[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
TIME TO REFORM IT ACQUISITION: THE FEDERAL IT ACQUISITION REFORM ACT
=======================================================================
HEARING
before the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 27, 2013
__________
Serial No. 113-42
__________
Printed for the use of the Committee on Oversight and Government Reform
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
U.S. GOVERNMENT PRINTING OFFICE
82-274 WASHINGTON : 2013
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001
COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland,
MICHAEL R. TURNER, Ohio Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of
JIM JORDAN, Ohio Columbia
JASON CHAFFETZ, Utah JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee MATTHEW A. CARTWRIGHT,
TREY GOWDY, South Carolina Pennsylvania
BLAKE FARENTHOLD, Texas MARK POCAN, Wisconsin
DOC HASTINGS, Washington TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming ROBIN L. KELLY, Illinois
ROB WOODALL, Georgia DANNY K. DAVIS, Illinois
THOMAS MASSIE, Kentucky PETER WELCH, Vermont
DOUG COLLINS, Georgia TONY CARDENAS, California
MARK MEADOWS, North Carolina STEVEN A. HORSFORD, Nevada
KERRY L. BENTIVOLIO, Michigan MICHELLE LUJAN GRISHAM, New Mexico
RON DeSANTIS, Florida
Lawrence J. Brady, Staff Director
John D. Cuaderes, Deputy Staff Director
Stephen Castor, General Counsel
Linda A. Good, Chief Clerk
David Rapallo, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on February 27, 2013................................ 1
WITNESSES
Mr. Richard A. Spires, Chief Infomation Officer, U.S. Department
of Home Security
Oral Statement............................................... 7
Written Statement............................................ 9
Ms. Cristina Chaplain, Director of Acquisitions and Sourcing
Management, Government Accountability Office
Oral Statement............................................... 16
Written Statement............................................ 18
Mr. Daniel L. Gordon, Associate Dean for Government Procurement
Law Studies, George Washington University
Oral Statement............................................... 34
Written Statement............................................ 36
Mr. Stan Soloway, President and CEO, Professional Services
Council
Oral Statement............................................... 42
Written Statement............................................ 45
Mr. Paul Misener, Vice President, Global Public Policy, Amazon
Oral Statement............................................... 54
Written Statement............................................ 56
APPENDIX
The Hon. Elijah E. Cummings, a Member of Congress from the State
of Maryland, Opening Statement................................. 90
The Hon. Gerald E. Connolly, a Member of Congress from the State
of Virginia, Opening Statement................................. 92
IT-AAC Assessment of Draft Federal IT Acquisition Reform Act
(FITARA)....................................................... 94
The Perenial IT Acquisition Challenge............................ 95
TIME TO REFORM IT ACQUISITION: THE FEDERAL IT ACQUISITION REFORM ACT
----------
Wednesday, February 27, 2013.
House of Representatives,
Committee on Oversight and Government Reform,
Washington, D.C.
The committee met, pursuant to notice, at 9:30 a.m. in room
2154, Rayburn House Office Building, the Honorable Darrell E.
Issa [chairman of the committee], presiding.
Present: Representatives Issa, Cummings, Mica, Farenthold,
McHenry, DesJarlais, Lankford, Walberg, Turner, Lummis,
Connolly, Cardenas, Horsford, Davis, Tierney, Duckworth, Pocan,
Grisham, Duncan and Amash.
Staff Present: Ali Ahmad, Majority Communications Advisor;
Richard A. Beutel, Majority Senior Counsel; Robert Borden,
Majority General Counsel; Molly Boyl, Majority Parliamentarian;
Lawrence J. Brady, Majority Staff Director; Sharon Casey,
Majority Senior Assistant Clerk; John Cuaderes, Majority Deputy
Staff Director; Gwen D'Luzansky, Majority Research Analyst;
Linda Good, Majority Chief Clerk; Mark D. Marin, Majority
Director of Oversight; Peter Warren, Majority Legislative
Policy Director; Rebecca Watkins, Majority Deputy Director of
Communications; Meghan Berroya, Minority Counsel; Krista Boyd,
Minority Deputy Director of Legislation/Counsel; Jennifer
Hoffman, Minority Press Secretary; Carla Hultberg, Minority
Chief Clerk; Elisa LaNier, Minority Deputy Clerk; Dave Rapallo,
Minority Staff Director; Rory Sheehan, Minority New Media Press
Secretary; Mark Stephenson, Minority Director of Legislation;
and Thomas Cecelia, Minority Counsel.
Chairman Issa. The committee will come to order.
I will read the Oversight Committee's mission statement. We
exist to secure two fundamental principles. First, Americans
have a right to know the money Washington takes from them is
well spent. And second, Americans deserve an efficient,
effective Government that works for them.
Our duty on the Oversight and Government Reform Committee
is to protect these rights. Our solemn responsibility is to
hold Government accountable to taxpayers because taxpayers have
a right to know what they get from their Government. We will
work tirelessly in partnership with citizen watchdogs to
deliver the facts to the American people and bring genuine
reform to the Federal bureaucracy.
Today, in order to move that purpose forward, we hold the
second Full Committee hearing this year concerning Federal
Government's approximately $80 billion Information Technology
Budget. We are all well aware that the Government
Accountability Office and others have repeatedly identified
problems and challenges in the area and this hearing is
continuation toward a grand solution.
One solution at the center of our discussion today is the
draft IT Acquisition Reform legislation I posted on the
Committee's website last fall. In recent months, we have
received generous feedback on the draft bill from more than a
dozen parties, actually more than 20 parties, some of them here
today.
We are going to continue with that feedback and continue
having the public know what the feedback is. Ultimately,
getting the whole system right requires not just that people
tell us how to improve it, but that the rest of the public sees
what we are being told and can further comment. We believe that
this open dialogue is the best way, once and for all, to prove
to the public that in the light of day, in clear transparency,
we can, in fact, find the best of all suggestions, evaluate
them, have our evaluations public and then, ultimately, produce
better legislation.
A number of things that we have come, or this Chairman has
come to believe, every agency needs one Chief Information
Officer who is clearly in charge. There are 243 CIOs in 24
major agencies. The Department of Transportation alone has 35
CIOs. That does not mean that the job is to layoff 34 CIOs. But
there has to be a structure including a chain of command and
including real authority to spend the money better, to be held
accountable for that money and ultimately what budget authority
needs and a CIO needs is to stop quickly when that money
clearly is not being as well spent as was anticipated. The
nature of why we have administration is not simply to spend the
money that Congress allocates, but rather to spend it better
than could be possibly considered at the beginning of the
project.
The third point that we have come to believe is that
consolidated resources and expertise make smarter purchases.
That does not mean that it needs to be consolidated in one
place. But for any given area of expertise there needs to be a
best of that you go to. Accomplishing these major reforms will
not be easy. It will not be done on a partisan basis. It will
not be done only in the House of Representatives. At the heart
of the effort is, in fact, the open dialogue about how we
produce effective spending but not so we buy IT for a few
dollars less, but, in fact, so that we can protect taxpayer
dollars from further waste, fraud, and abuse and mismanagement.
Ultimately, IT is the tool to save and to better spend $3.5
trillion, not about the $80 billion that we spend on IT.
And with that, I am please to recognize the Ranking Member
for his opening statement.
Mr. Cummings. Thank you very much, Mr. Chairman, and I want
to thank you for holding this hearing today and picking up
where you left off.
What you are talking about, Mr. Chairman, is effectiveness
and efficiency. And I think that is a good, those are good
words to capsulize what we are trying to do here. Holding this
hearing today on the need to reform Government's information
technology and acquisition policy is so very important. And I
certainly commend you on your bipartisan approach to developing
the legislation we are considering today, the Federal IT
Acquisition Reform Act, and I appreciate that you made a draft
of the bill publicly available for comment.
I also want to recognize Representative Gerry Connolly, the
Ranking Member of the Government Operations Subcommittee, for
his critical work on these technology issues. Back in May of
2012, we held a forum in his district. It was well attended and
it was one that yielded a lot of very valuable information and
I know that he was very pleased, and I was very pleased, to be
a part of that.
A significant portion of the Federal IT Acquisition Reform
Act is based on Ranking Member Connolly's legislation on
consolidating Federal data centers and I appreciate you making
sure that, again, this is a bipartisan effort. I agree with
both you, Mr. Chairman, and Ranking Member Connolly that
reforms are needed to ensure that the Federal Government is
making wise and efficient investments in information
technology. Every full Committee hearing so far in this
Congress has focused on wasteful spending, including some in IT
investments.
Two weeks ago, the Government Accountability Office issued
its newest high risk report which includes several IT
investments. For example, the Department of Defense has
contracts for a number of enterprise resource planning systems
to modernize the management of logistics, finances and business
operations. GAO and the Pentagon's Inspector General have found
that many of these contracts are behind schedule and
significantly over budget. For instance, a contract to
streamline the Army's Inventory of Weapons System is
unbelievably 12.5 years behind schedule. That is simply
incredible. And, almost $4 billion over budget.
Effective oversight is one of the best weapons against this
kind of wasteful spending. Congress has a duty to conduct
oversight as well as an obligation to give agencies the tools
they need to conduct their own oversight. Agencies need more
well-trained acquisition personnel to effectively oversee
complex systems and to ensure that the Government is a smart
and diligent consumer. The Federal IT Acquisition Reform Act
recognizes this need.
Congress must also ensure that agencies have the resources
to hire and retain acquisition professionals. Almost every
witness we hear from today will testify that the acquisition
workforce is critical to ensuring that the Government is
spending its money wisely.
However, just two weeks ago the House voted to extend the
freeze on Federal employee pay for a third consecutive year.
And even worse, at the end of this week, hundreds of thousands
of employees, including critical acquisition workforce
personnel across every agency, will face furloughs as a result
of the indiscriminate across-the-board cuts to agency budgets
imposed by this sequester.
We need these employees. Instead of repeatedly attacking
these key Federal workers, Congress should be pursuing ways to
retain their expertise, train them in the most cutting edge
techniques, and support their critical work. If we do that, it
will pay for itself over and over and over again.
So, I want to thank each of our witnesses for testifying
today. I look forward to hearing your thoughts on how Congress
can most effectively and efficiently modernize the way the
Government does business and save taxpayers money.
And again, Mr. Chairman, I want to thank you. And I yield
back.
Chairman Issa. I thank the gentleman.
We now recognize the Chairman of the Subcommittee, the
gentleman from Florida, Mr. Mica.
Mr. Mica. Thank you, Mr. Chairman, and thank you, Mr.
Cummings, for holding this hearing. And it is extremely
important, especially as we face in the next matter of hours,
almost now, a very difficult time with our Nation's finances,
looking for ways to cut spending, to eliminate waste, fraud and
abuse, that we focus on the dysfunctional manner in which
Government agencies acquire essential resources such as the
very basic tools that we have in our operations today, our
Government operations, of computers, software, business systems
which are absolutely essential to efficiently run Government.
It does not appear that just throwing money at these
problems or spending is, or lack of spending, that is the
issue. In fact, between Fiscal Years 2002 and 2012, we grew
from about one-quarter of a trillion to half a trillion
dollars. The spending went from $264 billion to $514 billion.
So, half a trillion dollars is a significant amount of money.
But I think what we will hear today, too, and I hope with
Mr. Connolly, working with him, to drill down and look at some
of the instances where we can and we must do a better job, but
there are instances of again, wasteful approaches. And we will
hear today from GAO, they found that in almost all cases in
which IT investments are underperforming, the lack of overall
skills and experience of the government-led program management
team is the underlying issue. And I think that it is something
that we are going to focus on.
Another area that interests me, coming from the private
sector, you could never operate a business the way we do
Government and these Government agencies. But I would like to
look in depth with Mr. Connolly and the Committee on
duplicative IT operations. In fact, we will hear today that GAO
reports in Fiscal Year 2011, our Government funded the
acquisition of 622 separate human resources systems at a cost
of $2.4 billion, 580 financial management systems at a cost of
$2.7 billion, 777 supply chain management systems at a cost of
$3.3 billion, and the list continues. Most of these back office
systems perform the same function.
And I think it is important, the Chairman has worked on
this, the Committee has worked on this, he has proposed
legislation that has lagged in adoption and it can solve some
of these problems. We will hear more details from some of our
witnesses today, work with them, and hopefully we can get this
legislation moving and adopt the reforms that are necessary to
correct the problems that will be exposed here again today in
this hearing.
Thank you again. I yield back the balance of my time.
Chairman Issa. I thank the gentleman.
We now recognize the gentleman from Northern Virginia, Mr.
Connolly.
Mr. Connolly. Thank you, Mr. Chairman, and I want to thank
you, and I particularly want to thank the Ranking Member, Mr.
Cummings, for his very gracious remarks.
I find myself in full agreement with everything you have
said this morning, Mr. Chairman, Mr. Mica has just said and Mr.
Cummings has said. When it comes to Federal management of IT, I
am reminded of John Kennedy's slogan in his first race for the
Senate, the United States Senate in my home State of
Massachusetts. His slogan was we can do better. And when it
comes to the management of Federal IT, we can and must do
better, whether it is commercial, off-the-shelf IT product
management or major mission critical custom IT programs.
