[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]





    WHO'S WATCHING THE COOP? A RE-EXAMINATION OF FEDERAL AGENCIES' 
                     CONTINUITY OF OPERATIONS PLANS

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 28, 2005

                               __________

                           Serial No. 109-26

                               __________

       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
21-468                      WASHINGTON : 2005
_____________________________________________________________________________
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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
GINNY BROWN-WAITE, Florida           C.A. DUTCH RUPPERSBERGER, Maryland
JON C. PORTER, Nevada                BRIAN HIGGINS, New York
KENNY MARCHANT, Texas                ELEANOR HOLMES NORTON, District of 
LYNN A. WESTMORELAND, Georgia            Columbia
PATRICK T. McHENRY, North Carolina               ------
CHARLES W. DENT, Pennsylvania        BERNARD SANDERS, Vermont 
VIRGINIA FOXX, North Carolina            (Independent)
------ ------

                    Melissa Wojciak, Staff Director
       David Marin, Deputy Staff Director/Communications Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 28, 2005...................................     1
Statement of:
    Hoover, Reynold N., Director, Office of National Security 
      Coordination, Federal Emergency Management Agency, U.S. 
      Department of Homeland Security; Marta Brito Perez, 
      Associate Director, U.S. Office of Personnel Management; 
      and Linda Koontz, Director, Information Management, U.S. 
      Government Accountability Office...........................    15
        Hoover, Reynold N........................................    15
        Koontz, Linda............................................    37
        Perez, Marta Brito.......................................    29
    Kane, James A., Ph.D., president and CEO, Systems and 
      Software Consortium; Julie Williams, director, Internet 
      business solutions group, Federal civilian agency practice, 
      Cisco Systems; and Kevin Luten, public policy 
      representative, Association of Commuter Transportation.....    62
        Kane, James A............................................    62
        Luten, Kevin.............................................    88
        Williams, Julie..........................................    71
Letters, statements, etc., submitted for the record by:
    Davis, Chairman Tom, a Representative in Congress from the 
      State of Virginia, prepared statement of...................     4
    Davis, Hon. Danny K., a Representative in Congress from the 
      State of Illinois:
        Letter dated February 21, 2005...........................   101
        Prepared statement of....................................     9
    Hoover, Reynold N., Director, Office of National Security 
      Coordination, Federal Emergency Management Agency, U.S. 
      Department of Homeland Security, prepared statement of.....    18
    Kane, James A., Ph.D., president and CEO, Systems and 
      Software Consortium, prepared statement of.................    65
    Koontz, Linda, Director, Information Management, U.S. 
      Government Accountability Office, prepared statement of....    39
    Luten, Kevin, public policy representative, Association of 
      Commuter Transportation, prepared statement of.............    91
    Perez, Marta Brito, Associate Director, U.S. Office of 
      Personnel Management, prepared statement of................    31
    Porter, Hon. Jon C., a Representative in Congress from the 
      State of Nevada, prepared statement of.....................   111
    Ruppersberger, Hon. C.A. Dutch, a Representative in Congress 
      from the State of Maryland, prepared statement of..........    12
    Williams, Julie, director, Internet business solutions group, 
      Federal civilian agency practice, Cisco Systems, prepared 
      statement of...............................................    74

 
    WHO'S WATCHING THE COOP? A RE-EXAMINATION OF FEDERAL AGENCIES' 
                     CONTINUITY OF OPERATIONS PLANS

                              ----------                              


                        THURSDAY, APRIL 28, 2005

                          House of Representatives,
                            Committee on Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2 p.m., in room 
2154, Rayburn House Office Building, Hon. Tom Davis (chairman 
of the committee) presiding.
    Present: Representatives Davis of Virginia, Shays, Duncan, 
Dent, Waxman, Cummings, Kucinich, Davis of Illinois, Watson, 
Ruppersberger and Norton.
    Staff present: David Marin, deputy staff director/
communications director; John Hunter, counsel; Rob White, press 
secretary; Drew Crockett, deputy director of communications; 
Jaime Hjort, Michael Layman, and Brien Beattie, professional 
staff members; Teresa Austin, chief clerk; Sarah D'Orsie, 
deputy clerk; Tania Shand and Mark Stephenson, minority 
professional staff members; Earley Green, minority chief clerk; 
and Jean Gosa, minority assistant clerk.
    Chairman Tom Davis. Good afternoon. I want to welcome 
everybody to today's hearing on Federal agencies' continuity of 
operations planning [COOP].
    Continuity of operations planning is the mechanism by which 
Federal agencies ensure that essential Government services 
continue to be delivered during a major crisis that disrupts 
normal operations. This is a complex process involving the 
identification of essential functions, the exploration of 
numerous emergency contingencies, and the allocation of 
appropriate resources to prepare for catastrophic events.
    In the stark new reality that now confronts our society, 
after the attacks on the World Trade Center and the Pentagon, 
much has been said and written about the continuity of Federal 
leadership, including Congress. However, more important than 
anything that goes on up here is the hard work that Federal 
employees do every day to keep the wheels of government 
churning. Members of Congress don't guard our borders; they do 
not deliver the mail or keep the government's payroll books in 
order. It is Federal employees who do these things and more, 
and they do a spectacular job day after day with no pomp or 
circumstance.
    However, what happens if the headquarters of a Federal 
agency or many Federal agencies is incapacitated in the 
aftermath of an attack or a major natural disaster? Federal 
Government agencies need to be prepared with a plan to continue 
doing the most important tasks to serve the American people 
under any circumstances, and it is this issue that we grapple 
with this afternoon.
    In a hearing held by the committee almost a year ago to the 
day, the Government Accountability Office reported significant 
inadequacies in Federal continuity of operations planning, 
including deficient guidance for Federal agencies in 
identifying their essential functions, and insufficient 
allocation of resources to ensure a continued delivery of 
services in a crisis.
    Consequently, I asked the GAO to continue to monitor 
Federal COOP planning to ensure that agencies are in compliance 
with the latest executive and congressional guidance and report 
back to us annually. We now have the results of GAO's first 
update.
    In its survey of 45 Federal agencies' COOP plans, the 
number of essential functions ranged from 3 to 538. This begs 
the question: If an agency has 538 essential functions, how 
essential can they be? What is the priorities? Since last 
April's hearing, FEMA, the executive agency for Federal COOP 
preparedness, has issued updated guidance designed to better 
assist agencies in the identification of essential functions. 
The committee is interested in hearing today about what 
progress has been made in clarifying this important first step 
in the continuity planning process.
    GAO also reported the majority of COOP plans did not fully 
identify the mission-critical systems and data, or fully 
establish resource requirements necessary to maintain essential 
services during a crisis. GAO has cited inadequate oversight by 
FEMA as a contributing factor in this problem, focusing, in 
particular, on the fact that FEMA will no longer be verifying 
agency readiness information submitted via an on-line reporting 
system. However, FEMA has told us that the on-line reporting 
system was never designed to be an assessment tool, but rather 
to provide authorities with status reports during a crisis. 
FEMA has also expressed its concern that GAO has not taken into 
account the field exercise that it has conducted to test 
readiness.
    We will be delving into these issues today to try to get at 
the true state of Federal COOP planning with the goal of 
providing FEMA and all Federal agencies the support they need 
to perform this important function and to prepare all Federal 
agencies so they can continue essential functions for our 
citizens in the event of disaster.
    Finally, it is imperative that we incorporate telework into 
its Government's continuity planning. Telework, or allowing 
employees to work from home or other remote locations, 
leverages the latest technology to give significant flexibility 
to managers. The committee held a hearing last July on this 
issue, because frankly, many Federal managers have been slow to 
implement telework at their agencies. The Federal telework, 
mandate in the fiscal year 2001 Transportation Appropriations 
Act made the Office of Personnel Management responsible for the 
establishment of telework policies across all agencies by last 
April. This deadline was not met, and it is unacceptable.
    I look forward to hearing from OPM today what progress it 
has made in encouraging telework implementation government-
wide. This should be a no-brainer for Federal agencies. But, 
unfortunately, politics is like a wheelbarrow; nothing happens 
until you start pushing.
    A provision in the fiscal year 2005 Appropriations Act will 
withhold $5 million from the budgets of several agencies if 
they continue to balk at telework implementation. Telework is 
not just common-sense efficiency, but an important national 
security consideration as well. The decentralization of Federal 
agency functions inherent in a healthy telework strategy can 
greatly increase the survivability of those agencies in the 
event of a terrorist attack or other disruptive crisis. It can 
even serve to reduce traffic congestion, which, as we all know, 
is a major problem around here, particularly when one considers 
the various evacuation scenarios in the event of a disaster in 
Washington.
    It doesn't take a disaster, however, to cause significant 
disruption of daily life in this region. I am sure we all 
remember what happened when a disgruntled farmer had a bad day 
and decided to park his tractor in a pond on the Mall. We need 
to make progress on this.
    I am pleased to note that FEMA has added some telework 
language in its revised COOP guidance, and I look forward to 
hearing from our witnesses today about how we are translating 
that guidance into practice. The committee looks forward to 
hearing from FEMA, OPM and GAO in the first panel on the 
government's progress in all of these areas. We will also be 
hearing from some experienced private sector witnesses today on 
their insight into what we in Government call COOP, and what 
they refer to as business continuity.
    I want to once again welcome all of you and thank you for 
being here today.
    [The prepared statement of Chairman Tom Davis follows:]

