[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
THE STANDARD PROCUREMENT SYSTEM [SPS]: CAN THE DOD PROCUREMENT PROCESS
BE STANDARDIZED?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON NATIONAL SECURITY,
VETERANS AFFAIRS AND INTERNATIONAL
RELATIONS
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 7, 2002
__________
Serial No. 107-144
__________
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
U.S. GOVERNMENT PRINTING OFFICE
84-232 WASHINGTON : 2003
___________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
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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
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
BOB BARR, Georgia DENNIS J. KUCINICH, Ohio
DAN MILLER, Florida ROD R. BLAGOJEVICH, Illinois
DOUG OSE, California DANNY K. DAVIS, Illinois
RON LEWIS, Kentucky JOHN F. TIERNEY, Massachusetts
JO ANN DAVIS, Virginia JIM TURNER, Texas
TODD RUSSELL PLATTS, Pennsylvania THOMAS H. ALLEN, Maine
DAVE WELDON, Florida JANICE D. SCHAKOWSKY, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
ADAM H. PUTNAM, Florida DIANE E. WATSON, California
C.L. ``BUTCH'' OTTER, Idaho STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia ------
JOHN J. DUNCAN, Jr., Tennessee BERNARD SANDERS, Vermont
------ ------ (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 National Security, Veterans Affairs and International
Relations
CHRISTOPHER SHAYS, Connecticut, Chairman
ADAM H. PUTNAM, Florida DENNIS J. KUCINICH, Ohio
BENJAMIN A. GILMAN, New York BERNARD SANDERS, Vermont
ILEANA ROS-LEHTINEN, Florida THOMAS H. ALLEN, Maine
JOHN M. McHUGH, New York TOM LANTOS, California
STEVEN C. LaTOURETTE, Ohio JOHN F. TIERNEY, Massachusetts
RON LEWIS, Kentucky JANICE D. SCHAKOWSKY, Illinois
TODD RUSSELL PLATTS, Pennsylvania WM. LACY CLAY, Missouri
DAVE WELDON, Florida DIANE E. WATSON, California
C.L. ``BUTCH'' OTTER, Idaho STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Lawrence J. Halloran, Staff Director and Counsel
J. Vincent Chase, Chief Investigator
Jason Chung, Clerk
David Rapallo, Minority Counsel
C O N T E N T S
----------
Page
Hearing held on February 7, 2002................................. 1
Statement of:
Myers, Margaret, Deputy Assistant Secretary of Defense,
Command, Control, Communications, and Intelligence [C3I],
Department of Defense; Gary Thurston, Defense Contract
Management Agency, Department of Defense; and Colonel Jake
Haynes, Program Director, SPS Program Office, Defense
Contract Management Agency, Department of Defense.......... 52
Willemssen, Joel, managing director, Information Technology
Systems Issues, U.S. General Accounting Office, accompanied
by Cynthia Jackson, Assistant Director, Information
Technology Systems Issues, U.S. General Accounting Office;
and Robert J. Lieberman, Deputy Inspector General, Office
of Inspector General, Department of Defense................ 14
Letters, statements, etc., submitted for the record by:
Haynes, Colonel Jake, Program Director, SPS Program Office,
Defense Contract Management Agency, Department of Defense,
prepared statement of...................................... 77
Lee, Deidre, Director, Defense Procurement Office of the
Under Secretary of Defense for Acquisition, Technology, and
Logistics.................................................. 5
Lieberman, Robert J., Deputy Inspector General, Office of
Inspector General, Department of Defense, prepared
statement of............................................... 32
Myers, Margaret, Deputy Assistant Secretary of Defense,
Command, Control, Communications, and Intelligence [C3I],
Department of Defense, prepared statement of............... 54
Shays, Hon. Christopher, a Representative in Congress from
the State of Connecticut, prepared statement of............ 12
Thurston, Gary, Defense Contract Management Agency,
Department of Defense, prepared statement of............... 66
Willemssen, Joel, managing director, Information Technology
Systems Issues, U.S. General Accounting Office, prepared
statement of............................................... 16
THE STANDARD PROCUREMENT SYSTEM [SPS]: CAN THE DOD PROCUREMENT PROCESS
BE STANDARDIZED?
----------
THURSDAY, FEBRUARY 7, 2002
House of Representatives,
Subcommittee on National Security, Veterans Affairs
and International Relations,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:36 a.m., in
room 2247, Rayburn House Office Building, Hon. Adam Putnam
(acting chairman of the subcommittee) presiding.
Present: Representatives Putnam, Shays, Gilman, Kucinich,
Tierney, and Lynch.
Staff present: Lawrence J. Halloran, staff director and
counsel; J. Vincent Chase, chief investigator; and Thomas
Costa, professional staff member.
Mr. Putnam. The subcommittee will come to order.
The Subcommittee on National Security, Veterans Affairs and
International Relations is convened here today to talk about
the standard procurement system. Can the DOD procurement
process be standardized? We welcome our panel and guests this
morning.
This year the Department of Defense will rely on a host of
incompatible, largely paper-based systems and processes to
manage an account for procurement contracts worth more than
$130 billion. The President's fiscal year 2003 budget released
this Tuesday pronounces those systems outdated and in need of
an overhaul. Both the Comptroller General and the DOD Inspector
General agree, citing longstanding financial weaknesses at the
Pentagon. They also note DOD often suffers the Government-wide
malady of purchasing large information technology systems that
fail to meet user needs, fail to replace older, incompatible
systems, and fail to meet schedule and cost projections.
The standard procurement system was meant to address both
problems. Standardization of contract and purchasing processes
should bring greater transparency and data commonality to DOD's
tangled web of financial systems. Selection of a commercial,
off-the-shelf product should have brought efficiency and
discipline to the data system development.
Today we ask whether SPS, the 7-year-old, $359 million
Department of Defense effort to modernize, streamline, and
unify Pentagon contracting, has become an expensive part of the
problem or a partial solution to the Pentagon's chronic
financial management woes.
The supposedly standard procurement system has required
extensive, unanticipated modifications to meet user demands,
causing the Inspector General to question the COTS-based
acquisition strategy.
The schedule has slipped by more than 3 years. Deployment
of system modules has been clumsy. The military services
continue to pursue non-standard approaches. A survey by the
Inspector General found SPS under-utilized or used only in
tandem with paper-based legacy systems.
Based on the IG's concerns and the size and significance of
the SPS effort, we ask the GAO to assess DOD management of the
program. Their findings describe how the potential of a
solution like SPS can be sabotaged by untested assumptions of
value and the resulting failure to weigh the costs and benefits
of each step in a complex development process.
The Clinger-Cohen Act of 1996 provides a framework for
large-scale IT acquisitions by Federal agencies. It requires
explicit economic justification over the expected life of a
program and specific analysis of the costs and benefits of each
program increment.
But the Department of Defense appears to dispute the need
for incremental justification, relying instead on an outdated,
all-or-nothing economic analysis of the $3.7 billion SPS.
According to the General Accounting Office, the Department also
lacks other non-economic measures to determine if SPS is
meeting performance goals.
SPS is an example of good intentions corrupted by lax
oversight and entrenched bad habits. The fate of SPS should
offer a cautionary tale to those in the Administration
entrusted with the resources needed to wage the war on
terrorism, enhance homeland security, modernize U.S. forces,
and maintain military readiness.
We look to our witnesses this morning to help us understand
how the standard procurement system went astray and how the
Department plans to make sure continued investment in SPS leads
to improved financial accountability.
Again, we thank our panel for being here. At this time the
Chair recognizes the ranking member from Ohio, Mr. Kucinich.
Mr. Kucinich. Thank you very much, Mr. Putnam, Mr. Shays,
and committee staff, and to the people who are testifying
today, good morning.
There's two things I want to say at the beginning. First of
all, I have three other committee meetings, Mr. Chair, at 10.
We've had that happen before. So I'm not going to be able to
stay.
Before I begin, I also want to take my privilege to
recognize the leader of the Democrats in the Ohio Senate who is
visiting with us today, Senator Lee Harrington. Thank you very
much for your presence.
Mr. Chairman, today's Washington Post contains an OpEd
piece. I'll just quote from one paragraph, because in a sense
it helps to frame the challenge which is before this
subcommittee and the IG's office. It says, ``The Pentagon
remains the largest source of waste, fraud, and abuse in the
Federal Government. Its bookkeeping makes Enron look
transparent. It still cannot track what it has spent money on,
what it has purchased, and what it has stored.'' That's from an
article in today's Washington Post OpEd piece by Robert
Borsage.
As this subcommittee has repeatedly heard, the financial
disarray within the Department of Defense has reached epic
proportions. Last year we heard testimony from David Walker,
the Comptroller General of the United States, regarding the
high-risk nature of DOD operations, including logistics,
acquisitions, planning, contracts, and management, just to name
a few. The problems were highlighted when the Inspector General
issued a report with some astonishing language. In fiscal year
2000, alone, ``1.2T--'' for trillion. And just to make sure the
people are transcribing this, ``1.2T--'' for trillion--``in
Department-level accounting entries were unsupported because of
documentation problems or improper because the entries were
illogical or did not follow generally accepted accounting
principles.'' That was $1.2 trillion worth of improper or
illogical expenditures. This is a figure that is beyond
disgraceful. It is beyond unbelievable.
