[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



 
 TOWARD A TELEWORK-FRIENDLY GOVERNMENT WORKPLACE: AN UPDATE ON PUBLIC 
                AND PRIVATE APPROACHES TO TELECOMMUTING
=======================================================================

                                HEARING

                               before the

           SUBCOMMITTEE ON TECHNOLOGY AND PROCUREMENT POLICY

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 6, 2001

                               __________

                           Serial No. 107-125

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform







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                     COMMITTEE ON GOVERNMENT REFORM

                     DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut       MAJOR R. OWENS, New York
ILEANA ROS-LEHTINEN, Florida         EDOLPHUS TOWNS, New York
JOHN M. McHUGH, New York             PAUL E. KANJORSKI, Pennsylvania
STEPHEN HORN, California             PATSY T. MINK, Hawaii
JOHN L. MICA, Florida                CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia            ELEANOR HOLMES NORTON, Washington, 
MARK E. SOUDER, Indiana                  DC
JOE SCARBOROUGH, Florida             ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
BOB BARR, Georgia                    ROD R. BLAGOJEVICH, Illinois
DAN MILLER, Florida                  DANNY K. DAVIS, Illinois
DOUG OSE, California                 JOHN F. TIERNEY, Massachusetts
RON LEWIS, Kentucky                  JIM TURNER, Texas
JO ANN DAVIS, Virginia               THOMAS H. ALLEN, Maine
TODD RUSSELL PLATTS, Pennsylvania    JANICE D. SCHAKOWSKY, Illinois
DAVE WELDON, Florida                 WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              ------ ------
C.L. ``BUTCH'' OTTER, Idaho                      ------
EDWARD L. SCHROCK, Virginia          BERNARD SANDERS, Vermont 
JOHN J. DUNCAN, Jr., Tennessee           (Independent)


                      Kevin Binger, Staff Director
                 Daniel R. Moll, Deputy Staff Director
                     James C. Wilson, Chief Counsel
                     Robert A. Briggs, Chief Clerk
                 Phil Schiliro, Minority Staff Director

           Subcommittee on Technology and Procurement Policy

                  THOMAS M. DAVIS, Virginia, Chairman
JO ANN DAVIS, Virginia               JIM TURNER, Texas
STEPHEN HORN, California             PAUL E. KANJORSKI, Pennsylvania
DOUG OSE, California                 PATSY T. MINK, Hawaii
EDWARD L. SCHROCK, Virginia

                               Ex Officio

DAN BURTON, Indiana                  HENRY A. WAXMAN, California
                    Melissa Wojciak, Staff Director
              Victoria Proctor, Professional Staff Member
                          James DeChene, Clerk
          Mark Stephenson, Minority Professional Staff Member







                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on September 6, 2001................................     1
Statement of:
    Robertson, Bob, Director, Education, Workforce, and Income 
      Security Issues, U.S. General Accounting Office; Teresa 
      Jenkins, Director, Office of Workforce Relations, Office of 
      Personnel Management; David Bibb, Deputy Associate 
      Administrator, Office of Governmentwide Policy, U.S. 
      General Services Administration; Harris N. Miller, 
      president, Information Technology Association of America; 
      Mark Straton, vice president, global marketing, Siemens 
      Enterprise Networks; and Robert M. Milkovich, managing 
      director, CarrAmerica......................................    12
Letters, statements, etc., submitted for the record by:
    Bibb, David, Deputy Associate Administrator, Office of 
      Governmentwide Policy, U.S. General Services 
      Administration, prepared statement of......................    38
    Davis, Hon. Thomas M., a Representative in Congress from the 
      State of Virginia, prepared statement of...................     4
    Jenkins, Teresa, Director, Office of Workforce Relations, 
      Office of Personnel Management, prepared statement of......    29
    Milkovich, Robert M., managing director, CarrAmerica, 
      prepared statement of......................................    70
    Miller, Harris N., president, Information Technology 
      Association of America, prepared statement of..............    49
    Robertson, Bob, Director, Education, Workforce, and Income 
      Security Issues, U.S. General Accounting Office, prepared 
      statement of...............................................    15
    Straton, Mark, vice president, global marketing, Siemens 
      Enterprise Networks, prepared statement of.................    61
    Turner, Hon. Jim, a Representative in Congress from the State 
      of Texas, prepared statement of............................     8


 TOWARD A TELEWORK-FRIENDLY GOVERNMENT WORKPLACE: AN UPDATE ON PUBLIC 
                AND PRIVATE APPROACHES TO TELECOMMUTING

                              ----------                              


                      THURSDAY, SEPTEMBER 6, 2001

                  House of Representatives,
 Subcommittee on Technology and Procurement Policy,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:35 a.m., in 
room 2154, Rayburn House Office Building, Hon. Thomas M. Davis 
(chairman of the subcommittee) presiding.
    Present: Representatives Davis of Virginia and Turner.
    Also present: Representatives Morella, Capito, Moran and 
Norton.
    Staff present: Melissa Wojciak, staff director; David 
Marin, communications director; Amy Heerink, chief counsel; 
George Rogers, counsel; Victoria Proctor, professional staff 
member; James DeChene, clerk; Mark Stephenson, minority 
professional staff member; and Jean Gosa, minority assistant 
clerk.
    Mr. Davis of Virginia. Good morning. Welcome to the 
subcommittee's second oversight hearing on Federal 
telecommuting. The telework initiative gives employees the 
flexibility to work outside the traditional workplace, 
generally at home or in telecenters. Today, we're going to 
evaluate the progress of the Federal Government agencies' 
efforts to promote the initiative. We will also review 
agencies' compliance with section 359 of Public Law 106-346, 
the fiscal year 2001 Department of Transportation appropriation 
bill.
    I want to take a moment to thank Congresswoman Connie 
Morella, Congresswoman Shelley Moore Capito, Congressman Jim 
Moran, and Delegate Eleanor Holmes Norton for joining us this 
morning. Congressman Frank Wolf wanted to be here today, but he 
was called to the White House this morning.
    As many of you know, Mr. Wolf has been a longtime supporter 
of telework and is responsible for the inclusion of section 359 
in last year's transportation appropriations bill. This year he 
introduced H.R. 1012, the Telework Tax Initiative Act, which 
would provide a tax credit to eligible telecommuters.
    Advances in computer and telecommunications technology have 
facilitated the rapid growth of telework in the private sector. 
While companies enjoy increased productivity, job satisfaction 
and employee morale as a result of telework programs, the 
Federal Government's success has been inconsistent. Over the 
past decade, there have been executive plans to encourage 
Federal telecommuting, but a more formalized plan with 
comprehensive guidelines was never introduced. Section 359 and 
the related conference report language strived to change that.
    Section 359 directs Federal agencies to establish telework 
policies as a means to ease congestion and permit 25 percent of 
their eligible work force to telecommute by April 23, 2001. An 
additional 25 percent must be permitted to telecommute each 
year over the next 3 years. The conference report requires OPM 
to assess the effectiveness of the program and to report to 
Congress.
    Our March 22nd hearing revealed that if telecommuting is 
used strategically, it can be an effective recruitment and 
retention tool in the Federal workplace. For example, an 
aggressive telecommuting policy may help the Federal Government 
address the shortage of information technology workers. As the 
Federal IT work force nears retirement eligibility, they may be 
enticed back to the Federal work force on flexible terms while 
taxpayers benefit from a knowledgeable and experienced work 
force. In fact, a December 2000 survey conducted by the Merit 
Systems Protection Board found a possible correlation between 
the availability of telecommuting and Federal employees' 
intention to leave Federal service.
    The March hearing also helped identify some of the key 
barriers to Federal telecommuting, including the availability 
of computer and telecommunications equipment, managerial 
attitudes, funding and insufficient marketing and education 
about the concept. In fact, some Federal employees still report 
confusion about their agencies' policies, and some don't even 
know if teleworking is an option for them. Furthermore, Federal 
managers in particular are resistant to telework, because they 
are no longer in a position to monitor employees directly. 
Thus, managers need to shift their focus from process-oriented 
performance measurements to results.
    But the Federal workplace culture will not change 
overnight. It's a long and gradual process. That's why I'm 
pleased that OPM and GSA have already made concerted efforts to 
promote telework and address these persistent concerns. In 
addition to training sessions for employees, managers and top-
level officials, OPM partnered with GSA to create a one-stop 
telework Web site to educate the work force and provide a 
variety of resources about telework, including links to agency 
policies, sample telework agreements, telecenter information, 
OPM guidance and OPM's study highlighting agency success 
stories.
    OPM's recent Interim Report on Telework in the Federal 
Government indicates that the barriers I mentioned still 
inhibit telework--they still inhibit telework. For the report, 
OPM surveyed Federal agencies about their telework policies. 
The data showed that the total percentages of teleworkers in 
the Federal work force has doubled to 3.1 percent since 1998, 
but it still remains very low. Agency narratives and followup 
discussions reveal that agencies are inconsistent in tracking 
their teleworkers, especially those who telecommute on a 
nonscheduled basis or less than 52 days per year.
    Based on this information, OPM concluded that Federal 
teleworkers are likely undercounted. It's been a challenge for 
OPM to compile accurate statistics about Federal telecommuters 
because there is no governmentwide standard for data 
collection. This is an important concern that I think has to be 
addressed since the report is intended to provide a baseline 
from which to assess the progress of Federal telework.
    Today the subcommittee will ascertain what oversight 
measures OPM will use to ensure Federal agency compliance with 
section 359. We'll determine whether OPM provides adequate 
guidance to assist agencies in determining which positions are 
eligible for telecommuting. In addition, we'll look forward to 
hearing about further action OPM will take to clarify the 
initiative and provide employees with guidance to ensure 
successful telework experiences. We'll also determine if GSA is 
using section 359 as a marketing opportunity to expand its 
advertising efforts for and increase utilization of the 
telecenters. Since OPM's interim telecommuting report reveals 
that there is no official system in place to efficiently and 
reliably count teleworkers and compile related data, the 
subcommittee will review the current tracking system and any 
suggestions for governmentwide standardization.
    The subcommittee will hear testimony from Robert E. 
Robertson, the Director of Education, Workforce and Income 
Security Issues, GAO; Teresa Jenkins, the Director of Office of 
Workforce Relations, OPM; David Bibb, Deputy Associate 
Administrator of Real Property within the Office of 
Governmentwide Policy, GSA; Harris Miller, president of the 
Information Technology Association of America; Mark Straton, 
the vice president of global marketing, Siemens Enterprise 
Networks; and Robert Milkovich, the managing director of 
CarrAmerica.
    We anticipate having with us today members of the full 
committee who are not on the subcommittee, as well as Members 
who are not part of the full committee, but have a strong 
interest in this. I ask unanimous consent they be permitted to 
participate in today's hearing, and without objection, so 
ordered.
    [The prepared statement of Hon. Thomas M. Davis follows:]
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    [GRAPHIC] [TIFF OMITTED] 82424.003
    