    [GRAPHIC] [TIFF OMITTED] T1468.001
    
    [GRAPHIC] [TIFF OMITTED] T1468.002
    
    Chairman Tom Davis. I'm now going to recognize our 
distinguished ranking member, Mr. Waxman, for an opening 
statement.
    Mr. Waxman. Thank you, Mr. Chairman.
    The Federal Government's continuity of operations planning 
is a critical first step necessary to ensure its effective 
response to a terrorist attack, natural disaster or other 
catastrophe. I am pleased that you, Mr. Chairman, are giving 
this issue sustained attention, given some of the troubling 
reports we have from the Government Accountability Office and 
others. The attention is well deserved.
    If September 11 and the anthrax attacks here on Capitol 
Hill were wake-up calls on the importance of effective 
contingency planning, this year's Patterns of Global Terrorism 
report, which will be released by the State Department 
tomorrow, demonstrates the continuing urgency we need to give 
this issue.
    Early this week, I wrote to Secretary Rice urging the 
release of the detailed data in this report, and yesterday the 
administration did release it. The report shows a dramatic 
uptick in terrorist incidents in 2004. And, in fact, there were 
about 650 significant incidents in 2004, more than triple the 
175 terrorist incidents from 2003, the previous 20-year high.
    The terrorism data the administration has released should 
foster a sense of urgency in Federal agencies, urgency needed 
to improve their contingency plans, and which they seem sorely 
to need. If September 11 was a wake-up call, then it seems some 
agencies may be nodding off when it comes to contingency 
planning.
    One of the first steps in effecting contingency planning is 
the identification of the central agency functions, yet GAO 
reports agencies may not be doing this basic first step 
effectively and thoroughly. Though there has been some recent 
improvement, GAO reports that the Federal Emergency Management 
Agency [FEMA], has inadequate oversight over agency contingency 
plans. The most troubling, FEMA apparently no longer plans to 
even try to verify readiness information agencies report to it.
    Mr. Chairman, these are very troubling findings which must 
clearly be addressed quickly. I commend you for this hearing 
and urge you to continue your efforts.
    I would also like to commend my colleague, Representative 
Danny Davis, for his work in seeking to improve agencies' 
telecommuting policies. His legislation from last year, H.R. 
4797, would require agencies to create and evaluate a 
demonstration project on telework. This is a good idea that 
deserves bipartisan support.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you very much.
    Mr. Davis, any opening statement?
    Mr. Davis of Illinois. Thank you very much, Mr. Chairman. 
Normally I wouldn't, but I do indeed, because I think this is 
such an important discussion, and such an important topic.
    Chairman Davis, Ranking Member Waxman, in the late 1990's, 
the Government Reform and Education and the Workforce 
Committees held oversight hearings to examine the barriers to 
telecommuting and the Federal agencies' development and 
promotion of telework programs.
    It was then thought that the primary benefits of 
telecommuting were reduced traffic congestion and pollution, 
improved recruitment and retention of employees, reduced the 
need for office space, increased productivity, and improved 
quality of life and morale of Federal employees. These continue 
to be compelling and valid reasons for implementing agency-wide 
telework programs. Representative Frank Wolf is to be commended 
for moving legislation that pushes agencies to increase the 
number of Federal employees who telecommute.
    However, with the Oklahoma City bombings and September 11, 
we have another very compelling reason to push Federal agencies 
and our staffs to develop and to implement the infrastructure 
and work processes necessary to support telecommuting. It is 
for emergency preparedness and the continued threat of 
terrorism. The question we must ask ourselves is this: In the 
event of an emergency, are we, this committee, our staffs, and 
all of the Federal agencies, prepared to serve the American 
people if, in an emergency situation, our primary places of 
work are no longer available to us?
    You only have to read the Government Accountability 
Office's [GAO's], updated report on continuity of operations 
entitled, ``Continuity of Operations: Agency Plans Have 
Improved, But Better Oversight Could Assist Agencies in 
Preparing for Emergencies,'' to know that the answer is no. The 
GAO report notes that in addition to the threat of terrorism, 
severe weather conditions and environmental hazards at Federal 
buildings can lead to the prolonged closure of Federal 
buildings and can interrupt essential government services. The 
report states that prudent management, therefore, requires that 
Federal agencies develop plans for ensuring the continuity of 
such services in emergency situations. These are referred to as 
continuity of operations [COOP], plans. These plans lay out an 
agency's approach to maintaining services, ensuring proper 
authority for government actions, and protecting vital assets.
    Neither the Office of Personnel Management [OPM], nor the 
Federal Emergency Management Agency [FEMA], the agencies 
responsible for providing emergency preparedness guidance in 
COOP, have adequately addressed workforce considerations 
related to the resumption of broader agency operations. While 
COOP efforts should give priority to the safety of all 
employees and address the needs of those who directly support 
essential operations, the resumption of all other operations is 
crucial to achieving mission results and serving the American 
people.
    The GAO report states that only 1 of the 21 agency 
continuity plans in place on May 1, 2004, documented plans to 
address some essential functions through teleworking. Two other 
agencies reported that they planned for nonessential staff to 
telework during a COOP event, but their continuity plans do not 
specifically mention teleworking.
    In the next few weeks, I will introduce legislation that 
will push agencies to do just that. The legislation, H.R. 4797, 
which I introduced last year, would require the Chief Human 
Capital Officer Council to conduct and evaluate a 30-day 
demonstration project that broadly uses employee contributions 
to an agency's operations from alternate work locations, 
including home. The outcome of the demonstration project would 
provide agencies and Congress with approaches for gaining 
flexibility and identifying work processes that should be 
addressed during an extended emergency. I intend to revise the 
legislation to take into consideration GAO's recommendations. I 
hope that you, Chairman Davis and Ranking Member Waxman, will 
join me as cosponsors of this bill.
    The number and types of potential emergency interruptions 
are unknown, and we must be prepared in advance of an incident 
with the work processes and infrastructures needed to 
reestablish agency operations. In a world where everything is 
possible, we must be prepared for all of the possibilities.
    I thank you, Mr. Chairman, for the time. I yield back the 
balance of my time.
    Chairman Tom Davis. Thank you.
    [The prepared statement of Hon. Danny K. Davis follows:]

    [GRAPHIC] [TIFF OMITTED] T1468.003
    
    [GRAPHIC] [TIFF OMITTED] T1468.004
    
    Chairman Tom Davis. Members will have 7 days to submit 
opening statements for the record.
    Are there any other Members that wish to make statements?
    Mr. Ruppersberger. Real quick, Mr. Chairman. Thank you for 
the hearing.
    During the hearing last year on this subject, we learned 
that GAO found some significant deficiencies in the various 
Federal agency COOP plans, and that those deficiencies were due 
in part to inadequate guidance from FEMA. I was very disturbed 
by GAO's findings, because, as we all know, the Government 
cannot function without reliable and realistic plans for 
continuity.
    Now, I understand that GAO did a followup study to gauge 
FEMA and agency progress as of May 1, 2004, in developing COOP 
plans. I have conflicting feelings about their findings. On one 
hand, I am pleased there was some improvement in the number of 
agencies with COOP plans, but on the other hand, it is 
disappointing that two major agencies still had no plan as of 
May 1, 2004, and that FEMA's oversight was still considered 
inadequate.
    I am encouraged that FEMA has since reissued and expanded 
their Federal Preparedness Circular 65 to address GAO's 
concerns regarding their lack of guidance to the agencies. 
Hopefully with the update, FPC-65, all agencies will at least 
have some plan on the books. The next step is to ensure that 
the plans are adequate and effective in maintaining essential 
government operations during a crisis.
    I am looking forward to the discussion as to how telework 
can become a vital part of agency's COOP plans. Last year I 
cosponsored Mr. Davis's bill, H.R. 4797, which required a 
demonstration program of conducting an agency's operations from 
alternate work locations, including employees' homes. I think 
with a little tweaking, telework could become an important part 
of our agencies' plans, and I look forward to hearing from the 
witnesses today.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Thank you.
    [The prepared statement of Hon. C.A. Dutch Ruppersberger 
follows:]

[GRAPHIC] [TIFF OMITTED] T1468.005

[GRAPHIC] [TIFF OMITTED] T1468.006

    Chairman Tom Davis. Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman. I appreciate this 
followup hearing, because I believe, based on the GAO report, 
that continuing oversight is going to be necessary to get the 
kind of more rapid movement that these hearings have asked for 
from COOP.
    We do note some improvements. I think it is always 
important to note improvements, because I know agencies and 
their employees strive to make improvements. One has to wonder 
why the improvements have been so slow, the improvements in 
such a vital notion as making sure that the Federal Government 
keeps operating in the event of an emergency. I cannot help but 
think that one of the reasons why is that these agencies are 
not in the security business, and in essence, without a whole 
lot of help, they are having difficulty doing what we have 
asked them to do.
    There is going to have to be a lot more help, a lot more 
leadership, in my judgment. It is simply not their expertise. 
You are the ABC Agency, you are trying your best to get that 
done. Here comes folks concerned, as well they might be, with 
homeland security and tell you, by the way, make sure you can 
continue your operations, and since you know your operations 
best, do it.
    Well, it turns out to be harder than that. The level of 
detail that the GAO report, for example, indicates is necessary 
in order to really have a plan is simply not there. Many of the 
agencies, they can't tell you how many folks they would need to 
have on duty in order to have continuous operations--that is a 
detail, that is a very basic detail--or what kind of data, what 
kind of computers you need to have. That is a harder one, 
because that involves secure measures. You would have to have 
not only computers and data, but you would have to know how to 
get to them.
    Mr. Chairman, I am particularly concerned, because a lot of 
the fall-out would be right here in the District of Columbia. 
That is where most of the Federal employees are. That is 
certainly where headquarters are, where the most essential 
employees are, and where people are going to look to see if our 
Government is running, if it is not running, where agencies are 
located here, is just not running.
    I looked at what FEMA's responsibility is. I can only 
conclude that FEMA needs help, too. And I understand that the 
White House is itself giving some leadership. They need to give 
a lot more leadership on this issue, especially if there is 
going to be any consistency here. In some cases it will not 
matter if one agency knows how to keep running and another does 
not, because you know what, this is one seamless government, 
and it will not do to have certain agencies up and certain 
agencies down, and that is how the administration has to look 
at it. They either are all up, able to communicate with one 
another, able to keep the Government working, or if one or two 
of them are down, all the rest of them may be down because of 
the particular function that agency serves.
    Yes, at bottom it is complicated, so complicated that I 
don't even think it is fair to ask agencies to do this without 
a great deal of help, and I think the two GAO reports that we 
have are a real indication of that.
    So I look forward to hearing what has occurred and what we 
can do to help improvements come about.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Well, thank you very much.
    We are going to now move to our panel. We have Reynolds 
Hoover, the Director of Office of National Security 
Coordination at FEMA, Department of Homeland Security; Marta 
Brito Perez, the Associate Director, Office of Personnel 
Management; and, of course, Linda Koontz, the Director of 
Information Management, Government Accountability Office. Thank 
you all for being here.
    Would you rise with me and raise your right hands. And can 
we have the two people behind you state their names for the 
record.
    Mr. Sweetman. Jim Sweetman, GAO.
    Mr. Marinos. Nick Marinos, GAO.
    [Witnesses sworn.]
    Chairman Tom Davis. Thank you very much.
    Mr. Hoover, we will start with you.