Contributing to these problems is the Department's failure
to manage its contracts properly. The Department of Defense
spends over $130 billion for goods and services each year, but
in 1992 and every year since the General Accounting Office
designated Department of Defense's contract management as one
of the largest high-risk areas within the Federal Government.
Although the Department of Defense has tried to remedy this
by initiating a new standard procurement system, GAO reports
that this effort is nearly $1 billion over budget, 3\1/2\ years
behind schedule, and is not meeting its objectives.
Yesterday, the President requested a $45.3 billion increase
in military spending, for a total Pentagon budget of $379
billion--I might add, more than the combined military budgets
of the next 24 largest-spending countries. In fact, the
increase alone is larger than any defense budget in the world
but Japan's. It is also the largest 1-year increase in military
budget authority since 1966, for a total budget 15 percent
above the cold war average.
Now, given the Pentagon's legendary accounting problems,
I'm asking how can the taxpayers be sure that the Department
will spend this extra money on measures that will, in fact,
increase security? No major part of the Defense Department has
ever passed the test of an independent audit. As ``Business
Week'' has put it, ``The Pentagon makes Enron and Arthur
Andersen look like paragons of number crunching.'' That's the
``Business Week.''
No sane investor would sink $45 billion extra into a firm
with this kind of performance. You have to wonder why the
American taxpayer should be asked that.
We're told that the extra money is needed to pay for war,
but in reality the proposed Defense funds are largely devoted
to the same weapons acquisition programs that GAO has decided
are at risk of waste and abuse, programs that are of little
utility in defending the Nation against the sort of attack we
confronted in September. These include the F-22, the most
expensive fighter ever, which, as this subcommittee has heard,
has racked up more than $9 billion in cost overruns, and
includes the crusader mobile howitzer artillery weapon, which
at 90 tons is so immobile that the military's largest transport
plane can't lift it without violating flight rules. The
Administration plans to spend $11 billion to purchase 480 of
these, and include the B-1 bomber, which even the Secretary of
Defense admits is headed toward expensive obsolescence.
This budget rewards our Defense establishment for its
fiscal mismanagement, and the allocation of this money follows
the same wasteful high-risk patterns of spending that lavish
politically influential military contractors with large sums to
produce weapons geared toward obsolete cold war era threats.
Protecting our country, our Service members, and our people is
a very pragmatic endeavor and it takes practical effort. It
sometimes requires some very mundane but essential tasks, such
as demanding that DOD pass an audit, demanding that DOD
efficiently manage its contracts, and demanding that DOD
dutifully seek the best value for every dollar Congress
appropriates.
I hope that after concluding this hearing on standard
procurement system that this subcommittee will endeavor to take
up oversight of programs such as the $200-plus billion national
missile defense system, the $250 billion joint strike fighter,
the $70 billion F-22, the $56 billion DD destroyer, the $45
billion C-17, the $37 billion V-22, and the $11 billion
howitzers.
The reason is simple. Is America getting the best defense
money can buy, or are defense contractors feasting at
taxpayers' expense? The question is the essence of procurement
and financial management oversight.
I hope this subcommittee will schedule hearings and devote
its attention to this question where these large and
significant procurement programs are concerned.
I thank the chair.
Mr. Putnam. I thank the gentleman for his opening
statement.
Before you leave, Mr. Kucinich, I'd ask unanimous consent
to put into the record the written statement of Deidre Lee,
Director, Defense Procurement Office of the Under Secretary of
Defense for Acquisition, Technology, and Logistics, without
objection.
[The prepared statement of Ms. Lee follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Putnam. I ask unanimous consent that all members of the
subcommittee be permitted to place any opening statement in the
record and the record remain open for 3 days for that purpose.
Without objection, so ordered.
I ask further unanimous consent that all witnesses be
permitted to include their written statements in the record.
Without objection, so ordered.
I welcome to the committee the real chairman of the
subcommittee, Mr. Shays from Connecticut.
Would you like to make a statement?
Mr. Shays. Yes, thank you. Just a very brief one.
I'd like to thank our witnesses and guests for being here.
I think this is a very, very important hearing. Mr. Kucinich
had some basic points right on target. It is astounding that
you would have $1.2 trillion worth of transactions that you
couldn't verify as an auditor. It has come down from a few
other trillion. You could look at it positively. But there is
really no part of the Defense budget the is auditable, and I
think we all know why. We all know why, because we don't have a
choice when it comes to Defense to appropriate the money, and I
think, therefore, the Defense Department has gotten used to the
fact that, ``You can't do without us, so we'll focus our
attention on other concerns.''
This borders on the line of being criminal because we are
wasting billions of dollars. There has to be tremendous amount
of theft, and so on, and misuse, and it has to be corrected,
and it has to be corrected now--I mean now in the next few
years. Over time it has to definitely change.
One of the points that I would have made to Mr. Kucinich is
that this committee is dedicated to helping the GAO and others
to see that happens.
I'm not chairing this hearing because I had requested the
Subcommittee on Energy Policy, Natural Resources and Regulatory
Affairs of the Government Reform Committee to hold a hearing on
Indian gaming and Indian recognition, and since I'm the one
that requested it I feel that I need to be there, so I will be
in and out of this hearing. I thank the gentleman from Florida
for chairing this hearing, but I hope to be back and I hope,
obviously, to listen to the first part of the panel discussion.
So I thank you very much and I thank our witnesses.
[The prepared statement of Hon. Christopher Shays follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Putnam. Thank you, Mr. Chairman. And thank you for the
opportunity that you've given me to participate in this
committee.
At this time we will swear in our first panel. Please rise
and raise your right hand.
Do you solemnly swear or affirm that your testimony you
will give before this subcommittee will be the truth, the whole
truth, and nothing but the truth?
Mr. Willemssen. I do.
Ms. Jackson. I do.
Mr. Lieberman. I do.
Mr. Putnam. Not for the record that the witnesses have
responded in the affirmative.
At this time I'd like to ask Mr. Joel Willemssen, managing
director of information technology systems issues from the U.S.
General Accounting Office to begin with your opening testimony.
You are recognized, sir. Welcome.
STATEMENTS OF JOEL WILLEMSSEN, MANAGING DIRECTOR, INFORMATION
TECHNOLOGY SYSTEMS ISSUES, U.S. GENERAL ACCOUNTING OFFICE,
ACCOMPANIED BY CYNTHIA JACKSON, ASSISTANT DIRECTOR, INFORMATION
TECHNOLOGY SYSTEMS ISSUES, U.S. GENERAL ACCOUNTING OFFICE; AND
ROBERT J. LIEBERMAN, DEPUTY INSPECTOR GENERAL, OFFICE OF
INSPECTOR GENERAL, DEPARTMENT OF DEFENSE
Mr. Willemssen. Thank you, Mr. Vice Chair, Mr. Chairman. As
requested, I'll briefly summarize our statement.
Accompanying me is Cynthia Jackson, Assistant Director.
DOD launched SPS a little over 7 years ago, with the goal
of replacing 76 existing procurement systems with a single
Department-wide system that would more effectively support
contracting processes. At that time estimated costs were about
$3 billion over a 10-year period.
For information technology projects such as SPS, the
Clinger-Cohen Act and Office of Management and Budget guidance
emphasized the need for investment management practices to help
ensure that projects are being implemented at acceptable cost
and within reasonable and expected timeframes, and that they
are contributing to tangible improvements in mission
performance. For SPS, we reported to you last year that the
Department had not met these investment and management
criteria.
First, the Department had not economically justified its
investment in the program. In fact, its recent analysis showed
that the system, as defined, had estimated costs that exceeded
anticipated benefits.
Second, it had not effectively addressed the inherent risks
associated with a program as large and lengthy as SPS because
it had not divided the program into incremental investment
decisions that coincided with incremental releases of system
capabilities.
Third, the Department had not met key program commitments
that were used to justify the program. For example, the
Department committed to implementing a commercially available
contract management system. However, because it had modified so
much of the foundational commercial product, SPS evolved into a
customized DOD system. Also, although the Department committed
to fully implementing the system by March 2000, this target
date has now slipped to September 2003, and program officials
have recently stated that this date will also not be met.
Fourth, the Department did not know if it was meeting other
key program commitments. For example, the Department had not
measured whether expected system benefits were being realized.
Further, DOD was not tracking actual program costs, so it does
not know how much has been spent on this program.
Because of these many problems with SPS, we made several
recommendations, including that investment in further
enhancements to the system be made conditional on the
Department first demonstrating that the system was producing
benefits that exceed costs, and that future decisions be based
on complete and reliable economic justifications.
In commenting on a draft of our report, DOD generally
disagreed with our recommendations, noting that they would
delay development and implementation of SPS. Since that time,
however, the Department has either initiated or stated its
intention to initiate steps that are consistent with our
recommendations.
For example, officials have stated that the Department will
prepare an economic analysis before investing beyond already
executed contractual commitments and that it will assess the
extent to which the Department is deriving benefits from SPS.
