[Senate Hearing 110-]
[From the U.S. Government Publishing Office]



 
  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2009

                              ----------                              


                        THURSDAY, MARCH 6, 2008

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:07 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Barbara A. Mikulski (chairman) 
presiding.
    Present: Senators Mikulski, Reed, Shelby, Stevens, and 
Brownback.

                         DEPARTMENT OF COMMERCE

                         Secretary of Commerce

STATEMENT OF HON. CARLOS M. GUTIERREZ, SECRETARY


            opening statement of senator barbara a. mikulski


    Senator Mikulski. The Subcommittee on Commerce, Justice, 
and Science will come to order. Today we are going to review 
the appropriations request at the Department of Commerce.
    There will only be a single witness, it will be Secretary 
Gutierrez. And we want to note that this is Secretary 
Gutierrez's fourth appearance before the subcommittee, and this 
Chairperson wants to really say that we've had a very 
productive relationship with him and his team. It has been 
characterized by content-rich conversations, by candor, by 
civility--we think it's been a model of the way people, if we 
work together, we can get the job done.
    So, we look forward to hearing your testimony. This is our 
first hearing of this subcommittee for this year, and I want to 
thank, once again, Senator Shelby and his staff for their 
ongoing, bipartisan cooperation.
    Last year was kind of a difficult year, particularly at the 
end, but Senator Shelby--you and your team were just great.
    As we look at this year's appropriation, we note that we 
are in a year of transition. This time next year, we will have 
a new President, and--a new administration. What we are very 
clear about on this subcommittee is that this appropriation 
that we do this year will be the operating budget for the first 
year of the first term of the new President.
    So, we've got to get it right. Because regardless of who 
America chooses, they will have the 2009 appropriations as 
their first year of operation. So, in the areas for which we 
have responsibility, we want to have everything as very clear 
and well-established to continue our national priorities. And 
we will be working together on a bipartisan basis.
    What we want to do at this hearing is to hear from the 
Secretary about the appropriations, we want to hear 
particularly about how he relates it to the mission of the 
agency, and also where we are on issues like the America's 
Competes Act.
    The other is that we will also focus on what we call red 
zone issues, which are areas where there are significant 
challenges within agencies at the Department of Commerce. We're 
concerned about the 2010 census, that we're able to do it 
right, and we understand there's some technological and 
managerial challenges there.
    The other that we continue to be concerned about is the 
cost overruns of the National Oceanic and Atmospheric 
Administration (NOAA) satellite program and then the perpetual 
backlog at the Patent Office. All three of those have dramatic 
consequences--not only on the Appropriations Committee, but on, 
essentially, the running of America.
    The census must be done, it deals with how we will 
apportion politically, and other information. The NOAA 
satellites stand sentry, giving us crucial weather information 
that saves lives, and it's the Patent Office that helps us do 
innovation--we take innovation and by turning it into a patent, 
we then, essentially, help our private sector be able to 
protect against those who would steal our intellectual 
property, around the world.
    As we look at this year's appropriation, we know the 
request is over $8 billion--it's $1.3 billion over 2008, which 
we appreciate, but what we're concerned about is that it also 
eliminates two programs that help our economy--the economic 
development assistance grants, which is a stand-alone agency, 
and the manufacturing extension partnership, which is over at 
the National Institute of Standards and Technology (NIST).
    The budget also falls short, we believe, in other areas of 
innovation. At NIST we applaud that the laboratory program 
request is $535 million, almost $100 million over the omnibus, 
but it is offset by the termination of important grant 
programs, which were authorized in the America Competes Act.
    At NOAA, the request is for $4 billion--almost one-half of 
the total Commerce Department's appropriation request. And when 
one looks at it, you see it's $200 million over 2008. And, we 
could say, ``Wow, we're going to really get serious about 
weather and oceans and global warming, and science education,'' 
but really where the money is, is in the satellite program, and 
if we excluded the growth in the satellite budget, the rest of 
NOAA would be flat.
    Ocean and atmospheric research is cut 4 percent, and 
education is cut 51 percent at NOAA. We'll talk more about 
NOAA.
    In the area of accountability, I'm going to get right to 
what I call the red zone issues--census. In terms of management 
challenges, we've got to take a look at the 2010 census. The 
budget for the Census Bureau grows by 112 percent, to $2.6 
billion--it's $1 billion more than the omnibus level, but we're 
concerned that with these handheld technologies, where there 
seems to be challenges in their workability. We're concerned 
that billion could go to boondoggle, rather than achieving the 
census.
    Two years ago, laptop computers got lost, there are privacy 
and security issues, and now these handheld computers. So, we 
think Census has some significant management challenges.
    Then we come to our favorite NOAA satellite program, 
satellites are critical to warning about the weather, and 
observing the changes in the Earth's climate. In other words, 
satellites help save lives and save the planet.
    Senator Shelby worked with me to include a provision in the 
2008 omnibus to give us early warning about satellite costs. We 
want to know how the Department, then, is doing that, to be 
sure we implement the Nunn-McCurdy framework.
    And last and not at all least, is the Patent Office. We 
continue to be concerned about the backlog and the waiting 
times, which continue to worsen. It now takes over 27 months 
for the Patents Office to issue a patent. And the backlog now 
is over 1 million.
    This is unacceptable. We've made progress, we've worked 
very tirelessly on management reform, we've increased the 
budget, it's 27 percent more than what it was in 2005, but we 
continue to have a backlog. More needs to be done to reverse 
this, and we look forward to your ideas.
    Mr. Secretary, we look forward to hearing you, and I now 
turn to Senator Shelby.


                 STATEMENT OF SENATOR RICHARD C. SHELBY


    Senator Shelby. We have worked extremely well during our 
tenure here, sharing many of the same goals and expectations of 
the agencies that we oversee, including the Department of 
Commerce.
    I'm pleased to serve beside her, and once again, doing what 
is shaping up to be another tight fiscal year.
    I look forward to learning about how the 2009 budget 
request will improve the Department of Commerce's mission. 
Overall, the Department's budget request for 2009 is $8.18 
billion, an increase of $1.32 billion from the funding level 
providing into 2008 omnibus appropriations bill.
    The Nation relies heavily on the Department of Commerce to 
maintain America's competitiveness within markets around the 
world.
    The Department works hard to provide avenues to promote the 
products and services of U.S. businesses, and then helps to 
level the playing field through expanding, strengthening, and 
enforcing our international trade agreements.
    Through the Department of Commerce programs, our country is 
able to maintain high technical standards, as well as staying 
on the cutting edge of scientific research, all of which are 
fundamental to our Nation's leadership in the global market.
    I'm pleased to see that the American Competitiveness 
Initiative, or ACI, continues to receive support from the 
administration, through the National Institute of Standards and 
Technology's budget request. The ACI will maintain the 
competitive edge that our Nation expects in the world economy 
through research and innovation, focusing on the ingenuity of 
our people, and tying our capabilities to policies that would 
keep us at the forefront of scientific and technical 
advancement for generations to come.
    The strength of America's economy rests on our ability to 
innovate, and use the latest technology to solve the problems 
of today, and preserve our economic and scientific leadership 
in the future. With the recent downturn in the economy, it's 
more important than ever that we do all we can to push the 
envelope in innovation and science to maintain our competitive 
edge in the world.
    I believe that Chairwoman Mikulski and I will work together 
to do all we can to ensure that science and technology are 
funded at the highest levels in our bill.
    If we can not train more engineers and doctoral students, 
America will fall behind the rest of the world. If we don't 
make a relatively small investment now, make no mistake about 
it--playing catch-up with the rest of the world will cost us 
fiscally and strategically.
    The operations of both NIST and the National Oceanic and 
Atmospheric Administration, or NOAA, function to keep the 
Nation competitive, and inspire the next generation of 
scientists and researchers. We must find better ways to use 
NOAA's education programs to capture the imagination of our 
children, to encourage them to pursue careers in science and 
research.
    Secretary, as we work to evaluate the number of scientists 
and engineers, I believe we also need to have the high-tech 
jobs of the future ready for them through our investment in 
transformative research in our Nation's businesses. The 
Technology Innovation Program at NIST will work to create the 
high-paying, technical jobs that drive our economy now, and are 
essential to our future.
    The $4.1 billion budget request for NOAA--a 5 percent 
increased over 2008 enacted level--is a pleasant surprise. 
However, none of the significant increases included in this 
request are directed at the Gulf of Mexico.
    The gulf coast still lacks the infrastructure, research and 
support from NOAA that other regions of the country have 
perpetually received. Since the recent rash of devastating 
hurricanes, nearly all infrastructure improvements for fish, 
severe weather forecasting, and research in the gulf, have been 
borne solely by the members of this subcommittee, with little 
or no assistance from NOAA headquarters.
    While I have been a big proponent of NOAA and worked with 
the Chairwoman to protect them from significant cuts that other 
agencies were forced to absorb in last year's conference 
negotiations, I can no longer turn a blind eye toward the 
continual lack of commitment by NOAA to the gulf coast. 
Therefore, I may not be able to protect NOAA at the expense of 
other agencies and programs this year.
    Mr. Secretary, I'm troubled by the large number of 
expensive technology procurement failures at the Department. I 
understand that the Geostationary Operational Environmental 
Satellite Program is back on track, but I'm disappointed that a 
$6.2 billion program, originally intended for four satellites 
has ballooned into a $7 billion program for only two 
satellites.
    I understand their importance for weather and research, but 
I have trouble understanding the benefits, when the taxpayer is 
stuck paying $800 million more than the original estimate for 
one-half the product, and a delivery date 3 years later.
    Further, the national polar orbiting operational 
environmental satellite system (NPOESS) has mushroomed from a 
$6 billion estimate to more than a $12 billion, with less 
functionality, and a delivery date 4 years later. I believe 
this is inexcusable.
    Since 1790, and every 10 years thereafter, this country 
undertakes a constitutionally mandated effort to count its 
population. Planning for the next decennial census begins 
almost immediately after the previous one has been completed. 
So far, it's taken 8 years and counting, merely to implement a 
plan to re-engineer the 2010 census.
    The Census Bureau's new technology initiative--acquiring 
and using handheld data collection devices--has been promising 
to bring the census into the 21st century, with improved 
accuracy, and reduced cost. It has been brought to my 
attention, at the committee level, that as the census is about 
to enter a crucial point in this technological transition, the 
Department has grave concerns about the Census' ability to 
manage and to deploy the handheld devices, and associated data 
collection necessary to carry out a successful 2010 census.
    I'm troubled that when my staff met with senior officials 
late last year, they were told that the $600 million contract 
for the handheld devices was on schedule and that there were no 
major concerns.
    A few weeks later, the Census submitted more than 400 
necessary changes to the handheld device contractor--400. In 
2005, the inspector general reported that the Census had 
insufficiently defined requirements for the data collection and 
handheld devices. The inability to define the requirements, 
combined with the 400 last minute changes, means that no one 
knew what they were asking the contractor to build to begin 
with, and yet a contract for more--yes, more--than $500 million 
was signed by the Commerce Department.
    The inspector general was right in his take on the Census 
Bureau, I regret it took 3 years to come to the realization, 
they have a problem. While I have been assured that you have a 
plan to bring this situation under control, Mr. Secretary, I 
have to wonder if any of the managers who told subcommittee 
staff the handheld contracts were still on track, are still 
involved in this program today. How much more of the taxpayers' 
money will be squandered before someone is held accountable for 
what is supposed to be a less expensive and more efficient 
Census? While I understand and support the importance of 
technology to assist the components of the Department, I cannot 
support unlimited, and unchecked resources.
    I believe it's imperative that you, as the Secretary of 
Commerce, proceed with caution to ensure that the Department 
does not make the same, blatant mistakes again. We expect 
results, and working with Senator Mikulski, we will do 
everything that we can to ensure success.
    Thank you for appearing with us today.
    Senator Mikulski. Colleagues, I'm now going to turn to 
Secretary Gutierrez. There's a vote at 10:55 a.m. What I offer 
as a way of proceeding is the Secretary presents his testimony, 
then I'll be the wrap up questioner. Because if we have votes, 
I'll be more than willing to come back. I know--and I'll turn 
to you two first. Does this sound like a good way to go?
    Senator Stevens. Well, I'd just ask unanimous consent that 
my opening statement be put in the record, and my questions be 
submitted.
    Senator Mikulski. Absolutely, yes.
    Senator Stevens. I'm managing one of the bills on the 
floor, so I really can't--I'm just here to pay my respects to 
the Secretary.
    Senator Mikulski. Absolutely.
    Senator Stevens. Thank you very much.
    [The statement follows:]

               Prepared Statement of Senator Ted Stevens

    Secretary Gutierrez, we welcome you before the subcommittee 
to discuss the fiscal year 2009 budget for the U.S. Department 
of Commerce. I commend the Department's efforts in the past 
year to enhance our nation's competitiveness, support our 
public and private sectors with reliable data, better 
understand our planet's weather and climate, and manage and 
protect our marine resources.
    We look forward to working with you to address the 
important issues that face us in the coming year.
    The work of your Department continues to be critical to the 
economic, social, and environmental health of my State.
    Your commitment to Arctic science is of great importance to 
Alaska, where the impacts of climate change will occur first 
and be the most pronounced. The sustainability of our fisheries 
depends on NOAA research and management efforts. Given our 
inclement weather, vast coastline, commercial fishing 
activities, and dependence on aviation, Alaskans rely heavily 
on NOAA for weather forecasting and storm warnings. EDA grants 
stimulate economic growth in distressed Alaskan communities. 
Those are just a few examples.
    Mr. Secretary, we look forward to hearing today about your 
priorities in the current budget request.

    Senator Mikulski. And if there is a question you would like 
to ask orally, if your staff will give it to us, we'll be sure 
to ensure that.
    Okay, Secretary Gutierrez?


                OPENING STATEMENT OF CARLOS M. GUTIERREZ


    Secretary Gutierrez. Thank you, Madam Chairman, Senator 
Shelby, and members of the subcommittee. I'm very pleased to 
present the--President Bush's 2009 budget request for the 
Department of Commerce, and with your permission, I'd like to 
make a brief oral statement and submit my written testimony for 
the record.
    The Department of Commerce is charged with promoting 
economic growth, competitiveness and opportunity for the 
American people. This request for $8.2 billion is a careful, 
and fiscally responsible budget that reflect the commitment to 
fulfilling the charge, and to maintaining U.S. leadership in 
today's global economy.
    I'd like to highlight some of the key items in the budget. 
For the National Oceanic and Atmospheric Administration, $4.1 
billion is requested, that includes $1.2 billion to provide 
timely access to global environmental data from satellites and 
other sources, $931 million to provide critical weather 
observations, forecasts and warnings to American communities 
and families, and $759 million for stewardship of living marine 
resources and habitats, including a $32 million increase to 
directly support implementation of the Magnuson-Stevens Act 
reauthorization.
    The funding requests for Economics and Statistics 
Administration (ESA) headquarters and the Bureau of Economic 
Analysis which produces the Gross Domestic Product and other 
vital economic data is $91 million.
    For the International Trade Administration (ITA) which 
supports U.S. commercial interests at home and abroad, the 
request is $420 million. U.S. exports totaled a record $1.6 
trillion in 2007, and free trade agreements are leveling the 
playing field, and helping American exporters access new 
markets.
    Free trade agreements with Colombia, Panama, and South 
Korea are now pending in Congress. Colombia is priority, it's a 
democracy and staunch ally of the United States, and we need to 
stand by Colombia in the cause of freedom, while at the same 
time creating new opportunities for U.S. exporters.
    The ITA budget request includes a $3.8 million increase for 
enforcement and countervailing duty law with respect to China 
and other non-market economies.
    The National Institute of Standards and Technology request 
of $638 million will keep America on the leading edge of 
scientific and technological advances. It puts us back on track 
to double the funding for NIST basic research in the core 
physical sciences by 2016, a major goal of the President's 
American competitiveness initiative.
    As you know, the National Telecommunications and 
Information Administration is administering the digital 
television transition and public safety fund, including the TV 
converter box coupon program.
    As with any budget, tough decisions were made. The Economic 
Development Administration (EDA) budget request for 2009 is 
$133 million. For the Census Bureau, which is part of the 
Economics and Statistics Administration, $2.6 billion is 
requested. This includes a program increase of $1.3 billion, to 
fund the 2010 decennial census, and continue the American 
community survey.
    Yesterday I testified before the Senate Homeland Security 
and Government Affairs Committee on how the Department is 
working to address some of the challenges currently facing the 
2010 census.
    The 2010 census is one of the highest priorities and most 
important responsibilities of the Commerce Department, however, 
I should say the field data collection automation, which we 
also know as FDCA, is experiencing significant schedule, 
performance, and cost issues. This is unacceptable, as I know 
it's unacceptable to the subcommittee.
    Concerns about the FDCA program grew over time, and we're 
taking several steps to address the situation. Following his 
confirmation in January, new Census Director Murdock began a 
top to bottom review of all components of the 2010 census. On 
February 6, he launched a 2010 census FDCA risk reduction task 
force, which is headed by Bill Barron, a former Deputy Director 
and Acting Director of the U.S. Census Bureau.
    As a result of the ongoing work of the task force, we are 
exploring four options. Option one is to continue with the 
Harris Corporation's original project plan, simultaneously 
evaluating the development of a paper-based backup plan. So, 
option one, essentially, is to continue with the baseline 
option.
    Option two is to shift everything but address canvassing 
back to Census Bureau, including the operational control 
system, and field infrastructure. Non-response follow up would 
then be paper based under that option.
    Option three would move non-response follow up and field 
operations infrastructure to Census with Harris developing the 
operational control system and the address canvassing.
    Option four would shift non-response follow up back to 
Census as paper based, while Harris would handle the 
operational control system, and field operations 
infrastructure, as well as address canvassing.
    So, each option, essentially, has a variance on how much 
Harris handles, and how much we send back to the Census Bureau, 
to be able to achieve the census.
    Yesterday, I announced that I am forming a panel of outside 
experts to review these actions, and other potentially serious 
problems with certain aspects of the 2010 census, and to 
provide recommendations to assure a fully successful census. 
The panel will augment the ongoing Census Bureau review of the 
overall 2010 census operations, regarding field data collection 
automation, or FDCA, especially the private contractors 
technological infrastructure support of the FDCA contract, and 
management practices.
    I am personally very involved in bringing key issues to the 
surface, and developing a way forward. The American people 
expect and deserve a timely and accurate decennial census, and 
the Department and I will not rest until they have it. So, it 
is our goal, not only to have a good census, but we'd like to 
shoot for having the best census.
    Madam Chairman, the President's fiscal year 2009 budget for 
the Department of Commerce will enable the Department to 
continue to provide vital statistics, strengthen the 
stewardship of living marine resources, support the innovative 
and entrepreneurial spirit of America, and increase our 
competitiveness in the global marketplace.
    This is the last time it will be my privilege to present to 
the Senate Appropriations subcommittee President Bush's budget 
proposal for the Department of Commerce, I want to thank the 
members for your consideration, for your courtesy over the last 
several years. I want to thank you for your support of vital 
Commerce programs that have served the Nation, the business 
community, the people of this great country, and while this is 
my last hearing, I hope to continue working with you over the 
next year.


