Dr. Reginald Wells interview

Friday, September 29th, 2006 - 20:00
"We recognized that because of the retirement wave and the importance of maintaining our workforce, our competency, and our commitment to service, that we needed to revitalize our recruitment program and efforts."
Radio show date: 
Sat, 09/30/2006
Intro text: 
Wells discusses how SSA is assessing and planning for the pending retirement wave. He describes some of the solutions to the retirement problem that SSA is considering, including workforce transition planning, succession planning, and new recruitment...
Wells discusses how SSA is assessing and planning for the pending retirement wave. He describes some of the solutions to the retirement problem that SSA is considering, including workforce transition planning, succession planning, and new recruitment techniques. Wells also talks about SSA's training programs and the challenges facing new and long-time employees. In addition, Wells explains how the Office of Human Resources tracks and uses customer satisfaction information. Human Capital Management
Complete transcript: 

Originally Broadcast Saturday, September 30, 2006

Arlington, VA

Mr. Morales: Good morning and welcome to The Business of Government Hour. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government. We created this 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 www.businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Dr. Reginald Wells, Deputy Commissioner of Human Resources for the Social Security Administration.

Good morning, Dr. Wells.

Dr. Wells: Good morning, Al.

Mr. Morales: And also joining us in our conversation from IBM is Tony Hess. Good morning, Tony.

Mr. Hess: Good morning, Al.

Mr. Morales: Dr. Wells, some of our listeners may be familiar with the Social Security Administration, but why don't we start with an overview of the history and mission of SSA.

Dr. Wells: I would be happy to, Al. The Social Security Administration came into being after President Franklin Delano Roosevelt signed into law the Social Security Act, back in August of 1935, and it began as a board but then evolved into an independent agency, and over the years it has really been like most federal agencies. As our government tends to enact laws in very incremental ways with lots of amendments and changes, it has morphed into something much larger, serving many more people. The original mission was to serve and basically provide income security for individuals who retired from gainful work.

Over the years, it's evolved, continuing that basic mission, but also evolving into serving or supporting people with disabilities, so it's essentially a social insurance program aimed at making sure that people have the subsistence they need to live in our society. And we do a tremendous job, in my opinion, on carrying out that mission. Essentially, we provide, for example, some 48 million folks in our nation with benefits that, I believe, are worth somewhere in the neighborhood of $521 billion, so it's really evolved into quite a substantial program. A very successful domestic program, obviously.

The Agency has actually once again returned to independent status. It had been part of the AGW; then HHS; Health, Education and Welfare; and Health and Human Services, but in 1995, once again it became an independent agency.

Mr. Morales: You have teased us a little bit with the size of the organization, can you give us a better sense of the scale, in terms of budget, number of employees, and geographic footprint of the organization?

Dr. Wells: Right, the total budget in '06, was $595 billion and the workforce is 65,000. As I think most of our listeners probably know, social security, we estimate, affects at least 95 percent or more of the public, and that range goes all the way from getting a social security card to receiving disability benefits. The mission is carried out through a network of field offices, hearing offices, teleservice centers, and program service centers that essentially allow us to be in communities around the country. And the commissioner often says that social security for many people is the face of the government, because most folks know where their social security office is.

Mr. Morales: Great. Can you give us now, a sense of the role and mission of your office, specifically, the Office of Human Resources? How big is your team and how are you organized?

Dr. Wells: I am responsible for the Office of Human Resources, and that is a cadre in headquarters of about 400 people. Because we are so decentralized as an organization and because we have 65,000 employees scattered over the entire country and beyond, actually we have some international involvement, the Social Security Administration has to administer that HR or human capital role through those regional offices that we have out there. And we have another 300 employees who work technically for the operations part of our organization, but because of our responsibility to oversee the policy for human capital and human resources, we oversee them technically.

One of the things we do in order to ensure that we have consistency across the agency is to be responsible for going out and monitoring the hiring, retention, and support of employees in the field. And of course, we do a similar thing for headquarters under the supervision, in a sense, of the Office of Personnel Management. In addition, my budget is roughly $100 million that includes obviously a lot of the service that we render to the employees for things like training. I have the Office of Training under my responsibility, the Office of Personnel, the Office of Civil Rights and Equal Opportunity, and the Office of Labor-Management and Employee Relations. Then I have a very small, actually new, component, a very small unit we call the Human Capital Planning Staff.

That allows us to do a lot of the coordination between my components and also it tends to oversee the national recruitment for the Agency. The gentleman that heads that component is responsible for our national recruitment campaign and he works through the regional offices and with local managers. It's a relatively small group, given the demands on it, but it allows us to do some of the tracking that is necessary under the President's management agenda. That's one of the important initiatives that all federal agencies are engaged in right now. They are being tracked by the Office of Management Budget and the Office of Personnel Management on how they go about certain lines of business, human capital being one of those.

Mr. Morales: Perhaps you could tell us a little bit more about your specific role. Although, your title is much longer, many of our guests will understand your role as being the Chief Human Capital Officer at SSA?

Dr. Wells: I wear those two hats. My social security formal title is Deputy Commissioner for Human Resources, but the government has the role, similar to the Chief Information Officer and the Chief Financial Officer, a Chief Human Capital Officer for many agencies. In some agencies the HR lead is not necessarily the Chief Human Capital Officer. At social security, the Commissioner's thinking was that those responsibilities should be contained under a single individual who can then coordinate and make sure that what we are doing internally is certainly consistent with what we are being expected to do externally. I will explain that a little bit.

As Deputy Commissioner for Human Resources, obviously, I have the responsibility for managing those areas that I have described a moment ago, personnel training, civil rights and labor management. In addition though, there is an expectation I think with this administration to look across government to make sure that we are achieving some consistency in the way we administer our strategic management of human capital, and so the Chief Human Capital Officers Council, and the Chief Human Capital Officer role was established in 2002 to make sure that we are achieving some continuity and that we have Chief Human Capital Officers coming together in a central place and sharing issues and working on planning for things that will further our interest as a government.

Mr. Morales: And that's very interesting. We also understand that you come from a family of public servants. Perhaps you could tell us about growing up with a family culture of federal government work?

Dr. Wells: Yeah, I do. I come by this work, pretty honestly, through my mother who worked for the Internal Revenue Service for 44 years. And growing up, of course, I heard a lot about the importance of public service, and I was fortunate to have both parents. My father worked in a factory in the private sector, but my mother worked in government and so I heard a lot about what that was like, and I never envisioned necessarily going into a government work, but I guess that acorn doesn't fall too far from the tree.

I also have a brother who works for the Veterans Hospital System. He was a Vietnam vet, came home, and, wanting to counter balance what he had experienced over there, he went to medical school and is now working in the VA System.

Mr. Morales: That's a great history. You obviously have a very distinguished career, including running the District of Columbia's Department of Human Services as well as Associate Commissioner of the Administration of Developmental Disabilities, how have these roles shaped your current management style?

Dr. Wells: Well, it obviously impacted it a great deal. I grew up, if you will, a little bit every time I had a new management experience, a new leadership challenge, and all the way from my early days working in New Jersey in what they called citizen services, the equivalent of what Health and Human Services does at the federal level, and also in their Health and Rehabilitation area, I got a lot of opportunity to see how things work at the local level; how local issues and concerns from direct service to the public sort of challenge you and force you to do your very best and to deliver that service. And working through people to get it done, is what you learn obviously, when you have a team.

And I got a lot of experience with those challenges in New Jersey. And then when I came into the District of Columbia it was probably a good time for me to experience that. I started out managing one of their institutions located in Laurel, Maryland, and was later asked to come into the city proper, and manage some of the programs; initially, the disability programs, but later I was asked to serve as the Deputy Commissioner for social services, and it really was that everything that was in public health and mental health fell under social services, so it really was a challenge and a lot of crisis management. You learn very quickly how to adapt to situations.

And I guess what really impacted me and influenced me was operating without all the tools and all the resources one would ideally like to have. And I think that is one of the challenges that public servants, no matter where they are, whether at the federal, state, or local level are sort of challenged with. There is never enough money to meet the needs of the public, particularly when you are talking about the kinds of programs that we are responsible for and the types of populations that rely on our support, so my management style has evolved into one that's pretty participative. I really believe that we get things done through teamwork, through collaboration, through effective communication, and those have been hallmarks of how I have tried to conduct myself as a leader and as an executive.

Mr. Morales: Excellent. How is the Social Security Administration managing the government retirement wave? We will ask Chief Human Capital Officer, Dr. Reginald Wells, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour, I'm your host, Albert Morales, and this morning's conversation is with Chief Human Capital Officer, Dr. Reginald Wells of the Social Security Administration. Also joining us in our conversation is Tony Hess.

Dr. Wells, not that this topic is immediately going to impact anyone in this room, but it is an important topic, and that's the pending retirement wave. What's happening now at social security in terms of staff retirement?

Dr. Wells: Well, and I'm glad you asked me that question, Al, because that is something we have been tracking as an organization at least for the last decade or so, maybe even a little longer than that. It was the foresight, I think, of the leadership at the time to pay attention to the baby boomers moving through employment and getting to a point in the not too distant future where they would be retiring in larger numbers. I think the leadership felt they needed to take stock of that and social security, maybe because of the role we play, tends to be an organization that is very data driven.

We have, just to give you a sense of the actuaries on staff who project well into the future, the solvency of the program and the service delivery trends and that kind of thing. So we started looking at how many folks are we likely to lose and at what points in time are we likely to lose them over a decade ago. So we do what we call a Retirement Wave Analysis. We update it every year. Right now, approximately 23 percent of our workforce is eligible to retire. Fortunately, most folks work a little beyond their eligibility and that's something that we have experienced at social security.

I think a lot of federal agencies have that. I think our rate beyond eligibility is something like 3.7 years. In five more years that number of people eligible will go up to 40 percent of the current workforce and in 15 years it goes up to about 54 percent, so obviously we had best be in a position to replenish that workforce and to have some sense of when they would be likely to retire. We do projections and we use a model for determining what those numbers are likely to be. And what we are projecting right now is that over the next five years we are going to lose about 21 percent of our workforce.

So it moves us to really pay attention to that and to have some strategies for keeping it from being such a spike. I think the way the model projects are right now, we are looking at the peak of losses between 2008 and 2010. We have been using some strategies however to try to flatten that curve so that we don't have a tremendous spike at any particular point in time over the next few years.

Mr. Morales: So you just referenced this wave of baby boomers retiring across the country, and told us a little bit about how this puts additional pressures on services that supported the SSA. How are you preparing for this perfect storm of resource challenges?

Dr. Wells: Well, it isn't easy, as you might imagine, and I knock on wood every time I talk about this, because we really have not had the difficulty yet. That's why I knock on wood, because I don't take that for granted, recruiting and hiring people. But to address your question about the baby boomers moving into those disability-prone years and moving into retirement causing a greater obvious demand for our programs, we are doing things like a lot of agencies. We are trying to automate as much as we can.

The Commissioner recently announced that we have new regulations for our disability program. We were making some disability service improvements, which should allow us to move them through the process more quickly in general, but where there are appeals, we should be moving people through that process a lot quicker as well so that they have an answer much quicker about whether they are going to be eligible and entitled to benefits. On automation, there has been some reform of some of our systems to try to make it less cumbersome, less labor intensive obviously for us. Technology is not going to be a panacea, but I think it is going to help.

More and more people are applying for benefits over the internet. We are pushing that and promoting that a lot. In my area, people will be able to apply and that's been something that the Office of Personnel Management has been working on as well so that the opportunity to apply for federal jobs is streamlined from what it has traditionally been. So we are using various techniques, technology, systemic reforms, and I guess speaking regarding the human capital issues. We are really emphasizing training within the organization.

We want our employees to be the best they can possibly be. Part of that are the concerns about the loss of institutional memory when these very seasoned employees we have now move onto retirement, well-deserved retirement. We want a group of younger employees coming behind them to get up to speed very quickly. And I think, the retirement wave is a challenge for all federal agencies, and actually, is a challenge for all organizations, because it's not just a public sector phenomenon. But I think you really do have to invest on the front end to make sure you bring people into the organizations who really want to be there and want to do that kind of work.

Our training programs or entry-level training programs are pretty extensive. People can come in and end up in 16 weeks of training before they are even are allowed to attempt to serve the public and that's a substantial investment. So you don't want a serious retention problem early on. If people come into the organization and work five or ten years, and you get a really good service out of them and they choose to move on to other things, so be it, but to have someone new come into the organization, you give them 16 weeks of training and they punch out almost immediately would be a tremendous waste. And fortunately, particularly with new recruits, we have a pretty good retention situation.

Mr. Morales: Perhaps you could tell us a little more specifically about some of the activities your office is doing to develop and manage this kind of challenge? For example, what is the workforce transition plan?

Dr. Wells: The workforce transition plan, actually, was the precursor to the human capital plan. Truth to tell, it actually attempted to do a lot of the same kinds of things. It sort of, describes what the workforce is, what kind of succession planning we should be engaged in, where our greatest needs are from the human capital perspective. We have since adapted it to become really more like a tracking document for us, so we updated quarterly to see in specific detail what kind of activities we are engaged in, in our human capital work. And it just helps us stay on top of what we are doing and allows us to self evaluate whether we are doing all the right things and working on all of the important things.

Mr. Morales: You alluded to succession planning, and certainly this sounds like one of the keys to success in managing this whole retirement wave. Can you provide some lessons or advice to other government leaders who are facing this challenge of succession planning?

Dr. Wells: I think I can offer a little bit of advice. I think that it's very important, first of all, to know what your needs are as an organization. If you have a core mission that requires a certain competency or a certain classification of employee, then obviously you have a little bit of a sense of what kind of skills and abilities the people need and if there are logical pathways to hire or to work, obviously, you want to wait to try to identify the people who are most likely to do the best job there. Obviously, we always have to be engaged in merit principles and you want to never have instances where you regress into prohibitive personnel practices, but it is important to try to identify employees who are interested in moving up into other types of work that are important to the organization.

One of the mechanisms we used to do that, which certainly withstands the scrutiny of meeting merit principles is we have a number of career development programs which allow us to compete within the organization for identification into one or more of these groups where you would be on developmental assignments, getting training, doing this developmental work that allows you then to be a prime candidate for promotional opportunity down the road. We have four mechanisms that we use dealing with the various levels of our organization. For example, we administer our own senior executive service career development program, which is geared toward our GS-15 employees who aspire to be senior executives and they go through a year, or 18-month developmental process where they receive a lot of training.

Some of it is formalized training provided by the Office of Personnel Management at FEI, Federal Executive Institute. Some of it is actually working in areas outside of where they may have come from. So if you were a GS-15 working in operations, you might work in systems, or you might work in human resources and get a better appreciation for the organization as a whole. The next level down for our developmental programs is our advanced leadership program, and it's geared to our 13 and 14 graded employees.

A very similar program, it demands having a mentor, someone that can work with you around your development, developing an individual development plan so that you have some very specific skills you are expected to live up to and meet, and you identify through this collaborative process, what goals you are trying to achieve in terms of self development and professional development. We have a leadership development program, which is the next step down for 9 through 12 graded employees and it's very similar to the others. It is just the level of complexity for the work that you do and the exposures that you get. And then the Presidential Management Fellows is a mechanism we use to bring some pretty talented people into the organization. They may not have grown up in social security, but they have advanced degrees and are willing to come in and get on that track toward leadership.

Mr. Morales: This is a very extensive program. How is the Social Security Administration recruiting new talent? We will ask Chief Human Capital Officer, Dr. Reginald Wells to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host Albert Morales, and this morning's conversation is with Chief Human Capital Officer, Dr. Reginald Wells of the Social Security Administration. Also joining us here on our conversation is Tony Hess.

Dr. Wells, we spent a little bit of time in our last segment talking about the folks currently within the administration. What changes are you making to the recruitment process at the Social Security Administration?

Dr. Wells: We recognize, because of the retirement wave and the importance of maintaining our workforce both the numbers that the public, and the Congress, and the President expect, and also the competency, and the commitment to service. And so we, a few years ago, decided we needed to revitalize our recruitment program, our recruitment efforts, and we came up with a tagline: "Making a Difference in People's Lives and Your Own," as a way of branding social security, the service agency that it is.

It was very important for us to do that because, within our mission, the Commissioner, with our strategic plan, has identified four areas: service, stewardship, solvency, and staff, and it's extremely important to bring employees into the organization who bring a skill set that and an interest in service that allows them to really apply themselves to what we expect them to do and what the public expects in the way of service. So we developed this integrated marketing campaign, and we have really updated our materials so that they can be specific to individuals interested in particular career paths.

Social security is a huge organization, and if you have a systems background there is a place for you in one of the largest computer systems in the world. Collecting all of that payroll data, the information on payroll taxes, social security numbers, and the new disability system which is paperless, so there is obviously a lot of work going on in that area.

We have an agency that's large with a tight budget. We have a pretty large budget staff. And well…it's not large. When I say large, that's relative.

Mr. Morales: Be careful what you say.

Dr. Wells: Yeah, exactly. It's not large in the sense of large numbers of people, but they manage a large budget, and they have to be really good at that. So we obviously recruit and hire people who are very good at that. So if you have a financial management background, you are the type of person we would want to bring in to the organization. In that area, our largest operation obviously is our Deputy Commissioner of Operations component. And we need people there who obviously bring a very strong service ethic and who are very good in dealing with the public across the counter and across the desk and who bring an empathy for the types of people who rely on us for economic support.

And in the Office of Human Resources, where it's, as I said, relatively speaking, a small staff, we want people who understand and have a commitment to that type of work. My point is that it's a very diversified organization. And if a young person or even a mid-career person had an interest in this kind of work, we are trying to reach them, so we developed this integrated marketing campaign. We put an emphasis on communicating with people using technology, so we do as much work as we can over the internet.

And we try to get ads and magazines that cater to various populations, because we have to be a diverse organization. Diversity for us is a business imperative, because we serve the entire population. And in order to do that, you obviously have to be able to relate to them. We need that sort of diversity of thinking within our organization to be effective, and so that's very important. We've attempted as have the government as a whole to streamline the hiring process so that people don't have quite the cumbersome role they have coming in.

In fact, the Partnership for Public Service just put out some information from a study that they've done that is focused on college graduates. And what they reported was that people were basically very interested in doing public service, but they very often found it cumbersome or they didn't know where to go to pursue that interest. And so we do go out to colleges and universities and we do job fairs that try to let people know just what kinds of career opportunities there are at the Social Security Administration.

It really requires a lot of outreach, a lot of coordination, and we, because we are so decentralized, while we have recruitment lead and headquarters, we actually work through lead recruiters in all of the regions so that we can have a local presence. And they can cultivate relationships with local colleges and universities, and people who can refer the best and brightest to us.

Mr. Morales: You touched upon, in the last segment, some of the leadership programs that you have at SSA as well as potentially up to a six week training program for some of the new hires. Many of our guests across government share that a great deal of their focus is on ensuring that staff have these appropriate skills. With such a large organization distributed across the entire country and in some foreign territories, how do you manage this at SSA?

Dr. Wells: It's not easy, as you probably appreciate. It requires a lot of focus and attention. We have an office of training, as I mentioned at the outset of this discussion that is solely focused on trying to make sure that our workforce is receiving the best training they can possibly receive. And we've put a lot of emphasis, as you would probably hope we would, on our entry level folks coming into the organization. Our programs in one sense are very basic in terms of providing income security for people.

But in other ways, they're very complex, because there are a lot of rules around eligibility and assets that people bring to us when they come in requesting support. And so it's vital that we do that entry-level training and that we get our new employees up to snuff. But the employees who stay with us, and work with us over the years, and do an entire career with us, of course, have to be nurtured as well. They have to be kept as interested and committed in work. And so you have to replenish them, you have to give them support.

We have a significant e-learning mechanism that employees have access to. It allows them to go online and take over 2000 courses that are available in a variety of areas. Some of it is technical, but it can also be self development; it can be courses that allow them to perhaps make a career or transition to another part of our organization. It's really a tremendous resource, and folks can access it either from their PC at work, or from home. So that part of it is good.

We are really focusing on honing in this year and last year on our leadership training, because we like a lot of organizations when resources are tight, tend to not do as much of that as is really warranted by the needs of your management cadre. And so we have dedicated ourselves. And I'm really pleased that the commissioner in her foresight felt that in order for us to really be effective into the future, we have to cultivate that talent, and build a leadership cadre that will take us obviously into the next 30-40 years of this program.

Mr. Morales: Can you tell us about the role the Office of Human Resources plays in promoting diversity at the SSA, and do you have any advice you'd like to share with other government leaders?

Dr. Wells: Well, my Office of Human Resources plays a major role with the support and the commitment of all of the senior executives. As I said earlier, diversity is a business imperative for us in a lot of ways, and I'm defining diversity in the broader sense, not simply the EEO compliance focus that I think a lot of organizations focus on very appropriately. But we broaden it, because we feel that in order to be inclusive, we have to have a diversity strategy that encompasses all employees, not simply certain groups of employees. So we basically pay attention to the data. Once again, SSA has always been a data-driven organization.

We track, very closely our hiring, and promotions, and training and on a lot of dimensions. I am proud to say that as of today, because it's constantly changing, we are at parity with all of the numbers for all of our protected groups. And our workforce is comparable to a civilian labor force across the board. And that's something we're very proud of. In addition, we really do well hiring employees with disabilities. And it's not something we rest on our laurels about, because it is a very underemployed group of folks in this country.

But we feel, given that it is part of our mission to serve people with disabilities, that we really should have a workforce that also reflects and has empathy for that population. So we do real well there. Some noted magazines: Careers & the Disabled, have recognized us as one of the better agencies in this regard. And we put a lot of emphasis into things like reasonable accommodations for employees with disabilities.

We are bullish about hiring veterans, and we're working as a matter of fact, with Veterans Affairs to basically step up some of the things we are doing in that regard.

One of the things we're talking with them about, because we do serve people with disabilities as a core part of our mission. We're really interested in some of those vets coming back from the war, who may choose to get employed with another federal agency. And we're hoping it can be us, because of the insights they'll bring, and the commitment that they have to service. But I think the important thing really is to pay attention to your workforce, understand the ways in which it's diverse, and the ways in which it is not and be deliberate in going about addressing that.

And obviously in doing so, you have to be sensitive, as I said earlier, to avoid prohibited personnel practices and maintain merit principles. Those are always a given. But I think within that, there's still a lot of opportunity to reach out and communicate to populations that you may not have traditionally talked to or approached about coming into your organization and being a part of it. The other thing we do, which is a little unique, although I think there are a few other agencies that do it, is we have a number of advisory groups that we charter and work with very closely.

Most of them represent those protected categories. But we have found that has been a really good resource, because at the Social Security Administration, those people not only advise us on how to recruit and hire members of their group, but they also do a lot of volunteer work in the community, building relationships with the community, and of course, that then accrues back. People who they may have helped, or people who may have observed them helping others will want to come and work for an organization that's willing to do that.

Mr. Morales: What does the future hold for the SSA? We will ask Chief Human Capital Officer, Dr. Reginald Wells to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour, I'm your host Albert Morales, and this morning's conversation is with Chief Human Capital Officer, Dr. Reginald Wells of the Social Security Administration. Also joining us in our conversation is Tony Hess.

Mr. Hess: Dr. Wells, we know that customer service plays an important role in the SSA's strategic plan. How do you track customer satisfaction within the Office of Human Resources, and what kind of feedback do you typically receive?

Dr. Wells: Well, Tony, we get a lot of feedback. Fortunately for me, most of it is very positive. There are no shrinking violets among the executive team at Social Security, and so I get a lot of weekly feedback. The Commissioner holds an executive staff meeting once a week, every Monday. We gather as a team and we share important things, we discuss things. Very often, before and after, and sometimes during those meetings, people are commenting on the level of support we offer from HR, and I'm fortunate, because as an executive, most of that feedback is very important.

And when there are issues, I think what they understand is that we are there to serve them. We are there to facilitate their ability to serve the American public, and so it's very important for us to meet the needs of our workforce. And that's not always easy, because we do have legitimate limitations in things that we can do. Certainly as a public sector organization, you're protecting stewardship which is one of the things I mentioned. It is very important to our Commissioner and our strategic plan, and you really do have to utilize the public dollar in a very responsible way.

So there aren't opportunities to do Cadillac things sometimes for employees. But I think the fact that we focus on their needs and we try to meet them where they are, and support them when meeting the needs of the public, I think goes a long way. We have a number of programs that we do under the group of work which we call "All Ages All Stages." And that is really a way of trying to address the needs of the workforce as an intergenerational group, particularly now, with a lot of new employees coming in, and a lot of senior folks, you know, moving to retirement.

So we do surveys of employees. We often get feedback unsolicited, good and not so good, when people feel that way. And we just remain very receptive to any and all feedback. I think that having me at the table as a partner goes a long way. And there are some organizations that don't have that opportunity. In fact, the Chief Human Capital Officer role was intended particularly for those agencies where the HR human capital interests were not always sitting at the corporate table. At Social Security, that has been true for a long time. They've had a Deputy Commissioner for human resources for a while, well before the CHCO was established. So it really has worked very well for us.

Mr. Hess: We understand that the Social Security Administration was involved in providing relief to the hurricane victims. Can you tell us about SSA's involvement, and what lessons did you learn that can provide insights into possible future emergency responses?

Dr. Wells: Well, I've been with the agency for over four years, it was four years in April. And I don't think I've ever seen a better example of public service than I saw with that particular crisis. Last year when hurricane Katrina, and then Wilma and Rita hit, I think everyone became painfully aware of the devastation in that part of the country. We have countless examples of where our employees, even though their houses were washed away, were, within a day or two, mobilized in meeting with hordes of people who obviously were reeling from the devastation of the hurricanes.

And it doesn't get any better than that as far as public service is concerned. They worked, 12, 14, 16-hour days, 18-hour days, or more. They were reeling back and forth between Baton Rouge and the New Orleans area in shifts, keeping around-the-clock service to the people, and we got checks out within a matter of days. It really was one of the success stories. I didn't get the sense it got a lot of publicity in terms of the main media, but within government, I think, we were recognized as having really hit the ground running.

And it really was not a surprise to us within the agency. I mean, obviously there was no storm as devastating as that one. It was a once in a lifetime kind of catastrophe. But that's what we do. Every year, there are hurricanes some place. Every year, there are earthquakes of some sort. Every year there are brush fires that may destroy the peoples' homes and displace people. And our agency always adjusts to it. It always has been on a smaller scale obviously, but we apply the same approaches in terms of this large scale catastrophe.

And really the lessons that we can offer are things like the importance of communication, making sure that people know what they're supposed to do and being prepared, having done that planning, or having that experience, even if it's on a smaller scale, addressing those kinds of needs is really, really important. And being visible, I think, one of the things we took away from it was that leadership really does matter, and our people stepped up when the need was there, to become the leaders for distribution of checks or whatever was necessary to keep people going.

Mr. Hess: Many in government encouraged folks who are starting their career to think of government as a stop in a long career. Do you encourage this philosophy and can you tell us what advice would you give a person who's interested in starting a career in public service?

Dr. Wells: There is a lot of discussion about that today. I know that Director Springer is trying to address that issue. Director Springer, the Director of Office of Personnel Management, she's doing a lot of very fine work, and she is looking at the fact that some people are not necessarily looking at government as their final stop in terms of their career path. At Social Security, we've had a little bit different experience, and again, I knock on wood, because it could change. But we've had a lot of young people coming into the organization.

And I think because we are so big, relatively speaking, and because we do direct service, which gives that sort of tremendous intrinsic reward feedback to people, we've had a lot of our young people coming, and saying, "You know, we think we do want to spend a career with you." Of course the caveat is, "as long as we're able to continue to progress in the organization and advance and move into areas that we really want to move into as we get older and more established in our careers." So we're really sort of shaving it that way. As I said earlier, we do a lot of training on the front end.

And we ideally don't want to lose any of those people even after 30-40 years. But where people are looking at us as maybe the first stop, obviously you've got to be prepared to address that too, and if you only want to serve for 10 years we're still interested. And, you know, it's not servitude. We happen to think if you come and work for us, you'll probably want to stay for a career, because I think there are a lot of opportunities working in the Social Security Administration.

Mr. Morales: That's great. So what advice would you give a young individual who's getting ready to launch their career?

Dr. Wells: Come work for us.

Mr. Morales: Excellent, excellent. This has been a wonderful conversation, and unfortunately, we've reached the end of our time. I want to thank you for fitting us into your busy schedule. But more importantly, Tony and I would like to thank you for your dedicated service to the public and our country in the various roles you've held at the SSA and in the federal government.

Dr. Wells: Well, as a follow-up to your last question, I just want to offer to anyone listening, our website: it's www.socialsecurity.gov/careers. And if you go into that site, you will get a really good sense of all that we offer, and as I said earlier, I think there are a lot of opportunities not only in terms of direct service delivery to the public, but also all of those support roles behind the scenes, that infrastructure that allows our frontline workers to be so effective.

Mr. Morales: This has been The Business of Government Hour, featuring a conversation with Social Security Administration, Chief Human Capital Officer, Dr. Reginald Wells. 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.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad, who can't hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support. For The Business of Government Hour, I'm Albert Morales. Thank you for listening.

Lisa Schlosser interview

Friday, September 15th, 2006 - 20:00
"We are modernizing our backend infrastructure, upgrading our desktop computers, mainframe systems, and servers. We hope to have state-of-the-art technology using open standards platforms to be flexible in responding to our business needs."
Radio show date: 
Sat, 09/16/2006
Intro text: 
In this interview, Schlosser discusses: Modernizing HUD's business and information technology (IT) systems; "Getting to green" on the President's Management Agenda (PMA) e-government initiative; Adopting enterprise architecture and a service-oriented...
In this interview, Schlosser discusses: Modernizing HUD's business and information technology (IT) systems; "Getting to green" on the President's Management Agenda (PMA) e-government initiative; Adopting enterprise architecture and a service-oriented IT approach within HUD; HUD's IT system challenges; HUD's Technology Investment Board Executive Community (TIBEC); and HUD's future technologies and investment plans. Technology and E-Government; Managing for Performance and Results; Leadership; Strategic Thinking; Collaboration: Networks and Partnerships
Complete transcript: 

Originally Broadcast Saturday, September 16, 2006

Arlington, Virginia

Mr. Morales: Good morning and welcome to The Business of Government Hour. I'm Albert Morales, your host, and managing partner of The IBM Center for The Business of Government. We created this 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 www.businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Lisa Schlosser, Chief Information Officer at the Department of Housing and Urban Development.

Good morning, Lisa.

Ms. Schlosser: Good Morning, Al. Thanks for having me.

Mr. Morales: And joining us in our conversation also from IBM is Pete Boyer, Director of Federal Civilian Programs.

Good morning, Pete.

Mr. Boyer: Good morning, Al.

Mr. Morales: Lisa, let's start at the beginning. Can you tell us about the mission and the history of the Department of Housing and Urban Development? And could you mention some of HUD's major programs?

Ms. Schlosser: Sure, HUD has been around really since the 1930s. Our mission during that timeframe has been pretty consistent, really, to open doors to homeownership to all Americans; to help to ensure affordable housing, and to help to build communities at both the state and local level.

We're really proud to say today over 70 percent of Americans do own their own homes.

Couple of the programs that HUD does focus on, we are very excited this year, we are focusing on our Federal Housing Administration, modernizing some of our programs to help support that -- that mission of HUD and that is to increase homeownership, and we're modernizing the program to ensure that all Americans have access to a safe mortgage product at a fair price. And we are building some flexibility into our mortgage insurance program.

Flexibility in terms of mortgage terms and loan terms, which again we hope to use to increase homeownership across the U.S. Also some of our other programs are Public and Indian Housing Area. We are providing housing authorities with more flexibility to help to service lower and middle income personnel, help them get affordable housing.

In our Community and Planning Development group, now, we're helping to rebuild the Gulf Coast by providing grants and loans and other support in that area.

Mr. Morales: Great, I do want to talk a little bit later on about your work down in the Gulf area, but can you tell us a little bit about the mission and scope of your office, specifically within HUD, and give us a sense of the size of the budget you have and how many employees are in your organization?

Ms. Schlosser: Okay. The Chief Information Officer, we have about $300 million budget which we spend on using technology to help support the mission and goals -- the business goals of the Department of Housing and Urban Development.

We have approximately 300 folks who are providing the support, everything from developing policy, investment processes, developing an enterprise architecture, and supporting our businesses in developing the systems that help them provide support and also to accomplish their missions in supporting homeownership and some of the other goals I mentioned.

Mr. Morales: Now, Lisa, can you describe your role as a chief information officer and what are your official responsibilities?

Ms. Schlosser: My role as HUD's information -- chief information officer, obviously, is to ensure that HUD capitalizes on the use of modernized technology to support our three main goals and missions within HUD, that's to increase homeownership and ensure that everyone has access to affordable housing and also to build communities and provide support to community development.

So again, our primary functions there are we develop the policies and develop the -- and implement the investment processes to make sure that we are spending our money wisely and spending money on technology that's truly going to help us further our business goals across the department.

The other major goal and major role that we have within the Chief Information Office is to ensure the security and the privacy of the information that we hold and collect.

Mr. Morales: Lisa, we understand that you came to this role after serving as Associate Chief Information Officer at the Department of Transportation for both Security and Investment Management. How did these experiences impact your current role?

Ms. Schlosser: By serving in the Department of Transportation before coming to HUD, I was really able to see and get across agency perspective and really see how many commonalities, even though we really have different missions within the federal government architecture.

We really have a lot of commonalities among the agencies, so by serving in that role and then serving in the role at HUD, I was able to see how we could capitalize and work together and collaborate on different opportunities, both at the business level and especially, at the system level, by collaborating together on common systems as opposed to having to go out and build individual systems. We were able to work together with other agencies and see where there are commonalities.

Mr. Morales: Lisa, we also understand that you spend a portion of your career working in the technology field in the private sector. How has this affected your perspective at HUD?

Ms. Schlosser: Well, I think by working in the private sector always gives you an advantage as a chief information officer within the federal government. You are able to see both perspectives. You are able to work and negotiate better with the private sector, kind of, understand where both parties are coming from.

And I think you are able to negotiate better successes for both the private sector and the government side on the various partnerships we work, and it really comes down to a good partnership between your industry partners and the government is what equates to success on some of our big computer system development projects.

Mr. Morales: Lisa, prior to the show, you had mentioned that you were in the military at one point in time, and in fact, are still are in the U.S. Reserves. How is this experiencing adding to your capabilities at HUD?

Ms. Schlosser: Well, again, it's by seeing how different agencies operate you can kind of take the best of the best, take the best practices, the best solutions from the various agencies you've been to, and bring those experiences.

So for example, the Department of the Army has an incredible portal, Army Knowledge Online, and we've been able to capitalize on that model based on my experiences there to help lead us towards a better solution at HUD, so we are able to capitalize on that as opposed to having to reinvent the wheel, on using that type of technology.

Mr. Morales: Great. What steps is HUD taking on the President's Management Agenda? We will ask Chief Information Officer, Lisa Schlosser, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Al Morales, and this morning's conversation is with HUD Chief Information Officer, Lisa Schlosser.

Also joining us in our conversation is Pete Boyer, Director of Federal Civilian Programs at IBM.

Lisa, we understand that you've emphasized a few goals for your organization in 2006. Could you share these goals with our listeners?

Ms. Schlosser: Sure. One of the first things, really, that we wanted to tackle at HUD is to really improve our processes. Again, make sure that all of our investments in information technology really truly support our business goals at HUD, as I mentioned before. So one of our first goals was, you know, to improve our processes and I think that's been demonstrated by getting to green on the President's Management Agenda.

So, you know, as of last quarter, HUD was one of only five cabinet-level agencies that was at a green status on the President's Management Agenda in e-government.

So we are very proud of that and we think that reflects that we have really focused on improving our processes, improving security, ensuring that we have a good architecture to work against. So that's -- really, our first goal was to do that and we're continuing to improve those processes.

Secondly, we've been focusing on the modernization of our backend infrastructure, upgrading our desktop computers, upgrading our mainframe systems, upgrading our servers, making sure that we had state-of-the-art technology using open standards platforms so we are more flexible in responding to our business needs as our programs are changing, as our programs are being modernized.

The third goal was really to focus on implementing something we are calling Vision 2010, which is our information technology strategy, bottom-line being that we want to get off of our old antiquated systems over the -- by the year 2010, so that we are in a purely open type environment using web services capitalizing on service oriented architecture.

So that's the three main goals that we're focusing on within HUD in the information technology arena.

Mr. Morales: I like to expand a little bit more on the President's Management Agenda in your efforts to get to green on e-government. Can you tell us a little bit about some of the activities that you undertook to get there and what some of the next steps may be?

Ms. Schlosser: Well, I think with any initiative like that the first step is always to get the support of the Secretary, the Deputy Secretary and the key business leaders, the key executives in the organization. And one of the things, I -- since, I've been at HUD that I've noticed is that there are executives from the Secretary, the Deputy and each of our assistant secretaries and deputy assistant secretaries, they really truly understand technology, they understand the power of technology and how to use that to really improve the way they deliver their programs.

So right off the bat, they were very supportive of all the goals of the President's Management Agenda, you know, using e-government, using shared services where we can, investing in new modernized technology and helping us go through that changed management process and helping to get folks to accept the new technology within the organization.

So it was really the first step, and then we had a very, very clear outline, clear goals, clear milestones. We focused on our capital planning process, you know, again, making sure that we have good investments; we have a good process to evaluate how we are investing money in information technology.

We also worked very hard with Dick Burk in the Office of Management and Budget and adopted all the models that have been put out from there for enterprise architectures. So we have a real strong architecture, we build to a consistent architecture, consisting group of standards.

We've shared those standards with all of our partners across HUD on our various development efforts. The third thing in, not necessarily in priority of course, this was actually overriding, is we really worked hard to improve our information technology security program.

We focused on really understanding where all our systems were and what our systems were doing, where the data was within our systems, we focused on certification, accreditation of systems, i.e., assessing the risk to those systems in putting in the right solutions to mitigate those risks, whether it was new policy or other type of technical controls.

So we accomplished those goals, we got all our systems 100 percent certified and accredited, we spend a lot of time training our folks within HUD. 96 percent of our folks go through mandatory training every year. 96 to 100 percent of our contractors also complete security training.