These are positive steps. Nevertheless, much remains to be done
before the Department will be in a position to make informed,
data-driven decisions about the system. To increase the chances
of program success, we believe the Department must follow
through on stated commitments and implement our
recommendations. Doing so means that the Department should
commit to specific tasks and milestones for completing those
tasks. If it does not, the Department runs the risk of
continuing to spend an unknown amount of money on a system with
unknown results.
That concludes a summary of my statement, and I would be
pleased to address any questions you may have.
Mr. Putnam. Thank you very much.
[The prepared statement of Mr. Willemssen follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Putnam. Thank you very much. At this time I'd ask Mr.
Robert Lieberman, Deputy Inspector General, Office of Inspector
General, Department of Defense, to give your opening statement.
You are recognized, sir.
Mr. Lieberman. Thank you, Mr. Chairman.
As requested in your invitation letter, my written
statement focuses primarily on results of my office's three
audits on the standard procurement system. To put our findings
in a broader context----
Mr. Putnam. Could you move the microphone a little bit
closer?
Mr. Lieberman. To put our findings on the SPS in the proper
context, I believe it is important to recognize the fact that
information systems are the primary tools that we put into the
hands of DOD employees to carry out the internal business
processes of the Department--things such as contracting,
contract administration, paying contractors, and accounting.
As I reported to you in a hearing last March, the DOD has
had chronic difficulties in fielding information systems that
are up to par in terms of meeting cost, schedule, and
performance expectations.
The SPS is no different from many other system acquisition
initiatives in the Department that have had problems. It is not
uncommon for information system acquisition projects to have
the kinds of problems that SPS has encountered. In fact, most
studies indicate that fewer than one in three large information
system projects in both the public and private sector meet
expectations in terms of cost, schedule, and performance. This
is not an excuse, but I do think we need to recognize how
inherently difficult a large information system development
project is.
We support the basic concept of SPS. The idea of
modernizing the information system tools in the hands of
contracting personnel and rationalizing the jumble of legacy
systems that we have in the Department, none of which are
really adequate to meet user needs, and few of which talk to
each other in any rational way, is a compelling need.
Our criticisms of the SPS project have to do with its
planning and management, not with the basic concept of
achieving as much standardization as possible. Even a total
standardization is probably too ambitious a goal.
Turning now to the results of our findings, in 1996 we
reported poor planning from the standpoint of identifying user
needs, providing for rigorous testing, and otherwise managing
what we felt were obvious developmental risks in this project.
I want to make it clear that we certainly were never against
the idea of acquiring a commercially available system and
modifying it to Defense Department needs. We certainly support
the idea that the private sector has leading IT technology and
the Department needs to get access to those products.
What we criticized, though, was the idea that you can
merely transplant a commercially available system to DOD
processes without massive changes to either the system or the
processes or both. Any time you attempt to do something like
that, you are automatically incurring a lot of risk and you are
very much in a developmental mode, as opposed to just buying
something off the shelf that has very little risk. We never
felt that the SPS project adequately recognized the risks that
were being taken, and therefore we criticized what we would
characterize as the risk management in the program.
In response to the 1996 auditors--audit, managers generally
agreed that the program carried risk and took various measures
to formalize the testing requirements, limit the Government's
financial exposure, and provide ongoing monitoring. Most
importantly, we were assured that each future acquisition
milestone decision would be accompanied by a rigorous review of
system functionality, contracting method, testing, and risks.
In retrospect, it seems to me the managers remain preoccupied
with maintaining system deployment schedules instead of
focusing on the functionality of the system.
It is clear that not enough was done to keep the commitment
expressed by the Defense Logistics Agency in response to our
report, which was that, ``SPS will not be deployed to any DOD
procurement site wherein we cannot provide equal to or better
than existing functionality.''
Because we lacked confidence that the program was on track,
we performed a followup audit during 1998. We raised or
reiterated a number of concerns, which are listed in my
statement on pages six and seven. The management responses were
mixed. By and large, program managers appeared to believe that
the latest version of the system would correct the performance
problems that we had found.
In late 1999, the House Budget Committee received a number
of complaints from SPS users in the Department of Defense about
the cost and usefulness of the system, so we did a user survey.
We reported on the results of that survey in March 2001. Its
results are summarized in pages eight and nine of my written
statement. Basically, user dissatisfaction levels were still
very high--abnormally high in such a late stage of the program.
We also reported that the licensing arrangement for the
software was inefficient, and we concluded that the program
needed better performance measures to control risk and enable
management to make informed decisions in how to proceed in the
road ahead.
To sum up, we believe that SPS was a good idea, remains a
good idea, will result in more efficient contracting and
related processes such as financial management, but the program
needs restructuring at this point. We understand that is being
done. I would defer to the second panel to provide you the
particulars. I remain cautiously optimistic that SPS will end
up being at least a partial solution to the Department's
information system problems in this area, but we shouldn't be
naive and think that the road ahead will be smooth. Several
important decisions need to be made about the exact scope of
the project, and it needs to be adequately resourced to get
from here to there.
Thank you for considering our views.
That concludes my statement.
Mr. Putnam. Thank you very much, Mr. Lieberman.
[The prepared statement of Mr. Lieberman follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Putnam. Let me just apologize to everyone for the
temperature in this room, although it is getting better. This
is Florida day in Congress, and so we are trying to make it as
hot and muggy as possible in here.
Mr. Willemssen, Mr. Lieberman just concluded that, the its
core, SPS is a good idea and is a functional program that is in
need of additional resources and restructuring. Do you agree
with that basic premise?
Mr. Willemssen. I think much of what Mr. Lieberman
mentioned in terms of standardization at its core could be
beneficial, but, in and of itself, we still need to identify
exactly what the benefits are and what the contributions are to
improve mission performance.
Does it mean that we are going to be able to get rid of
some of the 76 systems, for example, that SPS was intended to
replace? If so, then there are tremendous benefits associated
with that. Does it mean that on the battlefield that our troops
will be able to procure systems immediately and get the article
delivered to them? Could be tremendous benefits. We haven't
seen that analysis, though, demonstrating that SPS is going to
necessarily deliver those kind of--has delivered those
benefits, so what we are asking for right now is, before there
are further investments beyond existing contractual
commitments, let's make sure of what we are getting for our
money. How much have we spent? And what are the associated
benefits? Let's make some assessment of that, and then let's go
forward and see what additional benefits we can get for our
money.
Mr. Putnam. Have any of the 76 systems been replaced or
partially replaced thus far?
Mr. Willemssen. Let me defer to my assistant director. I
believe there are a couple that have been replaced at this
point.
Cynthia.
Ms. Jackson. Yes. At this point two have been fully retired
as a result of SPS and two partially retired, meaning they will
still be used--they are still being used by some of the other
Defense agencies at this time.
Mr. Putnam. Can you assign a percentage of implementation
that SPS is at this stage? Is it 50 percent in place, 80
percent in place?
Mr. Willemssen. I think it would be difficult to assess a
percentage until you define exactly what the program is going
to be. And I--our view would also be that now is a good time to
take a pause and understand where the Department is at with SPS
before it decides to move forward. There are releases out there
that are being used that, of course, don't provide the full
functionality that was envisioned for SPS, but I think it would
be prudent to make that kind of an assessment at this point.
Anything you want to add, Cynthia?
Ms. Jackson. No. Not at this time.
Mr. Putnam. Mr. Lieberman, did you want to add anything to
that last question?
Mr. Lieberman. No, sir. I think the second panel is most
qualified to tell you where this reassessment stands, but I
think they do have a responsive story to tell in terms of what
has been done in response to our reports and GAO's.
Mr. Putnam. How will the--when totally implemented, how
will it help assure total asset visibility, that we'd have a
handle on everything that is in the DOD inventory?
Mr. Lieberman. I don't think that total asset visibility is
one of SPS's features. It is not an inventory management
system. There are separate logistics systems that do that. This
is a system that connects with those inventory management
systems, rather than one that is intended to do inventory
management, itself. This is a system for identifying what needs
to be procured for helping people select the right contracting
mode, write the contracts, put all the right clauses in,
administer the contracts, get them placed, pay the contractor,
or at least provide the information to the finance people to
pay the contractor, and that sort of thing, but it is not a
supply management system.
Mr. Putnam. How will it interface with that payment
process, that payment portion of the equation?
Mr. Lieberman. The finance centers will have--they get
information from the contracting community on what to pay
contractors and how to deal with the invoices that they
receive, so there are elaborate interfaces. In fact, that's one
of the primary challenges of a system like this--being able to
connect efficiently to the finance systems so that the
contractors can be paid correctly and we won't have the kind of
overpayments or payments from the wrong accounts that we've had
in the past because of poor information coming into the finance
centers, among other things. And also the accounting systems,
keeping track of what funds have been spent out of each
account, need to interface into these systems, also.
Therein lies the challenge. In the commercial sector you
don't have nearly as many different systems. It is a much more
integrated picture. That's why it has been very hard to just
transplant an off-the-shelf commercial system to the Government
process.
Mr. Putnam. Are the payment systems and inventory
management systems among the 76 that this was to phaseout, or
are we talking about even more systems than that? To whomever
can answer that.
Mr. Willemssen. We're speaking of more systems than that.
Mr. Putnam. OK. It's just me and you all now. Work with me
here. Nobody else wanted to come.
