention, National Institutes of Health, the Food and Drug Administration, and we also work with the Health Resources and Services Administration, or HRSA, with their community health centers and so forth.
Mr. Lawrence: How would you describe the size of AHRQ, budget, employees?
Dr. Clancy: Our budget is $304 million, and we have just under 300 employees, so I often tell everyone that they’re a million-dollar employee.
Mr. Lawrence: And you described so many interesting things when you were going through the mission. What are the skill sets of the employees?
Dr. Clancy: Oh, a very, very broad mix. The research we support and do internally is actually multidisciplinary, so it draws on clinical science. So we have doctors and nurses and other health care professionals, including pharmacists. We also have a very broad array of social scientists, quite a few economists, sociologists, psychologists, and so forth. We also have people with a broad array of administrative skills.
Ms. Lee: What are the major areas of research currently being funded by AHRQ?
Dr. Clancy: A big, big focus for us is patient safety. You may have seen the Institute of Medicine’s first report on patient safety published in 1999, “To Err is Human.” When that report first came out, my brother-in-law had knee surgery about a month later. And he came home with “yes” on one knee and “no” on the other, and suddenly my family knew that what we did was, like, absolutely critical. Patient safety and errors I think are that tangible to members of the public. That’s a big part of what we do.
A lot of the research we support focuses on improving quality of care broadly; also focuses on promoting access to effective services. So we support a lot of data development that we use internally and that many others use as well to try to track what we’re spending on health care. Are we getting as much value as we could for our pretty substantial investment in health care services in this country? And we also focus on sort of the nuts and bolts of how to improve quality and safety in health care.
Ms. Lee: Why did you decide to even study medicine?
Dr. Clancy: A really good question. I decided when I was much, much younger than I had any idea what doctors did, and I don’t come from a medical family. But I think I had a gut instinct which is still pretty relevant today, which is that it was about bringing scientific skills to a job where you could work with people, and that’s still very much what I like about medicine.
Ms. Lee: Can you tell us about your experience as a Henry Kaiser Family Foundation fellow at the University of Pennsylvania?
Dr. Clancy: Sure. Yes, I’d be delighted. When I was doing my residency, I think I didn’t really have a clear career plan in mind. I thought I’d go into practice, but really hadn’t given it much thought at that point. Being up on call every third night, most of my thoughts were about sleep. And a faculty member came to me and suggested that I consider academic medicine. And he said if you don’t want to do that, that’s fine, but you need to make a decision, because I think you’d be really good at it. And my problem, of course, was that I thought all the subspecialties of internal medicine, like oncology and cardiology and so forth, I thought they were all great up to a point. The minute it got to bench and lab research, I was a little bit less interested.
And then I found out that the Kaiser Foundation was supporting fellowships in general medicine and, in particular, during this two-year period, you would learn more about doing research. And at that point in time, I’d gotten very interested in clinical decision-making; how do you make decisions when you’ve got a multiple array of factors, both related to the patient as well as the particular problem. Internists specialize in diagnosis, so that had a lot of appeal to me.
And in addition to that, the fellowship also gave us some time to learn how to teach. In medicine, that’s sometimes sort of assumed that you’ve watched the people ahead of you so you know how to do it automatically, but this was a little bit more focused attention to that.
So the fellowship was really fabulous. I actually got to go back to my birthplace and I met a terrific mentor, John Eisenberg, who ran the program. And subsequently, he and I worked together again at the Agency in 1997.
Ms. Lee: Can you tell us how you started with the federal government and a little bit about your progression, your career’s progression?
Dr. Clancy: Sure. When I finished my fellowship in Philadelphia, I took a job in Richmond, Virginia, at the Medical College of Virginia, which is now part of Virginia Commonwealth University, and it was great. I got to teach and do research and also see patients, and I also ran the medical clinic for the residents. Because of my interest in clinical decision-making, I became very interested in a kind of research which actually launched the Agency in 1989, which was looking at variations in practice.
There was work going on in Northern New England done by Jack Winberg and others showing that if you lived in one county, you were more likely to have surgical procedures done than if you lived in a neighboring county. So for example, you were more likely to reach age 50 with an intact uterus very much influenced by where you lived, and I thought this was quite amazing. And one of the theories underlying, trying to explain the variations in practice was that you saw the greatest variation where the scientific knowledge base was least well-developed. So it isn’t that people were guessing or flipping coins about what to do, the knowledge base just wasn’t that good. And part of the genesis of creating a new agency in 1989 was indeed to develop a better knowledge base, and to use that knowledge to help clinicians make better decisions. So that was a very good fit for my interests.