 STATEMENTS OF REYNOLD N. HOOVER, DIRECTOR, OFFICE OF NATIONAL 
  SECURITY COORDINATION, FEDERAL EMERGENCY MANAGEMENT AGENCY, 
   U.S. DEPARTMENT OF HOMELAND SECURITY; MARTA BRITO PEREZ, 
 ASSOCIATE DIRECTOR, U.S. OFFICE OF PERSONNEL MANAGEMENT; AND 
LINDA KOONTZ, DIRECTOR, INFORMATION MANAGEMENT, U.S. GOVERNMENT 
                     ACCOUNTABILITY OFFICE

                 STATEMENT OF REYNOLD N. HOOVER

    Mr. Hoover. Good afternoon, Mr. Chairman and members of the 
committee. My name is Reynold Hoover. I am the Director of the 
Office of National Security Coordination in the Federal 
Emergency Management Agency [FEMA], which, as you know, is a 
part of the Department of Homeland Security. I thank you very 
much for the opportunity to be here today to discuss FEMA's 
role in supporting continuity of operations programs [COOP], 
for the Federal Government.
    As you know, FEMA was designated as the executive branch 
lead agent for COOP and continuity of government programs by 
multiple authorities, which also requires departments and 
agencies to develop COOP plans and procedures to support their 
essential functions.
    In our capacity as lead agent, I am proud to report that we 
have provided and continue to provide a wide range of support 
and assistance to the Federal executive branch to develop this 
critical capability. This afternoon I would like to briefly 
highlight for you and the committee the progress that we have 
made to ensure that the Government's ability to deliver those 
essential services following a disaster from an alternate 
facility will be maintained.
    As you may recall from Under Secretary Mike Brown's 
testimony a year ago, we published Federal Preparedness 
Circular 65 that combines all previous COOP-related Federal 
preparedness circulars into one comprehensive document that 
includes definitive guidance on the essential elements of a 
viable COOP capability. But more importantly, the FPC also 
incorporates many of the GAO's previous recommendations for 
COOP capability improvement, including detailed information on 
essential functions, the importance of interdependencies 
between departments and agencies, and the identification of 
telework as an option for COOP planners.
    In addition, we have produced a series of documents, 
including templates, self-assessment tools and awareness 
materials, that have been widely distributed to the interagency 
community and are available through FEMA's Web site.
    As a part of our ongoing initiative to better define 
essential functions, and to provide a more coordinated approach 
to government-wide COOP planning, we have been working with the 
Homeland Security Council to help identify department and 
agency primary mission essential functions that support eight 
national essential functions identified previously by the 
Homeland Security Council. As a result of this initiative, we 
expect to incorporate those national essential functions into 
the Department's primary mission essential functions in future 
planning and exercises.
    But our COOP coordination responsibilities are not limited 
to the national capital region. In fact, we have established 
numerous interagency working groups at the headquarters and 
regional level. The centerpiece of this effort is the COOP 
Working Group in the National Capital region that is comprised 
of 76 departments and agencies, and has members as planners 
from the legislative branch, the judicial branch and the 
District of Columbia.
    At the regional level, FEMA has established COOP working 
groups with the assistance of GSA and OPM that support many of 
the Federal executive boards and Federal executive associations 
across the country.
    Because training readiness is a key to COOP preparedness, 
we believe exercises are critical to identifying, assessing and 
correcting COOP plan and program deficiencies. In that regard, 
we have been concentrating on building a national COOP exercise 
program, and as you know, Mr. Chairman, in May of last year, we 
conducted Exercise Forward Challenge 2004, the first-ever, 
full-scale COOP exercise for the Federal executive branch.
    Today we have already begun preparations for Forward 
Challenge 2006, which will be an externally evaluated exercise. 
Our support, however, for COOP exercises extends beyond the 
Washington, DC, area, and in partnership with GSA, our FEMA 
regions have conducted and will continue to conduct interagency 
COOP exercises nationwide.
    The foundation of this exercise program is a robust 
training component, which has been a primary focus of FEMA. 
Working in close collaboration with OPM, GSA and the COOP 
Working Group, we have developed and delivered the COOP 
Managers Training course, in a train-the-trainer-type format, 
and I am proud to say that as of March of this year, all 30 
major departments and agencies have participated in the 
training courses that we have delivered across the Nation. In 
fact, a total of 682 Federal, State, local and tribal officials 
have been trained and certified as COOP instructors. An 
additional 41 course offerings will be coordinated across the 
country by the end of this fiscal year.
    Recognizing the GAO's concerns for FEMA to take a greater 
role in assessments, and realizing a need to better understand 
COOP alternate facility requirements, we have been conducting 
Federal department and agency alternate facility site visits to 
provide an assessment of current capabilities and identify 
common issues facing COOP relocationsites. Through these site 
assessments, we will be in a better position to address and 
coordinate planning and preparedness needs for departments and 
agencies.
    Mr. Chairman and members of the committee, let me conclude 
by saying I believe that FEMA, in our role as the lead agent 
for the executive branch continuity of operations and 
continuity of government programs, and the Department of 
Homeland Security has significantly enhanced the Federal 
Government's preparedness to perform its essential functions 
across the full spectrum of all hazards, threats and 
emergencies. Working with our partners throughout the 
government, we will continue our leadership role by providing 
planning and programming guidance, conducting exercises and 
assessments, developing resource capabilities, and building the 
relationships necessary to ensuring an effective government-
wide COOP program that is coordinated and responsive to any 
threat or emergency.
    Thank you for your time, Mr. Chairman. I look forward to 
your questions and the questions of the committee.
    Chairman Tom Davis. Thank you very much.
    [The prepared statement of Mr. Hoover follows:]

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    Chairman Tom Davis. Ms. Perez, thanks for being with us.

                 STATEMENT OF MARTA BRITO PEREZ

    Ms. Perez. Good afternoon, Mr. Chairman. Good afternoon, 
members of the committee. I am very pleased to be here 
representing the Office of Personal Management. I appear to you 
today to discuss the Federal agencies' use of telework and its 
inclusion in Federal agencies' continuity of operations 
planning.
    It is my responsibility at OPM to work with the agencies to 
ensure that they have focused their attention on this critical 
aspect or their continuity of operations. The committee has 
been consistent in emphasizing the importance of telework and 
its significant benefits, particularly following the tragic 
events of September 11. I am pleased to report to you that OPM 
has played an important role in helping agencies recognize the 
need of emergency planning, as well as the need for 
incorporating telework in their COOP plans.
    It is, in fact, a reality that since September 11th, 
telework has become a matter of necessity for many employees 
and employers. While you and other Members of Congress have 
long recognized the need and the benefits of telework in 
reducing traffic congestion and air pollution, in addition to 
positive impacts on employee morale and retention, we have all 
come to recognize the important role that telework plays in an 
agency's ability to continue to perform mission-critical work 
in times of crisis or calamity.
    Using a train-the-trainer approach, OPM has partnered with 
FEMA to deliver human capital-oriented emergency preparedness 
training to agency COOP managers. Thus far we have provided 
training in each of FEMA's 10 regions. This ongoing FEMA-
sponsored COOP training includes an OPM segment on the various 
human capital tools that are available to Federal planners 
through their human resources efforts and the staff to secure 
and to ensure the continued operations of Federal agencies 
during a crisis. Telework is identified in the training as one 
of those tools for emergency planners to use in developing 
schemes to leverage the capability of the Federal workforce 
during times of crisis and disruption.
    Since, after September 11, OPM began working with the 
Federal executive boards to improve communication capability 
with special emphasis on emergency preparedness. In 2002, OPM 
identified emergency planning as an integral component of human 
capital management. In 2003, OPM administered the first annual 
emergency preparedness survey to assess the extent to which 
agencies were considering emergency planning, shelter in place, 
securing the workforce, with particular attention to those with 
special needs, as well as to look at the use of flexibilities 
and tools that were available to managers.
    Following the completion of the survey, OPM held several 
briefings in Washington, DC, to share the results with the 
senior managers and representatives from around the agencies.
    As you know, Mr. Chairman, the Federal Government is 
geographically dispersed. Approximately 90 percent of the 
executive branch employees work outside of the Washington, DC, 
metropolitan area, and as such, OPM has been working with the 
Federal executive boards across the country to deliver an 
emergency preparedness training to Federal employees throughout 
the Federal Government.
    Since October 2004, 22 training sessions have been held, 
focusing on the human capital tools that are available to 
Federal organizations and their emergency planning. Again, as 
part of that training, OPM emphasizes the importance of a 
strong telework plan to provide Federal agencies the capacity 
to employ its workers outside of their normal workplace when 
emergency circumstances dictate.
    Today over 20 agencies have participated in our training. 
To our cadre of human capital officers at OPM, we provide 
hands-on, one-on-one assistance to the agencies as well. On 
numerous occasions during the past year, OPM has provided 
consultation and support to agencies challenged by weather and 
traffic disruption. Certainly we have had a number of events in 
the Washington area where we have supported our agencies.
    In summary, Mr. Chairman, OPM has been a leading advocate 
of the need to better prepare a Federal workforce in order to 
cope with any possible crisis which could affect Federal 
workers and government operations. In addition, we are grateful 
for the attention that this committee has directed to Federal 
agency's COOP plans, with over 1.8 million nonpostal executive 
branch employees spread across the agencies, each with a 
distinct and important mission.
    We simply must incorporate employee safety with business 
needs. OPM's goal is to make telework an integral part of the 
agency operations, rather than a new or special program. I am 
sure that--I assure you that OPM will continue to champion 
telework as a key human capital strategy and do everything that 
we can to facilitate, to educate, to guide the incorporation of 
telework into the agencies' overall operations and emergency 
preparedness planning and use.
    Thank you. And I will be happy to answer any questions.
    Chairman Tom Davis. Thank you very much.
    [The prepared statement of Ms. Perez follows:]

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    Chairman Tom Davis. Ms. Koontz.