So we focused on those main areas of the President's Management Agenda, and I think through that executive commitment as well as the clear focus on milestones and goals, we were able to accomplish the green status.

Mr. Morales: Lisa, you mentioned modernizing HUD's business systems, how are you prioritizing the systems being modernized, and related to that, how are you involving the business owners in the modernization process?

Ms. Schlosser: Oh, we are starting with the Secretary's Strategic Plan, so for the first time, HUD has actually incorporated a specific strategic goal within the Secretary's Strategic Plan that specifically states that HUD will use and capitalize on modernized technology to improve the way we deliver our services to our stakeholders, be it a business, be it a citizen, be it another government agency.

So everything really starts from that strategic plan, it starts from that strategic objective, and then we have a very sophisticated process where we involve all of our business leaders at the program levels, our Community and Planning Development folks, our Federal Housing Administration, our Public and Indian Housing.

We collaborate together to determine what should be enterprise wide solutions for HUD. For example, this year we invested in a new collaboration tool. We invested in enterprise wide Correspondence Tracking and Document Management System, and then we work with each of the individual business leaders, each of the individual programs to identify their key business goals.

So for example, Federal Housing Administration has just initiated these new efforts to modernize the way they provide loan insurance to citizens, again with the goal of increasing homeownership, so -- because that is the top goal -- one of the top goals of the Department, the top business goals of FHA.

We are also prioritizing their system development needs to ensure that their systems are ready to deliver those new innovative programs.

Mr. Morales: And how are you tracking progress?

Ms. Schlosser: We track progress several ways. Every single one of our programs is accounted for in our Capital Planning and Investment Control process, and on a monthly basis we do program reviews with our business partners with the system owners for each of the projects and the project managers, and we track adherence to cost, schedule, and performance objectives for each of those programs.

So if we see any variance in staying within 10 percent cost goal, or 10 percent schedule goal, or not meeting the business objectives, you know, we do that through a series of surveys through customer participation.

Then we would put a program on a watch list and just try to get it back on track by putting additional resources, whatever it took to mitigate the risks of that program. So that's the way we watch over them.

Mr. Morales: All right. Lisa, you're seen as a leader in adopting enterprise architecture. How are your enterprise architecture efforts supporting the speedy modernization process?

Ms. Schlosser: Well, if you do enterprise architecture right, you start with the business process, so by really understanding what your business processes are, and then what the key goals of the business leaders are, you can really take that then to the next level.

Understand where you have any gaps in providing good technology solutions to your business, identify where you have any issues with that technology, and be able to make fixes based on those identified gaps or issues.

And so by having a good perspective on your business process, by understanding where technology is or isn't supporting those business processes, you can really use your architecture to know where you need to invest or where you need to focus on for your business.

Mr. Morales: Lisa, we know that HUD has adopted a service oriented and component based approach to enterprise architecture enabling HUD to "build once and use often." Could you elaborate on this approach?

Ms. Schlosser: Sure, again, what we've done is, we've really used the enterprise architecture principles that have been set out by Office of Management and Budget and other professional organizations.

We've really analyzed our business and we looked for gaps that could be filled, you know, or closed, performance gaps that could be closed by the use of technology and as part of our process in doing that, we just don't automatically go out and build a new system. We look across our enterprise and determine if there is technology in our enterprise that can mitigate, you know, a performance gap.

Our second part of our process is that we go and look across the government, and look at different repositories, work with other government agencies, determine whether there is other good practice solutions that we can capitalize on, and take advantage of those systems. Instead of again building our own, we're happy to outsource to other services that exist across the government.

Mr. Morales: Okay. What lessons have you learned when developing EA blueprints that you could pass on to the other government leaders who might be listening?

Ms. Schlosser: First and foremost, the most important thing is that enterprise architecture is about your business, and you have to make it real to your business, and demonstrate to your business partners, both internally and externally that you understand what their business is, and that you're using their business to drive the systems that you're developing or the technology that you're investing in.

Mr. Morales: Lisa, on the scene of business, over the last few years, there have been a number of federal government initiatives, including lines of business and centers of excellence. Could you speak to HUD's involvement in some of the important new focus areas and how these initiatives are affecting HUD's progress forward?

Ms. Schlosser: As I mentioned earlier, HUD's strategy is to take advantage of crosscutting services anywhere in the government to help close our performance gaps and to help support our business. So we were happy to see e-government solutions and other shared services come about and in fact HUD was one of the early adopters of the pay and personnel.

We have outsourced our pay and personnel to the National Finance Center, very happy with the service we are getting there. We have outsourced our human resource systems and worked with the Department of Treasury, used their shared service for human resource systems, and we also take advantage of the Environmental Protection Agency's online rulemaking service.

So we are a big adopter, we share these services, we use these crosscutting government services, where it makes sense for our business, particularly, in non-core mission areas.

Mr. Morales: And you found that this has been a pretty good program for HUD?

Ms. Schlosser: It's absolutely been a great program. In one particular case, in one of these programs, we spent two years on development of a new system; when we decided to go to the crosscutting service, we had it implemented within six months.

Mr. Morales: Wow! That's incredible. How is HUD preparing its systems for emergency response needs? We will ask Chief Information Officer, Lisa Schlosser, to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host Al Morales, and this morning's conversation is with Chief Information Officer, Lisa Schlosser from HUD.

Also joining us in our conversation from IBM is Pete Boyer, Director of Federal Civilian Programs.

Lisa, we know that HUD like many other organizations faces IT challenges from a number of fronts, including requirements to quickly respond to policy and result in system changes from events such as, in your case, FHA reform or natural disasters such as the hurricanes from last year.

How has HUD reacted to these challenges from a systems perspective, and how can industry help to prepare the Department to be able to react quickly and efficiently to these evolving IT changes?

Ms. Schlosser: Well, HUD's really been investing in standard open architecture using web services, using standard reporting formats, using standard information sharing protocols and formats as well.

And we've found, since we've been investing in this type of standard spaced architecture, we're able to share information quicker, we're able to make changes quicker to our systems to accommodate a lot of changes that are happening today. Everything from responding to various hurricanes across the country, other natural disasters, and program changes.

So I would say that's the first thing that we are really focusing on is using open standards, using commercial off-the-shelf products as much as possible, so that we can rapidly put in place new systems to adapt to these changing business requirements.

And also not from a policy perspective, we did, as we talked about earlier, invest quite a bit in ensuring we had a good business based enterprise architecture, so we know where to invest our funding, and we're investing in the areas where we anticipate we will have to make system changes quicker.

And that's where we are investing in the -- in the, you know, commercial off-the-shelf packages as much as possible, you know, where we're investing in web services and using web and portal technology to its fullest capabilities.

In terms of how industry really can support us, to continue to really understand our business, to understand our business processes, and to develop the commercial off-the-shelf products that we can rapidly integrate in kind of a plug-and-play type scenario into our environment.

So we can rapidly take advantage of technology so we can shorten lifecycles, you know, from the traditional years of development to the six months that we are starting to see.

When you have a new business requirement, you can capitalize on the COTS product on our web services, a portal type technology, so that's what we need to continue to have from our industry partners.

And a tight collaboration in sharing of best practices and bringing best practices that the industry has seen, you know, across the government, in other agencies bringing those solutions to us and helping us identify and capitalize on other shared services that could help to meet our business requirements quicker than before.

So for example, you know, HUD has, as I mentioned earlier, our Community and Planning Development group has really taken the lead in providing a lot of support in rebuilding communities in the Gulf Coast, and we rapidly put in place a web-based system with a series of controls to track and report on that funding, and to get the grants out, for example, quicker than we ever have before using again a web based technology, using open standards.

We can get that information out, we can get reporting and we can get access, secure access to the right people at the right time using that technology

Mr. Morales: Lisa, I'm sure one of the hot buttons for most CIOs these days is the issue around information technology security, and certainly, it's been in the news quite a bit these past few weeks and months with a variety of penetrations and stolen laptops, which cause a variety of major problems within different government agencies, and it fuels our citizen's concerns over issues such as identity theft. What does this mean at HUD and how has the Agency reacted to these types of events?

Ms. Schlosser: It's interesting about HUD, like I said, I think, earlier is, I've been there about a year-and-a-half, just a little bit more than that now, and one of my observations about the leadership at HUD is they're very aware of technology, capitalize on technology and not just technology itself, but also information security.

The Deputy Secretary who I worked for, Deputy Secretary Bernardi is very, very supportive of information technology security. In fact, when he started reading about some of these incidents, the first thing he did is call me, and say, "Lisa, what can we do to mitigate our risk?"

And fortunately, because we've had this support at that level, the support of our business leaders, we've actually been improving our security over the past, you know, since I've been there, certainly, at HUD.

And a couple of things that we've been doing other than the executive support, we really have focused on making sure we have a good solid inventory of systems, and eliminating redundant system, where we didn't need them.

There is not use having a system, just to have a system, so where we didn't need it, you know, we've decreased the systems or combined systems or reengineered to one platform, so less systems, obviously, I think you can have a better handle on security.

The other thing HUD really has an advantage on, and one of the really critical success factors, I believe, in protecting your data, is to have a centralized architecture, a centralized network, one helpdesk operation, one network, one way that you go ahead and implement patches across your environment by pushing a button basically.

HUD has that advantage, we are centralized. Again, we have one network, we have one helpdesk, we have one infrastructure, and I think that's been a real benefit to us.

We are able to have a standard image on every single one of our servers, on every single one of our desktops, so if a new virus comes out, we are able to implement the patch very, very quickly after we test it throughout our environment.

Other things that HUD's done obviously when some of these incidents started to occur, you know, we went out and we did a review of all our programs.

We updated our data architecture, just to make sure we truly understood where all our data was, where there was potential Personally Identifiable Information or PII, you will hear that term. And we made sure we had the right protection and controls in place.

We also went out and retrained all of our folks that had mobile access to HUD systems or to data, put in place strong policies about removing that data from HUD and had our user sign statements indicating that they realize their responsibilities in protecting that information.

So we've been very proactive as with most of the agencies now in putting in measures or enhancing the measures we already had in place to improve security.

Mr. Boyer: Lisa, on a different subject, one of your roles is to serve as both a member of the HUD Technology Investment Board Executive Community or TIBEC, and to coordinate the efforts of the TIBEC. Could you tell our listeners about the HUD TIBEC, for example, what criteria does the TIBEC use to evaluate the portfolio?

Ms. Schlosser: HUD has a governance process in place that's also embedded in policy where we have, what's called a, actually, a technology investment board working group that consists of individuals representing each of our key business areas within HUD.

This group gets together, establishes what our business goals are for the year, based on the strategic plans and others things we've talked about, and this group also goes out to each of the programs, asks for the programs, anybody who wants to invest in technology to put together a business case to justify why they need investment dollars.

The group then evaluates each of those business cases against the set of criteria as you just asked about, Pete, and in this case, this year -- this criteria change based on, you know, our business needs or you know, the direction of the Secretary or the Office of Management and Budget at the time.

This year, for example, we had a very clear set of criteria. Every single business case was evaluated against how well it met the new strategic objectives of the Department.

So, for example, did the proposed investment or business case support the FHA modernization program, did it support the Public and Indian Housing modernization programs, did it support some of our internal modernization programs, you know, or how well did it support those programs, was there a qualified program manager, you know, assigned or proposed for that project, okay.

If that project had been ongoing, was it meeting its cost schedule and performance goals? Was it showing value to the business of HUD and showing good business outcomes? And did the program or the project, is it taken into account, does it understand security and how it's going to protect the security of the data that will be embedded in that system.

Once that group pretty much puts together and evaluates each of the projects. In our case, we have about 13 major projects that get evaluated and another 50 non-major programs that are evaluated. The group gets together and decides which get funded and how much.

And then this is presented to what we call, as you mentioned, Pete, the Technology Investment Board Executive Committee, and that's the TIBEC. And the TIBEC is comprised of deputy secretary chairs that the CIO is a member, the Chief Financial Officer is a member, the Chief Acquisition Officer, and of course, each of our assistant secretaries is also a member and the General counsel.

So the budget is presented to that group and the group says, "Aye" or "Nay" on that particular budget and then the CFO takes that budget, and then incorporates it as part of the Secretarial budget, so everybody really has a say in where those dollars get invested and to what priorities those dollars get invested in.

Mr. Boyer: Now, how has this process changed the outcome of HUD's systems?

Ms. Schlosser: I think by having the business folks involved at a couple of different levels in the governance process -- it's not that just the Chief Information Officer obviously making these decisions, it's the business folks.

And so I think our systems are becoming more valuable or becoming more a critical part of the success of our programs, and I think you're starting to see some really positive business outcomes based on our enhanced use of modernized technology that's been derived from this process.

So I will give you two quick examples, I mentioned that obviously one of our goals in HUD is to increase homeownership. Well, we do that primarily through our loan insurance programs, so one of the areas that our businesses last year wanted to invest in was to automate or electronic the process whereby we get submissions on loans from the lender community.

It used to be that the lenders would submit a loan application to HUD in a paper-based format, which resulted in millions of pieces of paper a year. While, as of last year, we made that an electronic process.

So we cut processing time by 20 percent, cut costs by approximately 30 percent for that processes, so ultimately those reduced costs equate to quicker processing of applications, and getting loan insurance and ultimately loans to the citizen quicker than ever before.

Another quick example, I think, all government programs tried to increase efficiency in the way that we give out payments to recipients of our programs. In the past couple of years, HUD put in a system to help to ensure that our funding for various programs only went to qualified individuals or qualified organizations.

We put in a new database that we actually worked with HHS and SSA on, and we've reduced improper payments on this particular program by 57 percent just by using modernized shared technology.

Mr. Boyer: What are your next steps for the TIBEC?

Ms. Schlosser: We continue to improve the process in the TIBEC. We are increasing the representation of the business community, so our housing leaders, for example, Federal Housing Administration leaders are even more engaged than in the past in that process.

And I think you will ultimately see more and more our systems really supporting good solid business outcomes in measurable performance improvements in HUD's programs.

Mr. Boyer: Now, in our research for the program, we noticed your website includes significant information about the IT development cycle at HUD. Could you tell us about this information?

Ms. Schlosser: Well, we'd like to post the information to -- so that all of our partners really who help us develop these systems really understand what our processes are and how they can build systems to support, you know, to support HUD using a very standard, you know, standards based process.

So we do make sure we keep that updated, we make sure that it's out there so that anybody who would like to participate or bid on a HUD program has access to the methodology that we use and can apply that methodology to their solutions.

Mr. Boyer: Now, how has posting this information changed the activities or outcomes at the OCIO?

Ms. Schlosser: Oh, as we post more and more, we're finding that we're getting solutions that really fit into our architecture. We're -- it's really resulting in a fewer redundant systems. It's also resulting in better lifecycle delivery of new systems development.

Mr. Morales: Lisa, we also noticed that you've included a fair amount of information regarding privacy. What information is available for HUD customers? And when does your officer interact with the Chief Privacy Officer?

Ms. Schlosser: There are a couple of ways we get that information out. Number one, you will see on our website, we do post a privacy policy, so everybody understands what we collect, why we collect information.

Secondly, we also complete something called a Privacy Impact Assessment on every single one of our computer systems, so the documents, what information we collect, what might constitute privacy information, and we post the results of those assessments on our internet sites.

So anybody -- anybody in the public can have access and understand where and how HUD is either collecting or again using privacy act or personally identifiable information.

Mr. Morales: What does the future hold for HUD? We will ask Chief Information Officer, Lisa Schlosser, to discuss this with us, when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host Al Morales, and this morning's conversation is with HUD Chief Information Officer, Lisa Schlosser.

Also joining us in our conversation is Pete Boyer, Director of Federal Civilian Programs at IBM.

Lisa, what trends will have the largest impact at HUD and its customers in the next ten years? And how will HUD need to adapt to meet these changes?

Ms. Schlosser: I think first and foremost, as I mentioned a couple of times -- several times throughout the interview, that our primary mission is obviously to increase homeownership opportunities, provide affordable housing, and help build communities, and invest in communities.

And so obviously the direction of the housing market and the economy related to the housing market really impacts our business first and foremost, and that's what we have to plan for and react to as time goes on.

Second major trend, of course, which none of us can predict is disasters. What kind of disasters are we going to have? What areas of the country, and how can we provide the quickest support to getting folks into temporary housing, working with various agencies to do that, and also to rebuild any communities that are impacted by disasters as we go through.

Mr. Morales: Lisa, HUD, like many other federal agencies, is currently dealing with a reduction in budgets. How will the OCIO's Office incorporate budget reductions into modernizing planning in other ITI efforts?

Ms. Schlosser: Well, obviously, we have to continue to get better and better and again as I mentioned earlier, we've really worked on our investment processes, and we've really made sure that we have included our businesses and our strategic goals of the Department into our planning process for Information Technology Investments.

We will continue to do that. We will always have a handle on what the business priorities of the Department are, what the key priorities, again, from the business perspective are, and we will invest where the priorities are the highest.

And also we will invest where it makes good sense on the technology side, where we can build once and service many different programs at once.

So the way we will confront those things is through again better understanding of the business and consistent understanding of the changes in the environment impacting our business and also understanding the technology that's available where we can share technology to get the biggest bang for our buck.

Mr. Boyer: Lisa, on a related topic, there are many exciting technologies that are vogue in the marketplace today, such as SOA, that promise significant advantage in cost savings and improve systems integration. Could you please describe HUD's plans for future technologies and investments?

Ms. Schlosser: Certainly, the service-oriented architecture principles as we talked about before are something we want to continue to look at, continue to invest in.

Obviously, we want to share services, build once and service many, capitalize on economies of scale, you know, actually, use the products in an environment to service multiple business needs is what we want to continue to do.

And specifically, from a technology standpoint, we want to incorporate web services technology. We want to web-enable all of our business applications, so any stakeholder, be it a business, another government agency, or the citizen can access the HUD information that they need when they need it, and customize it to their particular needs, and their particular requirements.

And government-wide, HUD is also going to, you know, ensure that we invest in moving towards Internet Protocol Version 0.6, and we're going to take advantages of smartcards and other technology solutions on the horizon, better and quicker encryption.

The third thing that we really want to do is capitalize on the power of wireless at many levels where we can. We have an increasingly mobile workforce. We have less funding for travel. We have less funding for government employees, so we really want to be efficient about the way we use technology.

I really see remote access web mobile type solutions, handhelds, some of the other technology that gets our mobile workforce connected no matter where they are, they can access securely HUD resources that they need to do their business.

Mr. Morales: Now, related to that, how much of HUD's workforce is mobile today?

Ms. Schlosser: That's -- it's hard to pin on an exact percentage of how much. I would say somewhere between maybe 30 to 40 percent of HUD's workforce travels to conduct inspections, you know, to promote some of our homeownership opportunities. So I would estimate, though roughly, 30 to 40 percent of our folks out there needs some sort of mobile capability, but you also have to consider really your whole workforce as a potentially mobile workforce really.

In the event of a disaster, and in the event that you have to deploy rapid response teams to a disaster area, you have to assume that anytime, anyplace, you can enable your people with a wireless solution, tele-working, obviously.

You need to build in remote access capability, so for example, HUD's implemented a web basis remote access solution. We use the mobile computers, obviously, that are wirelessly connected, so again, we do equip our mobile workforce and we are prepared to equip more of our workforce as more mobility is needed down the line.

Mr. Boyer: Now, Lisa, we talk with many of our guests about the government employee pending retirement wave. How are you handling the retirement wave?

Ms. Schlosser: Well, a couple of things, the Department overall has really an incredible intern program. We bring in -- I think we probably had a couple of 100 interns this year from various programs, from various universities across the nation, and we have a structured program where we bring these folks in, we offer them training throughout their time here as an intern. We really invest in the interns because we want them to come back, we want them to be HUD employees.

Within the Office of the Chief Information Officer, we have an Emerging Leaders Programs, where we meet on a quarterly basis with some of our emerging leaders. And we train them on various things, not just technology, but we train them on how to be good leaders, you know, what to expect from their leaders.

How to be good program or project managers and to understand the technology. We also spend a lot of time teaching them about the business of the government and about the business of HUD, so we want them to get invested, to be excited about the incredible mission and opportunities that we have, so that they come in and so we have a workforce that's ready to move up the ranks, you know, as some of our other members of our workforce get ready and actually do retire.

Mr. Boyer: Lisa, we also talk to many of our guests about the topic or on the topic of collaboration. What kinds of partnerships are you developing now and how will these partnerships between HUD other federal agencies or the private sector change over time?

Ms. Schlosser: Well, I think we're finally really getting into a mindset across the federal government that it does really make sense to collaborate on areas of commonality and I think collaboration will continue to grow.

I think e-government initiatives from the current administration has -- have really opened our eyes to wow! you know, we really do have a common need. We do have a common way we can do this particular business and of course, that translates into technology that we -- we really can capitalize more on shared services across the government.

I think a couple of areas where you're seeing even more collaboration is say in the disaster recovery arena, HUD works very closely with the Veteran's Administration and the United States Department of Agriculture on making sure that we can take personnel and get them into housing as quick as possible and help to build the community, so you're seeing a good collaboration occur there.

We've also -- in that particular case, we've also put -- worked together with those two agencies. We have kind of common housing mission areas.

We put together a website called homesales.gov, where we list any properties that the government owns that we would like to sell, we list it on those websites, and anybody is able to get to that website, make an offer on those homes, or at least pursue how to make an offer, if they're interested.

So it's been a very good opportunity to work together to get that information out. I mentioned a program earlier, Enterprise Income Verification, where the Social Security Administration, Health and Human Resources have gotten together and shared a database that has income data from various recipients of federal programs, and by building that database once and sharing it, we have increased the quality, we have reduced the improper payment.

So there is some real tangible, quantitative benefits of collaborating particularly as we've been talking about in the area of information technology. Again, you build it once let multiple folks use it and you can really create some efficiencies in your process and some cost savings.

Mr. Morales: Lisa, you've certainly enjoyed a very exciting and distinguished career and you've made the migration from the private sector over to public service. What advice could you give to a person who is interested in a career in public service?

Ms. Schlosser: Well, I'd say, first thing is to really understand what aspect of government you'd like to get involved with. There are various opportunities out there, specifically, in the area of security type career fields. Always opportunities in the information technology, and my best advice would be to capitalize on usajobs.gov.

It's a great website, a great resource. It lists opportunities, talks you through what a career in the government is like and it definitely lists all the different job opportunities that are available across the United States, you know, in a variety of different areas of expertise as well.

So I would encourage folks to periodically look at usajobs.gov, and take advantage of the opportunities that are listed there.

Mr. Morales: Great, that's fantastic. Unfortunately, we have reached the end of our time. I do want to thank you for fitting us into your busy schedule, but more importantly, Pete and I would like to thank you for your dedicated service to the public and our country in the various roles you've held in public office, as well as in the U.S. Army.

Ms. Schlosser: Thanks and I appreciate you taking the time to have me here today, and allowing me to share some of the things that HUD's doing. Obviously, HUD's continuing to, what we think, provide a great service to the American public, homeownership, that's the American -- that's America's dream, right, it's to own a home.

And the mere fact that now over 70 percent of the American citizens do own their own home, I think is quite a testimony to Secretary Jackson, Assistant Secretary Brian Montgomery, the head of Federal Housing Administration, and other key leaders within HUD, and I think you're going to see some exciting things coming out of HUD.

They are really going to help people even have more opportunities for homeownership, modernization programs within the Federal Housing Administration.

That's going to allow more flexibility to first time -- particularly, first time homebuyers, and I encourage everyone to look for those programs, look for those opportunities.

Again, I thank you for asking me to be here today.

Mr. Morales: Great. We look forward to your continued success. This has been The Business of Government Hour featuring a conversation with Chief Information Officer of the Department of Housing and Urban Development, Ms. Lisa Schlosser.

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 conversation.

Once again, that's businessofgovernment.org.

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

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

Judy Davis interview

Friday, June 23rd, 2006 - 20:00
"We spend all day long writing, negotiating, and processing contracts and it's very easy to lose sight of why we're here. The mission statement reminds us that it's not about contracts. It's about supporting the Agency mission."
Radio show date: 
Sat, 06/24/2006
Intro text: 
Davis discusses making the OAM EPA's preferred acquisition-services provider. Davis also describes how her office is streamlining the procurement process at the EPA and shifting procurement decisions to the agencies' contracting officers.Contracting;...
Davis discusses making the OAM EPA's preferred acquisition-services provider. Davis also describes how her office is streamlining the procurement process at the EPA and shifting procurement decisions to the agencies' contracting officers.Contracting; Green
Magazine profile: 
Complete transcript: 

Friday, March 17, 2006

Arlington, Virginia

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

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Judy Davis, director of the office of acquisition management at the Environmental Protection Agency.

Good morning Judy.

Ms. Davis: Good morning.

Mr. Morales: And joining us in our conversation, also from IBM, is Pete Boyer. Good morning, Pete.

Mr. Boyer: Good morning.

Mr. Morales: Judy, although many of our listeners may be familiar with the EPA, perhaps you could share some history with us. When was the EPA created, and what is its mission today?

Ms. Davis: Sure. EPA was created in 1970, actually by Richard Nixon, who was President at that time. Matter of fact, we just celebrated our 35th Anniversary. And the current mission today of EPA is to protect human health and the environment.

Mr. Morales: Can you give us a sense of the overall size and budget of the EPA?

Ms. Davis: Yes. EPA has roughly 18,000 people and an annual budget of $7 to $8 billion.

Mr. Morales: Can you give us a sense of the responsibilities and duties as the director of the Office of Acquisition Management? Can you tell us a little bit about the area under your purview?

Ms. Davis: I have broad responsibility for all matters of procurement at the Agency. We have roughly 350 folks in our contracting shops around the Agency. Two hundred fifty of them are in my shop, which is the Office of Acquisition Management, and we call that OAM for short. And in Washington we have three divisions, two operations divisions and a policy division. We have an operations division in Cincinnati, Ohio. An operations division in Research Triangle Park in North Carolina, and we have roughly 10 regions around the Agency with approximately 100 folks, contracting folks, in those regions.

Mr. Boyer: Now, Judy, how does your office, the OAM, support the mission of EPA?

Ms. Davis: Essentially, we buy the stuff that EPA needs to carry out the mission, mostly services and supplies. EPA depends very heavily upon the private sector; we're very heavily leveraged with our contracts. We buy primarily services, technical services, support services, emergency response support. We obligate $1.3 billion per year, and we process somewhere in the neighborhood of 120,000 contractual actions per year.

Mr. Boyer: Wow. Now, could you describe your career path for our listeners? And specifically, how did you begin your career?

Ms. Davis: Well, if you ever want to hear an interesting story, just ask your friendly neighborhood contracting person how they got into contracts. Because, I don't know too many people, and you probably don't know too many people that, when they're six years old, they sit on their granddaddy's knee and say, "I want to be a contracting officer."

So my story is, I took the PACE test, that was the Professional and Career Entrance Exam, many, many years ago, and that test measures aptitude and potential. Then the Navy called me and said, "We have a job for you in procurement." And I said, "Great. I'll take it." And then I went home, got out my dictionary, and looked up "procurement" because I didn't know what it was. That's how I got into the job of government contracts.

I spent the first 13 years with the Navy as a civilian. Navy turned out to be an excellent training ground. They gave me all kinds of experience: headquarters experience, field experience, major systems procurement, and what I call real procurement, which is what we do here at EPA.

And then I went to NOAA, the National Oceanic and Atmospheric Administration, under Department of Commerce. There I was supporting the National Weather Service in their modernization of their contracts. I was there six or seven years. Then I came to EPA, first as the deputy director of contracts, and now as the director.

Mr. Morales: Judy, we understand that you sit on the board of directors for the Federal Acquisition Institute. Could you tell us about the Institute and specifically, your role on this board?

Ms. Davis: Sure. The Federal Acquisition Institute has a very, very, critical mission for the federal government, and that is to promote the development of the professional civilian acquisition workforce. Organizationally, it falls under GSA. Its parallel in DOD is the Defense Acquisition University, the DAU. There is no comparison between FAI and DAU in that the FAI has a very small budget and a very small staff -- only three to four folks. DAU by comparison has, we think, a huge budget and a comparable staff. It's headed by Frank Anderson.

The Board of Directors provides, as most boards, general direction to the Institute, and one of the things that we instituted was to leverage DAU's experience and expertise. FAI has physically moved down to Ft. Belvoir to be co-located with DAU, so they can partner more with DAU and learn from their experience. In the federal government there is a broad movement toward standardizing the contracting series across all the agencies, the idea being that a contract specialist is a contract specialist and the qualification requirement should be the same among all the agencies. That hasn't been the case in the past, and so one of the biggest challenges for FAI is to have a comparable qualification program for the civilian agencies as DAU has for the Defense agencies.

Congress recently saw a need for new skills and a new perspective in the acquisition arena, so that we could adapt to the challenges of the 21st Century. And as a result of that, they came out with the SARA legislation. SARA stands for the Services Acquisition Reform Act. One of the results of the SARA was the creation of the Acquisition Workforce Training Fund. That fund is one of the biggest challenges that FAI faces right now and that is because they are managing that fund.

It's a brand new fund, it's a sea change for FAI in that they formerly had virtually no budget and now they have a budget to create developmental opportunities for the civilian workforce. One of the challenges that we had on the board is, what is the most effective use for this newly created fund that came out of SARA?

So FAI in partnering with DAU, now today is offering courses, free of charge to agencies and departments, so that they can further Congress's vision of the new skills and the new perspective. And I would tell you as a person in an agency, in the contracting shop; this is a very welcome change to agencies as we struggle with our own positive resources to maintain a competent workforce.

Mr. Morales: Certainly, anything that has the word "free" in it sounds like it is probably a good venture. How is the EPA involved in disaster relief? We will ask EPA Director of the Office of Acquisition Management, Judy Davis, to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with EPA director of the Office of Acquisition Management, Judy Davis. Also joining us in our conversation is Pete Boyer.

Judy, the Office of Acquisition Management lists a vision, a mission, and strategic goals on its website. Could you describe these management tools and how your office developed them?

Ms. Davis: It is a well-established fact that the highest performing organizations are the ones with a vision, and that have all the folks in the shop are on board with the vision. So about six or seven years ago, we took our managers off-site and we said, "All right, where do we want to go in OAM, the Office of Acquisition Management, at EPA? What do we want our vision to be?" At that time, in our world, in the contracting world, there was a lot of competition going on, and organizations like GSA were marketing different agencies to get their business, and it really made us sharpen our pencil. Competition is a very healthy thing and it made us sharpen our pencil and we realized we were actually losing business to GSA.

So the vision that we came up with was we want to become the preferred business management partners for the Agency. And the way I translate that, there are a lot of big words, but I'd translate that into, "We wanted OAM to be the go-to organization for the Agency, not the go-around organization." And that's how we created our vision.

Then we said, okay, so what are the three biggest challenges to achieve that vision? And that's how we created our strategic goals. And we said first and foremost we have got to have a competent qualified workforce, because our business is very technical. You got to know how to spell contracts. You got to know how to jump over hurdles and tear down barriers to get the job done. And having a competent workforce is not a small feat. So our very first strategic goal is investing in our people.

Then we said, another challenge is, you know, one of the reasons that we think we're losing business is because we don't really have a great corporate image around the Agency, our contracting shop. And so we got to boost that up and we got to show what we're really made of. So our second strategic goal was enhancing our corporate image around the Agency with our customers.

Thirdly, and I'm sure this will come as no surprise to anybody in any kind of business world, is keeping pace with IT. Our IT systems are legacy systems and it's a big challenge for us. So our third goal is investing in information technology. That worked for us for a few years, and like all good organizations, it's always a good idea to go back and revisit your strategy. So, a year or two ago, we did just that.

We had another management off-site. We revisited our strategy and we said, okay, is it still working for us? What's working, what isn't working? Will you tell me the vision is working for us? We've made great progress. We've turned around a lot of business and we've gotten a lot of our customers coming back to us and we're getting lots and lots of kudos from our customers, so that's still working for us, still a good vision. We kept the vision to be the preferred business management partners for the Agency.

On goals, we actually decided to revise some of the goals but we kept the first one, investing in our people. Our view is that if we take care of our folks and we make sure we have a sharp, high-qualified workforce, they would take care of our customers and they'll take care of the rest. So that is still our first strategic goal.

Our other strategic goals, we decided, okay, the workforce, we made a lot of progress, but we need to broaden our focus now and be actually more outwardly focused, because enhancing our corporate image was kind of inward. What can we do to do that? And IT is inward looking. So, to be more outwardly focused and broader, the enhancing of our corporate image goal turned into providing business leadership.

We recognize it's very critical for us to be business leaders to achieve our vision. Investing in IT, we said, you know, we can broaden that too. Why are we focusing only on IT? We should be optimizing all our business processes. So our third strategic goal now is to optimize business processes.

We added a fourth one. The fourth one we added is strengthening our link to the Agency mission. Why? Because we realized that, you know, we're contracting types, we spend all day long writing, negotiating, and processing contracts and it's very easy to lose sight of why we're here. And this is to remind ourselves that it's not about contracts. It's about supporting the Agency mission. The contracts we write are a means to the end, not the end in and of itself. So that's our fourth strategic goal.

Every employee in OAM is familiar with our vision statement, and it's incorporated into our performance plans and as a matter of fact, in deciding to put our money where the mouth is, our awards are directly tied to our vision statement and our strategic goal.

Mr. Morales: Excellent. Certainly developing a vision, mission and goals is critical to the success of an organization, but many would argue that the real challenge is ensuring that employees have bought into the vision and the goals that you set out. What have you done in this area and what advice could you give to other leaders who are thinking about establishing a new vision and goals for their organization?

Ms. Davis: That's an excellent point. How many of us know organizations that have vision statements that end up in a file drawer or some place, and the next time the subject comes up, it's "Yeah, we had one of those. Let me see if I can dig it out." Well, once we had our vision statement, I was on a mission. We were not going to become one of those organizations. So what we did was we established some groups of our staff, we took a cross-cut of OAM, that means all levels, all different levels of OAM were involved, and we established one group for each of our goals.

And our groups, which were the staff, our employees, came up with how they thought we as an organization could implement these goals. They came up with some fantastic ideas. For example, in terms of enhancing our corporate image, besides a lot of our outreach that we do with our customers, they came up with an idea, like, we could have a periodical, a publication that tells stories and advertises successes and focuses on our customers. And we have that now and our folks came up with the name, Buylines, that's b-u-y lines. And so that's done a great job. It's a good way to communicate with our customers. Matter of fact, there's a section in there that's called "Captain Contracts," that's the humor section, and it seems like when we issue a new Buyline, that's where everybody goes, to the "Captain Contracts," to see what kind of humor we have.

Mr. Morales: Does he have a cape?

Ms. Davis: He has a cape. He has a cape. And I got some feedback, that some of our customers didn't realize that we had a sense of humor in the contracting shop, so that was a great idea. And they actually came up with the idea of the Director's Awards. We have a Giraffe Award for those stick their neck out. We have a Light Bulb Award for innovation. We have a Wings Award for one who mentors another. We have the OAM Customer Service of the Year award. We have Mission Made Possible Award, and the Circle of Excellence Awards and our folks came up with those ideas.

So they're very, very, actively engaged in coming up with how we're going to implement these goals. To maintain that, to maintain the goals, we do a number of things. First of all, our vision statement is posted all around our organization -- you can't walk into our organization without seeing it. And I personally meet and greet every individual who walks in to OAM, to work in OAM. I do that for a number of reasons, but not the least of which is to give my stump speech, if you will, on the vision and goals and what it's all about. And so I take great pride and I challenge anybody to find a single individual in OAM who is not familiar with our vision statement and our goals.

Mr. Morales: Most leaders take a top-down approach to vision, mission, goals and it sounds like you've taken a more collaborative approach, which has certainly solved a lot of the issues around employee buy-in to those points. You mentioned customers. So, did you share the goals with your customers?

Ms. Davis: Absolutely. That's how we keep ourselves honest. It not only is important for them to know what we're trying to do in OAM, but it's also important for them to give us feedback on that. We have shared with them at all levels, starting with the top levels. We do an annual outreach to our customers at the deputy assistant administrator level, and in the regions at the assistant regional administrator level. And in those outreach sessions I meet with those levels and bring them up to date on current areas of the contracting arena. And that was one of the first things we shared with them after we had our vision statement. We laid it out and discussed it with them.

At the division level, our division directors share it with them. They've done that annually and in other forums with their customers at the division level. At the staff level, we have a Contract Customer Relations Council that we do outreach with. We meet monthly with our customers and talk about new policies and new evolutions in the contracting world, and so we shared it at that level with them as well. So we shared it all around the Agency. There is no secret. It's very, very public.

Mr. Boyer: And Judy, we understand that EPA's playing a role in response to Hurricane Katrina. Could you describe this role and what results EPA has seen?

Ms. Davis: Oh, yes. When EPA responds, in general there are two modes in which we respond. The first is usually the response mode, in which we do emergency risk assessments and initial air and water monitoring. Longer-term, we do the recovery mode which is, we continue the role of monitoring the air and the water and we add to that handling and collection of hazardous material. And in the case of Katrina that was from households as well as what was out in the environment.

We initially started out in the response mode, and we provided very specially trained personnel to conduct the emergency risk assessments in Katrina. One of the things that is little known about Katrina is the magnitude, for example, of the oil spill. We worked very closely with the Coast Guard in the oil spill. That oil spill, as a result of Katrina, is second only to Exxon Valdez. Most people don't know that because it was overshadowed by the sheer enormity of Katrina and the other issues. Had there been just that oil spill, and not the rest of the impact of Katrina, that would've gotten wide publicity, but it didn't, because of everything else that was going on.

Now, we're in the recovery mode, in which we continue to monitor and remove the hazardous waste. A big focus is on white goods. White goods are the appliances, refrigerators, that sort of thing, that have hazardous contents. And removing the white goods and computers, the household computers, that's been a huge chunk of what we've been doing down there.

From a business perspective, from a contracting perspective, I have to say that EPA had an unprecedented response, and I could not be more proud of the Agency's acquisition personnel. We essentially moved mountains overnight

We were there dealing with unprecedented challenges under extraordinarily intense scrutiny. It's no secret, just a couple of days after Katrina, the media enquiry started coming in, the GAO scrutiny, OMB scrutiny, IG scrutiny, every body was scrutinizing. You couldn't turn on the news or read a paper without learning about scrutiny and all the bucks that we're pouring in to Katrina.