                           PREPARED STATEMENT


    So, thank you very much, and I'd be glad to take questions 
or comments.
    [The statement follows:]

               Prepared Statement of Carlos M. Gutierrez

    Madam Chairman and Members of the Subcommittee, I am pleased to 
appear before you today to present the President's budget request for 
the Department of Commerce. Our request of $8.2 billion in 
discretionary funds reflects a balance between the Administration's 
commitment to the Department's mission to promote and sustain economic 
growth, and the need to restrain discretionary Federal spending. 
Enactment of this budget will enable the Department to continue to 
support the innovative and entrepreneurial spirit of America and 
increase our competitiveness in the international marketplace.
    The President's fiscal year 2009 budget request of $4.1 billion for 
the National Oceanic and Atmospheric Administration (NOAA) reflects the 
Administration's commitment to environmental stewardship. It represents 
an increase of $214 million above the fiscal year 2008 enacted level. 
NOAA encompasses the National Weather Service, which provides critical 
observations, forecasts and warnings; the National Environmental 
Satellite, Data and Information Service, which provides timely global 
environmental satellite data; the National Marine Fisheries Service, 
which provides stewardship of the Nation's living marine resources and 
their habitat; the National Ocean Service, which measures and predicts 
coastal and ocean phenomena; the Office of Oceanic and Atmospheric 
Research, which provides research for understanding weather, climate, 
and ocean and coastal resources; and the Office of Marine and Aviation 
Operations, which operates a variety of aircraft and ships providing 
specialized support for NOAA's environmental and scientific missions.
    The request continues support for development and acquisition of 
the next-generation Geostationary Operational Environmental Satellite 
(GOES-R), with an increase of $242 million as we enter the main 
procurement phase for the spacecraft and the ground control system. 
There is also a $32 million increase to continue improving fishery 
management under the Magnuson-Stevens Act that was reauthorized in 
2006, and a $40 million increase to continue construction of the 
Pacific Region Center in Honolulu, Hawaii. The budget includes new 
requests of $74 million to restore climate sensors that were 
demanifested during the Nunn-McCurdy review of the tri-agency National 
Polar-orbiting Operational Environmental Satellite System (NPOESS) 
Program, and $12 million to replace the Satellite Command and Data 
Acquisition station in Fairbanks, Alaska.
    The Economics and Statistics Administration (ESA) promotes the 
understanding of the U.S. economy and its competitive position. ESA's 
Census Bureau is the leading source of quality data regarding the 
Nation's population and economy, and the President's fiscal year 2009 
budget requests $2.6 billion in discretionary funds for the Census 
Bureau. This includes a program increase of $8.1 million to provide 
policymakers, business leaders, and the American public with 
comprehensive and timely data on the service economy, which now 
accounts for 55 percent of economic activity.
    The largest increase requested, for both the Census Bureau and the 
Department, is $1.3 billion for the 2010 Decennial Census to fund 
critical operations and preparations for 2010, improve accuracy of map 
features, and continue the American Community Survey on an ongoing 
basis. As you are aware, the Census Bureau is currently experiencing 
significant challenges in the management of the Field Data Collection 
Automation (FDCA) project for the 2010 Census. I can assure you that 
not only the Census Bureau but the Office of the Secretary is devoting 
all of the resources at our disposal to resolve the IT management 
issues with FDCA and develop a successful way forward. We will keep you 
informed of our progress.
    ESA's Bureau of Economic Analysis (BEA) promotes understanding of 
the Nation's economic condition by providing policy makers, business 
leaders, households, and individuals with essential economic data. This 
data includes the Gross Domestic Product (GDP) as well as other 
regional, national, international, and industry-specific information. 
The President's fiscal year 2009 budget requests $91 million for ESA 
Headquarters and BEA. This request includes an increase of $5.7 million 
to improve measurement of the health care sector and to incorporate the 
impact of research & development investments into the GDP.
    The International Trade Administration (ITA) supports U.S. 
commercial interests at home and abroad by promoting trade and 
investment, ensuring fair trade and compliance with domestic and 
international trade laws and agreements and strengthening the 
competitiveness of American industries and workers. The President's 
fiscal year 2009 budget requests $420 million for ITA. This request 
includes an increase of $3.8 million for enforcement of the 
Countervailing Duty Law with China and other non-market economies, as 
well as a decrease of $3.0 million to reflect streamlining of Trade 
Promotion and domestic U.S. & Foreign Commercial Service offices. In 
the future, as in the past, our long-term economic growth will also be 
enhanced by supporting international trade, by opening world markets to 
U.S. goods and services and by keeping our markets open. Congress can 
help create jobs and economic opportunity by passing the pending Free 
Trade Agreements with Colombia, Panama and South Korea.
    The Economic Development Administration (EDA) assists states, 
regions, and communities in promoting a favorable business environment 
through capacity building, planning, infrastructure investments, 
research grants, and strategic initiatives. The President's fiscal year 
2009 budget requests $133 million for EDA. The request reduces funding 
for the Economic Development Assistance Programs (EDAP) by $149 million 
in order to support other Administration priorities.
    The Bureau of Industry and Security (BIS) regulates the export of 
sensitive goods and technologies to protect the security of the United 
States. The President's fiscal year 2009 budget requests $84 million to 
enable BIS to effectively carry out this mission. The request includes 
$2.4 million in program increases to upgrade export enforcement and to 
ensure compliance through validating end-users in foreign countries.
    The Minority Business Development Agency (MBDA) focuses on 
accelerating the competitiveness and growth of minority-owned 
businesses by assisting with economic opportunities and capital access. 
The President's fiscal year 2009 budget requests $29 million to enable 
MBDA to continue its activities to increase access to the marketplace 
and financing for Minority Business Enterprises.
    The President's fiscal year 2009 budget request of $638 million for 
the National Institute of Standards and Technology (NIST) will advance 
measurement science, standards, and technology. The request includes 
increases of $71 million for research initiatives at NIST Laboratories 
and National Research Facilities, and $62 million for Construction and 
Major Renovations as part of the President's 10-year American 
Competitiveness Initiative (ACI). This will put us back on track to 
double the funding for NIST basic research in the core physical 
sciences and engineering by 2016, to ensure continued U.S. leadership 
in this area, a major goal of ACI.
    The request includes $4 million to transition Hollings 
Manufacturing Extension Partnership centers to a self-supporting basis, 
and does not include new funding for the Technology Innovation Program 
(successor to the Advanced Technology Program).
    The National Technical Information Service (NTIS) collects and 
preserves scientific, technical, engineering and other business-related 
information from Federal and international sources and disseminates it 
to the American business and industrial research community. NTIS 
operates a revolving fund for the payment of all expenses incurred and 
does not receive appropriated funds.
    The National Telecommunications and Information Administration 
(NTIA) develops telecommunications and information policy, manages the 
Federal radio spectrum, and performs telecommunications research, 
engineering, and planning. A key responsibility for NTIA is 
administration of the Digital Television Transition and Public Safety 
Fund (DTTPSF). During fiscal year 2009, NTIA estimates obligating $592 
million from the DTTPSF to support several one-time programs created by 
the Deficit Reduction Act of 2005, most notably $472 million for the 
Digital-to-Analog Television Converter Box Program. The other $120 
million in DTTPSF obligations includes $50 million to implement a 
national tsunami warning system and $60 million to assist low power 
television stations in upgrading their signals from analog to digital 
formats. In addition, NTIA will continue working with the Department of 
Homeland Security to implement the Public Safety Interoperable 
Communications grant program. The President's fiscal year 2009 budget 
request of $19 million in discretionary budget authority for NTIA 
includes a reduction of $18 million to terminate further grants for 
Public Telecommunications Facilities, Planning, and Construction.
    Furthering the mission to promote the research, development, and 
application of new technologies by protecting inventors' rights to 
their intellectual property through the issuance of patents and 
trademarks, the President's fiscal year 2009 budget requests $2.1 
billion in spending authority for the U.S. Patent and Trademark Office 
(USPTO). The USPTO will use these funds to reduce application 
processing time and increase the quality of its products and services. 
Consistent with prior years, the Administration proposes to fund the 
USPTO budget exclusively through offsetting fee collections. Fee 
collections for fiscal year 2009 are projected to cover the proposed 
increases.
    Departmental Management (DM) funds the Offices of the Secretary, 
Deputy Secretary, and their support staff. Staffs in these offices 
develop and implement policy, administer internal operations, and serve 
as primary liaison to other executive branch agencies, Congress, and 
private sector entities. The President's fiscal year 2009 budget 
requests $20.8 million in discretionary appropriations for DM, which 
includes a $48.6 million rescission from the Emergency Steel Guaranteed 
Loan Program. Proposed increases include $7.1 million to upgrade IT 
security and ensure mission essential communications, and $3.6 million 
for blast mitigation windows and other renovations to the 76-year-old 
Herbert C. Hoover Building.
    The Office of the Inspector General (OIG) strives to promote 
economy and efficiency, and detect and prevent fraud, waste, and abuse 
in Departmental programs and operations. The President's fiscal year 
2009 budget requests $24.8 million to enable the OIG to continue to 
effectively meet these mandates. Also, the budget requests $1 million 
to improve the OIG's ability to evaluate and improve the security for 
the Department's information technology assets.
    The Department of Commerce is a diverse group of agencies, with 
varied expertise and differing needs, all engaged in a common 
commitment to keep the United States at the global forefront of 
competitiveness and innovation. The President's fiscal year 2009 budget 
effectively meets those needs, while exercising the fiscal restraint 
necessary to sustain our economic prosperity. I look forward to working 
with the Committee to keep our Nation's economy growing and strong, and 
to promote technological advancement and environmental stewardship.

    Senator Mikulski. Mr. Secretary, thank you for a very crisp 
testimony. We want to acknowledge that Senator Jack Reed of 
Rhode Island has come.
    What we're going to do, Senator Reed--because there is a 
vote--we're going to let Senator Brownback go first, we'll come 
to you, Shelby and I--Senator Shelby and I will be the wrap up.
    So, we can keep it crisp?

                     TRADE DISPUTE WITH EADS AIRBUS

    Senator Brownback. We'll try to keep it crisp.
    Secretary, thank you for being here, I appreciate that. And 
in the notion of crispness, then I want to focus you on the 
trade dispute we have with Airbus in the case that's supposed 
to be reported out, I understand, a ruling on it in April.
    Just to--and you know this case very well, it's been our 
ongoing subsidy fight with EADS Airbus, that's--I was in Bush 
One in the trade field, and we were fighting with Airbus then. 
And we're still fighting with them.
    But, as you know, European governments have subsidized EADS 
Airbus, we contend--our government, U.S. Government--$15 
billion in launch aid, financing--including $5 billion on the 
A-330, 340 program, which is $5 billion on launch aid, just for 
that particular program.
    The A-330, 340 program is the largest recipient of European 
government support, support from French, German, Spanish, 
British. We initiated a trade dispute against them, and I 
understand that is potentially going to report out in April.
    If we win that, we will be entitled to retaliatory measures 
against Airbus, is that correct, Secretary?
    Secretary Gutierrez. I believe that's one of the options, 
depending on--hopefully, that we will win that. We're working 
with the United States Trade Representative (USTR), and USTR, 
of course, is the lead on this, but we hope to be able to prove 
that there are launch subsidies, something that has worried us 
for a long, long time, but I can't be specific as to what we 
will be able to get back if we win.
    Senator Brownback. Is it the U.S. Government's position 
that the A-330, 340 program has received $5 billion in launch 
aid from the European governments?
    Secretary Gutierrez. I'm not sure about the exact amount, 
but we have always stated and alleged that they receive launch 
subsidies for their new products, as well as their new, large-
body plane, and that is essentially what we are taking forward.
    Senator Brownback. And that's the U.S. Government position?
    Secretary Gutierrez. Yes.
    Senator Brownback. Do you believe that European subsidies 
have created an unfair playing field for U.S. companies, 
competing against EADS Airbus?
    Secretary Gutierrez. I believe that they have made Airbus 
able to compete with lower prices versus Boeing, because of 
these government subsidies that they have had.
    Senator Brownback. I'm sorry, go ahead.
    Secretary Gutierrez. I just think it says a lot about 
Boeing that Boeing has been able to compete and win and gain 
market share, in spite of competing with these subsidies.
    Senator Brownback. You're concerned about the rapid 
increase in the European share of the U.S. commercial aviation 
market over the past two, three decades?
    Secretary Gutierrez. Yes. And to the extent that these are 
achieved, because of the benefit of subsidies, then absolutely. 
We want to be able to compete on a fair playing field, and we 
believe they do have the benefit of these subsidies.
    Senator Brownback. And you believe the current playing 
field is not fair for U.S. commercial aviation?
    Secretary Gutierrez. If we can prove that these subsidies 
are what we say they are, then it is not. Because they are 
receiving launch subsidies from their government, they're not 
projecting the total cost of the plane when they have to price 
to sell that plane.
    Senator Brownback. Are there other obstacles as well that 
U.S. companies face in competition with the subsidized European 
firm of EADS, that owns 80 percent of Airbus, in addition to 
the direct subsidy of the--what we suggest is $5 billion in 
launch aid, just for the A-330, and then $15 billion overall in 
launch aid in financing for their whole fleet of planes?
    Secretary Gutierrez. Our major concern has been launch 
subsidies. Aside from that, we know that it's a very 
competitive firm, and we have some very competitive firms, and 
we're constantly competing for major contracts--which we don't 
mind--but we just want our company to be playing on a level 
playing field. And if they are receiving this level of launch 
subsidy for these large planes, then they are not reflecting 
the full cost in their price, which gives them an artificial 
advantage.
    Senator Brownback. And you're aware that the current 
contract that was just let for the Northrop Grumman uses the A-
330 base plane, which we are contending is a heavily subsidized 
plane that's in its start?
    Secretary Gutierrez. Yes.

                RETALIATORY MEASURES AGAINST EADS AIRBUS

    Senator Brownback. What retaliatory measures might we use, 
if we win this case against EADS Airbus? What's possible?
    Secretary Gutierrez. I'd like to be able to get back to you 
on that, Senator Brownback. These are, obviously, legal 
questions. I don't want to preempt anything that USTR may want 
to state, but if you'd like, I'd be glad to go back, look at 
the different options we have, assuming we win, and get those 
to you. And I don't think there would be a problem in that, I 
don't think USTR would have a problem with that, but I do want 
to respect their lead role in this case.
    [The information follows:]

       Retaliatory Measures Following Ruling in EADS Airbus Case

    The WTO has not yet made its ruling in this dispute, so it 
would be premature to speculate on possible retaliation. 
However, if the WTO rules in favor of the U.S. complaint, we 
would hope that the EC would comply with that ruling or reach a 
mutually acceptable agreement. Should we not reach an 
acceptable outcome and assuming that the WTO dispute settlement 
body authorizes retaliation, there remain U.S. statutory 
procedures that require consultation and public notice and 
comment as to the particular retaliatory countermeasures to be 
adopted. Only after such consultations could we have a sense of 
what measures might be taken.

    Senator Brownback. Thank you.
    Thank you, Madam Chairman.
    Secretary Gutierrez. Thank you, Senator.
    Senator Mikulski. You were crisp.
    Senator Brownback. Trying to.
    Senator Mikulski. You raised excellent points.
    Senator Reed.

                  ECONOMIC DEVELOPMENT ADMINISTRATION

    Senator Reed. Thank you very much, Madam Chairman and 
Senator Shelby.
    Thank you, Mr. Secretary, for joining us today. I, in my 
experience over 18 years now, have found the Economic 
Development Administration (EDA) to be an incredibly effective 
and efficient source of support for local communities. I could 
list a number of items of support for my State.
    The most recent one, the one I am concerned about is 
support to the city of Woonsocket, Rhode Island. They had a 
levee system that, after Katrina, was declared substandard. We 
have taken steps to transfer the authority to the Corps of 
Engineers and the Corps will assume the authority, but the city 
still has the obligation for ongoing repairs and upgrades until 
the transfer is complete.
    EDA has stepped in with a lot of technical assistance, and 
the city has a grant proposal at the agency now. I personally 
want to thank, and show my appreciation of Tyrone Beach of your 
Philadelphia office and Dennis Alvord of your Washington 
office, for their assistance and their hard, hard work.
    This is an important issue, and certainly any consideration 
you could give would be appropriate, because literally, the 
city would have been bankrupted if they were forced to make 
these repairs and shoulder this responsibility ongoing.
    So, all of that is a long prelude to the question of--given 
the need we have for projects like this across the country, in 
fact the American Society of Civil Engineers have rated our 
infrastructure ``D''--why are we cutting roughly $170 million 
from the budget of an agency that is effective, efficient, 
responds to the needs of local communities in a very thoughtful 
and businesslike way, when the demands are way beyond the 
capacity of the existing budget?
    Secretary Gutierrez. Senator, I understand your point. We 
had to make, obviously, some decisions to reallocate some of 
our funds, we wanted to make sure that we got the long-term 
basic research right in NIST and we are a little bit behind our 
plan on that, so we had a 22 percent increase in NIST. Of 
course, we had the satellites, we have the census.
    The only thing I can say about EDA is that because these 
are grants, this is not a permanent cut. We have the 
flexibility to increase it and lower it, without having to 
commit to something that is long term. So, it is a 1-year cut, 
that's the way we're thinking about it, and again, it comes 
down to the tough role of having to allocate within a limited 
budget.
    Senator Reed. I appreciate the difficulties of prioritizing 
these programs, given the current budget situation, but I think 
this is one that would require a little more reflection.
    And I would also just finally point out, because I want to 
stay within my time, that it's sort of the curse, the baseline. 
Once you reduce EDA at this level, next year when you talk 
about increasing it, even a robust increase probably does not 
get it up to where it was. And I think that has to be 
considered long term.
    So, even though you see it as a 1-year cut, if this is cut 
this much, it will very difficult to replace that funding and 
get it to the level I believe it should be.
    But, thank you for your consideration, Mr. Secretary.
    Secretary Gutierrez. Senator, the city you mentioned, I 
just want to make sure I get that right--Woosakah?
    Senator Reed. That's the way you say it, if you have a 
terrible Rhode Island accent, like I have, but it's actually 
Woonsocket, W-O-O-N-S-O-C-K-E-T.
    Secretary Gutierrez. Okay, thank you.
    Senator Reed. Thank you, Mr. Secretary.
    Senator Mikulski. Senator Shelby.

                     TANKER CONTRACT TO EADS AIRBUS

    Senator Shelby. Mr. Secretary, I just want to pick up on a 
point made by Senator Brownback, a little bit. You know, trade 
is important, fair trade is very important to all of us. But 
when the Air Force selects a plane, and this is at the 
Pentagon, and chooses an airframe that's made in Europe, but 
the plane will be assembled in my State of Alabama, and 
thousands and thousands of new U.S. jobs--maybe not Boeing 
jobs--will be created, I think the Air Force's top criteria is 
what's best for the warfighter.
    In this case we--have regular order, we have a process that 
Boeing will have to go through, and should go through, to 
protest this award. The Air Force concluded that the Northrop 
Grumman proposal was superior in five main categories, over the 
Boeing plane. And I think that what we need to do is buy the 
best thing for the warfighter. You know, this is not going to 
be used in commerce, it's going to be used in national 
security.
    There is a process to go through, Senator Brownback knows 
that. Assuming there is a protest, GAO will review the awarding 
of the contract to Northrop Grumman/EADS, over Boeing. I 
believe they will uphold the award, but I don't know that. 
Because I don't know, and I don't believe Congress, including 
the Senator from Kansas, the Senator from Alabama, or Senator 
Mikulski, should get into the procurement business. Senator 
Warner spoke very strongly on that the other day as others 
have, too. Whether it's made in Kansas, or Alabama, or Maryland 
we better leave procurement up to the Pentagon, and not to us.
    I have several questions, and I have some for the record 
dealing with the Department of Commerce.