Mr. Lawrence: And then how did you get to be the director?
Dr. Clancy: I think some of my staff think just longevity. When I first came there to work in the primary care group, because that is the kind of practice I do and still find it very, very intriguing. This is when people come in and you get to translate often vaguely defined symptoms -- I don’t feel good or I’m weak or I’m tired -- and try to figure out what’s going on. And I still find that utterly fascinating. So they were starting a primary care research group. And we know very, very little about the natural history of a lot of these symptoms as well as how to make good decisions in primary care. So I thought that was terrific, and I eventually became director of that group.
And then one of my colleagues left, so I switched and ended up directing another center focusing on outcomes and effectiveness research. Now the two areas are somewhat related, outcomes and results of health care. You would think we know about that because we’re always hearing about information in health care. Oh, good, you got a lab test and you were better. These end results are really focused much more on the patient’s perspective. So for many chronic illnesses, for example, we assume that if your lab test is better, so are you. This is actually trying to figure out if that’s true and developing better measures, which are usually very short surveys to get the patient’s perspective on health care.
And then in 2002, John Eisenberg passed away very young from a terminal illness. And at that point, Secretary Thompson asked me to become acting director and, a year later, appointed me as permanent director.
Mr. Lawrence: Tell me about your own career, because as you described your progression, I saw your early years as a practitioner delivering medicine, and now you’re a director. So I’m guessing you do less of that, but more direct people who actually do the research and the like. Is that correct to say in terms of the progression from doing versus managing?
Dr. Clancy: That’s true. I started off in an academic job, so I was doing a little bit of everything: some patient care, some administration because I was the medical director for our clinic, and directed the residents education there, which was a lot of fun. And in addition to that, I also developed some early programs to try to assess the quality of care we were providing, and to put in place some strategies to try to improve that care, which is a big part of what we do at the Agency. So again, there was sort of a natural link between what I was doing then. And I spend a fair amount of time in direct patient care.
When I came to the Agency, I still continued to see patients a half a day a week, but because I had fewer distractions, if you will, from clinical -- the demands of clinical care or people calling at odd times and so forth, I had a lot more time to write. So in terms of doing research, it was a very productive time for me. But you’d be right, right now, I tend to direct more, or try to make sure that the various projects fit together, that we’re not missing pieces and so forth.
Mr. Lawrence: How would you compare the different management skills you use as a doctor versus now as the director?
Dr. Clancy: Well, it’s interesting. In some ways, particularly in my administrative role at the Medical College of Virginia, they’re very similar, trying to get people to work effectively in teams. Medicine culturally is a very individual enterprise, you know. Throughout medical school and training, the guiding metaphor is, you know, it’s you and your patient and you’re going to figure out the problems and then ride off into the sunset, so to speak. In reality, much of medical care is very much a team sport. If I see a patient who needs help, I may need to draw on other colleagues, I’m going to need to be working with nurses and others. So to that extent, there’s a lot of similarities.
Clearly, you rarely see 300 patients in an exam room at one time. It would be more like a coliseum. But many of the issues are quite generic, I think, particularly as it relates to teamwork. Most of the research that we conduct and support draws on multiple disciplines.
Mr. Lawrence: That’s an interesting point about the teamwork.
What’s the quality of care in our health care system and how might it be improved? We’ll ask Dr. Carolyn Clancy, director of the Agency for Healthcare Research and Quality, when The Business of Government Hour returns.
Mr. Lawrence: Welcome back to The Business of Government Hour. I’m Paul Lawrence, and this morning’s conversation is with Dr. Carolyn Clancy, the director of the Agency for Healthcare Research and Quality in the Department of Health and Human Services.
And joining us in our conversation is Vernecia Lee.
Well, Dr. Clancy, you mentioned the Institute of Medicine and the study that talked about that the current health care system has some quality problems that result in inadequate delivery of services. Given the mission of AHRQ and the current structure, what role do you see AHRQ playing in sort of redesign or working on the problems?