    Mr. Davis of Virginia. I would now yield to Congressman 
Turner for any opening statement.
    Mr. Turner. Thank you, Mr. Chairman. I commend you on 
having this second hearing on this important issue of 
telecommuting. We all know that the Federal Government faces a 
human capital crisis, and the Federal work force is indeed 
aging, and it requires us to be innovative in ways to not only 
attract and retain Federal workers, but to improve worker 
productivity, morale, and, as I said, retention and 
recruitment.
    We know that advances in technology in recent years have 
made telecommuting a far more feasible and attractive choice 
for employees and employers alike. Today we're told that about 
19 million people telecommute, and the number is increasing 
rapidly. Despite the fact that telecommuting has been an option 
for Federal employees over the last decade, as we'll hear today 
from the Office of Personnel Management, only about 45,000 
employees, or 2.6 percent of our Federal work force, 
telecommute once a week, and almost half of those are in one 
agency. Even though there's been a marked increase in 
telecommuting, we're still clearly behind the private sector. 
As some of our witnesses today will testify, the private sector 
offers valuable insights to us in how to address the barriers 
faced by organizations attempting to promote telework among 
their employees.
    As the chairman mentioned, Federal law requires agencies to 
develop a plan that allows 25 percent of the eligible Federal 
work force to telecommute. As of April 23, 2001, an additional 
25 percent must be permitted to telecommute each year over the 
next 3 years.
    Today we will explore the Federal Government's progress in 
developing telework-friendly policies and determine what the 
Congress and the agencies need to do to make telecommuting a 
viable option for Federal employees.
    I welcome all of our witnesses today, and, again, I thank 
the chairman for his continued interest in this important 
subject.
    Mr. Davis of Virginia. Thank you very much.
    [The prepared statement of Hon. Jim Turner follows:]
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    [GRAPHIC] [TIFF OMITTED] 82424.005
    
    Mr. Davis of Virginia. Mrs. Capito.
    Mrs. Capito. Yes. Thank you. Good morning. I'd like to 
begin by thanking Chairman Davis for inviting me to offer an 
opening statement this morning. I enjoyed participating in the 
last hearing on telecommuting, and I'm happy that you've 
invited me back. Although I'm not a member of the subcommittee, 
I greatly appreciate the opportunity to share with you my views 
on the importance of telecommuting in today's world.
    As you may know, the district which I represent plays home 
to the one and only telecenter in the State of West Virginia. 
The telecenter is located in the town of Ranson in Jefferson 
County, about an hour outside of Washington, DC, in an area 
known as the eastern Panhandle of West Virginia. Over the past 
several years, there's been a dramatic increase in the 
population in the eastern Panhandle of West Virginia. In fact, 
many Federal employees are relocating to West Virginia in 
search of a peaceful, family friendly environment. In the past, 
these individuals would face a difficult, congested daily 
commute through Hagerstown, MD, on 270 and ultimately onto 495. 
Today, however, thanks to advanced commuter technology, many of 
these individuals are capable of telecommuting from work 
stations only miles from their homes in Jefferson County at the 
telecenter.
    Unfortunately, most Federal employees in West Virginia 
can't take advantage of this exciting opportunity. While 
interest in telecommuting is high among those Federal 
employees, gaining agency approval is an arduous, frustrating 
and bureaucratic process.
    Despite the fact that telecommuting and other forms of 
working at a distance have been thoroughly proven and are 
already commonplace in the private sector, there remain those 
who are steadfastly opposed to this practice. Why? As the 
proverb tells us, all things seem difficult before they seem 
easy. Certain people are just slow to change their way of 
thinking.
    In my opinion, it is time for all of us to embrace the 
practice of telecommuting. Clearly GSA needs to improve their 
effort to market the concept of telecommuting to agency 
management. Emphasis should be placed on the need to comply 
with the recent changes in the law requiring 25 percent 
telecommuting participation among Federal employees. 
Additionally, efforts to streamline the telecommuting approval 
process should be promoted, and the length of time from inquiry 
to implementation of telework should be decreased.
    Employee interest in telecommuting should be met with 
enthusiasm, not skepticism, and whenever possible management 
should encourage employee participation in telework. It is time 
to stop resisting the changing structure of our work 
environment and start using the high-speed computing technology 
to its fullest potential.
    On a positive note, since this committee's telecommuting 
hearing last March, the telecenter in my district has made 
great progress in promoting and marketing its services to local 
citizens. Under the capable management of Neil Jagedny, who's 
in attendance this morning, I'm certain that the Jefferson 
County telecenter will continue to make great strides. In fact, 
last June, GSA provided $130,000 in additional funding to 
assist the Jefferson County telecenter as it moves to become a 
self-sustaining entity.
    But funding alone is not enough. We need more Federal 
agencies to actively promote and encourage employee 
participation in telecommuting programs. The Jefferson County 
telecenter can no longer afford to have dozens and dozens--and 
I think it's almost as many as 70--interested workers stuck in 
a confusing, lengthy and frustrating application and approval 
process. Those Federal employees who live in the eastern 
panhandle and have a legitimate reason to telecommute should be 
authorized quickly by their respective employers. It just makes 
sense. Almost every name on the waiting list represents a 
wasted opportunity.
    Ladies and gentlemen, after years of discussion, now it's 
time for action, and I'm hopeful that we can demonstrate 
leadership necessary to realize the vast potential of 
telecommuting. And I look forward to listening to the testimony 
of today's witnesses. Thank you very much.
    Mr. Davis of Virginia. Thank you very much.
    Mrs. Morella.
    Mrs. Morella. Thank you. Thank you, Mr. Chairman. I want to 
thank you for holding this followup hearing on teleworking in 
the Federal workplace. With 25 Federal agencies located in 
Montgomery County, MD, my district, this decision is of utmost 
importance to me and my constituents.
    I also want to thank you for the courtesy of allowing me as 
a member of the full Government Reform Committee, but not of 
this subcommittee, to appear here today because of the interest 
that I have in this issue. I want to thank you also for your 
leadership on this issue, and I want to thank someone who is 
not here today again--that is Mr. Wolf--for all of his efforts 
to ensure the Federal Government's support of telework programs 
and incentives. I look forward to the day that the entire 
Federal work force will telework to the maximum extent 
possible.
    Now, while there is no magic bullet that will solve all of 
our Nation's problems, teleworking becomes--it comes pretty 
close. As has been noted, for every 1 percent of the Washington 
metropolitan region work force that telecommutes, there is a 3 
percent reduction in traffic delays.
    And during the last hearing, we heard from several Federal 
agencies, including the Office of Personnel Management and 
General Services Administration. And from the panelists' 
presentations, a few questions were raised that I hope will be 
addressed during this hearing. First, how is the government 
encouraging telework for all qualified Federal employees? 
Second, how are the government agencies addressing obstacles 
that block teleworking implementation, such as security issues? 
In addition, what has been done to address these concerns? 
Finally, what can we do to facilitate a solution for telework 
programs within the Federal Government, and more specifically 
in Montgomery County, MD?
    Today we are acting as architects of a new mobile work 
environment, and with the cooperation of the Office of 
Personnel Management and the General Services Administration, 
the Federal Government will once again be an example to the 
States and to the private sector.
    So, again, I thank you, Mr. Chairman, for the opportunity 
to attend this hearing this morning. I certainly look forward 
to hearing from our witnesses.
    Mr. Davis of Virginia. Well, thank you very much, Mrs. 
Morella.
    We're going to now call our panel of witnesses to testify. 
Robert E. Robertson, the Director of Education, Workforce and 
Income Security Issues, GAO; Teresa Jenkins, the Director of 
Office of Workforce Relations, OPM; David L. Bibb, the Deputy 
Associate Administrator of Real Property within the Office of 
Governmentwide Policy at the GSA; Harris Miller, the president 
of the Information Technology Association of America; Mark 
Straton, the vice president of global marketing for Siemens 
Enterprise Networks; and Robert Milkovich, the managing 
director of CarrAmerica.
    As you know, it's the policy of this committee that all 
witnesses be sworn before they testify, so if you'd rise with 
me and raise your right hands.
    [Witnesses sworn.]
    Mr. Davis of Virginia. Thank you very much.
    We've had the testimony ahead of time. To afford sufficient 
time for witnesses, we'd like you to limit your comments to 5 
minutes. There's a light down here in front. When it turns 
orange, you have 1 minute left. When it's red, your 5 minutes 
are up, and you want to move to summary. Your total written 
statement is going to be made part of the permanent record.
    I'll begin with Mr. Robertson, and we'll move right down 
the line. Welcome, and thank you for being here.

 STATEMENTS OF BOB ROBERTSON, DIRECTOR, EDUCATION, WORKFORCE, 
  AND INCOME SECURITY ISSUES, U.S. GENERAL ACCOUNTING OFFICE; 
TERESA JENKINS, DIRECTOR, OFFICE OF WORKFORCE RELATIONS, OFFICE 
     OF PERSONNEL MANAGEMENT; DAVID BIBB, DEPUTY ASSOCIATE 
 ADMINISTRATOR, OFFICE OF GOVERNMENTWIDE POLICY, U.S. GENERAL 
     SERVICES ADMINISTRATION; HARRIS N. MILLER, PRESIDENT, 
 INFORMATION TECHNOLOGY ASSOCIATION OF AMERICA; MARK STRATON, 
VICE PRESIDENT, GLOBAL MARKETING, SIEMENS ENTERPRISE NETWORKS; 
    AND ROBERT M. MILKOVICH, MANAGING DIRECTOR, CARRAMERICA