                     MANAGEMENT OF DECENNIAL CENSUS

    Given where we are today, Mr. Secretary, would you rate the 
Census Bureau's management of the decennial census, as 
moderately effective? Poor, or what?
    Secretary Gutierrez. Based on where we are today, I would 
have to be very convincing to say moderately effective.
    Senator Shelby. Well, you couldn't convince me to that, 
now.
    Secretary Gutierrez. I know. I'm not going to try, Senator 
Shelby. I'm disappointed.
    Senator Shelby. You've got good standing, you don't want to 
ruin that standing.
    Secretary Gutierrez. Yes.
    We're in the situation today, and I will know so much more 
in 3 weeks when the task force gets back, but we are probably 
facing an overrun, and I'll know more about that. We're looking 
at different options, we may not be able to use all of the 
technology that we had hoped for.
    So, given that, and given the amount of time that it took 
the communication to work itself up the ladder, I would say I'm 
disappointed. I'm very much part of it, and I'm not separating 
myself from it, but it's been very disappointing.
    Senator Shelby. Indeed. People over at Census which came up 
with this--the handheld device, which makes sense, to some 
extent--did they know, really know, what they were doing when 
they're coming up with 400 additional changes? I mean, one or 
two, three or four--but 400? Plus the cost. That bothers us, as 
appropriators, and it should, and it should bother you, as the 
Secretary.
    Secretary Gutierrez. Yes, sir.
    Well, I think that part of the problem has been the lack of 
experience in working with an outside contractor that would 
come in and do a lot of the work that Census once did. And then 
once that happens, the level of intensity of management has to 
increase and I don't think that happened. I don't think that 
happened early on.
    So, Harris would have a certain date of delivery, Census 
would have another date--it just says that people----
    Senator Shelby. Why? Why? Why?
    Secretary Gutierrez [continuing]. People weren't talking. 
They hadn't set up the management processes to ensure that an 
outsider can come in and do what Census had always done.
    So, I think this is, while it comes down to a technology 
issue, I think that's a symptom. And from my standpoint, 
Senator, what we have is a management issue, and a cultural 
issue.
    Senator Shelby. What about a software problem?
    Secretary Gutierrez. Well, we had some software problems in 
our address canvassing, which we've done. We did our dress 
rehearsal, and those, I understand are fixable. We have work to 
do with the software, but those are fixable, but as you say 
with the 400 changes that were identified, some of those are 
software. It can be done, it's just a matter of the level of 
confidence of having to do that when we're 2\1/2\ years away 
from the Decennial Census.
    Senator Shelby. Are the same people at Census that came up 
with this idea to begin with, and assured the subcommittee that 
everything was rosy--are they still over there, running this 
program?
    Secretary Gutierrez. We have a new Director.
    Senator Shelby. Okay.
    Secretary Gutierrez. Who's been on board for 1 month. And 
we have a fairly new Deputy Director who has been in that role 
for almost 1 year. So there were some changes that took place.
    Senator Shelby. Okay.
    Secretary Gutierrez. Last year.
    Senator Shelby. Secretary, can we--this Committee of 
Appropriations--dealing with Commerce, and your money--can we 
anticipate a supplemental request from you, your Department, to 
accommodate the difficult position that the Census finds itself 
in?
    Secretary Gutierrez. That's the question I will have 
answered Senator Shelby. I should have the amount of money, but 
also if it falls into 2009 and 2010. We believe that a lot of 
it will fall in 2010, and we're also going to try to find the 
money internally before we do anything. So, I wish I could be 
more specific, but I'd like to wait before responding on the 
money and the timing. And then, I'll be back to this 
subcommittee with the full plan.

                   COLOMBIA AND PANAMA SHRIMP EXPORTS

    Senator Shelby. It's a lot of money.
    Mr. Secretary, going over to NOAA, free trade and shrimp?
    Secretary Gutierrez. Yes.
    Senator Shelby. If I can talk about that a minute. Has your 
Department examined Colombia and Panama's shrimp export 
activities, prior to these recent trade discussions? And, if 
so, what were your findings? If you don't know, will you get 
it?
    Senator Mikulski. Shift gears on that one.
    Senator Shelby. Yeah.
    Secretary Gutierrez. I will get back to you on that. I know 
that we--a lot of our shrimp activities are with Vietnam and 
Asia, but I will look back at Panama and Colombia.
    Senator Shelby. This would be dealing with Colombia and 
Panama's shrimp activities.
    I have a number of other questions, Madam Chairman, but I 
will submit them for the record and ask them in the timeframe 
we have.
    [The information follows:]

                 Colombia and Panama--Shrimp Activities

U.S. Shrimp Trade with Colombia and Panama
    The Department of Commerce's International Trade Administration 
reports no anti-dumping case work on shrimp with Panama or Colombia, 
nor any outstanding or longstanding shrimp-related issues within the 
purview of the National Oceanic and Atmospheric Administration (NOAA).
            Colombia
    In 2007, Colombia exported 2,221,646 kg of shrimp (of various 
product types) to the United States at a value of $12,877,685. That 
year, U.S. shrimp exports to Colombia amounted to 125,551 kg with a 
value of $909,424.
            Panama
    Panama exported 4,453,686 kg of various products of shrimp to the 
United States in 2007, valued at $36,644,581. In 2007, U.S. shrimp 
exports to Panama amounted to 28,474 kg, valued at $231,805.
Free Trade Agreement (FTA) Provisions
    The Office of the United States Trade Representative (USTR) reports 
no shrimp-related trade issues with Panama or Colombia--not before, 
during, or after the FTA negotiations with these countries.
            Market Access
    U.S. fish and fish product exports, including shrimp, will benefit 
from the pending FTAs with Colombia and Panama. Colombia's tariffs on 
high-priority U.S. fish exports such as shrimp, salmon, and sardines 
will be eliminated immediately upon entry into force of the United 
States-Colombia FTA. Currently, Colombian tariffs on U.S. fish exports 
range between 5 and 20 percent with an average of 18.9 percent. 
Similarly, Panama's tariffs on U.S. shrimp exports will be eliminated 
immediately upon entry into force of the United States-Panama FTA. 
Panama's tariffs on U.S. fish exports currently range between zero and 
15 percent with an average of 12.7 percent.
    For years prior to the launch of FTA talks with Colombia and 
Panama, the U.S. market was open to fish imports from these countries. 
The U.S. tariffs on fish and fish products average only 2 percent. 
Under the United States-Colombia FTA, most U.S. fish imports from 
Colombia will continue to receive duty-free treatment upon entry into 
force of the Agreement. Similarly, under the United States-Panama FTA, 
100 percent of U.S. fish imports from Panama will receive duty-free 
treatment immediately upon entry into force of the FTA. It is important 
to note these products, including shrimp, currently enter the U.S. 
market with little or no tariffs.
Turtle Excluder Devices (TED) Certification
    The chief component of the U.S. sea turtle conservation program is 
a requirement that commercial shrimp boats use sea turtle excluder 
devices (TEDs) to prevent the accidental drowning of sea turtles in 
shrimp trawls. On May 1, 2007, the Department of State certified 40 
nations and one economy as meeting the requirements set by Section 609 
of Public Law 101-162 for continued importation of shrimp into the 
United States. Section 609 prohibits importation of shrimp and products 
of shrimp harvested in a manner that may adversely affect sea turtle 
species. Colombia and Panama were among the countries certified.

                            FDCA TECHNOLOGY

    Senator Mikulski. Thank you very much.
    I'd like to pick up on Senator Shelby's line of questioning 
on the Census. Two points--number one, we've talked about the 
management issues, and you're a skilled manager, and we have a 
new Director of the Census in Mr. Murdock, so management is one 
thing.
    But, let's go to the technology. In this year's 
appropriation in the President's request, he's asking for, 
through you, $1 billion more. We have to make sure that $1 
billion gives us value at the end of the day. So, could you 
tell the subcommittee--what is the technological problem? 
What--I know that there are 400 changes, et cetera, but what 
doesn't work? If--think of someone knocking on the door, ``Hi, 
I'm from Census,'' and they have this technology in their hand 
and then they're asking their questions--at what point does 
this break down?
    Secretary Gutierrez. Yes, there are two big problems. One 
is that it takes a longer amount of time to capture the 
information for one interview than what was assumed. The other 
problem is that the number of interviews that a handheld can 
absorb in a given day is a lot less than what we expected. So, 
if you go into one of these apartment buildings with a lot of 
tenants, now all of a sudden we can't do that with one 
enumerator, we'd have to do that with more than one.
    Senator Mikulski. But what is it about--the technology that 
is broken--again, pardon me, but who cares if it lasts longer? 
Is it a consequence to the battery, what, what?
    Secretary Gutierrez. I believe it's a design of the 
software. I don't think it's a capacity problem, I think it's 
just the way that the requirements were communicated. And part 
of the problem is how the requirements were communicated to the 
contractor--this is what we need, this is the capacity we need, 
this is what an enumerator does every day--there are also some 
productivity assumptions that were not valid that were put into 
the program, so that also impacts.
    Senator Mikulski. So, the handheld can't absorb what we had 
hoped that it could absorb. So, it could mean, then, if you 
don't fix the handheld, you will need more people, because it 
takes more time.
    Secretary Gutierrez. Yes.
    Senator Mikulski. Okay. Then, is the handheld able to send 
it to the mother ship? I mean, is there a mother ship that 
absorbs all of this?
    Secretary Gutierrez. That's the plan. The whole idea was 
that the handheld would help us determine every single address 
in the country. We're also using global positioning satellite 
(GPS) technology this time. We'd send the questionnaires to 
those addresses, and then those households that did not 
respond, we would go back with the handheld, and all of that 
information would go back to what we call an operational 
control system, that would essentially get back to the 
enumerator with their tasks.
    Senator Mikulski. Pardon me, I'm a very plain-spoken and 
plain-thinking person. And knowing the way a census goes, there 
has to be--there will be someone who will knock on a door----
    Secretary Gutierrez. Yes.
    Senator Mikulski [continuing]. Presuming someone's at home 
and friendly and willing to answer. That in and of itself is an 
assumption--a big assumption. Because if they don't respond, 
there's usually a reason--they're old, they're poor, they could 
be hiding, they could have 15 people living in a house, some 
documented, some not.
    I mean, we've done censuses for 200 years--this is not a 
special ops operation, where we are doing a new secret thing in 
a foreign territory. It's in our country, we've been doing it 
for 200 years, and it's all been based on some form of 
interview.
    So, this is not to lay that on you, but the fact that they 
didn't understand what the hell they were being asked to do, I 
find shocking. If we are that dumb, we've got a problem in our 
country, let alone with technology. This, is again, not secret, 
not special ops.
    So, but here--they've gotten, you know, income under 
$50,000, et cetera. Then do they push a button, and it goes to 
a central facility?
    Secretary Gutierrez. Yes.
    Senator Mikulski. And is that part working?
    Secretary Gutierrez. That is one of the options we have, is 
to take that control system away from Harris, and put it into--
--
    Senator Mikulski. That's your option, but is it working now 
with the Harris contract?
    Secretary Gutierrez. I'll be able to answer that in 3 
weeks.
    Senator Mikulski. Okay.
    Secretary Gutierrez. The experts are looking at it to see 
if it's capable of----
    Senator Mikulski. And the enumerators talk to the computer, 
and that's going to take longer, and a computer isn't ready to 
work as hard as the enumerator. Then the handheld talks to the 
mother ship--we're not sure it can talk the same language. 
Then, having done that, the question is, can the mother ship 
process that information?
    You're shaking your head--who are you?
    Mr. Wienecke. I work for the Secretary.
    Senator Mikulski. So, can the mother ship process it? Okay.
    Mr. Wienecke. That's what we're working through right now.
    Senator Mikulski. Do you know the answer if the mother ship 
can process the information?
    Mr. Wienecke. We're testing that.
    Senator Mikulski. Okay. Now, let's presume that's happened, 
then they have to tell the enumerator the next day what they're 
to do.
    Secretary Gutierrez. That's right.
    Senator Mikulski. Do they talk back?
    Secretary Gutierrez. They essentially give the enumerator 
their schedule and tasks, and where they have to go for the 
next day.
    Senator Mikulski. Okay.
    Secretary Gutierrez. They also calculate productivity, they 
also calculate wages.
    Senator Mikulski. So, what you're saying, though, this 
could be really a collapse.
    And colleagues, this is really serious. Again, this is the 
United States of America. We hold ourselves out to be 
technological innovators, and we can't develop technology to 
take a census where we know the process, and we've known it for 
200 years.
    So, now, let's get to the money. If we have to do handheld, 
I mean, if we go to paper--if the United States of America has 
to do a paper census, it borders on a scandal. It really does.
    Senator Shelby. Madam Chairman, could I just interject one 
thing, just follow up?
    Senator Mikulski. Yes, because I want to get to the money 
punch line.
    Senator Shelby. Okay. I just----
    Senator Mikulski. Because we're heading to something 
that's--do you realize if we have to pay for a paper census----
    Senator Shelby. I know.
    Senator Mikulski [continuing]. Yes, go ahead, Senator.
    Senator Shelby. Just, I was just thinking of the software, 
here, and I'm a long way from being a software engineer. But, a 
census--the questions you ask during the census--I've talked to 
some software people, they said, ``That's so simple,'' you 
know, to program. I mean, because you're asking--let's assume 
you have the form, and you have to knock on the door, you know, 
and you had to fill it out, which we've done--that's not 
difficult. Is it laborious? Is it labor-intensive? It could be. 
And the software, or the handheld computer was to save money, 
be more efficient, and everything else. But, I don't think 
you're asking--whether it's Harris or whoever's doing it, the 
Commerce Department--you're not asking for a difficult software 
program.
    Senator Mikulski. Right.
    Senator Shelby. And I think the chairman's right. Thank you 
for letting me interrupt----

                  POSSIBLE SUPPLEMENTAL APPROPRIATION

    Senator Mikulski. Let's get to the--so, you're going to 
have answers. But, here's where we are. Senator Shelby asked--
as he does, such excellent focused and targeted questions--as 
he said, are you prepared to ask for money in a supplemental? 
And, as I understand your response is, ``Oh, we will turn to 
the Department first.''
    Secretary Gutierrez. Yes, I think I should say that----
    Senator Mikulski. Can I just give you a head's up?
    Secretary Gutierrez. Yes.
    Senator Mikulski. The supplemental appropriations will be 
before the Senate in mid-April. So, when you have your answers, 
we can't wait to know--we only get one crack at the 
supplemental. And this Appropriations Committee cannot absorb 
the fix, even if we get a robust allocation, because of all of 
our other compelling needs and very important agencies across--
remember, we not only have Commerce, we have Justice, where 
local law enforcement has been drastically cut, we're 
concerned--we could go on. So, we have to, if there--if you--I 
don't know where you're going to get the money. Because what we 
passed for the omnibus, was pretty lean. We scrubbed this 
pretty well.
    So, what we're saying, Mr. Secretary is, that whatever is 
the fix that is required, we would respectfully recommend that 
it be in the President's supplemental. I mean, we really do 
need a plan by, I would say, April 10. Because we'll be on the 
floor.
    Secretary Gutierrez. And we should have a plan, and numbers 
before that time, late March--and I will bring it to you as 
soon as we have it.
    Senator Mikulski. Fine, but we need, not only a plan, but 
we need a method----
    Secretary Gutierrez. Yes.
    Senator Mikulski [continuing]. For paying for the plan.
    But, we have a lot of confidence in your management 
ability.

                        NPOESS SATELLITE PROGRAM

    Let's go, then, to NOAA satellites. As I understand it, in 
terms of the famous NPOESS program, which is polar satellites, 
which are so important to giving us information about weather 
and climate, that there's--in addition to the cost overruns, 
that there is also another technological problem that could 
exacerbate the overruns.
    We understand that there is a main sensor, known as VIIRS, 
that's supposed to take a picture of the ocean color--now, why 
is that important? The ocean color tells us the temperature, 
which then gives us important information on climate change and 
weather. But that--what it's going to take a picture of is now 
blurry.
    You know, I went through that--the Hubble telescope over 20 
years ago, Senator Shelby was very aware of that--you know, we 
can't put a satellite up and then have it need a contact--its 
sensor needs a contact lens.
    So, our question is, oh my God, do we have to then fix the 
sensor, while we're already in cost overruns?
    Secretary Gutierrez. We----
    Senator Mikulski. Are you aware of this problem?
    Secretary Gutierrez. Yes. The assumption at this point, is 
that sensor will delay that part of the project by 8 months. We 
have not added 8 months to the end completion date. So, the 
VIIRS is 8 months off schedule, but the assumption is that we 
will be able to get back on schedule for the full NPOESS. So, 
we're still saying NPOESS will be launched in 2013. But that 
VIIRS sensor is 8 months behind schedule.
    Senator Mikulski. But, even on schedule, will it be able to 
see and do the job that it's supposed to do? Or is that another 
technological fix that requires, again, more money?
    Secretary Gutierrez. I don't know that, and I have not 
heard that. I have not heard that there will be another overrun 
on that part of it.
    Senator Mikulski. Well, Mr. Secretary, what Senator Shelby 
and I would like to do is submit our concerns about this in 
writing, because after we get it on track, and they deliver it, 
if we have a sensor with a blurry vision, and the whole point 
of it is that it's looking from the sky at our oceans, which 
gives us very important predictability, and like, his questions 
about shrimp, I'm asking about rockets----
    Secretary Gutierrez. The quality should be a constant, 
and----
    Senator Mikulski. Yeah, it should be.
    Secretary Gutierrez [continuing]. At this point, is----
    Senator Mikulski. Well, right now, we hear it's blurry. We 
hear it's blurry.

                        GOES-R SATELLITE PROGRAM

    Let's ask--let me go to GOES-R, and--which is another 
satellite program. Our question will be--what assurances can we 
give the subcommittee that we're not going to run into the same 
cost overruns with GOES-R as we did with NPOESS?
    Secretary Gutierrez. Well, and I'll be very up front here, 
we've gone from $6.9 billion to $7.6 billion and I believe you 
brought that up a little while ago. We are, today, $500 million 
away from having to trigger a Nunn-McCurdy-like process. I have 
been told that doesn't look like it's in the cards--one of the 
reasons that we have this $800 million increase is because we 
have mitigation plans, we have been very conservative, we have 
ensured that we're looking at the downside risk, but I just 
want the subcommittee to know that we've got to track this very 
closely, because we are $500 million away from hitting that 20 
percent mark. So GOES-R is clearly the big priority right now.
    Senator Mikulski. Well, that really gives us pause, 
because--first of all, there seems to be a consistent pattern 
of cost overruns in the NOAA satellite program. That's number 
one.
    Number two, that along with the cost overruns is then once 
we pay for it, do we get value for the dollar? The so-called, 
blurry-eyed sensor?
    Secretary Gutierrez. Right.
    Senator Mikulski. I have a real problem with our satellite 
programs across our Government. Whether it's in the classified 
area, or in others--we just don't seem to be able to get our 
satellites up on time, on budget, and then meeting what the 
expectations and criteria.
    So, here's where we are. What I would like--right now, the 
census is a crisis. We've got to get it solved, and we've got 
to get the payment for it within the supplemental. We ask you 
to please focus on that.

               MANAGEMENT REFORMS FOR SATELLITE PROGRAMS

    But we ask you to take a look now, also, at the NOAA 
satellite program, and give us a path forward, in terms of what 
you think will be the management reforms necessary in the--in 
this. One, so we can keep it on track for this year's 
appropriations, but at the same time, what this will mean for 
the incoming NOAA Administrator. Because we can't just be left 
holding the bag, and America will lose interest. People with 
scientists have their self on the line.
    Secretary Gutierrez. I'd be glad to do that, Madam 
Chairman.
    [The information follows:]

              Management Reforms in NOAA Satellite Program

    Within the Department of Commerce, the National Oceanic and 
Atmospheric Administration operates and manages two major environmental 
satellite programs: the Geostationary Operational Environmental 
Satellites (GOES) in geosynchronous orbit above the equator, and the 
Polar-orbiting Operational Environmental Satellites (POES) which 
provide global coverage in a low earth orbit.
    Following the Nunn-McCurdy certification of NOAA's next-generation 
polar-orbiting system--the National Polar-orbiting Operational 
Environmental Satellite System (NPOESS)--the Department and NOAA have 
strengthened the management, oversight, and systems engineering 
processes of its satellite systems acquisitions. These changes will 
ensure that NOAA does not repeat the NPOESS mistakes in the development 
of the next generation Geostationary Operational Environmental 
Satellite series (GOES-R). These changes include:
  --Robust Risk Reduction in instrument acquisition processes. Risk 
        reduction in these processes requires careful management and 
        engineering attention. Both GOES-R and NPOESS are aggressively 
        managing instrument acquisition to mitigate the risk to the 
        entire program.
  --Technical Teaming with NASA to implement proven NASA space 
        acquisition processes in Department of Commerce and NOAA 
        acquisition strategies. For GOES-R, this approach is documented 
        in a GOES-R Management Control Plan (MCP) which allows the 
        GOES-R program access to the expertise and experience of both 
        NOAA and NASA, their support contractors, and of the best of 
        each agency's acquisition processes to ensure active and in-
        depth oversight of the development contractors. For NPOESS, 
        NOAA has teamed with the Air Force and NASA with activities 
        guided by a Memorandum of Agreement among the Department of 
        Commerce, Department of Defense, and NASA which is implemented 
        by a series of management, acquisition, and funding 
        arrangements.
  --Regular Management Oversight and Reporting by the satellite 
        programs to senior management officials. The GOES-R program 
        reports to the Department of Commerce and NOAA executive 
        management, and NASA engineering teams through NASA and NOAA 
        Program Management Councils (PMC). The NPOESS programs reports 
        to the NPOESS Executive Committee (EXCOM) which is comprised of 
        senior representatives from NOAA, NASA, and the Air Force that 
        provides programmatic and management oversight and guidance. 
        The NPOESS program also reports monthly to the NOAA PMC.
  --Realistic Cost Estimating and Budgeting that vets the Government 
        cost estimates by independent experts to ensure that adequate 
        resources are applied to areas of high risk. This means budget 
        requests will more likely cover expected costs without 
        requiring additional budget allocations to deal with unforeseen 
        issues.
  --Program Control and Congressional Oversight is ongoing with annual 
        program reports for both the GOES-R and NPOESS and quarterly 
        reporting of program status to Congress.
  --Management of Contractors using Incentive Fee Structure to ensure 
        the Government utilizes a full range of incentive and 
        performance management approaches to facilitate contractor 
        management.
  --Independent Reviews by Experienced Space Acquisition Experts such 
        as the Independent Review Team (IRT) to provide NOAA and the 
        Department of Commerce with unvarnished opinions of the 
        program's readiness at key decision points.
  --Recruitment of Experienced Program Managers and Program Executives 
        to implement internal controls, to improve insight into 
        emerging cost, schedule, and technical issues and exercise 
        stronger management control on the release of management 
        reserve and changes to the estimate at completion. For the 
        GOES-R and NPOESS programs, seasoned and experienced Senior 
        Executives have been placed in lead management positions. For 
        the NPOESS Program, in addition to the System Program Director 
        who is involved in day-to-day activities of managing the system 
        acquisition, a Program Executive Officer position was 
        established to provide high level monitoring of the program and 
        contractor performance.