I have to say that in EPA we managed an extremely well-disciplined approach. We were meeting unprecedented emergency demands, while doing that with a very, very, well-disciplined contracting approach. And I'm proud to say, and maybe I shouldn't say this on the radio, but let me knock on wood, you haven't read anything in the papers about abuse of the contracting process in EPA's response to Katrina and that's because of the quality of our folks and their ability to respond as well as they did in that emergency.

Mr. Boyer: Well, that's really terrific, and I think most folks don't realize EPA's role as a first responder. Now, we also understand that EPA has a role in providing emergency response activities for other natural disasters, including tornadoes and snowstorms. Could you share some information with our listeners about this role?

Ms. Davis: Sure. Actually for EPA, more routinely than natural disasters, we respond to local disasters. We've had a few natural disasters like the California earthquake, couple of things like that, but more routinely we respond when the disaster or local disaster is too big for the local responders, that is, the police, the fire, and the municipalities, for them to deal with the response. That's when they call in EPA.

Some examples of that are local tire fires or a methane lab find, or a tanker car wreck with chlorine gas release. You probably remember the Columbia Shuttle disaster. We were a huge player in that one. So essentially, I think in most natural disasters FEMA plays a bigger role than we do, but we get involved in the local disasters a lot of times when there's hazardous material that needs to be addressed.

Mr. Morales: Judy, can you tell us a little bit about what steps you and your staff are taking to streamline the contracting process and what types of results you're seeing to date?

Ms. Davis: Sure. The real big one we did was empowerment of our staff. You know, when I took over as director, five or six or seven years ago, however long that's been now, there was a lot of stuff coming across my desk and I'm like, I'm asking myself, "Why am I signing this? Why is this coming to my desk? There are folks that are much closer to this that can handle this and I don't think this needs to be coming up to my desk."

So we took on this huge empowerment initiative, which is still ongoing. But my philosophy of leadership is, you put the right people in the right jobs, you push the decisions down to the lowest level possible, and you give them the right tools for them to be successful and then you get out of their way and let them do their job. And that's exactly what we did in OAM.

We've eliminated layers and layers of bureaucracy. We revamped the entire agency procurement regulations accordingly. What that did was, it freed up the senior leadership of OAM so we could be focusing on the strategic direction, where are we going in OAM, making strategic decisions, and our contracting officers, who are closer to the work and closer the customers, make the procurement decisions.

From a procurement perspective, we're doing a lot of things that I think a lot of other agencies are doing. Nothing earth shattering there. We're using a lot more umbrella vehicles, we call them Government-Wide Acquisition Contracts or GWACs or multi-agency contracts, the GSA federal supply schedules. We use them to reduce lead-times and increase efficiencies. That way when a customer comes to us and says, "Okay, we want you to buy this for us," we don't have to reinvent the wheel every time, we don't have to generate a brand new contract every time, because we have an umbrella vehicle in place that we can tap into, and it saves an awful lot of time and expense to the federal government.

Mr. Morales: How is the EPA greening government procurement? We'll ask EPA Director of the Office of Acquisition Management, Judy Davis, to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with EPA director of the Office of Acquisition Management, Judy Davis. Also joining us in our conversation is Pete Boyer.

Judy, in the last segment, you gave us a good overview of the streamlining activities in your organization. Can you tell us a little bit more about the specific benefits and results that you derived from this?

Ms. Davis: Sure. Actually, if I can brag about that a little bit, we've all heard the trite phrase, "doing more with less," I mentioned that I have roughly 250 staff in my immediate shop. We used to have over 300 staff, and that was only six or seven years ago. We had over 300 staff, and today we have about 250. We are still obligating $1.3 billion every year. We are still awarding roughly 120,000 contract actions every year. And that doesn't account for the new initiatives that we've taken on in addition to our normal everyday business.

Concomitantly, we've had a tremendous improvement in our customer-service satisfaction rate, while the dissatisfaction rate has gone down. And equally importantly, our employee morale has dramatically increased, which is very rare in times when your staff levels are being reduced. So I think that speaks volumes for how well our streamlining initiatives have paid off for the Agency.

Mr. Boyer: Judy, what is strategic sourcing? It's something we hear a lot about. And what impact does this have on your office?

Ms. Davis: Strategic sourcing is a structured process that uses historical experience to buy certain goods or services and leverage that experience. An example would be volume buying. The ultimate goal of strategic sourcing is to reduce the cost of taxpayers. At EPA, we have a head start on strategic sourcing. OMB has asked each department or agency to identify three commodities that would be good candidates for strategic sourcing and to make it happen.

The three commodities we selected are green office supplies, "green" meaning environmentally friendly, not the color green, recycling and disposal services for IT equipment, and lab supplies. The first two are ones that we were already doing, and that's why I say we have a head start at EPA. We were already doing strategic sourcing for the first two areas. We have a green BPA. BPA is a Blanket Purchase Agreement, which is one of those umbrella vehicles I mentioned, and that green BPA is the first of its kind in government, and we have made it mandatory since May of last year.

What it means is everybody buys office supplies. And so we are EPA, and so we concluded that it would be a really good idea if EPA buys green office supplies. So that's a way of leveraging the buying for the entire agency into one vehicle and reducing the footprint, the environmental footprint, on the country as well.

Our READ service is also an award winning contract. It stands for Recycling the Electronic and Asset Disposition. That's a fancy way of saying recycling IT equipment, and the READ services is something we were already doing for the disposal services for IT equipment around the federal government. So those are two that we are already doing that meet the criteria for strategic sourcing.

The third one is lab supplies. It's no secret that EPA has a lot of labs around the country and we buy a lot of lab supplies, so we thought that would be a really, really, good candidate as well. That one we're not so far along on. We just established something called a Commodity Council for the lab supplies and what we're doing there is, we're beginning the process of the spend analysis, which is part of the process for strategic sourcing.

Mr. Boyer: Well, you guys are clearly involved in greening the government procurement. How many other agencies are participating in this?

Ms. Davis: Actually, in addition to the regulated green procurement programs that have evolved from executive orders for all agencies we have these two landmark vehicles that I mentioned, the READ services and the green BPA. The green BPA right now is just for our agency, the EPA. It is, by the way, did I mention, it's an award winning contract as well.

Mr. Morales: Yes, you did mention that.

Ms. Davis: It won the 2005 White House Closing the Circle Award, which is a very prestigious award. The Closing the Circle is symbolic of recycling and it's a very prestigious award in the world of green. Right now it's just in EPA, but OMB is actually using our green BPA as a benchmark to promote green buying throughout the federal government, under the strategic sourcing initiative.

The READ service, which is the other one that I mentioned, we're also very excited about that one. In fact, I could take all day and talk about READ services, if you want to, so you may have to cut me short on time for that one. But it is also the first of its kind in government, and we're excited about that one for a number of reasons.

First of all, just the way it evolved. The normal process to get a government contract is a program office comes to the contracting office and says, "I have a requirement. Will you please buy this for me?"

This one actually was the brainchild of the contracting shop. We said, "We want to do something to promote green. That's part of our linking with the mission." And so we in the contracting shop said, "You know what? There is a market here to recycle IT equipment in an environmentally friendly way, so why don't we do that?" We went to the program shops and solicited their help. So that's one reason we're very proud of that, because it's not the normal model for how our contracts evolve.

Another reason we're very proud of this is because this is the first GWAC, Government-Wide Acquisition Contract that EPA has ever had. And that's significant, because the first hurdle we had to jump through to get it was to get OMB authority. OMB retains authority and it issues authority to do the government-wide contracts. That took us about a year, but OMB thought it was a very good idea and gave us the authority in March of '04. By the end of that year, we had seven contracts awarded to small businesses, and at this point in time, the READ services contract is widely used within EPA, and we're just starting to branch out to other agencies. We've had orders from FEMA and the Department of Education, to name the first couple agencies that are on board with that.

'05 was the first year we ramped up. We recycled around 300 pallets of IT equipment in '05. A pallet is a 4 by 4 cube which weighs approximately 10,000 pounds each. So this is a way that we contracting types have been able to impact the mission and serve the mission of EPA.

Mr. Morales: What does the future hold for the EPA? We will ask director of the Office of Acquisition Management, Judy Davis, to discuss this with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with EPA Director of the Office of Acquisition Management, Judy Davis. Also joining us in our conversation is Pete Boyer.

Judy, on the theme of people, which you've mentioned a couple of times already, we talk with many of our guests about the pending wave of government retirement. Is this an issue for the EPA? And if so, how are you positioned to handle this?

Ms. Davis: Actually, I would say EPA probably has an older workforce than most other agencies. But nobody ever leaves EPA. When I first arrived at EPA, I went around and asked everybody, "How long have you been at EPA?" And I get, 20 years, 25 years, 30 years, and I started wondering, why doesn't anybody ever leave? And so I had asked people, "Why doesn't anybody ever leave EPA?"

The most frequent answer I got to that question was EPA's mission. People are absolutely passionate about EPA's mission and very committed to accomplishing that mission. And the second answer I got, quite frankly, was EPA is a great place to work. EPA takes care of its employees and is very people-focused.

A friend of mine, a colleague, says that you know, we shouldn't be so concerned about who is eligible to retire. What we really should be asking people is, "When does your last kid graduate from college?" And we'd have much better metrics about who's going to retire when. Bottom line is, yes, EPA has as many folks that are eligible for retiring as the other agencies, but it's just not happening in the droves and droves that people have predicted.

Mr. Boyer: Now, Judy, you've made it clear, the number one goal within your organization is competent employees, and clearly EPA is people-focused. How do you ensure that your employers have the appropriate training and skills?

Ms. Davis: Well, it's a huge challenge for us as well as the rest of the field. Matter of fact, the Office of Federal Procurement Policy just came out with a recent policy called "Developing and Managing the Acquisition Workforce." So it is very widespread among our discipline trying to keep a competent workforce, and of course, with the shrinking numbers, it's no secret that the contracting arena has hugely shrinking numbers, more so than a lot of other disciplines.

In my shop, we take a multi-pronged approach. First, we have the hardcore technical skills. How do you spell contracts? What does it mean to be a contracting officer? And these are very regimented classes that are taken. I mentioned trying to have the normalcy of the discipline across the entire federal government. Department of Defense has the DAWIA requirements, and so this is pretty regimented.

Besides the hardcore contracting courses, what we do to maintain our technical skill is we do a lot of sharing of best practices and lessons learned around our shop. Beyond that, we say we want to make sure that our folks are well-rounded. It's not enough just to know how to spell contracts and to be good technically. It is equally important to have what we call "life skills." Some people would call these the soft skills. Things like leadership, communication skills, conflict management, and those sorts of things.

And so we've taken on a very large initiative in our shop to ensure that our folks get the people skills and the leadership skills that they need to be solid, well-rounded staff employees and future leaders. It is my view that the best leaders are ones who grow new leaders, and that's why we focus so much on the life skills as well as the hardcore contracting skills.

We try to make sure our folks have other developmental opportunities as well. We have a big emphasis on rotations and details. It's important for our folks to walk in the customer's shoes to understand what it's like to be in the program office. We've had rotations inside and outside EPA with other agencies and yes, even with industry. There are some ethics concerns there, but you can work around those and we've actually had some folks who've had the opportunity to do a stint with industry.

In addition to all that, we do routine in-house training. At different levels in the organization we do training for the staff members on contracting issues to keep current, GAO protests, couple of things like that. And we do management training. One of the big mistakes that people make, I think, in organizations is they take people who are very technically skilled, they put them in management positions, but they don't give them any new tools to be successful and then they wonder why the management isn't a dynamic management team.

It's very critical for our managers to stay current, as well as our staff, and so we have in-house management training. We just had training; just within the past couple weeks, on the generational differences in the workplace which is very, very interesting.

Mr. Morales: Fascinating.

Ms. Davis: Very interesting training, right, because we've got a lot of the different generations, and let's face it, we are different. It's important to understand, recognize and manage to those differences. The whole result of all this is that OAM takes great pride in turning out very, very, high quality talent.

Mr. Morales: Judy, you told us a wonderful story of how you started your career. What advice would you have to a person starting a career in public service, or perhaps just reflecting on that day they sat on their grandfather's lap?

Ms. Davis: I would say what you've got to think about, if you're considering a government career, is to step back and consider the difference between the government and the private sector. Let's face it; the government and the private sector do not exist for the same purposes. Industries, the private sector companies, exist because they want to make a profit. That's what drives their bottom line. The government is in the business of solving the most challenging and significant problems of the nation, and, yes, of the world.

And so I would advise folks that you should take that into account if you're choosing a career in public service. If you're looking to make the most money that you could make during your career, during your lifetime, don't come to the federal government. I would say, go to the private sector, because you can have the same level of responsibility and make a whole lot more money in the private sector than you do with the federal government.

If you are looking for a place where you can have an enormous amount of responsibility, you can have an impact on the world around you and tackle some very, very tough worldwide problems and challenges, you can have a reasonable standard of living and maintain a quality of life, but you can have an impact with significant responsibilities, I would say then consider the federal government. You make a decent living, you have a balanced life, and you can tackle some very difficult challenges.

The government has a public image problem. There is no question that the government has a public image problem. We've all heard the phrase, "good enough for government work." It may come as a surprise that that phrase when it was originally formed was an indication of the high standards that government was held to. Today, we don't get that sense when we hear that phrase.

And so my advice to you is if you are a talented, energetic, dedicated individual, find an agency with a mission that you can be passionate about. Come join the world of federal service and make a difference.

Mr. Morales: Judy, thank you very much. We've reached the end of our time and that'll have to be our last question. I want to thank you for fitting us in to your busy schedule today, but most importantly, Pete and I would like to thank you for your dedicated service to the public and our country in the various roles you've held at the EPA, NOAA and the Navy.

Ms. Davis: Thanks a lot. I really enjoyed the conversation and I appreciate the opportunity to be here today. If anybody in the listening world out there would like more information on EPA, come join us at epa.gov.

Mr. Morales: This has been The Business of Government Hour, featuring a conversation with the director of the Office of Acquisition Management, Judy Davis, of the Environmental Protection Agency. 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.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad, who can't hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support. For The Business of Government Hour, I'm Albert Morales. Thank you for listening.

David Combs interview

Friday, February 10th, 2006 - 20:00
"Globalization, advances in secure communications, and customer expectations for electronic access have prompted the department to assess its infrastructure and explore options for accommodating these trends."
Radio show date: 
Sat, 02/11/2006
Intro text: 
Combs discusses how the USDA Office of the CIO works closely with each of the CIOs in the department's various agencies, develops project management training programs, and works toward the electronic government goals in the President's Management Agenda....
Combs discusses how the USDA Office of the CIO works closely with each of the CIOs in the department's various agencies, develops project management training programs, and works toward the electronic government goals in the President's Management Agenda. Combs describes how USDA's Information Technology Services (ITS) provides service and support for more than 40,000 employees in the USDA's "service center agencies," such as the Farm Service Agency and the Natural Resource Conservation Service.
Complete transcript: 

Wednesday, January 18, 2006

Arlington, Virginia  

Mr. Morales: Good Morning, and welcome to The Business of Government Hour. I am Albert Morales, your host and managing partner of The IBM Center for The Business of Government. We created the center in 1998 to encourage discussion and research into new approaches to improving government effectiveness. You can find out more about the center by visiting us on the web at www.businessofgovernment.org. The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is David Combs, Chief Information Officer at the Department of Agriculture. Good Morning, Dave.

Mr. Combs: Good Morning, Al.

Mr. Morales: And joining us in our conversation, also from IBM, is Mike Wasson. Good Morning, Mike.

Mr. Wasson: Good Morning, Al. Good Morning, Dave.

Mr. Combs: Good Morning, Mike.

Mr. Morales: Dave, can you begin by telling us about the history and mission of the Department of Agriculture?

Mr. Combs: Sure. In 1862 President Abraham Lincoln founded the U.S. Department of Agriculture. He called it "The People's Department." In Lincoln's days 58 per cent of the people were farmers. They needed good seeds and helpful information to grow their crops. Well, today, USDA continues Abraham Lincoln's legacy by helping America's farmers and ranchers. But today we also do much more. We lead the federal anti-hunger effort with programs like food stamps, school lunch, school breakfast and the Women, Infants, and Children's, or WIC, program. We are the steward of our nation's 192 million acres of national forests and range lands. We are the country's largest conservation agency. We encourage voluntary efforts to protect soil, water, and wildlife on the 70 percent of America's lands that are in private hands. We bring housing, modern telecommunications, and safe drinking water to rural America. We are responsible for the safety of meat, poultry, and egg products. We lead research in everything from human nutrition to new crop technologies that allow us to grow more food and fiber per acre using less water and pesticides. We help ensure open markets for U.S. agricultural products. We provide food aid to needy people overseas. The U.S. Department of Agriculture touches virtually every aspect of rural life in America.

Mr. Morales: Dave, that's a very, very broad mission. Can you tell us about your office specifically, the Office of the Chief Information Officer? How many people work there and what kind of skill sets do you have?

Mr. Combs: The USDA is a very diverse organization as you just saw from our mission. It's comprised of 29 agency and staff offices. And my office, the Office of the Chief Information Officer, is responsible for managing the IT assets and the direction of IT investments needed to improve the quality, timeliness, and cost effectiveness of service delivery by the many agencies of the department. My organization has more than 1100 information technology professionals. And as CIO, I am responsible for nearly $2 billion a year that is spent on information technology to support the entire Department of Agriculture. Our information professionals come from very diverse backgrounds: project management, finance, programming and analysis, policy, telecommunications, and security. But most importantly, we need folks that know how to leverage technology to deliver services. Several of my senior managers do not have technical backgrounds. But they do possess the leadership and customer skills that will get us where we want to go and need to be.

Mr. Morales: I understand that you've been in the Office of the CIO at USDA for some time but you've recently been appointed to the CIO position. Congratulations. Can you tell us a little more specifically about the responsibilities as CIO, and to the extent that you have a typical day, what your typical day looks like?

Mr. Combs: Well, thank you very much. This has been a wonderful opportunity for me. But I want you and the audience to understand upfront that this is not about me. It's about getting results and establishing the people processes and tools that will support the mission of USDA long after my tour of service is over. And under my watch the OCIO has taken an integrated approach to ensure that all technology disciplines are woven together. These disciplines include capital planning, cyber security, e-government, telecommunications, and enterprise architecture. This integrated approach is intended to create a strategy that provides customers with access to the information that they need, protects the safety of USDA information resources, and strengthens the management and use of USDA information technology resources.

This past fall, I took my executive team on a retreat, to take a fresh look at what we do and where we're going. We took a look at the foundational legislation that established this office. And we found that according to the Clinger-Cohen Act, we needed to do several things. We needed to insert ourselves into the USDA agency, CIO selection and evaluation process which we now have done. We've developed performance standards to be used as a critical element in the evaluation of every agency's CIO's performance. We have also established performance standards for agency project managers. And speaking of project management, USDA is leading the federal government with its project management training program. So far we have graduated over 500 students. 200 of these students have received their Project Management Professional or PMP certification. This professional training is critical for USDA as the demand for skilled project managers increases. The President's management agenda is without question my top priority. As the CIO, I am considered the owner of the expanding electronic government initiative. And in this initiative we're evaluated in seven major areas: Enterprise architecture, acceptable business cases, earned value management, IT system certification and accreditation, implementing electronic government lines of business and smart buy initiatives, privacy impact assessments, and systems of records.

And USDA continues to make tremendous progress in moving this initiative forward. The scoring method is simple: Green, yellow, red. The President made it clear to me in a recent meeting that he does not like red or yellow. And neither do I. We're scored in two categories: Status and progress. And I am proud to report that USDA continues to be green for progress. Right now we're yellow in status but we're closer than ever to green. We're doing well and our goal is to be green by the end of June this year. This is truly a team effort involving a very talented and dedicated team of USDA agency CIOs and IT professionals that I'm proud to work with every day. We're also fortunate to have at USDA the full support of Secretary Johanns and Deputy Secretary Chuck Connor.

Mr. Morales: Dave, you have held several high level positions in federal agencies in the past. Which has best prepared you for your current role?

Mr. Combs: Well, we're all products of our past experiences, and my 30 plus years of experience in the private sector, in IT and telecommunications, and as an entrepreneur, were a great foundation. Serving for a year as acting deputy CIO here at USDA, and working with my good friend and colleague Scott Charbo was also great preparation.

Mr. Morales: Dave, you referenced a little bit of your past. You spent 23 years at AT&T prior to your service in government. And then you also spent some time in your own music business. This is sort of a fascinating background. I'm curious what led you to government and how has your leadership style changed over the years.

Mr. Combs: Well, I came to government primarily to -- first of all, to be in the same town with my wife. She, as you know, works in the federal government as well, as controller at OMB. And, rather than me living in Winston-Salem and her up here I decided to rearrange things in North Carolina and come up here and see what I could do productively as well. So that's how I ended up here. But, in asking about my leadership style, obviously, you know, years of experience certainly have been helpful in my leadership style, and I've come to appreciate the importance of selecting and depending upon an executive management team that will carry out the mission of my organization without being micromanaged. I've learned to delegate more, and always though with the motto of President Reagan: Trust but verify. I have surrounded myself with seasoned professionals and they know what is expected of them. I have a great team.

Mr. Morales: Dave, we talked a little bit prior to the show about your music business. I was hoping you just share a little bit about that business with us.

Mr. Combs: Well, it was basically one of those things, it was a hobby that turned into a career and now back into a hobby for the time being anyway. I come from a musical family and happened to be fortunate to have written a song called "Rachel's song" which kind of took off. Everyone that heard it on the radio and wherever they heard it just fell in love with it, and it's now been played millions of times around the world. And that one song launched me into a career of writing music and I have written over 150 songs and now have 15 albums of music. But that was, it's basically a hobby that kind of took on a life of its own and I had to catch up with it and enjoyed 10 years of doing nothing but my music as a support for my wife and myself.

Mr. Morales: That's fantastic. What is the information technology service? We will ask USDA CIO Dave Combs to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host Albert Morales and this morning's conversation is with Department of Agriculture Chief Information Officer David Combs. Also joining us in our conversation is Mike Wasson. Dave, what is the Information Technology Service, otherwise known as ITS? Who are its main customers and how do you ensure that your customers are satisfied with the services provided by ITS?

Mr. Combs: Well, the information technology services, or ITS as we call it for short, was born into OCIO on November 28, 2004. On that date it became the in-house provider of information technology service and support for over 40,000 USDA service center agency employees. ITS supports all their networked computers, IT equipment, and the shared infrastructure that their agency networks and applications run on. The shared infrastructure is also known as the common computing environment or CCE for short. Our customers are the three service center agencies and their partner organizations. They are the Farm Service Agency, or FSA; the Natural Resources Conservation Service, or NRCS; and Rural Development, or RD. The Farm Service Agency, FSA, administers farm commodity, crop insurance, credit, environmental, conservation, and emergency assistance programs for farmers and ranchers. The Natural Resource Conservation Service, NRCS, is the primary federal agency that works with private landowners to help them conserve, maintain, and improve their natural resources. And Rural Development, RD, creates partnerships with rural communities to fund projects that bring housing, community facilities, utilities, and other services to increase rural Americans' economic opportunities and improve their quality of life. The service center agencies use many sophisticated applications to provide over $55 billion in vital programs to over 6 million farmers and thousands of rural communities across the country. These programs include loans, grants, technical assistance, and basic information.

The goal of ITS is to keep the computing environment operating flawlessly so customers at the service center agencies, offices throughout the country, almost don't even know that it's there. Our goal is for their computers, applications, networks, and communications technologies to do what they're supposed to do and let the agency spend their time supporting the efforts of farmers, property owners, and rural communities.

ITS was formed by combining the service center agency's highly skilled IT specialists and support teams with a core team from OCIO into one organization of about 800 people. These folks are distributed in agency offices all across the country. I believe that this convergent plan is unique in the U.S. government. ITS is adapting best industry practices to organize IT resources and personnel efficiently and deploying them where and when they are needed. The point of creating ITS was to have one unified organization dedicated to supporting both the shared and the diverse IT requirements of the service center agencies and their partner organizations. On the one hand the agencies were already sharing and investing in a common computing environment with its infrastructure and network systems and associated hardware, software, and training. But on the other hand, each agency had to manage its own distinct computer system, software, and IT support teams. By converging both the technology resources and the skilled IT staff into one organization, ITS efficiently focuses on a broad range of technology, investment, and diverse support planning and management services spread equitably back to the agencies replacing what might be considered triplicate efforts. ITS has formed a customer-service support system based upon a central help desk that can flexibly and efficiently dispatch technical support specialists who are co-located in teams at many agency offices.

Mr. Morales: What kind of telecommunications services are provided by your office? And how does centralization impact the costs of services, and what other impacts does centralization drive?

Mr. Combs: During the fourth quarter of fiscal year 2005, we completed the launch of our new wide area network telecommunications infrastructure known as the "Universal Telecommunications Network" or UTN. It's a new corporate data network backbone for providing our customers with more secure, robust, and flexible telecommunications capabilities, and enhanced network support services. The UTN project team worked collaborative with USDA agencies and offices to transform the old USDA telecommunications environment into one that is state-of-the-art and well better to meet the delivery challenges of today and tomorrow.

Telecommunications voice and data services are increasingly critical to successful delivery of USDA programs and services. Since 1998, USDA's Internet access capability has increased 20-fold. The ability to interconnect systems and entire local area networks via the web has created increased demand for telecommunications capacity to carry information in multimedia formats to increasingly sophisticated USDA customers. And greater reliance on the Internet to conduct business and deliver services is also generating requirements for improved access, speed, reliability, robustness, security, and related standards.

In recent trends towards globalization, advances in secure communications, and growing customer expectations that electronic access will be made more widely available by the federal government within a five-year time span, have prompted the department to assess its current state of infrastructure support and explore options for accommodating these future trends as we move further into this century. The Universal Telecommunications Network Project is meeting those challenges.

Mr. Morales: It certainly sounds like a lot of bandwidth that's going to be required.

Mr. Combs: Yes, and very flexible.

Mr. Morales: We understand that your office is taking steps to innovate in the area of asset management. What are the goals of this effort, and what's its current status? And how does an organization called the IT Management Advisory Committee support this effort?

Mr. Combs: USDA has a vast number of IT assets, as you can imagine, and they are currently managed de-centrally, through disparate approaches. These dissimilar approaches present a challenge for managing USDA's IT infrastructure. USDA can gain significant efficiencies and productivity increases by establishing a uniform IT asset-management program that provides the information necessary to manage these IT assets from an enterprise perspective. We are in the early stages of this effort. Our goal is to implement an IT asset-management program that supports the establishment of standards-based technology architecture for USDA.

The IT Asset-Management Program will implement an automated system for managing USDA's IT assets from both an agency and enterprise perspective. Having a good inventory of USDA's IT assets will better enable enterprise approaches for procuring commonly used products. The Information Technology Management Advisory Council, or ITMAC as we call it, is a group of professionals representing many agencies throughout USDA. The ITMAC advises OCIO on best practices and approaches to enterprise issues. And one of the key roles of the ITMAC in this effort is to identify key issues and concerns and management decision points to ensure successful completion of the IT asset management initiative.

Mr. Morales: Dave, we understand that many of the forms at the government have now gone electronic. What role does your office play in supporting the forms? What are the benefits of the electronic processes, and what lessons could you share with other government leaders about your experience?

Mr. Combs: Well, that's correct. Over 500 of the department's most commonly used forms are available in an electronic format to provide citizens and businesses with an alternative to traditional paper-based processes. My office plays the lead role in coordinating this effort in several ways. First, we manage the paperwork and reporting burden that USDA imposes on citizens and businesses. To participate in our programs under the Paperwork Reduction Act, using online forms may reduce burden by permitting customers to compile information when it's most convenient for them, and to reuse information from prior submissions of the same or similar information. Electronic forms may also reduce travel time associated with completing the forms at a USDA office.

Further, USDA's participation in the President's interdepartmental E-Government initiatives has provided integrated access to forms required by multiple agencies within specific business areas. For example, businesses may locate forms required to apply for permits, and report compliance in a single location at http://business.usa.gov, regardless of which government agency requires them. Grant applications will find both the common and unique forms required to apply for grants at www.grants.gov. And USDA's export-related assistance and market information has been consolidated with similar information from our partners in the federal and private sector in one location at www.export.gov. There are many other examples.

The demand for electronic interaction in government is continuing to grow at a steady pace. But it isn't for everyone served by USDA. Government is striving to consolidate the presentation of its information and services in a seamless online manner similar to what many state governments have already accomplished. Forms will ultimately be replaced in this venue by fully electronic transaction tools that further simplify interaction with government by reusing information from prior transactions. However, many of the department's program beneficiaries prefer to visit a USDA office, or they do not have easy access to computers or sufficient bandwidth to make using electronic forms a viable alternative.

USDA will continue to offer the more traditional interaction methods for this group of customers. And many of our forms, though, are now electronic. Not all are electronic, but the amount of information we generate has increased exponentially over the past few years. The expectation is that over the coming few years we will generate even more information. There will be commensurate expansion of records, and much of this will be electronic. And my office plays a lead role in coordinating this effort across the department.

Mr. Morales: How do you ensure that customers are involved in technical decision-making, and what role does the Capital Planning Investment and Control play in this effort?

Mr. Combs: In the past, agencies and IT personnel across the department were not used to collaborating on IT. Although the Clinger-Cohen Act required greater coordination of USDA's IT budget at the department level, agencies still planned many investments and activities independently. They often did not collaborate even when other agencies were planning similar investments, usually for the simple reason they did not communicate with other agency IT staffs, and did not know that collaboration opportunities even existed.

Through activities such as what we call CPIC, USDA has been working to increase coordination across agency and department IT activities. This included developing a shared vision and purpose for IT collaboration, as well as developing the enterprise-wide governance structures to integrate coordination into all aspects of the USDA's IT activities. At USDA we have a very active internal CIO council that we call IT Leadership. This council is made up of all of the agencies' CIOs and IT leaders. We meet twice a month with the purpose of communicating on all IT issues, both technical and non-technical.

The foundation for IT portfolio management at USDA is the Capital Planning Investment Control or CPIC process. CPIC is a structured integrated approach to managing IT investments. It ensures that all IT investments align with the USDA mission, and support business needs while minimizing risks and maximizing returns throughout the investment's life cycle. CPIC relies on a systematic pre-selection, selection, control, and ongoing evaluation process to ensure each investment's objectives support the business and mission needs of the department.

Mr. Morales: Dave, how do you ensure your customers' data is secure? And perhaps you can share with us a little bit of the experiences during the recent hurricane disasters.

Mr. Combs: Well, securing USDA's IT assets is of paramount importance to the department and an integral part of USDA's enterprise architecture and IT transformation activities. Cyber security considerations are included at every stage of USDA's CPIC process. All proposed investments are required to develop robust and detailed security plans before they are even funded. Systems in the development require creation of adequate security infrastructure and the obtainment of a certification and accreditation, or what we call CNA, for continued funding. Annual security reviews are also required for major investments to receive continued funding.

And the recent experience with the hurricanes and the Katrina certainly emphasize the need to secure the data that we have. For example, at our National Finance Center in New Orleans, to make sure that that was securely transported to our backup site in Philadelphia, brought up, and which was done within a two-week period. And they actually just didn't miss a beat and actually brought on two new customers at the same time. So security and protection of our customers' data is of paramount importance to us.

Mr. Morales: It's a great story. How is the department ensuring data quality? We will ask USDA CIO David Combs to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Department of Agriculture CIO David Combs. Also joining us in our conversation is Mike Wasson.

Dave, we understand that your office has implemented a set of quality guidelines for information. Could you share a bit about the guidelines with our listeners? And what was the process that was used to develop and implement them?

Mr. Combs: Sure. The quality guidelines apply to all types of information disseminated by USDA agencies and offices. Now, I won't read them to you, but the basic premise is that USDA will strive to ensure the maximum quality, objectivity, utility, and integrity of the information that its agencies and offices disseminate to the public.

Well, what do I mean by "objectivity"? USDA offices and agencies will strive to ensure that the information they disseminate is substantively accurate, reliable, and unbiased, and presented in an accurate, clear, complete, and unbiased manner, and to the extent possible, consistent with confidentiality protections, USDA agencies and offices will identify the source of the information so that the public can assess for themselves whether the information is objective.

And what do I mean by "utility"? USDA offices and agencies will assess the usefulness of the information they disseminate to its intended users, including the public. When transparency of information is relevant for assessing the information's usefulness from the public's perspective, the USDA agencies and offices will ensure that transparency is addressed in their review of the information prior to its dissemination. USDA agencies and offices will ensure that disseminated information is accessible to all persons pursuant to the requirements of Section 508 of the Rehabilitation Act.

And what do I mean by "integrity"? USDA agencies and offices will protect information they maintain from unauthorized access or revision to ensure that disseminated information is not compromised through corruption or falsification. USDA agencies and offices will ensure their information resources by implementing the programs and policies required by the Government Information Securities Reform Act. And USDA agencies and offices will maintain the integrity of confidential information and comply with the statutory requirements to protect the information it gathers and disseminates. And these include the Privacy Act of 1974 as amended, the Paperwork Reduction Act of 1995, the Computer Security Act of 1987, the Freedom of Information Act, and OMB Circulars A-123, A-127, and A-130.

Mr. Morales: Dave, we understand that your office has a role in records management for the department. Are all your records stored electronically? And how does your office manage risk and redundancy in storing these records?

Mr. Combs: Yes, as I mentioned earlier, my office leads this effort at the department, and no, not all records are electronic. But the amount of information we generate has increased exponentially over the past few years. The expectation is that over the coming few years we'll generate even more information and much of this will be electronic. We manage the risk and redundancy in storing these records in various ways. We do it through continuity of operations planning, periodic exercises for the deployment of operations. We do it through vital records exercises, where records are positioned at primary and an alternate site. And through ongoing training of our records officers and project managers.

USDA is in the process of evaluating an electronics records management application. And after evaluating this application, we will be conducting a proof of concept pilot. By approaching electronic records management from a department perspective, USDA will benefit from reduced development and maintenance cost as well from the standardization of processes that will support e-records management.

USDA understands the need to manage a project of this magnitude at the department level to ensure conformity of standards across all USDA agencies to manage risk and redundancy.

Mr. Morales: Dave, how is the enterprise architecture that is already in place at USDA impacting operations, and where are you in the process of implementing the target architecture?

Mr. Combs: USDA's IT transformation framework, has better enabled USDA to manage its IT investment portfolio and select the best combinations of IT systems to effectively and efficiently support USDA's mission. Using the department's blueprint for the vision provided by the USDA enterprise architecture, USDA has conducted an extensive review of IT investments during the fiscal year 2005 budget process.

All USDA investments, major and non-major, were evaluated to determine whether they aligned with the enterprise architecture and provided a necessary and efficient service. The process particularly focused on consolidation with systems providing similar functionality identified using the tools and structure provided by the USDA and the Federal Enterprise Architecture. This careful review allowed USDA to eliminate nearly 150 of its 500 IT investments through consolidation and realignment, saving around $160 million annually. USDA's IT transformation activities have resulted in additional IT portfolio improvements as well. This was accomplished by having the department focus on developing enterprise-wide systems and services to serve business needs and replace the duplicative agency-specific approaches previously used. This activity has increased from 24 major investments to 66 over five years, nearly a 200 percent increase. And at the same time the number of small and generally agency-specific investments has declined significantly from 605 down to 330.

Mr. Morales: What is the directives system, how did the system evolve, and what can you share with us about the results that this office has seen in making directives centrally available and electronic?

Mr. Combs: The USDA directives system is basically an online repository of all USDA departmental regulations and notices, manuals, and secretarial memoranda. The old process was paper intensive, and a great deal of time and effort was put into copying and storing those paper forms. Well, that process was transformed basically into a print-on-demand function, online, and our customers now have access to the information they need without having to go through any other organization, pretty simple.

Mr. Morales: David, earlier you mentioned the programs you have to support the development of project management skills among your technical staff. I think you mentioned you had somewhere on the order of about 500 folks going through these programs. How have your efforts improved technical outcomes?

Mr. Combs: The USDA IT investment project management training program provides participants with the tools and techniques needed to manage IT projects effectively with an emphasis on the issues encountered in managing within the capital planning investment control process and other federal guidance.

This training program was initiated in response to the results of a survey of USDA IT executives which indicated the need for more training in project management. And the Federal CIO council as well as industry leaders considers project management to be a critical competency for IT managers. As I mentioned before, USDA has graduated over 500 students from this five-week course, and over 200 now have their project management professional certification. And our multimillion dollar IT development projects demand professional, experienced, and effective project managers.

Mr. Morales: What does the future hold for the Department of Agriculture? We will ask Chief Information Officer David Combs to discuss this with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I am your host Albert Morales, and this morning's conversation is with David Combs, chief information officer at the Department of Agriculture. Also joining us in our conversation is Mike Wasson.

Dave, we talk a great deal with government leaders about the pending retirement wave. Can you tell us about the steps that your office has taken to manage the retirement wave within the USDA, and what lessons learned could you share with other leaders in government?

Mr. Combs: In an effort to address an increasing shortage of skilled information technology workers at USDA, OCIO and our Office of Human Resources Management work closely together to provide USDA managers with recommendations and solutions on how to continually improve their IT work force.

The increased focus on the strategic management of human capital dates back to the Clinger-Cohen Act of 1996. And one of the requirements of this act is the mandate for all federal agencies to perform an IT workforce assessment. The act requires the federal chief information officers to implement a professional development strategy to ensure that IT staff possess the knowledge, competencies, and skills necessary to meet agency requirements as they relate to information resource management.

In partnership with our Office of Human Resources Management, we've established a USDA IT HR working group. This working group closely works with every other team within the OCIO to achieve the goal of recruiting, retaining, and training the most qualified team of IT professionals. In addition, this group meets monthly with representatives from numerous agencies, IT, and HR specialists within the department. The working group is focused on developing, implementing, and promoting recruitment and retention strategies to ensure that USDA maintains a quality IT job force capable of leading the department to meet its mission objectives.

Working group members are briefed regularly on all activities occurring at the federal level in the area of IT workforce improvement. They're responsible for achieving USDA's IT and HR leadership, in planning for and implementing effective recruitment, retention, and training strategies. The USDA IT HR working group is the department's only forum for active IT HR collaboration in the area of IT workforce planning.