How--you know, I guess all this begs the core question. How
and when will we know whether SPS has met the hype, the
expectations, the objectives? I mean, we're 5 years into an 8-
year program, I assume, and we're not doing so hot so far, so
when can we have some expectation or some basis for
understanding whether or not we're still headed in the right
direction after all this investment?
Mr. Willemssen. Well, I would answer the question in this
fashion, Congressman--and, again, somewhat similar to what Bob
said in terms of the second panel, but it is incumbent upon the
Department to commit to milestones and the tasks associated
with those milestones to implement, we think, our
recommendations focused at exactly the question you are
asking--when are we going to know how much this system costs
and what we are getting for that money?
Right now I would submit we don't know for sure what we're
getting, and that's why we think it important for the
Department to commit to taking those actions and commit to you
to when those steps are going to be completed. Without
milestones to get it done, this can continue on for several
more years.
Mr. Putnam. Mr. Lieberman, do you want to----
Mr. Lieberman. I certainly agree that more explicit
documentation of where we are going and where we are is
extremely important. When we talk about the lack of performance
measures, it may be sort of an esoteric term, but basically
we're saying the same thing. In order to measure whether we
have achieved success or not, we need some very specific
parameters laid out as to what success constitutes, and we
really don't have that right now in this program.
There are some positive signs. It was used recently during
a military exercise in Thailand where people plugged into the
system from over there and were able to place purchase orders
all over the world to buy supplies that they needed, and the
feedback from that was very positive. The system seems to work
well for small, local-level purchases.
The big question with it is: is it simply too much to ask
for the same system to handle all those millions of small
purchases and then those gigantic weapons systems contracts
also? That's probably a bridge too far, and I would predict
that the Department will probably decide to let SPS concentrate
on the small-and medium-sized purchases and deal with its
problems in the weapon systems and the inventory control points
with a different system some time in the future.
Mr. Putnam. Just out of curiosity, in a $350 billion budget
what is a medium-sized purchase?
Mr. Lieberman. Well, there's a definition of micro
purchases, which is $2,500 or less, so those are the little,
bitty ones. I don't know where large starts. In Defense terms,
everything is relative. But the weapons systems contracts
normally are tens of millions of dollars, and in some cases
even much greater than that, so they are clearly the high end
of the spectrum in terms of individual dollar value. In terms
of numbers, those small procurements are 95 percent of the
contracting activity.
So if SPS can support those smaller type of purchases well,
it will be dealing with 90 percent of the number of contracting
actions that we place, which will be a considerable
achievement.
Mr. Putnam. Mr. Willemssen, would that type of bifurcated
process achieve some efficiencies?
Mr. Willemssen. It very well could, and on the surface that
sounds reasonable. All I would add is to have the decisions be
data driven. It may, indeed, prove that through the next
release, which will focus more on the small and medium
contracts, that's where you get a lot of the benefits. That's
where you get a lot of your efficiencies. And if we looked
forward on the later phases of the original planned SPS with
the larger and more complex efforts, that may not be worth the
effort, worth the cost to do because you're not going to get
the same return on investment that you could with these first
increments, so I think that's--it very well could be the
outcome. My only caveat would be--is have the decision be data
driven, not what we think it looks like.
Mr. Putnam. But the 10 percent that would be remaining is
what percent of the money?
Mr. Willemssen. Well, it's a large percent of the contract
money, but it is not necessarily as large a percent of the
activity associated with managing contracts, the steps you have
to go through from cradle to grave in contract management,
which there's a lot of resources associated with just doing
that.
What you may find--and I think what program managers have
already found--is when you get into the larger, more complex
contracts there tends to be a lot more unique features that a
standardized system may not map well to, and it could be a
little bit more difficult to standardize in that regard. A lot
more complexity.
Mr. Putnam. Who is ultimately responsible for achieving the
SPS mission objectives?
Mr. Willemssen. Responsibility for the program--there is a
program office that has responsibility, and then also, because
this is considered a major system acquisition, C3I office, the
Chief Information Officer has a major role at key decision
points along the way of the life cycle of the system to make
sure that it is being kept on track.
Mr. Putnam. Did your report evaluate the level or quality
of oversight that office has provided in this program?
Mr. Willemssen. We looked at it from the perspective, not
so much individualizing the organizations, but what kind of key
tenets of effective investment management should be done, and
in the case of SPS they were not done as they should have been.
Mr. Putnam. Thank you.
At this time the Chair recognizes the gentleman from
Massachusetts, Mr. Tierney.
Mr. Tierney. Thank you, Mr. Chair.
Just two brief questions. One is: if you were to project
forward on this thing, just how many years behind schedule do
we anticipate this will run? And how much over budget?
Mr. Lieberman. Sir, that depends on the outcome of the
Department's current deliberation on where to go from here.
They have not made an irrevocable commitment that SPS will be
used for every kind of contract. So if you cutoff large
segments of the problem here, SPS could end up having a much
smaller scope than was originally envisioned, and I think that
there will be various options in terms of how much more to try
to do with SPS and how much that is going to cost.
Mr. Tierney. Do we have a range?
Mr. Lieberman. I don't.
Mr. Tierney. You don't?
Mr. Lieberman. No, sir.
Mr. Willemssen. The end date on the full program was late
2003, but then program officials told us they were not going to
be able to meet that either, so what the end date is for the
full-blown program I think is up in the air right now, and it
goes back to what Mr. Lieberman said. They're going to have to
make a decision about whether we are going to do the full
system or just significant pieces of it.
Mr. Tierney. OK. Mr. Lieberman, a somewhat unrelated issue
but similar on that. About a year or so ago you shared with us
the fact that you thought there was over $1 trillion
unaccounted for in the Department of Defense budget. Have we
made any progress in locating any of that money?
Mr. Lieberman. Well, you're referring to the $1.3 trillion
worth of unsupported adjustments to the year-end financial
statements.
Mr. Tierney. Right.
Mr. Lieberman. It is impossible to retroactively figure out
those accounting adjustments. The way the financial statement
auditing works is that each year the Department creates new
end-year statements, and each year we audit those. The reports
on the end-year statements for fiscal year 2001 are due later
this month. I don't candidly expect that you are going to see
much difference in terms of the audit opinions. We will still
find all of the major financial statements, with the exception
of the military retirement fund, which is in good shape. We'll
find the rest to be unauditable. And the unsupported adjustment
figure will still be very high, probably less than it was last
year because the Department has been trying to fix the reasons
why those kinds of adjustments have to be made and improving
the audit trail so that the auditors don't deem them to be
unsupported.
I should explain that what we're talking about is the
ability to portray financial statements in the year-end
statements. Saying that there are unsupported adjustments in
those statements does not necessarily mean that the Department
doesn't know where the money is, but it can't--the information
on where the money is is down in the roots of the Department,
and we have no efficient way to summarize that information and
portray it at the end of the year in the financial statements.
Mr. Putnam. Is there a plan to do just that? Is there a
guide which Department people or personnel could follow to get
to that point some time soon?
Mr. Lieberman. Yes, there is. The Department is currently
spending $100 million that the Congress just appropriated to it
to lay out a road map on what has to be done to overcome that
problem, plus a lot of money is being spent--we're not quite
sure how much, but we are in the multi-billion-dollar range--on
financial management system improvements, all of which are
designed to, among other things, create auditable financial
statements.
Mr. Tierney. Thank you.
Thank you, Mr. Chairman. I have no further questions.
Mr. Putnam. Thank you, Mr. Tierney.
Mr. Willemssen, in the GAO report and in your testimony you
state that, ``In commenting on a draft of our report, DOD
generally disagreed with our recommendations, noting that they
would delay development and implementation of SPS. Since that
time, however, the Department has either initiated or stated
its intention to initiate steps that are consistent with our
recommendations.'' To what do you attribute the change of
heart?
Mr. Willemssen. A couple factors come into play, not the
least of which is congressional oversight. To the extent--and
I've seen--witnessed this beyond Department of Defense, but
when congressional committees and subcommittees exert oversight
over the activities, or major information systems, in this
case, of a particular department, they get a lot more attention
at the department level when they know that congressional
subcommittees such as yours are actively engaged in oversight,
so that is a key factor.
Second, I think when you look at the facts of the
Department can't tell us how much in total it has spent on SPS
and they can't tell us what they've got for their money, I
think that's a hard position to defend indefinitely.
Mr. Putnam. Mr. Lieberman.
Mr. Lieberman. I totally agree. I think that, as I
mentioned in my opening statement, unfortunately, the kinds of
problems we see in the SPS project are the kinds of problems
that we find in most of the audits that we do of DOD
information acquisition projects. We need a more-disciplined
process, and the Department has been working on that for
several years, but progress has been slow and I think any
objective assessment would still have to say that we're a long
way away from achieving the goals of the Clinger-Cohen Act.
Mr. Putnam. We began this questioning with your statement
about the fundamental--your fundamental support of SPS, but
certainly stating that it was in need of restructuring. Would
you like to elaborate on some of the restructuring
recommendations that you have?