Today, Federal IT acquisition is a cumbersome, bureaucratic
and wasteful, often wasteful, exercise. In recent decades,
taxpayers have watched tax dollars evaporate into massive IT
program failures that pair staggeringly high costs with
astonishingly poor performance. The Air Force, for example,
invested six years in a modernization effort that cost over $1
billion but failed to deliver a usable product, prompting the
Assistant Secretary of the Air Force to state, I am personally
appalled at the limited capabilities that that program has
produced relative to the amount of investment.
The bottom line is all of us should be appalled at that
kind of performance and it is sadly not limited to the U.S. Air
Force. Massive IT program failures have real consequences for
the safety, security and financial health of our Nation. From
census handheld computers that jeopardized a critical
Constitutional responsibility to promised electronic fences
that never materialized, costs of IT failures cripple an
agency's ability to implement long-term strategic goals.
For instance, the Office of Personnel Management
dramatically reduced its claims processing staff in
anticipation of completing its retirement systems modernization
program, promising enhanced automated capabilities.
Unfortunately, when OPM was finally forced to kill this IT
program, the agency was left flat footed, without the resources
or manpower to process retirement claims, forcing thousands of
Federal retirees to experience outrageously long waits to
receive their benefits.
Nearly 17 years after enactment of the seminal Clinger-
Cohen Act, it is clear that agency Chief Information Officers
often lack the necessary authority and resources to effectively
analyze, track and evaluate the risks and results of major IT
programs. And here I echo what the Chairman has indicated. We
have to have somebody who has the authority and responsibility
centrally in each agency to manage these IT programs and
investments.
The GAO has found that many agencies struggle to maintain
accurate costs and schedule data from Federal IT investments,
undermining transparency and accountability while rating a
questionably low percentage of IT programs as high or
moderately high risk. Yet, the Department of Defense actually
does not rate a single DOD IT investment as either high or
moderately high risk. Not passing the giggle test. Meanwhile,
independent research conducted by the nonprofit institute
Defense Analyses found that DOD struggled to manage major IT
modernization programs for nearly 15 years.
With respect to commercial off-the-shelf IT products, I am
talking about email and other commercial business systems
software that could purchase on Amazon.com, far too many
agencies have spent precious dollars and time creating
duplicative, wasteful contracts for products and licenses the
departments already own.
The status quo is unacceptable and unsustainable,
especially in light of what Mr. Mica referred to as the pending
sequestration cliff here. That is why I am glad to be working
with Chairman Issa and his staff to develop the Federal
Information Technology Acquisition Reform Act, along with
Ranking Member Mr. Cummings, to enhance IT procurement policy.
Addressing Federal IT acquisition policy in a bipartisan
manner is precisely the type of important substantive work this
Committee should be conducting and I very much appreciate the
outreach and the willingness on both sides of the aisle to
listen and to refine this legislation to try to make sure we
get it right. When we are investing $81 billion every year in
Federal IT procurement, we have got to get it right, especially
as we look at fewer resources overall in the coming decade.
Mr. Chairman, I look forward to continuing to work with you
and your staff and I thank you very much for holding this
hearing.
Chairman Issa. I thank the gentleman.
Members will have seven days to submit opening statements
for the record.
We now welcome our panel of witnesses.
Mr. Richard Spires is Chief Information Officer at the
Department of Homeland Security and Chairman of the DHS Chief
Information Officer Council and Enterprise Architecture Board.
Now, that is a long title, but we welcome you back.
Ms. Cristina Chaplain is the Director of Acquisitions and
Sourcing Management at the General Accountability Office. Mr.
Daniel Gordon is the Associate Dean for Government Procurement
Law Studies at George Washington University. Mr. Stan Soloway
is President and CEO of Professional Services Council.
And Mr. Paul Misener is Vice President of Global Public
Policy for Amazon, previously mentioned as a place that we
could buy software off the shelf.
And with that, consistent with the rules of the Committee,
I would ask that you all rise to take the oath. And raise your
right arms.
Do you solemnly swear or affirm that the testimony you are
about to give will be the truth, the whole truth and nothing
but the trust?
[Witnesses respond in the affirmative.]
Chairman Issa. Let the record reflect that all witnesses
answered in the affirmative.
This is a fairly large panel. Some of you are returning
veterans, so you know the drill. Green light, yellow light, red
light. By the time it gets to red light, I hope you are saying
for the final time, and my final point is.
[Laughter.]
Chairman Issa. Mr. Spires?
WITNESS STATEMENTS
STATEMENT OF RICHARD A. SPIRES
Mr. Spires. Good morning. Chairman Issa, Ranking Member
Cummings and Members of the committee, thank you for the
opportunity to discuss how the Federal Government invests in
information technology to increase the efficiency and
effectiveness of our Government.
As a CIO of Homeland Security and the Vice Chair of the
Federal CIO Council, I speak from real world experience on the
challenge of delivering highly-effective IT across the Federal
Government. At DHS, we have made significant strides in IT in
four key areas.
First, we are rationalizing our IT infrastructure. So far,
we have closed 16 data centers as part of our data center
consolidation initiative, resulting in an average savings of 14
percent. We are aggressively expanding the use of cloud
computing across DHS by rolling out 11 cloud service offerings.
In addition, we have significantly improved our cyber security
posture through the established of inherited security controls
in our data centers.
Second, we are improving program management by instituting
a rigorous review process of our IT portfolio and implementing
a number of initiatives to improve oversight, more effectively
engage key stakeholders and ensure best practices are used in
running our programs.
Third, we are leveraging IT across DHS to support more
effective mission outcomes. Through the use of the DHS
enterprise architecture and the implementation of portfolio
governance, we are working to draw synergies from amongst DHS
components that improve efficiency and effectiveness, eliminate
system duplication and streamline processes.
And fourth, we are focusing on IT staff and talent
development. By establishing IT specific career paths, DHS can
more formally address how new workers can progress along a
technical or managerial career track. We are currently working
to leverage DHS developmental, mentoring and rotational
programs into this strategy.
Even with the successes outlined above, there are also
evolving and increasing expectations from mission customers and
external stakeholders. We need to, and we can, manage IT more
effectively.
I see three root causes that are barriers to having Federal
IT be on a par with leading private sector firms.
First, we must standardize our IT infrastructure. An agency
with a modern, homogenous infrastructure could save as much as
30 percent on its infrastructure costs, field applications more
quickly and less costly, and provide improved IT security.
Given the structure of agency budgets in organizations, it is
very difficult for an agency CIO to have the tools needed to
drive such standardization.
To address this root cause, I recommend we review the model
used by the Department of Veteran Affairs where the IT
organizations have been consolidated and consider its
applicability on a broader basis within the Federal Government.
Further, I recommend we implement an IT acquisition review
process in which all IT procurements must be reviewed by the
agency CIO. This will help ensure that IT procurements meet
architecture guidelines, are not duplicative and are properly
staffed.
As a second root cause, we must do more to develop and
retain the skills it takes to run and manage IT programs. The
common denominator for successful program execution is a solid
program management office. To support this, I recommend we
establish a program management center of excellence staffed by
detailees from agencies which would harness best practices,
tools, templates and training courses and drive the development
of Federal-wide capabilities that programs can leverage.
Third and finally, we must find ways to institutionalize
flexibility to implement IT best practices. Agencies
leaderships' need for speed and agility has far outstripped the
procurement and finance models in place in the Federal
Government today.
I recommend that we establish a Federal IT strategic
sourcing organization. This organization, again supported by
detailees from agencies, would be dedicated to IT's strategic
sourcing opportunities for Government-wide buying of IT
hardware, software and services. We can bolster that
organization through oversight provided by the newly-formed
Strategic Sourcing Leadership Council.
Finally, we need to reduce impediments to innovation by
more fully leveraging existing initiatives to include a digital
Government strategy and the use of such prize competitions to
reward vendor innovation in helping us solve Government
problems.
Mr. Chairman, I am serving as a CIO today because IT can so
meaningfully and measurably improve the mission and business
effectiveness of our Government.
Thank you for the opportunity to speak to you today and I
look forward to your questions.
[Prepared statement of Mr. Spires follows:]
[GRAPHIC] [TIFF OMITTED] 82274.001
[GRAPHIC] [TIFF OMITTED] 82274.002
[GRAPHIC] [TIFF OMITTED] 82274.003
[GRAPHIC] [TIFF OMITTED] 82274.004
[GRAPHIC] [TIFF OMITTED] 82274.005
[GRAPHIC] [TIFF OMITTED] 82274.006
[GRAPHIC] [TIFF OMITTED] 82274.007
Mr. Farenthold. [Presiding] Thank you, Mr. Spires. Right on
time.
We now go to the Director of Acquisition and Sourcing
Management of the GAO, Ms. Cristina Chaplain.
Ms. Chaplain.
STATEMENT OF CRISTINA CHAPLAIN
Ms. Chaplain. Thank you Mr. Chairman, Ranking Member
Cummings and Members of the Committee. Thank you for inviting
me today to discuss the proposed FITARA Act and how our best
practice work reflects that act.
Our best practice work provides a roadmap for overcoming
acquisition problems experienced by IT and any other
technology-intensive acquisitions such as weapons and space
programs. At the tactical level, we have identified the basic
ingredients for success on individual programs, such things as
defining requirements early on, providing realistic cost
estimates, and using prototypes to reduce risks.
At the strategic level, we have identified protocol
enablers for success such as having the right training and
support for program mangers and having the right visibility
over an investment portfolio and strategies that make tough
trade-off decisions based on cost benefits and risks.
FITARA emphasizes several of the enablers I have just
mentioned. It also emphasizes the use of strategic sourcing,
which is another enabler for generating procurement savings. I
want to discuss this just a little bit because it is important.
The Government is very far behind the private sector in this
regard.
As you know, strategic sourcing seeks to move an
organization away from numerous individual procurements to a
broader aggregate approach. Currently, Federal agencies act
more like unrelated medium-sized businesses and often rely on
hundreds of separate contracts for many commonly used items
with prices that widely vary, including IT.
Our work has shown that strategic sourcing has a potential
to generate 10 to 20 percent savings for procurement spending
and the companies that we studied strategically sourced the
vast majority of their procurement dollars. By contrast, four
large agencies we studied strategically sourced just 5 percent
of their procurement dollars taken together.
In addition, Federal agencies have been focused on
strategically sourcing less complex acquisitions, such things
as office supplies, telecommunications and delivery services.
They generally do not believe more complex services and goods
can be strategically sourced because of unique requirements,
among other reasons. However, the companies we have studied
have found ways to strategically source these types of items
and services.
Also, while some believe we have picked the low hanging
fruit for strategic sourcing and cannot go further in the
Federal arena, we have found pockets of success, notably with
DHS and the Defense Logistics Agencies. For example, in Fiscal
Year 2011, DHS had reported that it implemented 42 department-
wide initiatives that covered 270 products and services ranging
from software to professional and program management support
services. These efforts led to reported savings of $324
million.
My written statement does focus mostly on strategic
sourcing but I would like to emphasize that many of the other
leading practices we have identified over the years have not
taken root in the Federal arena. Short tenure of acquisition
leaders, for instance, still seems to be an issue as well as
the authority for program managers and, in this case the CIOs.
There are also those basic ingredients for success we do not
see fully taking hold yet, such things as defining requirements
before you start programs, realistically meeting costs and
providing good oversight.
In conclusion, best practices can be introduced into the
Government setting, but we know they do not always take hold.
What threatens tactics like strategic sourcing the most is a
lack of leadership, a lack of data and metrics, a desire to
maintain control, a lack of incentives and weak enforcement.
Reform sometimes end up adding new layers of oversight and
bureaucracy rather than streamlining and simplifying and for
this reason it is important that implementation be closely
monitored, that early successful adopters be recognized, that
incentives and disincentives be continually assessed and that
leaders be held accountable for success.
This concludes my statement. I am happy to answer any
questions you have.
[Prepared statement of Ms. Chaplain follows:]
[GRAPHIC] [TIFF OMITTED] 82274.008
[GRAPHIC] [TIFF OMITTED] 82274.009
[GRAPHIC] [TIFF OMITTED] 82274.010
[GRAPHIC] [TIFF OMITTED] 82274.011
[GRAPHIC] [TIFF OMITTED] 82274.012
[GRAPHIC] [TIFF OMITTED] 82274.013
[GRAPHIC] [TIFF OMITTED] 82274.014
[GRAPHIC] [TIFF OMITTED] 82274.015
[GRAPHIC] [TIFF OMITTED] 82274.016
[GRAPHIC] [TIFF OMITTED] 82274.017
[GRAPHIC] [TIFF OMITTED] 82274.018
[GRAPHIC] [TIFF OMITTED] 82274.019
[GRAPHIC] [TIFF OMITTED] 82274.020
[GRAPHIC] [TIFF OMITTED] 82274.021
[GRAPHIC] [TIFF OMITTED] 82274.022
[GRAPHIC] [TIFF OMITTED] 82274.023
Mr. Farenthold. Thank you very much, Ms. Chaplain. We will
get to the questions after all of the witnesses.