                   STATEMENT OF LINDA KOONTZ

    Ms. Koontz. Mr. Chairman and members of the committee, I 
appreciate the opportunity to participate in the committee's 
hearing on Federal continuity of operations planning.
    As has been discussed, a range of events can interrupt 
essential government services, and so Federal agencies are 
required by Presidential Decision Directive 67 to develop plans 
for ensuring the continuity of such services in emergency 
situations. This directive designates the Federal Emergency 
Management Agency as executive agent for executive branch 
continuity of operations planning, and FEMA has issued planning 
guidance to agencies.
    About a year ago we testified before this committee on 
agency compliance with FEMA guidance. At that time we stated 
that a number of agencies did not have continuity plans in 
place as of October 1, 2002. Further the essential functions 
identified in those plans varied widely in type and number, and 
the plans generally did not comply with FEMA's guidance.
    Since that time the executive branch has taken a number of 
important steps to improve continuity planning across 
government. These are fully discussed in the report we did at 
your request, and that is being released today. Specifically, 
since our last review, FEMA has issued a new version of its 
guidance that provides additional needed detail on each of the 
planning areas, including the identification of essential 
functions.
    In addition, the White House has issued guidance on 
essential functions and initiated the process to identify and 
evaluate agency-level functions. In doing so, the White House 
noted that in the past, many departments and agencies have had 
difficulty in clearly identifying and articulating their 
essential functions, which are the foundation of effective 
continuity planning. This is a condition we recognized in our 
prior and subsequent reviews of agency continuity plans. 
However, while the White House efforts should improve the 
identification of essential functions, the lack of a schedule 
to complete this effort makes it unclear when these 
improvements might take place.
    You also asked us to look at the Federal plans in place as 
of May 1, 2004. We found that agencies had made progress in 
improving compliance with FEMA's guidance, particularly in the 
area of tests, training and exercises. In addition, all but one 
of the agencies reviewed now has a plan in place.
    However, significant weaknesses remained. For example, 31 
of 45 plans did not fully identify mission-critical systems and 
data necessary to conduct essential functions. In our prior 
review of 2002 plans, we noted that insufficient oversight by 
FEMA contributed to agencies' lack of compliance with the 
guidance. FEMA has since improved oversight by conducting an 
interagency exercise in May 2004, and providing training to key 
Federal, State and local personnel. FEMA also plans to collect 
information from agencies on their readiness, but does not plan 
to verify this information.
    Finally, you asked us to what extent agency plans address 
the use of telework during emergencies. We found that although 
FEMA guidance was in place as of May 2004 it did not address 
telework, one agency's plan included telework as part of its 
continuity strategy. Also 10 others reported that they planned 
to use telework, but these plans were not clearly documented.
    Since then FEMA's new guidance directs agencies to consider 
telework in continuity planning. However, the guidance does not 
address the steps that agencies should take to ensure they have 
made preparations necessary to use telework effectively in an 
emergency situation.
    In summary, Mr. Chairman, FEMA's revisions to its guidance 
and the White House effort have the potential, if effectively 
implemented, to help agencies better identify their essential 
functions and thus develop better continuity plans. In 
addition, agency continuity plans are slowly improving. 
Finally, agencies appear to be making increasing use of 
telework in their continuity plans. However, we think there are 
further opportunities to ensure preparedness. Consequently, in 
our report that is being released today, we are recommending 
that a schedule be established for the White House effort, and 
that FEMA further improve its oversight of agency continuity 
plans by verifying that these plans are indeed fully compliant 
with the guidance.
    In addition, we are recommending that FEMA, in consultation 
with OPM, develop more detailed guidance on telework. With 
executive branch progress to date and the additional steps we 
have recommended, as well as continuing oversight by this 
committee, we believe that the Federal Government can ensure 
that it is fully prepared for emergencies.
    Thank you. That concludes my statement. I would be happy to 
answer questions.
    Chairman Tom Davis. Well, thank you very much.
    [The prepared statement of Ms. Koontz follows:]

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    Chairman Tom Davis. Mr. Hoover, throughout your testimony 
you characterize FEMA's role in the COOP planning process as 
lead agent and advisory assistance, to resource and providing 
training. Doesn't some agency have to exercise comprehensive 
authority and control over all of the other agencies to compel 
compliance, and who should that be?
    Mr. Hoover. Well, yes, Mr. Chairman, we are the lead agent, 
and in that capacity we work very closely with all of the 
departments and agencies. And I think we have made significant 
strides in ensuring that departments and agencies are compliant 
with the COOP guidance that we have put out as well as the most 
recent guidance that came out from the Homeland Security 
Council with regard to the national essential functions. And we 
think that in combination with the efforts and the support that 
we are getting from the Homeland Security Council, we are 
making great improvement, and that the guidance that we have 
now and the role and responsibilities we have now are 
sufficient to get departments and agencies moving forward in 
the right direction.
    Chairman Tom Davis. I have heard it said that data is the 
one resource that once it is lost can't be recovered. I know 
that sounds cold and unfeeling, but it does highlight the 
importance of maintaining security back-up systems.
    If Wall Street loses its financial records, they are gone 
forever, and the result would be financial chaos. Similarly, if 
the government loses its vital data, it would have profound 
consequences for the security of the country, and government is 
behind the private sector because it doesn't have the same 
market pressures on it. This school of thought, therefore, 
advocates a datacentric approach of continuity of operations 
planning.
    Let me ask GAO to comment on its views of the Federal 
Government's efforts to back up and secure its data, and then 
ask FEMA and OPM how they are working to secure this important 
resource.
    Ms. Koontz. Well, I think that, in general, we can say that 
the vital records area, which is ensuring that you have the 
information that you need in order to perform essential 
functions during an emergency, was probably one of the weaker 
areas that we looked at when we evaluated continuity plans as 
of May 1, 2004.
    Chairman Tom Davis. Can you give an example, something that 
if it really--as of that date, if it were lost, could be a 
severe problem?
    Ms. Koontz. There are many things in the Federal Government 
that I am sure that if they were lost would be very valuable, 
including all kinds of files involving recipients of benefit 
programs across the government, any data dealing with economic 
health of the agency. I could not even begin to enumerate all 
of the different kinds of information that is so valuable, if 
it were lost, it would be disastrous.
    Chairman Tom Davis. OK. Let me just ask FEMA and OPM how 
you are working to secure these resources.
    Mr. Hoover. Thank you, Mr. Chairman. One of the things that 
is in the new revised guidance for Federal Preparedness 
Circular 65 is an area that deals specifically with vital 
records and functions. Certainly if you go to an alternate 
facility and don't have reach-back capability to those vital 
records and functions, as you mentioned, you won't be as 
effective as you could be.
    So we put out guidance to the departments and agencies, and 
we help them implement that guidance by ensuring that they have 
the back-up capability and they have redundant capability not 
only in communications, but also in maintaining vital records 
and having that reach-back capability.
    We are working with departments and agencies to improve 
that. We have recognized that is an area that needs to be fixed 
across the government, and I think we are making some 
improvement in that area.
    Ms. Perez. Mr. Chairman, I will speak, obviously, from an 
OPM, an agency perspective in terms of having its own 
information and data backed up, but I can tell you that we are 
certainly following the guidance that is--the FEMA guidance, 
and that OPM does have all of its data, retirement information 
and so forth, backed up. So we feel comfortable that we have 
met all of their requirements and the guidelines.
    Chairman Tom Davis. The GAO study revealed--Ms. Perez, this 
is for you. The GAO study revealed that 19 of 23 agencies 
surveyed have a telework policy in place, but only 1 of the 19 
agencies had their telework policies play a role in COOP. Why 
this disconnect?
    Ms. Perez. Yes. In fact, Linda and I had a conversation 
prior to the beginning of the hearing, Mr. Chairman, and 
frankly, we have--since we survey the agencies on a regular 
basis, we did a survey in 2003 and 2004, and just surveyed them 
again in 2005. And I think our data may be a little more 
current than perhaps what--the GAO information.
    All of the agencies, with the exception of one, currently 
have a policy, a telework policy, in place. The response that 
we are getting from the agencies with regards to how many of 
them are actually using telework as a flexibility in their COOP 
operations, it is a little bit higher than that. We actually 
surveyed about 65 agencies. We have--about 35 percent of 
agencies say they have--they are using telework as a 
flexibility on a situational basis. About 40 percent of the 65 
agencies said that they actually have COOP as a permanent 
part--telework as a permanent part of their COOP planning. So I 
think that it may be the timing of the survey. Our data 
indicates that agencies continue to make progress, and that 
they are doing probably a little bit better than perhaps when 
the data was collected by GAO.
    Chairman Tom Davis. In the written testimony on our next 
panel, Julie Williams from Cisco says the one of the keys to 
success of Cisco's telework policy is it has provided 100 
percent reimbursement on the cost of broadband services to the 
employees' homes of up to $75 a month. Federal Government 
currently reimburses workers up to a $100 a month for commuting 
costs like Metro.
    Is employee reimbursement for broadband service an idea the 
Federal Government could pursue?
    Ms. Perez. Certainly. We have left up to the agencies what 
policies they use in terms of implementing what is 
reimbursable. The Federal Government does not have currently 
the capability, I don't think, of reimbursing for personal 
expenses. So I think that is something that would have to be 
looked into. Is it a good policy or not would have to be 
considered.
    Chairman Tom Davis. You would have no objection to 
individual agencies having that discretion, I gather, if we 
gave it to them?
    Ms. Perez. I think that it would be entirely up to--
somebody would have to analyze the costs and so forth and see 
whether it makes sense in the context of the agency's 
operations.
    Chairman Tom Davis. It wouldn't be every employee, but 
certainly for some employees. I mean, you talk about continuity 
of operations and the like. It seems that would be something 
that we might be interested in looking at.
    Ms. Perez. Certainly something that would be worth 
considering.
    Chairman Tom Davis. Thank you very much.
    Mr. Davis.
    Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
    Mr. Hoover, do you expect FEMA's June 2004's guidance to 
improve the agency COOP plans?
    Mr. Hoover. Yes, sir. Thank you for that question. We think 
that the guidance that we put out is a significant improvement 
over previous guidance that had been developed before September 
11th. In fact, we combined three Federal preparedness circulars 
that were previously out on the COOP subject.
    We included in this Federal preparedness circular that we 
released in June a section on human capital management that OPM 
helped us on. We included an annex in there on alternate 
facility site selection that the GSA helped us on.
    So we think that the new guidance that was put out, in 
addition to the most recent guidance on the eight national 
essential functions, and we have asked departments and agencies 
to identify their primary mission-essential functions that 
support that, are all things that will help improve the 
Government to be prepared to perform its essential functions 
from alternate facilities.
    Chairman Tom Davis. It seems as though some agencies have 
made less progress than other agencies; that is, some seem to 
be moving further ahead than others. Would you hazard a comment 
as to why some seem to be doing better than others?
    Mr. Hoover. Well, I think that is a fair assessment that 
some departments and agencies are moving quicker than others in 
regard to making sure that they have all of the elements of a 
viable COOP plan in place. But I would say that on whole, if we 
look at the 76 departments and agencies that are involved in 
our COOP Working Group, which are most of the major departments 
and agencies in the National Capital region, and certainly out 
in the regions as well, they are all making improvements in 
their COOP planning and preparedness, and folks have really 
taken an important renewed emphasis on COOP planning and COOP 
readiness.
    Mr. Davis of Illinois. Do you think that there is anything 
that will help to spur them on or cause them to intensify, 
perhaps, their efforts?
    Mr. Hoover. I think one of the most important things that 
has helped reinforce the importance of continuity operations 
and/or COOP programs has been the emphasis that the Homeland 
Security Council has placed on it. And with issuing the 
guidance with regard to primary mission-essential functions, we 
think as we finish that review of the submissions that we have 
from all of the major departments and agencies in the National 
Capital region, as we finish that review, we will be able to 
even provide more refined guidance for COOP planning and make 
us in a better position again to deliver essential functions in 
the event of an emergency.
    Mr. Davis of Illinois. Ms. Perez, a witness on the next 
panel, Kevin Luten, will testify that the Federal Government 
lags behind the private sector in the Washington region when it 
comes to telecommuting.
    The 2004 state of the commute by the Washington, DC, 
Council of Governments found that 15 percent of private sector 
employees teleworked, compared to only 12 percent of Federal 
employees. As of today does the Federal Government have a 
functioning telework program in place that would sustain an 
agency operation during an extended emergency?
    Ms. Perez. Well, the Federal Government--it is a big 
organization, sir. I would say that agency by agency it differs 
in the quality and the extent to which they are prepared to use 
telework as an alternative flexibility in deploying their 
workforce.
    With regards to why they use it and how they do not use it, 
I think that the Federal work continues to educate them. We 
provide a lot of guidance. Agencies continue to attend our 
briefing sessions. We have a quarterly event that we hold. We 
get a lot of questions from the agencies, and I think they are 
continuing to try to get better at this.
    There is still some reluctance in the way that our managers 
sometimes view telework. If we can't see them, we can't touch 
them, they may not be working as hard as we want them to work. 
But I think with continuous education and guidance from FEMA 
with regards to using it, and OPM as a tool for emergency 
planning, it could continue to grow. But it varies from agency 
to agency, sir.
    Mr. Davis of Illinois. Ms. Koontz, based upon the 
information that you have, does it appear from just your 
observation that there is a high level of serious intent or 
seriousness or feeling of need to seriously pursue this kind of 
activity?
    Ms. Koontz. I believe that with the recently initiated 
White House effort, and the attention that they are placing on 
creating a framework for identifying agency-level essential 
functions, I think we now have the sense of urgency and the 
intention that we need to get this done.
    Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
    Chairman Tom Davis. Thank you.
    Just have another question or two for this panel.
    Mr. Hoover, in your testimony you highlighted the 
establishment of the COOP Working Group, a Federal, State, and 
a local forum for the National Capital region designed to 
assist the executive branch in COOP capability development. Is 
Metro included in this working group?
    Mr. Hoover. Yes, Mr. Chairman. The District of Columbia has 
a representative, as well as the legislative branch and the 
judicial branch participate. And that group meets every month 
to discuss COOP planning, and other COOP-related issues.
    Chairman Tom Davis. So it is safe to say that this signals 
FEMA's view of the central role of Metro in the National 
Capital region's preparedness.
    Mr. Hoover. Yes, sir.
    Chairman Tom Davis. What can be done to ensure that Metro 
is a full partner in COOP preparedness?
    Mr. Hoover. Well, I would say that they are. And the fact 
that they attend our monthly COOP Working Group meetings, and 
certainly the efforts within the Department of Homeland 
Security's National Capital Region office, we have been working 
on issues such as evacuation and credentialing, and the D.C. 
area is very much a part of that.
    Chairman Tom Davis. OK. Thank you all very much. I 
appreciate it. We will take a 2-minute recess as we move our 
next panel ahead.
    Our next panel consists of James A. Kane, the president and 
CEO of Systems and Software Consortium, welcome him back; Julie 
Williams, a director of the Internet Business Solutions Group 
in the Federal Civilian Agency Practice, Cisco Systems; and 
Kevin Luten, the public policy representative at the 
Association of Commuter Transportation.
    We will recess for just a couple of minutes.
    [Recess.]
    Chairman Tom Davis. The meeting will come back to order. 
Are you ready to be sworn in? If you would stand up, I will 
swear you in.
    [Witnesses sworn.]
    Chairman Tom Davis. Thank you. We will start.
    Dr. Kane, I will start with you. We will go straight down 
and try to limit it to 5 minutes. I think you know the rule. 
Then we will go right to questions. Thank you.