Mr. Lieberman. Well, I should preface anything I say by
making it clear that we have not been into this program for
over a year now. But I think, in general terms, the question of
whether to try to push SPS into the inventory control points,
where we buy a centrally managed item like aircraft repair
parts and things like that, and to push it into the weapons
systems contracting world, which is so radically different from
what the current version of SPS can support, that's really, I
think, where serious consideration has to be given to drawing
the line and saying this is too much for one system to handle
and we're going to explore another option.
Mr. Putnam. Mr. Willemssen, what recommendations for
restructuring have you all made? And, of those, which have been
implemented?
Mr. Willemssen. Among the recommendations that we would
have for restructuring within that realm is, before the
Department invests in future releases of SPS, that it be made
conditional on the fact that they can demonstrate that what's
out there to date is providing results that exceed the amount
of money that has been spent, and DOD has told us that they
plan to do that.
Second, that those future investment decisions be based on
reliable and complete economic analysis. Again, the Department
has said they are going to do that. And also to determine--we
think it is important to determine the current status of
program commitments, and the Department has said that they
would do that, in terms of where each of the releases of the
system are and what they are getting for that.
We also think it is important that the Department look at
this system in retrospect and identify lessons learned and
report on those lessons learned so it can use them for
subsequent systems. This is not the way to go about managing a
multi-billion-dollar IT project.
And Mr. Lieberman is correct. There are many other examples
of where this has occurred. In fact, the reason Clinger-Cohen
was passed in 1996 is, frankly, the Congress became fed up with
repeated stories of major information technology projects that
failed. You can look at FA advanced automation system--couple
billion dollars; Internal Revenue Service tax system
modernization, $3 billion--and the list goes on. That's why
Clinger-Cohen was put in. It was to say, ``We want cost
benefits and risks managed, not just at the beginning of a
project, but throughout its life cycle, so that if this project
starts going off-track, we want management in there to say,
`Hold it. We've got to take action.' '' That's what needs to
occur with SPS.
Mr. Lieberman. Sir, could I add something to that?
Mr. Putnam. Mr. Lieberman.
Mr. Lieberman. One of the recommendations we made in one of
our reports was that DOD issue guidance on how to buy
commercial software. The Congress strongly encouraged doing so
with acquisition reform legislation in 1994, and as late as the
year 2000 DOD still had not put out guidance to its contracting
and program management people on how to do that and what
pitfalls might exist and how to avoid them, so we recommended
that be done, and it was done with a white paper issued in July
2000. That is really an excellent document, in terms of what to
do and what not to do when buying COTS products. Now the
challenge is to get people to read it and apply it to their own
program.
Mr. Putnam. And, finally, for the entire panel, what is the
likely outcome of the Department continuing with current plans
for this acquisition of SPS without implementing the
recommendations? What's the--what types of consequences can we
expect if this continues?
Mr. Willemssen. Namely, the Department, if they didn't
implement the recommendations--but I believe they will, but if
they didn't I think they'd continue to limp along year after
year, spending money on a program, an unknown amount of money
with an unknown set out outcomes about what we're getting for
that investment. But I don't think that's going to be the
outcome. I think the Department is going to move in the right
direction and make an assessment of where they're at and either
decide to, as Mr. Lieberman said earlier, either essentially
cutoff after the next release or go forward with future
releases.
Mr. Putnam. Do you agree, Mr. Lieberman?
Mr. Lieberman. Yes, I do. I think the Congress has already
expressed dissatisfaction with the current plan through a major
cut to the appropriate for SPS for 2002. The Department can't
expect the Congress to support the old program plan in future
budgets, so it is going to have to be restructured, and that
restructuring is underway. So, as I said, I remain cautiously
optimistic that SPS can fulfill a large part of the
requirement.
Mr. Putnam. Very good. Mr. Lieberman, Mr. Willemssen, Ms.
Jackson, I am very appreciative for your time and your talents
this morning in sharing this with us.
We are going to recess for me to run and go vote before we
seat the second panel, so at this time everybody can just enjoy
this summer weather and I'll be back in just a few moments.
This subcommittee is in recess.
[Recess.]
Mr. Putnam. The subcommittee will reconvene.
I'd like to welcome our second panel. I look forward to
your testimony and to helping us fill in some of the gaps from
the first panel. There were several references to the second
panel may be able to answer that a little better, and so we
look forward to that.
We will begin our second panel testimony by swearing you
all in, so if you will please stand and raise your right hand,
do you solemnly swear or affirm that the testimony you give
before this subcommittee will be the truth, the whole truth,
and nothing but the truth?
Mr. Thurston. I do.
Colonel Haynes. I do.
Ms. Myers. I do.
Mr. Putnam. Thank you. Note for the record that the
witnesses responded in the affirmative.
We will begin the second panel with Dr. Margaret Myers, the
Deputy Assistant Secretary of Defense, Command, Control,
Communications, and Intelligence.
Welcome. You are recognized.
STATEMENTS OF MARGARET MYERS, DEPUTY ASSISTANT SECRETARY OF
DEFENSE, COMMAND, CONTROL, COMMUNICATIONS, AND INTELLIGENCE
[C3I], DEPARTMENT OF DEFENSE; GARY THURSTON, DEFENSE CONTRACT
MANAGEMENT AGENCY, DEPARTMENT OF DEFENSE; AND COLONEL JAKE
HAYNES, PROGRAM DIRECTOR, SPS PROGRAM OFFICE, DEFENSE CONTRACT
MANAGEMENT AGENCY, DEPARTMENT OF DEFENSE
Ms. Myers. Good morning. Mr. Chairman, the director of
defense procurement, Ms. Lee, regrets not being here today, but
she had a previous commitment to host the DOD-sponsored SPS
users' conference.
Mr. Putnam. We won't hold it against her. Nobody would have
been here to listen, anyway, except me.
Ms. Myers. All right. Well, I appreciate the opportunity to
discuss the DOD chief information officer's oversight of SPS.
My organization is responsible for acquisition and Clinger-
Cohen Act oversight of the SPS.
The DOD CIO, Mr. John Stenda, is the milestone decision
authority for SPS. A key part of this responsibility is
ensuring that the program complies with the Department's
acquisition policies and the Clinger-Cohen Act. The 1994
initiative of SPS as an acquisition program occurred prior to
the Clinger-Cohen Act. By mid 1997, however, we began to
retrofit SPS to meet the act's requirements. One particularly
bright spot is the procurement community's initiative to
document the as-is and to-be end-to-end procurement processes
consistent with the Clinger-Cohen Act mandates for enterprise
architectures and business process reengineering.
In mid 1998 the Department set two performance goals that
significantly impacted SPS. These were a successful Y2K
changeover and a transition to paperless contracting. As a
result of senior leadership emphasis, both outcomes were
achieved by January 2000. SPS played a critical role in
retiring non-compliant legacy procurement systems and in making
the contracting process over 80 percent paperless.
In spite of intensive management oversight, however, the
SPS program experienced some problems during this period, and
we took appropriate risk management actions, such as directing
the program manager to re-baseline the program.
We are aware that the SPS program still has issues that
need attention. Nearly a year ago, my boss formally asked the
director for Defense procurement to conduct a program review.
As a result, she sponsored two independent reviews, and we are
in agreement with the findings.
The director for Defense procurement and I will continue to
review the program with the stakeholders to ensure that the
acquisition direction is properly executed. We look forward to
working with the committee to ensure that this program is a
success.
Mr. Chairman, this concludes my testimony. I would be happy
to answer any questions you may have.
Mr. Putnam. Thank you very much, Dr. Myers.
[The prepared statement of Ms. Myers follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Putnam. Thank you very much, Dr. Myers. At this time
I'd recognize Mr. Gary Thurston, Defense Contract Management
Agency, Department of Defense.
You are recognized.
Mr. Thurston. Good morning, Mr. Chairman. I appreciate the
opportunity to be here today to discuss the standard
procurement system. I will summarize my submitted testimony
with a review of some of the history of this program, outline
the progress through August 2001, and address some of the
concerns that have been raised about the system.
As the director of Defense procurement stated in her
written testimony, the Department initiated the program in
1994. Most of the Department's contract writing and invoice
payment systems were then approaching the ends of their useful
lives and would soon need replacement. The Department decided
that it would be far more cost effective to develop just one
standard system to create and manage contracts and make invoice
payments than to separately replace each of the systems being
used. That way the Department would save on systems development
costs and also enjoy considerable additional savings by
updating and maintaining only one system instead of many.
Thousands of users at 777 locations are using the standard
procurement system worldwide. Roughly one-third of the
Department's contracting actions in both numbers and dollars
are being accomplished by the standard procurement system. Four
existing major contracting systems needing replacement have
been retired, and plans are on hand to replace ten more such
major systems.
As regards to the economic value of this program, I
understand the General Accounting Office has criticized some of
the methods and assumptions used in the Department's two
analysis of the value of the standard procurement system. I
will only note here that my staff, as well as staff from the
Office of the Department of Defense Chief Information Officer,
have all reviewed the latest economic analysis and have assured
me that the program, despite its increase in cost and schedule,
still has a net positive return. That makes sense to me, given
what I know about the size and complexity of some of the
elderly contracting systems now in use. They would have to be
replaced separately if it were not for the fact the standard
system will replace them all.