Our next testimony will be from the Honorable Daniel
Gordon. He is the Associate Dean for Government Procurement Law
Studies at the George Washington University School of Law and
the former Administrator, the Office of Federal Procurement
Policy with the OMB. Mr. Gordon?
STATEMENT OF DANIEL L. GORDON
Mr. Gordon. Mr. Chairman, Ranking Member Cummings, Members
of the Committee, good morning. I am grateful for the
opportunity to testify before you today regarding the reform of
Federal IT acquisition.
This is the first time that I am testifying before this
Committee not as a Federal employee but as the Associate Dean
for Government Procurement Law Studies at The George Washington
University Law School. As you know, GW Law's Government
Procurement Law Program has, for more than 50 years, been the
premiere venue for the studying and teaching of procurement law
in this Country. And I am pleased that we have both students
and alumns of our program in the room this morning.
Let me begin by commending you for focusing on improving
the way the Federal Government buys IT goods and services.
Despite the criticism and the obstacles you may face down the
road, I am confident that we can improve the way the Government
buys IT.
You are particularly to be commended for your willingness
to get input, what I think the Chairman referred to as generous
feedback, from the many and varied stakeholders in this complex
area.
We at GW Law School hosted a symposium about this very
draft bill last October 18th and we heard at that symposium the
range of views that you have heard in your hearings and your
other outreach. I hope as the bill moves forward you will
continue to listen to the stakeholders and I hope this will be
a genuinely bipartisan effort.
With respect to the bill, my written statement includes
comments on various provisions. I am happy to address them in
question time. Let me highlight a couple of points here.
First, strengthening the acquisition workforce of the
Federal Government. I applaud the draft bill for drawing
attention to the continuing need to strengthen and invest in
our Federal acquisition workforce such as the provisions on the
IT acquisition cadres and a more secure source of funding for
them.
It was striking to me that in last month's hearing before
this Committee, private sector witnesses talked about the
importance that they attach to demonstrating to their employees
how much they are valued. No successful company would treat its
employees the way Federal employees have been treated recently,
repeated pay freezes, threats of unpaid furlough days and
general disrespect, as if our employees were causing our
Nation's fiscal imbalances.
Second, reducing wasteful duplication in IT investment and
contracts. During my service as Administrator for Federal
Procurement Policy, I saw example after example of multiple
agencies, and sometimes multiple components within a single
agency, spending time and resources creating duplicative
contracts for the same goods or services.
It is for that reason that I am particularly supportive of
the draft bill's effort to support strategic sourcing and to
require that agencies establish a business case before they
issue a solicitation that would create a new contract for goods
or services already available under existing interagency
contracts. And for the same reason, I support the draft bill's
effort to increase the transparency of blanket purchase
agreements.
Apart from these comments on the draft bill's provisions,
allow me to briefly mention a couple of additional factors that
I think that you will want to keep in mind as you move forward.
First, there are limits to what legislation can do in this
area. The problems that plague large Federal IT projects, in
particular, are often the result of management weaknesses in
both acquisition planning and contract management. And they may
not lend themselves to improvement through legislation.
Second, the Federal Government should learn from
industries' practices but it cannot always copy them. We all
agree the Federal Government should be focused on low prices
and high quality, just like private companies. Unlike private
companies though, Federal agencies have to ensure competition,
transparency and small business participation that our laws
require and that our citizens expect from the Government.
In addition, Federal agencies face some unique obstacles.
As members of this Committee well know, we generally insist on
agencies using one year appropriations in their IT
acquisitions, a constraint that no private company has to deal
with. I will not go on and talk about the impact of continuing
resolutions and sequestration that is certainly an obstacle
private companies do not face.
In conclusion, and the final point, many of the challenges
before this Committee are genuinely difficult and it is best to
proceed with caution. Legislation can be a blunt instrument and
there is a risk that even the best intentioned legislation will
lead to unintended and undesirable consequences.
But in conclusion, let me again commend you for your work
in this important but challenging area and thank you for the
opportunity to appear before you today. I look forward to
questions.
Thank you.
[Prepared statement of Mr. Gordon follows:]
[GRAPHIC] [TIFF OMITTED] 82274.024
[GRAPHIC] [TIFF OMITTED] 82274.025
[GRAPHIC] [TIFF OMITTED] 82274.026
[GRAPHIC] [TIFF OMITTED] 82274.027
[GRAPHIC] [TIFF OMITTED] 82274.028
[GRAPHIC] [TIFF OMITTED] 82274.029
Mr. Farenthold. Mr. Gordon, thank you very much.
We will now go to our next witness, Mr. Stan Soloway. He is
the President and CEO of the Professional Services Council. Mr.
Soloway?
STATEMENT OF STAN SOLOWAY
Mr. Soloway. Mr. Chairman, Mr. Cummings, on behalf of the
360 member companies of the Professional Services Council and
their hundreds and thousands of employees across the Nation, we
want to thank you for the opportunity to share our thoughts
with you this morning.
The legislation before us is both timely and important. And
while we do have some concerns with the current draft, we
strongly support its focus and intent and look forward to
working with the Committee on further refinements.
Clearly, the time is right for a thorough review of the
progress that has been made, or not, and of the ways in which
we can rapidly and effectively ensure even greater progress in
the future to foster an environment that enables the Government
to access the best and most innovative solutions at the best
possible price while also enabling this critical industry to
continue to invest, innovate and improve its service to the
Government.
In today's environment of constrained resources, budget
instability and dynamic workforce changes, that challenge has
never been more difficult nor more important. This fact was
highlighted in our biennial Acquisition Policy Survey of dozens
of Federal Government acquisition officials who made eminently
clear their concern that the state of acquisition and the
acquisition workforce has not noticeably improved over the last
decade or more despite enormous investments of time and money.
And it is the foundation of the CEO Commission PSC formed
earlier this year which will be reporting in April its
perspectives on how to drive efficiency and innovation in a
time of resource constraints.
Hence, we are deeply committed in working with you and the
Committee on this important bill. As difficult as the
challenges before us might be, we also have a unique
opportunity to fundamentally transform how Government utilizes
technology and in so doing to dramatically improve Government
performance and efficiency.
With regard to the legislation, we strongly support the
direction to bolster the role and effectiveness of Federal CIOs
by providing them with greater budgetary and personnel
authorities. Similarly, we are very supportive of the data
center consolidation provisions and the creation of Assisted
Acquisition Centers of Excellence provided that the
requirements include adequate flexibility with regard to the
actual nature and structure of those centers. Of greatest
importance is ensuring that they each share the qualities and
capabilities that are the hallmarks of excellence and best
practices.
There are also several aspects of the bill we believe merit
additional attention in order to ensure the achievement of the
bill's stated objectives. Key among them is the treatment of
so-called commodity IT and the creation of a Commodity IT
Acquisition Center.
First and foremost, the very term commodity IT is fraught
with risk and must be used with great care. Contemporary
information technology offerings often involve myriad hardware,
software and services solutions, some of which are highly
complex, others of which are far simpler, more routine and more
static. It is essential that any discussion of commodity IT
include clear definitions and context so that this critical
distinction is adequately and fully accounted for in both
policy and strategy.
And while the legislation does mandate that such
definitions be developed by OMB, we believe that the
legislation itself should address these distinctions and make
clear the importance of avoiding a one-size-fits-all approach.
We are also concerned with the tendency of some to equate
commodity IT with commercial IT. While most commodity IT is
commercial, a great deal of commercial IT is anything but a
commodity. This distinction must also be very clear in the bill
and reflected in any strategy associated with strategic
sourcing or other approaches.
This is also where the issue of buying for value versus
price is so critical, which was alluded to by the Chairman in
his opening remarks. Today, across Government, we witness the
dominance of low-priced, technically-acceptable acquisition
strategies both in name and in practice. For commodities, this
might be appropriate.
For more complex requirements, clearly it is not.
Especially in a resource-constrained environment, it is more
incumbent than ever on the buyer to ensure that their
strategies are truly appropriate to their requirements and that
where real complexity and risk is involved, where continuous
improvement and innovation is called for, the best of the best
are selected and incentivized for long-term success.
We also believe that additional attention needs to be paid
to the issue of competition, the single most effective means by
which to drive costs down and performance up. One goal of the
legislation must be to expand the competitive ecosystem and to
preserve robust competition where it exists. This involves
carefully assessing unique practices and policies that serve as
barriers to entry as well as resisting efforts to significantly
roll back current statute in ways that could cause current
market participants to exit.
So, it also means that we need to avoid overly limiting
contract options. While the proliferation of multiple award
vehicles has certainly created overlap and may have gone too
far, it is also important to not allow that pendulum to swing
back too far in the other direction. It is to the advantage of
the Government to have multiple competitive contract vehicles
that can be tapped for its IT and other requirements.
This is the core of our concern with the creation of a
single Commodity IT Center. That concern is exacerbated by the
proposal to give the center both policy-making and purchase
authority. Doing so, we believe, could create a conflict of
interest that is actually at odds with the Government's best
interests.
Finally, we greatly appreciate the attention paid to the
human capital dimension but believe more could be done to
bolster the ranks of the acquisition and technology workforces
through this legislation. We face a series of very distinct but
connected human capital challenges and skills gaps that must be
addressed holistically to include new strategies for workforce
recruitment, development and training. Long-term success will
simply not be possible without a well-resourced creatively and
effectively developed and supported Federal acquisition and
technology workforce.
Whatever we have been doing for the last decade has clearly
not been enough and this is a challenge we can no longer
ignore.
Mr. Chairman, Mr. Cummings, that concludes my oral
statement and I look forward to your questions.
[Prepared statement of Mr. Soloway follows:]
[GRAPHIC] [TIFF OMITTED] 82274.030
[GRAPHIC] [TIFF OMITTED] 82274.031
[GRAPHIC] [TIFF OMITTED] 82274.032
[GRAPHIC] [TIFF OMITTED] 82274.033
[GRAPHIC] [TIFF OMITTED] 82274.034
[GRAPHIC] [TIFF OMITTED] 82274.035
[GRAPHIC] [TIFF OMITTED] 82274.036
[GRAPHIC] [TIFF OMITTED] 82274.037
[GRAPHIC] [TIFF OMITTED] 82274.038
Chairman Issa. [Presiding] Mr. Misener.
STATEMENT OF PAUL MISENER
Mr. Misener. Good morning, Mr. Chairman, Mr. Cummings and
Members of the Committee. Thank you very much for inviting me
to testify today on behalf of Amazon.com and our customers on
the reforms proposed to the draft FITARA legislation.
Amazon opened on the worldwide web in July, 1995 and after
a decade of building and running a highly-scalable web
application known as Amazon.com, we embarked on a mission of
serving a new customer segment, including businesses and
Government agencies with a cloud computing business called
Amazon Web Services or AWS.
Today, AWS provides a highly-scalable, reliable, secure and
low-cost infrastructure platform in the cloud that powers
hundreds of thousands of enterprise, Government, education and
start-up organizations. Customers include over 300 Government
agencies. Notably, Amazon.com, the largest on-line retailer in
the world, has itself adopted cloud computing services provided
by AWS to enable rapid innovation and growth, to transform how
we deliver our services to customers and to lower our IT costs
substantially.
One way to think about cloud computing is that, instead of
buying, owning and maintaining data centers or servers,
Government agencies, business and developers can acquire
technology resources such as compute power and storage on an
as-needed basis and dispose of it when it no longer is needed.
The benefits of cloud computing to its users are first,
users pay only for what IT they actually consume and only when
they consume it. Second, expensive are lower than if the user
self-provided the IT. Third, users do not need to guess their
capacity needs. Fourth, virtually unlimited capacity is
available to users within minutes. And fifth, cloud computing
allows the users scarce technical talent without focus on its
core mission, not on maintaining infrastructure to support it.
Cloud users who enjoy these benefits include Federal
Government users. Amazon supports Federal IT acquisition
reform. Given the benefits I have just described, Amazon
believes the principle aim of Federal IT acquisition reform
legislation should be to facilitate Federal Government
acquisition of cloud computing services.
Amazon also generally supports the aims of the FITARA draft
released last fall. Although we are not experts in several of
the areas covered by the FITARA draft, we do know about cloud
computing and serving public sector customers. So, here we
offer our views on where the draft excels with respect to cloud
computing and where we believe it could be improved.
Title I of the FITARA draft would give Federal agency CIOs
more authority and budget flexibility. Amazon supports this
idea and believes it would lead to the adoption of more
efficient solutions including cloud computing by Federal
agencies. One area where CIOs should be given more authority
and flexibility is with respect to spending models,
specifically capital expenditures or CAPEX versus operating
expenditures, OPEX.
Title II of the draft already is strong but it should be
strengthened to help Federal agencies provide Government
services more efficiently. In Section 203, we recommend
including a direct link between the required plan for
implementation of the Federal Data Center Optimization
Initiative and OMB's Cloud First policy.