Dr. Clancy: Essentially, we see the Agency as a science partner to those who provide health care, and not just those who provide health care, but those who are buying health care services; for example, employers who are buying on behalf of their employees or other large purchasers. And we’re also very helpful to public programs, such as community health centers, the Medicare and Medicaid programs, and so forth.
I think most people are aware that in this country we have an embarrassment of riches in terms of biomedical knowledge, and all kinds of knowledge to help us provide the best health care in the world, and by some metrics, we don’t. And by any metric of evidence-based care is what we would call it, matching the content of that science to the care that’s provided, we often fall short. So part of the Agency’s role is actually helping develop the metrics for assessing quality of care.
In addition to that, we support a lot of studies that try to address the question why aren’t we doing a better job? Let me give you an example. Recently, we issued the first of an annual series of quality reports. It’s sort of a national report card on quality of care, and it’s about the most comprehensive report ever produced. It includes care provided in hospitals, in outpatient settings, nursing homes. And the Institute of Medicine was very helpful to us in providing recommendations about the content of the report and the framework and so forth.
But I mean, there are stunning examples in there of where we collectively could be doing a better job. So a little less than one patient in four with diabetes has had all recommended tests in the past two years. Of all the people who are admitted to the hospital and have a heart attack, about 48 percent are given advice to quit smoking before they’re discharged home. Now I’m a doctor, I know what’s going on here. Everyone assumes that this is so self-evident they don’t need to say it, or that one of their colleagues has already covered that. But the reality is if you ask patients did anyone talk to you about quitting smoking, less than half the time, this happens.
You know, a lot of people are not getting preventive care that they need. And in general terms, we’re doing well when we’re providing the right care somewhere between 80 and 90 percent of the time. Well, what’s going on here? We have a world-class scientific enterprise, we should have a world-class delivery system. And providing the scientific knowledge and providing it at a time when people can use it to make decisions, that’s where I see us being a part of the solution to improving health care.
Ms. Lee: Dr. Clancy, you just mentioned a little bit about the Institute of Medicine. They basically said that there are several ways that we could improve it, and one was through health information technology. Can you briefly describe what health information technology is and why it’s considered important?
Dr. Clancy: Very broadly, health information technology consists of an array of components of information and communications technology that can be applied to improve health care. So that can include everything from little handheld PalmPilots; there are software programs where we can beam information to doctors about the latest evidence about preventive care, for example, or information about symptoms related to potential bioterrorist attacks. So that’s one example of information technology.
More sophisticated examples are computerized physician order entry. And when I first joined an academic medical center, they had that kind of system, and it was quite different than simply writing orders in charts. Everyone could see and, more importantly, read the orders that you wrote. There are full-blown electronic medical records, which can include reminders in them so that I don’t just have to rely on my faulty memory in the article I read two weeks ago, but actually, it reminds me based on the content of the patient’s particular information. It also includes e mail between patients and doctors, telemedicine. So it’s a broad array of technologies.
Ms. Lee: Dr. Clancy, so much of what AHRQ does is around patient safety. The Institute of Medicine estimates that between 44,000 and 98,000 lives are lost annually due to medical errors. What role do you see AHRQ playing in improving patient safety?
Dr. Clancy: It’s a really important question and one that we focus on all the time because of the urgency of the problem. First, just to be clear about one point, the 44- to 98,000 number comes actually from two very large studies that were conducted in New York state and then repeated in Utah, actually looking at the malpractice problem. The question then was is bad care what leads to lawsuits? And it turned out that the overlap between poor care and lawsuits was pretty modest. In other words, a lot of people get poor care and don’t sue, and a lot of people who sue have not received poor care. So this was quite a breathtaking revelation. And when the Institute of Medicine published their report in 1999, they made those facts pretty glaringly obvious.
But the point is that that number applies to hospitalized patients. We have very little systematic information about what happens in outpatient settings in nursing homes, in other types of settings, and, very importantly, I believe, at transitions in care. It’s a lot of opportunities to not communicate information effectively at those transitions, which is another place where information technology could be helpful. So our research spans a spectrum from trying to develop better information about those other settings to realize just how far and deep the problem is, to focusing on strategies to improve health care right now.
So for example, in the latter category, we developed a campaign to help patients and their families understand what they can do right now to improve their health care, called “Five Steps to Safer Health Care”; fairly basic commonsense things that I can tell as a physician never happen or rarely happen. Always write down the names of the medications you’re taking, all of them, and bring them with you when you come to see the doctor. Now, you can always tell an internist office because you’ll see a lot of people sitting out in the waiting room with little brown bags, but those patients have been trained.