    Senator Mikulski. We note that the vote has started, has 
the second bell occurred?
    Senator Brownback. Madam Chairwoman, could I ask one other 
question----
    Senator Mikulski. On what topic?
    Senator Brownback. On the----
    Senator Mikulski. I have questions related to the Patent--
is it on the satellites?
    Senator Brownback. No, it's on the subsidization, but I 
just wanted to ask----

                             PATENT BACKLOG

    Senator Mikulski. I'd like to finish my patent question.
    Senator Brownback. Okay.
    Senator Mikulski. We have over a 1 million case backlog. 
There is a persistent pattern in our Patent Office with these 
issues. We have given them more money, we have given them more 
flexibility, but at the end of the day, our innovators and our 
inventors--be they big companies or those start-up companies 
that make America great, feel they're standing in line. Could 
you share with us, where you think we should be going forward? 
Is it a money problem? Are we doing our part? What is the 
problem, here?
    Secretary Gutierrez. Where we are today, essentially, Madam 
Chairman, it is like, we are on a treadmill and we're trying to 
catch up. The number of applications is increasing, and each 
application is more complex than it was 10 or 20 years ago. So, 
we're adding 1,200 people every year, and our initial pendancy, 
the first time we get back to people, is up to 25 months. Our 
final pendancy, when we finally get back with a patent, is over 
30 months. So, the number of people we're adding is not enough 
to keep up with the applications and the complexity.
    I think we need to come up with different process 
solutions, other than just adding more people. One day we're 
going to have 500,000 people, and we're still not going to be 
caught up.
    So, one of those things we're looking at, and this is where 
we'd like to go to the patent bill, we need some help on this, 
is we'd like to be able to offer applicants that, if they do 
more of the work themselves, that we will guarantee we will get 
back to them in 12 months. But that will essentially take some 
of the work that we're doing--having to do quality reviews and 
sending the application back, and asking for more information--
if they do the work themselves, we would guarantee a speedier 
response. That's a big solution.
    We're also looking at some workplace methods, flexible 
workplace, working from home. We're also looking at the 
flexibility of having quotas on a quarterly basis, instead of 
on a daily basis, so that people can be more empowered to 
manage their time and their priorities.
    So, I think we need to look at the process and a different 
way of thinking about this than simply adding more people every 
year. By 2013, we would have added 8,000 more people.
    Senator Mikulski. Well, this is really--again, we're almost 
at a breaking point, here. With 1 million patents pending. And 
at this breaking point, we've added more money--I won't repeat 
myself--the part you've said we have to look at the patent 
bill, that's beyond the scope of this subcommittee.
    But, in terms of the personnel reforms, that's not beyond 
the scope of this subcommittee, and I think we need to look at 
how do we retain the people we recruit, because of just the 
knowledge factor--they walk out, go to the private sector, et 
cetera, it's a big loss. And it takes at least 2 years for them 
to really know how to get--do the job in the way they do. 
Because experience counts.
    We really need from you, this year, what we're going to do 
here, whether it's flexibility on work hours, or all of these 
other creative things, because we're really frustrated, the 
Judiciary Committee is really frustrated, but America--the 
private sector is.
    I'll just stop here, because in the report on our 
innovation, from the National Academy of Science, ``Rising 
Above the Gathering Storm, Where We're Falling Behind'', they 
said one of the key things in an innovation-friendly Government 
is the Patent Office, which enables us to, not only take our 
brilliant inventions that are being done, but to really make 
sure that we protect them against our intellectual property 
being robbed.
    So, this is really, I mean, these are really three big 
issues we've laid out here--the census, which is a crisis, the 
satellites, which are bordering on a crisis, and then this 
whole other issue with patents, that I believe stifles our 
ability to turn our innovations into products that could be 
sold around the world.
    Secretary Gutierrez. We're also looking at sharing work 
with some other Patent Offices in international countries where 
it makes some sense.
    Madam Chairman, on the satellites, I offered up this notion 
that we are $500 million away--I've asked that question 
internally, I was told that we won't see that, because we've 
had mitigation costs, and we've been very careful about this 
increase to $7.7 billion. But, I just want you to know what I 
know----
    Senator Mikulski. Well, we've been told things before. We 
were told, from the Census, ``Oh, don't worry about it.'' We've 
been told, ``Oh, gee, the satellites,'' there's three different 
agencies, you know, we've been told a lot of things, and we're 
now acting like Missouri, ``Show us.''
    So, Mr. Secretary, we think you're doing a great job, but 
these three things are really--have now come to the Cabinet 
level, and we look forward to working with you.
    Secretary Gutierrez. Thank you.
    Senator Mikulski. There's only about 3 minutes left in the 
vote--Senator Brownback, did you want to have a round of 
questions?

                  SUBSIDATION OF EADS AIRBUS AIRCRAFT

    Senator Brownback. Yes, and I won't take long on this, but 
this is just a--this is a big deal, it's been going on for a 
long time. Just to complete that area, because I tried to stay 
within my time on that 5 minutes, and--but we believe, the U.S. 
Government, that every EADS Airbus plane receives launch aid in 
its development, believes in our proposal that each is given 
help in the development costs, is that correct, in the U.S. 
Government's position?
    Secretary Gutierrez. I'll have to check if every single 
plane--I know that we have alleged that the new planes that 
have come out, that there have been launch aids given by the 
Government.
    Senator Brownback. And that, for the A-330, includes the A-
330 airplane?
    Secretary Gutierrez. I believe so.
    Senator Brownback. My point to you is simply that wherever 
the plane is put together, it's the U.S. Government's position 
that that plane has received somewhere between 33 percent to 
100 percent of its development cost from European governments, 
and that's in our claim, that's in our proposal. And that that 
applies in pulling down the cost of each of those planes, and 
that's why they can be more competitive against a Boeing plane, 
is in our base proposal.
    And that's, I just--I wanted to draw that attention to you, 
and to my colleagues, because if we win this case and we're 
successful on it, there's going to be, then, what are we going 
to do in response to this, toward EADS and Airbus? And it's 
going to affect a lot of things that are being discussed, and 
the Secretary is going to be involved in these retaliatory 
measures, substantially, because of the development cost was 
for the whole plane. And then that is spread about over all 
planes that are sold.
    So, I--I appreciate Madam Chairman----

                            CLOSING REMARKS

    Senator Mikulski. Colleagues, I'm going to have to close 
out the hearing. I'm going to invite Senator Shelby to have 
whatever he wishes to say. But I want to announce that this 
hearing, after the conclusion of his remarks, will come to an 
end. The subcommittee, we can submit questions and so on for 30 
days, we will stand in recess until March 13, when we'll hear 
from NOAA and NSF.
    Senator Shelby. Madam Chairman, I just want to answer that, 
the best I can. We have this ongoing dispute of subsidies, and 
that's got to be settled there, but what we have here, though, 
is an award of a tanker by the Air Force that's going to be 
built in the United States with the air frame which comes from 
EADS, which the Air Force has selected in five major categories 
as superior, and we're talking about the warfighter, what's 
best for the warfighter.
    Boeing, in a lot of people's estimates, submitted an old 
plane, old technology, and they lost, fair and square. And now 
they're trying to come in different ways. I don't believe it's 
going to work. I think the decision by the Air Force will 
either be upheld or changed by the Government Accountability 
Office and that's regular procedure, that's not before us 
today.
    Thank you.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Mikulski. If there are no further questions this 
morning, Senators may submit additional questions for the 
subcommittee's official hearing record. We request the 
Department's response within 30 days.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

           Questions Submitted by Senator Barbara A. Mikulski

               CENSUS--2008 DRESS REHEARSAL AND HANDHELDS

    Question. I understand that the handheld computers were tested in 
last year's dress rehearsal of address canvassing. How did they 
perform? What problems were identified? What is the status of fixing 
those problems?
    Answer. We completed the Dress Rehearsal Address Canvassing on 
schedule using the handheld computers supplied by the FDCA contractor. 
Although we experienced some software, help desk, and training problems 
with this first-ever deployment of the contractor's solution, many of 
the problems were resolved quickly. We continue to examine the results 
to determine what needs to be done to make improvements for the 2010 
Census Address Canvassing operation, which will begin a year from now.
    During the Dress Rehearsal Address Canvassing operations, where 
census enumerators verify and update our Master Address File, the 
devices proved to be reliable, with a hardware failure rate of less 
than 1 percent--much better than industry standards. The devices were 
also secure--they required a fingerprint and password to operate, and 
the data were fully encrypted in the device and during transmission. We 
successfully collected precise Global Positioning System (GPS) 
coordinates for housing units and map features; data we collected were 
transmitted effectively via both landline and wireless transmissions; 
and our workers were generally comfortable working with the device. We 
were also able to identify software problems and apply solutions 
simultaneously and uniformly to all devices via electronic transmission 
to each device daily upon start-up.
    Following the Dress Rehearsal Address Canvassing operation, Census 
Bureau and contractor staff identified problems and analyzed their 
causes to learn from this operation. Teams conducted more detailed 
analyses of the transmission component of the design and performance 
during Address Canvassing. These analyses included data on average 
transmission time, the average size of transmissions, the type of data 
being transmitted, and the number of transmissions. The contractor also 
analyzed the end-to-end transmission workflow, problems documented in 
help desk tickets, and assignment area size. These analyses led to a 
number of corrective measures that are now being taken to improve 
performance of the handheld computer and of the transmission process. 
For example:
  --The initial handheld computer software design inhibited efficient 
        transmission to and from the handheld computer, resulting in 
        enumerator downtime. We resolved this by making improvements to 
        the database design and implementing hardware and software 
        upgrades.
  --The handheld computers did not function well if the data files were 
        too large. They worked most efficiently with assignment areas 
        of up to 720 addresses. However, approximately 3 percent of the 
        assignment areas had more than that. We are addressing this 
        issue for the nationwide 2010 Census Address Canvassing 
        operation by limiting the size of the assignment areas and the 
        amount of data that must be downloaded and processed on the 
        handheld computer.
  --The contractor's operations support (``help desk'') solution was 
        insufficient to meet the type and amount of support needs for 
        our field staff. We are addressing this by improving 
        operational readiness (more testing, increased knowledge base 
        development, and additional support personnel training) and by 
        jointly developing a more robust support system.

                      FDCA TECHNICAL REQUIREMENTS

    Question. The Field Data Collection Automation contract was awarded 
on April 4, 2006. Obviously, at the time Census and Harris figured all 
the work associated with the contract could be accomplished on time and 
within the $600 million budget.
    Given the complexity of the system why were Census' assumptions 
regarding time required for the handheld contract so far off?
    Answer. Early in the decade, we believed our experienced Census 
Bureau staff could develop and deploy the handheld computers for use in 
the 2010 Census. These staff did produce the solutions we tested in 
both the 2004 Census Test and 2006 Census Test. Although we were able 
to develop and use them well enough to determine that we could conduct 
field data collection on such devices, by 2004 we had concluded that we 
did not have sufficient expert resources in house to do this for the 
2010 Census, so we decided to contract this effort to the private 
sector. At the time we prepared the RFP, our strategy was to supply 
high-level functional requirements to the contractor on award, and then 
to determine final detailed requirements based on what we learned from 
the 2004 and 2006 Census Tests, and the 2008 Census Dress Rehearsal.
    Thus, at the time of contract award in April 2006, both the Census 
Bureau and the contractor were fully aware this strategy would mean a 
tight schedule for requirements development, system design, system 
development, and deployment. The initial requirements strategy at that 
point was to develop remaining requirements in a two-step process. 
First, based on results from the 2004 and 2006 Census Tests, we would 
provide detailed Dress Rehearsal requirements for our major operations. 
Then, based on lessons learned from the Dress Rehearsal, we would make 
adjustments to those detailed requirements for 2010 Census operations, 
as well as develop the detailed requirements for those operations that 
could not be included in Dress Rehearsal (e.g., enumeration in Puerto 
Rico; enumeration in remote areas).
    The contract was awarded in April 2006--less than one year before 
the first major application was needed for the Dress Rehearsal Address 
Canvassing operation. We knew this was a very aggressive schedule, and 
to mitigate some of this risk, all of the final vendors for the 
contract were required to develop a prototype of the Address Canvassing 
device so that, upon award, they would already have initial development 
underway. However, after contract award, it became clear that the 
contractor's funding needs by fiscal year differed from what the Census 
Bureau had assumed in its lifecycle cost estimate for the contract. In 
particular, the contractor stated they needed more of the overall 
contract funding earlier in the cycle, including fiscal year 2006. 
Because the Congress had already appropriated funds for fiscal year 
2006, and the President had already made his request to the Congress 
for fiscal year 2007, the Census Bureau had limited flexibility to 
address these funding issues directly. In response, the Census Bureau 
reprogrammed some funding to the FDCA contract, and a re-plan was 
developed which, among other things, delayed and extended software 
development into seven increments. Thus, this re-plan added additional 
risk to the overall development plan and strategy, though at the time 
the Census Bureau thought the added risk was manageable.
    Question. Last month, nearly 21 months after awarding the contract 
Census finally provided the contractor with a final set of technical 
requirements. Why did it take so long to finalize the requirements?
    Answer. As mentioned above, at the time of contract award in March 
2006, both the Census Bureau and the contractor were fully aware this 
strategy would mean a tight schedule for requirements development, 
system design, system development, and deployment. The initial 
requirements strategy at that point was to develop remaining 
requirements in a two-step process. First, based on results from the 
2004 and 2006 Census Tests, we would provide detailed Dress Rehearsal 
requirements for our major operations. Then, based on lessons learned 
from the Dress Rehearsal, we would make adjustments to those detailed 
requirements for 2010 Census operations, as well as develop the 
detailed requirements for those operations that could not be included 
in Dress Rehearsal (e.g., enumeration in Puerto Rico; enumeration in 
remote areas).
    We were moving on that path when, in October 2007, we had to de-
scope many paper-based dress rehearsal activities in order to have 
sufficient funds to keep this contract (and our data capture systems 
contract) on schedule in developing critical applications and 
interfaces planned for the Dress Rehearsal. Until that point, we still 
were planning to use our Dress Rehearsal experiences with various 
operations to help finalize detailed requirements for the FDCA 
contractor. However, because most of those operations had to be 
cancelled, in mid-November 2007, the contractor requested, and we 
agreed, to move forward immediately to deliver a final set of all 
detailed requirements. This effort was completed, and we delivered them 
to the contractor on January 16, 2008.

                         HARRIS CONTRACT AWARDS

    Question. I understand that this was a ``cost-plus contract'', as 
such bonuses were awarded based on performance. Harris was awarded two 
bonuses on grades of 91 and 93 for this program.
    What criteria were used to determine that Harris was exceeding 
expectations and deserved these bonuses?
    Answer. No bonuses have been awarded for this contract. The only 
opportunity for the contractor to earn any profit (over and above 
costs) is through the award fee process. For this contract, there are 
four evaluation categories for the award fee determination: Business 
Management; Technical Management; Project Integration; and FDCA/DRIS 
Integration.
    The criteria used in assessing performance are: Quality, 
efficiency, ingenuity, responsiveness, thoroughness, timeliness, 
resourcefulness, accuracy, safety/health/environmental compliance, 
communication, autonomy, and contract management.
    FDCA award fees are determined by an Award Fee Determination Board 
consisting of a Chairperson, eight voting members and three non-voting 
members and an Award Fee Determining Official, in accordance with 
procedures outlined below:
  --1. Government Technical Monitors (TMs) prepare/submit monthly 
        Technical Monitors Reports (TMRs) documenting aspects of 
        Contractor performance.
  --2. Government Principal Technical Monitor (PTM) prepares/submits 
        monthly report summarizing TMRs.
  --3. Together with final monthly TMR in the Award Fee Period (AFP), 
        TMs also prepare/submit a summary report of observations over 
        the entire AFP; the PTM prepares a similar overall summary.
  --4. FDCA Project Management Office (PMO) distributes timetable of 
        activities called for by the FDCA Award Fee Determination Plan 
        and schedules necessary meetings/briefings.
  --5. FDCA PMO distributes TMRs/PTMRs, any Individual Event Reports, 
        and related information to Award Fee Board members.
  --6. Contractor submits (and briefs to the Award Fee Determination 
        Board) its Self-Evaluation Report for the AFP in question.
  --7. Award Fee Determination Board members review documentation 
        referenced in previous steps, and other documentation deemed 
        relevant by individual Board members (e.g., field observation 
        reports).
  --8. Award Fee Determination Board meets to arrive at consensus 
        score.
  --9. FDCA PMO documents Board's findings and conclusions and briefs 
        Award Fee Determining Official.
  --10. Award Fee Determining Official makes final fee determination.
  --11. Government Contracting Officer reviews determination for 
        contract compliance and submits invoice authorization letter to 
        Contractor.
  --12. FDCA PMO debriefs Contractor on final award fee determination.
    Step 4 takes place shortly before the end of a given Award Fee 
Period. Steps 5 through 12 are scheduled so as to conclude no later 
than 60 calendar days after the end of the Award Fee Period.

                       EFFECT OF FDCA ALTERNATIVE

    Question. One of the options being looked at is to de-scope the 
contract and bring work back in-house at Census.
    What other programs will suffer as a result of Census 
reprioritizing staff to work on this program? Will additional 
contractors be needed? If additional contractors are used, aren't we 
back where we started?
    Answer. We do not believe this decision will have any significant 
impact on other programs. We likely will have to hire additional staff 
or contract support personnel to accomplish this work. These 
contractors will be used to supplement and support Census Bureau staff 
leading the work. This will not involve another solutions-based 
contract like FDCA.