In Section 204, FITARA should explicitly clarify that using
commercial cloud services is an equally valid is not preferred
way to comply with the data center consolidation mandates
because commercial service providers can make available more
compute power and storage for a fraction of the cost based on
what agencies actually use.
Section 214 recognizes as a Sense of Congress the overall
importance of cloud to Federal IT acquisition reform. However,
without changes to the budget and acquisition process, the
benefits of cloud computing may not be fully recognized by the
Federal Government as soon as they could be.
We support the development of Assisted Acquisition Centers
of Excellence under Section 302. We believe that these centers
could be well-positioned to examine and incorporate innovative
approaches including pay as you go utility price models to
acquire and deploy cloud computing services.
In closing, Mr. Chairman, I would like to thank this
Committee for working with the IT industry and other
stakeholders as this legislation is developed and formally
introduced. Amazon believes that the Federal Government, on
behalf of the people it serves, would benefit greatly from
expanded use if cloud computing. With FITARA, our Nation has an
opportunity to eliminate duplication and waste but also, with
the changes we have suggested today, to accelerate the adoption
of technologies and practices that transfer how the Government
performs its functions.
We look forward to continuing to work with you and your
Committee and thank you again for inviting me to testify. I
look forward to your questions.
[Prepared statement of Mr. Misener follows:]
[GRAPHIC] [TIFF OMITTED] 82274.039
[GRAPHIC] [TIFF OMITTED] 82274.040
[GRAPHIC] [TIFF OMITTED] 82274.041
[GRAPHIC] [TIFF OMITTED] 82274.042
[GRAPHIC] [TIFF OMITTED] 82274.043
[GRAPHIC] [TIFF OMITTED] 82274.044
Chairman Issa. I hope you do. I will now recognize myself
with some short questions.
Mr. Spires, how many CIOs are there in the network of CIOs
of the Federal Government?
Mr. Spires. I think you recognized earlier, you said
hundreds of CIOs in the Federal Government.
Chairman Issa. Well, the reason I did was because when we
asked the Office of Management and Budget how many there were,
although we have estimates and we have used numbers, OMB said
OMB does not have a role in nor does it manage the direct
hiring or titling of positions for specific agencies. In other
words, you can make as many as you want. It is an agency
decision and they can have a lot.
Now, you had a council of people with the CIO title. How
many do you have within your council?
Mr. Spires. There are 13 of us, sir.
Chairman Issa. And, as the chief, how do you feel about
having 13 titles none of whom have budget authority? Is that
really, is that manageable to have to create a council of
chiefs and none of you in the room have direct and absolute
budget authority?
Mr. Spires. It is a true statement that none of us have
absolute and direct budget authority. If I could frame what I
see as the issue around this, we find ourselves in a position,
and it really is a structure of the way Government is funded,
right, so that budgets, like at Department of Homeland
Security, are appropriated at the component level, like to FEMA
and to CBP. And so they control those budgets.
Chairman Issa. Well, let me stop you for a second.
Mr. Spires. Sure.
Chairman Issa. I completely concur that the dysfunctional
way we do things down the hall at Appropriations and have done
it, which is a chicken or the egg, Government formed this way,
appropriators formed to match Government, Government then
continued to conform to a system that had been established. So,
as we have gone from two or three secretaries that George
Washington had to a plethora of them and more being asked for,
and then sub agencies, we have created, everybody gets a little
pot of money. That is pretty much from George Washington until
now how we got here, right?
The question for you is, should money be allocated to IT
and be reprogrammable and spendable in a way that although you
anticipate an awful lot, there is accountability to a major
block for that money being spent, not spent, converged into a
common pool of money to do a job better, or, in fact, request
reprogramming to use an appropriator term, but have a single
point of accountability that ultimately has plenty of little
chiefs but somebody in a major agency can say I have got $6
billion and I will be darned if I will waste it.
Mr. Spires. Well, by the way, that is the way I feel every
day when I get up, sir. I have got $6 billion and I do not want
to waste a penny of it.
Now, that being said, I concur with the concept that I need
to, as the CIO as Homeland Security, drive real efficiencies.
My first thing I talked about as what we need to fix is this
issue of standardizing IT infrastructure through things like
cloud computing. We need to do that to drive the efficiencies,
okay? So, the model I am espousing, however that is done, all
right, does that need to be full budget authority? That is one
model and I think you should look at that model. There may be
other ways to do it. But I need to be able to drive that set of
efficiencies one way or another.
Chairman Issa. I appreciate that and we will get back to
you on that.
Ms. Chaplain, not to take the absolute of my explanation,
but if we continue the way we are with pockets of money spread
into hundreds or perhaps thousands of little fundings, don't we
almost guaranty that the big picture, the big solutions, the
big let us converge on the cloud and save money, just simply
will not happen?
Ms. Chaplain. Yes, and I think many, many studies point to
the issue of diffuse authority, most recently in DOD, and I
think if you do not have a single point of accountability,
someone who actually can stop projects and has good visibility
over the portfolio that can act on that, you do have a problem
that is going to remain.
Chairman Issa. Any other weigh-ins from the other
stakeholders here? Let me follow up with another question. I am
going to go to Amazon. And thank you for saying you look
forward to my questions.
If there are five Federal entities and they decide that
they want to all be on a, and let us just assume they are on
Microsoft Exchange, and they want to all be together in one
cloud and have all the bandwidth necessary or all the DADS and
other resources necessary that they had, but be on one
convergence, how long does that take at Amazon? Do you have an
idea?
Mr. Misener. Well, thank you, Mr. Chairman, and I do look
forward to the questions like this.
Our experience has been that we can move very quickly. That
is part of the beauty of cloud. You can ramp up and ramp down
as quickly as you need. And so, it can be, we had an experience
with a Federal agency who had a mission and knew that they
could accomplish it in the cloud about 18 months faster than
doing it on their own and yet they were not able to make
anything but a capital expenditure.
So, they ended up having to wait over a year, they spent $1
million on it, when it could have cost them about $120,000 a
year instead.
Chairman Issa. Well, let me ask two questions that I know
the answer to so I can yield time to the other side now. One
is, is it not true you sell time essentially and processing by
the minute?
Mr. Misener. Yes.
Chairman Issa. That you buy everything incrementally so
that you buy, you pay for only what you buy?
Ms. Misener. That is correct.
Chairman Issa. And is it not true that a typical company,
if 10 of us had our own exchanges that we could all be in the
cloud in hours at the minimum and days at the longest for a
standard off-the-shelf product like Microsoft Exchange?
Mr. Misener. Well, it is minutes if you are a small
enterprise. So, you can get on the cloud very quickly. It
really is measured in that. And obviously more complex needs
from enterprises or Government agencies, we want to be able to
work directly if necessary with those customers to ensure that
they get what they want.
But again, certainly it depends on the scale, but we are
faster.
Chairman Issa. Okay. And then I have an exit question, I
have got to go to the gentleman from, I think Massachusetts,
next. Is it not true that there are many other companies
somewhat like Amazon, that we did not bring you here as the
only one that could do it but that, in fact, whether it is
Rackspace or lots of other companies, there are companies who
provide similar services and there are no barriers to entry so
you could have 100 bids of people who could do various
Government cloud transfers?
Mr. Misener. Correct. And we are enthusiastic believers in
the cloud, both as a provider and as a user of it.
Chairman Issa. Thank you.
We now go to the gentleman from Massachusetts.
Mr. Tierney. Thank you. Let me just pick up from there. Are
there any security concerns or risks that we ought to be
considering in talking about encouraging people to use the
cloud?
Mr. Misener. Security is enabled by cloud. We are, because
of our scale, we are able to dedicate more resources and invest
more in policing and getting out ahead of threats in a way that
smaller enterprises just cannot. And so, it actually is an
enabler of security.
Mr. Tierney. So, the Administration is already sort of
heading in that direction and encouraging people on that. Do
you think that putting incentives into this bill is a positive
step or a necessary step?
Mr. Misener. Well, I think it is more permissions. The CIOs
need the permission to be able to get cloud services. They need
the permission to be able to go to an operating expense model
rather than a capital expenditure model. I cannot tell you how
many times we have had circumstances where the CIO wants to do
it, but cannot, or believes that he or she cannot. That is a
real impediment.
The theme that we see is that the CIOs get it. They
understand what is going on. They understand what is needed.
They understand that it can be as secure as they want it to be.
But they are not allowed, because of procurement policies, to
go and get it.
Mr. Tierney. Do you think the bill goes far enough?
Mr. Misener. No.
Mr. Tierney. What would you do, in addition?
Mr. Misener. I would specify in many places that cloud
computing is something to be considered as an option, not
forced upon CIOs, but at least give them the option to do it
and make sure they have the flexibility to spend money as an
operating expense, not just as a capital expense.
Mr. Tierney. Can you give us an example of something that
Amazon utilizes as a best practice that is not captured in this
bill but you think it might be beneficial to the Federal
Government?
Mr. Misener. Well, we pride ourselves on doing our very
best to serve our customers in whatever their needs are. So,
for example, we are happy to work through integrators, large,
our partners, to serve Federal Government agencies. We are also
happy to work directly with the Federal Government agencies if
they so choose.
And so, we try to be as flexible as our customer needs
demand. We have helped them get FISMA approvals, for example,
when they need it. And these sorts of customer-centric
approaches are ones that say that, you tell us what you need,
and we will provide it.
Mr. Tierney. I have no further questions, Mr. Chairman.
Chairman Issa. Would the gentleman yield for a second?
Mr. Tierney. I will yield. Certainly.
Chairman Issa. Wouldn't you always also characterize that
when you are in the cloud, by definition, if you are doing a
hundred different agencies and there is a patch, an upgrade, a
security change that typically the integrator of many, many
stations is going to be able to do that for all the customers
in real time much quicker than you would do at a typical
offsite where they would have to learn about it and then they
have to, the IT people have to go in and do it on servers
locally?
Mr. Misener. Yes, Mr. Chairman. The countermeasures that we
can deploy we can deploy globally in an instant. That is why we
are able to keep out in front of the threats just by virtue of
scale. It is not because we are more virtuous but the scale
that we have allows us to take care of those threats in
advance.
Chairman Issa. Thank you. I thank the gentleman.
Mr. Tierney. May I reclaim my time for a second? I just
want to yield it to Mr. Connolly who wants to make a statement.
Mr. Connolly. I thank my colleague. Actually, I did not
want to make a statement. I wanted to use a little bit of extra
time to get some more feedback.
Chairman Issa. The gentleman is recognized for a total of
seven minutes. Let us just get it all done at once.
Mr. Connolly. Thank you, Mr. Chairman. Thank you very much.
Chairman Issa. Go ahead.
Mr. Connolly. Mr. Gordon, the bill, the draft bill we are
talking about addresses open source, open source software, and
it requires OMB to issue guidelines on its use and
collaborative development. Do you think that would be, would
have been a useful provision, if it had been in law when you
had your previous position?
Mr. Gordon. Thank you, Mr. Connolly. It is very important
for there to be technology neutrality in this area. And I
think, I am not an IT expert and my colleagues on this panel
may have more to add on this, but my sense is that we need to
be very careful to keep competition open and to be
technologically neutral. If that is the intent of the bill's
language, I am very supportive of it and I think it would be
helpful.
Mr. Connolly. Could it save money, Mr. Spires?
Mr. Spires. Oh, absolutely, sir. In fact, we are using open
source in numerous ways now within DHS and we look to use more
of it into the future.
Mr. Connolly. Is there a differentiation of pricing in
various contracts within the Federal family on off-the-shelf
and open source?
Mr. Spires. I mean, back to what Mr. Gordon was referring
to. We want flexibility. We want to do what is in the best
interests of the taxpayer in this regard. And we will be
assessing all solutions and more and more we are looking at
open source solutions to meet our needs.
Mr. Connolly. Do you think that the Government could and
should rely more often on open source software when it buys new
products?
Mr. Spires. I will go back to we need to do that
assessment. I am not suggesting that we have an open source
first policy. I think we have to look at both open source and
standard products and what best meets the need for the Federal
Government. But with the maturity of where open source is
today, we can use it in mission operations spaces in a secure
manner.
Mr. Connolly. Mr. Soloway, industry's point of view about
that?
Mr. Soloway. I think we are all in alignment on the basic
question of open source and the needed flexibility. If I might
just go back to a point that was made a moment ago, the
discussion of cloud computing and the role of cloud, I would
offer a couple of contextual comments.
Number one, I do not think there is any disagreement about
the cloud. I think there is still inconsistency in the agencies
as to what they define as the kind of cloud they want to go
into, whether it is their own, whether it is a broader
commercial offering, and I think that issue is one that has not
yet sunk in in the National security environment. There is
still a lot of discussion and debate. So, there is a cultural
issue that needs to be addressed there.
The second point I would make is, and, Mr. Chairman, you
made this comment earlier about the access to the commercial
base and commercial best practices, even as we talk about that
in this hearing, we are seeing a stark pulling back by many
agencies of Government from commercial business practices on
the acquisition side.