STATEMENTS OF JAMES A. KANE, Ph.D., PRESIDENT AND CEO, SYSTEMS 
  AND SOFTWARE CONSORTIUM; JULIE WILLIAMS, DIRECTOR, INTERNET 
  BUSINESS SOLUTIONS GROUP, FEDERAL CIVILIAN AGENCY PRACTICE, 
 CISCO SYSTEMS; AND KEVIN LUTEN, PUBLIC POLICY REPRESENTATIVE 
             ASSOCIATION OF COMMUTER TRANSPORTATION

               STATEMENT OF JAMES A. KANE, Ph.D.

    Mr. Kane. Thank you. Mr. Chairman, members of the 
committee, distinguished guests and committee staff members, 
thank you for inviting me here today to provide insights on the 
importance of telework and continuity of operations planning.
    I am Jim Kane, president and CEO of the Systems and 
Software Consortium. The role of the Consortium and its 
relationship to your interest and support, Chairman Davis, and 
to Representative Frank Wolf's initiatives through the Telework 
Consortium are described in my written submission, so in the 
interest of time, I will proceed to the major points of my 
testimony.
    I am pleased to be here today to offer two key insights as 
inputs to the committee's deliberations and to offer two modest 
recommendations I believe can significantly contribute to the 
success of telework-based solutions in continuity of operations 
plans. My first insight corresponds to the committee's interest 
in the respective roles of OPM for implementing telework 
programs and for FEMA's role in continuity of operations. My 
first insight is to ensure that these agencies are clear on the 
concept of telework.
    The phrase ``telework'' as used by OPM and GAO is referred 
to by them as telecommuting and/or flexiplace. It conveys the 
image of a solitary worker remotely connected to a central work 
site. This is in dramatic contrast to the more contemporary 
concept of telework, which embraces spatially distributed work 
teams using high-bandwidth telecommunications to perform 
routine business activities.
    Contemporary telecommunications is taking the ``place'' out 
of the word ``workplace.'' If you doubt that, walk through an 
airport, walk through your neighborhood Starbucks. Are these 
people telecommuting or are they simply working in a more 
contemporary way? Accordingly, this committee's concern should 
not be merely whether an agency has telework in their 
continuity of operations plans, but rather whether the guidance 
being provided reflects what is now possible using contemporary 
practices for telework.
    If past is prologue in this area, yes, we will have 
guidance on telework as an element of continuity of operations 
planning, but it will be equivalent to having guidance on how 
to adjust the rabbit ears on your TV set to get those three 
channels of network television.
    My second insight is offered from the perspective of the 
committee's interest in the plans of individuals for 
incorporating telework in their continuity of operations plans.
    Pilot deployments of telework solutions are essential for 
successful large-scale implementations. Against that backdrop, 
I refer you to the GAO report of July 2003 and, specifically, 
to figure 1 on page 5 of that report. The figure lists 25 key 
telework practices for implementation of a successful Federal 
telework program, yet nowhere on this list does it say anything 
about actually implementing pilot projects as a key success 
factor. It is as if you have the cookbook, you have the 
ingredients, but you never cook the meal.
    We at the Telework Consortium have learned that pilot 
projects are essential. They enable us to ensure that the 
appropriate technology is deployed and that adequate resources 
are in place. But even more important is that pilots enable the 
participants to see and experience what is now possible. It is 
the behavior of people more than the performance of technology 
that enables telework-based solutions to support agency 
missions whether in normal times or emergency operations. 
Therefore, in evaluating GAO reports as to whether telework and 
continuity of operations plans are coordinated, the real issue 
is not whether they are on paper, but whether they have been 
tried in practice.
    The committee should not place false confidence in the few 
agencies that have at least coordinated telework in their 
continuity of operations plans. If the agency is not already 
running pilots, confidence in that agency's ability to support 
continuity of operations could be misleading.
    In closing, let me offer two modest recommendations. First, 
leverage what you already have in place and have invested in. 
Despite the continued interest and personal efforts of 
yourself, Chairman Davis, and Representative Wolf, agencies, 
with few exceptions, are not taking advantage of the Telework 
Consortium as a resource. I would recommend to the committee 
that agencies use the Telework Consortium as a resource for 
their telework programs to ensure they are getting maximum 
benefits from the pilot projects they should be conducting.
    My final recommendation is that I would again, as in my 
previous appearance before you, encourage you to consider a 
National Center for Distributed Work. We are now experiencing a 
technology revolution that will affect how government agencies 
operate. A national center could focus on pilot implementations 
of contemporary telework-based solutions in a continuity of 
operations environment. This could provide valuable insight to 
both government and industry on how to ensure an increasingly 
safe, adaptive and productive work environment.
    In closing, I again thank you, Mr. Chairman, and the entire 
committee for allowing me to share my perspectives on telework 
with you today. I would be happy to answer any questions.
    Chairman Tom Davis. Thank you very much.
    [The prepared statement of Mr. Kane follows:]

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    Chairman Tom Davis. Ms. Williams, thanks for joining us.