More often than not, what’s happening is patients are seeing several different doctors. For example, they might see a specialist for their heart problem and have a primary care doctor and then maybe had to go to an orthopedist because they had an injury, none of whom have an easy way to share information with each other. They tend to send each other letters, but it’s very common that one doctor makes a change in medication without taking the others. You can see that the potential for errors for adverse interactions from medications and so forth begins to multiply. So that’s, again, another point where information technology comes into play.
One new thing that we’re doing that I think is very important is that all of our priorities for research and patient safety have been guided by input from stakeholders across the health care system: doctors, the public, those who run hospitals, those who run health care organizations, and so forth. We’ve had a couple of summits to help people come testify and tell us what they saw as the most important problems facing them in trying to provide safe health care. The first time we did this, what states said to us was, you know, we have a lot of data already. What we don’t have actually is a lot of manpower or person power to help us analyze the data.
So this past year, we started a new program called the Patient Safety Improvement Corps. And every year, we’re going to be training 50 health care professionals from multiple backgrounds. Most of that is done back at this home institution where they work on very specific projects. And a lot of this includes learning and applying skills in change management. I might know what went wrong, but if I can’t persuade people to work together to develop and implement a solution to solving that problem, we’re not going to go too far. They spend three or four weeks on-site with us, and this is something we do in partnership with the V.A., because they’ve developed a very, very safe health care system. So they get to see whether their techniques can be generalized to a much more heterogeneous and fragmented health care system, and we get to take advantage of their expertise. But we think that we’re going to begin to grow a cadré of professionals who will actually understand and be able to apply these new skills and techniques on the ground.
Ms. Lee: Is there a national strategy for implementing health IT?
Dr. Clancy: That’s a really good question. It certainly feels like national excitement these days. There’s a lot of excitement on Capitol Hill. And Secretary Thompson, who is the Secretary of Health and Human Services, has been completely passionate about this. He keeps asking me when can we make health care paperless? Can’t we do it next week? Or, all right, you can have two weeks. Very, very insistent that we get this done right now.
It’s easy enough for me to say as a doctor, for example, that no one should get a handwritten prescription in the 21st century, period. I mean, I still write them, but, you know, the opportunities for errors and so forth are just all over the place. So this year, AHRQ will be investing $50 million in grants focused on the use of health information technology to improve quality and safety.
I think it’s very important to understand that information technology is not strange to health care, okay? The billing enterprise has long been electronic for the most part. What’s new is actually drawing on the power of this technology to influence the core clinical enterprise itself, and that’s where I think our investments will make a big difference. We have funded a variety of projects over the years, but they tended to be at fairly select sites that had already made those investments in the technology. So our resources were able to support projects to evaluate, for example, the use of reminders to improve the delivery of preventive care, and in one case, interestingly enough, to even remind doctors and patients to have those fairly difficult conversations about end-of-life care. Fairly simple, straightforward reminders, but because they came up at the point of care, people remember to do it even though it’s not an easy conversation to have. But now, we’ll actually have enough resources at one time to be able to build on those earlier findings, and hopefully spread the diffusion of that.
In addition to that, the Department has additional resources next year which will complement our investments very closely, which are going to focus on making sure that the information technology within health care organizations, physicians offices, and so forth can actually be shared and connected across a community. So for example, the information problem I mentioned before about a patient seeing multiple doctors, well, they could each have a fabulous electronic medical record system, but if they can’t talk to each other, you still have the same problem. Their offices are just neater, there’s less paper around. The strategy of developing programs for sharing health information in a secure and confidential way within a community is something that we’re going to be starting on this year, but will be amplified and expanded next year.
Mr. Lawrence: Millions of dollars are invested in health care research. How is the success of such an investment measured? We’ll ask Dr. Carolyn Clancy of the Agency for Healthcare Research and Quality when The Business of Government Hour continues.
Mr. Lawrence: Welcome back to The Business of Government Hour. I’m Paul Lawrence, and this morning’s conversation is with Dr. Carolyn Clancy, the director of the Agency for Healthcare Research and Quality in the Department of Health and Human Services.