The Department of Defense has tried for two years in a row
to dramatically change the definition of a commercial item or
service which, in fact, would have taken Amazon pretty much out
of the Federal space because I discussed it with them and
others who came in as a result of some of the reforms put in
place by Clinger-Cohen and earlier legislation.
So, we need to align the goals of our technology and IT
policy with the acquisition policies and practices we expect
and demand. One can have tremendous transparency and
accountability and still use commercial best practices. But,
unfortunately, we see a disconnect there between the
acquisition and technology communities that I think we need to
overcome.
Mr. Connolly. I guess by implication in terms of what you
just said, you do not feel that the language in the draft bill
goes far enough in that respect?
Mr. Soloway. No, I do not think, I think the language in
the draft bill addresses the basic question. As I said in our
testimony, I think there is more definitional context that is
needed. I think there are some risks to the term commodity IT
because it tends to be overused when it is, something is or is
not a commodity. We are seeing buying practices across
Government that assume everything is a commodity, which is not
the case. So, some more context and definitional support, I
think, would be important.
But also going back to Mr. Spires' comment, maybe the most
important thing would be substantially enhancing the focus on
the workforce that the bill addresses. As I said, our
Acquisition Policy Survey was stunning this year in that we had
more than four dozen Federal acquisition leaders say to us,
things are just not any better than they were a decade ago.
We have a huge, huge problem. We do not support and empower
the workforce. And, frankly, I think we could make an argument
that we probably do not develop, train and advance them in the
proper way. And so perhaps a fundamental rethinking to the
point Mr. Spires talked about with the Program Management
Center of Excellence gives you an opportunity on the civilian
side to do something that has never been done before.
What does program management mean? What kind of workforce
of the future do we want and need and how do we best develop
them? If you go to best commercial practices, they do not look
anything like the way we develop our acquisition community in
the Federal Government.
Mr. Connolly. Yes. I think maybe we do need to beef up the
people part, the personnel part, of the draft legislation. I
take your point very much. I know when I was in the private
sector we were always experiencing the good, the bad and the
ugly in terms of skill level in managing large, complex IT
contracts.
Mr. Soloway. One of the stunning statistics that is
relevant to this bill, and it is in the written testimony, is
as much as we talk about the graying of the Federal workforce
and having four times as many people over 50 as under 30, in
the IT workforce in Government it is dramatically worse.
According to the Office of Personnel Management, we have seven
times as many people over 50 as under 30 in the IT workforce.
Mr. Connolly. Careful about that.
[Laughter.]
Mr. Soloway. Well, I am of that same age, sir.
Mr. Connolly. Those are Renaissance men and women.
[Laughter.]
Mr. Soloway. The point being, of course, that it is the
diametric opposite of what you see in the commercial space.
Mr. Connolly. Yes. In my last one minute and 28 seconds,
Mr. Gordon, Mr. Spires talked about, and the Chairman laid out,
sort of the multiplicity of CIOs and respective areas of
responsibility. It is so diffuse as to mean there is no really
one locus of responsibility.
Do you think the bill as currently drafted adequately
addresses that and gives the proper authority to a person, a
point person, in each Federal agency and if not, how can we
improve on it?
Mr. Gordon. I think the bill is commendable in trying to
focus on having a person on the CIO side of the house. The only
points of caution I would add for consideration as you go
forward, and this may be more report language than statutory
language, is that you do not want the CIO to be a bottleneck.
You want a high level person to make high level decisions. You
do not want every small IT decision to be sitting on her or his
desk to get decided. That is one thing.
And a second thing, something that I have been worrying a
lot about over the last 10 years, there is a risk of imbalance
between the contracting workforce and the IT workforce. If you
give too much power to the IT workforce and exclude the
contracting workforce, you are going to lose the advocates for
small businesses, the advocates for competition, following the
FAR. That is why I have always been in favor of integrated
teams with clear leadership. Thank you.
Mr. Connolly. Mr. Chairman, my time is up. Would you
indulge Mr. Spires to be able to answer that question?
Chairman Issa. Absolutely.
Mr. Connolly. I thank the Chair.
Chairman Issa. Thank you, sir.
Mr. Spires. A couple of points regarding this. Under the
structure that I think would be best for larger departments and
agencies, the central CIO, the individual in my role, does have
that high level view but is also driving those enterprise
capabilities that are leverageable then by all. And we talked a
lot about cloud computing. I am a huge believer in it. We have
11 cloud-based services. I serve on the JAB at FedRAMP. That, I
think, can be transformational to deal with some of the
security issues that were raised.
So, the notion then is once we have that infrastructure
layer at an enterprise level standardized and modern, then the
individuals within my components, like FEMA, they can focus on
that value add, what is the functionality, how do we help the
mission deliver more effectively. What we have right now is too
many people out on the edge worried about infrastructure,
worried about things they should not be worrying about. I
yield.
Chairman Issa. Thank you. And now we go to the very young
but prematurely gentleman from Michigan, Mr. Walberg.
Mr. Walberg. That is probably the most unusual introduction
I have had.
[Laughter.]
Chairman Issa. And I want you to live up to that youth,
young, you now, you are not over 50 yet, so it is a lie on your
birth certificate.
Mr. Walberg. Just keep feeding me good chocolates and nuts.
That will work fine.
Mr. Spires, I hesitate in a sense talking about a
congressional budget cycle because I am not sure if one of the
Houses understands there is a budget cycle.
[Laughter.]
Mr. Walberg. But in any case, what impact does the
Congressional budget cycle have on IT redundancies and wasteful
spending?
Mr. Spires. Well, it certainly makes it difficult at a
program level, this notion, and Mr. Gordon alluded to it, of
having one year funding, it really does make it very difficult
to do good planning. And then when you get into things like
continuing resolutions, and we are jammed up trying to actually
issue procurements and complete procurements in a very short
time frame near the end of a fiscal year, those things are just
not best practice management or IT best practice. So I would
look for more flexibility.
Mr. Walberg. What are those flexibilities?
Mr. Spires. Well, I mean, multi-year funding helps us and
we do have some of that in certain instances so that we can, I
mean, even though we move to more agile programs and we are
getting releases out in four to six months on many of our
programs, that does not mean we are going to complete the whole
thing within one year. I mean, many of these are complex
systems that take multiple releases. And so we need the kind of
time frame to do the right kind of planning.
And I also think more portfolio types of budgeting so that
we have more flexibility. If we are in a cloud-based
environment like we have development and test as a service and
we can turn out product sometimes, I am saying simpler
applications, within a matter of a couple of months, that does
not fit with any Government budget cycle. But we need to have
that kind of flexibility.
So, if you will, funding us by a portfolio, an area. And
then on the flip side what we owe you back is real
transparency. What are we doing, how are we oversighting that,
how is the progression going, what decisions did we make and
how we made those decisions to allocate those funds, we owe you
that transparency.
Mr. Walberg. And an end zone that you ultimately get to as
well.
Mr. Spires. That is true, sir. I agree. What is our
objective, why do we need that portfolio money and what are we
trying to achieve with it? That is fair. Very fair.
Mr. Walberg. Let me follow up. Our legislation provides
CIOs with both a broader budget authority as well as more
flexible use of revolving and capital working funds. Is that
the right approach?
Mr. Spires. I think it goes back to the Chairman's
discussion around the budget authorities. One way to do this is
through those types of revolving funds, working capital funds.
We have such a fund within DHS that we use to fund enterprise
IT. I will say it is somewhat cumbersome but it does work. And
so, if you are not going to, it is way at least to get the
funds together.
Although I will tell you, even in that kind of model, one
of the problems that I have in trying to drive enterprise
services is that it might be good for all of DHS, but if it is
not good for a particular component, they are not going to play
ball with you well. They are not going to want to do that. And
this is a discussion I have many times with the CIO. I am
talking to the CFO of that component. I am even talking to the
head of that component because I am trying to optimize and
provide, if you will, enterprise capabilities across the
enterprise. So, that is an issue that we deal with by not
having that consolidated funding for IT.
Mr. Walberg. Thank you. Mr. Gordon, in your testimony, you
raised the concerns that there are limits to what legislation
can accomplish. What are those limits?
Mr. Gordon. Thank you, sir. I would, it may be worth
thinking of IT acquisition as divided into two different types,
very big projects and then purchases of small things, hardware,
software, software licenses. The very big projects in many ways
are more like DOD's major weapons systems. The challenges we
face are acquisition planning, very tough to legislate
acquisition planning, contract management, a tough area to
legislate. The idea of a CIO and strengthening the CIO does go
to large projects and may be helpful. But much of what I see as
positive in the bill is actually relevant to those smaller
purchases, the strategic sourcing and the other areas.
Mr. Walberg. Does our bill run afoul of those concerns?
Mr. Gordon. No, not at all, sir. It is just that the bill
does not, and it does not need to, distinguish between big
projects and the small purchases or relatively small purchases.
They are just different issues and the bill actually includes
some positive things with respect to both. I do not see
problems with respect to either one on a large scale in any
event.
Mr. Walberg. Okay. You mentioned in your testimony that
Government can learn from industries best practices but cannot
copy them. Can you elaborate on that in five seconds?
[Laughter.]
Mr. Walberg. Take a little time.
Mr. Gordon. Sure. There are all sorts of things that
industry can do that we cannot do in the Federal Government.
You have heard about the appropriations problem, the
competition issue. I will say, though, that I think that the
Government has more flexibility in its procurement system
today. In fact, I did not quite understand Mr. Misener's
reference to procurement policy getting in the way of shifting
to the cloud. I think we already have a lot of flexibility
under our procurement system.
We do have to worry about things like small business
participation, like transparency, that the private sector does
not need to worry about. But overall, I think our procurement
system can succeed and this bill is pushing us, I think, in a
helpful direction.
Mr. Walberg. Thank you. And thank you, Mr. Chairman.
Chairman Issa. Thank you. As I go to the Ranking Member,
Mr. Gordon, if I could summarize what you said? We cannot
legislate out stupidity.
[Laugher.]
Mr. Gordon. I do not think I actually used those words.
[Laughter.]
Mr. Gordon. But good management, as you know from your
experience before you came to Congress, sir, good management is
something that you just cannot do by legislation.
Chairman Issa. And as we go to the Ranking Member, that is
the point and the reason that we have to invest in our Federal
workforce every single day.
I recognize the Ranking Member.
Mr. Cummings. Mr. Soloway, you said in your written
testimony, and I quote, long-term success is simply not
possible without a well-resourced, creatively and effectively
developed and strongly supported Federal acquisition and
technology workforce.
Do you believe that making investments in the acquisition
workforce now will pay off with cost savings in the long term?
Mr. Soloway. Absolutely, if the investments are properly
targeted and made. I think we have spent, over the last decade
or more, a tremendous amount of money trying to develop the
acquisition workforce. When I was in the Defense Department in
the 1990s, the Defense Acquisition University was part of my
portfolio. I had a $100 million budget for acquisition
training.
The question I think that needs to be asked is similar to
the question the Chairman has asked with regard to the
foundation for this bill. It has been 17 years since Clinger-
Cohen. Why are things not better? It has been 20 years since
the Federal Acquisition Reform Act. Why is our acquisition
workforce still so beat down, under resourced and, frankly,
under empowered. What we see on the acquisition side, this may
be the dichotomy between what Mr. Gordon and Mr. Misener are
seeing, it is not a matter of policy, it is workforce that is
not incentivized to use critical thinking skills, to take some
reasonable element of risk to know that their leadership will
support them if they make a mistake or things go south which
they inevitably do for reasons having nothing to do with what
they did.
Mr. Cummings. Wait, wait, wait. So it is not about being
properly trained? Is that what you are saying?
Mr. Soloway. No, I think that we have not necessarily done
the right kind of training. I think there are gaps in the
training. I think there are gaps in the degree to which we
empower that workforce and support them.
Mr. Cummings. Yes, I tell the story that when I was
Chairman of the Coast Guard Subcommittee of the Transportation
Committee, we saw where because the acquisition people were not
properly trained, I mean we literally, literally, were buying
boats that did not float. I mean, we lost hundreds of millions
of dollars under this Deepwater Program. And they just
testified yesterday in Transportation that, because of the
changes we made, they now are on sound footing.
But they literally had to bring in a force, they had to
work with the Navy, to upgrade their people, to teach their
people how to do acquisition. And I do not think a lot of
people realize how important acquisition personnel can be.
Mr. Soloway. If I could just share with you? First of all,
Deepwater is a great example.
Mr. Cummings. You are familiar with it?
Mr. Soloway. Very much so. And when I was in the Defense
Department, I got a call from the GAO wanting to know what we
thought of Deepwater and my response was it depends on the
nature and quality and skills of the people that are there to
manage it. It is not necessarily the strategy that was wrong or
correct, it is a people issue.
But I think that it is worth rethinking how we develop our
workforce, not just how much money, but what we are trying to
train them to. We are talking here about commercial best
practices. We are talking about asking them to make tough,
complex business decisions. Yet, if you really look at the
training that we do, there is a stark lack of business training
involved in it. It is more about the rules of the Federal
Acquisition Regulation, which are important, but that does not
necessarily translate into then really thinking in a critical
sense how do I apply those rules in different circumstances to
come up with smart business decisions.