                  STATEMENT OF JULIE WILLIAMS

    Ms. Williams. Thank you, Chairman Davis, Ranking Member 
Waxman and other distinguished Members. Thank you for this 
opportunity to testify today regarding Cisco's experience with 
business continuity planning and the importance of telework as 
a key enabler of our strategy to provide highly available, 
responsive, secure and essential business operations.
    My name is Julie Williams and I am the director of our 
Federal civilian agency practice for Cisco's Internet Business 
Solutions Group. So today I will focus my comments on Cisco's 
experience with our business continuity planning and the 
important role that telework plays in enabling that continuity 
strategy.
    As a publicly traded company, Cisco has a corporate 
responsibility to its shareholders to maximize shareholder 
value in all areas of the business. Ensuring business 
continuity is a critical element of that shareholder 
responsibility. The company is responsible, in order to do 
this, to maintain a continuous operating infrastructure to 
support its financial systems and controls. To accomplish this, 
Cisco has established a robust business continuity management 
framework that defines the key elements for uninterrupted 
access to mission-critical corporate data and resources in the 
event of a natural disaster, homeland security threat or other 
significant interruption.
    That framework contains four layers beginning at the bottom 
with network resilience. The other three layers, in order, are 
application resilience, communications resilience, and finally, 
workforce resilience. It is this top layer and last layer, the 
workforce resilience layer, that provides the capabilities for 
employees to remain fully connected to enterprise 
communications and applications systems even if they cannot 
report to their normal work location.
    Each layer of resilience depends on those layers beneath. 
That is, it is impossible to achieve workforce resilience 
without a foundation of resilient communications, and it is 
impossible to provide resilient communications without basing 
it on a resilient network infrastructure and applications.
    In our experience, many organizations, to date, have 
focused on optimizing the network application and communication 
layers and have largely ignored that workforce layer in their 
BCM planning. So we have invested heavily as a company in this 
top layer through focused development of employment tools and 
teleworking policies. These tools and policies allow us to 
conduct business anytime and anywhere in the event of 
significant interruptions, and are critical to maintaining our 
shareholder value.
    A key element for success is Cisco's corporate Internet, 
our Cisco Employee Connection. CEC provides the foundation for 
our corporate information and processes worldwide. It gives 
employees 24-by-7 access to the tools, information and 
applications they need to be effective and contribute to our 
bottom-line revenue-generating activities. In effect, CEC 
becomes just another work location such as a cubicle, a remote 
branch or a coffee house.
    So I would like to give you some ideas of many of the tools 
and applications that our employees access via CEC, and these 
are what we consider our essential functions which are critical 
to running the business. For example, our employees and 
executives can enter and process all of our customer orders; 
track up-to-the-minute performance data, including our bookings 
data, revenue and operating expenses; record, distribute and 
play critical video and audio communications; and the like.
    So where does telework fit into this equation? Teleworking 
is essential to our continuity of operations plan as it enables 
access to these critical tools and processes. Many 
organizations overlook this top element of that workforce 
resilient layer and, instead, focus on the remaining layers. 
The events of September 11 and subsequent anthrax threats 
taught the world that continuity planning must extend beyond 
the physical buildings and allow workers to connect from 
anywhere they may be in order to begin planning through and 
recovering from disruptions.
    With this highly available foundation of networks and 
applications and the ability to have real-time video 
connectivity with peers, coworkers and management, Cisco 
employees with virtual offices feel less need to be attached to 
the Cisco office location and spend more time with customers 
and partners.
    Over 90 percent of Cisco's employees telework 1 to 2 days a 
week, and this productivity has generated significant financial 
benefits for our organization. Through our experience, 
deploying business continuity solutions, as well as helping 
other government and private-sector organizations deploy these 
same successful programs, we have found that there are several 
key underlying factors that need to be in place to enable this.
    The first is to migrate much of the organization's business 
activities and processes to paperless activities, make 
application tools available to support access and operation in 
a digital mode, ensure full access to all of those assets from 
remote locations, develop a cultural migration plan for the 
organization to accept individuals' becoming remote individual 
contributors; and this, in turn, requires that we define and 
capture new metrics to allow the management process to take 
place on a virtual basis.
    Finally, we feel that allowing the monthly reimbursement of 
Internet service provider access for teleworking is a key to 
our internal success. And in our experience with Federal 
organizations to date, the flexibility to reimburse employees 
for this broadband service cost, similar to the method for 
reimbursing more traditional commuting expenses like Metro, 
will be essential to increasing the adoption of telework and 
tele-COOP across government.
    So, in summary, I would like to mention that the U.S. 
Federal Government has publicly affirmed its responsibility to 
its citizens by putting into place a plan for sustaining a 
Constitutional form of government through any disruption. The 
continuity of operations is the means by which government plans 
to fulfill this responsibility, just as Cisco's business 
continuity management initiative is the means to fulfill our 
responsibility to our shareholders and employees. We each need 
the deployment and integration of all four layers in the 
business continuity model and framework to support the needs of 
this displaced workforce, and we need to support swift movement 
toward a true paperless government to help maximize the impact 
of the tools and processes we employ to manage the Nation.
    I would like to thank you, Mr. Chairman, and other 
committee members for inviting me here today; and I am pleased 
to answer your questions.
    Chairman Tom Davis. Thank you very much.
    [The prepared statement of Ms. Williams follows:]

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    Chairman Tom Davis. Mr. Luten.

                    STATEMENT OF KEVIN LUTEN

    Mr. Luten. Mr. Chairman, members of the committee, thank 
you very much for the opportunity to participate in this dialog 
on the role of telework in the Federal workplace concerning 
continuity of operations planning.
    My name is Kevin Luten. I am the planning director of Urban 
Trans consultants, a national transportation management 
consulting firm; and I am here representing the Association for 
Commuter Transportation [ACT], as their Washington regional 
public policy representative.
    I can also say that I am a full-time teleworker, and 
perhaps Dr. Kane has run into me at Starbucks on Pennsylvania 
just a few blocks from here. So I am familiar with the 
dynamics.
    Before I start, I would like to express ACT's appreciation 
to Chairman Davis and the rest of the committee for holding 
this hearing. Chairman Davis' commitment to a secure and 
efficient government is exemplified by his actions and this 
hearing. It is this commitment and dedication that will be 
needed in order to ensure that the Federal Government continues 
essential operations in the event of an emergency, natural or 
otherwise, large or minor.
    The members of ACT represent a broad coalition of 
organizations from major private-sector businesses and 
institutions to State and local transportation agencies. But we 
all have one thing in common. We are all working cooperatively 
to make transportation work better by making it more efficient 
and less costly, for government, communities, businesses, 
families and individuals. This means helping businesses and 
communities balance needed infrastructure improvements with 
complementary investments in the programs and policies that 
address the demand side of the transportation equation.
    ACT and its members have been very involved with regional 
planning agencies on emergency management planning. There are a 
number of different ways that demand side strategies can play a 
role in emergency situations. A key element of this equation is 
teleworking. Whether it is home-based or remote office-based, 
teleworking moves the work to the employee rather than moving 
the employee to the work.
    I would like to offer a few examples of the different ways 
that teleworking is increasingly important to businesses, talk 
specifically about the role of teleworking as a strategy for 
emergency preparedness, and offer some lessons learned from the 
private sector that can help guide Federal policy and program 
implementation.
    Companies implement telework programs, as you know, for 
many reasons, including increasing productivity, decreasing 
facility cost and facilitating expansion, increasing employee 
productivity and improving employee morale and improving labor 
recruitment and retention. In short, companies are pursuing 
aggressive telework programs to enhance productivity and 
economic competitiveness. These companies recognize that the 
extremely fast pace of change in computing and information 
technology is fundamentally changing the way that many 
companies do business and compete in today's global economy.
    Adapting to and incorporating these technological advances 
into all aspects of business operations from how people work to 
where they work to when they work is increasingly critical to 
maintaining competitiveness. In one example, AT&T, a large 
number of employees are permanently moving out of traditional 
offices and into virtual offices. AT&T is pursuing a 
fundamentally new corporate strategy by building operations 
that are net centric instead of building centric. Essentially, 
they are organizing operations around networks instead of 
buildings.
    AT&T, in 2003, had 17 percent of their managers working 
full-time in virtual offices and 33 percent of managers working 
at least 1 day a week in remote offices. As Congressman Davis 
noted, in the metropolitan Washington COG's 2004 State of the 
Commute report, it found that 15 percent of employees at 
private-sector companies in the Washington region are 
teleworking today versus 12 percent of Federal workers.
    AT&T's network-based structure is expected to generate over 
$150 million in benefits to AT&T by increasing productivity, 
reducing overhead costs such as real estate and enhancing 
recruitment and retention.
    Productivity gains are perhaps the most significant but 
least understood benefit of telework. AT&T teleworkers have 
consistently reported gaining about 1 extra hour of job-based 
productive time each day when working at home. Essentially they 
redirect the majority of their commuting time, on average 80 
minutes a day, into work activities.
    How does this relate to telework and emergency 
preparedness? Increasingly, companies are finding that 
teleworking is not only an effective business strategy, but 
helps address issues such as improving retention, reducing 
facility cost and increasing productivity. But also it is 
essential in preparing for and recovering from emergency 
situations.
    My company is currently helping the Tampa Bay Regional 
Planning Council in Florida to help companies develop pilot 
telework programs as a key part of their emergency preparedness 
planning. In the aftermath of last year's hurricane season, 
Florida is emerging at the forefront of using telework to 
maintain business and community operations in the wake of 
natural disasters. These programs can keep companies running, 
keep communities functioning and greatly reduce the larger 
economic hardships imposed by these events.
    A few lessons learned from Florida are that, one, 
telecommunications infrastructure tends to be more robust and 
include more redundancy than our roadway infrastructure; 
second, that organizations with established remote access 
programs were more resilient than those that did not have 
established programs; and most importantly, preplanning is key 
to quick response and quick recovery.
    Lessons from the private sector and from areas hit hard by 
natural and man-made disasters in the past lead our 
organization to urge the Federal Government to continue to 
speed its implementation of telework for all employees and to 
focus on advanced planning in order to fully utilize telework 
as a core element of contingency planning for Federal agencies.
    Just a couple of specific recommendations: abundant 
preplanning, including the use of pilot programs for the 
integration of telework into contingency planning at all 
Federal agencies; increasing education for managers and 
executives; providing adequate resources to develop and 
implement telework capabilities; reissue, clarify and assert 
the Federal standards for telework eligibility; and the last 
two comments, to explore other demand-side strategies such as 
ride-sharing and the use of mass transit options in addition to 
telework as part of contingency planning.
    Last, I would encourage you, Mr. Chairman, to explore the 
reimbursement of telework office and connectivity expenses as 
part of a pretax arrangement. ACT has been actively involved in 
those pretax arrangements for both transit and van pooling in 
the past and continues to support those activities.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Luten follows:]