    Mr. Robertson. Thank you for inviting us to be part of 
these hearings. Good topic. Good issues. As you're aware, the 
work that we'll be discussing today had its origins with a 
request that we received from Mr. Armey last spring. He was 
essentially interested in identifying potential regulatory tax 
and liability barriers that concern private sector employers 
who are considering establishing telecommuting programs. And in 
July, we briefed Mr. Armey and several other Congressmen on the 
results of that work, and what we'll be doing this morning 
basically is summarizing that work and talking about its 
application to the public sector.
    But before I go on to the summary, I'm going to have to 
admit that I'm going to have to use my glasses. Despite having 
increased the size of the type, I still can't see it. It's 
tough losing your eyesight.
    In a nutshell, here's our bottom line. Perhaps the biggest 
challenge to establishing and expanding telecommuting programs 
in both the public and private sectors involve management's 
concerns regarding the effect of telecommuting on the operation 
of their particular organization. These concerns are not 
necessarily new. They relate to assessing whether an employer 
has the types of positions and employees that are suitable for 
telecommuting, protecting proprietary and sensitive data, and 
establishing cost-effective telecommuting programs. In short, I 
don't think I can overemphasize the fact that the extent to 
which telecommuting programs are established or expanded rest 
in large part on a manager's belief, after having looked at all 
of these concerns, that his or her organization's operations 
are going to fundamentally benefit by establishing a 
telecommuting program.
    Now, apart from these management concerns, certain Federal 
and State laws and regulations, including those that are 
governing taxes, workplace safety, work force recordkeeping and 
liability for home workplace injuries, can also act as 
potential barriers to telecommuting for both the public and 
private sectors. Of all the barriers that are related to the 
laws and regulations, what we'd like to do today is focus your 
attention on the one that we believe is a key emerging 
challenge. That involves the applicability of State tax laws to 
interstate telecommuting arrangements. Here the basic question 
for the private sector involves possible increased State tax 
liabilities for the employer and employee when an employee 
telecommutes from a State other than the one in which the 
employer is located. Similarly, from a public sector viewpoint, 
interstate telecommuting arrangements could open up the 
possibility of some States double-taxing the income of Federal 
telecommuters.
    Overall, the application of State tax laws to telecommuting 
arrangements, as well as the application of other laws and 
regulations that were enacted before our transition to a more 
technological and information-based economy, is evolving, and 
the ultimate impact of these laws and relations remains 
somewhat unclear at this time.
    Let me just conclude with some observations on the 
implications of these barriers for the future of telecommuting. 
To begin with, we need to acknowledge that telecommuting offers 
a new set of opportunities that could benefit employers, 
employees, and society as a whole. These have been mentioned 
earlier in the hearings.
    However, whether these opportunities are realized will 
depend on resolving fundamental questions about how 
telecommuting effects an employer's ability to manage employees 
and other resources. As we noted earlier, some of those 
questions deal with the suitability of telecommuting as a work 
arrangement, as well as questions about data security and 
overall costs. Knowing the extent to which these questions 
apply to Federal agencies would provide important information 
for making decisions about telecommuting by Federal workers. 
This was referred to earlier by Representative Morella, trying 
to get a handle on just how extensively these obstacles apply 
to the Federal agencies.
    Realizing the full potential of telecommuting also requires 
that we look beyond internal management questions and concerns 
to the laws that govern an organization's operating 
environment. Some of these laws were put in place before we 
could imagine a world in which employees lived in one State, 
but, through technology, worked in another distant State. As a 
result, these laws may unintentionally discourage 
telecommuting. Further examining how current laws and 
regulations could potentially impact telecommuters and their 
employers would provide the opportunity to mitigate their 
possible effects.
    In conclusion, pursuing the question of how to promote 
telecommuting is really a question of how to adapt current 
management practices as well as laws and regulations to 
changing work arrangements that are and will be part of the 
information age in which we now live.
    Mr. Chairman, that concludes my statement, and I'll be 
happy to answer questions at a later time.
    Mr. Davis of Virginia. OK. Thank you very much.
    [The prepared statement of Mr. Robertson follows:]
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    Mr. Davis of Virginia. Ms. Jenkins.
    Ms. Jenkins. Mr. Chairman, and members of the subcommittee, 
I appreciate your invitation to come here today to discuss the 
progress OPM has made since March in promoting telework within 
the Federal Government. We take our role very seriously and are 
intensely focused on fulfilling our responsibilities under 
Public Law 106-346. On March 22nd, then acting OPM Director 
Steve Cohen discussed plans for assessing the status of 
telework in the Federal Government and the barriers agencies 
confront as they move to increased telework participation. 
Today, I will describe our activities since the March hearing, 
as well as upcoming initiatives.
    Agencies were surveyed in April, and the results were 
included in the Interim Report on the Status of Telework in the 
Federal Government. The survey identified 76 agencies that have 
telework policies covering the majority of their employees. 
Only 18 agencies reported having no telework policies. The 
April survey indicates that the percentage of Federal employees 
who telecommute at least 1 day per week has nearly doubled 
since 1998, but the percentage is still small, 2.6 percent 
today, compared to 1.4 percent in 1998.
    The data reported in April reflect an undercount of actual 
telecommuting practices within agencies. Some agencies were not 
yet tracking regularly scheduled or ad hoc teleworkers. Other 
agencies had no formal telework policies in place at the time 
of our survey. Still others had only draft policies or were 
modifying existing policies to comply with the public law.
    We have contacted agencies that reported having no or only 
draft policies in place in April, and considerable progress is 
being made toward formalizing and fully implementing telework 
policies. In addition, since April, OPM has engaged in a number 
of activities to assist agencies in increasing their telework 
participation. We shared best practices and aggressively 
marketed telework. We provided agencies with our study, a 
compendium of successful telework stories that illustrate how 
Federal agencies have overcome common telework barriers.
    In late June, OPM and GSA launched a joint Web site to make 
it simple for agencies to acquire all the information they need 
about teleworking in the Federal Government. We advised 
agencies to consider all positions as appropriate for telework. 
This positive analytical approach focuses managers' attention 
on job characteristics for determining whether a position is 
suitable for telework.
    When the agencies report to us later this year, we will 
have more reliable data to help refine calculations of actual 
telework utilization. And although Federal agency progress has 
been significant, much work remains to be done. Management 
reluctance, employee fears are two major barriers to telework 
implementation. Our next steps include a telework leadership 
seminar for top-level agency officials in October, an Internet-
based training module by November to break down major telework 
barriers, a satellite educational broadcast to Federal 
facilities in November, a conference in January aimed at agency 
supervisors and managers, and a telework guide for managers and 
supervisors to be published in the fall.
    Also in the fall, the Interagency Telework Issues Group, 
which was formed in September 2000, will provide OPM and GSA 
with recommendations in the areas of data security, computer 
equipment, legal and procurement issues, human resource 
management issues, health and safety, training and taxes. We 
are also assisting agencies with assessing the impact of 
telework on productivity, recruitment, work force stability, 
and these demonstrated benefits should help to change the 
perspectives of managers unconvinced that telework can assist 
them with their human capital challenges.
    Mr. Chairman, I believe that telework is good for business, 
for employees and the environment, and thank you again for 
inviting me, Mr. Chairman. I will be happy to respond to any 
questions.
    Mr. Davis of Virginia. Thank you very much. I appreciate 
you being here.
    [The prepared statement of Ms. Jenkins follows:]
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    Mr. Davis of Virginia. Mr. Bibb, thanks for being with us.
    Mr. Bibb. Good morning, Mr. Chairman, and members of the 
committee and subcommittee. I'm David Bibb from the General 
Services Administration, and today I'll discuss GSA's telework 
efforts within our own agency and our support of telework 
governmentwide.
    Telework, sometimes referred to as telecommuting, can be 
defined as performing agency work outside of the primary office 
facility. This includes working at home, in a telecenter or in 
the field directly supporting customer agencies.
    Public Law 106-346, which we've heard about this morning, 
was enacted last fall. It requires each Federal agency to 
establish a policy under which eligible employees of the agency 
may participate in telework to the maximum extent possible 
without diminished employee performance. GSA has established 
that required policy. Our agency has a little over 14,300 
associates in our work force. Approximately 12,000 of our 
associates are eligible to telework, based on the broadest 
interpretation of eligibility.
    Under GSA's policy, 100 percent of these 12,000 eligible 
persons may participate in telework, subject only to 
concurrence by their supervisors that this won't diminish their 
performance. Approximately 2,500 or 21 percent of GSA's 
eligible associates telework on a regular or ad hoc basis. 
Approximately 800 telework on a regularly scheduled basis 1 day 
per week. An additional 200 telework on a regularly scheduled 
basis 1 day per pay period, and we estimate another 1,500 
telework on an ad hoc basis.
    We are finalizing an electronic questionnaire to solicit 
additional feedback from GSA associates about teleworking, 
including more information about potential barriers to 
increasing the telework participation level beyond the 21 
percent that we now have, such as agency culture and managers' 
apprehension.
    In addition to telework, GSA also supports other programs 
that help to reduce transportation congestion, energy 
consumption and associated vehicle emissions. Approximately 59 
percent of all GSA associates participate in the alternative 
work schedule program. This gets those employees off the 
highways 1 or 2 days per 2-week pay period. Also 29 percent of 
our GSA associates participate in the transit subsidy program.
    In addition to efforts within the agency, GSA supports 
Public Law 106-346 on a governmentwide basis by its public 
building service operation of telecenters and by its office of 
governmentwide policy support of OPM's promotion of telework 
governmentwide. GSA's Public Buildings Service has provided 15 
telecenters in the metro Washington area. It offer a combined 
total of 326 fully equipped workstations.
    The telecenters--at this point, Mr. Chairman, I'd like--
some of the member numbers I will give you are slightly 
different from my printed testimony, because we were working 
with the center directors and completed updating them last 
night. The telecenters currently serve 462 Federal teleworkers, 
representing 19 executive branch agencies, and although 
utilization over the years has followed a slightly downward 
trend, center directors are now reporting a positive uptick in 
usage. The current overall utilization rate is 55 percent; 45 
percent of those are Federal workers. The other 10 percent are 
private sector employees.
    The centers as a group do lose money, and they're currently 
being subsidized by GSA's Public Buildings Service Federal 
Buildings Fund. However, it is possible as OPM works to carry 
out the telework provisions of Public Law 106-346 that overall 
increasing numbers of teleworkers in the Federal Government 
will result in greater utilization of the telecenters. In fact, 
our updated figures show that the number of Federal telecenter 
users is up 11 percent since the law passed last fall. Center 
directors also report an upsurge in inquiries by Federal 
employees about potentially working in the centers. Since the 
March 2001 telework hearing, our marketing efforts of the 
telecenters have concentrated on improved signage, open houses, 
telework training seminars, brochures and local newspaper ads.
    Another role for GSA is in the policy arena. For example, 
GSA's Office of Governmentwide Policy worked with OPM 
associates to develop the one-stop Federal telework Web site 
that's already been mentioned today.
    In response also to a request from Congress, we recently 
awarded a contract to identify technology barriers and 