                           MANAGEMENT REFORM

    Question. What management reforms have you put in place in order to 
avoid problems from now until the conclusion of the 2010 census?
    Answer. We have a new Acting Associate Director for Decennial 
Census, Arnold Jackson. Other moves are under consideration. We are 
taking a series of steps to strengthen management, including:
  --Instituting a new management approach that will strengthen planning 
        and oversight relative to risk management, issue 
        identification, product testing, communications, and budget/
        cost management.
  --Increasing the intensity and pace of senior management involvement, 
        including daily status assessments and problem resolution 
        sessions chaired by the Associate Director, weekly status 
        assessment meetings with the Director and Deputy Director, 
        periodic but unannounced reviews by MITRE and Department of 
        Commerce specialists in IT, project management, and 
        contracting.
    We also are developing a comprehensive plan that consolidates the 
recommendations from several studies and reviews, including MITRE, GAO, 
our own Blue team, the FDCA Risk Reduction Task Force, and the 
Secretary's expert panel. Some of the action items we are committing to 
are:
  --Comprehensive risk management such that the higher impact risks are 
        known as early as possible and elevated to proper levels for 
        timely resolution.
  --Strengthened leadership in the Decennial Program so that 
        stakeholders, contractors, staff, and management are unified 
        and focused on the issues that drive a successful census.
  --Transitioning from a planning phase of the Decennial cycle to an 
        action-oriented operational phase by shortening decision 
        cycles, cutting internal redtape, and pushing more problem 
        resolution responsibility down to our managers.
  --Adhering to a structured plan of action to see that the things we 
        have not done well do get better as rapidly as we can.
    The FDCA PMO and the Software Assessment Team have agreed to a plan 
to strengthen oversight of the contractor, and the plan is known as our 
``Insight Plan''. The PMO launched implementation of the Insight Plan a 
few weeks ago, and some of the key steps of that plan are:
  --A much closer review of the contractor's software earlier in the 
        development and test cycle.
  --Permanent Census staff at the contractor's Largo facility and staff 
        embedded with the contractor at key points in the development 
        cycle from requirements clarification to product release for 
        final field hands on testing.
  --Improving the contractor's test cases by including more realistic 
        census events and operationally characteristic data.
  --Involving census users of the information collected by the handheld 
        system in the process of review and approval of contractor 
        products before they are final. This will greatly increase 
        stakeholder participation and bring about rapid feedback needed 
        for problem correction.
    Question. After the problems with NPOESS we brought in a person 
with a proven track record to rescue the program and get thing moving 
in the right direction. Who is your General Mashiko for the Handheld 
contract?
    Answer. We recognize the need for better program oversight, program 
integration, and acquisition management. We are in the process of 
finalizing leadership and management improvements that address these 
needs and expect to announce these in the near future.

                     OTHER 2010 DECENNIAL CONTRACTS

    Question. The handheld computer contract is just one of many large 
contracts supporting the reengineering of 2010 operations. Given the 
problems with FDCA have you begun a top to bottom review of these 
programs? What assurances can you give the Subcommittee that there are 
no other problems lurking out there?
    Answer. One of our major, multiyear contracts for the 2010 Census 
recently was completed on time and within budget. Only one minor task 
and contract closeout remain. The Harris Corporation successfully 
completed its tasks in support of this MAF/TIGER Accuracy Improvement 
Program, which now has brought our geographic databases into GPS 
alignment for the entire country.
    For our two other major IT contracts, we are working with the same 
vendors who supplied similar solutions for Census 2000. For the Data 
Response Integration System (DRIS) contract, we selected Lockheed 
Martin, who was the contractor for the Census 2000 data capture system. 
For the Data Access and Dissemination System (DADS) II contract, we 
selected IBM, who also was the contractor for our existing DADS system. 
While previous experience with the same contractors on similar tasks is 
no guarantee of a problem-free process, we are much more confident 
these contracts will be completed on time and within budget.
    Although not an IT contract, we do have some initial concerns about 
the Communications contract and have reduced their initial award fee 
for the first evaluation period. Our primary concern is that their 
initial draft plan was not as fully detailed or analytically robust as 
we required in our statement of work. They can recover this fee 
reduction in the second evaluation period, and we are hopeful their 
performance will improve so that they do so.

          SATELLITE OVERSIGHT DURING ADMINISTRATION TRANSITION

    Question. What management reforms have you instituted within your 
office to ensure adequate oversight of NOAA and its satellite programs 
as we transition into a new Administration?
    Answer. With regards to the GOES-R program, on December 21, 2007, 
the Department delegated Key Decision Point Authority for the GOES-R 
program to the Under Secretary for Oceans and Atmosphere. With that 
delegation, the Department laid out a series of expectations for the 
program:
  --The GOES-R program will adhere to the Department's standard review 
        board processes.
  --NOAA and the GOES-R program will make available all information 
        necessary for budget oversight and legal advice.
  --NOAA and the GOES-R program will provide the Department will all 
        briefings and information packages for all Key Decision Point 
        Reviews and will provide the Chief Financial Officer and 
        Assistant Secretary for Administration quarterly briefings.
  --The Department established cost and schedule thresholds for 
        reporting variances.
    The Department fully expects that these requirements will survive 
the transition into a new administration. In addition, the NOAA Deputy 
Under Secretary, a career NOAA executive, will continue to provide 
senior oversight of NOAA's satellite acquisition programs. The 
Assistant Administrator for Satellite and Information Services and 
Deputy Assistant Administrator for Systems have multiple years of 
experience acquiring satellite systems and will continue to provide 
day-to-day supervision of the System Program Directors of the 
Geostationary Operational Environmental Satellite N Series (GOES-N), 
GOES-R Series, Polar-orbiting Operational Environmental Satellites 
(POES), and the National Polar-orbiting Operational Environmental 
Satellite System (NPOESS) programs.
    NOAA has also established a Program Management Council (PMC) that 
meets monthly to review and provide oversight to the major acquisition 
programs. The PMC will continue its reviews of all NOAA satellite 
acquisition programs during the transition period.

                   VIIRS AND OCEAN COLOR REQUIREMENTS

    Question. The latest problem with NPOESS is its main sensor, know 
as VIIIRS, will not meet all of the requirements for ``ocean color'' in 
time for the NPP launch. However, we have been told that this problem 
will be corrected in time for the first NPOESS launch.
    Answer. This is correct. In 2007, problems were noted during 
testing of the VIIRS instrument that were traced to the Integrated 
Filter Assembly (IFA), which allowed some light to cross into the wrong 
detectors, and caused degraded performance of ocean color sensing.
    The NPOESS Executive Committee (EXCOM) directed the NPOESS 
Integrated Program Office (IPO) to: (1) fly the first sensor on NPP 
with the existing IFA, accepting the existing performance degradation 
for that mission; and (2) resolve the VIIRS IFA problems before flying 
it on NPOESS C1.
    The agreed to path forward is to remanufacture the IFA to achieve 
an acceptable Ocean Color/Chlorophyll (OC/C) capability for NPOESS C1. 
The remanufactured IFA was delivered ahead of the scheduled June 2008 
plan. Performance results are expected from IFA testing this year.
    Question. By placing a VIIRS on NPP with less than 20/20 vision 
will we still get useable science when it comes to ocean color?
    Answer. The expectation for Visible/Infrared Imager/Radiometer 
Suite (VIIRS) on NPP is expected to exceed existing operational earth 
observation capabilities in space. VIIRS is expected to meet 20 of 21 
Environmental Data Records, including the Imagery and Sea Surface 
Temperature Key Performance Parameters (KPP). These data records are 
the main scientific data required of the NPP. Only Ocean Color/
Chlorophyll (OC/C) products and Aerosol will be degraded.
    Although these Ocean Color/Chlorophyll products and Aerosol will be 
degraded from original levels of performance, aerosol measurements will 
still be at specification.
    Question. What assurances can you give us that the ocean color 
problem will be correct on VIIRS in time for the first launch of 
NPOESS?
    Answer. The remanufactured Integrated Filter Assembly (IFA) 
incorporates a different coating technology which is expected to 
significantly reduce the amount of degradation. Testing later this year 
will verify performance against the VIIRS specification requirements.

                            GOES-R CONTRACTS

    Question. Will the contract for GOES-R be a ``firm-fixed price'' or 
a ``cost-plus'' contract?
    Answer. The contracts for the GOES-R Ground and the Flight Segments 
will be Cost Plus Award Fee (CPAF) contracts.
    Question. Will the GOES-R contract include cost overrun penalties 
to ensure contractors don't get away with another boon-doggle?
    Answer. The GOES-R Program will structure the contract management 
mechanisms for the Ground and Flight Segment contracts to ensure 
adequate safeguards to prevent contract overruns.
    For the GOES-R Ground and Flight Segment contracts, overall cost 
performance will be evaluated on how well the total cumulative actual 
costs were controlled as compared to the negotiated baseline estimated 
costs. Per the award fee structure, the contractors should not earn a 
satisfactory rating for cost control when there is a significant cost 
overrun within its control. The Government will consider the reasons 
for any overrun and assess the extent and effectiveness of the 
contractor's efforts to control or mitigate the overrun.

                  GOES-R ``COST-PLUS'' CONTRACT OPTION

    Question. Given all the problems associated with the Department of 
Commerce's other ``cost-plus'' contracts, namely the Handheld computers 
at Census and NOAA's own NPOESS, would it not be a better decision to 
not do a ``cost-plus'' contract?
    Answer. A cost plus type contract is suitable for the GOES-R Ground 
and Flight Segment contracts as there are too many uncertainties 
involved in contract performance that do not permit costs to be 
estimated with sufficient accuracy to use a fixed-price contract. 
Because of the high degree of uncertainty in developing this new 
observing system and the volume of data produced by these new sensors 
that the ground system will have to process, contractor proposals for a 
fixed-price contract would contain an extremely large amount of risk/
contingency funding which would eliminate any degree of potential 
savings with a fixed-price contract. In addition, cost pressure on a 
contractor in such a contract can drive them towards cost cutting 
efforts that threaten mission success. For programs such as these, NOAA 
prefers to maintain risk dollars outside of the contract in order to 
have close government control of cost/schedule and technical trades 
throughout the development cycle.

                       GOES-R TOTAL PROGRAM COST

    Question. If the decision is made to build the 2 option satellites 
then what will the total program cost be?
    Answer. The estimated cost for the additional two satellites is 
estimated between $2.5 and $3 billion above the current $7.672 billion 
cost for the two satellite program. This includes four satellites, 
instruments for each, ground facility support, and operations and 
sustainment (O&S) funding for the lifetime of all four satellites. The 
last satellite (GOES-U) is expected to cease operations in 2036.

               UNITED STATES PATENT AND TRADEMARK OFFICE

    Question. At last year's hearing we talked about my concerns with 
PTO. I appreciate that you took my request for a remediation plan 
seriously. Unfortunately we need to do more. For example the GAO has 
recommended that patent examiner's work production quotas need to be 
revised. Do you agree with this recommendation?
    Answer. In September 2007, the GAO recommended that the USPTO 
undertake a comprehensive evaluation of the assumptions that the agency 
uses to establish its production goals. In September 2004, the Commerce 
OIG also recommended that the USPTO reevaluate current patent examiner 
goals and assess the merits of revising them to reflect efficiencies in 
and changes to work processes resulting from automation and other 
enhancements. I agree that a comprehensive evaluation of the 
assumptions that the agency uses to establish its production goals is 
appropriate.
    Question. Will you charge the PTO to immediately begin a 
comprehensive revision of these work production quotas?
    Answer. I support the USPTO's ongoing efforts to conduct a 
strategic level assessment of its patent examiner production process in 
comparison to best practices similar to other large-scale federal 
agencies and commercial organizations.
    To that end, the USPTO is selecting a contractor with expertise in 
assessing practices in large-scale production environments to conduct 
an independent analysis.
    Another significant component of these ongoing efforts includes 
evaluation of the Flat Goal Pilot Program, initiated by the USPTO in 
April of 2007. The ``Flat Goal'' pilot tests a new concept of how 
patent examiner production is measured.
    Specifically, the 173 patent examiners who volunteered for the one-
year pilot (April 2007-April 2008) are given flexibility in choosing 
when and how to do their work, and may earn larger, quarterly bonuses 
for every application examined above a particular target goal rather 
than earning bonuses on an annual basis.
    Examiners who participate are assigned a production goal at the 
beginning of each quarter rather than tracking their use of examining 
time throughout the quarters of the fiscal year. The results of the 
flat goal pilot may help the USPTO reassess some of the assumptions 
underlying the examiner production goals.
    Question. Since we met last year patent waiting times have 
continued to increase due to the increasing dual challenges of rising 
workloads and more complex challenges. What efforts has PTO made to 
provide continuing education to its examiners so that they can review 
these ever more complex technologies?
    Answer. Effective training and continuing review and education are 
priority issues for the USPTO because the agency recognizes that the 
expertise of its examining corps is the primary factor influencing 
patent quality.
Tech Fairs
    Our Technology Centers (TCs) regularly hold on-campus ``tech 
fairs'' where industry speakers share state-of-the-art information with 
our patent examiners. In April 2008, the USPTO held a Design Day for 
its design examiners (TC 2900), where USPTO specialists shared 
information on the Hague Agreement and its implementation and how 
design patents impact the economy.
    On May 5, the USPTO has planned a Tech Fair for the biotechnology 
area (TC 1600). Dr. John Rossi from Beckman Research Center of City of 
Hope will speak about the state of the art in Dicer-substrates and 
Oligonucleotides and Dr. Kevin D'Amour from Novocell will speak about 
human embryonic stem cells. On May 14 and 15, a Tech Fair is scheduled 
for the semiconductor area (TC 2800). Thomas Gallagher from IBM will 
speak about magnetic random access memory; Santokh Badesha from Xerox 
will give an overview of electrophotography; and Michael Nelson from 
NanoInk will speak about ``Nanotechnology Applications and Micro 
Electromechanical (MEM) Devices.''
    On June 4 and 5, the USPTO has planned a Tech Fair for the 
mechanical area (TCs 3600 and 3700). Dr. Ned Allen from Lockheed Martin 
will speak about the F-35 Joint Strike Fighter; John Boller from Mizuno 
will speak about golf equipment; and William Bachand from Taser 
International will speak about the ``Taser Gun.''
    We are happy to invite you and your staff to participate in any of 
USPTO's tech fairs so you can see for yourself the sort of cross-
pollination training provided for examiners.
Expanded Technical Training Program
    The USPTO has expanded the range of eligible non-duty training 
courses available for examiners to enhance their technical skills and 
abilities. A similar ``After Work Education'' (AWE) program is 
currently being implemented for technical support personnel.
    While the USPTO has provided paid non-duty training in the past to 
patent examiners to enable them to take technical classes, it was 
determined that the previous program was too restrictive. In response 
to an explicit need expressed by the examiners, amendments were made to 
broaden the program to provide examiners with one year of experience at 
the USPTO the opportunity to take classes in arts outside their 
immediate docket. The classes, however, must still be related to a 
recognized technology that is examined at the USPTO.
    This program will assist in developing and maintaining a highly 
skilled workforce by enhancing the employees' knowledge, skills and 
abilities through formal education. Currently, the patent examiner can 
receive up to $5,000 per year, and the agency has proposed to raise 
that opportunity to $10,000 per year.
University-style Training
    USPTO's recently established university-style training program 
leads to new-hire examiners with the ability, skills and confidence to 
work with reduced oversight. The training program consists of classes 
of approximately 130 students, which are broken down further into small 
``labs'' of approximately 16 examiners who will work in a similar area 
of technology. The training program is conducted over a period of 8 
months in a location outside of the Technology Centers.
    The program courses are taught through a combination of large 
lectures and small group sessions within the individual labs. The 
curriculum is kept current by a committee, with representation from 
every Technology Center, that writes and reviews the substance of the 
curriculum.
    Lectures are followed by practical application and testing. The 
results of ongoing testing, administered electronically, indicate to 
examiners how well they grasp a particular topic and provide the 
trainer with information as to whether segments of the topic need 
additional review. Examiners write Office actions that are reviewed and 
evaluated by the trainer who provides appropriate feedback. A 
proficiency test is administered at the end of the 8-month program. The 
intent of the program is to deliver, to the examining corps, new hires 
who are capable of writing complete Office actions for supervisory 
review.
Examiner Certification and Recertification
    The USPTO has implemented a thorough certification process for any 
patent examiner seeking to be promoted from the GS-12 level to the GS-
13 level. This process includes a review of the work product of the 
examiner and a certification exam modeled upon the patent bar exam that 
patent attorneys and agents must pass.
    Examiners are provided with legal education on fundamental concepts 
involving patent laws and procedures to assist them in the preparation 
of taking the certification exam. Patent law and evidence courses, 
coaching lectures and on-line Study Tool for Examination Preparation 
(STEP) are offered to the examiners as training preparation tools.
    An in-depth review of the work of primary examiners is conducted 
after three years to ensure that primary examiners maintain the 
knowledge, skills and abilities necessary to perform high quality 
examinations.
Patent Reviews
    USPTO's Office of Patent Quality Assurance (OPQA) has implemented 
targeted reviews of examination processes or functions that are 
perceived to potentially be problematic trends. These reviews provide a 
means to validate the accuracy and magnitude of the most significant 
examination process complaints, to establish a baseline of current 
performance in the targeted area as well as a basis to establish 
performance targets for improvement plans.
    The reviews are conducted on a sample designed to provide 
statistically valid data and yield an assessment of the current level 
of performance and the supporting review data with respect to the 
identified examination process or function. Based on input on potential 
areas for consideration obtained through customer satisfaction survey 
data and other input from applicants and practitioners, the areas of 
final rejection practice, Request for Continued Examination (RCE) 
practice, search quality and restriction practice were identified for 
review during fiscal year 2007. Fiscal year review findings are 
summarized at the Corps and Tech Center levels and OPQA consults with 
the Technology Centers to develop and/or implement improvement plans, 
as appropriate.
    In October 2006, OPQA instituted an in-depth analysis of the search 
quality in applications selected from specific Art Units within each 
Technology Center in order to positively identify root-cause problems 
related to search quality and to identify and share best practices. Art 
Units subject to review were selected by the Technology Centers on the 
basis of perceived need, taking into account the findings of quality 
assurance programs in place within the Technology Centers and the OPQA.
    Based upon the review findings, training tailored to the specific 
needs and technical subject matter of the individual Art Units is 
developed and delivered to the unit in an interactive format. Training 
is a collaborative effort between OPQA, Technology Center managers and 
search experts from the Scientific and Technical Information Center and 
covers topics including search strategy, claim interpretation, search 
tools and effective search techniques.
    Question. The remediation plan you presented to the Subcommittee 
discussed a number of initiatives devoted to improving retention rates 
of staff. What progress has PTO made in instituting these initiatives 
and when will we begin to see measurable progress in improving 
retention rates of examiners?
    The USPTO has already achieved notable successes in patent examiner 
retention efforts; during fiscal year 2007 our targeted strategies 
focusing on first-year attrition were very successful. First-year 
attrition is the highest attrition year for nearly all businesses and 
has historically averaged 20 percent at the USPTO. In 2007, the USPTO 
reduced the overall first-year attrition rate to 15 percent. Further, 
in some hard-to-hire areas where we targeted recruitment bonuses, the 
first-year attrition rate was cut in half--to 10 percent.
    Additional relevant retention facts include the following:
  --The USPTO's overall, organizational attrition rate (8.5 percent) is 
        lower than the average attrition rate for Federal workers (11.2 
        percent).
  --The average attrition rate for USPTO patent examiners with 0-3 
        years experience is 15.5 percent. The average attrition rate 
        for USPTO patent examiners with 3-30 years experience is 3.95 
        percent.
  --The attrition rate of patent examiners with 0-3 years experience, 
        though measurably higher than the rest of the patent corps, 
        appears to be well below the attrition rate experienced by 
        similarly situated entities hiring more than 1,000 engineers in 
        a year.
  --Examiners with the highest production requirements have the lowest 
        attrition rates, and the examiners with the lowest production 
        requirements have the highest attrition rates. In fact, 70 
        percent of all work in fiscal year 2007 was done by examiners 
        with 3 or more years of experience who exceeded their 
        production goals by an average of 8 percent and had an average 
        attrition rate of 3.95 percent.
  --60 percent of all patent examiners exceeded their production 
        requirements by at least 10 percent in fiscal year 2006.
    Question. PTO's management continually states that examiners are 
leaving for better opportunities, when in fact the GAO's survey 
revealed that 67 percent of examiners who left cited the workload and 
production quotas as their primary reason for leaving. Why is PTO 
management in a state of denial over the reasons examiners are leaving?
    Answer. The GAO's data was based on its survey of current 
employees, and asked these current employees to speculate (from a 
preset list of possible answers) regarding the primary reason they 
would consider leaving were they do leave. Under these parameters, 
those surveyed identified production goals as among the primary reasons 
they would leave the USPTO if they did leave.
    As you can see, the approach used in the GAO survey is not the same 
as asking people who actually chose to leave why they are leaving (or 
have left).
    The USPTO conducts actual exit interviews--as opposed to 
speculative interviews--with employees who do choose to leave. Based on 
the information provided to us by employees who are actually leaving 
the agency, we have enhanced our hiring and recruitment process.
    In 2006, the USPTO started a focused effort on exit interviews, to 
help better determine why employees who actually leave the USPTO decide 
to do so. The exit interviews are voluntary, but the data indicate 
that--even though attrition is relatively low after the first three 
years--room for improvement remains. Senior employees most frequently 
cited personal reasons and management issues when asked for the primary 
reason they were leaving. The USPTO has held off-site management 
conferences for two consecutive years to enhance communication and 
leadership skill sets.
    The GAO report draws attention to issues that are of paramount 
importance and the USPTO recognizes that attrition of patent examiners 
can impair the effectiveness of its hiring efforts. However, we do not 
observe a direct link between production requirements and attrition. 
For example, examiners with the highest production requirements have 
the lowest attrition rates, and the examiners with the lowest 
production requirements have the highest attrition rates. Also, 70 
percent of all work in fiscal year 2007 was done by examiners with 3 or 
more years of experience who exceeded their production goals by an 
average of 8 percent and had an average attrition rate of 3.95 percent.