And joining us in our conversation is Vernecia Lee.
Ms. Lee: Dr. Clancy, AHRQ invests millions of dollars in research to really address the issues that we talked about earlier. What types of metrics are you using to measure the success of these investments?
Dr. Clancy: Critical question, because ultimately, we don’t think that we’re successful unless we can demonstrate that the findings from our research have had a positive impact on health care, and ultimately on people’s health. You know, clearly that’s a pretty tall order when we give a check to an investigator to start their grant to say, gee, tell me how many people are better off as a result of your work. So looking across the body of work that we fund, early in the phase of research, we’re looking to make sure that the grants and other investments that we fund are consistent with our goals and strategies going in.
As the research progresses, we’re looking to the investigators to tell us how many decision-makers, and those who are going to use the work have been able to understand it and use it. And ultimately, we hold ourselves accountable for at least making sure that that information gets to decision-makers in a way that’s usable for them and useful. And what we’d like to see is that health care is actually better.
Mr. Lawrence: Could you take us through the process of, you know, funding a grant that has to do with health information technology and then turning this into a business solution that’s adopted by health care providers?
Dr. Clancy: Sure, let me give you one example. We funded a project some years ago that was not specifically about health information technology. It was actually about developing a model to help doctors understand which patients coming into the emergency room with chest pain, which might be cardiac, would benefit from getting thrombolysis or the clot-busters. Some patients come in with an EKG that’s completely diagnostic and it’s clear what to do. Other patients come in with a history, which is often more predictive of whether someone’s having a heart attack, but the EKG is sort of nonspecific.
So based on a few items of information about the patient’s history, how long they’ve had the pain, risk factors, and so forth, as well as the EKG, these investigators developed and tested very thoroughly a model that could predict which patients were more likely to benefit from this therapy. And as a result, two of the leading manufacturers of EKG machines have now incorporated that into their strips, so when a patient is rushed in with chest pain, you get the EKG. And in addition to looking at the strip, there’s also the output from this model at the bottom of it. I’ve often thought it would be a nice sort of example to put on a video. So that’s one example of a business solution.
In some cases, we’ve simply supported research evaluating the impact of a solution that was already in place. In other cases, we’re providing content from the work that we support; for example, the evidence about how to measure quality, or what’s the right thing to do for a particular patient, to those businesses that are in the business of providing information to electronic medical record systems and so forth. But it’s a series of pathways that we’re still trying to discover what’s the most efficient and effective way to do that.
Mr. Lawrence: In the example of the EKG and the strip, how long did that take from sort of start to the adoption by the manufacturers?
Dr. Clancy: There was some serendipity involved. The research itself started in the early ‘90s, and they had incorporated this into EKG strips by the late ‘90s, so I’m saying about seven or eight years; a little bit hard to put a precise date on the starting time. And there was an awful lot of work that went into making sure that this was valid. I mean, developing a model is a great idea. Making sure that it’s the right model and that you’re not misclassifying patients and the people are accurately put into the right group, that took a lot more time.
Mr. Lawrence: I was going to ask about the management challenges that lead to people adopting it. What are those and how are those worked?
Dr. Clancy: To some extent, this is I think a very good example of something that comes up to you at the point of care. So to that extent, one of the usual barriers to adopting evidence into practice is overcome immediately, right, it comes to you, you don’t have to go find it. You don’t have to think, oh, boy, do I have time to go run and find out a piece of information or where is that guideline or other source of information when I need it, it’s right there. So I think to that extent, it’s a good model.
I can’t say that it was entirely strategic. We didn’t know when the investigator started all of this work that this was going to happen. There was a fair amount of serendipity involved, which I think there always is. What we’re trying to do now, again, looking at the challenges facing the health care system, is to try both within the Agency as well as with the researchers we support to figure out earlier in the process who’s likely to take this up, how can we link these research findings to levers of change, because knowledge of itself is likely to have a very modest impact.
This is not about people getting smarter. Every Institute of Medicine report has told us that. This is not about telling health care professionals to read faster and pull their socks up, so to speak. This is about creating a system where the right thing to do is the easy thing to do. So we see that as very much within our research domain.
Ms. Lee: Dr. Clancy, again, going back to AHRQ’s mission, is there interagency collaboration with agencies like Food and Drug Administration, Centers for Disease Control, Veterans Affairs?