solutions for Federal home-based telework. The study we hope 
will be done in early 2002.
    Again, Mr. Chairman, I appreciate having the opportunity to 
appear here today, and I'm prepared to answer any questions the 
Members may have.
    Mr. Davis of Virginia. Thank you very much.
    [The prepared statement of Mr. Bibb follows:]
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    Mr. Davis of Virginia. Mr. Miller, thanks for being here.
    Mr. Miller. Well, thank you, Mr. Chairman. I'm Harris 
Miller, president of the Information Technology Association of 
America, representing 500 of the largest IT companies across 
the United States, and I'm very pleased to let you know, Mr. 
Chairman, that my son Derrick, who attended high school with 
your son, helped to draft this testimony.
    The simple message I have----
    Mr. Davis of Virginia. If this is anything like his 
graduation speech, it's going to be spectacular. Thank you very 
much.
    Mr. Miller. Very kind of you, Mr. Chairman.
    The simple message is that 21st century work is no longer a 
place, and those managers and those organizations who continue 
to think that work means that you have to be in a certain place 
at a certain time simply do not understand the realities of the 
21st century.
    Congressman Turner mentioned the figure of 2.6 percent of 
Federal employees are telecommuting as opposed to about 10 
percent in the private sector, but I would contend it even 
understates how fast the private sector is moving, because if 
you eliminate from the private sector jobs which cannot be 
telecommuting, such as manufacturing and certain retail jobs, 
in fact it's much higher in the private sector. It's probably 
close to 20 percent now. So the Federal Government seems to be 
falling even farther behind.
    So my message to the Federal managers is--not to 
blaspheme--let thy employees go. To me, the issue really is, to 
a large extent, attitude. There are certain legal and 
regulatory administrative barriers which have already been 
mentioned, but basically it's psychological. One has to 
understand that workers can be and, in fact, are frequently 
more effective and more productive.
    For example, AT&T teleworkers work 5 more hours per week at 
home than AT&T office workers. JD Edwards, one of the largest 
global software companies, teleworkers are 20 to 25 percent 
more productive than their office counterparts. AT&T estimates 
it saves over $3,000 annually per teleworker. Telework can cut 
corporate real estate costs by 25 percent or more, and, of 
course, teleworkers save substantial time by not being engaged 
in a commute.
    Also an interesting data point from AT&T's survey, 77 
percent of employees working from home for AT&T reported much 
greater satisfaction with their current career responsibilities 
than before teleworking.
    So we see the benefits are clear, more hours, more 
productivity, cutting costs, saving time and psychologically 
for the employees frequently much higher satisfaction, much 
happier, much more productivity.
    There's, of course, also the challenge for the managers, 
and I admit myself to be a bit of a lay convert. I'm one of 
those people who also believe that you need to manage people, 
you need to see them. But I've come around and realized now 
that many of my employees do now telework. They are very 
productive. They are very much engaged, and I suggest the 
Federal managers need to open their ears and eyes and minds to 
this opportunity.
    Let me talk about some of the other benefits that haven't 
been discussed here very extensively. One of the big issues 
that this Congress and our Nation is wrestling with is getting 
more broadband into the homes. In fact, Congress has a big 
debate potentially coming up here about that issue in the very 
near future. One people--one factor people have not focused 
enough on is the relationship between telecommuting and 
broadband. In fact, as it turns out, if you look at people who 
have broadband in the homes, that it's now only about 7 or 8 
percent, which is pretty disappointing considering what we 
expected in 1996 when we passed the Telecommunications Reform 
Act. But it's interesting that about 80 percent of those people 
are telecommuters. What that tells me is that if people have a 
real reason to have broadband, they will get it, because it 
affects their work.
    Imagine a part of northern Virginia in Congressman Davis' 
district or Congresswoman Morella's district or Congresswoman 
Capito's district where it enabled you--a lot of Federal 
employees who got together and negotiated broadband into their 
neighborhood and reduced rates because they could be more 
effective telecommuters, set up kind of a buying co-op that 
would convince the cable company or the satellite company or 
the telephone companies, the competitive local exchange 
carriers to offer broadband because they knew they had a built-
in customer base because there are so many Federal employees 
concentrated in Virginia, Maryland and West Virginia and other 
places around Washington, DC. So there are some great 
opportunities to drive more broadband.
    Let me talk about a couple of other challenges, though. One 
Congresswoman Morella mentioned, the information security 
challenge. This is not just a challenge for the Federal 
Government. It's a challenge for the private sector. We need to 
make sure that if people are working at home, they have 
information security. But another challenge is to make sure the 
technology is current. You can't have one version of software 
in the office and another version on the home computer. So the 
challenge is to make sure that all the technology is kept 
current, and that's something people are learning to live with.
    The regulatory barriers were already mentioned by the 
witness from GAO, so I won't go into them in great detail, but 
certainly we share his concern about the taxation issue, home 
deductions, and we certainly hope that we won't have a repeat 
of that effort by OSHA a couple of years ago to think about 
trying to regulate teleworking. I think everyone realized that 
was a very silly idea and hope it's gone away.
    One last issue I'd like to mention, Mr. Chairman, is 
contractors. We're talking today primarily about Federal 
employees, but keep in mind, a huge percentage of the IT work 
is done for the Federal Government by IT contractors. 
Contracting officers almost never allow the contractors to 
allow their workers to telecommute because there is no specific 
leadership from the Congress or from above, and that could also 
provide the same kind of benefits we've been discussing. If an 
IT worker is working for one of the major companies in the 
Washington area or anywhere around the country that provides 
services to the government, if they are encouraged to telework, 
that provides the same benefits, cutting down on commuting 
time, cutting down on pollution, increased productivity. But if 
the contract officers have the mindset that the person who is 
the contractor has to be sitting in a particular office at a 
particular time from 8 to 6 every day, then you're not going to 
get over this barrier. So, again, I believe it's psychological. 
It may require legislation for Congress to direct the agencies 
to do this, but right now I don't see any regulatory barriers.
    Thank you very much, Mr. Chairman.
    Mr. Davis of Virginia. Thank you. Let me just add that we 
are putting that in our bill, working with your groups and so 
on, and that we'll be introducing a little later this session.
    [The prepared statement of Mr. Miller follows:]
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    Mr. Davis of Virginia. Mr. Straton, before I get to you, 
Ms. Norton may have to go off to another hearing. I want to 
allow her to make a few comments. She's tried to take a 
leadership role in this area.
    Ms. Norton. Thank you very much, Mr. Chairman. And I thank 
you for inviting me here to this subcommittee hearing. I'm a 
member of the full committee, but not of this important 
subcommittee. I am a member of the Transportation Committee, 
and I regard this as a transportation issue and a major 
transportation issue.
    I very much thank Chairman Davis with whom I have worked so 
closely on regional and District of Columbia issues for 
focusing as he is on telecommuting. I'm very concerned at what 
I can only call negligible progress in the Federal sector here. 
I was very glad to hear about what GSA is doing. Clearly we 
have a huge amount of unevenness here.
    Mr. Chairman, I do have a suggestion as to what we might do 
to clear up a lot of our transportation problems on which you 
and I work so closely. Just have more of the residents of the 
region understand that the way to countermand this 
transportation problem is to do what so many of you are already 
understanding you must do, and that is move to the District of 
Columbia. You will not need telecommuting. You will not need 
transportation. You will live in one of the variety of 
beautiful neighborhoods in our town, and this problem will go 
away. Now, inevitably, some of you will have to go to Fairfax. 
Others of you will make your way to Montgomery. The only reason 
they are there in the first place--when I was here--when I was 
growing up----
    Mr. Davis of Virginia. Ms. Norton, let me just join you. I 
would particularly give that to my Democrats, a welcome to 
move----
    Ms. Norton. I'll take that, Mr. Chairman. I do want you and 
my good friend Connie Morella, who chairs the District 
Subcommittee, to know when I was a child growing up in the 
District of Columbia, Fairfax and Montgomery were cow country, 
and as far as those who live in the District of Columbia are 
concerned, they still are. Montgomery and Fairfax is there only 
because there was not enough room in the District of Columbia 
for the entire Federal presence. The reason that Montgomery and 
Fairfax have become so prosperous is because first of the 
Federal presence, which then spawned everything else, including 
the whole IT sector.
    Seriously, though, we have a terrible national crisis. I 
only hope some parts of the United States have done better than 
we have in this region, because we are the poster child for a 
transportation crisis, and we are sitting on our thumbs and 
doing nothing about it. You would think, given the fact that 
this part of the country is way ahead of other parts in IT, 
that telecommuting would be far advanced here, and, in fact, 
the opposite is the case. Traffic problems are sapping the 
energy and the money out of this region. If, in fact, somebody 
is looking where to locate, whereas normally locating near the 
Nation's Capital or locating particularly in Montgomery or 
Fairfax would have been prime places given the work force and 
given the other advantages, this part of the country is 
becoming just the opposite place now to come, and I think 
places in the far West where there are equally good work 
forces, where they have telecommuting further advanced and 
where traffic is not a problem that it's become here are likely 
to overtake us in competition.
    If I may say so, Mr. Chairman, as a person who chaired a 
Federal agency, the Equal Employment Opportunity Commission, I 
believe that a--and concentrated on management and on reform of 
the agency when I was there under President Carter, I believe 
that the challenge really lies in management. Until management 
understands how to supervise and hold employees accountable who 
indeed are engaged in telecommuting, I don't think that there 
is a great incentive for them to change the culture that, in 
fact, has been a part of the culture of our country and of the 
Federal Government forever. I don't think that they will know 
how to do it on their own.
    I was pleased to hear the OPM testimony, because I believe 
you've got to begin at the top on this one. You've got to make 
managers understand how to do it. We're not born into this 
world knowing how to supervise people who work from home. We 
know how to hold you accountable if you are sitting right under 
our nose. This really envisions an entirely different way to 
manage employees, and the Federal Government is way behind on 
understanding that, because we have not given our own managers 
who are very good at managing the tools to cross over from the 
old industrial society management to the new management that a 
technological society demands. And that is why I think the 
chairman's leadership here in focusing us so that we come up 
with true remedies--and I want to say, Mr. Chairman, if it 
takes legislation, fine. I do believe the Federal Government is 
quite capable of doing it with hearings like yours that involve 
the kind of oversight that give the government the incentive to 
move far more rapidly on telecommuting.
    Thank you, Mr. Chairman.
    Mr. Davis of Virginia. Thank you very much, Ms. Norton.
    Mr. Straton, thank you----
    Mr. Straton. I'd like to ask you----
    Ms. Norton. Mr. Chairman, I will be back. I'm going to 
another hearing, but I will be back.
    Mr. Davis of Virginia. Thanks.
    Mr. Straton. With your permission, Mr. Chairman, after I 
read my statement, I'd like to take about an additional 60 
seconds and just show you some examples of what we're doing.
    Mr. Davis of Virginia. Good idea.
    Mr. Straton. Mr. Chairman, ranking member, and other 
members of the subcommittee, thank you for providing Siemens 
the opportunity to discuss this experience as a pioneer and 
leader in teleworking. Siemens is one of the oldest and largest 
electronic companies in the world, operating in 192 countries. 
In the United States we employ over 85,000 people in 700 
locations with presence in each of the 50 States. At Siemens we 
both use and sell teleworking technologies. Siemens views 
teleworking simply as a means to allow for geographic 
dispersion of the work force using electronically supported 
communications and collaborations.