                          ECONOMIC DEVELOPMENT

    Question. What data did you use to determine that $8.7 million 
would meet the nation's needs for rural economic development?
    Answer. From 2001-2007, EDA invested approximately $1 billion or 62 
percent of its total investments in rural communities. Although EDA 
does not have a program specifically targeted for rural communities, 
rural areas typically receive 50 percent or more of the agency's total 
investments annually. We do not anticipate a substantial change in 
fiscal year 2009.
    Question. Given the proposed cut to public works grants it would 
seem logical that there should be a corresponding cut to EDA's salaries 
and expense account. Why were salaries not cut or is this just an 
indication that this request should not be taken seriously?
    Answer. The increase in the Salaries and Expenses (S&E) account is 
necessary for EDA to maintain its full staffing level of 170 full time 
equivalents (FTE). EDA's staff performs multiple duties across its 
programs, not just evaluating and processing new grants. Therefore, 
maintaining EDA's current staff level is necessary to provide 
assistance to communities and maintain current programmatic functions.
    Since 2001, EDA's S&E account has remained virtually flat. 
Meanwhile, EDA's non-personnel operating costs--many of which, like 
computer security expenses, are inflexible--have increased by 45 
percent. EDA also faces annual personnel cost increases in its efforts 
to maintain an effective workforce. The lack of necessary funding 
increases in the S&E account to offset increases in non-personnel 
operating costs, has represented an effective $1.5 million annual cut 
in EDA's operating budget. Without the increase in S&E proposed in the 
fiscal year 2009 request, EDA may have to reduce staff.
    While EDA programs are flexible and scalable--we can ``ramp up'' 
operations, as well as ``ramp down'' based on available funds--the 
agency nonetheless needs an appropriate level of funding to maintain 
its existing organizational structure as directed by Congress.
    Question. Your testimony states that the proposed reduction for 
economic development assistance is done in order to support other 
priorities. What are those other priorities?
    Answer. In a difficult budget environment, the Administration has 
made tough choices to rein in spending to eventually balance the 
budget. Areas such as homeland security and the 2010 Decennial Census 
exhibit pressing needs that necessitate these difficult choices.

                   ELIMINATION OF MEP FEDERAL FUNDING

    Question. The Administration again proposes devastating cuts to the 
one federal program specifically designed to assists manufacturers.
    Can you explain the rationale for the cut to the MEP?
    Answer. Elimination of federal funds to MEP centers could be 
compensated through a combination of increased fees derived from the 
benefits accrued by individual companies and cost-savings in the 
operations of the centers. This would move the centers to a self-
sustaining basis. The fiscal year 2009 President's budget request 
focuses on NIST's core measurement science and standards activities in 
our laboratories that impact entire industries or entire sectors of the 
economy--and where Federal dollars can make the biggest impact on 
innovation and competitiveness. The focus of the fiscal year 2009 
budget supports this principle by increasing NIST Core activities, 
which increases by $115 million (+22 percent) over fiscal year 2008.
    Question. Your testimony states that the request ``includes $4 
million to transition the center to a self supporting basis''.
    Since this is a partnership with the states have you engaged MEP 
state partners on this decision?
    Answer. NIST shared the fiscal year 2009 President's budget for MEP 
with all MEP centers.
    Question. Can you share the analysis that went into the 
determination that the network will survive without federal cost share?
    Answer. With sufficient support from local resources along with 
increased fees from the manufacturing customers, the centers could 
remain operational.

                           DIGITAL TRANSITION

    Question. I have received constituent letters requesting 
information about the coupon program. The letters indicate confusion 
among average citizens regarding the transition to digital and where to 
request a coupon for a converter box.
    What is Commerce doing to educate consumers? With a limited budget 
for education and outreach what efforts are you undertaking to leverage 
your efforts? Should we provide additional funding in the supplemental 
to enhance education and outreach efforts?
    Answer. NTIA's consumer education campaign--coupled with the over 
$1 billion commitment from industry--is working. According to a recent 
survey by the Consumer Electronics Association, public awareness of the 
DTV transition grew 80 percent between August 2006 and January 2008, 
from 41 percent to 74 percent. Given consumer education activities have 
intensified since the beginning of 2008, we would expect consumer 
awareness to continue to increase. In addition, robust demand for 
converter box coupons, including demand from over-the-air reliant 
households, is a strong indication that consumers are learning about 
their options and taking the necessary action to ensure their TV sets 
continue to operate after the digital transition.
    Members of the industries most directly affected by the 
transition--television broadcasters, cable system operators, and 
consumer electronics retailers--are investing heavily to ensure that 
their viewers, subscribers and customers are made aware of the 
transition. Their efforts, targeted at the general population, have 
been very successful in raising consumer awareness and have enabled 
NTIA to focus its resources, funding, and activities on reaching 
particular groups that are likely to rely more heavily on over-the-air 
television than others. These include seniors, minorities, rural 
residents, people with disabilities, and economically disadvantaged 
households.
    NTIA's strategy for its consumer education campaign is simple and 
straightforward: use earned media and leverage trusted partners that 
possess pre-existing relationships with members of our target groups to 
deliver tailored messages about the transition and the Coupon Program. 
NTIA has instituted a proactive campaign to educate consumers about the 
role of the Coupon Program in the DTV transition, leveraging 
relationships with consumer groups, community organizations, federal 
agencies, and members of affected industries to inform consumers of 
their options. NTIA is collaborating with more than 200 partner 
organizations, including social service and community organizations 
with ties to seniors, rural residents, minorities, and disabled 
communities, as well as a variety of federal agencies that communicate 
directly with these constituent groups. As of March 31, 2008, broadcast 
and print coverage of the Coupon Program has reached over 200 million 
media. This is coupled with the National Association of Broadcasters' 
campaign which aims to generate 30 billion audience impressions of the 
broader digital television transition before February 17, 2009.
    Additionally, the Federal Communications Commission has received 
$2.5 million in fiscal year 2008 and requested an additional $20 
million for fiscal year 2009 specifically for consumer education about 
the DTV transition. Based upon multiple surveys that reveal a steep 
increase in consumer awareness about the transition and the sheer 
number of households that have ordered coupons to date (as of April 25, 
2008, 6.2 million households have ordered 11.9 million coupons), these 
combined consumer education efforts are working. NTIA is confident that 
these public and private sector investments in DTV consumer education 
will be sufficient to educate all consumers about the DTV transition 
and the TV Converter Box Coupon Program.
                                 ______
                                 
            Questions Submitted by Senator Richard C. Shelby

                  2010 DECENNIAL EFFECTIVENESS RATING

    Question. I have serious concerns about how the Administration and 
the Department have been monitoring the progress of the 2010 Census. 
The Performance and Accountability Report for the Department submitted 
November 15, 2007, gave the Decennial Census a moderately effective 
score of 83 percent. It also says that the Census Bureau is ensuring 
oversight of critical information technology services.
    Given where we are today, Mr. Secretary, would you rate the Census 
Bureau's management of the Decennial Census as moderately effective?
    Answer. Both Secretary Gutierrez and Dr. Murdock have testified 
that the Census Bureau's failure to effectively communicate its 
expectations to the contractor has been a major contributor to the 
current situation.
    Given these concerns, both the Census Bureau and the Department of 
Commerce have made substantial management changes to address the 
challenges facing the 2010 Census. We are working to ensure that there 
is clear accountability and that we have set specific leadership 
expectations. This includes better integration between Census and 
Harris personnel; rapid decisionmaking; real-time problem solving; and 
improved transparency, oversight, and communication.
    We are taking this very seriously and hope these changes and others 
reflect our concern and ultimately our resolve to better serve the 
American people. Secretary Gutierrez is personally engaged in this 
matter and will continue to devote time to this issue until he can be 
assured that we have established a sustainable and achievable path 
forward to a successful 2010 Census.

                           MANAGEMENT REFORM

    Question. What are you doing to ensure that the Census Bureau has 
leadership capable of solving the problems with field automation and 
conducting a successful 2010 census?
    Answer. We have a new Acting Associate Director for Decennial 
Census, Arnold Jackson. Other moves are under consideration. We are 
taking a series of steps to strengthen management, including:
  --Instituting a new management approach that will strengthen planning 
        and oversight relative to risk management, issue 
        identification, product testing, communications, and budget/
        cost management.
  --Increasing the intensity and pace of senior management involvement, 
        including daily status assessments and problem resolution 
        sessions chaired by the Associate Director, weekly status 
        assessment meetings with the Director and Deputy Director, 
        periodic but unscheduled reviews by MITRE and Department of 
        Commerce specialists in IT, project management, and 
        contracting.
    We also are developing a comprehensive plan that consolidates the 
recommendations from several studies and reviews, including MITRE, GAO, 
our own Blue team, the Barron Task Force, and the Secretary's expert 
panel. Some of the action items we are committing to are:
  --Comprehensive risk management such that the higher impact risks are 
        known as early as possible and elevated to proper levels for 
        timely resolution.
  --Strengthened leadership in the Decennial Census Program so that 
        stakeholders, contractors, staff, and management are unified 
        and focused on the issues that drive a successful census.
  --Transitioning from a planning phase of the Decennial cycle to an 
        action-oriented operational phase by shortening decision 
        cycles, cutting internal redtape, and pushing more problem 
        resolution responsibility down to our managers.
  --Adhering to a structured plan of action to see that the things we 
        have not done well do get better as rapidly as we can.
    The FDCA PMO and the Software Assessment Team have agreed to a plan 
to strengthen oversight of the contractor, and the plan is known as our 
``Insight Plan''. The PMO launched implementation of the Insight Plan a 
few weeks ago, and some of the key steps of that plan are:
  --A much closer review of the contractor's software earlier in the 
        development and test cycle.
  --Permanent Census staff at the contractor's Largo facility and staff 
        embedded with the contractor at key points in the development 
        cycle from requirements clarification to product release for 
        final field hands on testing.
  --Improving the contractor's test cases by including more realistic 
        census events and operationally characteristic data.
  --Involving census users of the information collected by the handheld 
        system in the process of review and approval of contractor 
        products before they are final. This will greatly increase 
        stakeholder participation and bring about rapid feedback needed 
        for problem correction.

                         MITRE REVIEW JUNE 2007

    Question. In June of last year, MITRE produced a report 
recommending that Census immediately stabilize the requirements for 
data management and to co-locate Census and contractor staff. This 
report is in stark contrast to the information senior Census officials 
provided in December when they reported that this procurement was 
moving forward as expected. These same Census officials then submitted 
over 400 changes to the contractor less than a month after assuring 
this Committee that they had this procurement under control.
    Do you believe the Census now understands the requirements 
necessary to acquire the handhelds that they contracted for in 2006?
    Answer. Although we have decided to drop plans for using the 
handheld computers for nonresponse follow-up in 2010, we still will use 
them for the Address Canvassing operation that will begin one year from 
now in May 2009. We tested the use of the contractor's Address 
Canvassing solution last year, and while we experienced some problems, 
we believe the contractor now has a full set of final detailed 
requirements in place to ensure success for this operation next year. 
We continue to work with the contractor regarding new or revised 
requirements resulting from the shift to paper-based NRFU, and the 
other contract scope changes that were part of the recent decision 
announced by Secretary Gutierrez.
    At the time of contract award in March 2006, both the Census Bureau 
and the contractor were fully aware this strategy would mean a tight 
schedule for requirements development, system design, system 
development, and deployment. The initial requirements strategy at that 
point was to develop remaining requirements in a two-step process. 
First, based on results from the 2004 and 2006 Census Tests, we would 
provide detailed Dress Rehearsal requirements for our major operations. 
Then, based on lessons learned from the Dress Rehearsal, we would make 
adjustments to those detailed requirements for 2010 Census operations, 
as well as develop the detailed requirements for those operations that 
could not be included in Dress Rehearsal (e.g., enumeration in Puerto 
Rico; enumeration in remote areas).
    We were moving on that path when, in October 2007, we had to de-
scope many paper-based dress rehearsal activities in order to have 
sufficient funds to keep this contract (and our data capture systems 
contract) on schedule in developing critical applications and 
interfaces planned for the Dress Rehearsal. Until that point, we still 
were planning to use our Dress Rehearsal experiences with various 
operations to help finalize detailed requirements for the FDCA 
contractor. However, because most of those operations had to be 
cancelled, in mid-November 2007, the contractor requested, and we 
agreed, to move forward immediately to deliver a final set of all 
detailed requirements. This effort was completed, and we delivered them 
to the contractor on January 16, 2008. It was not until the contractor 
delivered their cost estimate (to complete all these requirements) at 
the end of January that the full scope of our problem came into focus.
    Question. Mr. Secretary, can you provide this Committee, in 
writing, a timeline that shows on which dates actions were taken by the 
Census to address the issues identified in the June MITRE report?
    Answer. After reviewing the June 2007 MITRE report the Census 
Bureau:
  --Established a temporary FDCA requirements ``SWAT Team'' to 
        streamline, integrate and finalize all Dress Rehearsal 
        requirements for FDCA, including better integration of the 
        contractor's and Census Bureau's schedules.
  --Expanded the FDCA Strategy Group to include all division chiefs 
        critical to the FDCA program. This group began meeting on a 
        weekly basis to discuss and resolve FDCA issues and establish 
        priorities.
  --With MITRE's assistance, redefined the process for finalizing 2010 
        requirements to ensure a more structured, systematic, and 
        integrated approach.
  --Clarified roles between the FDCA Project Management Office 
        (responsible for contract management) and the Decennial 
        Management Division (responsible for managing the entire 2010 
        Census program).
  --Redefined the FDCA contract Change Management Process with the goal 
        of ensuring additional control of requirements changes.
  --Established monthly Executive Management meetings in addition to 
        the monthly Program Management Reviews. These meetings 
        consisted of executives and key managers from both the FDCA 
        contractor and the Census Bureau to discuss and resolve 
        critical issues.
  --With MITRE's assistance, redefined and began implementation of a 
        more structured Risk Management Process.
    In late November 2007, the Deputy Director of the Census Bureau 
initiated a comprehensive assessment to determine the status of the 
program and to better understand any issues or concerns as the program 
approached key 2010 Census milestones. This assessment included a 
series of wide-ranging meetings with Census Bureau staff directly 
involved in the FDCA program. The Deputy Director also met with Harris 
Corporation, the company developing the FDCA system, and MITRE 
Corporation, an information technology firm under contract with the 
Census Bureau. MITRE's role was to provide an internal, independent 
assessment of the information technology systems in the decennial 
programs and also IT systems in the Census Bureau. The Census Bureau 
also established an Integrated Project Team (IPT) made up of key, high 
ranking 2010 Census managers. The IPT was tasked with producing the 
final set of FDCA program requirements by mid-January 2008.
    This effort was completed, and the requirements delivered on 
January 16, 2008. At the end of January, the contractor provided 
feedback on these requirements, including their initial, high-level 
estimate of the additional costs that would be needed to meet all of 
the 2010 Census requirements.
    At this point, the full scope of our problem came into focus. New 
Census Bureau Director Steve Murdock then established a FDCA Task 
Force, chaired by former Deputy Director William Barron, and made up of 
some of the Census Bureau's and the Department's senior technical and 
management officials, as well as representatives from MITRE, to help 
develop a strategy to address these problems. The Task Force outlined 
four options for moving forward. All of these options called for using 
the handheld computers for Address Canvassing, and all but one (the 
baseline) assumed we would revert to a paper-based NRFU operation. For 
the other major components of FDCA, each of the options considered a 
combination of responsibilities between the contractor and the Census 
Bureau in terms of capabilities, expertise, staffing, timing, and 
costs.
    The work of the task force was then turned over to the Expert Panel 
established by the Secretary and made up of two former Census Bureau 
Directors, a former Associate Director of the Census Bureau, two 
information technology experts, and a former Member of Congress. After 
deliberating with this panel, the Secretary recommended the plan that 
he described in his testimony.
    As to management steps now being taken, we have a new acting 
Associate Director for Decennial Census, Arnold Jackson. Other moves 
are under consideration. We are taking a series of steps to strengthen 
management, including:
  --Instituting a new management approach that will strengthen planning 
        and oversight relative to risk management, issue 
        identification, product testing, communications, and budget/
        cost management.
  --Increasing the intensity and pace of senior management involvement, 
        including daily status assessments and problem resolution 
        sessions chaired by the Associate Director, weekly status 
        assessment meetings with the Director and Deputy Director, 
        periodic but unscheduled reviews by MITRE and Department of 
        Commerce specialists in IT, project management, and 
        contracting.
    We also are developing a comprehensive plan that consolidates the 
recommendations from several studies and reviews, including MITRE, GAO, 
an internal expert software assessment team, the Barron Task Force, and 
the Secretary's expert panel. Some of the action items we are 
committing to are:
  --Comprehensive risk management such that the higher impact risks are 
        known as early as possible and elevated to proper levels for 
        timely resolution.
  --Strengthened leadership in the Decennial Program so that 
        stakeholders, contractors, staff, and management are unified 
        and focused on the issues that drive a successful census.
  --Transitioning from a planning phase of the Decennial cycle to an 
        action-oriented operational phase by shortening decision 
        cycles, cutting internal redtape, and pushing more problem 
        resolution responsibility down to our managers.
  --Adhering to a structured plan of action to see that the things we 
        have not done well do get better as rapidly as we can.
    These management activities are described in our ``Program 
Management Plan'' to be finalized in early May.
    The FDCA PMO and the Software Assessment Team have agreed to a plan 
to strengthen oversight of the contractor, and the plan is known as our 
``Insight Plan''. The PMO launched implementation of the Insight Plan a 
few weeks ago, and some of the key steps of that plan are:
  --A much closer review of the contractor's software earlier in the 
        development and test cycle.
  --Permanent Census staff at the contractor's Largo facility and staff 
        embedded with the contractor at key points in the development 
        cycle from requirements clarification to product release for 
        final field hands on testing.
  --Improving the contractor's test cases by including more realistic 
        census events and operationally characteristic data.
  --Involving census users of the information collected by the handheld 
        system in the process of review and approval of contractor 
        products before they are final. This will greatly increase 
        stakeholder participation and bring about rapid feedback needed 
        for problem correction.

                            USE OF HANDHELDS

    Question. The primary innovation that was going to create 
significant savings and efficiencies for the 2010 Census revolves 
around the handheld computers and moving away from a paper based 
system. I would like to know what your plans are for dealing with the 
problems of the handheld computers and getting the 2010 census back on 
track.
    Will the handhelds still be used? When is the latest date you can 
make this decision?
    Answer. On April 3, 2008, Secretary Gutierrez testified before the 
House Appropriations Subcommittee on Commerce, Justice, Science, and 
Related Agencies that he had decided to discontinue plans for using 
handheld computers for the 2010 Census nonresponse follow-up operation, 
and revert to the paper-based approach used in previous censuses. He 
also testified that we still plan to use these devices to conduct the 
nationwide Address Canvassing operation next year.
    Question. When will the Department determine if the handheld 
computers will be used for any portion of the 2010 Census?
    Answer. Please see previous response.

                      PAPER NON-RESPONSE FOLLOW UP

    Question. Will the Census have to go back to paper for non-response 
follow up? When will this decision have to be made?
    Answer. On April 3, 2008, Secretary Gutierrez testified before the 
House Appropriations Subcommittee on Commerce, Justice, Science, and 
Related Agencies that he had decided to discontinue plans for using 
handheld computers for the 2010 Census nonresponse follow up operation, 
and revert to the paper-based approach used in previous censuses.