I also suggest an additional value not yet fully accounted
for in any analysis will become apparent in the timeliness and
accuracy of the management information available to the
Department once all the new systems in the end-to-end
procurement process model are on line and fully operational.
In summary, we began the program with an open competition
of a commercial item from industry sources. We did a two-phase
selection process. We used user assessment criteria and
financial criteria for selecting the most-qualified vendor. We
justified investment in the program. We have one-third of the
Defense work force using the standard system. Procurement
professionals in the Army, Navy, Air Force, and Defense
agencies are performing their operational mission with the
standard procurement system. We are improving the software to
respond to user concerns. The SPS acquisition is a major
undertaking to revolutionize the procurement processes and
systems operating with the Defense Department.
In response to your question--can the DOD procurement
process be standardized--I believe it can. The SPS software is
only one facet, though. Users' willingness to change is also
vital to the standardization of the DOD procurement process.
That concludes my opening remarks. I look forward to
answering any questions you may have.
Mr. Putnam. Thank you very much, Mr. Thurston.
[The prepared statement of Mr. Thurston follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Putnam. At this time I would like to call upon Colonel
Jake Haynes, the program director for the SPS Program Office,
Defense Contract Management Agency, Department of Defense.
Colonel, welcome to this committee.
Colonel Haynes. Mr. Chairman and members of the committee,
good morning. I appreciate the opportunity to appear before you
today to discuss the SPS program and its crucial role in
standardizing Defense procurement practices. This program has
tremendous importance for our ability to meet the needs of our
servicemen and women and, consequently, has a vital impact upon
our overall military readiness.
On 6 August of last year, I assumed the position of program
manager for the SPS system. As a result, other witnesses before
this committee can better address the history and the
background of the SPS program. I believe my testimony will
avoid repetition of other witnesses and contribute to the
committee's understanding of the SPS program by focusing on
three major areas.
First, I would like to contribute my initial impressions of
the SPS program upon assuming my current position.
Second, I would like to offer my perspective on some of my
current concerns expressed about the SPS program.
Finally, I would like to make a few comments about the
actions that can help facilitate greater acceptance of the SPS
program throughout the Defense procurement community.
Upon assuming my current position, I was struck by the
enormity of the SPS program. In many ways, it was unprecedented
step from both the Department of Defense procurement community
and information technology within the Department of Defense.
This initiative was designed to replace several dozen existing
legacy systems with a single system based upon commercial, off-
the-shelf COTS business software. Its reach included the entire
Defense professional procurement community--over 43,000
different users in all services and Defense agencies.
Finally, the comprehensive approach included both
standardization of existing procurement functions as well as
the inclusion of enhanced contract management tools that will
ultimately result in end-to-end integrated processes with
interoperability across the entire Department of Defense. When
I fully understood the scope of the SPS program, I was
impressed by the progress reached prior to my arrival.
SPS has now been deployed to 21,900 procurement
professionals at 773 sites, reaching over half of all intended
users and over two-thirds of intended sites. In fiscal year
2001, Defense procurement professionals used SPS for over
480,000 contracting awards, procuring more than 36 billion in
goods and services. The fact that such a massive undertaking
has advanced to the current level of implementation is a credit
to the numerous Defense officials, including my colleagues on
this panel.
At the same time, I was also impressed by the enormous
benefits offered by standardizing of Defense procurement
practices in general and the potential advantages of the SPS
program, in particular.
A single, integrated procurement process would allow the
Department of Defense advantages almost too numerous to
mention, including greater financial accuracy, improved
operational efficiency, and substantial cost savings.
Implementation of this program will provide the Department with
greater resource visibility needed to optimize spending and
track funding, improve management and oversight capabilities,
and ultimately provide better support to America's war
fighters.
It will be accomplished--these objectives, by reducing
administrative time required for contract management and
allowing procurement personnel to focus on quality of goods and
services, as well as eventually reducing administrative or
overhead costs associated with contract management and freeing
more appropriated funding to go to the needs of the war
fighter.
SPS will also enhance productivity and interoperability of
our procurement work force. This standardization will be an
important component in the Department's ability to comply with
the requirements of the Chief Financial Officer Act and balance
his books.
In summary, SPS is transforming the Defense procurement
community, and its full benefits are just beginning to be
recognized. An appreciation of the size of the SPS program,
both in terms of the number of users and breadth of procurement
functions, helps one understand the likelihood, if not
inability, of challenging in implementation phase. As I began
reviewing various reports and talking to numerous people
involved in the program, from supervisory officials to end
users, I developed an understanding of both the concerns
expressed by this committee and the GAO and the actions being
taken to address them.
In reviewing comments on the SPS program to date, many have
focused on the lack of user satisfaction with the new system. I
fully appreciate the importance of acceptance of SPS within the
user community and would like to address the situation in a
number of different respects.
First, the Inspector General Audit on Standardized
Procurement System Use and User Satisfaction Report, number
D2001-075, dated March 13, 2001, noted many users--many areas
for training enhancements and improvement throughout the
program. The current program budget includes extremely limited
funds for exchange management activities, which include
training, business process reengineering, and dedicated
communication activities dedicated at end users. All parties,
including the PMO, services, agencies, and contractor believe
that the program requires additional training efforts. We will
be engaged in a continuing effort to identify means and
resources to enhance the quality and amount of training
available to end users.
I would also like to stress the broader concept of change
management with regard to end user acceptance of the SPS
program. Communication and an understanding of the ultimate
objectives of any business change or technology implementation
is critical for success. The evolving nature of the program and
the focus on the technical and software resulted in less than
clear communication to the end users regarding the goals of the
program and its impact on the procurement work force, which, in
turn, led to unmanaged and often unrealistic expectation for
both the SPS program and the implementation process.
Greater communication on the broader goals of the SPS
program and the upcoming deployment of SPS version 4.2, with
its improvements and add-in functionality, would help remedy
their situation.
Nonetheless, we also recognize the absolute importance of
being responsive to the user needs and taking positive actions
to meet user expectation for the SPS program. My No. 1 focus is
on user satisfaction with SPS. As described in the testimony of
Director Lee, the Department has undertaken a number of steps
designed to ensure overall customer satisfaction with regards
to all aspects of the SPS program.
The Department has fully committed to taking actions to
ensure that end user needs are met by both the operational
capabilities of the new SPS version 4.2 and the overall
deployment process.
I would like to address some of the new measures we have
taken within the Program Management Office to implement our new
focus on the end user satisfaction. We have adopted a two-prong
approach that involves improving both PMO processes and
communications with the SPS users. Within the PMO, we have set
up and are enforcing discipline processes to handle all aspects
of the SPS program, including the requirements process for the
new version 4.2. In this area, as in all areas of the SPS
program, we are focusing on the SPS user. I also have a strong
new management team in place within the PMO with a defined set
of responsibilities and priorities, including monitoring and
reporting on user satisfaction issues.
We are also taking steps to increase communications with
users about the SPS program in both directions. First, we are
continually stressing to users the importance of their programs
and the many means of communications devices available to them.
For example, my first contribution to the SPS program
newsletter stressed our goals of addressing users' concerns in
improving communication. We have also initiated an SPS
communication survey that we expect to provide the PMO with
both substantive comments on the SPS program and ideas on how
we can continue to improve our communications with the SPS
users.
Finally, this very week we have been conducting the SPS end
users conference sponsored by the PMO with the support of the
program contractor. I am confident this dialog would benefit
the program. At the same time, a vital part of the PMO dialog
with users must involve continuing efforts to explain why the
SPS program is so important to the future of the Department. We
understand the perspective of a user being faced with a
challenging--a challenge of learning a new system that does not
seem to offer obvious advantage to their legacy systems. Once
users better appreciate the Department's commitment to the end-
to-end model and the critical importance of linking
procurement, financial, and logistics communities in an
integrated process, we believe that users will then understand
the need to implement the SPS program.
Since I assumed my responsibilities as program manager for
the SPS program, I believe that we have made major strides in
restoring focus to the basic and crucial task of making SPS
work at the user level. I am convinced that the commitment of
the Department's team to identify and implement actions more
oriented toward user satisfaction will have beneficial effects
throughout the SPS program.
I am also pleased to report that the program contract is
fully supportive of the need to increase end user satisfaction
within the SPS program and has cooperated fully with the
efforts recently undertaken to devise an improved approach to
resolving these issues.
In summary, the Department recognizes both the importance
of the SPS program and the continuing need to address the
concerns expressed to this committee. Achieving greater
efficiency in the Department's business practices is a crucial
means of meeting modern procurement challenges and enhancing
overall readiness to meet 21st century missions. We recognize
that we can only achieve our goals through a more-focused
effort to maximize our greatest resource--the skilled and
dedicated professionals who serve our Nation at all levels.
We will be working to provide the committee with confidence
that ultimately standardization of the Department of Defense
procurement process can and will occur in the years ahead and
that our national security will be improved as a result.
Thank you for the opportunity to appear before this
committee. I will be pleased to answer any questions at this
time.
Mr. Putnam. Thank you very much, Colonel Haynes. We
appreciate your being here.
[The prepared statement of Colonel Haynes follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Putnam. At this time the Chair recognizes and
acknowledges for the record that the gentleman from
Massachusetts, Mr. Lynch, has arrived, and we welcome him to
the subcommittee.