    Siemens initially deployed teleworking because of 
significant cost savings opportunities, but other benefits have 
accrued over the years. As a result, teleworking became a 
mainstream part of our business model in 1996. Today 20 percent 
of our employees are full-time teleworkers, and roughly 40 
percent are what we would call mobile workers.
    Teleworking has enabled us to decrease our office space by 
35 percent nationwide, resulting in annual cost savings of over 
$3 million in the 3,000-person enterprise networks division 
alone. Productivity increases of over 20 percent are typical, 
with no decline in customer satisfaction. In addition, we have 
grown to appreciate the benefits to our employees' families and 
ultimately our communities.
    Business benefits are measurable and recurring, from entire 
departments to individual employees. Teleworking allows us to 
retain high-performing employees who contribute beyond their 
peers and enables us to help dual-income families. It also 
allows us to recruit part-time workers with great talents who 
previously had been unavailable to us, stay-at-home parents who 
want to work while the kids are at school, or retirees who want 
continued income and intellectual challenge. For example, 
through teleworking, Siemens retained a high-performing 
Virginia-based contracts administrator whose husband was 
transferred to Texas. Instead of going through the exhaustive 
and costly process of rehiring, retraining and agonizing over 
whether the new hire could match the employee's standards, 
Siemens placed her in the teleworking program.
    While the Siemens business units continue to thrive with 
such solutions, our employees also reap significant quality-of-
life benefits. We all are aware of the cost of living and the 
choices families must make, PTA meeting or late-night project, 
coaching Little League or overcoming deadlines. Successful 
businesses realize that these concerns impact employees' 
quality of work, tenure, loyalty and motivation.
    Teleworking solutions can mitigate seemingly difficult 
choices, because geography and time zones become transparent. 
Businesses with telework programs can attract and retain the 
best in a highly competitive environment. Society also benefits 
from teleworking. The actions taken by hundreds of teleworkers 
can reduce traffic congestion, energy consumption and 
pollution, a practical, not wacko environmentalism.
    Teleworking can present opportunities to improve the 
quality of life for many Americans. For example, a key 
individual in Siemens became ill with multiple sclerosis that 
forced him to reconsider full-time employment. Teleworking came 
to the rescue. He continued to share his intellectual capital 
with his coworkers, impacting our business as if he were at his 
desk 5 days a week.
    Our teleworking success did not occur overnight. We had to 
decide to adopt teleworking as a business practice using 
technology to facilitate and management to enable. Siemens 
faced some of the concerns identified in the recent GAO report 
for the Honorable Dick Armey. The report cited management 
concerns in key areas. The identification of employees in 
positions suitable for teleworking, the security of sensitive 
data and the ability to remotely monitor teleworkers, the 
impact of teleworking on a business' profitability all are 
valid concerns, and, coupled with liability and privacy issues, 
they are at first glance significant hurdles to implementing 
teleworking. But imagine, if you will, a three-story building 
in an office complex ensnarled in nonstop traffic with over 
25,000 square feet for 60 employees sitting at their desks in a 
high-rent area. Day by day in sweltering summer heat or snowy 
winter days, the workers commute in to receive calls from 
clients seeking technical assistance. Now envision the same 
group of workers dispersed in over 23 States, not worrying 
about the road conditions or the issue of the latch-key 
children. They continue to perform their jobs; in fact, are 
more likely to process more calls, stay with Siemens and 
maintain high customer satisfaction.
    This is the new Siemens customer technical support center, 
completely operated by teleworking agents. We now manage our 
teleworkers in a variety of methods, including by objective, by 
measurable and realtime data and by the traditional performance 
measurements. The teleworking requires that managers be very 
clear in job responsibilities and objectives and quick and 
forthright in performance communications. Our technology allows 
us to interact with our teleworkers by ensuring their business 
numbers ring them at home, on their cell phone or in a hotel 
environment. This flexibility allows our managers the 
opportunity to maximize interworking with our teleworkers and 
maximize the employee's opportunities to succeed.
    As with any business practice, teleworking must be 
evaluated through an ongoing dialog between management and 
employee to ensure common business goals are achieved. In sum, 
once acclimated, both management and employees simply view 
teleworking as a way of doing business at Siemens and not an 
individual privilege.
    Mr. Chairman, we applaud your leadership in focusing 
congressional attention on teleworking and its potential 
benefits to government. We believe teleworking can help 
incentivize Federal workers to stay in Government and can be 
used as a recruiting tool. In addition, as Siemens has 
demonstrated, teleworking programs can also reduce costs and 
improve productivity.
    We owe a debt of gratitude to Congressman Wolf for his 
determined efforts to expand teleworking opportunities for both 
public and private sector employees. We believe the Telework 
Tax Incentive Act introduced by Congressman Wolf is also a 
model to incentivize private sector organizations to implement 
teleworking programs.
    Siemens also recommends that the Federal Government look at 
ways to partner with the private sector and consider pilot 
programs that capitalize on the expertise and lessons of 
private sector programs. After all, for most of human history, 
people worked out of their homes. It is only recently with the 
rise of industrial and information revolutions that large 
centralized office complexes have become commonplace, and 
commonplace only because communication and information were 
bound to a single location. Now, today, communication and 
information are not limited to single locations, because new 
technologies have enabled a mobile and distributed work force. 
For example, by 2002, there will be more mobile phones in the 
world than wired phones, and by 2006, the Internet will be 
accessed more by mobile devices than wire devices.
    Recently there was a lot of publicity and consternation in 
the press regarding the President's month-long vacation. 
However, after having watched the coverage of this and many 
Presidential vacations, I could not help but think to myself 
that Presidents often telework, and being a marketing guy, I 
couldn't also help but think what a PR opportunity it could 
have been. If Presidents can telework with the most important 
job in the world, why can't the average worker do it with maybe 
just a little bit less responsibility?
    Mr. Chairman, Siemens appreciates this opportunity to 
discuss the issues confronting implementation of a teleworking 
program. We are proud of the success of our program and feel 
strongly that the teleworking business model can be transferred 
to the public sector. We fully support your efforts to expand 
teleworking opportunities.
    With that, let me just very quickly show you a couple 
pictures. This is just an example of a teleworker coming into 
our Reston office. And you go into a computer, and you sign 
into a cube. And, Tim, if you can show the next slide. And what 
the teleworker sees is they see a schematic of the teleworking 
area, and they click on the cube that they would like to have 
for the day, and then their phone number and their PC all go 
there.
    Now, I think this is one of the most interesting pictures. 
Rather than having filing cabinets, etc., the teleworkers have 
cabinets, much like you would have in a high school, and they 
go to the cabinets and they have some shelves there. You'll 
often see pictures of their families, open cans of Coke, and 
you can see that they have a cart. And I have an example of it 
right here. Let me just walk around you for a second. And they 
put their PC on the cart, and they roll the cart over to the 
cube, and as you can see, this is a live cart. It was very 
heavy to get here. Thank you very much, Tim. Full of things. 
You'll see things, like I said, like pictures, personalization, 
just like people would do in an office.
    And then the next picture is just--it looks like a regular 
office cube, because it is. The only difference is that the 
telecommuters' phone automatically rings just like it was their 
office all the time, and when they leave the office, their cell 
phone automatically rings if they would like it to, just like 
if you called their office number.
    Thank you very much.
    Mr. Davis of Virginia. Thank you. Thank you very much. That 
was a good spin on the President's vacation. The President's 
telecommuting initiative. You ought to let Ari Fleischer know 
about that.
    [The prepared statement of Mr. Straton follows:]
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    Mr. Davis of Virginia. Mr. Milkovich, thank you.
    Mr. Milkovich. Mr. Chairman, members of the Subcommittee on 
Technology and Procurement Policy, I thank you for your 
invitation to speak here today on issues relating to commercial 
real estate solutions for the private sector, specifically as 
it relates to teleworking. I'm going to work between two sets 
of paper here. One is my written testimony, and then the other 
is to address some of the questions that were submitted to me 
in the invitation letter dated August 27, 2001 from the 
Chairman.
    I would like to say thank you to Mark. Having been on a 
plane quite a bit lately, I thought this was a self-
administered beverage cart. So I'm glad to know I have seen 
these, though, with the work in the----
    Mr. Straton. Some days it is.
    Mr. Milkovich [continuing]. Private sector.
    Again, I am Robert Milkovich, managing director for 
CarrAmerica, and I would like to give just a quick history on 
CarrAmerica Realty Corp. We are a publicly traded real estate 
investment trust [REIT]. We were born out of the Oliver Carr 
Co. in 1993. Many of you in the NCR region know the Oliver Carr 
Co., which has operated here for over 40 years. Currently, we 
are in 12 markets across the country. We have 287 buildings 
that total well over 20 million square feet of commercial 
office space.
    I bring this to your attention because in 1997, we saw 
quite a movement for the alternative workplace solution in the 
private sector. With that, our research and data that we 
collected, we invested in HQ Global Workplaces, essentially an 
executive suites operator. Concurrent to that, we piloted a 
target program called NOWSPACE in Atlanta, GA, and that 
essentially was turnkey office space which included the 
furniture, fixtures and equipment that people could come in and 
what we would determine as plug and play. You could essentially 
contract for the space on a Friday and be up and running on a 
Monday. This program was successful enough that we also 
deployed those efforts into the Dallas market as well. We find 
that the drivers behind this were the need for speed, growth, 
flexibility and low capital expenditure to entry. It also 
helped in employee recruitment and retention, to highlight a 
few items. I offer this as a background insofar as our company 
is concerned because we see a trend in the private sector.
    Another case study that I would like to utilize is what we 
refer to as the Schwab Hotel experience. In an effort to meet 
the demands of a longstanding customer, we built, operated an 
office hoteling facility for Charles Schwab in Walnut Creek, 
CA. This facility was opened to meet the needs of the employee 
base at Schwab that lives north and northeast of San Francisco 
and battles traffic congestion into the city. The space is 
equipped with FF&E and a sophisticated reservation software 
system to allow employees to schedule and manage their time 
more efficiently. The reservation system has the ability to 
track and report on space utilization. This attribute is 
paramount to management for controlling costs and monitoring 
the work force. Now, the employee-manager relationship can be 
tracked electronically, and communication can be made simple.
    Another powerful attribute of this facility is the 
capability for employee recruitment and retention. Equally 
important, this modern technology promotes the seamless 
integration of the employee's workspace at a variety of places. 
The experience enables employees to work from a multitude of 
locations, thus spending less time commuting and more time 
productively at work. The benefits are endless, supporting the 
Clean Air Act and other responsibilities that corporations must 
meet in today's competitive world.
    The economic benefits are substantial. Most telework and 
hoteling programs strive to capture a minimum ratio of one 
workspace per two employees. This in simple math can result in 
a cost savings in annualized rent of as much as 25 percent. In 
fact, most of the insurance companies that we have interviewed 
target 33 percent as a goal. For large private sector space 
users, this can have a substantial impact to the bottom line.
    Let me address a couple of the items that were in the 
invitation letter. One was managerial barriers that we have 
encountered in the private sector that we have identified. One 
is managing from a distance for employers. That is obviously a 
big cultural issue, and we also see it from the employee's 
standpoint. Employees' concern about career path and being 