Mr. Cummings. And I guess that goes to your point a little
bit earlier, when you talked about, I cannot remember your
exact words, but you said something about, sometimes folks are
looking at best price but not necessarily looking at quality.
And sometimes the price is nice but, in the long run, you are
not really saving because you are not purchasing wisely and
looking at the long run. Would that be part of the kind of
training you are talking about?
Mr. Soloway. Absolutely. And part of what the workforce is
encouraged to do, and this is where I differ a little bit with
Mr. Gordon, I think that where the bill can help that issue is
in the definitions of commodities versus more complex solutions
because the way you approach the business relationship is very
different. I am not sure there is enough explicit distinction
there. But we are seeing that trend, Mr. Cummings, across the
Government. Very complex requirements.
And there is in the acquisition requirements a term called
low price technically acceptable and what that says is anybody
who is minimally acceptable submits a bid and the lowest price
automatically has to win. That does not give you any
flexibility to say well, if I spent 3 percent more over here, I
got a little bit better performance or a better history or what
have you.
So, a low price approach to complex solutions does not make
sense. But, unfortunately, that is now what the workforce sort
of thinks that they are expected to do. And that all comes back
to training and, in a big way, comes back to leadership.
Mr. Cummings. Mr. Spires, these upcoming furloughs, does
that affect you? Are you concerned about that? I have heard the
Secretary talk about the Department overall.
Mr. Spires. I do not want to talk for the Secretary. But of
course we are concerned about that, sir.
Mr. Cummings. I am talking with regard to this particular
issue.
Mr. Spires. For ourselves, here, and we are in a position
to keep our mission critical systems operational.
Can I go back and just comment, please, on this whole issue
of acquisition workforce and the like?
I would rather use the term for large, complex development
programs or IT programs, I use the term program management
because one, I come from the private sector and that is what we
used, but two, I want to make that distinction. I have reviewed
hundreds of programs in the Federal Government over my eight
years of service in this Government, and many in the private
sector, and I have always found that it is the competency of
those that are running the program and how they are doing it is
the determining factor for success.
And so, I will take exception a little bit to Mr. Gordon
that focus on contract is important, but you have got to be
able to run a program and a contract vehicle or contract
vehicles is a part of the program. And if you focus on the
program, what is important there first, that is where you have
got to start. That is how, when I evaluate programs I am always
talking about that first. Do we have the right skill sets to be
able to effectively run this program?
Mr. Cummings. Thank you, Mr. Chairman.
Chairman Issa. Thank you.
We now go to the gentleman from Florida, Mr. Mica.
Mr. Mica. Thank you. An interesting discussion. A couple of
comments.
Mr. Cummings was talking about the Coast Guard and
Deepwater and, having followed that pretty closely, some of
the, I guess the issues that we have to deal with is do we have
the authority and part of this bill is trying to make certain
that we have the authority. Some of you have said we do have
the authority. Then the next thing would be the skill sets or
the management, the administration of the program.
I noticed, just to reminisce a second on Deepwater, I
looked at that, and the Coast Guard is a relatively small
agency and they got into building these they call them National
Security-sized Cutters which they did not have the in-house
expertise to do. There was a whole host of issues there, I
found. They could not first retain the personnel to do that,
they pay so low. The Coast Guard are paid just a fraction of
what some of the Federal bureaucrats are.
And then, did you want to create an agency which was going
to build a half a dozen of these ships with this massive thing
that they, that the United States Navy was having difficulty
acquiring the skills sets and personnel.
So, do you all think there is enough authority in the bill
as revised? You had some good, well, you gave some specifics.
Rarely do we have any anybody who actually comes up with
specific legislative remedies. So, we have yours. Does anyone
else have any specifics?
Mr. Soloway. Mr. Mica, I would like to suggest, and this
has occurred to me as we have listened to the testimony this
morning, that Mr. Spires' comment around program management, I,
along with some Federal CIOs and others several years ago
looked at this issue, three or four years ago. And I am
wondering if the bill, if Mr. Spires' objectives, which I think
are correct in terms of the program management function and
capability, could not be strengthened in terms of identifying
and defining a true program management career field on the
civilian side.
We have people in the civilian agencies who have some
program management skills but it is a very roughly defined, and
not clearly defined.
Mr. Mica. Well, yes. Are you talking about for CIOs and
other officials?
Mr. Soloway. I am talking, I am sorry, sir, I did not mean
to interrupt. If you look at the Defense Department, not that
all the Defense Department programs are successful, but they do
have a very clearly defined program management skill workforce
with very clear training and development requirements. That it
still relatively nascent in the civilian sector and I think to
Mr. Spires point, perhaps one of the things in the bill is to
help define that and advance that objective. Because that is
where it all comes together at the end of the day, is through
program management and the leadership of the team.
Mr. Spires. Picking up on that, sir, I recommended this
idea of the Center of Excellence. We are never going to be able
to go out and hire all of the talent we need into the
Government to really use commercial best practices for running
our programs. But we have real pockets of excellence. We have
excellent people. If we can leverage those people in a way that
can be leveraged across agencies, I think we would do ourselves
good. So, I gave some, in my written testimony, some ideas on
how to do that.
Mr. Mica. Okay. Well, the first thing, again, is authority,
then the skill sets and the personnel are important. It is
interesting, the aging workforce is a fascinating factor
because, you know, if I want anything IT done in my office I
have the geriatric ward, having been here 20 years that I
employ, but I do not go to any of them, I go to sort of the new
kids on the block and they are wired, they know how to do it
and get it done. But it looks like we are headed in the wrong
direction.
And it is not that we do not pay people enough or there is
instability in the Federal Government, Mr. Gordon, it is
probably one of the most stable employers. I was Chairman of
Civil Service. Nobody gets fired in the Federal Government,
period. And we do pay above scale. The question is, who we are
paying and how much and getting those skills.
When I was chairman of a subcommittee here, we did IRS and
one of the things we found is we were not paying people to pay
these systems the wages they could get on the outside. We had
to change that. We may have to do that. And also a campaign to
attract the young talent.
You have to have people who really know how to, and not me,
but GAO said that in most cases IT investments are
underperforming, overall lack of skills experience of
Government-led management teams. So, authority and then
somebody who knows what the hell they are doing and how the
hell to do it.
[Laughter.]
Mr. Mica. So, again, as we craft the bill, the Chairman has
done a great job in putting this together, you want something
that gives us the tools and then the personnel to do it. So, I
only have 11, well, I am already over time, so yield back my
over time.
Chairman Issa. Okay, that is 18 seconds of negative yield
back.
[Laughter.]
Chairman Issa. Thank you.
We now go to the gentleman from Illinois, Mr. Davis.
Mr. Davis. Thank you very much, Mr. Chairman. And let me
thank you for calling this hearing.
I was thinking that the people in my district would really
appreciate listening to this discussion, especially given the
fact that we are talking about how do we get the most mileage,
or the most effective results, from the monies that we spend,
the money that we allocate, the resources that we use, and how
do we create the systems and the workforce that will give us
results.
OMB estimates that consolidating Federal data centers could
save us between $3 and $5 billion. So, I am thinking about that
and I guess my first question to the panel is do you believe
that the consolidation of data centers is actually helping to
modernize the Federal Government's IT investments and do we
save from this process?
Mr. Spires, why don't I begin with you?
Mr. Spires. Sure, because we are in the middle of this,
sir, and I think the proper consolidation of data centers. So,
as you consolidate you need to not just set up the same servers
that you had in your old data center in a new data center, but
you need to look at virtualization technologies and now cloud
technologies and leverage those appropriately.
I am very heartened by what we are doing around the Data
Center Consolidation Initiative, together with the cloud first
policy, because it is, I believe, the right formula to move us
forward. And we are seeing very significant savings. We at DHS,
we are looking at a 10 percent cut in an overall infrastructure
budget.
So, I am pushing very, very hard to get this done because
we can realize that level of savings by doing these things with
the Data Center Consolidation and the cloud first.
Mr. Davis. Mr. Gordon, let me just ask you, the workforce,
we have had some discussion, the kind of training that people
receive, can we create, or do we create, training modules that
will produce the kind of results that you talked about,
perhaps, and how do we do that?
Mr. Gordon. Thank you, Congressman Davis. It is very
important that we have enough people and that we give them good
training. And I can tell you that there are efforts both at DOD
through the Defense Acquisition University and the civilian
agency SOD through the Federal Acquisition Institute to get
good training, including online training which is an area we
are working on.
I am honored to be a Director of the Procurement Roundtable
which has had sessions devoted to training of the acquisition
workforce. We actually have a couple of sessions with junior
people in the acquisition workforce tomorrow at GW Law School.
What we often hear is that the acquisition workforce is
simply traumatized. They are traumatized by continuing
resolutions, by disrespect that they get. When they go to low
price technically acceptable, Mr. Soloway pointed out, it is
not because they think it is the best path but they are scared,
they are scared of getting in trouble for picking something
that costs more even though it is higher quality. They are
worried about, perhaps, being dragged in front of this
Committee. They are worried about IT reports.
Chairman Issa. I want to state that we welcome people, we
invite them. They have never actually been dragged in here.
[Laughter.]
Mr. Gordon. And I am honored to be here, Mr. Chairman.
We need to change from an atmosphere of fear, a poisoned
atmosphere where people don't feel appreciated, don't feel
empowered, to one where they believe that they can be trusted.
There is cognitive dissonance when we say on the one hand, oh
sure, we are going to support the acquisition workforce but on
the other hand we bash them all the time.
You cannot expect to get positive results when you do not
show respect and support for your workforce.
Mr. Davis. Thank you. Mr. Chairman, I know that my time is
about to expire, but could we allow Mr. Soloway to respond to
that? And Mr. Misener?
Mr. Soloway. Very briefly, I agree with almost everything
that Mr. Gordon said. I just offer a couple of observations.
We do a biennial survey of Federal acquisition leaders. It
is the Government talking to us about what is on their plate,
what is bothering them. I think the findings this year, as I
mentioned earlier, were very stunning and that they clearly
concluded that things are not getting any better for many of
the reasons that Mr. Gordon cited.
But two other things that jumped out of this. By a margin
of almost seven to one, they said they do not feel that their
workforce has adequate skills to acquire complex IT. And by a
margin of nine to one, they felt that their workforce did not
have adequate negotiating skills.
What that led them and us to conclude is that while we are
investing in and constantly trying to reevaluate the training
and development, we do not have it right yet. And perhaps it is
time to break out of the mold, to really open the aperture to
much more, and I will use the term loosely, commercial training
and commercial development tools.
We do not take our workforce and rotate them throughout the
organization as the best companies do when they hire new people
so that, as they move up the chain, they have experience and
knowledge of very different aspects of company operations, for
example.
And as I said earlier, there are, I think, some huge gaps
in just basic business training and how that aligns or doesn't
with the specific and unique policies of Federal acquisition.
Mr. Davis. Mr. Misener, if you have anything, briefly.
Mr. Misener. Thank you, thank you both, Mr. Davis. A lot of
discussion has been around the nature of the procurement
workforce and our experience has been that they are extremely
talented and they know what they are doing. But they also feel
inhibited by vague or counterproductive rules from above. They
know what they need to buy. They know the best solutions. But
they just are not empowered to choose those solutions.
And so I think the FITARA could go a long way to giving
them that confidence they have to choose the correct solution
for the Government and the taxpayer.
Mr. Davis. Thank you, Mr. Chairman.
Chairman Issa. Of course.
We now go to a man who is a young entrepreneur in the IT
area, Mr. Farenthold.
Mr. Farenthold. Thank you, Mr. Chairman, and I am happy
that you guys all chose to testify. I think there is a whole
lot of savings to be had and I appreciate your input.
When I was back in the computer consulting business in the
ancient history in computer days, one of the things that I
liked to tell my clients was that you need to change your
mindset about IT. Admittedly, I was primarily dealing with
small businesses, but with the technological cycles you almost
need to look at IT as an expense more than a capital item,
specifically with respect to the day-to-day stuff, the desk top
PCs and some of the things you go there. I know Mr. Misener and
Amazon whose name appears way too often on my credit card bill,
puts that as a, software, as a service.
[Laughter.]
Ms. Farenthold. But I wanted to visit with you, Mr. Spires.
Obviously, the big massive technology projects do need to be
handled in a different fashion. But how do we get to, or can we
get to, or is it appropriate to get to, technology more as a
day-to-day technology as an expense rather than a capital item?
Mr. Spires. That is a great point. In fact, we are trying
to get there. I mentioned 11 cloud-based services we are moving
to. As an example, we have got 110,000 of our employees on our
emails as a service offering now. And that is an expensed item.
We are buying it as a cloud-based service, there was very
little in the way of capital outlay, we had some migration
costs to get to it, but not large, and we pay on a monthly
basis.
And by the way, I really want to move, as you say, our day-
to-day IT operations to that model.