                      ADDITIONAL COSTS FOR CENSUS

    Question. This Committee has been supportive of the Bureau of the 
Census and its plans for the 2010 Census. However, it is obvious that 
more funds than anticipated will be required to conduct what is 
currently the most expensive census in our nation's history. GAO has 
estimated that the increase will be between $600 million and $1.2 
billion. Can we anticipate a supplemental request from the Department 
for fiscal year 2008 to accommodate the difficult position the Census 
finds itself in today?
    Answer. No, the Department will not be submitting a supplemental 
request to cover the funding shortfall in fiscal year 2008 related to 
the 210 Census. The Administration believes that the fiscally 
responsible action to address this difficult position is to work within 
existing resources at the Department. To that end, I have proposed 
transfers from other Commerce bureaus to provide the necessary 
resources for the Census Bureau. While this was a difficult decision, I 
believe that avoiding mission failure of a constitutionally-mandated 
operation at the Census Bureau warranted lesser impacts among our other 
bureaus.
    Question. Will there be a need for a budget amendment for fiscal 
year 2009 for the 2010 Census?
    Answer. Yes, addressing the issues within the 2010 Census will 
require a budget amendment for fiscal year 2009, as funding 
requirements for that year have grown beyond the requested level in the 
fiscal year 2009 President's budget submission.

                          NPOESS--VIIRS ISSUES

    Question. Last year we discussed the failures of the National 
Polar-orbiting Operational Environmental Satellite System (NPOESS) 
which was scrutinized for its mismanagement and lack of oversight. 
Since that time NPOESS was restructured, but problems have occurred on 
a critical instrument the Visible Infrared Imager (VIIRS).
    Can you elaborate more on the problems that exist?
    Answer. The NPOESS Executive Committee, working with the NPOESS 
Program Executive Officer, has implemented a number of steps to address 
the management of the program. The key NPOESS sensors are currently in 
ambient testing, when several test anomalies are expected to be 
uncovered and addressed.
    One of the anomalies uncovered is the likelihood of performance 
degradation to ocean color/chlorophyll and aerosol measurements on the 
first VIIRS instrument due to issues with the Integrated Filter 
Assembly (IFA). Using the current IFA, aerosol will be degraded from 
original levels of performance measurements but will still be at 
requirement specification, so ocean color will be the only measurement 
greatly impacted. Because of this limited degradation of capabilities 
and the risk reduction nature of the NPP mission, the NPOESS Executive 
Committee (EXCOM) directed the NPOESS Integrated Program Office (IPO) 
to: Fly the first sensor on NPP with the existing IFA, accepting the 
existing performance degradation for that mission; and resolve VIIRS 
IFA problems before flying it on NPOESS C1.

                           NPOESS LAUNCH DATE

    Question. What is your degree of confidence that the first NPOESS 
launch date will be met and if your confidence is high, why?
    Answer. There is a high degree of confidence that the NPOESS 2013 
launch date will be met. The confidence is derived from program metrics 
which at this time show all program segments remain on schedule.

                   NPOESS--VIIRS CONTINGENCY PLANNING

    Question. What are the contingencies if VIIRS continues to have 
problems?
    Answer. The Integrated Program Office (IPO) has developed a plan, 
with the prime contractor, which established an achievable delivery 
schedule in advance of the April 2009 commitment with margin to that 
date. The IPO monitors that margin daily. In addition, the PEO holds 
bi-weekly executive reviews of the Visible/Infrared Imager/Radiometer 
Suite (VIIRS) status with the contractors and government leadership to 
ensure appropriate focus is placed on this critical sensor program. We 
believe these steps will allow the IPO to contend with future issues 
regarding VIIRS.

              NPOESS--CROSS TRACK INFRARED SOUNDER ISSUES

    Question. What is the status of the other critical instrument, the 
Cross Track Infrared Sounder, that was having problems?
    Answer. Following the frame failure in 2006, the frame was 
redesigned and all Cross-track Infrared Sensor (CrIS) components were 
inspected and fixed, as needed. The CrIS unit has passed its vibration 
testing and is in its final thermal vacuum tests. At this time, the 
instrument is expected to be delivered in mid-June 2008, well in 
advance of its August 2008 need date for spacecraft integration.

                    NPOESS--COST AND SCHEDULE GOALS

    Question. Can we reasonably expect the program to stay within the 
new cost and schedule goals?
    Answer. Although the NPOESS program is undertaking the most complex 
operational environmental satellite system ever built by the United 
States; the program expects to deliver within its restructured budget 
and schedule goals. The cost estimate provided at the time of the June 
2006 Nunn-McCurdy certification used to establish the restructured 
budget reflected the results of an intense independent review of the 
Program's technical requirements and associated costs. The Integrated 
Program Office (IPO) has based the restructured NPOESS program budget 
and contract on the independent cost estimate developed by the 
Department of Defense Cost Analysis Improvement Group (CAIG). The CAIG 
estimate takes into account the technical, schedule, and cost risk 
remaining on the program to ensure adequate resources are available to 
fully respond to the ``unknown unknowns'' that are continuous 
challenges to any major development.

                       NOAA IN THE GULF OF MEXICO

    Question. Although NOAA's 2009 budget request boasts a $213 million 
increase, it yet again continues to short-change the Gulf of Mexico. I 
am disappointed that NOAA has continually underfunded weather 
infrastructure, research, and fish and habitat growth in the Southeast. 
The Gulf Coast has severe weather events, we have fishing disasters, we 
have underutilized research capabilities just like everyone else, yet I 
see no money in this budget to help the people of the Gulf receive any 
improvement in the dedication of services from NOAA.
    What will it take for NOAA to make the Gulf of Mexico and the 
southeast a priority?
    Answer. NOAA has a diverse mission ranging from managing fisheries 
to predicting severe weather. The Administration's request provides for 
a balanced set of priorities that sustains core mission services while 
also addressing our highest priority program needs. As part of that 
mission, NOAA's fiscal year 2009 budget request continues to fund many 
ongoing efforts in the Gulf of Mexico and southeast region. For 
example, the request includes $74.2 million in support of fisheries 
research and management, habitat conservation and restoration, and 
fisheries enforcement; $5 million to support the Gulf of Mexico 
Alliance for increased regional collaboration to enhance the 
environmental and economic health of the Gulf of Mexico; and $7.4 
million for continued operations of the three National Marine 
Sanctuaries in the region. In addition, the fiscal year 2009 request 
includes $19.5 million in new increases across NOAA for hurricane 
modeling improvements, research, and operations, which contributes to 
NOAA's overall spending of over $300 million a year for hurricane 
warning and forecast efforts throughout the southeast.

                WEATHER INFRASTRUCTURE IN THE SOUTHEAST

    Question. When will the Southeast receive state of the art NEXRAD 
radars and Advanced Weather Interactive Systems that are in other parts 
of the country?
    Answer. NEXRAD radars were installed at the Weather Forecast 
Offices (WFO) in the Southeast United States during the mid-1990s. As 
with the rest of the United States, the NEXRAD radars in the Southeast 
are all part of the same service configuration; they all go through the 
same technology refreshes every several years. Since 1996, AWIPS has 
been utilized not only in the Southeast but at all of the WFOs across 
the United States. As with the NEXRAD program, all AWIPS are part of 
the same service configuration and are on the same technology refresh 
cycle. NWS appreciates the support it has received from members of 
Congress with these programs and because of this support we have been 
able to keep these programs state of the art.

                     FREE TRADE AND SHRIMP IMPORTS

    Question. Recently, the Administration has called for expanding 
free trade agreements with Latin America, particularly with Colombia 
and Panama. In fact, last week you led a delegation to Colombia to 
discuss a U.S.-Colombia Trade Promotion Agreement. The expanded 
agreements would eliminate tariffs on American exports and provide 
duty-free access for American agricultural commodities. However, many 
people along the Gulf Coast are still concerned about Latin America's 
agricultural exports, particularly that of farmed shrimp. Shrimp 
imports from Latin American countries continue to rise despite 
confirmed antidumping activities that your Department investigated.
    Has your department examined Colombia and Panama's shrimp export 
activities prior to these recent trade discussions, and if so what were 
your findings?
    What protections are in place for the U.S. industry?
    Answer. The Office of the United States Trade Representative 
reports no shrimp-related trade issues with Panama or Colombia--not 
before, during, or after the FTA negotiations with these countries. In 
2007, Colombia exported shrimp (of various product types) to the United 
States at a value of $12.9 million. During the same year, Panama 
exported shrimp (of various product types) to the United States at a 
value of $36.7 million.
    Brazil and Ecuador are the countries in Latin America in which the 
Department issued antidumping (AD) orders on frozen warmwater shrimp 
imports to the United States. In order to comply with the WTO panel 
decision regarding the Department's ``zeroing'' methodology, the AD 
order on frozen warmwater shrimp imports from Ecuador was revoked on 
August 15, 2007. According to U.S. import data, Brazil did not export 
any warmwater shrimp in 2007 that would be subject to the AD order. We 
reviewed the harmonized tariff code and found that no tariffs or quotas 
exist for shrimp imported from Colombia or Panama except for food 
preparations that include shrimp as an ingredient. As a result, the 
Free Trade Agreement extension to Colombia or Panama would have no 
visible effect on the U.S. Gulf of Mexico shrimp fishery.

          INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS

    Question. The Internet Corporation for Assigned Names and Numbers, 
``ICANN'', is responsible for making policy concerning the Internet's 
global address system. While I support the idea of the Internet being 
managed by a non-government entity, I have become aware that ICANN has 
been pushing very hard to sever its ties completely from the 
Department. I have also heard from industry officials who have raised 
concerns that while ICANN makes decisions that have the potential to 
affect billions of dollars in commercial transactions, the organization 
lacks an effective mechanism for redress by companies affected by those 
decisions.
    Do you think it is wise to allow ICANN to sever all of its ties to 
the Department?
    Answer. The Joint Project Agreement (JPA) between the Department of 
Commerce and ICANN will not be terminated before its September 2009 
expiration as was suggested in ICANN's submission to the Notice of 
Inquiry (NOI) issued by the National Telecommunications and Information 
Administration (NTIA). The JPA required the Department of Commerce to 
conduct a mid-term review of progress achieved on each ICANN activity 
and responsibility contained in the JPA. NTIA, on behalf of the 
Department, conducted this mid-term review which included a 
solicitation of public comments through the NOI and a public meeting. 
NTIA received 171 comments, the majority of which did not support early 
termination of the JPA. All comments to NTIA's NOI can be found at the 
following link: http://www.ntia.doc.gov/ntiahome/domainname/
jpamidtermreview.html.
    Question. Do you think ICANN is a mature enough organization to 
handle this enormous responsibility on its own?
    Answer. On April 2, 2008, NTIA issued a statement on the mid-term 
review summarizing that the record demonstrates general consensus that: 
(1) ICANN is the appropriate technical coordinator of the domain name 
and addressing system (DNS) and has made significant progress in 
several key areas; and (2) important work remains to increase 
institutional confidence through implementing effective processes that 
will enable long-term stability, accountability, responsiveness, 
continued private sector leadership, stakeholder participation, 
increased contract compliance, and enhanced competition.
    As previously stated in the ``U.S. Principles on the Internet's 
Domain Name and Addressing System,'' the Department of Commerce remains 
committed to taking no action that would have the potential to 
adversely impact the effective and efficient operation of the DNS.
    NTIA's statement on the JPA can be found at the following link: 
http://www.ntia.doc.gov/ntiahome/domainname/ICANN_JPA_080402.pdf.
    Question. Do you think it would be wise to release ICANN from its 
contractual obligations before redress mechanisms are in place?
    Answer. As noted above, important work remains for ICANN in order 
to increase institutional confidence through implementing effective 
processes that will enable long-term stability, accountability, 
responsiveness, continued private sector leadership, stakeholder 
participation, increased contract compliance, and enhanced competition. 
The Department of Commerce strongly encourages all stakeholders to work 
with ICANN to address these issues and others that may be of concern, 
including redress mechanisms.

                            GOES-R OVERSIGHT

    Question. Not only are there serious issues with NPOESS, there are 
serious failures of the Geostationary Operational Environmental 
Satellites Program (GOES-R). While this program has been restructured 
and finally seems to have some management controls in place, I am 
disappointed with the revised program plan. When I compare the new 
goals with the program's original prospects, I see that the plan has 
lost 2 of the 4 planned satellites, has added 2 years to the 
development cycle, and has a cost increase of $800 million.
    Answer. There have been no identified failures with respect to the 
GOES-R program. GOES-R has recently completed Program Definition and 
Risk Reduction (PDRR), a phase where requirements are traded against 
design concepts, cost and schedule in order to formulate appropriate 
scope, cost and schedule prior to major procurements.
    At completion of the program's work, independent reviews of cost 
estimates, program business organization and technical structures were 
performed successfully. Only at the completion of program work and 
independent validation does NOAA consider a program ready for initial 
baseline which occurs at Key Decision Point (KDP). The GOES-R Program 
passed KDP in January 2008 when the Secretary of Commerce delegated the 
authority to proceed to the Under Secretary of Commerce for Oceans and 
Atmosphere.
    Satellite acquisitions cannot be accurately baselined until after 
the developing contractor is formally onboard. NOAA uses the 
Preliminary Design Review (PDR) as the formal milestone since it 
contains all necessary factors to accurately establish a cost and 
schedule baseline.
    Question. How are responsibilities for this program divided between 
NOAA and the Department?
    Answer. The Department of Commerce retains ultimate authority for 
the GOES-R program. On December 21, 2007, the Department delegated 
Milestone Decision Authority for GOES-R to the Under Secretary for 
Oceans and Atmosphere (the NOAA Administrator). With this delegation, 
however, the Department set forth a number of requirements that ensures 
its ability to conduct appropriate oversight of the program. The 
Department has responsibility and approval authority over the ground 
segment acquisition strategy and complete authority over the budget 
through the annual budget formulation process. The Program also reports 
ongoing progress on a quarterly basis to the Department of Commerce 
Assistant Secretary for Administration/Chief Financial Officer. The 
Program has also begun providing the Deputy Secretary a bi-weekly 
status. There is also a Department of Commerce Attorney on site at the 
GOES-R Program Office as the Program Legal Counsel. NOAA's Program 
Management Council (PMC) is NOAA's primary oversight body for the GOES-
R program. At monthly program reviews, the program provides an update 
of its status and provides detailed explanations of technical and 
budget issues and risks. The Department also has insight into the PMC 
activities and routinely sends representatives to observe PMC meetings. 
The PMC is chaired by the Deputy Under Secretary for Oceans and 
Atmosphere.

                       GOES-R KEY DECISION POINT

    Question. How did you ensure that the recent GOES-R Key Decision 
Point to proceed was based on complete and accurate information?
    Answer. A number of independent bodies reviewed the program before 
the Key Decision Point (KDP) decision was made. An Independent Review 
Team (IRT) of senior satellite acquisition experts (with over 250 years 
of combined satellite acquisition experience) reviewed the program 
starting in 2006. The IRT's November 2007 assessment determined the 
program, with its contracts divided into flight and ground segments, 
was technically and programmatically ready to proceed into the next 
acquisition phase. An Independent Cost Estimate (ICE) review was deemed 
sufficiently close to the Program Office Estimate to validate the 
probable cost of the program. These were independent bodies. Within the 
Department of Commerce and NOAA, numerous reviews were conducted 
leading up to the KDP decision and all decision makers were satisfied 
that the program had provided complete and accurate information and 
that the program was indeed ready to proceed.

                     GOES-R COST AND SCHEDULE GOALS

    Question. Can we reasonably expect the program to stay within the 
cost and schedule goals identified in the President's fiscal year 2009 
budget request?
    Answer. For a two satellite program, we are confident the program 
can be executed within the requested funding and schedule profile, 
assuming the planned budget profile in the President's fiscal year 2009 
budget request.

                       FISH PROTECTION PRIORITIES

    Question. The NOAA budget proposes to spend $10 million on 79 
Atlantic salmon. That is $130,000 per fish and a 92.3 percent increase 
for this program. While I support programs that assist fish 
populations, and I want to support this program, I am at a loss why 
there is not a similar program to assist the Gulf of Mexico and its 
large variety of fish, shrimp and oyster populations that are stressed 
and need assistance. Looking at your budget request, I see no new money 
or resources that are dedicated to gulf coast fisheries or to gulf 
coast research.
    How much do we spend on any one species of fish in the Gulf?
    Answer. The Annual Report of the U.S. Atlantic Salmon Assessment 
Committee reports that 1,480 adult salmon returned to U.S. rivers in 
2006. Of this total, 79 adults were counted as returns to the Gulf of 
Maine distinct population segment (DPS) and 1,044 adults were counted 
on the Penobscot River. The Gulf of Maine DPS was listed as endangered 
in 2000 and is composed of small coastal rivers in Maine. The 2006 
Status Review recommends that the Gulf of Maine DPS be expanded to 
include the large rivers in Maine (Penobscot, Kennebec and 
Androscoggin). It is important to note that these are adult counts only 
and are not population assessments. A full population assessment with 
totals for all life stages (adults, fry, parr, smolts, post smolts) is 
not available at this time.
    Because of the sheer number of fish, it is not feasible to estimate 
NMFS' spending on a per fish basis for any one species of fish in the 
Gulf. However, the budget does provide $74.2 million specifically for 
Gulf of Mexico fishery activities--a 6 percent increase over the fiscal 
year 2008 enacted level.
    Question. How much do we spend per fish on Pacific Coast Salmon?
    Answer. NMFS does not prioritize funding on a per fish basis. The 
funds requested are not to save the existing fish, generally, the fewer 
the fish the more critical the need. Requested funding is an investment 
in the future to ensure that the number of Pacific Coast Salmon will 
increase--and that we will eventually be able recover ESA listed 
Pacific Coast Salmon to a sustainable level, and delist them. Section 
4(f) of the Endangered Species Act requires NOAA to develop and 
implement recovery plans for the conservation and survival of all 
endangered or threatened species. These plans lay out activities 
necessary to recover the species and provide an estimated cost to 
accomplish these recovery tasks.
    Question. What is the justification for a 92.3 percent increase for 
this program?
    Answer. The fiscal year 2009 funding amount will allow NOAA to 
focus conservation and recovery actions on supporting listed Atlantic 
salmon populations as required under the Atlantic Salmon recovery plan 
and re-establishing extirpated populations by addressing habitat needs 
in key watersheds historically used by Atlantic salmon that span five 
New England States. NOAA will use the additional Atlantic salmon funds 
to restore connectivity to fragmented habitats to enhance recovery of 
Atlantic salmon on an ecosystem basis. Priority will be given to 
projects that support listed populations to restore connectivity and 
recovery of ecosystem functions for the benefit of Atlantic salmon and 
all diadromous species in New England. Collaborative efforts will also 
be used to prioritize projects funded with the increase. Projects will 
likely include dam removals, fish passage, stream restoration, and 
reduction in sedimentation to salmon spawning areas. This increase will 
allow NOAA to fund 25 additional projects each year, which will open 
approximately 230 stream miles annually for use by Atlantic Salmon.