Mr. Lynch. Thank you, Mr. Chairman. I can say on this
committee I am very proud to serve and I'm here to learn, here
to listen, so I thank you for your testimony.
Mr. Putnam. And the distinguished gentleman from New York,
the chairman emeritus of the International Relations Committee,
Mr. Gilman.
Mr. Gilman, I understand you have a statement. You are
recognized.
Mr. Gilman. Thank you very much, Mr. Chairman. I am being
called to another meeting, and I appreciate your calling on me
at this time, and I want to welcome our panelists on a very
important issue and thank you for convening today's hearing to
examine the status of the standard procurement system for the
Department of Defense.
The oversight of Federal agencies is an extremely important
congressional responsibility, and, of course, this committee
carries out that responsibility. Nowhere in today's climate is
it more important than to make certain our Defense Department
has the ways and means to do whatever they need to do.
Given the current military environment in which we find
ourselves, it is prudent and appropriate that we work to make
certain that the Department of Defense is getting the best
value for the money it spends on new equipment, and with the
increased budget it becomes even more important.
In 1992, the GAO listed DOD contract management as a high
risk component that required additional senior management
oversight. This led the Department of Defense to initiate a 12-
year program to create and implement a standard procurement
system, the SPS, which we are examining today to replace a
myriad arrangement that evolved over 35 years, and when I take
a look at DOD's chart on--GAO's chart on DOD's current systems
environment for contract and vendor pay, I wonder how anyone
can keep up with all of those crossed lines that take place and
all of the other agencies that are involved.
We are now 7 years into that progress, and we've already
missed the original target date of March 2000, for full
implementation of this system. And the Defense Department
revised its target date, as I understand it, by 3\1/2\ years to
September 2003--is that correct?
Colonel Haynes. Yes.
Mr. Gilman. But that new goal may also be further delayed,
as I understand it.
Given the Administration has requested historic increases
in Defense spending over the next 5 years, it makes sense then
for the Congress to require that the DOD's procurement system
be as streamlined and as efficient as possible as we perform
our oversight responsibilities.
Just two quick questions before I have to run.
What cost savings have been realized to date as a result of
implementing SPS? I address that to any of our panelists who
could tell us that.
Mr. Thurston. We did a productivity study last summer, and
we have documented, we believe, around $75 million on an annual
basis.
Mr. Gilman. And that has been the accumulation of savings
each and every year?
Mr. Thurston. That was just during 2001 with the
deployments that happened from 1997 through 2001. We expect
that number to grow as more deployments would happen and more
use would happen.
Mr. Gilman. And how do you determine those cost savings?
Mr. Thurston. We took a team and went out to 50-some sites
and actually conducted interviews with the people who were
using the system and went through a list of productivity
factors that we had.
Mr. Gilman. Now, can the panelists tell me about the
justification that exists for the Department's continued
investment in SPS? Any of the panelists? Is there
justification? I notice that GAO has raised some issues about
the continued investment, and they say it has yet to be
justified. What are your thoughts?
Ms. Myers. The SPS has followed all of the Defense
Department's acquisition policies, to include doing an economic
analysis. I believe the disagreement comes in that the GAO
doesn't like the way we did the economic analysis.
I heard the number cited earlier of this is a $1 billion
program. From our perspective, it is about a $300 million
program. The difference comes in that the GAO would like us to
account for infrastructure and program cost.
Let me give you an example. If I have a computer on my
desktop and somebody comes to me and asks me to load SPS so
that I can write a contract, or whatever, we would not count
the cost of that computer on my desk. We would consider it part
of the infrastructure that's already there. It would be subject
to normal upgrades with all desktop automation, as is normal.
The GAO believes that we should have counted all that
infrastructure, and if you do count it, that's where they get
up to $1 billion.
Mr. Gilman. Let me ask, then, if the program costs over
$300 million, is that right, and you're getting a savings of
$75 million----
Ms. Myers. Per year.
Mr. Gilman. Yes. Where is the cost--where is the benefit of
that system? Where is the actual benefit in dollars?
Mr. Thurston. The $300 million cost was from 1995 when we
started the program through 2005, a 10-year program cost. And
what I was suggesting was a $75 million on an annual basis. So
the accumulation over once we started the full-scale deployment
from 1999 and on, you will have a 75 million, so in 4 years you
would recoup that investment.
Mr. Gilman. Thank you very much.
Thank you, Mr. Chairman.
Mr. Putnam. Thank you, Mr. Chairman.
Dr. Myers, my understanding is your office is in charge of
the milestones. What is the next milestone for SPS and when
will we know whether it has been achieved?
Ms. Myers. We have directed the program manager to take
what we've called a ``strategic pause,'' and he has, at this
point in time, some number of requirements that he has
assembled that will comprise release 4.2. He has also taken a
cut in his budget for this fiscal year. So we have asked him to
baseline or re-baseline release 4.2 based on the funding that
is available and determine what requirements he can deliver
with that funding and how long it will take. His current
schedule looks like we're talking this would happen roughly in
the next year.
That is essentially part one is baseline 4.2, and we will
do the economic analysis that the GAO has requested for that
increment.
Anything beyond that we consider part of release 5.0, and
we have directed the procurement users community to identify
and to essentially re-look the requirements for release 5.0.
This is where we got into the discussion in the last panel of
the major weapons systems. So we, the acquisition community,
have asked the functional owners of this process to take a look
at their requirements and reassess whether it is prudent to
proceed with 5.0. It is entirely possible that they will do
that analysis of alternatives and come back and say that we
will stop this program at the end of release 4.2. They may come
back and say, ``No, we want to proceed.'' They may come back
and say, ``We found a system in the Air Force that we think we
could adopt.'' At this point, they are just beginning that
analysis.
Mr. Putnam. These milestone 4.2 and 5, those are versions?
Ms. Myers. Yes.
Mr. Putnam. OK.
The gentleman from Massachusetts, Mr. Lynch, is recognized.
Mr. Lynch. Thank you, Mr. Chairman.
Given the significant increase in Defense spending--and
certainly we all want to support this President, and especially
under today's circumstances--I think it would be important,
however, to make sure that we are spending all this money
wisely.
One of the things that I find disturbing in the GAO
report--and I don't accept it all as gospel, but they certainly
know when they're not getting information that they request,
and that's one of the troubling parts of their report is that
they, when they asked for information, they didn't get it. And
I want you to address that concern, as well as the GAO's
assessment that there was no system of accountability to know
whether we are meeting certain goals along the way. That is
troubling, as well. So I don't know which of the panelists
would like to address the GAO's concerns, and if you can't
address those specifically, then suggest to me what the source
of the GAO's concerns are or why they would take this position.
Colonel Haynes. Sir, I would like to address it.
Mr. Lieberman. Sure.
Colonel Haynes. From 6 August as the new program manager or
the program manager of the system, I can say that we have
engaged fully with GAO to address their concerns, to provide
the information that they have requested in a timely manner,
and we have a track record of everything that we've released to
them.
In addition, we have invited GAO to come in and be a part
of our integrated process, our reviews where we go through
every aspect of the program addressing the processes normalized
in software development, and they have been a part of that.
Approximately 2 weeks ago members of the GAO staff came and
spent approximately 8 hours in the office to better understand
our path forward, our get well plan, and the processes that we
currently have in place to ensure that the quality of the
software meets the users' needs.
So I can only speak from 6 August and to the current time,
and I can attest to the fact that we have been fully engaged
with GAO and very cooperative in their requests.
Mr. Lynch. Thank you, Colonel.
What of the other sense that there was not a reliable
system of----
Mr. Putnam. Mr. Lynch, I think Mr. Thurston wanted to
answer your first question.
Mr. Lynch. Sure. That would be great.
Mr. Putnam. I didn't mean to cut you off, but----
Mr. Lynch. All right.
Mr. Putnam [continuing]. I wanted you to get a full----
Mr. Lynch. Thank you, Mr. Chairman.
Mr. Thurston. Since the report was on my watch, I wanted to
respond about not getting the information that they were
requesting.
I'm not sure exactly what specific text. If it was in the
area that we were not able to supply actual cost of the
program--was that related to----
Mr. Lynch. That would do it. Yes.
Mr. Thurston. OK. That's a difficult job in our Department
when we look at implementing an information technology system.
As Dr. Myers talked about, when we have 700 sites and 20,000
users, what expense has been spent at each of those sites on
the IT information was not something that us, as a program
office, could go out and collect, nor, when we asked for that
from the military departments, we were provided some ballpark
information, but, again, it is a tiering or layering effect of
how a site through a command into a military department. So
when they asked why we could not report actual cost, we had no
way to collect actual cost. That's one of our issues in the
Department.
Mr. Lynch. So no one is tracking that?
Mr. Thurston. Well, not to say that no one is tracking it.
When you look at the whole Department and try to understand, in
all the different pieces that we were touching, it was not
obtainable. I think even Mr. Lieberman talked about it is not
that it's illogical in an audit statement, but to go down to
the very specifics is an issue for the Department, that it's
tracked about many different levels.
Mr. Lynch. OK. Well, at least you're honest. Thank you.