Mr. Morales: Dave, you touched on this a little bit, but is your office also working on recruitment and retention activities, and how does this fit into the overall HR strategy for OCIO?

Mr. Combs: Yes, this ties directly to the overall HR strategy I just mentioned. We clearly recognize the issue of recruitment and retention. And we've been working very hard over the last year to recruit strong talent to fill these critical vacancies at all levels.

Mr. Morales: Dave, how do you envision the operations of the OCIO in five to ten years? Is the OCIO considering expanding its customer base through shared services or other methods?

Mr. Combs: Well, absolutely. We've already begun to move in that direction. Just last December USDA's executive board granted my office permission to move forward with three major initiatives, a single electronic mail system, a consolidated network with centralized support, and a consolidated data center and disaster recovery infrastructure.

Mr. Morales: Earlier, Dave, we talked a little about enterprise architecture, but can you discuss what impacts will the enterprise architecture planning have on the long term capabilities of the department?

Mr. Combs: The USDA-wide enterprise architecture supports and reinforces the goals of the President's management agenda. The USDA-wide EA repository and EA program is a catalyst for creating easy to find, single points of access to government services. It encourages automating internal processes to reduce the costs. It enables reducing cost by disseminating best practices and coordinating approaches across USDA agencies and staff offices, and it results in reducing duplication of efforts to build similar software systems. The USDA EA program supports the coordination of USDA's participation in the E-Government presidential initiatives.

This year, in its first year of use, the USDA EA repository and program will support initiatives such as FirstGov portal, Recreation One-Stop, e-authentication, e-loans, and e-grants initiatives. This support is in the form of the development of standards, the development of common data sets and structures, identification of common processes, and identification of common technologies. The EA repository also supports the federal architectures being developed for finance, human resources grants, and federal health.

And finally, the EA repository and EA program closely align the E-Government initiatives defined in USDA's E-Government strategic plan leveraging e-authentication, enterprise shared services, web-based supply chain management, and other initiatives. This alignment advances USDA's EA goal of using common enterprise-wide and intergovernmental systems when possible.

The EA repository directly supports the achievement of USDA's EA vision. The information it provides will help the Office of the Chief Information Officer and the executive board to make informed IT investment decisions based on a clear understanding of the department's existing and planned architectures at both the agency level and the federal level. Further, it will help agency and staff office personnel to identify opportunities to leverage existing systems or contracts already in use elsewhere in the department, helping to avoid redundant IT investments.

Mr. Morales: Dave, you've had a highly successful career starting in the private sector. You've turned a passion into a business, and now you're in public service. What advice can you give to a person who is interested in a career in public service, especially in information technology?

Mr. Combs: Well, if you're looking for a rewarding and challenging opportunity, you need to look no further. It's truly an honor and a privilege to be in public service, and the demand for information and the technology to create it, organize it intelligently, and communicate it efficiently and effectively is growing exponentially. The future for informational professionals is bright. Unlike my generation, children today are exposed to information technologies before they can even walk.

IT has become engrained in their everyday routine. From the time they enter kindergarten, sometimes sooner, children are exposed to computers and electronic knowledge. These experiences translate into capabilities that can be applied to future careers in information technology. But you don't have to major in computer science to have a career in IT. The federal IT organizations are always looking for smart, energetic people who are good thinkers and good leaders and not afraid to tackle large and difficult problems. If that description fits you, then there are several people in the federal CIO community that want to talk to you.

Mr. Morales: That's great advice. We've reached the end of our time, and that will have to be our last question. First, I want to thank you for fitting us into your busy schedule. Second, Mike and I would like to thank you for your dedicated service to the public and our country in the various roles you've held at the Department of Agriculture.

Mr. Combs: Thank you Al and Mike; it's been a pleasure and an honor for me to be here this morning, and I welcome the opportunity to discuss our many missions and areas of -- that we are working on at USDA and it's a big department with a wonderful service mission to the rural parts of United States of America, and actually to all of it, when you consider the food safety protection and everything. So there's hardly an area of American life that we aren't intimately involved with, and it's a real honor and a privilege to work in that department.

Mr. Morales: This has been The Business of Government Hour featuring a conversation with David Combs, chief information officer at the Department of Agriculture. Be sure to visit us on the web at www.businessofgovernment.org. There you can learn more about our programs and get a transcript of today's fascinating conversation. Once again, that's www.businessofgovernment.org.

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

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


Thomas Cooley interview

Friday, January 27th, 2006 - 20:00
"Our system enables program managers to tick down their funds throughout the year. Every morning you can log on, see how much money you’ve got. Then, if you’ve made some award recommendations and commitments, you can see how much you have left."
Radio show date: 
Sat, 01/28/2006
Intro text: 
Cooley discusses the process of managing grants and research priorities across the NSF and working to support and nurture the future scientists and engineers of America. He discusses the NSF’s efforts to understand the impact of technology, especially...
Cooley discusses the process of managing grants and research priorities across the NSF and working to support and nurture the future scientists and engineers of America. He discusses the NSF’s efforts to understand the impact of technology, especially nanocomputer technology, on American lives.
Complete transcript: 

Wednesday, August 3, 2005

Arlington, Virginia

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

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Thomas Cooley, Chief Financial Officer and Director of the Office of Budget Finance and Award Management at the National Science Foundation. Good morning, Tom.

Mr. Cooley: Good morning, Al.

Mr. Morales: And joining us in our conversation, also from IBM, is Steve Watson. Good morning Steve.

Mr. Watson: Good morning Al and good morning Tom. Thank you for joining us.

Mr. Cooley: Thank you Steve.

Mr. Morales: Tom, can you begin by telling us the history and the mission of the National Science Foundation, and more specifically, the Office of Budget Finance and Award Management.

Mr. Cooley: Sure, but I don't want to take a whole lot of time. I could spend an hour just talking about that. The National Science Foundation is a branch and arm of the federal government. It was created in 1950 after World War II, after they found out how important science was -- research and development was to the mission of carrying out that war effort. Our fundamental mission is to support basic science and engineering research and education, primarily through colleges and universities, but we also have activities that are engaging the profits and non-profits as well. We currently have a budget of about $5.8 billion each year. We are waiting to get our fiscal year 2006 budget through Congress right now. What that translates to is roughly thirty-five thousand active awards every year. We get about forty-four thousand proposals from principal investigators at universities and colleges throughout the country. We put them through a rigorous external merit review process. Each year we make about eleven or twelve thousand awards. The typical duration of an award is about three years. Hence we have an active award portfolio in the neighborhood of thirty-four to thirty-six thousand awards each year.

Mr. Morales: Can you tell us about some of NSF's research priority areas?

Mr. Cooley: Well, fundamentally you have to understand that research covers everything from anthropology through zoology, and fundamentally, that is our role, that is our mission, and we do do that. So we have a directorate for biological sciences, we have a director for math and physical science, there's a director for engineering sciences, for example. But there are priorities in any era, and right now some of those priorities are in areas such as nanoscale science and engineering. The public tends to think of that as nanotechnology, and how that may help manufacturing processes in the future, how it may help the healthcare industry in the future, for example. We also have a very interesting research priority in social and dynamic behavior of people and organizations. How do we get things done? How do we get them done more effectively? How do people interact with technology, and what impact is technology having on our lives? There's also a very -- there are some broad national kinds of things going on right now, we call them administration priorities. One is in the National Information Technology Research and Development Program called NITRD. One is in the Nanoscale Science Initiative, that's called NNI. There is also a very broad research program across the federal government in global climate change supported by the administration. It's important for policy to be set by the best science that we can get, and so in order to understand what is really happening with global climate change, it's important to get the research done. These are integrated government-wide programs where the National Science Foundation, NOAA, NASA, Department of Energy, the United States Department of Agriculture, they all collaborate and coordinate and carve out a unique piece that fits their mission and then put an integrated program together.

Mr. Morales: Tom you mentioned some of these other organizations, how does the research in science supported by NSF complement the research supported by organizations such as NASA or NOAA and the National Institutes of Health, and how does NSF work together with these science organizations?

Mr. Cooley: I think the answer is actually a fairly simple one. When one thinks of NASA or NOAA, one thinks of the mission that they have. NASA, space, to put it very distinctly, NOAA is oceans and atmospheres. So in carrying out their missions, they have specific things that they're interested in looking in to. Our mission is about basic research, so we don't have a mission that's directed to a particular component of the environment, the world, the population. What we try to do, and a very fundamental part of our mantra, so to speak, is the training of the future generation of scientists and engineers, so that we're not only helping to fulfill other agency's missions by training people that are going to be the scientists or engineers that work for those agencies, but we also do the kind of basic research that those mission agencies draw upon in order to carry out their own missions. So, for example, one of our partnerships is at the National Center for Atmospheric Research in Boulder, Colorado. We collaborate with them. We are interested in generally, you know, what is causing climates to change, how do you map weather, how can you use super computers to model weather changes and predict and forecast weather at a microscale, which is going to be very difficult, but that's ultimately where people want to go. And so, when storms are coming up, I'm not interested in what's happening in the general D.C. area, I want to know exactly what's going on in Columbia, Maryland where I live, and I think a lot of people feel like that. So many of the National Weather Service activities that are carried out and for which NCAR in part participates -- NCAR, as I said, is the National Center for Atmospheric Research is through a collaborative set of activities that we have working with this center out in Boulder, and with the National Weather Service, with NOAA, whatever.

Mr. Morales: Tom, thank you. That's a fascinating and certainly a broad set of issues, and I would certainly be interested in understanding the weather patterns just around my block. You talked about the budget of $5.8 billion dollars, can you describe a little bit just the overall size of NSF and the skill set of the employees there?

Mr. Cooley: Sure. I think the audience would be surprised to find out how small we actually are. We're about twelve hundred federal employees with about three hundred fifty contractors who help us. Those contractors assist us in classification for our position descriptions. The bulk of our contractors actually assist us in the development of our hardware, software, and maintain those electronics systems for us, and then they do other things, such as the mailroom, delivery into buildings, support services of various kinds. So, within the building over there at 4201 Wilson Boulevard in Arlington, we've got roughly fifteen hundred people, about 75 to 80 percent are full-time federal government employees. The mix of that staff, you know, you've got it all the way down from a GS-4, 5, 6, 7 kind of secretary, program assistant. Usually, traditionally, there are people who are born raised right in this area here. And then at the top end of the system, you have got PhDs, scientists, and engineers working in NSF from Harvard, Yale, MIT, Cornell, the University of Maryland of College Park, Wisconsin, Madison, Charlottesville, University of Virginia, we draw them in from all over. We have a mix right now of about 50 percent full-time program managers and about 50 percent rotaters, and that ensures that about every two to three years those rotaters turn over. These are people who are actually bench scientists. They are out there at the universities, they're on the cutting edge, and they really know what's going on. So that when we get proposals in from the principal investigators, the people who are looking at those proposals, evaluating them and trying to find people to review them, other scientists and engineers in the community. Our staff is really plugged into that community, they know what the hot topics are, and they who are the best and most highly qualified reviewers are. From my perspective as the chief financial officer, that means I can tell the American public the proposals that we fund have undergone the most rigorous external merit review process that we can envision. Many people on the hill refer to it as the gold standard. So that when we make an award with American taxpayer's dollars, my confidence that this is going for something that's really cutting edge, that could really impact our lives, ten, twenty, thirty years from now is really great. I mean, when we look at the fact that research on transistors was done fifty years before transistors were ever used. Sometimes the concept doesn't lead to a product for a very long period of time. And some concepts don't lead to any products at all. They're dead ends. I mean there's value in finding out that there's a dead end out there. It saves other people time and effort from pursuing what ultimately would be a dead end, and then go in a different direction.

Mr. Watson: Tom, you're the chief financial officer, and also the Director of the Office of Budget Finance and Award Management. Can you tell us a little bit about the roles and responsibilities of that position?

Mr. Cooley: Sure, Steve. First of all, I think it's important to understand what it means to be the Director of the Office of Budget Finance and Award Management. I have five divisions that report to me. One is the budget division, so we work with the administration and the Congress to propose a budget and then implement a budget once the Congress has passed it. We have the Division of Financial Management that oversees the internal controls and the financial practices that we use to ensure that every dollar that goes out the door goes to the right person for the right reason. The third division is the Division of Grants and Agreements. They're the division that does the bulk of the business at NSF because we are predominantly a grant making entity. The fourth division is our Acquisition Procurement Division, the division of contracts, and they have the very complex agreements, things where we have a much more hands on relationship with the entity that we've made the award to. And then, the fifth and the newest division is the Division of Institution in Awards Support, and its focus primarily is on audit resolution where we have issues that have been raised through the audit process and we have to find out how much money does the government get back because you didn't spend it all appropriately, or maybe even misused it. And then our largest and newest activity, which is post-award monitoring and oversight. The focus of that is to ensure that if you get an award to do X, that you've actually done X, and that the money that you spent on X was relevant to X. It's important for the accountability of the taxpayer's dollars. I think it's also important to the accountability of the Merit Review System.

Mr. Watson: Tom, that's a lot in one position. What was your experience and what path did you take to prepare yourself for that?

Mr. Cooley: Well, there is a long story. When I was a young man, many years ago, I read a couple of books by some fairly famous authors who were doctors and physicians at the time. It got me very interested in a field called microbiology. And I was more interested at that time on potential for microbiology to help me understand how I might help humankind. As I got older, I discovered that microbiology touched all fields, plants, animals, human beings, soils, et cetera, so I majored in microbiology at the University of Maryland, College Park, came out, went into a job and told myself, oh my goodness, what have I done to myself. I didn't enjoy the work experience. I really did not. I was very fortunate, as I have been at three or four critical times in my career, to have a mentor at that time. He was not my immediate boss, but he was a partner with my boss. And my mentor came to me and said, you know, there's something that's not gelling here for you, I can tell. And he encouraged me to go back to graduate school, which I did. I pursued the field of botany. I got married. Things change when you get married. We had a little girl. And I had an opportunity presented to me, it was a career choice. I had one path or another. I could go to a post-doc at the University of Montana, or work part-time for the summer at a place called the National Science Foundation in 1979 to write an environmental impact statement for what at that time was envisioned as the Ocean Margin Drilling Program. My family is here, my wife's family is here, and our daughter was six months old, and the pay here was twice as much as the pay in Bozeman, Montana. So I thought, well let me go with this and see where it goes. They extended it two more times for a year and a half, after which they hired me full time as a GS-11. I worked for some great people. I worked for Sandra Toy, Al Shin, Joe Cull, all of whom had great influences on my career development, basically gave me some advice, pointed me in a direction, and then left me alone to see if I could really do it or not. And a couple of years ago, the Director of the National Science Foundation, at that time Dr. Rita Colwell, turned to me and said, how would you like to be the CFO, and I said, only if I can dot, dot, dot. And she said, fine. So I've been there for five years in this role. There are days when it's a lot of fun, and there are days when I'm glad to get home. But I think all of our jobs are like that.

Mr. Morales: Tom, that's just a fascinating start to just a wonderful career. How is NSF working on the President's management agenda's five government-wide initiatives? We'll ask NSF CFO Tom Cooley to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Tom Cooley, Chief Financial Officer of the National Science Foundation. Also joining us in our conversation is Steve Watson. Tom, can you give us a brief overview as to how NSF is working on the President's management agenda's five government-wide initiatives?

Mr. Cooley: This is not an easy question, and may actually end up being probably one of the most difficult questions you will ask me. First of all, I have answer with a very honest and straightforward one that my staff will recognize, and that is a lot of very hard work. This is not easy. It's one thing when you set your own agenda, it's one thing when someone else sets it for me, and then continually raises the bar so that you do better and better and better. I buy into that philosophy, it's basically a philosophy of continuous feedback, you do something, you do it well, you get feedback for improvement, and then you go off and make improvements based on that feedback. And then I think it's fundamentally the tenant that underlies the President's management agenda. We were very fortunate in that the President's management agenda had two key areas where we had already invested a lot of time and effort -- financial management and e-gov. And it was actually division of my predecessors and now I have to go back to the 1980s to talk about this. My predecessors had thought that it would be good if as many of our paper systems were electronic as is possible. And there were two key vision statements back in the '80s. One by Al Muellbower, who was the Division Director for Financial Management, and he wanted a financial management system that was totally electronic, where on a day to day basis, he knew exactly how much money was left in the bank. On the other hand, Connie -- oh, and I can't think of her name, she was the head of the Division of Information Systems, and her vision was one of how to enable our PIs, or principal investigators, to submit proposals to the foundation electronically rather than in paper copies. When you used to send a paper copy proposal, each proposal was about a half inch thick, and you were required to send twenty of them. So we had stacks of paper in the mailroom. The vision was, if you do this electronically, you can flip them out to your reviewers electronically, you can handle the paperwork electronically, and make your awards electronically. Those visions were put in place in the 1980s, and we were totally electronic by the end of the 1990s. So when the President's management agenda came along, in these two particular areas, it was very natural for us to go over and talk with the President's people in the White House and say we think we're green in financial management because, and we think we're green in e-government because. So when the very first scorecard came out, we in fact were green in financial management. They gave us a yellow in e-gov, because they had some questions for us that we needed to resolve and finish answering. So the next quarter, I believe it was, we did go to green in e-gov. The very interesting thing about the process though, is that they're -- those two do tend to be integrated, and the key integrating function is the other third PMA initiative, the integration of budget and performance. If you're going to integrate your financial system's data with your budget request, your justifications, what we call the budget execution plan, and you want to be able to tell the American public exactly what we are doing with that money and how you're doing, i.e., performance, then these three initiatives are all integrated. What we had not had a vision for was the integration of budget and performance. This agenda item caused us to really think in terms of a vision, we got working on that. My Division Director, Marty Rubenstein, really pulled a great vision together and pulled it off and we've got green and BPI, I believe, three cycles ago, something like that. The other two though were the more difficult ones. We at the National Science Foundation, frankly did not have a vision for human capital. We bought into the system that existed. It seemed to work very well for us. When you look at human capital as the fourth item and competitive sourcing as the fifth item, we were able to take advantage of a concern that we had had about four years ago that we really didn't have a vision for human capital, and we didn't have a vision for how all of the processes of the foundation needed to be integrated to get the most bank for the buck. And we had hired a contractor at that time to do an in depth, integrated assessment of absolutely everything that we do, and everything that we touch at the National Science Foundation, including this very critical piece. The staging of that meant that we needed to understand our human capital needs before we went down the road of trying to figure out what we needed to competitively source. Now part of the background here is that things that the other agencies are competitively sourcing today, we outsourced in the 1980s. I was around, we outsourced mailroom functions, we outsourced all of our IT support functions, we outsourced many, many different things. So where agencies today are looking to outsource those things, we've done other things. So we're on the cutting edge of what do you do after you've done that. Having just gotten to green -- yay, on human capital this last quarter, it allowed us to also integrate our vision for getting to green in human capital with the first steps of competitive sourcing. So we have our first competitive sourcing out on the street. Now we've moved from red to yellow in progress, not in status, so that we now have four greens and a yellow on the progress report card. We're very pleased with that, and I think that in general, while the PMA does take a lot of hard work, if you don't integrate your team across your agency, and you can't be successful if you buy in and set your own vision for yourself, because doing that means that you've got that community integrated within your agency. They see it as part of their vision, and therefore, it's the right thing to do.

Mr. Morales: In the fiscal year 2002, the National Science Foundation established the advisory committee or GPRA performance assessment that is structured internally to report PMA activities to the director of NSF. Who is part of this committee, and how does the committee evaluate NSF's progress on the PMA initiatives?

Mr. Cooley: Well, let me go to ground zero on this question. I think the audience that may by listening in could not necessarily know that the Government Performance and Results Act requires every agency to do its own self-assessment. There's a bit of a conflict of interest in my view with that self-assessment. It means, you know, if I think I'm doing a good job and my staff who work for me tell me that, because they're afraid to tell me otherwise, you know, for whatever reasons, you don't have some independent benchmark. So, a couple of years ago, the foundation agreed, you know, reporting performance was important to the community at large, whether it's a taxpayer, whether it's our principal investigators, whether it's the reviewers that are out there, whether it's the scientific community at large. In order for us to satisfy ourselves, because we have this independent review process that we rely upon to tell us how good a proposal is. The vision that I had was we need an independent group to come in and tell us how good we really think we are. We'll give them all the data, all the information, we won't preload it, we won't prejudge it, or prejudice it. And when they look at that, they have to give us feedback. If they think that we've prejudiced something, or have been lacking and providing them with information in a particular area, then the next time around we'll do better there. So, we came up with this advisory committee for GPRA performance assessment. They do want you here because they review our programs on an annual basis. What we do is we bring in experts in all the fields that we support, they all sit on this, they look at the portfolio of awards that we make, they look at annual reports, they look at collections of reports, they look at our Committee of Visitors reports, they look at National Academy of Science's reports, workshop reports, they look at everything, and they write a report to us and say this is good, or they say this is not so good. We've been very fortunate the last -- at least the last three years that I can remember, they have said that everything that they have seen indicates that the investments that we make to support our mission have been very good and satisfactory, we're making satisfactory progress, they support the mission of the agency, they support the strategic vision and the strategic plan and more importantly, in each annual plan, they support each annual plan in trying to get from point A to point B.

Mr. Watson: Tom, you mentioned you're green already in four of the five key PMA areas. What is your plan for staying there? Is it as difficult to stay there as it is to get there, or do you have processes in place that carry it to this point forward?

Mr. Cooley: The answer is yes, it's as difficult to stay there, and as I had mentioned earlier, it is as difficult to stay there because once you pass a bar, what the government is saying to itself is we need to move that bar higher. If we really want to be an effective and efficient organization, and I think most organizations buy into this concept, you need to do everything that you can through some process of continuous feedback loops, to figure out where you can still improve. It does take a lot of hard work, it does take a lot of effort, and people do pull their hair out, I'll be the first to admit that. But fundamentally, the only way that I, as the CFO of the agency can do it, is to set up a system of trust and integrity, and I think most of us in the government have tried to do that, let your people who are in charge with these activities run with them, get reports periodically on how they're doing, hold them accountable, but fundamentally trust them to do their jobs. Once in a while I find that I have to set a due date to make sure something continues to move along and it doesn't languish. But I think that if you trust your staff, and realizing that they trust you, whatever job you're asking them to do, they'll do their darndest to accomplish for you. And I have seen that time and time again. I've got a -- oh, I guess it's about one hundred twenty-eight or one hundred thirty people that work for me right now, small by most departmental standards, but nonetheless, I know most all of them by their first name. I know something about their history, their family, what their interests are. When I pass them in the hall, I always say hello to them. They always say hello to me. There's a sense of camaraderie, but I think fundamentally underlying that, we each share core values. For the Office of Budget Finance and Award Management, and that's posted on our BFA website. We talk about it at all of retreats to make sure that it's still the appropriate kind of core value and vision for us. And the last phrase in there is have fun. And as long as we don't lose our sense of humor, and we try to find ways to have fun in doing our job, then I think everybody has that little blowout patch available to them on a daily basis.

Mr. Morales: I think I'd certainly like to see that as one of the new initiatives on the PMA having fun. How has NSF successfully linked financial data and performance data? We will ask NSF CFO, Tom Cooley to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Tom Cooley, Chief Financial Officer of the National Science Foundation. Also joining us in our conversation is Steve Watson. Tom, I understand that NSF is one of the agencies that excel in the performance assessment report, which links financial data to program performance. What are some of the factors that have lead NSF to successfully articulate and link financial data to performance data.

Mr. Cooley: Well, I think that one of the most fundamental successful factors is the integrity of the science process itself. It starts with the person, man or woman, who has an idea, wants to put it forward, and hopes to get it funded by the federal government. What they want is an excelling research project that is going to make into the scientific literature because after all, these people are -- have the ability to become a tenured faculty member at a university or college, and I think that's part of their own career path. In establishing their research record, while at the same time they're establishing the fact that they teach well at a university or college. That helps them move up the ranks from an assistant to an associate professor, ultimately to a fully tenured faculty member. They have a vested interest themselves in making sure that the results of their research, their education project -- we fund things in informal science education at museums, for example, is known nationally. It's name recognition. You know, they want to become a recognized name in the field. So they want to publish their results. That's an effective way of measuring their performance out there with the taxpayer's funds. If they've got a successful project and it's been successfully published, then taxpayer funded information is now in the public domain for other scientists, engineers, and educators to use around the country to influence not only their own teaching and what information they impart to their undergraduate and graduate students, but their own personal venues of research. Then there's the internal piece of performance, how are we, as members of the federal government, performing with the taxpayer's funds. And in that regard, I think we do a very, very good job. We have one of those systems that, at the beginning of the fiscal year on October 1, you fundamentally load up whatever your appropriation is, and then we start ticking it down. Our system enables every program manager who has a slice of that pie, they can start ticking down from whatever their amount is throughout the fiscal year. Every morning you can log on, you see how much you've got at the beginning of the day, and at the end of day, if you've made some award recommendations, those funds get committed, and you see how much money you have left at the end of the day. The other thing that we have, are online progress reports. PIs are required to submit an annual progress report so you can review it and see how it's doing. They tell us how many graduates students they've got, how many they've trained, did any of them get their Master's, did any of them get their PHD, have they submitted any publications, what's going on in your lab, have you had any kids in, did you talk to them, all of that kind of information is embedded in these so that you get a real picture on an annual basis of what's actually happening out there in the lab. That helps you as the program manager assess whether this project is performing well, and the person who writes it up, generally speaking, the principal investigator at the other end, goes through this thought process once a year. Yeah, I'm doing this and this and this and this and this and stop some things, but I'm not doing so good over here. I need to reach out more to let people know what I'm doing, and you know, some of the area high schools maybe reach out to them, offer field trips for people to come in where you can talk to them about your research and a lot of these PIs do that kind of thing, they tend to get really plugged in to the community around the university.

Mr. Morales: Tom, to dabble a little bit more into the secret sauce over at NSF, how is NSF moving to adopt new technologies in business processes and maintain financial integrity in internal controls?

Mr. Cooley: Well, I would like to think of it as driving business processes rather than moving business processes. We are a homegrown e-system, so what we have are legacy systems that are our contractors built and maintained for us. That comes with a heavy cost in terms of maintenance and operations and upgrades. And I think in the area of financial management there are commercially off the shelf software technologies that are getting better to address the federal needs, but they were built to address private sector needs, and they need some refinement, quite frankly, but I can see those refinements coming. So, where the federal agencies are beginning to go into cuts packages and work with those providers, the providers are learning how to improve the cuts packages. That's fine from my perspective. But in the grant making world, there are no such cuts packages. In order for us to do electronic grants administration, we had to build our own legacy system, that's what we've got. In terms of driving the future, what I would like to see is the government through this new grants management line of business, send a signal to the private sector that if we're really going to do this, we're going to need cuts packages. The grants business alone is something like $560 billion a year that go out in grants. So if the private sector starts building some of those cuts packages and offering them up to the government agencies, then there should become a point in time when we don't have to worry about legacy systems, where we can have integrated systems for grants management across the federal government, some of which may be a legacy system at a huge agency, such as HHS, might be. Or they may have cuts packages that are shared by multiple agencies. So I would like to see the government act a little bit more like the private sector in terms of trying to drive improvement by laying it out there to the private sector, you know, $560 billion a year is a big chunk of change, and if we really want to see if we can do some cost savings government wide by using cuts packages, you guys need to start building those and offering them to us.

Mr. Watson: Tom, you touched on the line of business concept, which is a current push in government and a number of areas. How is that impacting the National Science Foundation?

Mr. Cooley: It's really impacting all government agencies, not just NSF. But if I use NSF as the example, it's forcing us to make key decisions about, do we provide a service or do we go find a service provider? I think it's a key fundamental issue for the government. In the old days, one used to think -- and I'm talking fifty, eighty years ago, the Office of Personnel Management provided all of the personnel functions for the federal government, and everything you did went through OPM. That was disbursed -- probably for very good reasons at that point in time. What they're looking at now is rather than every single agency, and within major departments, every separate bureau having its own system, you name it, classification system for personnel, financial management system, procurement, contracts. Rather than having everybody have to duplicate that everywhere, you can get economy of scale and efficiency of operations by offering that service at a key few touch points. So that ultimately, like we did with the payroll, NSF had its own separate payroll system. The government went from something like twenty-six major providers for payroll to four. And the intent eventually is to get down to two. That created some streamlining, and there were good benefits that came out of that. Were there bumps along the way? Of course, there were bumps along the way. You don't bring any system up without bumps along the way, nothing goes absolutely smoothly. But in terms of trying to turn the government into a much more efficient and streamlined operation, there are shared operations across federal government, grants is one of them, where we need to start thinking strategically about how to do the front end, which we're already out in the front on with the grants.gov find and mechanisms, and how to do the back end, which is, you know, grants management within the federal government, and how to streamline that, make it more effective, make it more useful. One of the criticisms that we hear from -- well, let's say the governor's office. There is a lot of federal money funneling into the states, but there isn't any single portal where anybody in that state can figure out, well, how much is coming in on an annual basis and where is it going. How much is going to our Department of Transportation, how much is going to our public universities and colleges that we support in the state, and for what reasons? So, what's lacking and what is the value added here is the possibility that in the future that information allows you as the governor or as the state legislator, or as a single PI in the university to start to begin to integrate those efforts to get even greater value added our of the integration of those efforts. I've got an award over here and this guy over in the Department of Transportation has an award over here, I got to talk to him about what he's doing and let him know what I'm doing because maybe we have great information to share that may be of value to both of us.

Mr. Watson: Tom, you have mentioned using some of these lines of business, payroll for example. Any areas where you envision the National Science Foundation becoming a center of excellence providing a line of business?

Mr. Cooley: I would like to see us be able to do it for the grants management line of business, but we have a legacy system. It was not built with the intention of having a lot of capacity to it. We're not stretched right now in receiving forty-five thousand proposals a year, but on the other hand, we certainly couldn't handle the volume of proposals that comes in to the National Institutes of Health. If we did want to pursue becoming a center of excellence for the grants management line of business, we would have to bite off a discreet chunk that we felt that we could handle appropriately. Small bureaus, small departments, people in the federal government that already operate similarly to us, so if a portion of USDA, maybe EPA, maybe the National Endowment of the Humanities -- if I were to just take three random organizations, my guess is those three just about fill up our capacity. So then our concern would be what do we do if all of a sudden state funding dries up, and even more proposals -- say our proposal load goes from forty-five thousand per year to sixty thousand per year, that would saturate our capacity, we wouldn't be able to provide the service that we're supposed to be providing to the other agencies and the whole system could come crashing down. So, you know, we still got some homework to do, but I think that there would be value in pursuing that. The government is right now asking agencies to consider if they want to be a service provider, do a business case for yourself, and at the end of the business case, make a decision. So what I'd like to do is do the business case and see what it tells me.

Mr. Morales: Certainly a challenge, but an opportunity. What does the future hold for NSF? We will ask NSF CFO, Tom Cooley to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Tom Cooley, Chief Financial Officer of the National Science Foundation. Also joining us in our conversation is Steve Watson. Tom, how is NSF promoting partnership with academia, government industry, and international stakeholders?

Mr. Cooley: That's an easy one. Person to person contact. Without that personal contact, things just aren't going to get done. This is one area that I would say NSF has excelled in the past fifty-five years of our existence. The very nature of research is global in scope. That caused the agency when it was first forming itself to worry about how do you touch all the bases, how do we touch the Office of Naval Research, how do we touch the United States Department of Agriculture and their research programs? So many of our program managers that reside at the National Science Foundation know the other program managers that work at the Office of Naval Research, or the Defense Advance Research Agency, DARPA, or the USDA. So there's that inside the government natural connection that already exists, and we frequently invite them to be reviewers on our panels and they invite us to be reviewers on their panels. In terms of working with academia, that is the fundamental tenant of the Principle of Operation at the National Science Foundation. The relationship between the foundation as an arm of the federal government and academia is one of partnership. We expect them to put something in, you know, they turn on the lights everyday for the PIs, and they make sure the water is running. The PIs give something back to the institution, sure they're being paid a salary, but they're expected to teach and do research, find time to mentor students, graduate students, post-docs, find time to talk with undergraduates, bring undergraduate students into the laboratory and have an undergraduate research experience those students who are thinking about a science or engineering career, reach out to the community, visit high schools, that is just a nature of our business. Even our own program managers in NSF do science fairs, participate in research at nearby universities, keep their ongoing research programs going. Industry has been a bit more of a sticky wicket, and I think that our real outreach to industry started about in the 1970s, but really solidified under our director for six years from -- I think it was about '84 to '90, Dr. Erich Bloch promoted a lot more partnerships. He envisioned a couple of very key programs that required industrial participation. That has. We have some centers -- I remember one that's up in Rochester, New York, where for a long time, I believe it's still in existence, Kodak was a partner because it was research on -- in the whole field of photography. And then international, well, we have several ways to do that. First of all, government-wide, you've got the State Department. So you'll always need to be concerned with working through the State Department, particularly in some sensitive countries, but we have our own Office of International Science and Engineering, and they have their own connections to their counterparts in -- out in the other countries. So, for example, my boss at the time who was the Chief Operating Officer, Joe Bordogna and I were invited to go to Beijing about a year and a half ago because the National Science Foundation's counterpart in the Chinese government located in Beijing was undergoing a strategic planning and envisioning exercise, and they wanted to know how NSF did it, and how NSF implemented it, and sold it to their own administration. Well, we found out about that because there was a very natural relationship between the people in those -- in that office in Beijing, and our people, here at NSF and the Office of International Science and Engineering who are always going back and forth and touching base and finding out what's going on in each other's countries, so we do that with virtually every country on every continent, and of course with cell phones now, it's instantaneous, call up, dial up, email, whatever. Then there are some research communities which by their very nature are international in scope. The astronomy community comes to mind, the ocean sciences community comes to mind. But you see more and more of this internationalization of research, biosciences is probably the hottest topic right now, and that's the sharing of information across borders about what's going on with the human genome and plant genomes, and how to worry about getting better crops that are drought resistant, or other kinds of things, that's very important on a world-wide basis.

Mr. Watson: Tom, looking into the future, what are the major challenges you see for the National Science Foundation, generally, and then more specifically, for your office?

Mr. Cooley: Making sure that people can actually go home at the end of a very busy, hard day. We all work more than eight hours, we know that now. Email has made it -- you work virtually twenty-four/seven. I get home, I take off my tie, and in the summer time put on shorts and go around in flip-flips because of the heat, but after dinner I logon. Do I have any important messages, did somebody need to give me a heads up about things the next day, is there something I didn't get to today because I had meetings all day long and I didn't have time to actually sit back and think? I think that in my own opinion right now, the biggest problem that we, as a nation are facing is that there is so little time left to be proactive or reacting to everything because it's information coming at you twenty-four/seven, whether it's TV, radio, email, people in the halls, and having that quiet time to stop and think strategically about where you should go right now is lacking. So, I guess the answer to the question is, the biggest significant challenge is carving out a piece of time to yourself, and letting your employees carve out a similar piece of time to themselves. One of the ways I do that, I refuse to have an iPod or a Blackberry or a cell phone. If you want to reach me, I log on to email, you can leave me a message. If it's really that important, you have that venue, but I don't want you calling me on my cell phone at 11 p.m. at night, nothing's that urgent, I'll deal with it in the morning when I get in. And I think that as long as people wherever they work feel like they still have that little safe spot they can go to, you know, you can keep pushing yourself along, you can bring home the paycheck, you can do what you need to do for the family, but we all need that little safe spot.

Mr. Watson: Tom, earlier in the program you told us a wonderful story about how you got started. What advice can you give a person who is interested in a career in public service?

Mr. Cooley: Understand what you're getting into. I think that was the real wakeup call for me when I got into my first real job. Like many of us, we had part-time jobs in high school and college. I worked my way through college. But, you know, you see multiple career paths, and sometimes you have to actually get on that path and find out for yourself whether you're going to be happy or not. In terms of the basics, I think most people who are worried about any kind of future career need to be thinking about to what extent am I going to be happy, and to what extent is my earning power going to support my family if I'm the kind of person that wants to have a family, big or small. So, good high school education, certainly go to college, because I think having a college degree opens up your earning potential as you get older. If you really love college, stay in college, get a Master's, get an MBA, go on for a PhD if you're interested in pursuing education, if you're interested in pursuing science or engineering. I'll tell you one thing about having a well-rounded, educated background, whether it's just a Bachelor's or a Master's, is I do think it prepares you to take advantage of the opportunities. As we all know in life, doors close and it's up to you to find out where that window is open, and trust me, based on my own personal experience, when a door closes somewhere, there's always a window open somewhere, but you've got to find it. And then when you find it, you have to have confidence in yourself that your background, your education, your experience, your training allows you to leap through that window. And frankly, if you're not sure, leap anyway, take the chance. You can always go to the supervisor and say, you know, I thought I really understood this, I need some more training in this area. And if you've got a good supervisor, they're going to say, absolutely, go do it. I'll pay for it.

Mr. Morales: Tom, that is just great advice. Unfortunately, that will have to be our last question. Steve and I want to thank you for fitting us into your busy schedule and joining us this morning. And we also want to especially thank you for your service to our country, both first at the Department of Agriculture, and now at the National Science Foundation.

Mr. Cooley: Well, that's great. I really do appreciate that. I'm third generation in service to this country, so over the past one hundred years, I've loved living in Washington, D.C., all of my life. If anybody wants to find anything else about the National Science Foundation, a very simple website, www.nsf.gov. Thank you.

Mr. Morales: This has been The Business of Government Hour featuring a conversation with Tom Cooley, Chief Financial Officer of the National Science Foundation. Be sure to visit us on the web at www.businessofgovernment.org. There you can learn more about our programs and get a transcript of today's fascinating conversation. Once again, that's www.businessofgovernment.org.

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

Norman Enger interview

Wednesday, January 25th, 2006 - 20:00
"The goal of the HR line of business is essentially to free HR professionals in the government from routine back-office type work so they can focus on recruiting, motivating, training and rewarding the people in the federal workforce."
Radio show date: 
Thu, 01/26/2006
Intro text: 
Enger discusses the HR Line of Business program, its relationship to the e-government initiative in the President's Management Agenda, and its alignment with the Federal Enterprise Architecture. Enger also describes some of the programs that have arisen...
Enger discusses the HR Line of Business program, its relationship to the e-government initiative in the President's Management Agenda, and its alignment with the Federal Enterprise Architecture. Enger also describes some of the programs that have arisen from the HR Line of Business and OPM e-government initiatives, such as the USAJOBS web site, the improved security clearance system, and improved employee training programs.
Complete transcript: 

Thursday, January 26, 2006

Arlington, Virginia

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

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Mr. Norm Enger, director of the Office of Human Resource Line of Business at the Office of Personnel Management. Good morning, Norm.