connected to the organization. Certainly technology can help to 
bridge this gap, but there is that old style of management that 
still believes in out of sight is out of mind. This also calls 
to question should people work from home or a third place such 
as a telework center.
    Another issue that I address in your letter is the private 
sector implementation, two other cases that I will bring to 
bear here. One is Aetna. As an example, they have instituted a 
program whereby claims processors can work from home, managers 
can easily monitor the number of claims processed, and the 
benefit to the company is less office space. I think this is a 
particular situation that addresses how private sectors can 
monitor the workload.
    You also have the most successful model that has been out 
there in the private sector, and that is large accounting firms 
that are practicing and perfecting this type of business model 
for years. The genesis of this success is due to the nature of 
the work. To be profitable they must have employees in the 
clients' offices, requiring less office space for themselves. 
Telecommuting offers significant benefits to the private 
sector, and those are obvious in space reduction, flexibility, 
employee recruitment and reduction.
    Concurrently, or in conclusion, I should say--I am looking 
at the clock now. My apologies. In conclusion, teleworking in 
the private sector is an effective tool in use by many 
companies for employee recruitment and retention and offers an 
economic benefit. Thank you.
    Mr. Davis of Virginia. Thank you very much.
    [The prepared statement of Mr. Milkovich follows:]
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    Mr. Davis of Virginia. We are going to start with 
questions. I will start with Mrs. Capito.
    Mrs. Capito. Thank you.
    I believe, Mr. Robertson, you may be able to answer this 
question. In thinking of the telecenter in Jefferson County 
where I mentioned there were seven folks who have been on the 
waiting list for quite a while to try to telecommute at least 1 
day a week, from a variety of different agencies, now when you 
look at a private company, lots of times they will have, you 
know, a structure where there is a personnel office that is, 
you know, handling all of these kind of concerns. Do you see 
that one of the problems is the variety and the vast 
differences between the different agencies in the Federal 
Government, that is one of the stumbling blocks, or is it 
something else?
    Mr. Robertson. We didn't specifically look at telecommuting 
centers, but I imagine that when you have several different 
Federal agencies working out of the same center with several 
different sets of rules and regulations, you know, they can act 
as obstacles to making the most efficient use of that 
telecenter.
    Mrs. Capito. Well, may I ask then, Mr. Straton from 
Siemens, in your telecommuting experience are all the rules and 
regulations centered in one personnel office, or is it done 
through the different departments?
    Mr. Straton. Yeah. We have learned a lot about how to do 
it, and there is actually in the handouts that we have a good 
overview of some of the policies, so we have pretty explicit 
agreements with each teleworker. Now, one of the things that we 
do differently and is a problem that we encountered is 
teleworking--employees love it, so they are like, OK, I want to 
telework 2 days a week, but what they want to have is they want 
to have an office fully functioning, and then they want you to 
have a fully staffed office at their home. So one of the things 
that we had to do is you can't be both. You make a choice. It's 
either an office worker or a teleworker. And that doesn't mean 
you wouldn't allow somebody to telework a day a week or 
something like that, but you are not going to pay for both as a 
company because the driver for the company is productivity and 
cost savings, and I think those are the right drivers for the 
government as well.
    So I would say that yes, we have common practices we 
differentiate between teleworkers and office workers. And the 
other thing is that teleworkers, they still need that 
community, and so that is why I think the hoteling concept that 
I showed you is specific to in this particular case a sales and 
engineering function so that when they do come in, they do get 
together. So I think that is something you have to think 
through because the communications when you are dispersed 
becomes key.
    Mrs. Capito. That is the end of my questions. Thank you.
    Mr. Davis of Virginia. OK. Thank you.
    Mrs. Morella.
    Mrs. Morella. You know, it comes down to leadership, a 
belief, a commitment to doing what is right, trust. This 
reminds me of our Y2K, Mr. Miller, the whole concept of the 
need to trust, and then it comes down to security also. And I 
just wondered if--maybe I will start off with Mr. Robertson. If 
you would indicate what you have seen with regard to the 
security issue.
    Mr. Robertson. Well, we have talked about it already this 
morning. I think the point has been made that the security 
issues are big in the public and private sector, even before 
you throw in telecommuting to the mix. And when you throw in 
telecommuting, and you are talking about accessing possibly an 
organization's central data base, then, you know, you raise the 
level of concern. And there are people who can talk more about 
how to build firewalls and so on and so forth. But it is an 
issue in both the public and private sector.
    I am not sure, you know, what the solution is or if there 
is an easy solution beyond using the technology as best as 
possible to secure that data, but there could be simple ways of 
addressing some of the security concerns, too, just through--
and this is very nontechnical--but basically having in the 
Federal Government, for example, making sure that all workers 
were aware of how to handle sensitive data, and making sure 
that all Federal workers who are telecommuting in particular 
understood what to do and how to handle this type of data. And 
it may in some cases, require that there be some limits on the 
use of certain types of sensitive data by Federal 
telecommuters.
    Mrs. Morella. You know, one thing I noted in listening to 
the wonderful testimony that each and every one of you 
presented, I don't think there is any partnerships going on or 
any sharing of best techniques or standards or practices with 
the public sector and the private sector. I mean, we hear from 
ITAA and from Siemens and CarrAmerica about how teleworking is 
succeeding. It seems to me there should be more of a sharing.
    Would any of you like to comment on whether there are any 
attempts to do that and whether or not you think this is a 
stellar idea that we should develop further?
    All right. Mr. Bibb.
    Mr. Bibb. I would just say from the standpoint of GSA, 
yeah. It is a great idea, and we are trying our best to do 
that. We are prime members of the International Telework 
Association and Council, which is a joint partnership of 
private sector firms and the Federal Government. In fact, we 
are trying to do that in many of the arenas where we operate. 
And our Web site which we have talked about, the joint OPM-GSA 
Web site, does contain the best practice success stories and 
that sort of thing.
    So, yes, it makes all the sense in the world, you are 
absolutely right, to learn from the private sector firms, and 
we think vice versa in some cases.
    Mrs. Morella. And you may want to have an exchange of 
people, too. I mean, they may want to go visit and see how it 
is working. Do you want to comment on that, Mr. Miller?
    Mr. Miller. I would agree from the private sector 
standpoint. I was very interested to hear Ms. Jenkins comment 
about the telework leadership seminar. If there is some role 
for the private sector to play in that in terms of giving some 
examples, companies like Siemens could testify about their 
success, if that is helpful, to give real-world examples.
    Let me go back to your first question, Congresswoman 
Morella, about the security. I think that is an excuse, not a 
reason, for telecommuting. I certainly agree with what Mr. 
Robertson says. There are myriad challenges, but as we know 
from where the government itself already is when they are not 
telecommuting, they are pretty far behind in information 
security, the recent GAO report on Department of Commerce just 
being one very glaring example of how the government is behind.
    There is no intrinsic reason though the telecommuters, 
whether they are telecommuting from a telecenter that 
Congressman Capito talked about or telecommuting from their 
home, that they cannot be properly outfitted with the 
technology and the people and the processes to secure 
information. Obviously there are some types of jobs that are so 
sensitive that you would never want to have anybody outside the 
building, but for most of the government work force we are 
talking about, I don't see any obstacles whatsoever that can't 
be overcome fairly straightforwardly.
    Mrs. Morella. Can be overcome.
    Did you want to comment on that Ms. Jenkins?
    Ms. Jenkins. Yes, please. As far as partnering with the 
private sector, we have done a lot of work with AT&T since 
their testimony here in March. They participated with us within 
a strategic planning session, acting as our advisors and 
consultants on how we can help the agencies comply with the 
public law, and we are continuing to partner with them. We have 
learned a great deal from AT&T. They have helped us to expand 
our thinking about how we can increase the number of 
teleworkers. They have talked to us about training efforts that 
they found to be appropriate, and we have adopted many of their 
philosophies.
    And as far as our upcoming leadership conference, we do 
plan to extend an invitation to both Siemens and AT&T. We think 
that it is important for agency leaders to hear firsthand about 
how telework can actually work and help them with their human 
capital issues.
    And on the issue of security, we have a number of things 
that we have been doing at OPM. We have had many conversations 
with the Federal CIO Council, particularly the security 
committee, on how we can perhaps establish some governmentwide 
guidance for agencies to use. We encourage agencies to include 
the security officials on their planning team when they are 
establishing telework policies. We also encourage managers to 
precede a telework arrangement by addressing security issues 
with their employees, and ensuring that they have up-to-date 
virus protection and proper firewall software on their 
computers. Thank you.
    Mrs. Morella. I thank you.
    And I know my time has elapsed, but I just want you to 
think, Mr. Bibb, about the fact that you have 100 percent 
participation in Frederick, MD. Are there particular factors 
there that you don't find in Montgomery County, MD, where we 
could establish such a record?
    Mr. Bibb. Well, as you know, we are going to be taking a 
look at the feasibility of a couple of centers in Montgomery 
County, MD. I don't have answers to that, but that will 
certainly be some of the items we are looking at as to whether 
we can make a go of it. We will be responding to the report 
language in the House appropriation bill and giving you a full 
report on how those compare.
    Mrs. Morella. Splendid. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Davis of Virginia. Thank you.
    Let me just note that our colleague Mr. Moran has just 
joined us, another strong champion of telecommuting here in the 
Washington suburbs.
    Jim, do you want to make any statement at this point?
    Mr. Moran. It is not necessary. I am sure that anything 
profound and constructive has already been said that could be 
said from the dais, so----
    Mr. Davis of Virginia. I think I got most of that in my 
opening statement.
    Mr. Moran. I trust you did. And certainly Mr. Turner had a 
statement. I am sure that covered it as well.
    Mr. Davis of Virginia. Well, we finished the panel. And let 
me ask a few questions as we go through the panel.
    First of all, great testimony. Let me start; we have heard 
a great deal about the need for incentives to promote telework. 
As you know, Mr. Wolf has introduced the Telework Tax 
Initiative Act. In Virginia, Governor Gilmore introduced the 
Telework Virginia, a public-private matching program to provide 
financial incentives to Virginia businesses to start or expand 
existing telework programs.
    Can any of you think of any incentives that could encourage 
Federal agencies and employees to embrace telecommuting more 
fully? And let me just say, we are working on our CERA bill 
coming out of this committee that will, I think, enhance 
Federal contractors, Mr. Miller, with what you suggested, 
allowing them to use more telecommuting in what they are doing.
    A lot of this is managerial, and managers are just not 
comfortable; they are in the old paradigm. But having heard 
AT&T's testimony last time and what Siemens and Carr have done 
shows us that the private sector has found this to be excellent 
for recruiting and retention.
    Mrs. Norton mentioned the traffic situation. It has many 
good elements if we can learn to utilize it correctly. But are 
there more incentives that we can give you at the Federal level 
to make it more palatable so we could move this faster? We have 
used the stick. I mean, I think Mr. Wolf's legislation was kind 
of the stick. We give you deadlines and so on.
    Mr. Miller. I think in the private sector the incentives 
are--frequently simply are strictly financial. You simply say 
to a manager, here is a way to save money. It was covered in 
testimony from my colleague on the left about Siemens, the 
savings in real estate, the more productivity out of the 
workers, and obviously it is much tougher in the Federal 
Government where you don't have as many bonus systems. But 