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    Chairman Tom Davis. Well, thank you all very much. That was 
very useful testimony.
    Let me ask anybody, are there any specific Federal 
Government departments or agencies that currently have telework 
policies that you would recommend?
    Mr. Kane. Yes. TIGTA at Treasury, the Treasury Inspector 
General Tax Administration, they have been one of the pilots we 
have worked with over the years, and they are clearly out in 
front. Very impressive.
    Chairman Tom Davis. Anybody else want to offer up any?
    Ms. Williams. Yes, Mr. Chairman. We are currently working 
with two to three agencies right now on some demonstration 
projects.
    Chairman Tom Davis. Dr. Kane, in your testimony, you 
emphasized a more contemporary concept of telework that is 
really different from GAO's concept of telework, which they 
also referred to as telecommuting or flexiplace.
    What is different?
    Mr. Kane. Chairman Davis, I think there are probably at 
least three key dimensions.
    First of all, a lot of the telework, in terms of 
telecommuting, it tends to sort of assume fairly low bandwidth, 
and the amount of bandwidth availability now is different.
    Second, that means the types of applications that you can 
take, that you can implement on your desktop, whether it is at 
home or at Starbucks or at the airport, is entirely different, 
particularly in terms of going well beyond text to do graphics 
and video.
    One of the best pilots where I got tremendous insight was 
when we worked in Loudoun County and they produced a whole 
magazine--graphics, layout, financial information--again, just 
with current software available.
    And third, just the amount of processing power that is 
available. All of this is becoming less and less expensive. And 
so we have more powerful technology at a lower cost.
    Chairman Tom Davis. Ms. Williams, in your testimony, you 
note that Cisco has a policy of reimbursing employees for their 
home broadband connections.
    What percent of employees or how many employees take 
advantage of this?
    Ms. Williams. Mr. Chairman, I would say that just about 
all, 90 percent, of our current telework employees take 
advantage of this reimbursement service. I think the reason 
that we find there is such a high adoption rate is, as Mr. Kane 
mentioned, the cost of traditional commuting is skyrocketing 
and the cost of these new broadband services is being reduced. 
In fact, some of the costs for some of the residential and 
business-class broadband services are actually starting to come 
down, and those are the services that provide the very high-
bandwidth capable to do video and voice and data to the home.
    Chairman Tom Davis. What percent of these employees would 
have paid for it anyway, out of their own pockets, and what 
percent--I mean, it is hard to guess, I guess--are you 
incentivizing to now have the full bandwidth?
    Ms. Williams. It is a bit of a difficult question to answer 
in that most of our employees, when they started with the 
company, had the ability to utilize this service from the get-
go. So there is a bit of a difference in that.
    We have not been shifting our employees from a pay-on-your-
own to a company-sponsored program. However, I do believe that 
because of the productivity gains that they feel they gain as a 
result, as well as the quality-of-life balance that they 
receive, that they would in fact offer to pay for that 
broadband service themselves if they had to make the choice.
    Chairman Tom Davis. I wonder if there is a way to tell the 
percent of employees who qualify for this and have the full 
broadband versus ones who don't qualify for this, if I give you 
a delta of people that you have incentivized, that you actually 
are paying for. I appreciate the comment.
    Mr. Luten, you made mention of the same thing in your 
remarks. Any observations on that?
    Mr. Luten. Sure. I think that I agree generally with Ms. 
Williams' comments. It does depend on the circumstance.
    I think we are also seeing some shifts, that Dr. Kane 
referred to, in the way that communications technologies are 
available that is moving these expenses perhaps beyond just 
based in the home and opening up more regionwide broadband 
connectivity that is increasingly available, including here in 
the Washington, DC, area.
    So we may be talking about connectivity that doesn't just 
limit you to the office or even limit you to the home, but that 
keeps you connected in a variety of applications, which greatly 
increases flexibility for companies.
    Chairman Tom Davis. Thank you very much.
    Mr. Davis.
    Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
    In my opening statement, I mentioned legislation that I had 
introduced last year calling for a pilot program. How in your 
estimation, each of you, would such a program help plan or move 
us further along relative to telecommuting?
    Mr. Kane. Representative, if I might respond to that. I 
think there are three areas.
    First of all, for military tactics, you know that the first 
thing that breaks is the plan after the first shot gets fired. 
And so, while agencies may have a plan, it is really the 
pilots, the demonstrations that you are advocating that let you 
first assess how good the plan is.
    Second, when you do these types of demonstrations and 
pilots, you have the opportunity to tailor your response. It is 
sort of like, do you move the picture a little bit to the right 
or to the left.
    Is the network quite optimized? Are people quite familiar 
with the software? What types of business processes are you 
supporting? Is it more of a financial transaction or is it more 
of a client service delivery type of transaction? That all 
implies some subtle adjustments.
    Finally, and as I emphasized in my testimony, what I 
believe is the most important is people realize what is 
possible. They use the system available to them in ways that 
probably weren't first envisioned, and it becomes 
institutionalized in the way that they work. Thank you.
    Mr. Davis of Illinois. Ms. Williams.
    Ms. Williams. Yes, Representative. I second Dr. Kane's 
comments about the need for pilots. I do believe, personally, 
that the program that you are speaking of will help 
organizations, particularly the employees and the managers, 
understand what is possible, because you don't know what you 
can't see and manage. Those have been some of, I guess, the 
adages regarding not embracing telework.
    But with the new technologies in place, there are 
capabilities to manage by objectives, create new measurements 
for employee effectiveness and managerial effectiveness, and I 
think that the demonstrations will allow these folks to 
understand the possibility of changes in behaviors and 
attitudes toward working differently as we move the economy 
forward.
    Mr. Luten. Just following up on those comments, I certainly 
agree that planning is critical in terms of revealing what the 
hurdles are to successful teleworking. The time to understand 
those hurdles is ahead of time and not during a time of crisis 
when understanding these things becomes much more jumbled in 
other issues. So planning ahead of time is certainly critical.
    Certainly another thing that we are seeing in other areas, 
however, are the spin-off benefits of exploring pilot programs. 
We have worked with a lot of hospitals in rural areas who have 
developed, for example, ride-sharing programs for emergencies 
like snowstorms and other circumstances. Folks try these things 
in times of emergencies, or in this case, during a pilot 
activity, and it does create spin-off benefits where folks will 
try these things on a more regular basis. That's another thing 
I would note. There are probably additional spin-off benefits 
of pilot programs beyond just planning for emergencies.
    Mr. Davis of Illinois. How much of a factor should cost be 
in doing telework planning? How much of a consideration should 
we give or do we give to cost as we plan for telecommuting?
    Ms. Williams. Representative, I think the answer to that 
is, in our experience, working with many of the agencies, it 
has been difficult for them to understand where to find the 
additional funding for these types of initiatives. What we have 
experienced is that there are significant savings in terms of 
real estate costs, traditional commuting expense costs that can 
defray these types of programs, as well as the efficiencies 
gained from having access to better applications and services 
to accomplish the work a bit more quickly and more efficiently.
    So I do think it is a challenge for agencies to understand 
where to find the funds, and I think that the flexibility in 
allowing agencies to use some of the savings from other 
programs can help fund these types of initiatives.
    Mr. Kane. Representative Davis, I think I might take a 
slightly different perspective than Julie in that, the last 
time I checked, the Federal information technology budget as 
reported by OMB is somewhere in the neighborhood of $61 or $62 
billion. I think the potential savings that agencies could 
achieve by telework, there are probably enough puts and takes 
within $62 billion where cost should not be an issue for 
implementing wide-scale telecommuting, telework programs.
    Mr. Davis of Illinois. Thank you.
    Mr. Luten. Let me just followup on the idea that looking at 
this comprehensively from an organizational perspective seems 
to be the best approach; that integrating the potential savings 
in some areas with additional costs in other areas, that in 
order to look at this stuff properly, we have to be looking at 
it as part of a comprehensive approach and integrating telework 
into our overall operations and not thinking about it as a 
stand-alone, adjunct idea.
    Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
    If I could ask Ms. Williams, what percent of the Cisco 
employees did you indicate telecommute?
    Ms. Williams. Approximately 90 percent of our employees 
telecommute at least 1 to 2 days per week, and that percentage 
is actually higher in Europe where we actually--they are able 
to use the higher percentage of mobility applications there.
    Mr. Davis of Illinois. Thank you.
    Mr. Chairman, could I just ask unanimous consent, I have 
two letters here, one from the Tampa Bay Regional Planning 
Council and one from the Association for Commuter 
Transportation.
    Chairman Tom Davis. Without objection, they will be put in 
the record. Thank you, Mr. Davis.
    [The information referred to follows:]