Mr. Enger: Good morning.

Mr. Morales: And joining us in our conversation, also from IBM, is Don Shaw. Good morning, Don.

Mr. Shaw: Good morning, Al.

Mr. Morales: Norm, can you tell us about the mission and the history of the Office of Personnel Management, otherwise known as OPM?

Mr. Enger: OPM was created by the Civil Service Reform Act of 1978. It has a number of different responsibilities, one of which is to build a high-quality and diverse federal workforce based on merit-system principles. Essentially, it's the guardian of the integrity of the federal merit system. The director of OPM is the HR consultant for the executive branch. She's the President's principal advisor on matters that relate to the civilian workforce.

In addition to this responsibility, the OPM also has responsibility, for example, for the employee benefits systems, and in effect operates and administers the Civil Service Retirement Systems, the Federal Employee Retirement System, and the Civil Service Retirement System, which is servicing millions of retired federal employees. It also administers the Federal Employee Health Benefit System, which, again, services millions of both employed and retired civilian employees.

In addition, a very large responsibility that OPM now has is the processing of personnel background investigations. OPM now performs 90 percent of all the federal government's personnel background investigations, which covers both the civilian workforce, DoD, and also includes contractor personnel.

Mr. Morales: You've been with the Office of Personnel Management now for, I believe, about four years, Norm. Is that correct?

Mr. Enger: That's correct, yes.

Mr. Morales: And you came on board to lead the implementation of the e-government initiatives. Could you describe the various roles at OPM that you've had in these past four years?

Mr. Enger: My background has been private sector. I spent my life in the private sector and what happened, I then was asked by the federal government to help out the federal government. I met with the director of OPM and the chief of staff back in 2000. They asked me would I consider doing some public service. Essentially, at that time, the OPM had five of the original 24 e-government initiatives. These were initiatives that really had three primary mandates, if you will. First one was to make transformational change -- really change a business process in the federal government. Number two, do it in a relatively short space of time -- say, two to three or four years. And also the third mandate was to prove you've been successful. Show us by numbers, metrics, or whatever that you really have achieved that goal. The five that we had really framed the employee life cycle from recruitment to retirement. Essentially, the five we had were what I call point solutions.

For example, one of them dealt with the website where someone goes to find a federal job. That's called usajobs.gov, and we, in effect, transformed that website. What happened is in last three to four years, we've moved those five to a point where they're ready to graduate into the regular business of OPM. They've been successful and met all of their milestones. However, what you're looking at is fixing a piece of the overall HR business process. Namely, you fix the website, but you don't fix the entire hiring process.

What happened is that OMB recognized that perhaps it was wise to expand upon the original concept of improving federal HR systems, and what they did in March of 2004, they announced something called Lines of Business. They announced at that time five lines of business, and one of those five was the Human Resources Line of Business. Essentially, the difference between the original five e-gov I had and the new Line of Business is that this is much broader in scope. They're looking at everything you do in terms of the business process from hiring a person to retiring a person and saying, let's look at the entire scope of this, the entire business process and all the sub-functions and really try and change as much as possible, and where possible use technology.

Mr. Shaw: Norm, you are now the director of the Human Resources Line of Business. Could you tell us about the mission of your office? You've spoken briefly about it, but could you provide some more detail?

Mr. Enger: The mission of my office is really to implement the vision of, now, the Human Resources Line of Business and also to complete the final graduation, if you will, of the original e-gov initiatives. Essentially, we are following the President's Management Agenda, the PMA, which sets forth as one of the five major components, e-government. We're following the goals and desires specified in the PMA -- the part, of course that deals with e-government. We also are following the E-Gov Act of 2002, which, again, has visions to improve federal IT systems. And finally, there's also something now called the Federal Enterprise Architecture, which is a big picture of the government from a business point of view, whereby it's looking at the government as one organization, saying, what does this one organization, this one government do? So we're responsible for, in effect, giving detail and giving the structure to the Human Resources part of the Federal Enterprise Architecture.

In terms of my mission, I have a staff of approximately 37 people working for me. With contractors, we have approximately 60 people working to implement both the HR Line of Business, but also to finish off or complete the earlier 5 e-gov initiatives.

Mr. Shaw: Norm, some of our listeners may have difficulty understanding what the federal government means by "human resources." Could you share your understanding of this term?

Mr. Enger: Human resources really means the 1.8 million people in the civilian workforce. What we are trying to do is we're trying to, in effect, improve how we recruit, how we motivate, how we reward the people in the federal workforce. So human resources means people. Another term that's come into popularity is "human capital." Essentially, this is also the people, but it wants to give the flavor, if you will, of the people in terms of a real asset to the organization. So when you say "human capital," you mean: Think about these people you have and think of them as an asset, like any other asset you have in a large corporation.

Now, the goal of the HR Line of Business is essentially to implement modern and cost-effective HR solutions to support the strategic management of human capital. A goal here is to, in effect, free up the HR professionals in the government from routine back-office type of work and move a lot of that work to federal processing centers -- I should say federal and also private processing centers. So in effect, you free them up to focus on the mission of recruiting, motivating, training, rewarding the people in the federal workforce, the move to a more strategic use of our HR professionals to build a better work force. And of course, a secondary consideration here is the fact that by doing this you also achieve many, many operational efficiencies, you save a lot of money, and you become much more efficient.

Mr. Shaw: As you mentioned earlier, you came to OPM after working in the private sector, including a successful launch of your own technology company. How have you translated your private sector experiences to your work now at OPM?

Mr. Enger: Well, I spent most of my professional life running my own company. It was a consulting, professional services, IT system integration type of company, and then what happened is the company was bought in 2000 by a large multibillion-dollar company called Computer Associates. I spent two years with that company as a vice president. So I really had the experience of both working at my own company and also working for a very successful large corporation.

Now, to answer your question specifically, what has happened is the federal government has moved toward trying to follow the best practices in the private sector. I was surprised when I joined the government in 2002 that I was seeing the government actually turning more and more to the private sector for help, answers, and solutions. Essentially, if you look at how the federal government rates their senior executives, they have several criteria that you have to really try and meet. One is leading change. A second one is leading people. A third one is being results-driven -- give us some results or some tangible evidence you're successful. A fourth one is having business acumen -- namely, you can intelligently operate a business-type function. And the fifth one is building coalitions and communications.

Well, all of these elements, these five, are very, very critical in the private sector. When I ran my own company and when I worked for Computer Associates, these were the criteria by which you judged the successful executives. And now, what I see is that that structure has now moved over into the federal sector, and we find the federal government trying to follow the same model, if you will, that we have in the private sector.

I might also add that a very key element here is results-driven. You see now a very, very keen desire in the federal government to tie performance to results, and that is very much a private sector orientation.

Mr. Morales: What role did OPM play in changing government recruiting? We will ask HR Line of Business director Norm Enger to share with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with OPM director Norm Enger. Also joining us in our conversation is Don Shaw.

Norm, you were a guest on our radio show in March 2004, and our listeners would be interested in an update on the progress of the e-government initiatives under your purview over the past few years. Let's start with the recruitment one-stop initiative and the usajobs website. Can you give us some background on this initiative? How's it helped with recruiting qualified candidates, and how many visitors do you now have, and how many online r�sum�s have been posted?

Mr. Enger: Well, this is one of the original five e-gov initiatives. It was called Recruitment One Stop; it's really focused on usajobs, our website. What happened is, when I joined the government, there was an old legacy system, which was definitely in need of replacement, renovation, or whatever. So what happened is in August of 2003, we actually brought up a brand new replacement site. Now, let me mention that this is the primary site where a person goes to locate, search for, and apply for a federal job. All competitive federal jobs must be posted by law on this website.

What happened is that in August of 2003, we shut down the old website on a Friday evening, and we were averaging 20,000 visits a day to that old website. We came live on a Monday morning, and fortunately, there were no glitches with the operation, but what did surprise me is on day one, we had 200,000 people on the site. We increased tenfold when people knew there was a new site. The new site is complete -- it's a modern site, the site appearance, the search engines, the r�sum� builder, the guidance on the site, how to locate a job that meets your desires or qualifications -- this has all been totally redone. It's now a modern, very robust site. So what's happened is that we're now averaging over 300,000 visits on the site per day, and that comes down to over 70 million people a year are actually going to this website. By every rating that we know -- and we actually have third parties evaluate the site -- 91 percent of the people that go to the site say they would return to the site and recommend the site to other people looking for a federal job.

At this point in time, we have over one million r�sum�s on the site. The site, I think, has met the earlier mandate I mentioned of e-government -- namely, you transformed a business operation, you've done it in a relatively short space of time, and you can prove that it's been successful by the number of visitors and outside surveys judging how well the site services the U. S. public.

The site is still evolving. Now, we are trying to give the applicants more feedback as to the status of their application or r�sum� to actually have it so they will know who's looking at their r�sum�, and what the next step in the hiring process is. This is a significant step forward into fixing the hiring process, which is a very high priority with the U. S. government and the director of the Office of Personnel Management. Where we are now is we're trying to have the site integrated more fully with what I call back-end systems in the agencies. Namely, they have systems that asses the applicant r�sum�, and the more we integrate their assessment systems with the r�sum�s produced by usajobs, the more you'll speed up the time it takes to hire somebody and the more you'll improve the federal hiring process.

Mr. Morales: That's a very impressive transformation. Two years ago, we also discussed your efforts to improve the federal government's security clearance process. Could you describe how the E-Clearance Initiative has transformed this approach to granting security clearances in the federal government?

Mr. Enger: This is a very, very major area -- topic area -- especially after 9/11, when the awareness of security really intensified across the country. There are several aspects to e-clearances, the initiative which we're talking about now. It's one of the original five. The first thing that we did is we built a system called the Clearance Verification System. This system -- it's the first time this was ever established -- this system holds 98 percent of all active security clearances. This covers all of the civilian workforce, the DoD workforce, and also all contractors. So one of our major accomplishments here is to build a central database or a central system whereby authorized people can put a name in and rapidly find out their clearance status and who granted that security clearance.

Also under this initiative we have moved forward to automate the forms people use to apply for a security clearance. One of the more common forms is called the SF-86; there are several other forms. What we have done is we have built electronic versions of all of these forms whereby it simplifies the process of filling out the application and also transferring the information to the appropriate investigative agencies.

The third element to this is to develop the specifications, to image background investigation information, the paper files that are produced by the investigators to do the background investigation. So the three pieces of this were the Clearance Verification System, the automation of the forms -- it's called E-hyphen-Q-I-P or e-QIP -- and also the imaging standards to image background investigations.

So in effect, what we've done here is we have moved from a paper-driven security clearance process to an electronic process. A very significant act was the 2004 Intelligence Reform and Terrorism Prevention Act. Based upon the mandate of this very important act, and based upon the progress in e-government, we are now looking that 80 percent of all background checks will be finished within 90 days by the end of 2006. As I said earlier, at this point in time, OPM is doing 90 percent of all the federal government's personnel background investigations. At the present time, we're conducting over one million investigations a year.

Mr. Shaw: Norm, one aspect of the Human Resources Line of Business is skill development, employee skill development. Could you share an update on the E-Training Initiative and the usalearning.gov website?

Mr. Enger: Essentially what this was to accomplish was to build a web-based learning site where people could obtain from the Internet, from a website, courses, books, mentoring, the various things required to develop competencies and skills. We launched, in July of 2002, a very, very simple site. It was extremely basic; at that time, Mark Forman was in charge of e-gov -- now it's Karen Evans. Mark Forman was there, and in effect, we launched the site. We had a handful of courses, maybe 30 or 40 courses; we had a handful of books. It was a very, very humble beginning.

Since July of 2002, it's really grown very, very rapidly. We now have four providers of web-based training services under the E-Training Initiative. We have golearn.gov, which is operated by OPM, which is the site that I mentioned that we brought up in July 2002. We have FasTrac, F-A-S-T-R-A-C, a site operated by NSA. We have a site operated by Department of Commerce, NTIS. And our newest web provider is Department of State, the Federal Service Institute. They all are working with us under the E-Training Initiative, and we have, in effect, an advisory council that works with all of these providers.

And what's happened is now we have 1.3 million registered federal people using the courses and materials under the E-Training websites. These courses -- we now have thousands of courses, not 30 courses, but thousands -- we have hundreds of books, we have collaboration on the site, we have mentoring. The site keeps on getting richer and richer, and it's become a primary vehicle to educate and help the federal workforce build knowledge, skills, and also competencies. The site keeps on expanding in terms of what it's offering.

A very significant aspect now is we're moving into career planning or pathing on the site. We worked with the Chief Information Officer Council and we developed, basically, a career path for people in information technology. We mapped out what they should know from an entry-level position in IT to becoming a chief information officer. A person can go into this site and see at every step in their career in IT what they should know in terms of knowledge areas, skills, abilities, and they're able to, in effect, plan a curriculum and using our USALearning, they're able to, in effect, start taking courses, and the site will help them to track their training and their curriculum. So, in effect, you've moved now from just having courses and materials to actually helping people move forward in a well-defined career. This really is improving competencies. We plan to follow this model of building competencies. We're now working with the HR community, the acquisition community, and the financial community to, in effect, add to this web-based training, career pathing, or planning facilities similar to what we did with the IT community.

Let me also add that we have established a council. It's called the Learning and Development Advisory Council. Now, we have 23 agencies, and we have these four service providers all working with us on this council, which, in effect, as a government, is looking together, saying, how can we better use web-based training to improve and help the federal workforce. This ties very, very much into the whole move to pay-for-performance because you have to have people properly trained to do their job in order to be able to have them able to give the results you want, which ties to their performance on the job.

Mr. Morales: How is OPM supporting electronic payroll? We will ask HR Line of Business director Norm Enger to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with HR Line of Business director Norm Enger. And joining us in our conversation is Don Shaw.

Norm, another e-government initiative that you've led is the E-Payroll Initiative. Could you provide some background for our listeners on this program and what's the current status of the payroll provider consolidation and agency migrations?

Mr. Enger: When I joined the government in 2002, I learned that there were 26 agencies paying the 1.8 million federal employees. Coming from the private sector, where efficiency is very important, I was wondering why do you have 26 places paying the federal workforce. It turns out that the same question was asked many, many times by OMB and other parts of the federal government, and in effect, this initiative was to consolidate and standardize civilian payroll processing. What happened is, starting in 2002, we've moved forward, and what we have done is we have gone through a process in establishing 4 of the 26 agencies to be payroll providers, and we are finishing now the consolidation of civilian payroll into those four providers' sites. The four are the National Finance Center, which is part of Agriculture. It's based in New Orleans. You have the National Business Center, which is part of Interior, based in Denver. You have GSA, which is based in Kansas City. And you have, of course, you have DoD, something called Defense Finance Accounting System of services, payroll also.

Now, where we are in this process is we now are 85 percent complete. We now have 1.5 million of the 1.8 million people in the workforce being serviced by these four payroll providers. I think this is a very, very great success in e-government. We've done this in a relatively short space of time, and we've had no significant problems in terms of somebody getting the wrong paycheck or whatever.

Let me also add that one of our sites, the National Finance Center in New Orleans, they actually were shut down, essentially, during Katrina. They were able, through their planning, to be able to operate at other locations. They were able to continue processing pay for roughly 600,000 federal employees, which I think is a real tribute to how robust and how well this E-Payroll Initiative has progressed. From my point of view, the great success of E-Payroll, which has saved large sums of money and led to a more standard and more coherent civilian payroll system, really was one of the main reasons why the government thought of the Lines of Business. A major part of the Lines of Business is moving away from stovepipe installations, moving to more sharing and, in effect, offering modern, robust solutions at these service centers.

Mr. Morales: We know that OPM, GAO, and the OMB are encouraging the link between employee performance, organizational outcome, and pay. How is your office supporting the development of performance-based organizations?

Mr. Enger: Part of the Human Resources Line of Business, we have a task force of 24 agencies that meets every month to talk about direction, progress, for the Line of Business. But in addition to which, we've established something called the requirements board. This requirements board consists of OPM management, but also we have on the board, for example, we have Defense, Homeland Security, and other parts of the civilian workforce. They are looking at the legislation and requirements that drive information systems.

One of the main areas here is compensation management, which deals with payroll and also the various HR systems. What's happening is that they are developing the requirements which, in effect, become the IT structures, if you will, that will be running at the Federal Service Centers. What I'm saying here is that we now are, through the HR Line of Business, we're putting in place the infrastructure, we're putting in place the data centers or the service centers, and also we're putting in place the requirements for the new personnel payroll systems that'll run at those centers. And all of that supports the new pay-for-performance systems, which are now being implemented at DoD, the National Security Personnel System, and you have a new system at DHS -- Homeland Security -- MAX HR, and they're also talking about a new system for the rest of the civilian workforce in the Working for America Act.

In addition, I said earlier that many aspects of my early initiatives, like the E-Training and such, are really key to building competencies necessary for the workforce to perform properly.

Mr. Shaw: Norm, we've been discussing the coming wave of Lines of Business: Human Resources, Financial Management and Grants, and Information Security. We understand that agencies are planning centralized service providers for these functions. What role does your office have in supporting Human Resources shared service centers?

Mr. Enger: When the business case for the HR Line of Business was finished by our task force in 2004 and delivered to OMB, there were essentially two main recommendations in the business case, one of which was the government should move toward establishing shared service centers that would offer quality modern systems to support HR professionals that manage the civilian workforce.

The second major thrust was there should be more standardization -- where it makes sense -- in the HR business processes. What happened is that in roughly September of 2004, OMB asked agencies who would like to volunteer to be a federal shared service center, as we call it in the HR Line of Business -- namely a provider of these services. At that time, five federal agencies submitted proposals to be these centers. There was a proposal from Defense, a proposal from Agriculture -- the National Finance Center, a proposal from Interior -- the National Business Center, a proposal from Health and Human Services, and a proposal from Treasury. OMB reviewed these five proposals and in February of last year, they announced that from their point of view, from a budgetary and managerial point of view, they passed the OMB review. They were called candidates.

At that point in time, the proposals were turned over to OPM and the HR Line of Business, and we formed a number of panels, a technical and also an advisory board, and we spent many months analyzing these five proposals. We asked for more information from these five proposed providers, we met with them, et cetera. In September of 2005, the director of OPM, Linda Springer, and OMB announced that these had also passed the criteria, if you will, to be certified by OPM. So, in effect, as of September of 2005, you had five established, certified, federal shared service centers. And right now, these centers are in business to, in effect, offer agencies solutions, and they're following all the guidelines of the HR Line of Business, and they're also taking and looking at and moving toward meeting the requirements that we're publishing all the time relative to what they should be offering in terms of modernizing the IT systems that support the federal government.

Let me also add that beyond the IT services, they can offer other services also, but essentially, we're looking at moving routine, back-office type of work from the agencies to these centers.

Mr. Shaw: We understand the Human Resources Line of Business is a significant collaborative effort across multiple agencies. How would you characterize this collaboration, and what lessons learned can you share with us?

Mr. Enger: Well, we established the HRLOB task force in March of 2004, and it meets every month. And the task force is very, very active. We have very, very strong participation. The task force, of course, developed the business case for the line of business, the task force reviews all of the requirements we're putting out in terms of what should be offered at our shared service centers. And what we have now, we have established -- I think there are four poles to the HR Line of Business. One is we have the governance structure, which is the task force of 24 agencies with many, many sub-working groups. We also have established a shared service center advisory council, which consists of the four new HR service providers. And on the same council we also have the earlier four payroll providers, so there are nine components there. Then we also have as part of the task force, we have a group of 11 agencies that represent the voice of the customer.

So we have now the governance structure. We have the voice of the customer, which is a part of my task force, to speak for what the customers want, and they'll develop service-level agreements and performance metrics whereby they'll say what they want from the service centers. Then we have the voice of the service centers, or providers, which is this advisory council I mentioned before. And the last piece, the fourth piece, is we're publishing and making available to both the private sector and the federal government what we want in terms of the modern business systems. We're defining exactly what those systems should do and how they should operate and what their functionality should be. So we're actually telling the private sector and these centers, here's what those systems should do in terms of responsiveness, functionality, and also, you know, various performance criteria. So those are the four poles, if you will, of the HRLOB.

Now, to answer your question, though, what I've learned from this is that you can never do too much communication. You really have to outreach as much as possible to, in effect, make people understand what you're doing and why you're doing it. I've learned, if you will -- it's reinforced what I guess I understood earlier -- that you've got to make an effort, go out to meet whoever wants to meet with you in Congress or an agency, who wants to know more about what you're doing and why you're doing it, and make the presentations. And in that way you build the support which is really critical to moving ahead with these initiatives.

Mr. Shaw: Norm, can you briefly describe the technology that will support the HR Line of Business solution? Are you planning COTS software, or will custom software development be required?

Mr. Enger: Well, essentially, the federal government very much wants to learn and use the private sector as much as possible. There's a real movement away from the federal government building its own systems. So a major thrust here will be to, as much as possible, use commercial off-the-shelf software. Wherever possible, turn to the private sector, bring in their commercial software, and contract with them to, in effect, use that software and benefit from all the evolving technology they've put into that software. A major thrust also is to use the private sector wherever it makes sense, and contract out where it makes sense, and then, in terms of technology, it's really no different from what the private sector is facing in moving toward XML, Java, moving more and more toward Internet-based systems, moving away from the client server toward the Internet-hosted and -based systems. In terms of technology, it's really the exact same technology any large American corporation would be looking at and assessing at this point in time.

Mr. Morales: What does the future hold for the HR Line of Business? We will ask OPM director Norm Enger to discuss this with us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with Norm Enger, HR Line of Business director at OPM. Also joining us in our conversation is Don Shaw.

Norm, what are the specific plans for the HR Line of Business in fiscal year '06? How many agencies do you anticipate will migrate to the HR Line of Business Shared Services Center?

Mr. Enger: I mentioned earlier that we now have in place five federal HR service centers. We anticipate that in fiscal '06 three agencies at least will migrate major HR functions to these Shared Service Centers. I anticipate that the numbers will accelerate in the next fiscal year, so we'll see over the course of the next year more and more of the back-office work moving from the agencies to these service providers. In the course of this year, we'll continue our meetings with the task force, we'll meet every month with these five providers -- we have a council of five providers -- we also will continue the work we're doing to, in effect, define the solutions that we want to run at these service centers.

I think that the work we've done in defining solutions is really key to the future because for the first time, the government is defining what do we want these federal HR systems to do, and these are coming out in published specifications available to the private sector so they can build systems that meet those requirements.

So we have a lot of activity this year to, in effect, move forward defining solutions, and I might add also in defining solutions, that we anticipate that at some point in time, we'll actually be able to certify solutions. So if a vendor says, I have a new HR system that does this and this, we'd be able to take that and match it to our requirements, and then if it passes the requirements testing, we could certify that as a certified federal HR system. And that, of course, would wind up running at one of our shared service centers.

Mr. Morales: Norm, we spent a fair amount of time talking about commercial best practices, and certainly, you have a perspective coming from the private sector. What emerging technologies hold the most promise for improving the federal management of human resources?

Mr. Enger: Well, from a technology point of view, I think we're looking at knowledge management being one broad area. I think open architectures being another one. Web-based services, XML -- I mentioned this before. I think that the technologies that let us integrate systems more and pass information more easily and seamlessly between systems, all of this -- which is really the keynote of the open architecture -- will let us have more flexibility in how these service centers operate, how they communicate with each other, and how they're able to add new functionality, in terms of new vendor software becomes available, and they can plug this in, if you will, and offer this to the federal agencies.

Mr. Shaw: Norm, if we can ask you to look into the future now, what types of human resources concerns will face the federal government in 10 years and then even further out in 25 years?

Mr. Enger: Well, the federal government, as Linda Springer, our director, has said several times now, we're facing the fact that roughly 60 percent of the federal workforce can retire within five years. So you're looking at a very large potential for retirement from a 1.8 million civilian workforce. This puts great pressure on the federal government to do succession planning -- namely to be training people, hiring people to replace these people who leave. Because they leave with many years of knowledge about certain activities and functions, so you have to have in place people who are able to understand that functionality and replace these people.

So we're looking at that, which ties into the very important task of attracting talented young people into the federal workforce. It's very key that we have the ability to attract these young people. One step forward has been this usajobs site that I mentioned. We have to make the federal government more attractive to young college graduates and people looking for long-term careers. The federal government right now has an aging population and in effect, we now really need some new blood and quality -- talented young blood to enter our federal workforce.

Looking forward, we're looking at a more diverse population, a more diverse federal workforce which reflects the American population. The federal government tries to, in effect, represent the U.S. population, which is becoming more diverse. I think we're talking about what I call a blended federal workforce. We find that, in reality, most of your major operations or programs are a blend of both federal people and contractor. We're looking at a realization that we can't just look at a federal workforce, but we have to realize that it's a federal workforce totally supported by a competent private-sector workforce. So you really have to look at the whole picture -- the blended workforce is what I call it. I think this requires a little bit of assessment as to the best way to deal with the blended workforce.

The other issues, I think, are more general, like globalization. You know, there are jobs going overseas, software is being built in India and elsewhere. This does have some impact upon the long-term view we have as to what we're doing in the federal sector.

Mr. Shaw: How will OPM need to evolve to respond to these significant challenges in the future, Norm?

Mr. Enger: Well, the OPM, as I mentioned earlier, is really the guardian of the civilian workforce. Essentially, OPM has as a goal to have agencies adopt human resource systems that allow them to build a competent workforce. A second goal of OPM is to create a work environment so that people want to stay with the federal government or join the federal government. So OPM puts in place the policies, the guidance, to agencies that lets them establish this positive work environment so people can, in effect, do their job properly and, in effect, be results-oriented.

And the third part of OPM's goal here is to deliver services that are both efficient and quality. OPM has major, major roles in benefits, retirement systems, health benefit systems, and also investigative service systems. So OPM wants to deliver its services to the U. S. public very effectively and efficiently and cost-effectively. And also to pass on this view to the agencies that in turn have to service or are servicing both U.S. public and the civilian workforce.

Mr. Morales: Norm, on this theme of guidance, you spent most of your career in the private sector. But you've obviously successfully transferred to public service. What advice could you give a person who's interested in a career in public service?

Mr. Enger: Well, I think we have a significant situation now in terms of the federal government wants to be more like the private sector where it makes sense. The whole idea of pay-for-performance whereby every year you put in place a plan which specifies your goals for the year and ways to measure your achievement of those goals, this is very much a private-sector mentality. I think this will attract many young people who are looking for challenges, who are looking for accomplishments. The federal government offers individuals a chance to work on systems and projects that are much larger than most private companies can offer. I mean, you're talking about systems that affect millions of people, that involve billions of dollars in many cases, and the scale here is quite attractive, I think, to many young professionals coming out of college.

This is a good time for a person to join the federal government. Hopefully our usajobs website has been able to show people some of the benefits of working for agencies and working for the federal government. We have, on usajobs, numerous aids to help people who might have interest in the environment, interest in law enforcement, intelligence, military, whatever -- there are numerous guides on the site that let a person put in their desires, what they'd like to see in the job that'll guide them to what jobs are available in the federal sector. I encourage young people to go to this site and explore the site.

We also have on the site a special area for student jobs. In effect, someone who wants to work part time for the government can go to Student Jobs and find these part-time jobs. We also have something called a Presidential Management Fellows Program, designed to attract young people into the federal service, a special program to motivate and incentivize these young people.

So in summary, I think that this is a very, very good time for a young person looking for a positive career to consider federal service.

Mr. Morales: That's great advice. Norm, we've unfortunately run out of time, and that'll have to be our last question. First, I want to thank you for fitting us into your busy schedule today. Second, Don and I would like to thank you for your dedicated service to the public and our country in the various roles you've held at the Office of Personnel Management and in the information technology industry.

Mr. Enger: Yeah, I would suggest that people go to the opm.gov website. There's much more information about the Line of Business at the site. And also I mentioned the usajobs.gov website where a person can locate and apply for a federal job. Thank you very much.

Mr. Morales: This has been The Business of Government Hour featuring a conversation with Norm Enger, director of the Office of HR Line of Business at the Office of Personnel Management. 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 conversation. Once again, that's businessofgovernment.org.

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

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

John Garing interview

Friday, January 20th, 2006 - 20:00
There’s pressure to find answers to coalition information sharing issues. We have to be able to talk amongst coalition partners—not just with other countries but with NGOs, first responders, pilots flying fighter planes... and share that in a network.
Radio show date: 
Sat, 01/21/2006
Intro text: 
Technology and E-Government...
Technology and E-Government
Complete transcript: 

Tuesday, July 26, 2005

Arlington, Virginia

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

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is John Garing, chief information officer and director of strategic planning and information for the Defense Information Systems Agency or DISA. Good morning, John.

Mr. Garing: Good morning.

Mr. Morales: And joining us in our conversation, also from IBM, is John Thomas. Good morning, John.

Mr. Thomas: Good morning.

Mr. Morales: John, let's start off by finding a little bit more about DISA. Could you tell us about the purpose, mission, and programs of the agency?

Mr. Garing: DISA provides the systems and capabilities that enable the deployment, employment, and sustainable war-fighting force. We do the wide-area network for the Department of Defense. We do the heavy-lift data processing. We are active in the information assurance area supporting both. And we do command and control applications that enable command and control of a joint task force as it deploys.

Mr. Morales: Would you give us some details on the size, budget, and the employee skills of the folks at DISA?

Mr. Garing: DISA today has about 6,600 people, and that's down from around 8,200 we had 4 years ago, largely because of some smart-sizing we've done in our data centers. Our budget is around $6 billion. Of that, three-quarters of it comes from customers, either through the Defense Working Capital Fund or through reimbursable work that we do for them, and 25 percent of it is direct appropriated from the Congress for specific programs and things like civilian pay.

The workforce is highly technical -- computer scientists, engineers. In fact, we just went through a scrub of our workforce about 18 months ago and we added more computer scientists and more engineers and removed some lesser technical skills, like computing operators, which we have largely automated the functions for, so highly technical, highly educated. Like most government agencies, we have a lot of people within a few years of retirement, but we also have a very active intern program bringing in about 120 per a year. And our success rate with those interns is about 70 percent retention. So we have a way of infusing new talent and the right kinds of talent, and the interns are mainly technically trained, educated, from schools throughout the country.

Mr. Thomas: John, as the CIO and director of strategic planning at DISA, what's your role and how do you relate to the other DOD CIOs, and is your role more internally or externally focused?

Mr. Garing: Well, that's a two-part question. As a CIO it's more internally focused, doing the things that CIOs are responsible for, for my agency: Klinger-Cohen, sound investment planning, information assurance for our internal networks. As the director of strategic planning and information I have two major roles there. One is the outward look, outside of DISA, in providing the systems and capabilities and services that enable our customers to do their jobs. Things like Net-Centric Enterprise Services, Global Information Grid band with expansion, global command and control system, the data centers, the Defense Information Systems network, all those things. As a planner, I'm supposed to be looking three to five years or beyond that out. From a programmatic point of view, I am the one that defends our outward-looking budget that will be called upon. And I'm also the one that does the interface with the office of the secretary of defense and the joint staff on many things.

My other hat is in the information world and, you know, our previous director created this organization because he wanted a nexus where the experience, expertise, and day-to-day knowledge of programs and systems and capabilities resided with our both external and internal information organizations. That is to say our public affairs, our internal command information that spreads the word among our employees, and the conference functions that we do, like our annual customer conference. There's a synergy there between the planning function and information that you could not contrive any other way. It's really - it was a brilliant move on his part to do that.

The strategic planning involves a number of things. One is senior engagement with customers. We have our 500-day action plan, the director's 500-day action plan, that we publish about every two years. And that is an attempt to get from our customers what they need from DISA in the next 500 days, as it turns out. We also do strategic planning visits with the combatant commands and the services where a flag officer, general, or an SES or a couple of SESs, plus a team of four will go and engage at the high levels of the service at combatant command, like, for example, I was at Joint Forces Command with their J-7, their J-8 and J-9: the 7 is a training guide, the 8's requirements, and 9 is experimentation. They are customers of ours and they're not the typical communications and information technology people. We went on to Europe, we met with the intelligence people, the operations and the planning people, in addition to the communications and information technology.

So we gather inputs strategically from our customers to try to get in their heads and figure out where they're going and how we can complement them in their programming planning process. We do the same with industry, and that's been a little bit slower in starting up. Senior engagement in companies where our seniors, like our director, vice-director, people like me can get in a relationship, a professional relationship with the leadership of a company so that we can understand where their market and technology are taking them and how we can leverage that, and they can learn from us where we're going. Now we're not the biggest buyer of IT by a long shot in the Department of Defense, but we do exercise I think some technical leadership. And so we have found that the senior leadership in large companies, like IBM, like to listen to what we have to say and we sure learn from them.

The side benefit of that is that we also learn how they run their business, which is helpful to us. And a lot of what we did in our last reorganization 22 months ago was learned from corporations and corporate executives who talked to our previous director and to some of us and gave us ideas and lessons learned.

Mr. Thomas: John, you've worked both in government and in industry. Give us a snapshot of your career and note any significant similarities or differences.

Mr. Garing: I spent 24 years in the Air Force as a communications officer, retired 16 years ago. And I spent the next eight years in businesses, working around the Beltway in professional services companies, most of which have been bought and sold since I was there. And then I came back to government in August of '98, but I came back because I wanted to get a little extra juice in my life. I needed to come to work for a reason.

And what I found is that if you could create an executive in the government, if I could, I would take somebody who has had my career path, learned the skills of what it takes to run a military organization, what the military's needs are, and then learns what makes a business run. You know, I've been at the wrong end of a chief operating officer's power stare more than once and I understand P&O, I understand the bidding process, I understand capture, and I understand how I got taught difficult but good lessons on program management and forecasting and things of that nature. So when I bring, and others like me, bring that back into the government, it gives us great insight and it helps us create better relationships with our senior vendor partners or our vendor partners. And it makes negotiation more easily a win-win because we understand what the guy on the other side of the table or the girl on the other side of the table is going through having done that before, and there are several of us that have done that.

And the gentleman who runs our sustainment organization is a 20-year veteran of IBM as a matter of fact, was a troubleshooter for IBM, a vice president. And he has tremendous insight into what it takes to run a business not just from providing a service, but from a basic fundamental business understanding and business foundation. He and I and a couple of others are really cost-based people because that's one of the lessons I learned from my boss when I was at Cincinnati Bell Information Systems: You have to understand the cost of doing business or you can't do the business.

Mr. Morales: John, you certainly have a wide breadth of experience with your experience in the Air Force, at the White House, in the private sector, and now at DISA. Of all those experiences, what do you draw upon the most in your current role?

Mr. Garing: I think it's the importance of relationships. I think this -- what we do for a living, you and I -- is all about relationships. And you have to establish, as a provider, a service provider, we have to establish relationships with our customers or, you know, you go and look the guy in the eye or the woman in the eye and you say, "How are we doing?" And you'd be surprised what they'll tell you. They'll tell you the truth.

Similarly, we have to be able to talk to our suppliers in the same fashion. And one of our jobs in this organization we call strategic planning and information is to create the relationships in OSD and the Joint Staff, with our customers, the services and the defense agencies and the combatant commands, and with the business world. That is probably the one I would put number one.

Number two is what I mentioned a few minutes ago, and that is you've got to understand the cost of doing business. In the government we don't always do that. We work to a budget. You know, in the private sector returning money to the company's a good thing. And in the public sector, if you're returning money oftentimes you're punished because you don't get that money next year; you don't need it as much and you end up missing opportunities to spend it. But underneath all that is the absolute that you have to know the cost to deliver a product or a service before you can price it. And, three-quarters of what we do comes from our customers, so we're in a buyer-seller relationship all the time, and knowing what cost is, is an important piece of that.

Mr. Morales: That's a very critical point, thank you. What are the top goals and objectives of DISA? We will ask DISA CIO John Garing to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and this morning's conversation is with John Garing, chief information officer of the Defense Information Systems Agency. Also joining us in our conversation is John Thomas.

John, DISA has transformed over the years from a telecommunications provider to a computer-hosting and now network services provider. How has this affected the organization of the agency?

Mr. Garing: Well, transform is a big word and we use it a lot. I've been in DISA for just at eight years, eight years next month. In the five years of our previous director we reorganized three times. And some people cringe and even mock that, but I found that the Fortune 500 reorganizes at least part of their companies every 11 months to maintain relevance in the marketplace.

And DISA, I think, is to be given credit for having the guts, the courage to undertake reorganization. So we went through a major one 22 months ago when, in fact, my office was created. And the theme we followed was one of, if I get them all right, six mandates. The first was becoming an acquisition organization that can, in fact, lead major acquisitions, like the Global Information Grid band with expansion and Net-Centric Enterprise Services. Now we have a component acquisition executive who has the same authorities virtually as the service acquisition executives. So that was one element.

The second was concentrating our engineering in one main body, using home-teaming, so that the engineers have a career monitor/manager that's in the engineering organization while they may work someplace else. But we've put the muscle in under one leader for engineering.

The third was to create an organization that would help us do what we call net ops. Net ops is not an abbreviation. Some call it network operations, but it's more than that. It's the operation and the defense of the Defense Department's network -- "network" here meaning data, voice, video, transport layer, the whole, the broadest definition you can think of with network. And we wanted to make sure we had an operations organization that could in fact support what is now called the Joint Task Force-Global Network Operations, who is JTF-GNO, who is charged with operating and defending the network.

And the fourth was sustainment. We acquire, engineer, and operate, and in the middle is the guy that does the maintenance, the guy that provides the network day-to-day, makes sure it's tuned and operating, provides the data center, and hosts the applications that we're responsible for.

The fifth is financial transparency. Our goal is to get a clean audit opinion by 2007. And we have reorganized a bit and retooled to make sure that we had the right people and the right processes in place to lead us to that clean audit opinion, including getting some new people.