there are SES bonuses given based on various performance 
factors, and this could be looked at perhaps as one element of 
the incentives for managers to save money in terms of making 
the work force more productive, and that may incent them to 
promote more telecommuting.
    Mr. Davis of Virginia. And I would think from a parking 
perspective and some of these problems around some of the 
buildings where you have it up, it could help on all of those 
kind of things.
    Mr. Straton and then Mr. Milkovich.
    Mr. Straton. Yeah. I just want to echo what Harris said. I 
think if you look at Siemens as a model, IBM also is another 
good model, what drove both these companies was cost. We were 
under intense competitive pressure, and we had to reduce our 
expenses, and because it is difficult to ask managers to 
change, it is difficult to manage in a distributed environment, 
it takes different skills. You have to do different things.
    So, you know, the one thing that you could do, I think, to 
get it really widespread within the Federal Government and then 
I think it has a ripple effect into the private sector is you 
just simply tell them that they have to reduce their real 
estate expenses, and the rest will follow. But people don't 
change unless they have to.
    Mr. Milkovich. Let me submit, obviously we have talked 
about the backbone being cultural, technological, you know, the 
kind of social benefits, if you will, I think, from the private 
sector, Mr. Straton is on, that there has to be an underlying 
economic benefit. It has to be a reduction in space. It has to 
be a better efficiency on occupancy levels and use of space.
    I think that the Federal Government is in an enviable 
position in the sense that you control a substantial amount of 
leasehold interests, so you have a lot of room to make those 
type of moves. I am not sure I am correct on this, so it is 
almost a statement in the way--formed in a question, and that 
is, if a particular department is able to reduce its real 
estate costs, if there is a way that they could see that 
benefit to their department, it would be recorded or somehow 
recognized for that department, I think you would see a 
stronger shift toward teleworking.
    Mr. Davis of Virginia. OK. Let me ask--sure. Ms. Jenkins.
    Ms. Jenkins. All the things that were stated I think are 
important incentives, and I think the Federal Railroad 
Administration is a good example to follow relative to the 
space reduction and the incentive to encourage managers to 
allow more employees to telecommute.
    In addition to what has been said, and it sort of follows 
upon what has been said, is that it seems to me the most 
important and critical incentive is tying telecommuting to the 
business needs of an organization, and that would also include 
the human capital challenges that managers are feeling right 
now with a potential huge numbers of employees about to retire; 
that utilizing telework as a retention strategy, utilizing 
telework as a recruitment tool to gain the best and the 
brightest college graduates into the public service are real 
incentives for managers, and that is what it is that we are 
trying to do at OPM is trying to get that word out and really 
tie the impact of telecommuting to the business of an 
organization.
    Mr. Davis of Virginia. It just seems that right now we are 
getting the worst of all worlds. We are not getting any office 
space reduction from this plan yet because we just don't have 
the penetration in the work force that we ought to have. And 
yet we are spending money for these telecommuting centers. So 
it is really a net cost right now. And the reaction we tend to 
get is, ``I guess we have to do it. Congress wants us to do it. 
And we really don't understand what it can do for our work 
force and for other things.''
    But when you listen to Siemens and you listen to Carr and 
you listen to IBM and you listen to AT&T and some of these 
private companies and how it is helping them in their business 
plan, you feel like you ought to do a seminar with some of your 
managers and show them what the possibilities are.
    Ms. Jenkins. Yes. And that is exactly what we intend to do. 
There is really good data out. AT&T particularly has done a 
cost-benefit analysis relative to the impact of telecommuting 
on productivity, and we plan to push that information out. The 
Internal Revenue Service, an aspect of the Internal Revenue 
Service has done a cost-benefit analysis which we intend to 
help them market. It is wonderful to talk about the money that 
can be saved when you don't have to recruit for individuals 
that leave your organization. It's estimated between 93 and 
100--150 percent of annual salary is spent on recruiting, and 
we need to translate that into dollar figures for Federal 
agencies. So that is something that we are planning to do, not 
only in our October leadership conference, but also in our 
January conference where we really get to the managers and the 
supervisors.
    Mr. Davis of Virginia. OK. Sure. Mr. Bibb.
    Mr. Bibb. Just to make one point. On the space reduction, I 
don't want to leave the impression that this is a space 
reduction program. I have done a lot of interaction with the 
private sector, and in some companies it may result in space 
reduction. In others it may not result in space reduction at 
all, but it may result in getting the job done better. It may 
result in much lower turnover rate, the ability to attract and 
retain good employees.
    So the whole thing, from my perspective, is it is about the 
business. How do you best get the business done. How do you 
offer the associates or employees the best range of a 
combination of working in the office, working at home, working 
in the field and linking that all together with the technology. 
And that calls for a lot of careful planning, a lot of thinking 
and a lot of willingness to make those options available.
    Mr. Davis of Virginia. Well, there are many benefits. And I 
think, as you say, you don't employ this with one thing in 
mind.
    But, clearly, on recruiting and retention, we find some 
specific examples in the testimony today about people who you 
can get into the business and you can retain them because they 
can spend more time at home with their families and do other 
things. That is something, with the Federal Government spending 
as much as money it does recruiting and retaining people, that 
is a plus.
    Also, you will get some space reduction, obviously, with 
your work force; and you walk through Siemens and you see it.
    Third, traffic reduction. This helps people who aren't 
telecommuting by getting a few cars off the road. It is much 
cheaper over the long term to move cars off the road than it is 
building new highways. That is a byproduct. It is not the 
reason we are doing this, but it can be a significant 
byproduct.
    Also, on very bad days, an employee might get off down in 
Dale City in my district or out in Reston or out in West 
Virginia, see what the traffic is like and say, ``This could be 
a long day today,'' and they can telecommute on that given day.
    And fourth is something that we haven't talked enough about 
but it was mentioned in the testimony today and that is 
productivity increase. The fact of the matter is that people 
who telecommute are working after their 40-hour weeks, are 
working more hours at home than employees who don't 
telecommute. It is a cultural change, and their job can become 
part of their life this way but not interfere with the other 
parts of their life.
    So those seem to me to be really significant benefits.
    I have more questions, but let me ask my friend, Mr. Moran, 
if he would like to ask any questions at this point.
    Mr. Moran. Thank you, Tom.
    I appreciate you holding this hearing, Mr. Chairman; and 
for all of the reasons that you just listed it is imperative 
that we find the obstacles to expansion of telecommuting and 
then find ways to address those, overcome those. So I would 
like to bring up two such potential barriers.
    First of all, in terms of the Federal Government, I want to 
ask Mr. Bibb and Ms. Jenkins to comment on the security aspect. 
Because in northern Virginia, for example, the largest Federal 
employer by far is the Department of Defense. Yet my sense is 
that the telecommuting that goes on within the Defense 
Department is pretty limited, and my--I would guess that, if we 
pushed them, the first thing they would come up with is 
security. We can't compromise the data that our employees are 
dealing with. Then, of course, normally we would be intimidated 
into--or at least inhibited from pursuing that any further.
    I would like for you to address that aspect of the security 
of information that is dealt with when you are using home 
computers. Obviously, we have had some very public examples of 
some of our chief executives in intelligence agencies, for 
example, compromising intelligence that they had available 
through their home computers, and that became a problem. So I 
would like to see how you would address that.
    And let me just give an opportunity for the private sector 
people to think about the second thing, which is the Tax Code 
and how the Tax Code is related to telecommuting, both the tax 
advantages, potentially, for individuals, but also some of the 
complications. For example, if there are two State income tax 
regimes that you might have to deal with if you are 
telecommuting. So I just want to get you prepared for that.
    And Mr. Bibb and Ms. Jenkins.
    Ms. Jenkins. Well, certainly, within the Defense 
Department, I agree that the security issue is the biggest 
obstacle there. At 0.5 percent of the work force telecommuting 
right now, or as of April, that is a huge obstacle to overcome.
    Some of the things that we are doing in OPM to help 
overcome the governmentwide obstacle to security is working 
with the Federal CIO Council and the Security Committee to come 
up with some ideas that will help us to help agencies such as 
Defense overcome this concern of theirs.
    We also already have a number of pieces of guidance that we 
have provided to the agencies to help them to overcome some of 
the security concerns that they have, such as making sure that 
they have the proper firewall protection and virus updates and 
simple things like, if your computer is home, make sure it is 
secure and away from your children so that there aren't any 
accidents that might occur while the computer is at home. Those 
simple things we are publicizing to the agencies so think 
about.
    Coupled with that is that when agencies plan their 
telecommuting programs they must include a variety of 
stakeholders and individuals within the organization to help 
plan the program and some of the most important people are the 
security officials and to identify how they can overcome some 
of the security obstacles that--and to prevent problems. So we 
realize that, particularly for the Defense Department, their 
culture is such that they are more concerned about the security 
issue than perhaps some other agencies and we need to work 
perhaps personally with them to help them overcome some of 
their obstacles.
    Mr. Moran. You began your response by noting that only one-
half of 1 percent of the largest agency in the Federal 
Government has any telecommuting going on.
    Ms. Jenkins. Yes, sir. A lot of work to do.
    Mr. Moran. Yes. I wonder if it isn't to some extent a 
generational thing, too, in terms of management wanting hands-
on control over employees. But, Mr. Bibb, unless you have 
something to add to Ms. Jenkins' very comprehensive and very 
good response, informative response, let me ask Mr. Miller 
about the tax implications of telecommuting in the private 
sector.
    Mr. Miller. Could I first address your first question, Mr. 
Moran?
    I think that we have to make a bit of a distinction here, 
because telecommuting frequently blends together two concepts. 
There is telecommuting from home and there is telecommuting 
from telecenters which are controlled by the government in one 
way or another, either directly or through contracting with a 
private vendor. And it seems to me that even in the most severe 
security concerns of the Defense Department at least many of 
these telecenters can be just as secure in terms of protecting 
the information technology, the data, etc., as they are if they 
were coming into the Pentagon or some other Defense Department 
building that is immediately approximate to the Defense 
Department. So it seems to me that this can be a bit of a bogus 
issue.
    If the issue really is legitimately concerned about 
security and we don't want people taking things home, 
nevertheless they still may be able to work at a telecenter in 
Dale City or some other relatively remote location, and so we 
need to make that distinction. I think it is very important.
    Mr. Moran. I appreciate that, Mr. Miller. But, of course, 
these telecenters in the long run are going to be only a 
marginal amount. I suspect the most telecommuting is going to 
take place at the home if it is really effective. Because to 
get to a telecenter that has a sufficient critical mass of 
employees and resource equipment, supplies and so on, it is--
you have a transportation hassle there, anyway. So, I mean, if 
you are coming from, you know, south of Springfield and trying 
to get into the Springfield mixing bowl where we have a 
telecenter, we have defeated the purpose in large part.
    But I do think there is a security issue with home 
computers, where the individuals use that computer for personal 
use as well. And when you can attach cookies on your--on banner 
ads and so on, it seems to me it is pretty easy to then access 
information that is being used for work. I mean, it may be my 
ignorance, but I don't know how you buildup sufficient 
firewalls to prevent--to separate your personal usage and 