That will undoubtedly shake the confidence of some Members who
would otherwise be willing to vote for--you know, go to
appropriations. If we don't have a reliable system of
accounting for when and where and how these dollars are being
spent, it's sort of a blank check, don't you think?
Mr. Thurston. I don't see it as a blank check, sir. I think
it is the scope of what the GAO is requiring us to obtain
information on as a program office. Just as Dr. Myers talked
about, trying for us as a program office to track all the
individual expense at each of the sites of what they're
spending on information technology--their personal computers,
their servers, their communication lines--where I'm just
providing software to that operation to perform their mission,
but I'm not out there collecting all the information on all of
their finances of putting in support infrastructure.
Mr. Lynch. But as a business practice, building in
accountability, that would be an important part of that.
Mr. Thurston. Well, that's a part that we're heading down
with the standardization for the procurement community and the
standardization of the finance community and the
standardization of the logistics community that have all of
these systems that can interact and flow data to provide those
type of an accounting process.
Ms. Myers. I believe there is a nuance here in that the
Army, Navy, and Air Force, and the Defense agencies account for
what they spend on information technology infrastructure, so
they know what they spend. The program office doesn't know what
the Navy spent to put--to upgrade the computers on people's
desktops that they might have upgraded anyway and SPS happens
to be one of the applications running on those computers.
Mr. Lynch. I understand what you're saying in a general
sense, but I don't--I mean, what--apparently what the GAO was
looking for was a breakdown on a per-site basis, what we're
spending here, and, at least in their report that I have here,
they're not satisfied that anybody knew what these things cost
and, you know, there's no sense of accountability. So that
would appear to be a problem.
Ms. Myers. I think the issue----
Mr. Lynch. From up here, anyway.
Ms. Myers [continuing]. Is different channels of
accountability, and that we do not have an easy means to marry
up what is spent through one channel in IT infrastructure with
what the program manager was spending on SPS.
Mr. Lynch. I must be honest with you. I find this
conversation surprising. It just--it would appear that, given
the size of the budget, there would be a greater level of
accountability and a more precise response to the GAO, that
someone would find a way to respond to them so that they could
do their job. That's all I'm saying.
That's all I have.
Mr. Putnam. Thank you, Mr. Lynch.
The Clinger-Cohen Act and OMB guidance provided framework
for IT investment management by setting the requirements for
economically justifying proposed projects on the basis of
reliable analysis of life cycle cost, benefits, risk, using
those analysis throughout the project's life cycle, and doing
so for large projects by dividing them into a series of smaller
incremental sub-projects or releases.
Now, in doing that the risk associated with these huge
investments ought to be able to be effectively measured against
cost, schedule, capability, and our benefit expectations.
Now, we've heard testimony that DOD has not followed this
incremental approach for funding and cost/benefit analysis. You
represent those who are--those positions that are responsible
for this, so how do you respond to the criticism that it is not
being acquired and deployed under the specific guidance of
Clinger-Cohen?
Ms. Myers. I think there are a couple of reasons here. No.
1, the program was initiated before the Clinger-Cohen Act was
passed, so that it was--to as great as an extent as we could,
we tried to retrofit the incremental strategy, but, again, it
was difficult to change--to make significant changes. We did,
at the beginning of the SPS program, require a thorough
economic analysis, so the implication is that none was done.
There was one done. The issue is the GAO would like to see a
follow-on analysis for each increment.
We, in fact, had a difference of opinion with the GAO on
whether that was required. There were within my office several
people who worked on Senator Cohen's staff at the time that the
legislation was written, and they believe that our
methodology--our people believe that our methodology was
appropriate. GAO felt otherwise.
We just found out last week--we asked GAO to go back and
verify that, and their lawyers determined, I heard last week,
that they thought they were right, so we have agreed and the
program manager will follow their guidance for doing any--an
economic analysis for increment 4.2.
Mr. Putnam. Anybody else want to pitch in on that one?
Colonel Haynes. I'd like to also add that this, the EA, a
scalable EA to support incremental releases is something that
we feel is in concert with the GAO's vision. More importantly
is that the EA is not used to satisfy a requirement but used in
our business case analysis to determine what the future of the
program and how we build version four, our user community.
So it is a--we've taken a very proactive stance, and we'll
feed the data in real time to GAO and all of the other bodies
that help support the program, to include OSD and the
integrated process team that provides oversight to our program
prior to a milestone decision.
Mr. Putnam. Colonel, you've testified that 22,000 people in
two-thirds of the desired sites, half the users are equipped
with the SPS system, and last year it was used to purchase $36
billion worth of whatever.
Colonel Haynes. Yes, sir.
Mr. Putnam. How much--if we're that far along in the
process on the ground, if two-thirds of the sites already have
it and half the people have it, then why at the macro level
does it appear to be so far behind, and why is there such a
high level of dissatisfaction amongst those who are using it?
Colonel Haynes. Sir, I'd like to answer the question in two
parts. First, I'd like to start with the latter part of your
question. I mentioned in my testimony that when we deployed SPS
to the user community we, at the Department, did not
communicate the overall benefits to the Department to the
actual users on the ground, and we could have done a better
job, and we're currently doing that through our communication
process to the users. Ms. JoAnn Patell for DFAS, for example,
is a keynote speaker at the SPS conference in San Diego,
ongoing as we speak.
Once the users understand what the benefits of the
Department from an end-to-end perspective, they then understand
that the additional keystrokes or the source edits that we
enforce on the front end of SPS satisfies a greater need.
Initially, most of the users thought that SPS would replace
their legacy system one for one, and that was not the case. The
power of SPS in providing end-to-end through EDI is much
greater than any legacy system that they currently have.
So as we communicate to our users, we are finding that the
user satisfaction is increasing through that process.
On the second part of the question, on the remaining one-
third, which does represent some of the weapons system
community and the ICP community, the original strategy to wait
for 5.0 and 5.1 to deploy to those sites we have found was
probably a flawed strategy in that it was a good deployment
strategy, but for incremental releases it is functionality that
is required throughout the entire SPS community.
We have seen some success in the weapons system community
with the current 41E version that's currently in the Navy today
in the NAV-AR community. So we are starting to see SPS moving
to the other communities and satisfying some of those
requirements.
Mr. Putnam. Another key SPS program commitment which was
indicated DOD failed to attain was to use commercially
available software, and this was discussed a little bit in the
first panel. The contractor has modified the commercial product
extensively in an attempt to tailor it to meet your needs. As a
result, it has become a DOD unique solution rather than a truly
COTS product, and I've got to tell you that all these acronyms
sounds like a ``Saturday Night Live'' skit. According to the
program manager, SPS as a commercial product provided 45
percent of the functionality that you need, but according to
the industry best practices, software modifications to a
commercial product should have 90 to 95 percent functionality.
Since it is now essentially a DOD-specific solution, the
Department will not be able to take advantage of the reduced
risk associated with using proven technology that a wide
consumer base participates in. As a result, DOD may not accrue
the reduced costs and greater benefits associated with the use
of a COTS product.
Now, recognizing, of course, that there isn't really
anybody else in the world out there like the Department of
Defense, and so I stipulate that, was it ever intended to be a
true COTS product, and why has it had to be modified so
extensively after the original choice was made that particular
program was what met your needs?
Mr. Thurston. I'd like to respond to that. In 1994 the
Department was assessing what to do to standardize its
different business communities. Each of the different business
communities took an approach of whether to do development for a
unique system or go to a commercial and determine which would
be the best.
We did a request to industry, and they delivered about
eight different systems that we looked at, and we found out
that there were systems that could do procurement. So when we
ran the competitive process, we found that the best system
could only do 45 percent, and none of the other systems were
even above that, so we knew we were starting with a commercial
base that did have a proven technology that could operate, but
we knew that it would only perform a piece of the Defense
method of doing procurement.
Most of the standardization has been about connecting all
the systems, as Mr. Gilman pointed out, among the different
finance and logistics systems. That is where a lot of the
development has been. There has been some development in
tailoring the way we do procurement, because, as you know,
there is a Federal acquisition regulations and then there is
the Defense Federal acquisition regulations, and so we knew
that we would be commercially derived but that we would have to
do development to meet the full DOD commitment of procurement.
Mr. Putnam. Dr. Myers, did you want to add anything to
that? I'm not putting you on the spot.
Ms. Myers. No, thank you.
Mr. Putnam. Colonel.
Colonel Haynes. No, sir.
Mr. Putnam. Are all DOD components and agencies required to
acquire and deploy SPS?
Colonel Haynes. As part of our deployment strategy, the
43,000 users that is the target audience for SPS will
accommodate all of the DOD and the majority of the other
Defense agencies.
Mr. Putnam. At this time we are going to have another vote.
I would ask the commitment from each of you to submit answers
to questions that the subcommittee may present to you in
writing. I appreciate that commitment and I thank you very much
for your time. I apologize that we're cutoff and aren't able to
more fully explore these and give you an opportunity to be more
fully heard. It is a crazy congressional schedule and I
apologize for that, but we thank you again for being here. We
thank the first panel. We thank our guests. With that, the
subcommittee stands adjourned.
[Whereupon, at 11:38 a.m., the subcommittee was recessed,
to reconvene at the call of the Chair.]
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