And the sixth and final is governance to make sure that we are able to provide the oversight needed to become a cost-based organization, to understand what our customers were expecting of us, and to be able to deliver that. And that's partly why my organization, Strategic Planning and Information, was formed as to be part of that governance process -- not all of it, but part.

Mr. Morales: That's a very impressive list of objectives. How do you see your specific role in achieving those priorities?

Mr. Garing: I smile because sometimes I feel like a confessor. My people are the heart of most of what goes on in DISA. Either something touches a policy aspect or touches a programmatic funding aspect or it touches something to do with the CIO itself, that organization itself, or touches information, so we get involved in almost everything that goes on. And the director and the vice-director turned to my organization for a lot of advice, a lot of counsel, sensing what a customer may really want or not want, sensing what the mood is in OSD on a particular subject, paving the way for something that's controversial and laying the groundwork and doing the requisite, I'll call it schmoozing, that needs to be done.

So we're pretty much at the center of this. And I'm not saying it to brag; it's just the way he created the organization. And it takes people like I have working with me to do that -- good, strong, smart, savvy, street-smart people. So we're pretty much at the center of a lot of what goes on. And it's a role that's hard, but it's a role that's also a lot of fun.

Mr. Thomas: John, you've mentioned the director's role as the Joint Task Force for Global Network Operations. You've been quoted as saying that DOD needs more coordination in the procurement of network systems and the management of the network. Could you elaborate on that?

Mr. Garing: There are two parts to that question: One is on acquisition and one is on the management. Eventually, we're going to have to come to the realization that there is one enterprise at the Department of Defense, not several, not one for each service and one for each agency and one for each combatant commander. There's one enterprise, it's a single network, many components. And how you define single -- is it all managed by an organization or is it a combination of networks that are singly overseen and commanded, if you will, allowing individuality among the services, but with common standards?

We have to come to the realization that the data that the Department of Defense has is not anybody's data; it's the secretary of defense's data. He owns it. And to me truly net-centric, that means that we have to have data on the network that's discoverable, authentic, trusted, timely. And to do that there have to be rules about what is put on the network, what's allowed on the network, how it's managed and controlled. And from my point of view, you cannot do that with, you know, seven or eight master chefs in the kitchen. You need a master chef and a lot of chefs to help him or her out. So from an operations point of view of the network, you're going to need a master chef.

And that doesn't mean -- it's like a heart surgeon. The heart surgeon doesn't do all the cutting and sewing, but he's there overseeing what's going on. Everybody has their own specialties. So you need an orchestrator, and the JTF-GNO is the beginning of that. That's going to take, I think, a number of years to mature fully.

On the acquisition piece, I listened to Gen. John Jumper, who is the chief of staff for the Air Force, talk about, we're all about programs, we're all about platforms, and we're not about an enterprise. And the way that we, the department, acquires systems now is on a program-by-program basis. And the programs produce hardware capabilities over time based on their individual program charters, and that has led to some gaps in capabilities.

For example, if you look at the transport, the GIG band with expansion is going to be finished this fall. The Joint Tactical Radio System, which is the tactical end for band, with improved bandwidth is five or six years away I guess from full maturity. And the transformational satellite architecture is another seven or eight years from now or maybe longer that that. So we have the GIG-BE in place with a lot of bandwidth and then we have gaps. We have the legacy, the satellite and whatever else that's there, not the high bandwidth we need to go into denied areas like Afghanistan.

And then we produce things like high-power applications and the capability that Net-Centric Enterprise Services will start producing in 2007. And some liken that to driving a high-powered Maserati on a dirt road: You got all that power and you can't go over 30 miles an hour. So there needs to be synchronization of capabilities.

And I think what you're also seeing now is inquiring minds asking, okay, what is the return on investment for all these bucks we're putting into these programs? What capabilities are we producing and when? So we're starting a poor man's version of what we call a net-centric roadmap, and it's looking at the applications, the systems, the capabilities that DISA is responsible for producing. And seeing, if they were left unattended, what would they deliver when and seeing how much overlap is being produced, where the gaps are, and what technology is going to allow. And we've chosen three years, arbitrarily. They go along with our budgeting process, but 2008, '12, and '16, and we're going to draw kind of marks in the sand, lines in the sand to look at what those programs we have are delivering, when, what the technology's going to allow us in 2008 and 2012, what we think it'll allow us, and then maybe adjust our planning and our resourcing to cover the gaps and eliminate duplication.

Let me give you an example, the term "collaboration." There are some 30 or 35 programs that either are collaboration in nature or rely on collaboration. As long as collaboration is a web service that is an icon on a piece of glass that you can click on, nobody should care where it comes from. We get into religious wars, though, about is it this program or is it that program or whatever. There are a number of video collaboration services being produced. We probably ought to have one or two and not seven or eight, and take the money that was going to be spent on those other extras and put it someplace else, into a gap that we might have found.

So the idea behind a net-centric roadmap is to find what we're doing. And that may sound silly, but we're about projects, we're about programs, we're about platforms, we're not about capabilities necessarily. Find out what our programs are producing, look at the capabilities that we need, look where the gaps are and duplication, adjust the planning and resourcing, and try to get some capabilities-based planning done instead of program-specific planning done. If we're successful with this, we will team with Joint Forces Command and others, Strategic Command, to broaden and export this to the rest of the department if we can.

Mr. Thomas: John, it sounds like DISA's right in the center of jointness. How is DISA approaching this from the coalition perspective?

Mr. Garing: Well, that's the $64 question, I think. In our strategic planning visits and in our inquiries we made to the combatant commands about our 500-day plan that is the single biggest, most asked about capability is coalition information sharing. And we haven't got a good answer for that right now. There are a number of systems that allow us to share, on an ad hoc basis in some cases, in some cases on a predictable basis, with our allies, our coalition partners.

But if you look at the tsunami relief at the end of December, there was a come-as-you-are coalition built with partners who we probably hadn't thought of using, not just other countries, but also nongovernmental organizations as well. And we have to be able to talk among themselves. First responders, strategic partners, guys who fly in fighter planes next to our people, people who understand, like in the tsunami relief, the culture of the country and how the place is laid out and what the road infrastructure's like, and be able to share that in a network, some of it classified, some not, is difficult. So there's a lot of pressure being put on all of us in this business to find an answer -- and it's not going to be a silver bullet -- find an answer to the information sharing. And it's probably going to be in the information sharing's architecture, which is a different way of approaching this. It's more identity-based.

There's another thing, if I can do one little opinion here. All of us were brought up in a culture where the information is owned by the producer of the information, who controls the need to know, and especially in the classified arena. Net-centric turns the apple and now it's really consumer-based and we have to assume that the consumer needs the information to do his or her job and making sure that he or she has their permissions to get it is a more positive way of looking at it than saying, yes, proves the right or the need to know.

And that's getting at the heart of the coalition problem as well. This is a hard, hard problem that everybody in OSD and DISA and the services and combatant commands are talking about.

Mr. Morales: John, is the issue any easier or just as difficult closer to home with respect to the emphasis on homeland security with increased communications between federal, state, local, and travel government entities?

Mr. Garing: In some regards I think it's easier and in some regards I think it's harder, and part of that has to do with the funding. DHS has its source of funding. OSD has its source of funding, the Department of Defense. And we've got to make sure that we give to Caesar what is Caesar's here and not cross-pollinate.

But having said that, U.S. Northern Command's job is to, if I can use the word, broker the relationship with homeland security and homeland defense and how OSD -- how the Department of Defense helps. And under their leadership we're beginning to take these pieces on one at a time, but it's going to be long time before we have ubiquitous information sharing where, you know, a fighter pilot can talk to a fireman. It's going to take a while to do that.

Mr. Morales: Well, that certainly is going to keep us busy for a while. What are some of the challenges associated with meeting the evolving customer mission changes? We will ask DISA CIO John Garing to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host Albert Morales, and this morning's conversation is with John Garing, chief information officer of the Defense Information Systems Agency. Also joining us in our conversation is John Thomas.

John, DISA has established a corporate board structure. What is your role on that board and how well is it performing?

Mr. Garing: Well, my office is the secretariat for the board. Our corporate board is the 20 senior people in DISA by position, the strategic business units. By the way, we believe and embrace a balanced scorecard concept that comes out of the Kaplan/Norton book, Strategy-Focused Organization. Our strategic business units and our shared service units and our special staff are on the corporate board. And it meets twice a week regularly: once on Monday morning for a operations review of the past 168 hours and then with a small staff meeting to follow, then on Wednesday mornings we meet and we call them senior strategy sessions, and they're focused strictly on strategy. We don't do informational briefings. We don't do operational reviews. We do tough, strategic questions that we need to have the seniors and the senior leadership contribution on, opinions on.

And in those sessions we at times get emotional, but the directors, director and vice director, have created a senior staff and a mood -- atmosphere -- that allows us to get emotional in those meetings and then leave as friends. We have been tackling programs or problems one at a time or two at time for the last -- well, I was going to say 18 months, it was probably less that that. We really got into gear on this probably around the first of this year and we've begun to be able to take problems, solve them and put them behind us, and move on to the next one rather than have them linger.

And sometimes you got to have people with biases say what their biases are in public and argue about them, and then we leave there as a team and we're moving on. Our vice director, Maj. Gen. Marilyn Quagliotti, has led most of these and she is decisive at the end and, okay, everybody has their say, this is what we're going to do, and we go on from there. So it's a good exchange. It's a good way of solving problems, good way of planning where we're going, particularly planning where we're going, and you end getting to know each other better, too.

Mr. Thomas: What are some of the challenges associated with meeting the evolving customer mission changes and do you ever invite your customers to attend some of these strategy planning sessions?

Mr. Garing: We don't invite them into our own corporate board sessions, but we have sessions with our key customers, some routinely. For example, what we call a board of directors meeting with the Missile Defense Agency, that's a quarterly affair. We have DISA-Defense Logistics Agency Day where Admiral Lippert brings his staff to our place this year and the two senior staffs sit there for a half a day, five hours, and go through mutual issues and concerns, and some back-patting as well. And in the off-year, we'll go down to Ft. Belvoir and meet with Admiral Lippert down there.

We've done it with the services, too, mainly on Net-Centric Enterprise Services and what Net-Centric is. The movement to Net-Centric has affected everybody, not just us. And the way we fight today, which we have proven again in Afghanistan and Iraq, is indeed joint. And it is almost to the point now that if you cannot fight joint, for whatever reason, you're not relevant. And it'll get to the point that if you cannot post your data on a network, you won't be relevant because you're going to have to have sourcing data targeting ISR or whatever, all available sources. It's a shame to think we have young soldiers in harm's way and we have information that may be available to some other stovepiped source, that had those soldiers had that, they would have avoided a firefight or would have had the upper hand in a firefight. So the movement in Net-Centric has caused us a lot of change: the way we organize, the way the Army's organizing today, the way the Air Force is organizing, those expeditionary forces. And that has caused differences in the way we deal with what they want.

Distributed networks, distributed data, both pose security issues, John remembers from his Marine Corps days, that we need to deal with in a different way. Putting data on a network, as I mentioned earlier, how you accredit that, how you make sure that it's timely, how you make sure that the predator feed that somebody's drawing down in Afghanistan is the most recent and is it, in fact, live, or is it archived? How do you tag that and make sure that you've got the most relevant current data for that person? That's all difficult.

And on top of that the world is changing. We're rebasing in the Pacific, we're rebasing in Europe. That has a large implication for us because we have to provide the infrastructure in those places and that's a resource issue. And we have to make sure that we are locked at the hip with European Command and Pacific Command in these cases so we can do the planning that will enable them to do what they have to do and it won't be an out-of-cycle bill to pay for somebody because we didn't do our planning properly.

So as they change, we change. In some cases, our changes, like the GIG band expansion, putting those large fiber pipes into 80-some locations, is going to change the way we do business as well in the department. It's going make putting data on the network much easier and much cheaper, and that should change behavior. So it's a constant evolving. They change, we change, we both change, and we feed on each other.

Mr. Thomas: John, you mentioned the balanced scorecard. Are there other performance metrics that you use to determine if you're on target and how do you involve your customers in this process?

Mr. Garing: Well, we have lots of metrics: metrics for the network, metrics for the data center that are used principally by the people that run those. Corporately we look at the metrics every week, every Monday morning, the operational impact.

We involve our customers through the 500-day plan principally to get what it is that they need from us or what we're not doing. And we have customer forums, like the conference, that we get feedback on. But we try now to move most of our metrics into the balanced scorecard. We believe in it. And every quarter I stand before my peers and defend my corporate strategies that I'm responsible for and my internal strategies and their measures and the initiatives. And if the balanced scorecard does not reflect what our customers want, either one of two things is wrong: the balanced scorecards are wrong or our customers are wrong, and it's not them. If the balanced scorecard does not reflect our resourcing, our palm, and our budget, then one of two things is wrong, and we have to make those things work together.

This is not just a reporting or a metrics technique. It's a real way of organizing and running a business that we think has got a lot of merit to it. So we are actually looking at statistics. Every month, one-third of the organization briefs. So we have a five-hour session on a Thursday afternoon. Every month we go through the metrics. And if anybody from DISA's listening to me, they all enjoy this as much as I do. It's a very painful process, but it's a necessary thing. So it's peer review, you can't use smoke and mirrors, and it's good for us.

Mr. Thomas: John, what is your biggest challenge to meeting or exceeding the tenets of the Klinger-Cohen Act and how are you making progress?

Mr. Garing: Well, I think that we do okay within DISA. And as a CIO, my organization signs off on virtually everything we do. The larger issue here is, I think, the programs that we are doing for the Department of Defense that are not internal at DISA. We are heavily involved in the analysis of alternatives and in the certification of things that go on the network. Getting an understanding of, no kidding, what is a good solid analysis of alternatives is not as easy as one might think. It's got to have some rigor to it that'll look really at are the alternatives real, first; second, have you done an honest assessment of what their strengths and weaknesses are; and third, in the end, when you've done the analysis does that lead you to the right conclusion? Not the acceptable conclusion, but the right conclusion. And it's not always easy to do that. And AOAs, as we call them, are tough to crack. And I know that Dr. Wells views it the same way that he relies a good deal on the analysts to do rigorous analyses to make sure that we get the decision that's right, not just acceptable.

Mr. Thomas: John, earlier you talked about information sharing. What processes do you have to reduce or eliminate silos of information that may exist within the agency?

Mr. Garing: Well, just this week, our vice director appointed a colonel, Yolanda Cruz, who is going to be the agent of change to make us really net-centric. We have silos, like everybody does and we have been going after them a bit at a time, but not at a pace that is fast enough to do something meaningful. So the parts of my CIO organization that do portal and are some of the internal applications in the network are going to support her in an effort to bring all applications we have into some net-centric view of the world so that we can share data better, and data ownership will be the directors, not individual organizations in DISA.

It's easy to preach from a stage about what being net-centric is. It's awful hard to do it because, you know, we have box huggers like everybody, and that's my server, you know, I need to see it right there, it cannot be someplace else. And that's my information -- because information is power. So getting people to share data is difficult, but we'll do this. We will do this or we're all going to die trying -- I'm telling you right now.

Mr. Morales: That's very interesting, John. What does the future hold for DISA? We will ask DISA CIO John Garing to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm your host Albert Morales, and this morning's conversation is with John Garing, chief information officer of the Defense Information Systems Agency. Also joining us in our conversation is John Thomas.

John, earlier this morning, you talked a little bit about the relationship with the private industry. What are some of the challenges that still need to be overcome in this relationship and environment?

Mr. Garing: Well, the movement to net-centric has changed things. We find ourselves moving away from building things, first of all. We have pretty much the philosophy that we're going to buy before we build. Second, rather than acquiring capital assets, we'd rather acquire a service that may be based on a capital asset, and I'll explain that in a second. And third, the need for large-scale integration is not like it was, say, a few years ago. So that kind of puts into perspective what it is that we want from our vendor partners and what we think we need from vendor partners.

If I were king for a day I don't think we'd develop any software. We would acquire off-the-shelf capabilities as we could. And I'm not a big student of this, but when you look at enterprise resource planning tools, ERPs, one of the things that has made them difficult is that the customer tends to want to customize them, which makes them every one of them a one-off and becomes more expensive rather than adapting to the processes, the business processes that are resident in the ERP and then try to change them to reflect the agency or the organization that's using it. So we believe pretty much in buy before you build.

Secondly, in our computing business we have done some things that are probably pushing the envelope a bit. And we've gone to a concept, a lot of people use the term "managed services," but managed services, capacity on demand, utility, pricing. And we have a number of contracts in place now with key providers that are based on those concepts. And the easiest one to talk about is processing power on the floor of the data center and in mainframes. And probably we still have some 50 of those.

We have a need to run -- pick a number -- 60 applications or 70 applications on mainframes that either are based on the IBM zOS or on the Unisys proprietary system. And what we have done in the past typically is when we have to increase capacity or change technology we have written a specification, put it in the Request for Proposal, and sent it out even though it may a sole-source. Sent it out, got the proposal back, had to check the I's and T's and make sure that we're all dotting and crossing those the way we should, and then look at does it meet the spec, does it meet the statement of work, is it priced reasonably, and then award the contract. And then you live with what you got.

What we've done now is taken a lesson from United Kingdom and some others and gone to a different way of looking at things, and that is using statement of objectives, three or four pages long, that describes the problem that we want to solve, and then asks the vendor community that's going to bid on this, tell us how you would do that, with no specification or very little in specification. Here's the analogy. If you've got two tons of trash to pick up every day, you ask trash contractors to pick up the trash, you don't tell them to use a broom or a vacuum or people or a plow, you just tell them to remove the trash. And then you evaluate them and how responsive they're going to be and how much it's going to cost you.

We did data replication for -- this may be a sore subject for a couple of you here in the room -- but data replication for IBM mainframes. We went to a number of vendors and we said this is what we want to do. After trying for 19 months to do it ourselves, this is what we want to do. And we don't care what technology you use, we don't care how it's done, but this is what we want to do and this is the kind of service level agreement we're going to ask you to sign to guarantee that you'll do what you do. And then we evaluated -- we got it turns out three different approaches -- all three different -- and we made the award based on best value. So the idea is to share the problem with the people that know how to do it rather than telling them what we want done exactly.

And we do this then in the case of processing power where the vendor retains the ownership of the capital assets. We have to put it on our floor, under our security and operations for security purposes, but let the vendor manage the capacity on the machines. In one case we went from 24 large boxes to 4, and we didn't notice a difference. In that case, that vendor realized some economies and we asked to share in those, so our bill went down as well.

Managed services, acquiring a service, paying for capacity on demand, only what we use is where we're going. We've done some of that. We deal with about five classes of vendors: The large-scale integrators, the lead systems integrators, the LSIs, the big companies that we all know; the companies that are of a similar size, but also have technology and R&D; and then -- the third category -- there are those that provide mainly just labor, services, professional services; the fourth are the hardware and software providers, the technology providers by themselves; and the fifth is the smaller companies, niche market companies, like in the Silicon Valley that are developing unique technology for a given market that gets venture capital funding. And the people behind the idea of the technology have never associated that with a military requirement and we may very well have R&D programs going on to solve a problem that has already been solved, but we haven't been able to connect the dots.

So as we move into this net-centric and buy before you build and do small spiral development where we build a little, pilot it, learn, invest what we learned into the pilot and build some more, it changes how and when we buy things. And we want to make sure that our vendor partners are attuned to us and that they can influence what we do and that we can influence what they do. And when they come to see us, come to see our director, that's always one of the conversations that we have is how is it we're going to work together better, continue our relationship into the future because things have changed. And, you know, the likelihood of seeing out of DISA a large systems integration effort for any specific program is probably not high.

Mr. Thomas: John, speaking of the future, DISA has been very active in support of the war-fighter as well as national and international disaster relief. Do you see much change in your mission or the environment in the future?

Mr. Garing: No. In fact, the global war on terror coupled with things like the tsunami relief require you to be -- or us to be -- resilient and agile and flexible. What allowed us to do well in a lot of cases is the senior leadership that has, and I'll call it instinct or intuition. Our former director, Gen. Harry Raduege, and our current director, Charlie Croom, and the senior civilians and our vice director, Gen. Quagliotti, have been doing what they've been doing for a long time and they have instincts. And after 9-11, Gen. Raduege, on instinct, committed to the lease with the proper authorities now at risk of some commercial satellite band with some transponders because he knew that within a month or two we were going to have to be doing something in Southwest Asia. In the Gulf War 12 years ago, 12 or 13 years ago, a lot of that was gobbled up by commercial concerns before we had a chance to get at it.

So we have instinct and intuition based on the experience level of our people who have been doing this for a long time. We get the agility from beginning in the interns and the new people that are bright. You know, it's the young captains, and John knows this, and lieutenants who make us older folks look sometimes backwards. My wife says to me when I'm trying to do something with the VCR that what we need in this house is somebody under the age of 35. And the same thing happens in war. And getting the right kind of mix is what we are trying to do to make us continue to be a little bit able to see around corners with instinct and intuition and a lot having the infusion of bright, young talent that we need to make sure that we keep pace with the world around us.

Mr. Morales: Talking about the mix, what advice do you have for the young people who are interested in a career with public service, especially those interested in information technology?

Mr. Garing: You couldn't want a more challenging, intriguing job than lies before you in the IT profession in the Department of Defense and, in fact, in federal government. If you like excitement, if you like challenge, if you like to do the impossible, there's no place better to work. This is a fun thing to do. Now you may not get as rich as you would in the private sector, but myself, I came back after eight years in the private sector because I wanted to know I was contributing. And, you know, I can say honestly that in seven of the last eight years -- the first year was a little bit slow for me -- but I have enjoyed coming to work every morning, and it's because you can contribute. And it just makes a difference.

And in the federal government, in the Department of Defense you can make a difference every single day. That was one of our slogans: Our people make a difference every day. And I believe in that passionately.

Mr. Morales: Well, John, that'll have to be our last question. John Thomas and I want to thank you for fitting us in your busy schedule and joining us this morning. We also want to especially thank you for your service to our country, both as an officer in the U.S. Air Force and now as CIO for the Defense Information Systems Agency.

This has been The Business of Government Hour featuring a conversation with John Garing, chief information officer of the Defense Information Systems Agency. Be sure to visit us on the web at www.businessofgovernment.org. There you can learn more about our programs and get a transcript of today's fascinating conversation. Once again, that's www.businessofgoverment.org.

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

Bert DuMars interview

Friday, January 13th, 2006 - 20:00
"There’s huge demand on e-filing and e-services that we hardly knew about. All of a sudden customers are using the information we put on the web all the time. So, electronic services are something we're really going to focus on in the future."
Radio show date: 
Sat, 01/14/2006
Intro text: 
Missions and Programs...
Missions and Programs
Complete transcript: 

Thursday, June 9, 2005

Arlington, Virginia

Mr. Kamensky: Good morning and welcome to The Business of Government Hour. I'm John Kamensky, a senior fellow with 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 www.businessofgovernment.org. The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business.

Our special guest this morning is Bert DuMars, director of the Electronic Tax Administration at the Internal Revenue Service, which is in the Department of Treasury. Good morning, Bert.

Mr. DuMars: Good morning.

Mr. Kamensky: And joining us in our conversation also from IBM is Jeff Smith. Good morning, Jeff.

Mr. Smith: Good morning.

Mr. Kamensky: We all have heard of the IRS when it comes to the April 15th deadline as individual taxpayers but can you tell us more about the overall mission and the vision of the IRS?

Mr. DuMars: Our overall mission and vision are really focused around people, processes, and technologies and how we actually administer the tax code as handed to us by Congress. So what we're trying to do is make sure it's as fair as possible and administer it in that way and then also driving from a paper process, it's been a traditional paper process, to an electronic process, which we think actually benefits the taxpayers both going from individuals all the way up to major corporations. So those are the types of things we're trying to work on in that area.

Mr. Kamensky: Can you tell us a little bit about the Electronic Tax Administration and its e-file programs?

Mr. DuMars: It's interesting. Electronic Tax Administration is broken up into three parts. One part is our strategy, policy, and marketing group, another part is our development services area, and our development services area focuses on things like our next generation of e-file or what we call modernized e-file and also our electronic services, and then our third group is our Internet development services group, which focuses on our portals, portal strategies, and then also irs.gov and where we're going to go with that.

And then, going back to our strategy, policy, and marketing group, it's really interesting that no matter what you do if you change a policy you end up having to change technology to support the policy. If you change technology you have to do the other thing. You have to make sure the policies support the technology change. So it's things that we think of that are fairly simple or easy to do in a technology world when it gets to the policy side become very complex and sometimes things that we think on the policy side are very simple when we get to the technology side become very complex. So there's this balancing act that we always have to play and that's why that third part of ETA or Electronic Tax Administration is so important in our group. So that's how we break up the focus areas that we have.

Mr. Kamensky: In the case of the e-filing what are the benefits of doing that for both the taxpayers as well as for the IRS?

Mr. DuMars: A couple things. For the taxpayers, especially the individual taxpayers, if you have a refund it is the fastest way to get your refund and the majority of all individual taxpayers actually do get a refund. It's well over three- quarters of them. So they will do it and they'll get their refund quicker, in as little as eight days, but more than likely between about a week to three weeks and that's if there's no problems.

The other thing that they get is they actually get an acknowledgement, which is really critical. I can't tell you how many times I've run across people who've said I mailed it in and I never hear back from you in the first place but then all of a sudden I get a notice and it never showed up. And they don't know why and the Postal Service doesn't know why, just something happened.

And then a lot of people also will do certified mail thinking well, that'll guarantee it, right. All certified mail does for us is it really guarantees the envelope showed up. So we'll get stacks of envelopes show up. They got ripped somehow, just something happened along the way. So those are some of the benefits you get. The refunds are faster and then you get the acknowledgement.

And the acknowledgement also becomes critical for the people who actually owe and that are actually our fastest growing segment. That's growing faster than e-file. E-file overall is growing at about 10.7 percent a year. The people who actually owe are growing at 38-plus percent per year. And what they like is they like getting an acknowledgement because then they can come back to us and say yeah, I got it to you, I paid what I owed, so I shouldn't have to owe any penalties and I shouldn't have to pay any additional interest. So it's really important to that group, too.

Mr. Kamensky: Well, what are your roles and responsibilities as the director of the Electronic Tax Administration?

Mr. DuMars: One of my key roles is actually being the spokesperson for the IRS regarding electronic filing so that's a key role. Actually I meet with the press. I work with industry partners, software industry. I also work with the tax professionals. So it's this outbound role. And then on the inward side, facing into the IRS, it's really to help promote and push processes that we can automate, so one of the things that we've been looking at is how does it all work. How does it all work? What's the life cycle from end to end? And one of the key things we keep finding is sure, we could add another form, make another form available, electronically and sure, we could add another electronic service on irs.gov. But oftentimes what really causes most problems of all is some policy that says you have all these electronic policies and there's some policy sitting there right in the middle that says but you have to sign a document and keep that piece of paper. And that will slow down electronic file growth faster than anything else.

Another thing we're looking at is we're looking at the back end. Where does the whole process start for most taxpayers, when they get their W-2 or their 1099 or their 1098? Today those come mostly in paper. And they wait for those to show up and that's when they start their tax return process.

So what is that hurdle of I'm collecting paper and either I'm going to buy a software package and do my return or I'm going to go to my tax preparer, CPA, and do my return or I'm going to go online and do it and I'm starting with paper. Now I'm going from paper to electronic and it's like there's this hurdle that they have to cross over. Now, a lot of people have successfully done that but a lot of other people go if I'm starting with paper I'll just do it on paper, just finish it up. And so I think those are some of the challenges we have going forward and some things I'm trying to work on and fix and that's a big part of my role.

Mr. Kamensky: Well, that raises the question of what's your prior experience before you took this job in April 2004?

Mr. DuMars: I have a rather eclectic background and the reason I say that is because I was a history major undergrad who went to work at a nuclear power plant, actually the Southern California Edison San Onofre Nuclear Generating Station. I started my first year in the management training program in contracts administration and purchasing and then got hooked on computers. Now, that probably should have been natural. As my mom would tell me, she said when you were in college you used to tell us how much you hated computers. But actually all my roommates ended up getting their masters in computer science. That's like, three of my best friends. But I didn't. I was a history major.

And then all of a sudden I become the computer guy at the nuclear power plant and learned it really well just by reading lots of books and on the job training. And then I applied for a position in network engineering with the nuclear power plant and joined a group of people that ended up being leaders in Novell NetWare networking. In fact the guy I ended up working for wrote seven books on it. His name is Bill Lawrence and he wrote multiple books during the eighties and early nineties.

So I worked there for 10 years, gained a lot of experience. I got so good at computer networking I actually ended up teaching for Learning Tree International for a couple years part-time. And then I decided you know what, I've done what I needed to do here and I've had a great career. I want to get my master's degree. I always had this dream of getting my master's degree and my MBA.

And so I applied to several schools and got into the University of Michigan and went there for a couple of years and then I was a customer so I knew a lot of people at Intel and I went to Intel Corporation after my graduate degree and moved into product management marketing. And it was that network engineering piece that fit with what Intel was trying to do in the systems management space.

And then from there I had an opportunity to go to Dell and take it up from systems management for individual products and move to systems management marketing across the entire corporation. And then, of course, this was the late nineties and the dot-com boom and well, I got hooked, too. So I went and did a startup and yes, I succeeded and yes, I failed so I did both.

And then I went back to Intel and went into a division. They were trying to do a big startup called Intel Alliance Services and that was managed web hosting services and was part of that effort. I think Intel invested almost a billion dollars, had data centers all around the world. I was doing the operating support systems and then also services marketing. And then the person I worked for who I'd worked for before at Intel moved to become the chief marketing officer at a company called Trend Micro and was anti-virus and content security and I went there with him and was the global director for the e-business group.

We got to the websites and we implemented new content management systems and so on and was doing online marketing, e-commerce, e-business. It was funny. Things there just started not working out after a while for a variety of reasons and this job at IRS came at the exact same time. And what ended up happening was I read this position. I read all the points. I kept going that's me, that's me, that's me. They were looking for all these different skills that I had and other jobs I had looked at and applied for were always looking for one part of what I was able to bring. And this job allowed me to bring a lot so it was fun. It was interesting.

Mr. Smith: Certainly an eclectic background, like you said.

Mr. DuMars: Yes, my background is very eclectic. But in this role you need that because in the ETA role you go from policy strategy marketing to development services where you're looking at XML technologies and how you would actually change an industry to Internet development technologies where you're looking at well, how would you run websites better and so on and so forth. So it spans all the things I've worked on in my career.

Mr. Smith: Well, I know when you came on board to the IRS the IRS Commissioner Mark Everson said that you bring a variety of talents from the private sector to help lead us through the next stage of our e-file strategy so, hearing that background, how do you apply those experiences to what the commissioner just said there?

Mr. DuMars: Well, it's interesting. I mean, I can take some simple things. Like when I came in, for instance, irs.gov, we know that irs.gov is heavily used. Already this year we've had over a billion page views, just this year. That is more than we had all of last year. So, I mean, it's just grown dramatically. I think we're up over almost 70 percent in growth, which is incredible for websites in this day and age. They usually don't grow this fast any more. I mean, we've been around for a long time. But I have people come up to me and they go your website is great. I am really good at using your website. And that's exactly the wrong thing I want to hear them say. I want them to say your website is so easy to use it makes my life easier, I can find the information I need, and I can do what I need to do.

And so what we're trying to do now is change it from where it's very popular and there's lots and lots of information to it's very popular and it's easy to find the information you need. At one point on April 15th this year we had 80 searches a second. And some people might say well, 80 searches a second, wow, you can really handle the capacity. But on the other side you might say why are people doing that many searches? I mean, is it because our navigation is weak? Are they having a hard time finding things? So those are the types of questions and I bring that background to look at that and help that out.

The other thing, too, is just trying to really understand the customer life cycle and in essence IRS has a channel to the taxpayer because we have the tax professional community. So really understanding how they work, what they need from us, how the software industry works, what they need, and then the taxpayer, what they need, what services, how we can help make this all a much smoother process.

Mr. Kamensky: That's really fascinating. It's a terrific background that you've got that you bring to this to make the IRS e-filing popular and easy to use. What are the factors contributing to the high rate of e-file usage? We'll ask Electronic Tax Administration Director Bert DuMars to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Kamensky: Welcome back to The Business of Government Hour. I'm John Kamensky and this morning's conversation is with Bert DuMars, Director of the Electronic Tax Administration at the IRS. Joining us in our conversation is Jeff Smith.

This tax season the IRS received approximately 50 percent of its 2004 tax returns through e-filing and it's been reputed to be the smoothest tax season ever. Can you tell us about the factors that contributed to this high rate of e-filing usage and why this tax season was the smoothest ever?

Mr. DuMars: Well, that's a really interesting question because I always get asked that, what was the one thing, and I can tell you there was no one thing. There were lots of things that contributed to why this is growing. There are lots of people, too, that I should probably mention along the way. I mean, one person that really made this go for years was Terry Lutes and is actually the person I work for today, and he's the associate CIO in the IRS information technology services group.

And another thing is all the other IT people surrounding this and make it actually flow and then work on the processes. That's what helped make it smooth. Ad actually I've heard this from several of the software vendors as well that this was the smoothest filing season they've experienced in a long time. So a lot of credit needs to go to that side.

Another thing that we looked at is there's been a lot of marketing efforts over the years. We've had TV advertising, we've had online advertising. That has helped contribute to the knowledge and building up the education. The brand e-file is a well-known brand. It's been going on for several years now it's been available.

Another thing that helped contribute was our Free File program and our Free File alliance members. There are 20 software companies involved with that. They contributed more than 5 million returns this year to the federal program. They also helped promote it and helped us promote that program so that helped e-file grow as well.

And then overall the tax professional community, I mean, the tax professional community actually handles at least 60 percent of the tax returns and they have a big part in contributing to the overall growth of e-file. And finally the one thing that we don't talk about as much but it actually has a big impact are the mandates that the states have put in place on the tax professional community. So we had several mandates this past year. They've built up over a couple years. We have at least one or two more that are going to come on next year and that's also helping the growth of e-file. So it's a whole bunch of different things that actually make it come together and grow fast.

Mr. Smith: That's great. I understand that the IRS has a goal of 80 percent of electronic filing for taxpayers by 2007. So what are your additional plans to reach that 80 percent goal now that you've just crossed 50? Are there any incentives that you're providing taxpayers in that regard or the practitioner community?

Mr. DuMars: With regard to the 80 percent goal we've got two years left and we've just crossed 50 percent. And we can tell you it's very difficult. But we're using the model that Tim Allen used in one of his movies never give up, never surrender. We're going to keep trying until the bitter end.

From an incentives point of view there really isn't a lot the IRS can do to incentivize this. It's been discussed in the past to give them an additional credit or to extend the filing date. These things Congress would have to pass a law to do that so we can't do that unless they decide to do that.

But the one thing that is happening, and I go back to what we talked about in the first segment, is getting those refunds faster, getting their acknowledgements on time, getting those acknowledgements, know they have them, and people who owe needing those acknowledgements all come together are driving it.

And the other thing that's really increasing e-file, another piece that we haven't talked about as much, is just the word of mouth. If your neighbor's e-filing it's like oh, well, this is what my neighbor does, this is what a friend of mine does, it becomes just the common thing to do. So that's helping us as well. For us to grow beyond the 10-11 percent that we've been growing in the last couple years is going to be difficult but we're going to do everything we can.

Mr. Smith: Switching gears a little bit, let me ask how are you addressing some of the taxpayers' fears that credit card or bank account information would be used for data collection or for some other purpose by the IRS? I mean, I know that may have a part in some of that goal that you're trying to achieve.

Mr. DuMars: This year's been a tough year and not necessarily that we've had a tough time this year but it's been a tough year in the overall data collection or financial services industry. There have been a lot of disclosure issues this year. Surprisingly enough, most of those disclosure issues were not around someone hacking into someone's database. They were around really more social engineering where someone said they were someone else and then got the information or information was lost in transit from one place to the other.

What we're trying to do is we're focusing on working with the industry to make sure that disclosures don't happen. We actually have a Regulation 7216 that if a disclosure does happen we actually have teeth behind that. But we think working in a partnership is really going to work better. So we actually had what we called a protecting and securing taxpayer electronic data summit last fall. We met with industry partners, we met with the states and other government agencies, and we talked about what things could happen, what issues could occur, and how we'd work together to solve those problems.

The one fear that we have most of all is that a perceived problem happens and the press takes it and there's a headline. And all of a sudden whether it was real or not or whether the impact was large or small we've got fear and mistrust in the taxpaying community. So we're working on what types of communication strategies we need to put together to help maintain that trust because that's the one thing with e-file we can't lose is the trust of the taxpayer.

And this is another thing that we do looking back at our own systems internally. How do we make sure that our systems are safe and secure? We have to be vigilant about it. The person who comes out in the security area and says I win hasn't won anything. The battle is never-ending, the battle never stops. The people who want to break in are constantly evolving and we have to be vigilant about protecting data no matter where it is either within our systems or in transit to our systems. We have to keep looking at that and make sure that we protect it and work with the industries so they protect it too. So those are the things we're working on together.

Mr. Smith: You mentioned a second ago the role of tax practitioners and they clearly play an important role in making sure that returns are filed electronically. How are you partnering with this community to increase this rate of e-filing?

Mr. DuMars: One of the things we do there is we actually run tax fora through the summer and we invite them in and it's a way for them to get continuing education credits but it's also a way for us to talk to them and hear about their issues. So we want to make sure we're listening to them as well and then coming back with solutions to their problems.

We also meet with them on a regular basis. We have our different groups within IRS. Our national public liaison group actually brings them together into different fora and groups to meet and talk with us and give us feedback. And then for the Electronic Tax Administration we have the Electronic Tax Administration Advisory Council, which consists of tax professional associations, it consists of reporting agents or payroll companies as well, and the software industry with us and states. And we all talk together about what types of issues are going on, what types of things do we need to work on together to make this much easier to do.

The biggest thing that we've had to overcome is showing them that it actually is good for their business. Telling someone e-file is not the same as saying hey, if you e-file and make your total office electronic you actually are going to win in this business space. And what we do, we actually give out awards during the tax fora to those who have actually gone to all-electronic and have done it very successfully with high quality and good customer service. And they actually end up being examples to all the other tax professionals.

People have told us once they cross and they get over and they do all e-file they make money and it actually helps their business and they grow their business. So we know there are a lot of positives for them. It's really educating them and helping them get there.