official usage.
    Mr. Miller. Actually, it is not. I mean, the technology is 
there; and the technology has been developed to a large extent 
for exactly the reason that telecommuting has become so popular 
in the private sector. And the private sector is no less 
worried than the public sector is about data being compromised 
when it is used by telecommuters.
    The trick is not whether the technology exists or not. The 
technology does exist. The trick is to make sure people 
implement it.
    As you know, part of the problem is that people don't 
always update their technology. They don't always make sure 
that they have the latest anti-virus software. They don't make 
sure that the firewalls are current. So part of the big 
challenge here is again a management challenge.
    It is one thing to tell people that the technology is 
available, which means that people can't come in through remote 
locations and access data bases if they do A, B and C. It is 
another thing to make sure they do A, B and C.
    Mr. Moran. And it is not just the employees' 
responsibility; it is the employers' responsibility to instruct 
them.
    Mr. Miller. Absolutely. Fortunately, there are monitoring 
systems. There are technologies available and companies that 
specialize in monitoring to make sure that both central 
locations and remote locations are following the procedures. So 
you do have to in a sense put another layer of protection on. 
You would have to have some kind of monitoring system to make 
sure that the telecommuter would have his or her computer 
monitored. And if the monitoring service found out that they 
hadn't updated their firewall or hadn't updated their software 
or whatever was necessary to protect the information technology 
then basically it would cut that telecommuter off until he or 
she had updated that technology to the appropriate levels of 
security.
    But I don't think the vulnerabilities are quite as high as 
you might be imagining if the corporation or the government do 
everything possible to use the latest technology that is out 
there.
    Mr. Moran. Well, invariably, if there is a will there is a 
way. Although I suspect that this is one area where our defense 
and intelligence agencies are going to find an easy excuse not 
to do anything.
    Mr. Miller. On the tax issue, I certainly agree with you, 
Mr. Chairman; and I notice that the GAO mentioned--or Mr. 
Moran, rather, mentioned this in his testimony also, that this 
whole tax liability and multi-State jurisdiction--as you know, 
we have 7,500, approximately, taxing jurisdictions. It is 
particularly a challenge for small businesses because they are 
not used to having to pay employees in all types of 
jurisdictions. They are used to, in most cases, just having 
employees in one jurisdiction. Also, some States are now trying 
to use the presence of employees as an excuse to set up what is 
a so-called nexus which, as you know, is a big issue in terms 
of interstate taxation.
    So it is something that is potentially going to become a 
problem as more and more small businesses--most large 
businesses, frequently they already have employees in multiple 
jurisdictions. So it is a pain, but it is a pain they are used 
to dealing with. But when you are talking about a small 
business and trying to incentivize them, the tax--multiple 
taxing issue can be a problem.
    Mr. Moran. Well, a clever business, or at least a business 
with clever accountants could easily locate their--if it is a 
business that buys supplies and equipment and so on on line, 
they could simply locate their employees in those jurisdictions 
that have the lowest sales tax regime and maximize the 
opportunity through telecommuting.
    But did you want to add something, Mr. Straton?
    Mr. Straton. I don't really have much to add. The only 
thing I would say is you would take the Defense Department--I 
mean, when these guys are on the battlefield or, you know, out 
doing practice sessions they are communicating. They are 
teleworking. I mean, you have a very small subset--or it is 
small, but you have a subset of employees that have very, very 
secure information. They clearly should be in a secure 
environment. But you have a whole other subset that, you know, 
they are ordering supplies or whatever it is. It just doesn't 
matter.
    So, as it relates to us, my view would be for secure--you 
know, there is janitors come in and clean things at night. 
Stuff is not locked up, PCs not turned off. You are probably 
more secure at home. I don't know what a 3-year-old is going to 
do with confidential Siemens software information. So I don't 
think it is a big issue. I think it is a big excuse, to be 
honest.
    Now, as it relates to the government, I mean, and the 
taxation for us, it has not been a problem. I think the 
companies gaming the system, as you stated, needs to be thought 
through; and I think you have to make sure the company is not 
in a position or the employers are not in a position when they 
are paying taxes to multiple States.
    I think that the Wolf idea of a tax incentive to jump-start 
this thing is a good idea. I think a better idea, though, is to 
have the government take a leadership role at the senior 
levels. I think with all the government agencies you just say 
that, you know, over a certain period of time you have got to 
have 10 percent less real estate; and I guarantee you, you 
will. And you will probably have better results and everything 
else.
    Yes, what other private sector issues? You just have to 
make sure that the laws for liability, privacy and performance 
issues don't penalize the companies. I will give you an 
example.
    One of the--you know teleworking is not a right. And I have 
had that problem in my own department where we actually had a 
secretary who teleworked. Circumstances changed, and she had to 
come back in. And so, needless to say, she got upset. So my 
point is that, in the performance things, you can have the 
exact same job and two different people and that job can--one 
of those people can telework and one of them can't. And there 
is a lot of factors that come into it--whether they have small 
kids at home, how responsible they are with their performances.
    So that is an area that I am probably the most nervous 
about being penalized as an employer, because it becomes a 
fairness issue, for example. But it really comes down to can 
the job telework and does their performance allow them to 
telework.
    Mr. Moran. Thank you. Oh----
    Mr. Milkovich. I will just add real quickly on the two 
jurisdictional tax issue. I think it hits at the heart of 
recruitment; and it could potentially, depending on the 
company, hit at the heart of recruitment and retention. And I 
think private sector companies today are starting to view 
teleworking as part of a standard offering, much like a 401(k) 
plan or medical benefits. Many people are asking about 
teleworking today.
    Let me digress for 1 quick second just to say that when I 
talk about space efficiencies it is not always as if the glass 
is half empty. I also think that teleworking is a very potent 
tool to manage your growth. As agencies grow, that can't 
acquire the space fast enough, teleworking is an excellent tool 
to facilitate the growth.
    Mr. Moran. That is a very good point. I didn't ask anything 
of GAO because your report is so extensive, comprehensive. You 
have done a good job at looking at all the problems.
    Mr. Robertson. May I make an observation, anyway?
    Mr. Moran. Sure.
    Mr. Robertson. I guess this goes back--you know, we have 
been talking, and it is not on the tax issue so much as the 
data security issue that we have been--seem to come back to 
several times during the hearings. I am just--to me, that whole 
discussion is it an issue, is it an issue is a great 
illustration of what, I think, Representative Morella was 
talking about at the beginning. And that basically had to do 
with, you know, we have really got to get a really good handle 
on the extent to which these management obstacles that we have 
talked about as GAO and as a group today exist in each 
individual Federal agency. I think that should be a prime 
action area for OPM, basically.
    Mr. Moran. That is true. Thank you very much.
    Chairman Davis, thank you again for having this hearing and 
for the generous time you allotted for the questions and 
responses.
    Mr. Davis of Virginia. Thank you.
    I have just a couple of questions.
    First of all, at the GSA, you have gotten beyond, I think, 
to some extent, managers' fear of letting employees work 
outside the workplace. But that seems to be the major paradigm 
that we need to move. How do you manage if you can't see the 
people? It seems to me that is our biggest obstacle for 
managers. How have you gotten beyond it? What do we need to do 
to change that?
    We have seen, you know, from the testimony of the private 
sector how they have moved well beyond that and are actually 
being more productive.
    Mr. Bibb. Well, I think we--we haven't totally gotten 
beyond it. They are still plenty of supervisors who have some 
distrust. But, yes, our numbers are good, and it has been a 
combination of things.
    One is our continued emphasis that this is a way of getting 
the work done, that it makes sense for both the supervisor and 
the employee. If it does make sense, then there ought to be 
teleworking.
    Second way is to continue to discuss with our supervisors 
that you measure the work the same way you measure the work 
when they are in the office. You set performance targets and 
they are hit or they are not. And if they are not then you have 
the same performance discussion.
    In my own case, half of my associates telework, and they 
are held to the same standards as any others. So that is the 
basic way you are able to monitor the performance.
    I think the other piece--and have good, sound policies in 
place. The other piece is cultural, and it does in part come 
from the top with the recognition that this is a viable way to 
work. It will be supported and where it makes sense we will go 
after it.
    So it is a combination of having the right policies in 
place, common sense approach and top management support.
    Mr. Davis of Virginia. OK. I think that is all the 
questions. Let me just ask about the OPM tracking system that 
we are working on, imperfect at this point. What are we doing 
to try to improve it and get a good baseline?
    Ms. Jenkins. Well, the tracking system that we are working 
on governmentwide is under the auspices of the Human Resource 
Data Network, which is a system that will streamline and 
improve reporting and eliminate paper records within human 
resource offices. So we have already established data elements 
that can be included in either the government's payroll or 
personnel systems that would be able to track the number of 
teleworkers.
    We won't be able to get that system in place as quickly as 
we would like--hopefully in 2002. But I am not sure at this 
point that it will happen in 2002. Meanwhile, we are providing 
agencies with some guidance, and many of them are taking our 
guidance.
    For example, the Defense Department has decided that one of 
the ways that it is going to help with its tracking system is 
to require all telecommuters to be on agreements, even their ad 
hoc episodic telecommuters. That will help them to better 
track. Other agencies are doing something similar, and there 
are even other agencies that are requiring their various 
departments to report to them monthly so that they can get used 
to the fact that they are going to have to be reporting their 
teleworkers on a regular basis and to help them to establish 
and refine their current tracking system. So it is an issue 
that we are addressing governmentwide.
    But we have also seen significant progress within the 
agencies because they fully understand that there is a 
requirement to report to OPM on their progress and they are 
making strides in establishing and refining their tracking 
systems.
    Mr. Davis of Virginia. OK. Thank you.
    Let me just ask one other question. Are there any union 
issues on this where you have to renegotiate to try to do this 
kind of thing? Any prohibitions under agreements that anybody 
is aware of?
    Ms. Jenkins. What is required under the Federal labor 
management relation statute is that there is an obligation by 
Federal agencies to negotiate telework with their employee 
unions, things like telework. And we know that agencies are 
doing that and we--one of my other jobs at OPM, besides the 
Work-Life Programs, is the governmentwide Labor and Management 
Relations Program; and we have brought the labor relations 
directors together just last month to go over the requirements 
of negotiating contracts and providing sample bargaining 
language to the agencies.
    Mr. Davis of Virginia. OK. Thank you very much.
    Anything else anyone want to add?
    Well, let me thank all of you. Before we close, I just want 
to again thank everybody for attending the subcommittee hearing 
today.
    I want to particularly thank the witnesses, Congressman 
Turner, who had to leave early, Representatives Moran and 
Norton and on my side Mr. Wolf, who couldn't be here but has 
been such a leader in this element, and, of course, Mrs. Capito 
and Mrs. Morella, who were here, and thank them for 
participating as well.
    I want to also thank my staff for organizing this. I think 
it has been very productive.
    I would enter into the record the briefing memo distributed 
to subcommittee members.
    We will hold the record open for 2 weeks from today for 
anyone who might want to forward a further thought on this or 
supplement your remarks.
    I thank you again, and these proceedings are closed.
    [Whereupon, at 11:12 a.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record 
follows:]
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