Mr. Farenthold. You have got a four-year lifespan, four to
eight year lifespan on a PC depending on how techie you are.
Mr. Spires. Well, we struggle, we have old gear because we
do not have the capital to replace it. So, I want to move out
of that model into a consumption-based model where it is then
in the service agreement to replace that and keep that gear
current where we are paying on a monthly basis.
Mr. Farenthold. All right, and Ms. Chaplain, you talked
about strategic sourcing. I see two issues there as we do these
types of contracts. Do we not keep up enough with technology
and do we cut out vendors. I mean, do we get, you know, Dell,
HP or Apple, those are your choices, and do we cut out other
folks?
Ms. Chaplain. In the Strategic Sourcing Initiatives that
have been done to date, we found that we can include small
businesses and a wide variety of companies, not just the Dells
and people like that. They had one on office supplies where 13
of the 15, or a good majority of the contracts, went to small
businesses.
Mr. Farenthold. Okay, let me go back to Mr. Spires. I'm
sorry I'm bouncing all over. I have a lot of questions.
We talked about, I want to talk a second about open
standards in API. I think one of our big problems is one
Government computer does not talk to another Government
computer. And we are seeing in the VA, even though they are
doing a massive technology project right now, getting
information from DOD and people coming out into the VA is
resulting in year-long delays at times getting benefits.
Do you think there is an opportunity there? It seems like,
to me, like the internet, which was actually kind of developed
at our expense through RFC open source, not so much open source
but open standards, is that something we can replicate
throughout the Government?
Mr. Spires. We are in a number of ways. I mean, under the
digital government strategy being driven by OMB, I mean, there
is a whole area there about how do you build APIs to be able to
access data. Another example of this is the National
Information Exchange Model which is used for exchanging data
for law enforcement, for first responders, for many other uses,
between ourselves as a Federal Government and the State and
local governments.
Mr. Farenthold. Do you think it is reasonably doable to
come up with some API standards for Federal Government websites
so advocacy organizations can, and the public, can aggregate
data? Do you think that is doable?
Mr. Spires. That is part of the initiative under the
digital Government strategy.
Mr. Farenthold. All right. And let me go, you talk about
bailing out of failed projects and I hate to pick on Homeland
Security but we look no further than the back scanners that TSA
has and TWIC cards. How do we encourage folks to fix those
problems before we keep throwing good money after bad?
Mr. Spires. Well, I come back, sir, to this whole notion of
increasing the capability of our program management workforce,
part of the acquisition workforce. We need to do that and we
need to give programs help. One of the things we have done at
DHS, I will just be quick, is we have instituted a more
aggressive oversight model so that the right stakeholders are
meeting with the program management team on a monthly, or every
other month, basis to make sure that things are being dealt
with.
Mr. Farenthold. All right, great. My last comment is to Mr.
Misener. Would you do me a favor and talk to GSA and see if you
can use some of the Amazon technology to update their website.
I try to buy stuff for my office off the GSA website and I
finally just given up. You could certainly save the Government
a lot of money. We would appreciate your helping them out.
Mr. Misener. I would be happy to. Can they spend OPEX?
[Laughter.]
Mr. Farenthold. Yeah, right. Thank you very much. And I
yield back.
Chairman Issa. I believe Mr. Horsford is next for our side.
Mr. Horsford. Thank you, Mr. Chairman, and having just
visited Switch and Cobalt in Southern Nevada last week, this is
a very opportune panel focusing on issues that really are
important to streamlining our IT functions.
I do find it interesting, though, that technology continues
to change rapidly and no provision in any one bill is going to
be able to keep up with those changes. And I think we all have
to be cognizant and aware of that.
My other committee, Mr. Chairman, is the Committee on
Homeland Security so I do want to ask a question of Mr. Spires.
Because Homeland Security is the third largest Federal
agency in the Federal Government, the IT budget is also one of
the largest. In Fiscal Year 2012, the Department of Homeland
Security's IT budget was approximately $5.6 billion. You are
responsible for over 360 IT programs, 83 of which have life
cycles, cost estimates of over $50 million or more.
So, obviously the size and complexity of what you are
responsible for provides us, I think, a great opportunity to
support a well planned governing structure that allows you to
carry out those functions.
Now, we received the GAO high risk report recently. We had
a hearing on that in this Committee. And in that report it
indicated that in July of 2012 that the governance structure
currently covers less than 20 percent, 16 out of 80 of the
departments major IT investment, and 3 of its 13 portfolios
within the department had not yet finalized the policies and
procedures that are necessary.
So, I just wanted Mr. Spires, if you could, to comment on
that, since that is an area that this Committee is specifically
charged with from an oversight role.
Mr. Spires. Yes, sir. And in fact this is near and dear to
my heart to get this better. When I came on three and one half
years ago it was one of the areas where I felt like the
governance of our IT was very weak. And so, we have taken it on
in two major ways.
One, to your point, we are now up to 88 major IT programs
from the 83 that you had cited and I, as I said, as I just was
reflecting, we need a more active governance model, a better
oversight model, on many of these.
Now, to scale the 88 programs, many of which, by the way,
are in operations and maintenance and we do not need perhaps
that level of scrutiny on all programs at the same level, but
those 16 programs you alluded to are the ones that I viewed as
the highest risk programs in the department, the IT programs,
and that is where we have added this additional layer of
governance. So, these are Executive Steering Committees where
the right executive stakeholders meet on a very regular basis
with the program team to address issues, to set direction for
them, to give them help. And it has made a meaningful
difference in many of these 16 programs.
On the portfolio level, we have 13 separate portfolios
within the department that are functions. They are not
components, they are the functions, they are screening, they
are incident response, they are finance, the mission and
business of DHS. And we are working feverishly to get, if you
will, the right portfolio look and governance around each of
those so we can eliminate duplication, and we can streamline
processes and we can get the synergies of each of the
components across those functional views. So that is what we
are working on, sir.
Mr. Horsford. And to that point, I would just encourage the
department to just continue your effort in working with local
and State stakeholders in that regard. I just met with our
sheriff in Clark County and, you know, he indicated that in
some respects it is very good, in other respects they are not
at the table and there are some best practices happening at the
local and State level that we should be adopting, not
necessarily having a top down approach from the Federal
Government.
Where are you in the final development or your policies and
procedures?
Mr. Spires. Those will be finalized within the next month.
There is a couple of documents that we still have to sign off
that I am reviewing right now, sir. I could be happy to report
back to this Committee on that when those are completed.
Mr. Horsford. That would be great. Thank you very much for
being here. Thank you to all the witnesses.
Mr. Duncan. [Presiding] Well, thank you very much.
A few weeks ago, at the earlier hearing on this subject, we
got into this and our Committee memorandum says at that hearing
it was established that despite spending more than $600 billion
over the past decade, too often Federal IT budgets run over
budget, behind schedule, never deliver on the promised solution
or functionality.
Now, it was mentioned at that hearing, and I was at that
hearing, that we spent $81 billion over the last Fiscal Year
and it is going to be a little bit more this Fiscal Year which,
interestingly enough, is about identical to the amount of the
sequester.
I have read and heard that the computers and off shoot
products are obsolete as soon as they are taken out of the box.
Now, that may be an exaggeration, but apparently our technology
is moving so fast that things become obsolete very fast.
Now, my wife and I have three cars, two of them have well
over 100,000 miles on them, the third one has, I think, 98,000
miles on it, but they are still doing real well. And Mayor
Rendell, former Governor of Pennsylvania now, but when he was
mayor of Philadelphia, he testified in front of a Congressional
Committee and said that one of the main problems in Government
is there is no incentive to save money so much of it is
squandered. Those were his words.
And I noticed, Mr. Soloway that you said what to me, I
think, is the key word when you said we have go incentivize
people because it seems to all the IT people, since the Federal
Government purchases, the money is not coming out of their
pocket like it is when I have to buy a new car. They want the
latest bells and whistles. They want the most advanced. The
want the newest thing.
How can we incentivize people to get more use out of the
technology that they have and hold onto it and use it one year
longer or two years longer, or not only incentivize individuals
but incentivize departments and agencies? Because it seems to
me that if we do not come up with a way to do that, the
spending is going to continue to spiral out of control because
I am sure they thought that they were taking care of this
problem when the passed the Clinger-Cohen Bill that is
mentioned here 16 years ago. Sixteen years from now, is another
Congressional committee going to be here facing the same
problem except just multiplied many times over?
Mr. Soloway. It is a large issue and a large question, Mr.
Duncan. Let me take it from the beginning and go back to the
beginning of your comments.
I think one of the things we have not talked a lot about
here is the requirements generation process being so critical
to ultimately what the Government buys. And so a lot of that,
and I think the governance model that Mr. Spires is talking
about will directly and aggressively deal with are the
requirements the right requirements, are we structuring them in
the right way, are there area in which we do not need to be on
the leading edge or even the bleeding edge.
We can continue to operate, I mean, we have some systems in
Government that are still COBOL-based that might be worth
taking a look at. But there is going to be a variety of need
and, as you said, it is not automatic that I need to go for
every bell and whistle.
That said, I think again that it gets back to the
development of the workforce and of the program management
structure and teams. What is celebrated? We do not celebrate
acquisition success. We hammer people for failure, we do not
celebrate success. I think that there are a lot of things you
could do to balance this out. But again, I think it ultimately
comes back to how we develop and prepare our workforces and
empower them because I think they are generally highly
responsive and responsible and are not looking to spend money
they do not have to.
Mr. Duncan. All right. Anybody else want to say anything?
Yes, madam.
Ms. Chaplain. The bill does talk about having to have a
business case to justify some of the larger purchases and that
is a good place where you could be asking those questions, do
we need to move to something new, what is the cost and benefit
of that versus staying with the legacy.
Mr. Duncan. Well, it seems to me the Chairman is trying to
move in the right direction, trying to do something about this
problem in his bill and giving the CIOs more flexibility or
more power and along with that would hopefully have to come
more accountability. So, maybe we can make some progress.
Mr. Pocan?
Mr. Pocan. Thank you, Mr. Chairman. I would like to yield
my time to Mr. Connolly please.
Mr. Connolly. I thank my colleague. I have two more
questions, if I might, of first Mr. Gordon. There have been
concerns raised by some of the industry groups with respect to
the draft legislation on the provision calling for the
transparency of blanket purchase agreements. Specifically, the
concern is that the final negotiated price for a purchase
agreement is often proprietary and exposing it would weaken a
company's bargaining power. Your take on that?
Mr. Gordon. Sir, I was raised to understand that public
contracts were public documents and I find it baffling that a
company would claim that the price it is charging a Federal
agency for a good or service for that matter would be
proprietary. In any event, we need transparency across BPAs.
Again and again, when I worked at OMB, I discovered that one
agency, when it was negotiating a blanket purchase agreement
which is typically under the GSA Federal Supply Schedule, had
no idea that another agency had already negotiated with the
same vendor for the same product but, of course, at a different
price.
The vendors know how much they are charging different
agencies. I do not understand why the Federal Government is not
sharing that information. Today, it should be readily available
for Federal purchasers. I think it is an excellent idea in this
bill.
Mr. Connolly. Mr. Soloway or Mr. Misener, any industry
reaction to that?
Mr. Soloway. I think the caution I would offer here is that
there is a difference between price and cost and I think it is
one thing to have public disclosure of a public contract, what
the Government is paying, but the underlying elements and cost
elements are highly proprietary and I think that that is an
area where we would have to protect against the inappropriate
sharing of information.
The second piece is, if you are dealing with a commercial
contract and it is fixed price, the only thing that matters is
the ultimate price that you pay. You say I am paying X dollars
for this per minute or per hour and I am done the hours. But
divulging my labor rates, specifically how I characterize them,
or my other costs I think would cross the line.
Mr. Connolly. Okay. Final question. We have been talking
about workforce development. And it has always bothered me as
well that in addition to the reasons you gave rather
passionately, Mr. Gordon, and I could not agree with you more,
disparaging the workforce does not get you skilled workers,
especially when we look to the next generation of skilled
workers let alone retaining them.
But what about training? I note a huge imbalance in terms
of the resources, for example, put into the Defense Acquisition
University and the resources put into the Federal Acquisition
Institute. I mean, it is night and day. And I wonder if you
would comment on that. Could the Federal Acquisition Institute,
with some beefing up, help us? Because right now a lot of those
are in fact online courses but they are refresher courses. They
do not solve the underlying problem of do we have the requisite
skill set to manage large systems integration contracts.
And it seems to me the Pentagon is doing a much better job
of that because it puts serious resources into it. Maybe, Mr.
Spires, you could begin commenting on that because you are on
the civilian side.
Mr. Spires. Sure, I am. Yes, I would agree that we need to
beef up our training capabilities. But we also need to marry
that with something that Mr. Soloway mentioned. We need to have
a career track for these kinds of professionals on the program
management side. And that is more than just training. That is
mentoring, that it bringing th em along on smaller programs and
then building until they are taking on these large programs.
Because there is nothing that beats experience in actually
delivering these kinds of large complex IT programs.
Mr. Connolly. Mr. Soloway.