Mr. Smith: Well, we've talking a lot about the e-filing as it relates to individual filers. Switching to the business community, I know in January the IRS requires now that certain large corporations and tax-exempt corporations have to file either their annual income tax or annual information returns beginning in 2006. So what is the IRS doing to address the other community in the business which is the small businesses? What are you doing to target that population to increase their filings since they're not mandatory at this point?

Mr. DuMars: It's actually pretty amazing what comes from the small business space. There's pent-up demand there. So until the last year when we actually brought out our next generation of e-file or what we've been calling our modernized electronic filing they couldn't e-file. There wasn't really a solution there for them. And now it's available and the biggest problem we have now is actually making sure all the software companies make sure it's available. Now that we have it available and about half the software companies that sell into the space have it available we're already exceeding all expectations for e-filing from the small business community.

What we're expecting next year as all of the software companies come across the finish line is that we're going to see it probably triple in growth again and we saw triple what we thought we'd see out of the small business community. But it's still in the thousands and we have a long way to go because the number of small businesses is actually in the millions. So we'll have a long way to go but I think because they were waiting for it whereas in the individual space it's actually been going since the mid- to late eighties electronic filing has been available. So I think this is a good opportunity for us to really grow in that space and educate. And the other interesting thing there is we have to focus on the tax professional community again because in the individual space it's 60 percent of them use a tax professional. In the business space it's 87 percent. So it's a much higher percentage and really we have to, again, win.

The interesting thing about it is that many tax professionals will do an individual return, they'll do a nonprofit, they'll do a small business, and they may even be doing some medium-sized businesses. So a lot of times you'll run into a professional who's doing an across the board and if we get him in one it's a lot easier to convert them in the others.

Mr. Kamensky: Well, that's interesting because earlier you were mentioning that you are really trying to move forward in reaching the 80 percent goal. What are some of the strategies or approaches that you've got in place over the next couple years to try to get there to increase the usage of e-filing?

Mr. DuMars: One of the things that really became clear to us this past year was that we'd probably run through the cycle of what television and radio ads were going to help us to in the space. We have high awareness; that's not the issue any more. The issue is really more around educating them when they're interested in learning about it.

And the other thing we found and as I was saying with irs.gov, as its growth has dramatically gone up, I mean, it's going faster than it did for the past two prior years, is we've got them coming to us. So that's why this year we're looking at redesigning irs.gov and actually focusing in on its opportunity. The opportunity's there to touch them when they want to be touched.

So that's always your best thing when it comes to marketing. If you can touch them when they want to be touched that's a great way to get them to come across. If we're trying just to reach them when they're not ready to be reached or they're not sure that they want to be reached that's a little more difficult. But we're now getting millions of people coming to our website and we're going to take full advantage of that and really help to guide them to why this is the best solution. So that's one thing, really focusing in the online space. And we're going to continue working with the tax professional communities and we're going to continue working actually more with the tax software communities because if you think about it what is the user interface that a taxpayer or tax professional sees? They go to irs.gov to get information but the user interface that they're doing the preparation is their software package, the one they chose, and they chose it for whatever reasons it makes sense to them, it works for them, it's the usability model that they've chosen.

That's what we want to focus in on is working with them because that's where they're going to either be able to touch the professional or the taxpayer directly. So we're keeping our partnerships and our agreements with them going and working hard to whenever they talk get them to say e-file too just like when we talk with them or we talk by ourselves. So those are some of the tactics we're trying to use.

Mr. Kamensky: That's interesting because it sounds like you're beginning to take the things that you developed when you were in the private sector and bringing those strategies into the public sector space for my guess is the first time.

Mr. DuMars: And the one interesting thing is that everyone thinks you're in the private sector, you have all this money to market. In reality you may have less or you may have none. And in the government because we do have budget deficits and we're trying to be more frugal in the way we spend money we don't have as much money to spend on advertising as we've had in the past. So what do you do? You just take what's worked in the private sector when you don't have a lot of money and you use the same thing in the government and it does work. I mean, there are certain rules that we have in the government that we have to make sure we stay within but besides that sometimes this guerilla marketing effort actually works better than even full-blown advertising.

Mr. Kamensky: For encouraging a greater use of e-filing. How is IRS improving the performance of its programs? We'll ask Bert DuMars, Director of the Electronic Tax Administration at the IRS, to explain this to us when our conversation about management continues on The Business of Government Hour.


Mr. Kamensky: Welcome back to The Business of Government Hour. I'm John Kamensky and this morning's conversation is with Bert DuMars, Director of the Electronic Tax Administration at the IRS. Joining us in our conversation is Jeff Smith. So, Bert, what role do you see electronic filing and e-solutions playing in helping taxpayers?

Mr. DuMars: I think the next steps that we're going to start seeing you actually started seeing in our electronic services which just launched last year. And what this allowed was is really electronic transactions to occur directly between the tax professional or the person representing a taxpayer and the IRS and it speeds the process.

So, for instance, we have electronic account resolution, we have transcript delivery systems, we have the way to check Social Security numbers to validate the Social Security number's accurate. And what it does is instead of them having to send us a letter and we send a letter back and forth and there's paper going back and forth which can take days, weeks, months they can do a process that takes minutes, hours, maybe a day to do. And we see that actually expanding. So as we add more services in the future the tax professional and then the taxpayer will get full benefits of that where they can come directly to us get quick access to services.

A very simple example is our service called "Where's My Refund?" We launched that a couple years ago and everyone thought well, maybe a million people would use it and just check on their refund and we ended up getting 20-plus million. And then this past year we even got more. Tens of millions of people use it and want to see where their refund is, want to see when it's going to show up. I mean, there's a lot of interest there.

And so there was this huge pent-up demand that we hardly even knew about. We just knew people were calling in for the information. We put it on the web and all of a sudden they're using it all the time. So there's obviously a place there for more of these electronic services and this is something we're really going to focus on in the future.

Mr. Smith: So the success of the e-filing is certainly helping the IRS meet its goals and measures. Can you describe how electronic filing has helped the federal government in its overall E-Gov program?

Mr. DuMars: Well, I think when you look at E-Gov with regard to the IRS one of the things with electronic filing, the big benefit, is the cost savings. There's a big cost savings between what a paper return costs to process and what an electronic-filed return costs to process and we've actually over the years have closed down service centers where we process paper and consolidated those down to a couple majors. And that's a good thing because if you think about it from a taxpayer's perspective you don't want us wasting dollars on the least efficient processing method. You want us spending our money most efficiently because that's your tax dollars at work. And that's where electronic filing really pays off in a big benefit.

And also again with the paper process your refunds are going to take much longer to get back to you. If you owe you won't get an acknowledgement. So there's a lot of downsides to the paper process versus the electronic process. So there are really benefits on both sides.

Mr. Smith: Switching a little bit to performance metrics, IRS must track a number of performance metrics for e-filing. Which do you track to see if your goals are being met and then what role do third parties or other stakeholders whether it's agencies with the government help in defining what those metrics are?

Mr. DuMars: What I look at are a couple different things and I focus in on a few. One area is I look at the total, how many electronic returns, and so far this year, we've gotten 66.7 million returns. It's a huge number and that's out of about 133 million returns that we expect. So we're already above 50 percent and growing. And we still have two extensions to go through which will probably give us at least another million, million and a half returns, maybe even more.

A couple other metrics we look at are how are the tax professionals doing, how is their growth, and this past year they grew at 10.7 percent. And then also the online, the self-prepared, the people who are coming across and doing it on their own, that grew at 17 percent. So we're seeing a lot of growth in that space. And then, of course, we keep a close eye on Free File because Free File is a program that it's aimed at a variety of different groups including the poor and underprivileged but also other people that need access and are underserved. And it grew dramatically this year, almost 46 percent. So there are some key metrics in there that we keep an eye on.

The other thing that we've been focusing on quite a bit is our modernized e-file and its growth and that's because we had really underestimated what was going to happen there and it far exceeded our expectations. And so we have several thousand returns that we've gotten in through that process and we're expecting a lot more next year as all the software companies come on. So those are several of the different metrics that we look at. I mean, as you guys can see, I've got tons more but we don't have all day.

Mr. Smith: Well, we've talked today a lot about the strategic relationships IRS has with tax practitioners, with software developers, I know electronic returns organizations, agencies, state governments as well as, of course, the taxpayer and I've heard you refer to this as somewhat of an ecosystem. What are the challenges that you face dealing with this ecosystem or partnership with these?

Mr. DuMars: Let me describe what this ecosystem looks like. When I came into the IRS, and this is the one thing coming from the private sector and most people don't realize this, when you come into the Service it's like getting the fire hose effect. There is so much going on, there's so much new information, and having to deal with Treasury, Congress, the commissioner's needs, your own executives, and the public it's just a lot coming at you all at once. What I was trying to figure out is how does this whole thing work?

I mean, we've got all these different players. We've got software developers, we've got other government agencies, we've got states, and so on and so forth and, as my staff would say, I just started drawing pictures because I'm a visual guy so I'm trying to see how it works instead of just trying to read about how it works. So I was drawing pictures about how the pieces all fit together and that's when I started coming to the realization that there are so many different pieces and parts and so many different pieces work together or work in tandem or work in parallel or cross each other's paths that I thought well, this is some sort of an ecosystem where one group lives off another group and so on and so forth.

So payroll is a big key player and tax software is a big key player. On our end we have vendors that actually help build all the applications behind the scenes like IBM helps us with the modernized e-file and we have a whole bunch of other prime contractors that help us. We have vendors that help us with irs.gov and so on. So all these things come together and make it so the process works.

And the ecosystem has been there for a long time. It was there when the paper process was the primary and it'll be there when it's all electronic some day in the future. And so by understanding that, understanding the ecosystem and that life cycle of how the information flows through, we can start pinpointing what are the problems. Is it a policy issue that's preventing e-file from growing? Is it we're missing a form? Is it we're missing something else? Is it we're missing the fact that 1.4 billion information returns all come in paper to the taxpayers mostly and half of them come in paper to us which is a huge problem. We call it the final frontier because it's the next place we need to fix.

So looking at that we're trying to think about what kind of ideas could we put in place that would help grow e-file more? One of those we keep looking at is a clearinghouse concept for information returns and we're trying to figure out what would that be and how would that work so we're looking at other examples that are out there today. There are examples in the health medical records space, there are examples in student data and transcript space, and there are also examples in transportation and licensing space. So we're trying to understand how they work today and a lot of those have been going for many years and see what we could possibly do in our space.

Is something we want to do a clearinghouse, a nonprofit? Is it something we want to build in the IRS? Is it something the industry would want to build? Don't know what the answer is but we're trying to understand this and by understanding it it will set the direction for where we go in the future.

Mr. Smith: We talked earlier this morning about security as it relates to the data and some of the issues that are surrounding that. But as we bring it back to the ecosystem what is the IRS doing to work with this tax industry community around protecting their critical infrastructure, things that are outside of the IRS's direct control, and what measures are you taking to help them with that?

Mr. DuMars: That was one of the key things when we came to the summit and we all came together. And we sat there on day one and we looked at each other and we said IRS, we're doing a lot of work in security and disaster recovery. Then you talk to another big player like H&R Block and they go we're doing a lot of work in disaster recovery, and Intuit would say the same thing. And we had some smaller vendors there and they say yep, I'm doing a lot of work in protecting myself.

And then we all came to the realization but no one's working to protect the whole thing. We're all looking at each other and we're saying we're all going to protect ourselves but there's a lot of pieces in the middle. And then there's also the taxpayer and the small business owner who's at the end of this line of the ecosystem and how are they protecting themselves and do they fully realize what's going on? And there's been lots of statistics and studies done and 40 to 50 percent of small businesses don't keep their anti-virus software up to date. They don't have personal firewalls on their computers. And if a tax professional is a small business, which a lot of them are, they probably fit in that category. They just forget out it. Oh, I forgot to pay my $19 a year or whatever their cost is for their software.

So how do we educate and outreach in that space? And what things do we do in the event something happens? Four hurricanes in Florida… who would have thought? It happened. It was a statistical anomaly but it occurred. And there are data centers that line up under where those hurricanes were. They could have been impacted. There could have been tax returns floating through there. What would we have to have done as a group, as an industry, to protect ourselves? Because the thing we also came to realize, if one of us has a problem, all of us are having a problem. It's not just one of us has a problem and the rest of the industry gets to skate away from it. We don't get to any more. We don't get a free ride.

Mr. Smith: You're very connected, right.

Mr. DuMars: We're all extremely connected and we all need to work together. So we're actually working right now on different plans for how we would do an industry-wide business recovery plan and what types of communication efforts we work on, how would we keep in touch with each other. Take away the fact that there are terrorist attacks or other types of disasters or cyber attacks it may not be anything associated with it. It could be something completely that we don't expect and it's something we'd work have together on to resolve and fix and, as I say, the thing we can't lose is trust.

Mr. Kamensky: That's really fascinating. It's really interesting to hear your description of a tax ecosystem. What are some of the lessons learned on customer service? We'll ask Bert DuMars, Director of Electronic Tax Administration at the IRS, to explain this to us when our conversation about management continues on The Business of Government Hour.


Mr. Kamensky: Welcome back to The Business of Government Hour. I'm John Kamensky and this morning's conversation is with Bert DuMars, Director of the Electronic Tax Administration at the IRS. Joining us in our conversation is Jeff Smith. Well, what are some of the lessons learned from your experience as Director of Electronic Tax Administration and what advice would you share to government leaders and executives who work on customer service issues?

Mr. DuMars: Well, I think some of the lessons learned in this space have been making sure you've got everyone at the table you need to have at the table if you're going to talk about something, if you're going to talk about, for instance, security in the industry, if you're going to talk about a policy change. Some of the things that we're working on, we're working on some major regulations this summer that we're hoping to go public in the fall so they can comment on it.

We've needed to get feedback and the feedback's been coming in actually even before I got in but it's bringing everyone together and making sure that you can get some consensus. Another thing when I came up with this ecosystem concept a lot of it was based on a reporting agent summit we had when I first arrived at the IRS. And we actually had, again, states and payroll and credit unions and banks and financial services firms all in the room.

And the way I came up with this clearinghouse concept wasn't because I was brilliant and had this great idea. It was because we sent them off in four groups and they all came back and said boy, wouldn't it be cool if we had something like this, a data warehouse somewhere that we could use that would be available to the taxpayer, would be available to us to give data to you, and then they could give data to the government and do that in a safe and secure manner protecting privacy and everything else. So it's really working with them and listening to the industry. And the same thing would go with customer service, listening to their issue, listening to the problems they're having. Sometimes, as I told you earlier, they say boy, I'm really good at using your website. Well, okay, that person's really good at using my website. Well, the other person who maybe just started in the tax industry or has been there for a while is having difficulty using my website. So that says hey, sure, we're meeting the needs of a good group of people but we also need to meet the needs of other people and how do we improve our service that way.

So it's really how do we all work together in bringing the right people together at the table to talk about these things. And that's the interesting thing with the Electronic Tax Administration Advisory Council. We get that opportunity. And they don't always agree. In fact it's hard to get consensus but we get to drive in a very similar direction.

Mr. Smith: Well, technology has certainly also played a part in how the IRS is progressing and how you've dealt with customer service. How do you see information technology as we move forward helping the IRS and helping your office, the Electronic Tax Administration?

Mr. DuMars: I think the real key thing with all the technology direction is, number one, providing more services through the Internet to taxpayers, tax professionals, and businesses that are actually doing their own, they're going to manage their own tax preparation process, and then also providing more automation internally to the IRS itself. How do we make sure our employees are more efficient? At both ends of that scale you see where the taxpayer dollars are being used more efficiently both for internal and external processes. And anywhere where we can do process innovation in those two spaces will make our overall operational excellence improve dramatically.

So how do we make sure that even our customer service agents are much faster, they can answer the phones quicker, they can get the information to the taxpayer quicker? And then how can we make it so the taxpayer can just get it themselves? I think we're going to always have to have multiple channels but the more we can put more automation in and more technology in its place to make those channels faster and more efficient the better off the public is going to be in the long run.

Mr. Smith: So aside from managing this challenge you have with serving varied customers because you have a variety of customers you deal with can you describe other challenges that the IRS faces now that you're dealing with a lot of electronic interaction with taxpayers?

Mr. DuMars: I really think because of all the issues that we had this past year in Chief Security Officer magazine they called it March Madness with all the disclosure issues in the different financial services firms that happened. That is going to be our big issue going forward, how do we maintain that trust? The one key thing about e-file which I haven't mentioned yet is that e-file is a voluntary process. There's nothing that says a taxpayer, a tax professional, a small business, has to e-file their return and if we lose that trust we can't afford for them to go back to paper. So that's a real key point. So we have to make sure we keep that trust and we keep those benefits that they're getting out of the program now and keep those going into the future. And one thing that we're hopeful to have in a few years down the road is the ability for the taxpayer or the tax professional to really go in and have more of an account with the IRS where they can look at their information and they know what they've done in the past and what they need to do for the next filing season. So that's really one of the goals we're trying to strive for as well.

Mr. Smith: So looking forward 5 to 10 years from now, where do you see your office, Electronic Tax Administration, in the IRS overall?

Mr. DuMars: Well, it's funny. Electronic Tax Administration has a role of really pushing the IRS, pushing it along, looking for new opportunities to move our processes in the electronic space. A good example is this information return area. There's a good opportunity there to do more in that space. There's a good opportunity to advance in more of our electronic services.

I'm hopeful that someday instead of having 50, 60, 70, even 80 percent of e-file returns hopefully we're banging closer into the mid-90s and maybe even higher. Who knows? We'll see where things are in 5 to 10 years from now. But if we have an all-electronic process from end to end starting with think about you're getting your paycheck and money's being distributed to the state and federal governments, Social Security, and then when you get at the end it's an all- electronic, you get all your information in an account format and you start your preparation process either yourself or with a tax professional and then it's all done electronically. You get your refund or you make your payment electronically. It's this total electronic process and you know it's done, it's all secure, it's all safe, and that's really where we want to be. We want to see that whole process end to end all electronic, all secure, and all safe.

And I think that by doing that and making it easier and safer and securer that it'll actually allow the taxpayer to pay their fair amount and know that they've done that and know that their neighbor's doing that as well so that they won't feel like hey, someone's getting away with something. It'll all just work. It'll be seamless.

Mr. Kamensky: One last question we always ask our interviewees, what advice can you give to a person who's interested in a career in public service given that you've come here for the first time from the private sector?

Mr. DuMars: Well, I'll tell you coming from the private sector the one thing you have to be is patient. The process is a long process. If you want to go into the IRS or any of the agencies you have to go through a lot of background investigation. You have to give them time to go through the interview process and go through the approval process to hire you. So one piece of advice is if you want to go for a federal government position give yourself six months to make it happen because it's going to take at least that long. That's one thing.

And don't get frustrated. The people that are trying to get you in, they're working hard but there are processes in place and they're in place for a good reason, to make sure that they're getting the right employees. The other thing to consider is when you're in there you will never get more exposure than inside the federal government because if you're working on a high profile or a low profile there's a lot of oversight. There's more oversight than there is in the private sector. So you need to understand that going in.

And it's not that people are going to be beating you up or they're looking to take down your program or anything. It's just part of the process of the checks and balances. It's the oversight from one agency to the other. It's the oversight from Congress over the agencies or even within the Treasury over the IRS and OMB over IRS. So those are the things you just have to be aware of when you come in. Not get too frustrated, understand the processes, and understand how to communicate within those boundaries.

Mr. Kamensky: That's really fascinating. Jeff and I want to thank you for fitting us in your busy schedule and joining us this morning.

Mr. DuMars: Oh, well, thank you and thanks for having me. And if anyone wants to get more information about our programs in the IRS please do go to www.irs.gov.

Mr. Kamensky: This has been The Business of Government Hour featuring a conversation with Bert DuMars, Director of the Electronic Tax Administration at the IRS. Be sure to visit us on the web at www.businessofgovernment.org.

There you can learn more about our programs and get a transcript of today's fascinating conversation. Once again, that's www.businessofgovernment.org. For The Business of Government Hour I'm John Kamensky. Thank you for listening.

Kathleen Turco interview

Friday, December 16th, 2005 - 20:00
"Bringing together different service lines of GSA’s purchasing divisions will allow us to be a one stop shop for federal agencies. Agencies will be able to see a 'One GSA.' That makes it more effective and efficient for other agencies to deal with us. "
Radio show date: 
Sat, 12/17/2005
Intro text: 
Financial Management; Managing for Performance and Results...
Financial Management; Managing for Performance and Results
Complete transcript: 

Tuesday, June 14, 2005

Arlington, Virginia

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

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Kathleen Turco, Chief Financial Officer of the General Services Administration.

Good morning, Kathleen

Ms. Turco: Good morning.

Mr. Morales: And joining us in our conversation, also from IBM, is Steve Watson.

Good morning, Steve.

Mr. Watson: Good morning, Al, and good morning, Kathleen. Thank you for joining us.

Mr. Morales: Kathleen, can you begin by telling us about the history and the mission of the General Services Administration?

Ms. Turco: Yes. General Services Administration, or GSA, has a mission to help federal agencies better serve the public by offering, at best value, superior workplaces, expert solutions, acquisition services, and management policies. The mission of the GSA actually translates into the three services that we have today, including the Public Building Service, the Federal Supply Service, and the Federal Technology Service. So we offer a lot of opportunities in terms of goods and services and facilities that we support in the United States, and now we do some support of state and local governments.

GSA came about in 1949, so we've been around a while, not as long as some other federal agencies. It was an attempt to consolidate some responsibilities that both the president at that time and Congress felt would be better served moved together to better serve other agencies at a lower cost, best value approach, even back in the 1940s, and we continue to do that and continue to evolve today in terms of how we can provide best value in our services to other federal agencies.

Mr. Morales: Can you describe to us the size, budget, and employee skill set at GSA?

Ms. Turco: Yes. GSA has approximately 12,500 employees, and GSA is somewhat unique. It's the first agency I've been with where we operate on a revolving fund basis -- full-cost recovery basis. The majority of other agencies -- federal agencies -- operate on an appropriated funding basis. We act as a catalyst for nearly $66 billion in federal spending annually, and we're probably one of the largest procurement agencies, if not the largest, in the federal government. We oversee assets totaling -- about 8,300 government-owned or -leased buildings, an interagency fleet of 170,000 vehicles, a variety of technology programs. We offer products ranging from laptop computers to systems that cost over $100 million. So we assist other agencies in terms of leveraging billions of dollars in the marketplace; we work with industry to deliver those services and with our federal clients in order to improve on their mission and their delivery to the taxpayers.

Mr. Morales: Can you please describe the role and responsibilities of the Chief Financial Officer?

Ms. Turco: The Chief Financial Officer's office at GSA provides leadership in strategic planning, budgeting, financial policy and procedures, as well as the operations of the financial system at GSA. GSA is rather large in terms of its financial operations, which I find exciting. We process over 1.2 million invoices a year. On the receivables side, we process nearly 440,000 bills totaling $18 billion during fiscal year 2004.

Mr. Morales: That's a lot of checks to write at the end of the month.

Ms. Turco: That's a lot of checks, and we do most of them electronically.

Mr. Morales: What were your previous experiences prior to being appointed CFO in August of 2002?

Ms. Turco: I have had a federal career. I started out at the Department of Education as a management intern. I was very fortunate to obtain that position. And I started in the Budget Office at the Education Department and moved over to the Office of Management and Budget after three years, where, again, I was very fortunate. I was on the management side, and we got to work on the development and putting in place the Chief Financial Officers Act of 1990 and the Government Performance and Results Act, and other opportunities, including Klinger-Cohen. So we were looking at cash and credit management programs across government, internal control programs, working with the Inspector General community.

I had a variety of experience, all of which then led to being offered a job as the IRS examiner in the Treasury Branch at OMB, where I worked closely with the IRS on their tax system of modernization and changes to that, along with bringing in the new commissioner -- it's when Charles Rossotti was brought in to change around the Internal Revenue Service. And that's when the reorganization plan was put in place for the Internal Revenue Service. And then I was subsequently hired by Commissioner Rossotti and Dave Mader to come over and manage the budget and planning process at the Internal Revenue Service, along with working with the senior team on the reorganization of the IRS.

So that was 3-1/2 years of exciting work to change how the Internal Revenue Service delivered business services to the American taxpayers. It was challenging. It was at times frustrating, at times an opportunity that I probably won't have again in my career, so even on the long days, I was very grateful to be there, to be able to work with a group of senior people who wanted to make a difference for the taxpayers. Without that position, I don't think I could have one, gotten the position of CFO at GSA; and two, have been able to walk into it as I have and to set a course out for the office of the CFO. So I learned a lot working with the senior folks at IRS that I brought that to GSA, and it's been, I think, an easier time for me at GSA than I would have had otherwise.

Mr. Watson: Kathleen, it sounds like you dealt with many of the same financial and technology issues and aspects of the job at IRS as you're dealing with at GSA. Can you give us a comparison of your position and approaches at GSA relative to IRS when you were there?

Ms. Turco: There are many similarities, and a couple of differences. In terms of similarities, what's been exciting both at IRS and GSA is bringing in a new strategic planning process, and I think that's the result of the GPRA legislation -- when GPRA was first implemented, the focus was on the metrics, and once you start the development of metrics and you don't have a planning process, it becomes much more difficult to bring together the metrics and the budget process. And at both agencies, I've had the opportunity to put in place a performance management process that allows the senior executives to focus in on the strategic planning necessary for their programs and their business lines in order to drive change of associates or federal employees in terms of delivering on the services, and measuring performance and bringing that together with an awards system and demonstrating our value to the American taxpayers.

And that's very important; folks want to know what they're getting for their money, and being able to put in a performance measurement process really drives that for a federal agency. And I know other agencies have processes in place, and I think when you have that you really can take your agency further in terms of delivering on the business. I think now, with the emphasis from OMB on the program assessment rating tool, the PART process, you have to have a planning process. So that's been exciting. The other piece, I think, is the technology and working on the enterprise architecture and the technology requirements. Both the financial system and the IRS had the opportunity to work on the tax systems as well.

Mr. Watson: Kathleen, you've had an impressive career you've outlined here. As you've progressed into more responsible positions, how has your management and leadership style changed to accommodate that progression?

Ms. Turco: I think when I started out, clearly I was an analyst delivering on the facts and figures to tell the story in terms of the programs or the business activities of an agency. What I've tried to evolve, in terms of my leadership style, into is a business partner or strategic advisor, both to the head of the agency and to my peers and to the other executives that I work with. I think it's very important to demonstrate the value of the financial and budgetary analysis and how it can assist in decision-making and, in fact, different types of business process re-engineering or changes that can be made and programs to improve delivery.

Mr. Morales: I found it interesting that you started off studying elementary education and then moved on to receiving your MBA. What led you to this decision?

Ms. Turco: Somewhat similar. I like teaching. After I got through my education program at the University of Maryland, I moved down to Florida, and I had the opportunity to teach there, but I also had the opportunity to attend graduate school. I had planned to combine the education degree with teaching management at the junior high or high school level, but once I got the MBA, I applied for some federal jobs, so I was off at the intern program at the Education Department. So it was kind of a natural fit to start at the Education Department. So -- and I had planned to stay there, but I got the opportunity to go to OMB, and, you know, I was advised when you have an opportunity to go to OMB, you take it.

Mr. Morales: How is the office of the Chief Financial Officer moving from bookkeeper to decision-maker? We'll ask GSA CFO Kathleen Turco to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm Albert Morales, your host, and this morning's conversation is with Kathleen Turco, Chief Financial Officer of the General Services Administration.

Also joining us this morning in our conversation is Steve Watson.

Kathleen, can you briefly describe to us the six strategic goals of GSA?

Ms. Turco: Yes, thank you, Al. In 2001, when administrator Steve Perry came into GSA, he set out a new mission, refinement of mission statement in terms of better serving the public by offering best value, superior workplaces, expert solutions, acquisition services, and management policies. Part of that he defined with the senior team six goals: first being provide best value to customer agencies and taxpayers; second, achieve responsible asset management; third, operate efficiently and effectively; number four, ensure financial accountability -- my favorite -- maintain a world-class workforce and a world-class workplace, number five; and then to carry out social and environmental and other responsibilities as a federal agency.

Of those, the best value addresses our desire in terms of being an agency that delivers acquisition excellence, in terms of offering at lowest cost service and technology offerings to other federal agencies. In doing that, it's also a matter of delivering on the service and working with our industry vendors as well as the client agency to ensure best value through the contracting practices. Asset management, obviously, because of our management and Public Building Service -- that is our responsibility for the real property management that's carried out daily by GSA.

Mr. Morales: With respect to the office of the Chief Financial Officer, what are some of the short-term goals for the programs within your office?

Ms. Turco: We've actually set out one what we call long-term goal under GPRA to deliver timely and accurate financial and performance-management policies and services needed for management decision-making and financial reporting. And we annually then update our goals in order to ensure that we continue to deliver on those. This year, we are working on providing strategic business and financial advice to advance management decision-making and reporting vis-�-vis the performance management process. We put that in place about two years ago. That continues to evolve; this is a broad-framework process in which we set out to conduct strategic assessments of our environment in terms of external and internally -- the external environment in terms of what our customers are requiring us, internally in terms of our staffing requirements -- and then we work on strategy and action plans. And my office works hand-in-glove with the other business executives as well as the comptroller offices within the services to ensure that we set out strategy and action plans with performance and budget linkages, including our performance metrics, and then our annual targets, both at the national office level as well as across the other ranges.

Mr. Morales: Kathleen, I think most of our audience has heard about the Sarbanes-Oxley requirements in the private sector. Of course, it's now hitting in the public sector with the issuance of a revised Circular A-123. Can you tell us a little bit about these new requirements and how GSA is meeting them?

Ms. Turco: GSA has received over the last 17 years a clean financial opinion, so we're very familiar with all of the management control and internal control requirements, both the previous ones that was passed in the Federal Manager's Financial Integrity Act from 1982, as well as the current revision to Circular A-123. What's different this year going forward in to fiscal year '06 that we are currently planning for is that we are going to have to document and test our internal controls. Previously, it was through an assurance process -- yes, we have controls; yes, we think they're working -- the bar has been raised, and it will require much more documentation and a testing program that we will carry out in conjunction with the Inspector General's office.

Mr. Morales: Any surprises in meeting these new A-123 requirements?

Ms. Turco: Not so far. Not so far. We're fairly comfortable with the requirements and how we're going to carry them out. I think that's attributable to having -- at GSA, I'm very fortunate to have just a wonderful financial management team; they take the business of financial management seriously. I think the process of going through an annual audit and receiving 17 years of clean opinions has put them in good stead to address any new requirements that come our way. So it's been actually a really easy process in terms of planning for the work we need to do.

Mr. Morales: Sounds like you're in good shape then. This is something you touched on a bit earlier, and I wanted to go back and explore it further: the concept of CFOs moving from a transaction-based focus -- sort of a back-office focus -- to the new focus on delivering information to decision-makers to help them better run the organization, how's that transformation coming at GSA?

Ms. Turco: I think the transformation is underway. When I stepped into the job in 2002, we were about to upgrade to a new financial software package. We carried that out in October of 2002. That was not without its challenges, as all transitions are. And we still have some work to do. But what it's allowed us to do is to be able to do analysis in a more timely way in terms of our receivables and payables, as well as the budgetary analysis and also the performance metrics. We've also put in a performance management tool -- it's called the PMT -- in which we put in either monthly, quarterly, or annually our performance measures and our targets, along with -- we bring in our financial data, and that's reported out monthly. We report out on income and expense statements on a monthly basis. We work with the senior team to go through every month where we stand in terms of revenue expenses, including our operating expenses, what are we seeing in the marketplace in terms of sales, how are we doing with our customers, what are the sales on the schedules, what are we seeing with the fleet, global supply, information technology, telecommunications -- we have both long-distance and regional IT, so we follow both our customer activity and the marketplace fairly closely.

With the new financial system and the concept of a performance management process being put in place, I think that the CFO's office has been able to demonstrate that we can be a strategic partner and a provider of business analysis to our executives, as well as maintaining our requirement for compliance that is the foundation of the financial management office. You cannot not do that. The CFO really needs to drive that home, given this Sarbanes-Oxley and what we're seeing in the private sector, and some challenges that some federal agencies have had. The issue of compliance and internal controls is fundamental to the operation.

We are still a little bit challenged at GSA in terms of moving out of the transaction base, and that's because we've had a challenge with our receivables, billing and collection module. What we do in GSA is fairly substantial, and we're actually in the process of looking to the private sector for solutions, and we've actually issued an RFI, and we've received responses in, and we're going to review those responses and look to put out an RFP and to partner with the private sector, because we believe that they have more expertise in this area than we do. I think that's part of the change, of the evolution, of the federal CFOs, looking to the commercial sector to see what's going on there, what we can learn from them, where we can partner in terms of delivering on financial operations. It's very costly to run a financial system, and we need to find ways to streamline that.

Mr. Watson: Along with your other initiatives, I understand GSA is undertaking development of a financial management systems architecture. Can you tell us a little bit about the architecture and how you're using it there at GSA?

Ms. Turco: Yes. The Chief Information Officer, Michael Carlton, and his team are leading an overall effort for GSA to put in a one GSA enterprise architecture. As part of that, my team said we would volunteer to go first in terms of truly defining the financial management portion of that architecture, and we have been working basically non-stop since last summer in terms of defining the receivables, the payables and all the processes that go through a financial system. That, too, will be used as we move forward to make changes in our financial system and streamline some of the processes and procedures that we have to undertake on a daily basis.

Currently, we have defined six business drivers for financial management related to GSA's overall strategic goals. We have reviewed these through our comptroller offices, and we are looking to drill down in particular in the receivables area and to use that to assist us with our solution necessary to address what we need in billings and collections for GSA.

Mr. Morales: A slight change in topic: government and industry want assurances that procurements are in line with agency and government buying rules. Tell us a little bit about the Get It Right program and how it creates these assurances.

Ms. Turco: The General Services Administration initiated the Get It Right program or campaign or -- in fact, one of might call it a philosophy -- about a year and a half ago to prevent abuses in the use of contracting vehicles as well as contract management at GSA. So what it's about is putting in place a process that ensures we're following the policies and procedures of the FAR, of FASA, and the requirements for contract managers in ensuring that we manage, compete, and carry to fruition on our promises for contract management for other federal agencies.

Mr. Morales: Earlier, you had mentioned the PMT, and I have a very special interest in performance management. Can you tell us about GSA's performance management tools and how they are used to measure the performance of the programs and goals?

Ms. Turco: Yes. We have a fairly robust performance management tool, namely PMT, that's managed out of my office. It allows for us to capture and set the strategy and goals and activities of each of the services and offices. It then allows for us to drill down and to detail out, by way of the six GSA goals, how we will set out objectives and initiatives for the year and measure those in terms of the goals and targets and metrics for each of the services and staff offices at GSA. We report in quarterly; we meet with the administrator, the deputy administrator on a quarterly basis to assess our progress in meeting our goals, and then that performance management information is also used to set out as part of our performance assessment program that the chief people officer manages on our overall performance appraisal and award system. The measures are used to drive awards allocation, both on an individual level and an organizational level. So at GSA, the associates take seriously the performance measurement program, and tying to both your rating and your potential award for the year keeps people focused on the business of GSA.

Mr. Morales: Certainly sounds like a best practice.

Why is there a need for reorganization within GSA? We'll ask GSA CFO Kathleen Turco to explain this us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm Albert Morales, your host, and this morning's conversation is with Kathleen Turco, Chief Financial Officer of the General Services Administration.

Also joining us in our conversation is Steve Watson.

Mr. Watson: Thanks, Al. Kathleen, OMB has undertaken its line of business initiatives to improve efficiency and effectiveness of common business functions across government. Supporting this initiative, OMB has designated GSA as one of the centers of excellence for financial management, one of the lines of business they're focused on. Can you tell us a little bit about this new initiative and how GSA will go about becoming a center of excellence?

Ms. Turco: Yes, Steve. It's exciting times in federal financial management in terms of looking towards the future. The line of business and becoming a center of excellence is probably the most exciting work I think that we're going to undertake. Under the President's Management Agenda and the performance scorecard, as you were addressing, the Office of Management and Budget is looking for more efficiencies and effectiveness in the federal government. They took a process which they looked across federal agencies, and they asked federal agencies to come in and compete or apply to become a line of business.

GSA -- in the financial management office, we currently cross-service via a shared services model more than 50 organizations providing payroll and financial services and budgetary services. We thought it was unnatural for us to apply, and we were fortunate to be selected as a line of business. And we are moving forward with growing that business, so to speak; we currently offer financial services related to our systems. Our challenge is going to be along expanding that into e-payroll -- we also offer payroll now -- but expanding that in terms of the type of customers.

Currently, we offer our services to commissions and boards and smaller agencies, so our challenge is going to be in terms of growing that to midsize agencies. We are currently working on our strategic plan and all efforts related to how we'll undertake that. We anticipate that fiscal year 2007, we will begin to work with other agencies, bringing them on board, offering financial services. We're looking to see if we can expand to HR services -- we're in discussion right now with our chief people officer on that -- and to expand on e-payroll. We are partnered right now with DFAS at the Department of Defense; we are payroll partners, and we have taken on a couple more agencies over the last year. And the question becomes expansion on e-payroll as well.

Mr. Watson: Focusing on financial management, GSA sounds like it's already in the center of excellence business. What changes does the new push have on the way GSA will operate?

Ms. Turco: In terms of the office of the CFO or --

Mr. Watson: In terms of the center of excellence services you'll provide.

Ms. Turco: We will be expanding, I think, in terms of both the actual software that we're going to be providing; we're going to have to become more adept at the different financial packages because our customers will want to be able to shop. There's currently three or four that are on the market; we will offer one at this point as we start out. In terms of expanding the services beyond just a financial operation in terms of your payables and receivables and your obligations, our challenge will be, can we move into the financial analysis and assistance related to audit. So that's an exciting change that we are looking to make. Probably fiscal year '08. As well as expanding in terms of our budgetary operations and what we can offer for budget analysis, including formulation and assistance on execution.

Mr. Watson: Sounds like a lot to get done.

Mr. Morales: Kathleen, continuing on this theme of change, I understand there's a plan for merging the Federal Supply Service and the Federal Technology Service. For listeners who are unfamiliar with GSA, can you tell us about what these services within GSA do and why there is a need for this reorganization?