Dr. Clancy: Absolutely.
Ms. Lee: Can you talk to us about that?
Dr. Clancy: Yes. In fact, we collaborate with all of those quite a bit. In this country and around the world, we have a broad array of drugs to choose from for multiple conditions, which is a great position to be in; there’s not just one. So for example, the treatment of high blood pressure has been revolutionized in the past 30 years. It used to be here were your choices. You could not treat it and have a stroke young or you could treat it and take incredibly unpleasant medication. This is not a great choice to be offering to people. Now there’s a very broad array of drugs, so it’s highly likely that when doctors see a patient with high blood pressure, they’ll find a good drug that will meet their needs and treat them effectively.
Now when drug manufacturers submit a drug to be approved for the market by the FDA, most of the time, the trials that they submit compare that drug to a placebo. Of course, that’s great and the drug gets approved and that’s another option to use -- it makes it challenging at times for doctors and patients to choose among multiple alternatives. So we support a variety of research that looks at the safe use of those medications once they’re approved, and also helps people understand what are the risks and benefits of a particular agent. So it helps them understand how to customize and, you know, make the right choice based on their particular circumstances. So that’s one example of how we collaborate with the Food and Drug Administration.
We were very fortunate and excited about some work we’ve done with the CDC in Minnesota, working with an organization called Health Partners, which is a community-based -- it started off as a health maintenance organization; now, like many of those organizations, has multiple product lines. But we worked very closely with them so that we could bring the clinical sector as well as the public health sector to work together to address the problem of diabetes. And there have been some very important and dramatic improvements as a result of that partnership. So again, our work with the CDC focuses on bringing those who see patients one at a time working in partnership with those who think about community health strategies, namely the public health sector. So that’s another example.
The V.A. has a very interesting challenge because, as you know, they provide care to millions of veterans. And they have a research enterprise which is pretty much focused on meeting the needs and figuring out how their health care system can work better. But their research and evidence tends to be stronger if it’s also done in partnership with others testing exactly the same questions in a much broader population, so that when they then turn to their network leaders and so forth and say this looks like the right strategy to improve quality of care, their network leaders have confidence knowing that it’s been tested in a very broad array of populations. This isn’t just something we tried in one corner of the V.A. system and now you’re asking me to roll it out for everyone.
Ms. Lee: Can you talk a little bit about CMS and your collaborations with CMS, or Centers for Medicare and Medicaid Services?
Dr. Clancy: Sure. We work with them very closely on a lot of different projects. One way that we work with them, for example, is when they have to make decisions about should they cover a particular service, they often turn to us for something called a technology assessment. So sometimes internally -- more often, we contract it out -- what we do is review all the research on a particular topic, and we give them a very comprehensive report that gives what’s known about the benefits and potential adverse effects or harms of a particular service or intervention. They then give it to a coverage advisory committee, which makes recommendations. So we’re not making the decision for them, but, again, we’re the science partner for their efforts.
We collaborate on some types of research. Very recently CMS, because they are responsible for assessing and improving the quality of care for people enrolled in the Medicare program, has been working collaboratively with a variety of hospital organizations and others to try to improve the quality of hospital care. So we’ve been part of that initiative. And one unique contribution we’re making is that we’re developing for them a measure of patients’ perspectives on care in the hospital. Was information provided to you in a timely fashion? And it’s a short survey that asks patients lots of questions about their experience of care, because that makes a big difference in terms of making sure that patients are understanding the information that’s given to them, you know, that they’re pain-free as much as possible, that all the right things are done. So that’s another example of where we work together with them.
Mr. Lawrence: That’s very interesting. What does the future hold in terms of new health care technology? We’ll ask Dr. Carolyn Clancy of the Agency for Healthcare Research and Quality when The Business of Government Hour continues.
Mr. Lawrence: Welcome back to The Business of Government Hour. I’m Paul Lawrence, and this morning’s conversation is with Dr. Carolyn Clancy, director of the Agency for Healthcare Research and Quality in the Department of Health and Human Services.
And joining us in our conversation is Vernecia Lee.
Well, Dr. Clancy, in our last segment, you were talking about the partnerships with other government agencies. And I’m curious about, since there are so many stakeholders in the health care industry, how you work with the private sector.