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    Chairman Tom Davis. Mr. Duncan.
    Mr. Duncan. Thank you very much, Mr. Chairman. I am sorry 
that another meeting prevented me from hearing the witnesses on 
the first panel, and maybe some of these things were discussed 
a little bit on the first panel; but let me just ask you, 
almost everybody seems to be very favorable to telework and 
telecommuting and so forth. I don't have anything against it. 
But when I practiced law, we tried to anticipate or discuss 
more about what the weaknesses in our case were or what the 
problems might be, so we wouldn't be caught by surprise and so 
we would be better prepared.
    I guess one thing I am wondering about is, what are the 
problems with this or--and more specifically, in the briefing 
paper we have this statement. It says, ``FEMA recognized that 
improper identification of essential functions can have a 
negative impact on the entire COOP plan.'' That sounds kind of 
bureaucratic to me, because I am not really clear exactly what 
``improper identification of essential functions'' means. I 
would like to hear comments from each of you about all that.
    Dr. Kane.
    Mr. Kane. Representative Duncan, I am not sure quite what 
the phrase means, either, but let me try to respond as best I 
can.
    Certainly, when we see obstacles in telecommuting and 
telework, it is not so much technology sorts of issues, but 
they probably fall into two areas. No. 1 is the function. We 
can't do this dispersed; we have to be all in the same room to 
do this.
    Driving over here today, one of our staff members was 
telling us the pilot we are doing with Loudoun County, their 
board of supervisors, where they found out yesterday that they 
could sort of mark up some documents, where the chairman was 
one place and another member was another place and they were 
working it together. That is sort of, probably, illustrative of 
the functions that don't apply themselves or are not 
appropriate for the types of activities that could be supported 
by remote, distributed work.
    And I think, second, as Chairman Davis discussed at the 
hearing last July, there is some managerial resistance, ``I 
have to see it to know you are working.''
    Mr. Duncan. Ms. Williams.
    Ms. Williams. Yes, Representative Duncan, thank you.
    I echo Dr. Kane's confusion on the comments about how to 
miscategorize essential functions. I think, from our 
perspective, we look at functions that are critical to our 
business to protect our shareholder or to ensure shareholder 
value, and when I look at the same corollary for government, I 
would anticipate that the agencies would look at essential 
functions and categorize those that are essential to the 
citizens and maintaining their financial viability of 
government.
    It is difficult to understand why it is difficult to 
categorize the right functions when I think of--I think folks 
ought to take a different tack and look at what is valuable to 
the citizen and what is valuable to them as members of 
government.
    Mr. Duncan. OK.
    Mr. Luten. I will just say briefly, in following up on Dr. 
Kane's comments, I think the weaknesses we see in telework are 
that, in fact, our telecommunications infrastructure is 
accelerating faster than our ability to change in our workplace 
culture. And I think that is the challenge of the modern 
workplace, to keep up with the changes in technology that are 
essentially always two steps ahead. Things are more possible 
than they are easy to implement. Workplace culture, managerial 
culture, service culture, those things seem to be the biggest 
hurdles to effective programs.
    Mr. Duncan. My time is about to run out already. You have 
led me into another area, or really two areas. One is, there 
was a comment made a while ago about the costs coming down. The 
computers do wonderful and miraculous and great things. I agree 
with all that. I think, though, that everything has become much 
more expensive because of them; and what I am getting at is 
this.
    The computer companies tell us that a computer is obsolete 
the day it is taken out of the box, technology is moving so 
fast, and so you always have to buy new equipment, it seems, 
every time you turn around. I know we do for our offices.
    I am wondering about the expense of all this, since we are 
talking about all these people working generally 1 or 2 days a 
week at home. Do they have to duplicate with all the equipment 
at home that they have in the offices? It seems that could get 
kind of expensive.
    And then, last, I am a little concerned about the national 
security situation, because I heard on the CBS radio news a 
couple of years ago that computer hackers got into the Top 
Secret files at the Pentagon more than 250,000 times in the 
previous year. So it sort of led me to believe that really 
there are no secrets of any kind really anymore.
    But do we have some concerns about that, about getting 
certain information that we would have to limit or prohibit 
people from working on at home?
    Mr. Luten. I think data security obviously is a critical 
element of any good telework plan. I think when we talk about 
people working at home a few days a week, as well as working in 
the office place, a couple of things are offsetting those 
additional costs.
    One is, as you mentioned, the fact that all this equipment 
is coming down in price significantly. Two, that many people 
that we find----
    Mr. Duncan. I don't think it is coming down. It seems to me 
it is going in another direction. At any rate, what I am 
wondering about is, is there any tax loss when the company 
writes off all this office space that they are not using--and 
they write off also, the employee does, a home office? I don't 
know. Anybody?
    Mr. Kane. If I might comment, you've raised two issues, one 
which was a cost issue, one which was a security issue. I will 
say that one of our member companies, a very, very large 
defense contractor has found that it is more cost effective for 
them simply to buy laptop computers for their employees and 
have the employees take it home.
    No. 1 is, it has more flexibility and so it is not--to the 
extent the company is going to have to update its equipment 
every 3 years or 5 years, whatever, you've provided one 
computer that can be both at home as well as at work or on the 
road.
    And second, what was more important for them was the 
security consideration, that they were able to configure those 
laptops to avoid viruses, to put in the appropriate protection; 
so, for that company, it was very much a security 
consideration.
    Mr. Duncan. OK.
    Chairman Tom Davis. Thank you very much.
    Ms. Watson.
    Ms. Watson. Thank you, Mr. Chairman.
    I am just wondering. We are talking about telework, but if 
there were a gigantic disaster, are we sure that regardless of 
where people would work, that we could communicate? I am 
thinking that if they are on a system and there is a disaster, 
let's take September 11, that touched everything in a radius 
around the World Trade Center.
    I am just wondering, are we planning for alternative ways 
to communicate? Are we planning on looking at virtual offices, 
homes, and so on as teleworks? What is the breadth of what we 
are planning?
    Let me give you an example of my concern. On September 11, 
as you know, when those towers were coming down, there were 
first responders walking around with pieces of equipment that 
did not work. That is the reason why we lost so many 
firefighters, because they didn't get the message to evacuate 
quick enough.
    I am just sitting here listening to all this, this high 
technology and so on, we will have them here rather than at 
their regular workstations, but does reality say they're going 
to even be able to operate from their homes?
    Mr. Luten. I have a couple of comments.
    One, I think that we aren't likely to see in a significant 
event 100 percent of people being able to continue to work 
through a telework arrangement. However, we are likely to see--
--
    Ms. Watson. Can you explain that? Being able to work 
through--what do we mean by that statement?
    Mr. Luten. Being able to complete their job duties without 
being in their normal, physical offices.
    Ms. Watson. How are they doing that? That is what I want to 
hear.
    Mr. Luten. Let me answer that if the question is--if people 
are dispersed in terms of their home locations, the 
telecommunications infrastructure in major events has proved a 
little more resilient than transportation infrastructure. So we 
may lose some percentage of the telecommunications system and 
lose a percentage of our workforce, but we can still find, even 
if it is 40 to 50 percent of people who are able to continue 
working, because the communications in the area where they live 
is still working. If we have done good planning up front, 
people understand how to communicate and they understand what 
the alternate means of communicating are--maybe that's advanced 
contact lists of cell phones for everyone in your company, etc. 
Planning these things out in advance can be a big benefit.
    In 2004, in the hurricane season, the total economic impact 
of all the hurricanes was in the neighborhood of $42 billion. A 
lot of that was lost worker productivity. Even if we can get 30 
to 40 percent of people continuing to work, we can offset a lot 
of that impact.
    Mr. Kane. Representative Watson, if I might also comment on 
this, the answer to your question of how do they communicate is 
the Internet. If you have skepticism of that, let me share with 
you what I believe is one of the untold success stories of 
September 11.
    Technology developed by the Department of Defense in 1969, 
called the ARPAnet, which was originally developed to support 
communications in time of attack, which evolved into the Milnet 
which has subsequently evolved into the Internet, worked 
exactly as military planners planned it out in the early 
1970's.
    I know personally, while no one else was able to sort of 
communicate and cell phones weren't working and land lines, I 
have a daughter who lives in Manhattan, and we were doing e-
mail all day on September 11 over the Internet just as military 
planners had figured out approximately 30 years earlier.
    Ms. Watson. OK. That is one scenario, the one we know.
    Suppose there is a nuclear explosion at one of our plants 
and so on that will destroy everything in a radius of maybe 45, 
50 miles. Are you thinking forward? Are you thinking backward? 
We were shocked by September 11. So I would say this is an 
opportunity to look at how we communicate not just among the 
administration, but out there in the hustings. If it is an 
enormous kind of attack that could happen, are you sure that 
our systems can function?
    Ms. Williams. Representative Watson, I would like to answer 
that, giving an example of how our company architects its 
business continuity plan and how teleworkers are able to work 
in the event of a catastrophe.
    As I mentioned in my testimony, the business continuity 
plan really has four layers. The bottom layer is the network 
layer where, for example, a data center of one agency would 
need to be replicated many thousands of miles away from its 
center to provide for the right continuity. The teleworking 
aspect of it, as long as those data centers were replicated in 
the right manner, would then allow employees anywhere, it could 
be outside of the country, to access those mission-critical 
applications in that data center.
    And to the point that Dr. Kane mentioned before, it is the 
Internet protocol which is different from some of the radio 
interoperability protocols or radio frequencies that are in use 
today that provide that capability to access those 
applications.
    So you have your data centers that are dispersed and then 
you have the teleworking capability from any location around 
the world, or the globe for that matter; and in fact, that's 
how our employees overseas access our mission-critical 
applications that are actually based in the United States. So I 
think the technology is changing a bit where we have an 
increased capability for resilience than we did have before.
    Ms. Watson. Thank you, Mr. Chairman.
    Mr. Shays [presiding]. Thank you, Ms. Watson.
    Mr. Dent, you have the floor.
    Mr. Dent. Thank you, Mr. Chairman.
    Good afternoon. Dr. Kane, you have discussed how current 
technology has changed the type of work that now can be done 
using commercial telework. Can you give us some specific 
instances about technology and what it now enables, and then 
also just cite some specific departments or agencies that 
currently have telework policies that you would recommend?
    Mr. Kane. Let me cite a couple of Federal agencies and some 
at the local level.
    As I mentioned in one of my earlier responses to, I believe 
it was Chairman Davis, the Treasury Inspector General, the tax 
administration group there, has certainly been on the forefront 
of telework at the Federal level; and just about 2 months ago, 
we at the Telework Consortium started working with the 
Securities and Exchange Commission to implement some pilots 
there. So those are two good examples.
    At the local level, we have just started a pilot with the 
Loudoun County board of supervisors. As I said, one of my 
favorite examples is a magazine, the Loudoun County magazine 
which--you think of a magazine and how graphic intensive it is 
and everything that goes into a magazine. It was produced 
without an office. We supported that as a pilot, to just 
demonstrate that something you would think that people would 
have to come together could be produced and nobody ever had 
face-to-face contact in the production of it.
    Mr. Dent. Thank you. I have no further questions.
    Mr. Shays. Thank you.
    Mr. Luten, I just have one question. You stated that ACT 
has had success in educating managers and executives about 
telework. What educational techniques did you find effective?
    Mr. Luten. Primarily, the No. 1 educational technique is, 
one, experience that others have had. So more often than not, 
peer education can be one of the more effective forms when you 
are talking about managers, because no one learns more than 
they can learn from someone who does a similar job that they do 
in a similar location. So if we can find good peers, that's one 
good example or one effective example.
    Probably the second is the notion of a pilot and just 
trying these things. More often your fears and expectations 
turn out to be different than reality. So getting people to try 
something initially can overcome a lot of those initial 
obstacles.
    Mr. Shays. Do you have anything else?
    Mr. Davis of Illinois. No.
    Mr. Shays. Let me then just conclude. That is the only 
question that I had.
    Is there anything that you wish we had asked that you had 
prepared to answer, anything you think we need to put on the 
record that wasn't asked? That applies to all three of you. If 
there is, I would like to do that now. Sometimes frankly we get 
the most interesting response from this question.
    Anything, Dr. Kane?
    Mr. Kane. No, thank you, sir.
    Mr. Shays. Ms. Williams, any comments you would like to 
make?
    Ms. Williams. No, thank you, sir.
    Mr. Shays. Mr. Luten, anything?
    Mr. Luten. No.
    Mr. Shays. Thank you all very much. This hearing, with 
that, will adjourn.
    [Whereupon, at 3:55 p.m., the committee was adjourned.]
    [Note.--The GAO report entitled, ``Continuity of Operations 
Agency Plans Have Improved, but Better Oversight Could Assist 
Agencies in Preparing for Emergencies,'' may be found in 
committee files.]
    [The prepared statement of Hon. Jon C. Porter and 
additional information submitted for the hearing record 
follows:]

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