Ms. Turco: Yes. The Federal Supply Service provides federal customers with products, services, and programs to meet their supply, procurement, vehicle purchasing and leasing, travel and transportation needs, as well as personal property disposal requirements. The Federal Supply Service is one of three services currently; there are five business lines within FSS. FSS is located throughout the United States, as well as aligned with military customers overseas. The Federal Technology Service delivers information technology solutions, including network services, telecommunications, and professional services. So the FTS supports government agencies with assistance services in terms of assisting in IT solutions and delivering of larger buys or assisting in the overall acquisition strategy for putting in a total solution for an agency program or operation.

One of the challenges that we've had: we have two revolving funds, one known as the IT fund, or Information Technology Fund, and the other is the General Supply Fund. Over the last 10 years, the requirements for IT have expanded beyond just laptops or desktops, computers; it's really expanded to delivering solutions. And we felt we were somewhat hamstrung with the IT fund because the focus was on just sort of basic IT-type activities, and so we proposed as part of the fiscal year '06 budget to merge the two funds in order to better offer to our customers opportunities for business solutions, and to break down some artificial barriers between these two funds, as well as we think it'll make it a little more efficient and effective in managing it from a CFO's perspective.

Along with that evolved an opportunity to merge the two services as well. A proposal is pending on the Hill with the fiscal year 2006 budget to do just such a merger. Again, we think that bringing together the different services and business lines for FSS and FTS will allow us to be an almost one-stop shop for federal agencies. So along with the Public Building Service -- where we provide buildings, repair and alterations, as well as new constructions -- an agency will also be able to see sort of a one GSA, where you can also purchase your IT, your telecommunication requirements, whether or not you need services from the vast number of schedules that we offer for purchasing your daily office requirements of paper and pencils, et cetera. It'll be much more efficient and effective for other federal agencies to deal with us.

In addition to that, we're looking to expand our customer relationship management opportunities with federal agencies, and to better understand the mission of our federal agencies and to ensure then that our supplies and services address their mission as well.

Mr. Morales: This is a tremendous undertaking, and I would imagine that it will drive impacts in people, process, and technology. How will the process of the reorganization be carried out, and who will be involved?

Ms. Turco: The process of the reorganization starts at the top; Administrator Steve Perry is leading the reorganization. He established a steering committee in February of this year that includes the acting commissioner for the Federal Technology Service, Barbara Shelton; the commissioner of the Federal Supply Service, Donna Bennett; myself, representing the financial management community at GSA; and Michael Carlton, chief information officer. In addition, we have Joe Moravec on the team, and he's the commissioner for PBS, and we also have Marty Wagner, who heads the Office of Government-Wide Policy.

This team brought in some assistance from a contractor to assist us in the design and development of the reorganization. As you can imagine, it's a difficult task. It's a difficult task to ask individuals to look at their operations and propose revising them, realigning them, possibly asking them to take on a new job as we go forward. So there has been a lot of off-sites and meetings in terms of drilling down what is the best alignment for delivering on these services and supplies and products, et cetera.

We just released a draft plan on May 31st, and that has been out on the website, gsa.gov. We're asking our industry vendors to review the draft plan. Obviously, the Office of Management and Budget has been involved in the review of the plan, as well as our stakeholders on the Hill, and we are working to refine it. It's high level at this point. We're going to move forward and drill down into each of the proposed business portfolios and business lines, as well as the office of CFO and the new comptroller office that's going to be established in the new service -- it's going to be called the Federal Acquisition Service -- as well as the requirements for the IT to support the new FAS.

Mr. Morales: You mentioned industry, and I would imagine that industry's concerned about this reorganization. How are you addressing their concerns?

Ms. Turco: We've had now two Industry Day opportunities to have the industry come in and comment, meet with us, and discuss their view of the reorganization. That's very important, because we do work closely with the industry in terms of delivering on our IT solutions, telecommunications, and in particular, of course, the schedules. So it's important to hear the industry concerns and to consider what the impact would be on the industry. So we've taken all that into account, as well as looking at discussing with federal agencies the acquisition community as well as the CIO community.

Mr. Morales: That's interesting. What does the future hold for GSA? We'll ask GSA CFO Kathleen Turco to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Morales: Welcome back to The Business of Government Hour. I'm Albert Morales, your host, and this morning's conversation is with Kathleen Turco, Chief Financial Officer of the General Services Administration.

Also joining us in our conversation is Steve Watson.

Kathleen, I understand GSA has a program called the Financial Management Intern Program, or FMIP. Can you tell us about this program and how GSA is training and retaining its financial management employees?

Ms. Turco: Yes. As part of our overall workforce strategy, about four or five years ago, the Office of the CFO initiated the Financial Management Intern Program. When I arrived at GSA, I was thrilled to learn that I had such a program. It was actually sitting in a separate office; I moved it in to directly report to me.

The management and hiring of financial management staff is critical to the Office of the CFO and to the General Services Administration, and so I take it as a personal responsibility to ensure that we're getting the best and brightest undergraduate financial -- both accountants and analysts out of the local universities and colleges. My staff person on this, Wendy Stoner, works with a recruiting firm; they spend a good majority of the winter and spring each year canvassing the campuses and participating in all of their recruitment programs, and we bring in about 20 or so financial analysts every summer.

In fact, a new class starts July 11th. So we're very excited about this; they have brought in, obviously, you know, sort of a fresh face and the eagerness to make a difference. Every year, we experience that with the folks coming out of school. It's allowed us an opportunity also to grow the financial management offices, to ensure that we have the right set of analytical skills, both financial and the economic performance measures training that they actually do bring from the universities now with the programs -- we've been focusing on that -- has been a real infusion in terms of knowledge and opportunity.

While they may not have the experience, what they have is just an incredible eagerness to demonstrate their value. And working with them day-in and day-out is just -- it's simply -- it's fun. You know, some folks, well, why do I need to redo this, or why are we changing, why are we reorganizing, why do we have to worry about performance metrics? You don't get that with your interns; you get what can I do to help and how can I improve the process. For me, it's an invigorating group of folks to work with.

Mr. Watson: Well, it's good to hear the words "fun" and "work" in the same sentence again.

Mr. Morales: Kathleen, following up on that, that does sound like an interesting program. First of all, how long are the interns there?

Ms. Turco: The program runs two years. We put them on the schedule where they rotate three and six months through the different financial offices, as well as we try to put them into some of the business lines to work directly with business executives to ensure they learn about global supply or the schedules or operation of the buildings. That's very important that the financial analysts and the budget analysts at GSA understand the business of GSA; that's the only way we can really be a force in terms of being a business advisor and strategic partners with the senior team.

They also go through some extensive training in terms of the very basic budget formulation, budget execution, as well as managing their time, analytical programs. They bring, of course, tremendous computer skills; you don't have to worry about that. They're spreadsheet-savvy, they can do research on the Internet -- you don't have to take them through that -- so it's really about growing them, we offer them opportunities to take other courses that'll round out their experience from their undergraduate courses.

Mr. Morales: Shifting gears here a little bit and looking into the future, what will GSA look like five, ten years from now?

Ms. Turco: I believe that GSA will be, as Administrator Perry likes to say, the acquisition workforce for the federal government. I think we will achieve acquisition excellence, and I think part of achieving that is the Office of the CFO and the financial management community at GSA providing the necessary financial analysis and business support needed to ensure that we become the acquisition workforce for the federal government.

I believe that GSA can really offer other federal agencies a cost-effective and efficient way of acquiring their IT needs, their telecommunication needs, their buys off the schedule, whether it's assisted service or assisted light or they buy directly off the schedule using their own staff, providing this type of general services makes it just much more efficient for the federal government to operate. The budget scenario is tight; it's going to remain that way. GSA needs to continually improve how we deliver on services. We need to continually assess our fees to ensure that we're as low as possible yet fully recover all expenses, and we need to continually challenge ourselves to provide those services timely and on-schedule, within budget, to other federal agencies. I think the financial team can really be a great advisor to the business lines as we move forward.

Mr. Watson: That's a vision of GSA. Let's zero in on the CFO's function. What would the Office of the CFO look like five, ten years into the future?

Ms. Turco: The Office of CFO will be definitely a shared service in terms of how we deliver both for financial analysis, policy-setting, and operations, as well as continuing and expanding on our strategic planning and performance measurement. I think that we will see a greater emphasis on the planning and the performance measurement as we move forward -- as you move away from being transaction-based, you really need to plan for how you will conduct and provide the analysis of the programs and the business lines of the agency. And so the focus is really going to be on ensuring the financial policies and procedures are followed, as well as the financial analysis around the income expenses and the fee-setting and the rate setting that we do. In addition to all that, the planning and the budgeting -- the operational piece, I think, will be streamlined. I think we'll be more like the commercial sector. We need to continually reinvent that and find ways to deliver our financial operations in a timely basis that is at low cost. I mean, the transaction-based activity for the agency needs to be really at minimal cost. So I think we'll be a much stronger organization, and I think we'll be an even better business partner for the administrator and for the commissioners and the business executives at GSA.

Mr. Watson: Good objectives for the vision there of the CFO. How will technology play in helping you achieve those objectives?

Ms. Turco: Technology is fundamental. The ability to both acquire and put it in place is fundamental to us moving forward with this concept of being a business advisor. If your financial systems aren't operating, they consume your time. When we implemented the new software, it was six weeks of really dealing with issues almost hour-by-hour in terms of how we were doing getting payments out and billing our customers and watching that on a daily basis. It drove a lot of -- more reporting that we're doing now, actually on a daily basis related to operations, so there's been some good things that have occurred. But without a streamlined, efficient, shared services model for financial systems, you just can't move forward; that is really the piece that will I think drag down an Office of the CFO.

It's been interesting with the financial management line of business the number of folks who have called us and said, we'd like for you to take over our financial operations; we're not interested in doing them. So we think there's just a tremendous opportunity for the CFO office at GSA to become a real driving force in the line of business and financial systems as well as analysis offerings going forward.

Mr. Morales: Kathleen, you paint an exciting picture of the future at GSA and in government. What advice can you give a person who's interested in a career in public service?

Ms. Turco: I would advise anyone who's interested in a career in public service, as well as a career in the private sector, to come in and give us a try. I think we have a fairly high retention rate with our financial management interns; it's about 85 percent. I think that folks find when you're in the federal government, tremendous opportunity for learning and growth. You are challenged on a daily basis. It's very complex; it's ever-changing in terms of the challenges that you have understanding the federal laws, regulations, the programs, the business activities, the financial piece, the metric piece -- it's very comprehensive.

I don't think anyone can say -- I know I have never been bored, and I've always had the opportunity for personal as well as career growth. I think if you're a self-starter, the federal government is the way to go, and there are many, many opportunities out there. As we all know, the workforce is aging, and many agencies are looking for the newer generations to come in and to help us with setting out the agenda and achieving the missions of the federal agencies.

Mr. Morales: Kathleen, that will have to be our last question. Steve and I want to thank you for fitting us in your busy schedule this morning and we especially want to thank you for your 20-plus years of service to our country.

Ms. Turco: Thank you. Thank you. I appreciate that. If anyone wants to learn any more information about GSA, we're at gsa.gov, and I also want to stress for folks who want to learn more about the federal government, if you go to firstgov.gov, you can stroll through the many opportunities there to review federal agencies and the activities and the services that we deliver to the American taxpayers.

Mr. Morales: Great.

Ms. Turco: It's a pretty exciting site.

Mr. Morales: This has been The Business of Government Hour, featuring a conversation with Kathleen Turco, Chief Financial Officer of the General Services Administration.

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

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

Dr. Natwar Gandhi interview

Friday, December 9th, 2005 - 20:00
"How many cities run universities, hospitals, Department of Motor Vehicles, Department of Tax and Revenue, Mental Health, Medicaid? We are spending roughly half a billion dollar a year to run what I would call state-like services."
Radio show date: 
Sat, 12/10/2005
Intro text: 
Gandhi discusses balancing the district’s budget and the upgrade of the district’s general obligation bonds to an A level from major rating agencies. Gandhi credits enlightened leadership that is fiscally responsible, strengthening the revenue system...
Gandhi discusses balancing the district’s budget and the upgrade of the district’s general obligation bonds to an A level from major rating agencies. Gandhi credits enlightened leadership that is fiscally responsible, strengthening the revenue system and tax administration, and controlling the district’s spending. With a five-year balanced budget plan and the city’s economic growth, rating agencies have praised the city’s financial success and given it high ratings.
Complete transcript: 

Wednesday, July 13, 2005

Arlington, Virginia

Mr. Kamensky: Good morning, and welcome to The Business of Government Hour. I'm John Kamensky, senior fellow 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 the management of government.

You can find out more about the Center by visiting us on the web at businessofgovernment.org.

The Business of Government Radio Hour features a conversation about management with a government executive who is changing the way government does business. Our special guest this morning is Dr. Natwar Gandhi, Chief Financial Officer for the District of Columbia.

Good morning, Dr. Gandhi.

Dr. Gandhi: Good morning.

Mr. Kamensky: And joining us in our conversation, also from IBM, is Maryann Magee.

Ms. Magee: Good morning.

Mr. Kamensky: Dr. Gandhi, can you tell us a little bit about the mission of the Office of the Chief Financial Officer?

Dr. Gandhi: Sure. The primary mission of the Office of the Chief Financial Officer in the District -- and it is rather a unique office -- the primary mission of this office is to maintain the fiscal and financial viability of the District of Columbia government. Please recall that in the mid-90s, the District had gone through severe financial crisis, and at that time, the Office of the Chief Financial Officer was created. And again, the primary purpose was to bring back the financial health to the District, and that is what has been a consistent mission of the office -- make sure always that we remain financially and fiscally viable.

Mr. Kamensky: How big is your office: the size of the budget, number of people that you have?

Dr. Gandhi: Roughly 1,400 people work for the District of Columbia Office of the Chief Financial Officer and a budget of about $107 million. The primary focus here is to manage all financial operations of the city within the Office of the Chief Financial Officer, so all financial personnel working in the city, no matter where they work -- Police, Fire, Corrections -- they all work for the Office of the Chief Financial Officer.

Mr. Kamensky: Now, what kind of skills do the employees there need to have?

Dr. Gandhi: All kinds of skills, and I must say we are very proud to have a very distinguished -- academically and otherwise -- accomplished professionals -- accountants, lawyers, treasury personnel, budget people -- all kinds of people that have to do with the finances of the city, they reside within the Office of the Chief Financial Officer.

Mr. Kamensky: And what is your specific role and responsibilities as the Chief Financial Officer?

Dr. Gandhi: My purpose, as I suggested earlier, is always to have a broad perspective on the city's financial fiscal viability. In general, I am responsible for managing budget of $6 billion, but in every case, it is also that we are responsible for managing $6 billion of collection, because the Office of Revenue -- Office of Tax Administrations are within the Office of the Chief Financial Officer. And also, we prepare mayor's budget and follow and monitor expenditure of $6 billion as well, so it's more like a $12-billion operation.

Within the Office of the Chief Financial Officer, we have Office of Revenues, Office of Tax Administration, Office of Budget -- we prepare Mayor's budget -- Office of Comptroller -- we put together our annual financial report -- we have a Treasury operations, we do all the borrowing for the city, we also run the lottery. So anything that has to do with the money is within the Office of the Chief Financial Officer.

Ms. Magee: And Dr. Gandhi, what were your previous experiences prior to being appointed CFO in June of 2000?

Dr. Gandhi: Before I joined the city -- before I became the Chief Financial Officer, I should say, I was the head of the Office of Tax and Revenue from 1997 through 2000, and then in 2000, I became the Chief Financial Officer. Before I joined the city in 1997, I was with the General Accounting Office, the Congressional watchdog agency. At that time, I was one of the heads of the Office of Tax Analysis and Administration, doing IRS audits as well as advising Congressional agencies and Congressional committees on various tax policies. Before I came to Washington, I was on the faculty of the graduate school of business at University of Pittsburgh. And I also worked for the private sectors -- a stint at IBM, old steel plant named Jones & Laughlin -- so I'm dating myself. So I've been all around in the public sector, private sector, both here as well as in India. I also had worked for about six months advising Governor Florio of New Jersey on some budget issues in New Jersey. So I have a kind of a very varied background.

Ms. Magee: And how do you apply these experiences to your current position?

Dr. Gandhi: Well, I think what I learned, say, in the private sector, the accountability on an immediate basis. Indeed, in the District government, my office is primarily responsible to assure whether or not that we have a balanced budget, so there are no doubts about it, no two opinions about it. You know, if the external auditors were to tell you your budget had balanced, than that's what it is; it's a balanced budget. If not, then I would have failed in that measure of accountability. Similarly, bond ratings: you have to be accountable for upgrading your bond ratings, and if it were to go down, then that is an accountability right there.

So things that we do do in the Office of Chief Financial Officer that have this private sector accountability, and that the measures are very clear whether you balanced budget or you did not, whether your ratings went up or not, whether you got a clean audit opinion or not. And these are basically private sector measures, all right?

In the federal government, you know, there is a vast bureaucracy, and having worked with the General Accounting Office, I can also understand the virtues of bureaucracy, having set procedures, processes, documentation. And what we are trying to do is to learn from those established processes and procedures and try to reinstitute them in the District government. So that's what I learned from the government.

And then lastly, from the academic world -- having been a professor myself -- I think the training that I received there, I've been able to communicate in very simple, precise terms what are the implications of a budget that is not balanced, what are the implications of a given expenditure. So you're basically communicating -- or if I were to say teaching -- all the time to staff, to the committees of the Council, to the senior representative from other governments. You're all the time explaining to financial community on Wall Street -- also in the District government here -- how are the finances of the District going? So everything I have been though has been helpful in fashioning the skills that I'm applying today.

Mr. Kamensky: You've had the experience of holding high-level positions with finance and tax over the course of your career.

Dr. Gandhi: Right.

Mr. Kamensky: How has your management and leadership style changed over the time?

Dr. Gandhi: Well, I think it has changed in two respects. One is that now being at the highest level in the finances of the city, you learn to delegate. As you go up in the management structure, the work is done through others, and you should be able to motivate people. Particularly in the government, that is very, very important, because heaven knows, we don't pay our people enough even though we try to be competitive, but still, we can never pay as much a the private sector does. So you have to motivate people, and you learn to motivate, and I think in the District government that is particularly important, because the work is often frustrating, and you want to motivate people.

The second is the level of accountability, particularly in the District, is quite acute. Not only do we have to attend to the needs of the Council and the Mayor and the Congress, but we also have a federal government observing us all the time. And let us not forget the Washington Post, you know. First thing in the morning, all of us in the city government, we look at the Metro section and see if our name is there. If our name is not there, then we say thank God, move on with the day, and if it is there, you know what you will be doing the rest of the day and sometimes rest of the week. So that level of accountability was absent, for example, when I had worked with the General Accounting Office, but now, it is there.

Mr. Kamensky: That's a very interesting background.

What are the plans for financing a new baseball stadium in D.C.? We'll ask the District's Chief Financial Officer, Natwar Gandhi, to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Kamensky: Welcome back to The Business of Government Hour. I'm John Kamensky, and this morning's conversation is with Dr. Natwar Gandhi, Chief Financial Officer for the District of Columbia.

Joining us in our conversation is Maryann Magee.

Now, I know we promised to talk baseball when we returned, but first, Dr. Gandhi, can you give us a brief overview on the District's fiscal 2005 strategic results goals?

Dr. Gandhi: Right. Again, you know, it'd be difficult for me to speak for the city as a whole -- that becomes kind of a non-financial venture for me -- but let me concentrate on the CFO strategic goals. As I indicated earlier, overwhelming concern that we have in the Office of the Chief Financial Officer is about the financial viability of the city. That would mean that we must balance our budget; that we must produce our annual report on time, and having a clean audit opinion from our external auditors; going to sustain our ratings and increase them to the extent possible, and on all these fronts -- on balanced budget, clean audit opinion, annual report on time, improved ratings -- we have done extraordinarily well.

In these days and times when we have rating agencies downgrading many, many municipalities and states around the country, to have upgraded us -- indeed, in case of Moody's, they have given us a double notch upgrade. And just last week, Fitch Rating Agency had also upgraded us with a positive outlook. So this is the first time the District has achieved a clean "A" rating from all three rating agencies. We enjoy currently roughly $300 million of cash reserves, which is 6 percent over budget, which is unprecedented anywhere in the country. So on those key elements, we have done extraordinarily well.

There are still areas that require further improvement. You know, I'm still not entirely happy with our customer service and tax administration area, about the calls that we receive on telephones as well as letters that we receive; we are not as quick to answer them as we should be. We still have to go some ways in collecting some additional taxes from those who are not complying with our tax laws. So there are areas that still need to be improved. However, this is still a far cry from 1997, when I had joined the city, when the city was simply a financial basket case, to today, when we are enjoying roughly a billion, 200 million dollars of fund balance. In those days, we had a negative fund balance, deficits in our fund balance, of roughly $500 million. So this is basically a billion-700 million-dollar turnaround since 1997.

Mr. Kamensky: That's pretty impressive.

Dr. Gandhi: It's very impressive, and great credit goes to the Mayor and the Council and our elected leadership who have done the heavy lifting on those fronts.

Mr. Kamensky: How did you go about doing this? How do you wind up assuring that there's going to be a balanced budget each year?

Dr. Gandhi: Well, first, it requires an enlightened leadership, in the Mayor, Anthony Williams, in our Council, particularly Council Chair Mrs. Linda Cropp, our chair of the Finance Committee Jack Evans, and other Council members. We have a very vigilant fiscal leadership. Second, on an operational level, what we have done over the last several years is to strengthen our revenue system. As I indicated earlier, our revenue system was a joke in the mid-90s. Today, it is rated among the best in the country. Our tax system is rated best among the country, not by me, but by the Federation of Tax Administrators.

By strengthening our tax administration, we have collected a billion, 200 million dollar more in taxes since 1997. One would say, well, the economy has been good. Yes, economy is indeed good, but had we not have improved our revenue administration, our tax collection, we wouldn't be collecting taxes the way we have. So we have improved and made our tax administration aggressive, but fair and equitable. Three, we have controlled our spending. We have been very careful in monitoring where we have agencies spending beyond their appropriations. So we continuously monitor them and try to bring them back within the appropriated limits. So that is why we now have had eight consecutive balanced budgets.

Ms. Magee: You mentioned a projected surplus. How do you plan on using this surplus?

Dr. Gandhi: Ah, that is for the Council and the Mayor to decide. All I tell them is how much do we have to spend; the priorities are decided by them.

Ms. Magee: You've also managed to upgrade the District's general obligation bonds to "A" level --

Dr. Gandhi: Right.

Ms. Magee: From major rating agencies for the first time since Home Rule was instituted. Can you tell us a little bit about this?

Dr. Gandhi: Sure. I think what the rating agencies are looking for above all is how responsible is the financial management of the city, both at the policy level and at the operational level. At the policy level, as I indicated, that we have a very enlightened political leadership that is fiscally very responsible. So the Mayor and the Council deserve a great deal of credit for improved rating. At the operational level, however, it's the financial management -- the Office of the Chief Financial Officer, basically, through its budget operations, through its revenue operations, both controlling the budget, monitoring the budget, and raising revenues -- that assured the rating agency that this government will not spend more than what it gets. Thirdly, we are among the extremely few, if not the only jurisdiction in the country, that has to have a five-year budget balanced budget plan. We cannot shift our expenditure to the following year so that we can balance the budget this year. We have to balance on a five-year basis.

So rating agencies then can see that this government is not shifting numbers, shifting expenditures, shifting revenues to balance the budget in a given year, all right? And lastly, I think overall, they want to see whether or not the city is on the right track economically speaking. And again, we are on an economic roll in the city. City's real property market is extraordinarily strong; we enjoy an almost economic renaissance in the city, and if you walk through the city, you will see cranes everywhere. So given all these factors, rating agencies have been quite enthusiastic in praising the city's financial successes and give us the ratings.

Ms. Magee: Well, it's also very exciting to finally have baseball back in D.C. Along with this excitement, there are currently plans for financing a new baseball stadium. Last month, the Office of the Chief Financial Officer issued a report on alternative financing plans submitted for the construction of the stadium. Can you tell us about the process and how you decide on proposals?

Dr. Gandhi: Right. What the Council had wanted us to do is to look at various proposals put forward to finance the building -- constructing -- the stadium. We looked at those proposals and provided our analysis to the Council and the Mayor as to what is the most beneficial proposal for the city. I think at the end of the day, the city will have a stadium which will be built in the most financially responsible fashion, and I think the city will play ball, as it is already playing. And our team is doing extraordinarily well. Just see what happens; you wonder whether these are the same people who used to play in Montreal.

Ms. Magee: Just recently, you reached a conclusion that D.C. would spend no more than 161.4 million to acquire the 14 acres along the Anacostia waterfront, conduct environmental clean-up, and build infrastructure. How did you reach that conclusion?

Dr. Gandhi: Well, not easily. We have concluded soon that we in the Office of the Chief Financial Officers do not have the technical expertise that is needed to appraise the land, to appraise the environmental damage, so what we had done is to hire the best available consultants on that front. We hired Deloitte Touche, and they put together a very solid report on that front, and we provided that report to the Council, and we stand by those conclusions. Our Office of Property Management in the Mayor's office is conducting its own appraisal; we hope that that will be done by the end of the month. And after that, we simply have to acquire the land and get on with building the stadium.

Mr. Kamensky: Well, that sounds pretty exciting.

So how is the Office of the Chief Financial Officer ensuring financial integrity in the city government? We'll ask the District's Chief Financial Officer, Natwar Gandhi, to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Kamensky: Welcome back to The Business of Government Hour. I'm John Kamensky, and this morning's conversation is with Dr. Natwar Gandhi, the Chief Financial Officer for the District of Columbia.

Joining us in our conversation is Maryann Magee.

Dr. Gandhi, the District of Columbia has what is arguably the most complex government in the United States. How is the District navigating the jurisdictional complexity while facing the limited resources and increased service needs?

Dr. Gandhi: You are absolutely right when you say that we are among the most complex government in the United States. We are a District, we are not a state, we're not a country, we're not a city; we are all combined into one. And consequently, we have the problems of a state, of a city, and of a country. Further, given that we are a district, even though we have state responsibilities, we do not have the resources of a state.

Congress decided that we will not be able to tax all the income that is earned in the District, unlike, say, any other state or city. Consequently, what we do have is a very limited, constrained tax base. Of every $100 that is earned in the city, we can get to tax only $34. Further, roughly 40 percent -- 40-plus percent of our real property values are tax-exempt because of the federal government institutions, diplomatic institutions, and tax-exempt institutions. So what we have is a situation where we have a very limited constrained tax base, but at the same time, we have needs which are far greater than what we can ourselves afford. Consequently, our tax rates are very high; for a long time, our tax policy was that once you find a taxpayer, we never let him go, we keep piling on. Fortunately, the Mayor and the Council are changing and moving away from that. We have a five-year plan of reducing our tax rates. We also have a very high borrowing; indeed, currently our tax rates are very high, comparatively speaking. And our borrowing, our capital debt, is highest in the country.

So we still manage well, primarily because of enlightened leadership that we have in the city with the Mayor and the Council, and also the economy is extraordinarily good in the city. So given all these put together, I think we have been able to manage ourselves well. Nevertheless, I must point out that we still have a structural imbalance; that is, the resources that are needed to meet the needs that we have -- we do not have those resources. And that structural imbalance is about $700 million annually to about a billion dollar annually, according to the General Accounting Office.

Ms. Magee: How is the Office of the Chief Financial Officer ensuring financial integrity while striving to achieve balance between policies, budget priorities, and expenditures through interaction with the Mayor, D.C. agencies, Council, and Congress?

Dr. Gandhi: Well, important characteristics of this particular office is that we enjoy an extraordinary level of independence; we are an independent Chief Financial Office. So we have exclusive rights to provide the revenue estimation for the Council and the Mayor. So we tell them how much to spend in a given year. Once the Mayor and Council decides to spend that money, we expect that they will not decide to spend more than what is coming in. Two, that we would carefully monitor how the money is being spent by the agencies; and we have a right to go in and control the expenditure of a given agency that may be violating its appropriation limits. So given that level of independence and authority, we basically manage the city's finances well.

Ms. Magee: And I understand the District's electronic tax filing services experienced a dramatic increase in its usage this year. How is the government investing in technology to make filing taxes easier, and in general, making its financial services customer-friendly for citizens?

Dr. Gandhi: First, I want to point out that that's a remarkable development for the city, that this city that has basically no systems in mid-'90s -- indeed, we were operating out of the shoeboxes in '97 -- today, we have one of the most sophisticated tax systems in the country. Indeed, we were the first city to offer the tax filing on the web. You can go to the Mayor's website and file your tax return; you don't have to go through IRS.

Two, we made a concerted effort to make sure that citizens have free availability to file their returns on the web. The strategy here is that more people filing on the web, better off it is for them, better off it is for us because there are less chances to have returns being lost, errors being made, and above all, a proper storage of records technologically -- it's done much easier through electronic filing. So we are pushing very hard and heavy towards electronic filing.

Ms. Magee: I understand that you are implementing a system for budgeting, reporting, analysis, and scoring. Can you give us some details about this?

Dr. Gandhi: That is currently under construction, and we hope that we soon shall be able to unveil that. And primarily the emphasis here is that we are thinking in terms of performance budgeting. We already have most of our agencies doing their budgeting on a performance-based budgeting basis; meaning that it is not enough to say that you were given $10 million and that you spent $10 million, but to say, what did you get out of those $10 million? And if it costs you more, say, than Baltimore to pave one mile of road or to process 100,000 returns, then why is that so? So we are not benchmarking ourselves to the best of the municipalities in the country and see how we do. So now we are talking in terms of not only that you maintain the control and spend money within the limits, but going beyond that and asking what did you get of the money that you did spend.

Ms. Magee: How are you working with the chief technology officer on implementing and supporting financial systems?

Dr. Gandhi: Very closely. We have a close collaboration with the Chief Technology Officer. We work in terms of designing systems with them; we work with them in terms of implementation, and maintenance of the system. And that collaboration has proved to be very successful, as can be seen in the successful implementation of our integrated tax system, our financial system, and now, the budget system.

Mr. Kamensky: I've been studying the implementation of performance budgeting across the country, and the District looks like it's making an enormous amount of progress. How are you moving the District's budget and finance plan basically entirely to a performance budgeting approach?

Dr. Gandhi: We are -- basically started with large agencies first, and then gradually move into the smaller agencies. First, we have recast our budget according to the performance indicators, and it is not enough to say that we are going to give you, say, $10 million to do this function or this department. We will say, what are the outcomes of that function or that department, and how can we associate given expenditure to those indicators? And then at the end of the day, we ask ourselves on the money that is spent whether or not those indicators had been achieved, accomplished at the level that was expected. And there are still ups and downs, agency who are not used to doing budgeting on this basis, but we have made great strides and hope that some day, we will come back to you and say, the entire District government budget is done primarily and exclusively on the performance-based budgeting, and that we can tell the Mayor and the Council that money that you allocated to the police, to the fire, to the corrections, have been spent according to those indicators, and these are the results.

Mr. Kamensky: That's really impressive.

Well, what does the future hold for the District of Columbia and the Office of the Chief Financial Officer? We'll ask the District of Columbia's Chief Financial Officer, Natwar Gandhi, to explain this to us when the conversation about management continues on The Business of Government Hour.


Mr. Kamensky: Welcome back to The Business of Government Hour. I'm John Kamensky, and this morning's conversation is with Dr. Natwar Gandhi, the Chief Financial Officer for the District of Columbia.

Joining us in our conversation is Maryann Magee.

Dr. Gandhi, can you tell us about other processes you plan on automating in the near future?

Dr. Gandhi: Yes. I think as we move towards more and more automation, relying upon the web to do city's businesses, my expectation is that we can practically accomplish most of our treasury operations, most of our budget operations, on computers, on the web. I think the revenue administration has made a great stride, but we can still go a long way. We still have citizens that are habituated to work with pencil and paper, and the real challenge is how to take them away from that and use the computers.

But I still want to caution to you that you will still have an irreducible amount of people who are addicted to use paper and who also don't have access to computers. So that level will always remain in manual operations. But we would like to make as much stride as possible to go towards electronic management. I just want to point out that our website, CFO website, has been rated among the best in the country by financial markets. We have a wealth of data on that website, and using that website, you can look at our operations and do work with us through the website.

Ms. Magee: How do you see technology further shaping the future of the District of Columbia and how it interfaces with its customers?

Dr. Gandhi: I think we are very fortunate to have our Mayor, who is quite devoted to technology, and using technology to improve our managerial operations and the customer service operation of the city. Say, 10 years ago, we had no website; today, as I indicated, not only the financial website, but the entire city website, one of the most sophisticated, one of the most robust in the country. We have millions of people hitting our website on a regular basis to learn more about the D.C., and our expectation -- Mayor's expectations are that a vast majority of the city operations should be done on the website. There's no need for us to stand in a line to get a driver's license or to get renewal of your tag or to file a return. You don't need to stand in the middle of the road on April 15th to file a tax return. All of that can be done, and is being done, efficiently, effectively, on the web.

Ms. Magee: What other significant challenges do you think the Office of the Chief Financial Officer faces in the near future, and how do you plan on responding?

Dr. Gandhi: Well, I think our first problem here is, as we enjoy this financial prosperity as we currently are enjoying, the challenge here on the part -- particularly of the elected leaders -- is to spend money. After all, the city has great needs, and they must be met. So the function of the Chief Financial Officer is to caution how much you can spend; even though the goal is quite worthy, the need are a great deal demanding, but you still want to be very careful as to how much you should spend.

Second, we have to keep in mind that we have a very constrained, restrained, limited tax base, so that should be another inhibition on how much we should spend. As I indicated, we cannot borrow much; we have the highest per capita borrowing in the country. So given all this constraint, to refrain from spending is very, very important, and that is what we need to do.

The second most important challenge that we do have is to somehow amend the structural imbalance that we are currently facing, and have been facing for a long, long time. And for that, we need the help from the Congress, from the federal government, because the District does not have a state; all central cities of America are subsidized by their suburbs via state. State gives a lot of help to cities, inner cities in particular. We have no state, and the federal government is our state. How many cities run universities, hospitals, Department of Motor Vehicles, Department of Tax and Revenue, Mental Health, Medicaid? We are spending roughly half a billion dollar a year to run what I would call state-like services.

So we need help from federal government to take care of those expenditures which are state expenditures, not a city expenditure. So that is a very big challenge, and that challenge can only be met by having the federal government's helping hand.

Mr. Kamensky: That's very interesting. I'd like to maybe shift a little bit to talk about a couple of other things. I understand you host an awards ceremony every year for your employees in the Office of the Chief Financial Officer. Can you tell us a little bit about how you do that and how the D.C. government is recruiting, training, and retaining its employees?

Dr. Gandhi: That is correct; it is a challenge to attract younger, able people to come to work for the District government. I think we have been very lucky -- exceptionally lucky -- in the workforce at the Office of the Chief Financial Officer. And given that we have enjoyed a great amount of success -- indeed, an externally validated success, by rating agencies, for example -- I make it a point to have an annual ceremony where we recognize that accomplishment, and indeed reward our employees who have done extraordinarily well in helping the city achieve this level of financial viability and fiscal prudence.

The city as a whole, also under our Mayor, is attracting very, very able administrators from throughout the country, and the city's image has fundamentally changed over last five, six years, and a great credit goes to the Mayor. The city now is a place to come and work. I think if you're looking for an easy career, lot of money, then you should not look to us, but if you're looking for challenge, worthwhile work, sense of accomplishment, we are the place to come, and I think working -- particularly in my office, Office of the Chief Financial Officer -- I guarantee you will get challenging work. You'll get a sense of accomplishment. After 50 years, when you retire, if your grandchild asks you, what did you do, you'll be very proud to say that I worked for the District government.

Mr. Kamensky: What is your vision for the Office of the Chief Financial Officer, say, five to ten years down the road?

Dr. Gandhi: The vision of the office that I have is to have basically an independent office within the District government, an office that provides numbers, financial information, analysis to our policymakers, our elected leaders. And numbers coming out of this office ought to be viewed as impartial, objective, and an independent evaluation of the problems facing the city. I think a model, if you want to call it that, is provided by the Congressional Budget Office. The Congressional Budget Office provides this level of independence and objective evaluation to the Congressional policymakers. When the numbers come from CBO, people say, yeah, let's take that for granted. Similarly, as I see it, I want to build in the Office of the Chief Financial Officer a relatively permanent bureaucracy of highly qualified financial professional people whose word will be the last word on city finances. That's the vision we have.

Mr. Kamensky: That's really neat. Closing question: what advice can you give a person who's interested in a career in public service -- you've had a background in academia and private sector and federal and state, local government -- especially for those who are interested in state and local government?

Dr. Gandhi: And we welcome them all. All of us, obviously, would like to have some level of financial education, but above all, we are looking for people who are smart, who are coming into public service, and who take their job as a mission and not as a 9-to-5 office work. Work is challenging, but also frustrating, and it would try your soul when you come and work with us. But at the end of the day, you'll feel accomplished.

How does one go about doing that? Well, our Mayor has a website. You can go to the Mayor's website, you can go to CFO website within the Mayor's website, and there are plenty of opportunities. And since I indicated that we have roughly 1,400 people working with us, there are vacancies of all types: in accounting, in budgeting, in revenue administration, in tax collection, in real property assessment, in lottery operations, in treasury operation -- you name it, we got it. You simply go to that website and see what fancies you, what kind of skills you have, and let us know what interests you, and we will welcome to have you with us, talk about it -- and even if nothing over there really fits your particular skill, you should still come and talk with us, and who knows -- you know, for smart people, there is always room in the CFO.

Mr. Kamensky: Well, that's great. Well, Maryann and I would like to thank you for fitting us in your busy schedule and joining us this morning.

Could you share that website with us?

Dr. Gandhi: Yes. It's www.dccfo.gov. Or you can go to www.dc.gov and you can go to the Mayor's website.

Mr. Kamensky: Great. Well, this has been The Business of Government Hour, featuring a conversation with Dr. Natwar Gandhi, the Chief Financial Officer for the government of the District of Columbia.

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

For The Business of Government Hour , I'm John Kamensky. Thank you for listening.