Dr. Clancy: We work with the private sector in a variety of different partnerships, which have been, we think, successful and also enormously rewarding for both sides, which I think is the key to any kind of partnership. Probably the simplest type of partnership we often have is around disseminating information; the idea being that information sent out from a government agency might be helpful, but if I see it coming, for example, from the American Academy of Family Physicians if I’m a family physician or the American Academy of Pediatrics, I may pay more attention to it because that organization has deemed that it is credible.
So we do a lot of partnerships like that, some for information targeted at professionals, some for information targeted to the public. So for example, we worked with the AARP to disseminate information about staying healthy over 50. And it’s a very simple checklist based on the best possible evidence about which tests and procedures you should be getting, which is, in turn, derived from what conditions should you be worried about getting, what steps can you take to prevent those conditions or at least postpone or delay them? And so that’s one kind of partnership.
Another type of partnership is when an organization essentially says to us, you know, we’re having problems with safety and quality. Could we work together to try to do better? And we have a couple of networks that have established capacity to begin to support that kind of partnership.
We have a research network of integrated delivery systems across the country, and we also have a network of primary care practices. This is sort of doctors in practice across the country who see patients. Some of them are in small practices, some are in slightly larger practices, but who are very interested in providing the best possible care and also contributing to a larger collegial enterprise. So that’s been another type of partnership that we support.
Ms. Lee: In Fiscal Year 2000, AHRQ received $5 million to support and conduct research to improve the ability of the nation’s health care system to respond to possible incidents of bioterrorism. Can you tell us how AHRQ’s bioterrorism research differs from that being conducted by other agencies?
Dr. Clancy: Sure. You said it well. The focus of the investment and the resources we were given was to focus on the role of the health care system. At that time, which was before 9/11 and before the anthrax and other episodes, there was a great deal of interest in strengthening the public health infrastructure, but very little public resources going in to enhance the health care system’s response, but health care systems were very, very worried about this. Once anthrax hit, of course, suddenly there was a huge demand for information. So the timing of this investment was very, very helpful for us. We had determined that two areas where we could be helpful was, one, on the use of information technology to provide critical information to the public health enterprise about potential early warning signs. It’s still an area of great interest, both within the health care system as well as within public health.
In addition to that, we were very interested in learning how clinicians could be trained to potentially think about this if they saw patients with unusual symptoms. Because one of the scenarios then that people talked about a lot was suppose someone releases an agent which is not immediate and rapid-acting as anthrax was, but is slower and they release it somewhere like the Super Bowl? So you imagine all these people who are exposed who then disperse and go back to multiple communities, are being seen by multiple doctors who aren’t talking to each other, and so forth. So what could we do to help clinicians keep this in the background of their minds as to be suspicious?
So at the time, one of the projects we supported was at the University of Alabama. And in order to keep it on people’s minds, they had this idea of screensavers. They were focused on emergency department physicians and other professionals. So their idea was to have screensavers that if anytime you walked by one of the computers in the emergency department, you know, you might see anthrax or smallpox, keeping it in the back of your mind. Well, once the actual anthrax episodes hit, they didn’t need the screensavers anymore.
But the good news was that they had developed a website where clinicians could turn, and it’s not just a lot of information, although it is a lot of information, but the information is organized in a way to respond to questions that clinicians would have as they’re seeing a patient. So instead of being a textbook on anthrax, it’s actually organized in terms of the symptoms the patients might present with, what laboratory findings you might see, what the X-ray might look like. And in addition to being a very useful source of information, people can also get continuing medical education credits. So a week after the first episode of anthrax, that website was live and, needless to say, was incredibly popular. So that’s one kind of work that we support.
Another area that we’ve supported -- you’ve probably guessed that mathematical models are not a trivial part of what we do. In one instance, we were funding a team in New York City to develop a model for how would you provide mass prophylaxis? Anthrax hits and you’ve got to get antibiotics to those people who are at highest risk rapidly. So they’ve developed a model based on the best information that they had, and they were due to test it on September 12th of 2001. Needless to say, that testing was postponed a number of months.
But essentially, having developed the model, what they then worked with was the Police Academy. So they had police cadets sort of running down this pier, someone would ask them questions and would either give them a placebo or the actual drug. They weren’t giving out drugs, of course, they were using different colored M&Ms. But they then went back and refined their model, and this has been something that a lot of states and communities around the country are using.