Mr. Soloway. Yes, I would caution, I think your point it
well taken. I would caution the linear connection. In the
Defense Department, the acquisition workforce is much more
broadly defined than it is in the civilian space. I had that
responsibility when I was in the Pentagon.
There are far more career categories and fields that are
considered a part of the acquisition workforce. So, it is a
much larger entity. It is about 175,000 or so people. Maybe
150,000. In the civilian agency traditionally the acquisition
community has been contracting officers and contracting
officers' technical representatives and limited to that. So,
you may only have one-quarter or maybe even one-fifth or even
less numerically so that the numbers are not a linear
connection.
That said, to Mr. Spires' point, one is beefing up the
definition and the skill sets around Acquisition with a capital
A which involves all of the program management skills and so
forth, marrying that with the technology requirements and
really defining career categories and training and development
opportunities that are contemporary and reflect the need of the
Government in terms of what it is buying, not the need of the
Government as to what it used to buy.
Mr. Connolly. And if the Chair would just allow Mr. Gordon,
who is seeking recognition, and I thank the Chair for its
indulgence.
Mr. Gordon. Thank you. Very briefly, I very much agree. As
you know, Congressman Connolly, there has been strengthening on
the civilian side at the Federal Acquisition Institute. There
is more work to be done.
One quick point may be worth mentioning. It is a nice
example. One of the problems that we often see is poor
requirements put in the solicitation initially which causes
problems the whole length of the contract. When I used to ask
contracting officers, what is causing this, the answer I often
got was oh, well we were afraid to talk to industry when we
were writing the solicitation initially.
One of the things I always push for, and I am glad the
Administration is continuing to push, is what we call the Myth
Busters Campaign, to improve communication between industry and
Government, it reinforces Government people's understanding
that it is okay to talk to industry early on a solicitation. If
there were a way to get that into the bill, it might actually
be a helpful message.
Chairman Issa. Excellent. And I would like to do a quick
second round because I have heard a lot of things that were
particularly of interest to me.
Mr. Soloway, when you were asked about essentially making
public costs/price, you made a good point which was that there
is only so much information that is helpful and at some point
it becomes proprietary. I am assuming you were only answering
as the to the public that in a reform, if anybody who is part
of us, the Federal Government, wants to know what us, the
Federal Government is paying for something, they should have a
level of transparency to get that, either online or through a
briefing structure.
In other words, you would not support any closure of Mr.
Spires and six other counterparts in other agencies having full
access so they could be the smartest buyer. In other words, if
you bid higher at the next, or Mr. Misener's bids higher at the
next contract bid, that would be known to Government that
somehow your price had risen rather than fallen.
Is that a fair statement?
Mr. Soloway. I think that it is the top line price that I
am buying. My contract with Amazon is for X dollars, that is
going to be public, I do not have any problem with that.
Chairman Issa. No, actually what I am saying more
specifically, and I am going to go to Mr. Spires in a second
and Mr. Misener, this bill envisions that the Federal
Government is a single entity. We do not buy that way now. We
buy as though we are different companies and we pay different
prices and actually we redundantly end up buying excess
licenses, which is another factor that we know is low-hanging
fruit to save money, at least if the price of a pro license
does not change.
My question to you is, do you agree with one of the
premises of the IT reform which is that the Federal Government
is a single entity, therefore any piece of information, let us
just call it the explanation of how a price was reached on a
contract, should be available to that entity in any and all
parts internally looking, the Federal Government has a right to
know. Mr. Spires should never go out for a bid with a company
and not know what they charge for a similar product at a
previous quote.
Mr. Soloway. With your permission, I would like to take
part of that under advisement and come back with a written
response for the record because I think there are several
elements to this that I think we need to think through.
Chairman Issa. Okay, because this is a value of the IT
reform that we have had over 20 major entities, including
yours, make comments on. I do not want it to be a secret that
my view is some of the savings is by the Government considering
itself a single entity for the first time.
Mr. Soloway. Right, and I think to a significant extent we
would agree with you. But I think there are going to be
limitations that we would like to think through and how to
define them best so I do not misstate anything here.
I would make one comment, though, at this point on that
question. We hear this question a lot with the issue of
strategic sourcing. A lot of discussion about well, I brought
this solution but I am paying x dollars an hour for this kind
of engineer from a company but why for that same engineer in
another contract and I think this is part and parcel of really
defining the whole concept of what strategic sourcing is and
what its objective is.
In some cases, it strictly is an effort to use bulk buying
to get costs down. In other cases, it is truly to be strategic
in how I source things but recognizing the driving price is not
the only issue. If I am dealing with cloud services, the kind
of work that Amazon does, it is a little bit cleaner and
clearer than if I am dealing with a complex integrated
solution. So, if you do not mind, I would like to take that
question over the record.
Chairman Issa. And Mr. Gordon, you are, as Mr. Connolly
noticed, is eager to answer also.
Mr. Gordon. Yes, sir. Thank you, Mr. Chairman. I
enthusiastically endorse the view that you are setting out. Let
me give you a couple of points along those lines.
The fact is, when the Government buys, if it is a big
agency like the Department of Homeland Security, it is really
important to do, to make those decisions across the entire
department and, as much as possible, we should be making our
decisions across the entire Federal Government. That is why I
so much support the idea of BPA transparency.
I want to point out that my former and wonderful colleagues
at GAO, in the high risk report that came before this Committee
recently, they did something very unusual. They took something
off the high risk list and it is really relevant to this bill.
They took interagency contracting management off the high risk
list because the Executive Branch had worked to improve it and
frankly leaving it on the high risk sent a message to agencies,
oh, interagency contracting is bad. In my opinion, interagency
contracting, when managed properly, is a very good thing, fully
consistent with your draft bill.
Chairman Issa. Ms. Chaplain, this goes right squarely into
what you look at every day, that much of the savings is through
interagency activities and finding the most qualified prime and
then being able to tag onto that.
Ms. Chaplain. Yes, and I completely agree with the notion
that the Government should be acting, where possible, as a
single buyer. Also, with regard to strategic sourcing, you
cannot put everything in one bucket. Not everything is a
commodity. There are more complex requirements and there are
scenarios where there are fewer suppliers and you have a very
specialized thing you are after.
But in those cases, the best practice companies we have
studied tailor their tactics, too. They look at cost drivers,
they develop new suppliers, they prioritize with suppliers. So,
there are different things you can do beyond just the basic
strategic sourcing when you get to these more complex types of
products.
Chairman Issa. We are going to get to Mr. Misener, but Mr.
Spires, I am going to give you a tangential question to what we
have already been talking about. You are a sophisticated
manager of these kinds of things and DHS, I am presuming
routinely in your council, deals with, hey, we are buying
something similar to just like, and therefore you begin to say
why can we not buy just like for the same price. And you go
out, in a sense, with that concept often, don't you?
Mr. Spires. Yes, we do. And we have had a very aggressive
strategic sourcing internal effort, working with our Chief
Procurement Office. And I agree, we need to do more of this
across the Federal Government in IT. There are many things that
do not lend themselves to strategic sourcing. But there are
many things that we buy that do, billions of dollars worth,
within DHS alone that I think would be, we would offer up as to
try to be a part of strategic sourcing for the whole Federal
Government.
Chairman Issa. Mr. Misener, I said I would get back to you.
Mr. Misener. Thank you, Mr. Chairman. Just to add that we
would greatly appreciate the clarity Government-wide that your
bill would bring. And so, we focused on cloud computing, that
it what we are expert in. I will note that we have dropped our
prices two dozen times since we began in 2006.
Chairman Issa. I might note that I am familiar somewhat
with Amazon in the private sector. You dropped prices, for some
reasons, even while you are under contract with somebody for a
two-year period. That has befuddled people who have observed
it. I do not believe that happens in a Government contract at
this time, but if it does, I am pleased.
Mr. Misener. Well, we have, and will continue to, drive our
prices down, greater efficiencies and economy of skills. I
think one thing that would be helpful, if I may, is to
recognize that our cloud computing business, we report in our
finances as part of a category we call other and that obviously
includes other things.
Chairman Issa. I was on the board of a public company. I
understand why you throw things into other rather than letting
people see what is growing and not growing if you can help it.
There are a couple of CFOs behind you laughing right now.
Mr. Misener. That other category had revenues of about $2.5
billion.
Chairman Issa. So it was peanuts really.
Mr. Misener. Well, it was out of $60 billion for the whole
company.
Chairman Issa. I always wanted to say that about $2.5
billion.
[Laughter.]
Mr. Misener. In a sense, if my math is right, that is less
than 5 percent. Now, obviously we are very happy with the
business and how it is going and how we are able to serve as
customers, both private and in Government side, but something
important to recognize is that $2.5 billion is an interesting
calibration within our company.
But the most important point that I want to make on that is
that the other $57.5 billion is supported by the cloud. We have
entrusted that business to the cloud. We have put our legacy
and our core retail business on cloud because we really believe
in it. So we are enthusiastic supporters, unabashedly so, but
not just as providers of the service, we are also users of the
service.
Chairman Issa. Okay, I have one final question, with the
ranking member's indulgence.
GAO reports in 2011 the Government had funded 622 separate
human resource systems and 580 financial management systems,
and 777, lucky triple 7, supply chain management systems. Now,
I have dollar figures and all that.
But let me just ask a fundamental question and some of it
will go to GAO but some of it maybe goes to Mr. Soloway and so
on, when you have this many systems, even if you bought every
one of them right, and even if every one of them did their job
perfectly, you go to big picture because they were separate,
what we use to call WYSIWYG, you know what you see is what you
get kind of a term, if you go to train, if you go to have
somebody go from Department of Homeland Security to Department
of Defense, they are inherently going to a different system
they have to learn over again.
Is it not one of the goals that we should have in IT reform
to make the portability of the employee, the expertise
transferable to the broadest extent possible whether it is in
payroll, in purchasing, or in fact, in any other system, so
that the training cycle goes way down because more and more
people can have on their resume I know how to use the Federal
procurement system and it is one system even if the parts they
are looking at are different for a different part.
Is that not one of the biggest goals that IT should have,
is to drive down the training costs by driving up the common
interface, user interface, that people train? And I will start
with Ms. Chaplain.
Ms. Chaplain. Generally, the more that you can standardize
your requirements and make things more alike, you are driving
down the costs just by its nature. And then if you get to a
point where they can be sort of in the same category or just
the same, that is where you can bring in more strategic
sourcing techniques. So, it should be done, not just from a
workforce side but a cost side, too.
Chairman Issa. Mr. Soloway.
Mr. Soloway. Yes, I think that is absolutely true. That is
clearly a goal of technology, it is an initiative that has,
fits and starts if you will, across Government over the years,
the lines of business initiatives and shared services
initiatives and other work that is being done, but there is no
question that should be an objective, to harmonize these
systems to the maximum extent possible. We see this in other
non-technology way with security clearances where they are
different for every agency and I have a clearance at Justice
but it is not even usable in the FBI. I mean, you see all kinds
of disconnects, but I think you are absolutely correct.
Chairman Issa. And Mr. Connolly, do you have any closing
remarks?
Mr. Connolly. No, Mr. Chairman, I just want to thank you
for the hearing. I think this has been very, very thoughtful. I
really appreciate all of the testimony and I think it is going
to help us in the drafting of our bill. And again, I thank the
Chair for reaching out and I want to commend his staff who have
been wonderful to work with. We really appreciate the
collaboration.
Chairman Issa. Thank you. And with that, I would like to
announce that our goal on the Committee is to bring to a
published bill by the time we leave for the spring recess which
is later in March. So, less than about three weeks until we
expect to turn it into a published bill from which we will
begin the process of further proposing mark-ups. And I do that
because I would like both people on the outside and, quite
frankly, all of staff and members to be aware that we think we
have gone far enough that we should be able to put it into a
bill that will not be perfect but at least will be modestly
amendable with some help.
I want to thank all of you for comments. I am going to
leave this hearing's notes open for all of you for five
business days, giving you an opportunity to come back, Mr.
Soloway and others, with the ideas and answers that may not
have been able to be done live here today.
And with that, we stand adjourned.
[Whereupon, at 11:40 a.m., the committee was adjourned.]
APPENDIX
----------
Material Submitted for the Hearing Record
[GRAPHIC] [TIFF OMITTED] 82274.045
[GRAPHIC] [TIFF OMITTED] 82274.046
[GRAPHIC] [TIFF OMITTED] 82274.047
[GRAPHIC] [TIFF OMITTED] 82274.048
[GRAPHIC] [TIFF OMITTED] 82274.049
[GRAPHIC] [TIFF OMITTED] 82274.050
[GRAPHIC] [TIFF OMITTED] 82274.051
[GRAPHIC] [TIFF OMITTED] 82274.052
[GRAPHIC] [TIFF OMITTED] 82274.053
[GRAPHIC] [TIFF OMITTED] 82274.054
[GRAPHIC] [TIFF OMITTED] 82274.055
[GRAPHIC] [TIFF OMITTED] 82274.056
[GRAPHIC] [TIFF OMITTED] 82274.057