Mr. Lawrence: Let’s look out to the future. What role do you envision AHRQ playing in the health care system, say, 10 years from now?
Dr. Clancy: The health care system is sort of slowly lurching and catching up to other sectors in terms of becoming part of what might be called the Information Age. Although we’re incredibly excited right now about the power of information technology and the investments we’re going to be making this year and into the future, we’ve begun to see, based on our prior investments, the difference that can make. The reality is that much of medical care still looks a lot like Marcus Welby. A lot of paper, literally all over the place.
So what that means is that all of our models for providing care mean that it’s rare or unusual to have the information you need literally at your fingertips. What you’ve got at your fingertips is a chart. You need to leave the room or in some way go elsewhere to get the information that you need. With information technology and the interest in making sure that the inputs to that technology are as evidence-based as possible, what I see happening in 10 years is that more and more people have the information they need, and the best and most current information at the point of care and/or be customized to what they need.
So for example, some of us use Amazon.com. Some of us ought to stop using it so much, but -- and you know that you cannot only buy books there, but periodically they send you e-mails, so when you log on it says, gee, based on your prior purchases you might want this. Well, you can imagine a smart system that knows the type of patients I see, that might even know some of the errors that I’ve made or difficult challenges or things that I’ve forgotten before, and is sending me prompts. It’s that customized. That would be one part of it.
Essentially what I see is that the growth in information technology as well as the demand for the best possible evidence to guide health care decisions means that the actual delivery of health care will not only be a lot better, but our information will essentially be the Intel inside, if you will.
Ms. Lee: Dr. Clancy, the White House announced earlier this year that it was going to expand the E-government initiatives to include grants and health case management. Have these initiatives impacted plans for the future of your agency?
Dr. Clancy: Well, some of those initiatives focus on making the business of running the Department more efficient. So for example, there’s always been a little industry in academia and other places where people track grant announcements, you know, and it’s someone’s job. It actually could be the job of several people to put out a weekly, sometimes daily, bulletin of what grant opportunities there are at the Agency or at the NIH and CDC and so forth. You kind of have to know a lot of lingo to do that in a way that’s timely and meaningful, because a lot of solicitations are time-limited.
Part of the E-gov initiative is actually going to allow for one storefront for grants. So that’s definitely going to change how we do business, although we think it’s actually going to be incredibly helpful to us. Right now, investigators send in paper applications and they all go to a central place, and then many copies have to be Xeroxed. So there’s this time window of four to six weeks where I know that someone’s submitted a grant and it may be at the Agency, but it may be somewhere in that process of the massive Xeroxing and so forth. All that will go away.
Now some of that requires, you know, the support to have authentication that it’s your application and so forth. But that I think is going to very, very helpful to us.
Mr. Lawrence: You’ve had an interesting career serving the public, and I’m curious, what advice would you give to someone considering a career in public service?
Dr. Clancy: Well, you know, the Department just launched a program two years ago called the Emerging Leaders Program. But we’re not as concerned looking at the demographic changes affecting the public workforce as they are in many areas showing that a very high proportion of people will be eligible to retire over the next few years, and also concerned that they weren’t attracting some of the best and brightest young people. This program is unbelievable. We’ve had a number of folks. We’ve had some who work at the Agency for most of their two-year rotation, sort of similar to the presidential management -- PMI program, but they just stay within HHS.
A lot more rotate and help us, and they are fabulous. And what’s been very gratifying is I think that most of them can see that the work that we do and that others in the Department do is very exciting and is making a difference. So my highest hope is that young people coming out of college or graduate school would give a government career serious consideration. There’s going to be a huge array of opportunities.
Mr. Lawrence: I’m afraid that’ll have to be our last question; we’re out of time. We want to thank you for joining us this morning.
Dr. Clancy: Thank you. For your listeners who are interested in finding out more about the Agency and, in particular, are interested in information that they can use right now in terms of making their own health care better and safer, our website is www.ahrq.gov.
Mr. Lawrence: Thank you very much. This has been The Business of Government Hour, featuring a conversation with Dr. Carolyn Clancy, director, Agency for Healthcare Research and Quality in the Department of Health and Human Services.
Be sure and visit us on the web at businessofgovernment.org. There, you can learn more about our programs and get a transcript of today’s very interesting conversation. Once again, that’s businessofgovernment.org.
This is Paul Lawrence. Thank you for listening.