                             DATA SECURITY

    Question. In September 2006, in response to media and Congressional 
requests for information on laptops lost or stolen during the previous 
5 years, the Department reported the loss or theft of 214 Census Bureau 
laptop computers. The Commerce Inspector General reported that the 
missing laptops contained sensitive information that could be recovered 
with tools easily available on the Internet.
    How will the Census Bureau ensure that the systems involved in the 
decennial census, including the handhelds or even a paper census, 
provide adequate protection of the sensitive data collected?
    Answer. The Census Bureau understands the great responsibility it 
has to ensure the public that the information it provides is protected 
to the greatest extent possible. As an outgrowth of the DOC Inspector 
General's report in 2006 the Bureau has looked at security controls 
implemented in all of its systems to ensure that they meet Federal IT 
security requirements and afford the level of protection to which the 
public should expect.
    Specifically for the Decennial 2010 Census, the Census Bureau has 
worked to ensure that its mobile computing devices afford the best 
protection possible while still allowing for flexibility and ease of 
use. We have also begun to prepare processes and procedures to better 
track and account for paper forms that will be used during the 
Decennial operations.
    All laptops used during the Decennial Census will have full disk 
encryption installed. This will render the information on the laptop 
virtually useless to unauthorized individuals in the event a laptop is 
lost or stolen. In addition to the full disk encryption, users will be 
required to enter a unique user name and password to access the laptop. 
The laptop will have anti-virus software installed to prevent infection 
and possible spread of malicious code.
    The Hand Held Computing devices (HHC) will also employ technical 
security controls to ensure the data collected is protected in 
accordance with Federal IT security requirements. These devices will be 
protected with similar controls as implemented on the laptop with some 
specific differences based on the device and intended use. These 
additional controls include the use of biometrics (fingerprints) that 
must be scanned in order for the user to gain access to the device and 
the applications. In addition, the HHC is run using a specific mode 
(Windows Mobile 5.0--Kiosk Mode) which provides the ability for the 
program to control the applications and the user interface. This 
prevents the device from executing unnecessary or vulnerable 
operations. The HHC has had a number of capabilities which could 
introduce vulnerabilities either removed or blocked at the factory. The 
application monitors processes running on the HHC as well as critical 
registry settings; with this control, processes that are not authorized 
are unable to run. If critical system-level settings are found to be 
changed, they are automatically reset to the proper value.
    Data collected is stored on a removable SD (sometimes called a 
Flash) drive. The data is encrypted using a NIST-approved encryption 
product which ensures that the data could not be read on another device 
if the SD card is lost or stolen.
    All communications containing sensitive information between the 
Field, Decennial Offices and the Data Processing Centers (DPC) are 
across secure communications paths that use NIST-authorized encryption.
    Paper presents a more difficult problem by its nature and the sheer 
volume which it will be present in the Decennial Census. The Census 
Bureau is responding to this challenge by increasing its awareness and 
training at the Field level as well as implementing checks with each 
shipment of paper to track its progress from start to finish. Careful 
records of paper shipments will be kept to make sure that in the event 
a package or set of paper forms is lost or misplaced, there is an 
accurate record of exactly what was lost, the circumstances surrounding 
the loss, and actions taken once the loss is discovered.

                             DATA SECURITY

    Question. The 2010 Census will require the hiring of thousands of 
temporary employees. Can you offer this Committee your assurance that 
the background checks for these employees will be fully completed 
before they are invited into homes of millions of Americans?
    Answer. In the 1990 and 2000 decennial censuses, the Census Bureau 
used Federal Bureau of Investigation (FBI) name checks to determine the 
suitability of all applicants for temporary Census jobs (most work for 
8 weeks or less). There was virtually no criminal activity by temporary 
Census workers in 1990 or 2000. Accordingly, as part of the cost 
estimates prepared for the 2010 Census, we again assumed we would use 
this method to conduct background checks on all temporary workers. 
Although Executive Order 8914 requires that all newly hired federal 
government be fingerprinted within 14 days of beginning work, this 
Order also specifically authorizes fingerprint exemptions for temporary 
workers. The Census Bureau continues to study various operational 
approaches for conducting background checks, including risks and cost 
implications.

                    HANDHELD TECHNICAL REQUIREMENTS

    Question. After several discussions with the Census, it has become 
clear that the Census entered into the contract for 2010 Census data 
collection before the Census was actually certain of what the 
requirements for such a system would be. It is rare that when given an 
unknown, that the costs come in below the estimates.
    Did the Census Bureau enter into a data collection contract knowing 
that it would cost more than expected?
    Answer. We did not enter into this contract knowing that costs 
would be higher than expected. The final bids of all vendors for the 
contract were similar, and all were relatively close to the independent 
government cost estimate prepared by the MITRE Corp.
    Regarding the level of requirements known at contract award, early 
in the decade we believed our experienced Census Bureau staff could 
develop and deploy the handheld computers for use in the 2010 Census. 
These staff did produce the solutions we tested in both the 2004 Census 
Test and 2006 Census Test. Although we were able to develop and use the 
devices well enough to determine that we could conduct field data 
collection on them, by 2004 we had concluded that we did not have 
sufficient expert resources in house to do this for the 2010 Census, so 
we decided to contract this effort to the private sector. At the time 
we prepared the RFP for the FDCA contract, our strategy was to supply 
high-level functional requirements to the contractor on award, and then 
to determine final detailed requirements based on what we learned from 
the 2004 and 2006 Census Tests, and the 2008 Census Dress Rehearsal.
    Thus, at the time of contract award in March 2006, both the Census 
Bureau and the contractor were fully aware this strategy would mean a 
tight schedule for requirements development, system design, system 
development, and deployment. The initial requirements strategy at that 
point was to develop remaining requirements in a two-step process. 
First, based on results from the 2004 and 2006 Census Tests, we would 
provide detailed Dress Rehearsal requirements for our major operations. 
Then, based on lessons learned from the Dress Rehearsal, we would make 
adjustments to those detailed requirements for 2010 Census operations, 
as well as develop the detailed requirements for those operations that 
could not be included in Dress Rehearsal (e.g., enumeration in Puerto 
Rico; enumeration in remote areas).
    The contract was awarded in April 2006--less than one year before 
the first major application was needed for the Dress Rehearsal Address 
Canvassing operation. We knew this was a very aggressive schedule, and 
to mitigate some of this risk, all of the final vendors for the 
contract were required to develop a prototype of the Address Canvassing 
device so that, upon award, they would already have initial development 
underway. However, after contract award, it became clear that the 
contractor's funding needs by fiscal year differed from what the Census 
Bureau had assumed in its lifecycle cost estimate for the contract. In 
particular, the contractor stated they needed more of the overall 
contract funding earlier in the cycle, including fiscal year 2006. 
Because the Congress had already appropriated funds for fiscal year 
2006, and the President had already made his request to the Congress 
for fiscal year 2007, the Census Bureau had limited flexibility to 
address these funding issues directly. In response, the Census Bureau 
reprogrammed some funding to the FDCA contract, and a re-plan was 
developed which, among other things, delayed and extended software 
development into seven increments. Thus, this re-plan added additional 
risk to the overall development plan and strategy that the Census 
Bureau thought was manageable.

                    HANDHELD TECHNICAL REQUIREMENTS

    Question. When did the contractor ask for a finalized set of 
requirements?
    Answer. At the time of contract award in March 2006, both the 
Census Bureau and the contractor were fully aware the initial 
requirements development strategy would mean a tight schedule for 
software development, system design, system development, and 
deployment. The initial requirements strategy at that point was to 
develop remaining requirements in a two-step process. First, based on 
results from the 2004 and 2006 Census Tests, we would provide detailed 
Dress Rehearsal requirements for our major operations. Then, based on 
lessons learned from the Dress Rehearsal, we would make adjustments to 
those detailed requirements for 2010 Census operations, as well as 
develop the detailed requirements for those operations that could not 
be included in Dress Rehearsal (e.g., enumeration in Puerto Rico; 
enumeration in remote areas).
    In mid-November of 2007, however, facing a delayed, scaled-back 
dress rehearsal, and early 2010 Census operations not too far behind, 
the Harris Corporation requested that the Census Bureau deliver the 
final 2010 Census requirements by November 30, 2007 so that they could 
conduct a re-plan to align scope, schedule, and cost. These 
requirements were to include: Operations not planned in Dress 
Rehearsal, known defects in the operations, the de-scoped Dress 
Rehearsal requirements, as well as any clarifying requirements from 
those operations planned for Dress Rehearsal. We did deliver the final 
change requirements for Address Canvassing (the first major Census 
operation that Harris is participating in) by November 30, and in early 
December, negotiated with Harris to deliver final requirements by 
January 16, 2008.

                     DEPARTMENT INFORMATION SYSTEMS

    Question. For the last 7 years, the Inspector General has noted 
that the Department has a material weakness in its information 
technology (IT) security because of problems with its certification and 
accreditation (C&A) process. I understand that several Department 
systems have recently been compromised.
    What is the Department doing to improve the C&A process so the 
material weaknesses can be resolved?
    Answer. Since fiscal year 2001 when the system certification and 
accreditation (C&A) material weakness was first reported, a deadline of 
one year was set for its resolution. Because of the short timeframes, 
efforts mainly focused on completing C&As instead of improving their 
quality. It is the poor quality of the C&A packages that caused the 
material weakness to continue. To that end, an OCIO/OIG joint strategy 
has been developed to incorporate realistic milestones, take measurable 
steps, and build consistent and repeatable C&A practices. We have 
established a 24-month schedule to meet these commitments, with the 
following significant milestones:
  --Standard assessment cases can promote consistency and improved 
        security for the Department's IT systems. Bureaus will use the 
        examples to develop system specific assessment cases that will 
        be used during security control assessments associated with 
        certification and continuous monitoring by May 2008.
  --The C&A package documents the security posture of a system as a 
        snapshot in time, but continuous monitoring must be performed 
        to ensure that appropriate adjustments are made to security 
        controls and the system security plan as changes to the 
        information system and external environment occur. OCIO will 
        develop Department-wide continuous monitoring policy and 
        guidance to help achieve consistency and compliance. The 
        planned completion date for this guidance is June 2008. As part 
        of its independent Federal Information Security Management Act 
        (FISMA) reviews of C&A packages and security control 
        assessments, OIG will identify controls that have not been 
        adequately assessed and recommend that they be assessed during 
        continuous monitoring. OIG will later review continuous 
        monitoring activities for those systems to determine whether 
        appropriate actions were taken. OIG will also assess compliance 
        with the continuous monitoring policy and guidance when it 
        becomes available. This work will be performed on an ongoing 
        basis as part of our fiscal year 2008 and fiscal year 2009 
        FISMA reviews.
  --The Information Systems Security Line of Business (ISSLoB) 
        initiative requires that agencies use a designated FISMA 
        automated tool to standardize tracking and reporting. The 
        Department has begun to implement the Justice Department's 
        Cyber Security Assessment and Management (CSAM) tool to 
        standardize the C&A process and documentation as well as 
        conduct compliance reviews. CSAM will be implemented in two 
        phases--the management information inventory phase, which will 
        provide consistent security records for IT investments, is 
        scheduled for September 2008; full implementation, including 
        conversion of existing packages, is scheduled for June, 2009.
  --IT security compliance is one of the Department's highest 
        priorities. To ensure this effort is on track, both OCIO and 
        OIG will brief progress at the Department's Senior Management 
        Council (SMC) on a quarterly basis. We will also brief the CIO 
        Council on a quarterly basis.
    Question. The Inspector General recently reported that only 1 of 
the 16 system security officers at Census is an IT security specialist. 
What are you doing to ensure there are enough qualified IT security 
professionals to protect the Department's many sensitive systems and to 
oversee the work of its IT security contractors?
    Answer. The attraction and retention of experienced IT Security 
Officers is a challenge. The insufficient number of individuals 
proficient in IT security has been raised in various government and 
private-sector organizations. Experienced IT security professionals are 
not easy to come by, and the Department must compete in the market 
place for these skills.
    In 2007, the Departmental CIO worked with Office of the Secretary 
Information Technology Review Board, CIO Council, and Commerce 
Information Technology Review Board. Discussions regarding the 
increasing threat environment and escalating requirements resulted in 
an increase in the fiscal year 2009 budget for IT security. Part of 
this budget is set aside to address training and certification of our 
IT security personnel.
    Census continues to actively address building a robust IT security 
staff. The Census Bureau has taken steps to address this problem area 
by supplementing its limited staff resources through the use of highly 
qualified contractors. These additional skilled resources, together 
with the adoption of new and improved processes, have resulted in a 
great improvement in the Census Bureau's ability to assist the system 
owners, authorizing officials, and Information System Security Officers 
(ISSOs) in understanding and carrying out their information security 
responsibilities.
    Over the past two years, we have seen a dramatic increase in 
security-related activity throughout the Federal government. Heightened 
threat levels, as well as a need to strengthen the overall IT security 
program, have led the Census Bureau to review its budget and consider 
future increases, as well as a plan of action to improve the Division 
Security Officer/Information System Security Officer (DSO/ISSO) 
program. The Census Bureau is considering options for significantly 
increasing staffing to support the IT Security Program. More 
specifically, the Census Bureau is studying ways to provide resources 
to the office so that it can provide more advice and guidance to senior 
executives and all other roles relating to IT security. This includes 
training and support to ensure that authorizing officials, system 
owners, and DSO/ISSOs are performing their roles properly.
    Further, the Census Bureau hired MITRE Corporation to conduct an 
independent organizational assessment of the Census IT Security Office 
(ITSO). The assessment was to identify strengths as well as areas for 
improvement in the ITSO management, communications, processes, and 
structure. The analysis generally found that, despite many challenges 
in today's Federal IT security environment, the ITSO has significantly 
improved information security at the Census Bureau over the past few 
years. Based on MITRE's recommendations, the ITSO developed a five-year 
strategy to address the findings of the assessment and other gaps in 
the program, to include strengthening the role of the DSO/ISSO. The 
ITSO is currently conducting a gap analysis of the DSO/ISSO role 
structure and intends to recommend a plan of action to the Census 
Bureau Executive Staff in June 2008.

                    NOAA'S FLEET MODERNIZATION PLAN

    Question. Mr. Secretary, over the past several years this Committee 
has supported and funded new Fisheries Survey Vessels for NOAA's fleet. 
These vessels provide a valuable service to this county, and the aging 
ships they replace deserve retirement. However, these fishery vessels 
represent only a fraction of NOAA's fleet. NOAA also has hydrographic 
and oceanographic research vessels, some of which are well past their 
prime. We need to do more to support the officers, crew and shore 
support staff that keep these vehicles working well past their prime.
    When will this Committee receive a long-term fleet modernization 
plan that covers the entire NOAA fleet?
    Answer. NOAA's Ship Recapitalization Plan has been drafted and is 
currently undergoing Administration clearance.

                           LAKE PONTCHARTRAIN

    Question. A number of members have raised a concern about a lack of 
funding for the Lake Pontchartrain Restoration Program which would 
provide funding which would help restore and preserve the estuarine 
areas. Tell us whether this is a priority of NOAA and what NOAA is 
doing to assist Lake Pontchartrain.
    Answer. The Lake Pontchartrain Restoration Program is important to 
NOAA. The current research conducted has provided NOAA a better 
understanding of the water quality, critical habitats, biological 
resources, and contaminant sediments, thus benefiting those living on 
the Lake's shores. These research and education efforts contribute to 
NOAA's priority of habitat conservation and restoration. NOAA 
recognizes the need for such projects as they preserve nursery habitats 
for fisheries and protects and buffers coastlines. In fiscal year 2008, 
NOAA will provide approximately $500,000 to support the Lake 
Pontchartrain Restoration Program.
                                 ______
                                 
               Questions Submitted by Senator Ted Stevens

            FISHERIES RESEARCH AND MANAGEMENT FUNDING LEVELS

    Question. I have heard from fishermen in my state with concerns 
about the level of NOAA funding for Fisheries Research and Management 
in the fiscal year 2008 omnibus. Effective management of our fisheries 
depends on sound science.
    Will funding in the fiscal year 2009 budget allow for the stock 
surveys necessary to ensure sustainable management of Alaska's 
fisheries and the fisheries of the nation?
    Answer. Based on the fiscal year 2009 President's request, we 
estimate that we would allocate $57.1 million for the Alaska Fisheries 
Science Center (AFSC), an increase of $2.7 million compared to the 
fiscal year 2008 level. In addition, the 2009 President's request 
restores funding for core survey and monitoring activities that were 
not included in the passage of the 2008 enacted budget.
    While additional funds for survey activities may be available, due 
to increased charter and fuel costs, it is unlikely that the total cost 
of all bottom trawl and acoustic surveys needed in fiscal year 2009 
will be realized. The AFSC would prioritize the acoustic surveys for 
pollock, and the Bering Sea bottom trawl surveys as top priorities. 
Restoration of the Aleutian Islands survey, cancelled in fiscal year 
2008, would not be possible at the 2009 funding levels. Likewise, the 
Gulf of Alaska slope survey would be cancelled and a portion of the 
Gulf of Alaska shelf survey would likely be scaled back.

                        MSRA IMPLEMENTATION--IUU

    Question. Can you give me an update on the progress the Department 
is making toward implementing the provisions of the Magnuson-Stevens 
Act, specifically with respect to ending overfishing and addressing the 
problem of illegal, unreported, and unregulated (IUU) fishing?
    Answer. Under the international provisions of the MSRA, the 
Secretary of Commerce is required to take action to combat illegal, 
unreported, or unregulated (IUU) fishing activities. The fiscal year 
2009 President's budget request includes a total request of $2.6 
million for international cooperation and assistance activities to 
combat IUU fishing. Of this amount, $1.5 million is for consultation 
with nations that have been identified as having vessels engaged in IUU 
fishing and engage in capacity building activities with developing 
countries. The above figure also includes $1.1million for the Law 
Enforcement program to support the MSRA requirement to strengthen 
international fisheries enforcement by providing additional 
infrastructure and personnel to monitor imports of fish and fish 
products into the United States through collaboration with enforcement 
entities in other federal agencies and foreign governments. 
Furthermore, the Secretary of Commerce is required to produce a 
biennial report to Congress which lists countries the United States has 
identified as having vessels engaged in IUU fishing and to certify 
whether identified nations have taken appropriate corrective action to 
warrant receipt of a positive certification. The absence of steps to 
address these IUU fishing activities may lead to prohibitions on the 
importation of certain fisheries products into the United States and 
other measures.
    In January 2008, the NMFS Office of International Affairs released 
a progress report on the status of implementation of the MSRA 
international provisions. This report summarizes efforts to combat IUU 
fishing around the world and can be found at http://www.nmfs.noaa.gov/
msa2007/.
    In preparation for the first biennial report, which is due to 
Congress in January 2009, NMFS has begun to collect information the 
agency can use to identify nations engaged in IUU fishing activities. 
To help acquire this information, on March 21, 2008, NMFS published a 
notice in the Federal Register that solicited information from the 
public regarding nations whose vessels are engaged in IUU fishing and 
bycatch of protected resources. The information request has been 
circulated broadly within constituent groups.
    NMFS is drafting a proposed rule for the identification and 
certification of nations whose vessels are engaged in IUU fishing or 
bycatch of protected living marine resources. We hope to have the rule 
available for public comment this summer. In preparation for the 
development of the proposed rule, NMFS published an Advanced Notice of 
Proposed Rulemaking in June 2007, and the agency held several public 
meetings in July 2007 to solicit public comments on this process.
    NMFS is also undertaking projects that will address IUU fishing and 
bycatch of protected living marine resources all around the world, with 
a focus at present on Central America and West Africa. These projects 
include workshops to provide technical assistance on the adoption of 
bycatch mitigation technologies and to improve enforcement. The 
enforcement activities focus on the development of effective legal 
frameworks and the implementation of improved monitoring, control and 
surveillance (MCS) programs.
    The United States continues to serve as Chair of the international 
MCS Network. In addition, we are also continuing to collaborate with 
various countries to address pelagic longline sea turtle bycatch 
through the use of circle hooks and we have collaborated with the U.S. 
Navy in partnership programs aimed at providing development assistance 
in Latin America and West Africa.
    The NOAA Office of Law Enforcement (OLE) is working closely with 
enforcement entities, with other federal agencies and foreign 
governments, to gather intelligence data on IUU fishing activities and 
trade in IUU fish and fish products. NOAA OLE is also developing its 
capability to analyze this intelligence data to create intelligence-
based products to improve the detection and intercept IUU fish product 
entering the United States.

                 ENDANGERED SPECIES LISTINGS IN ALASKA

    Question. I am concerned about Endangered Species Act petitions for 
species in Alaska. In addition to the current listings for Stellar Sea 
Lions, there are proposed listings for Cook Inlet Beluga Whales and 
ribbon seals before the Department of Commerce. Decisions on these 
listing could have huge consequences for development in my state.
    Would increased funding for research in this area improve NOAA's 
ability to make scientifically supported decisions on these listings?
    Answer. NOAA must render an ESA listing decision based on the best 
available scientific and commercial data information. More research 
will likely reduce scientific uncertainty and assist NOAA's ability to 
determine how to recover the species if they are listed.

              ECONOMIC DEVELOPMENT ADMINISTRATION FUNDING

    Question. The President's fiscal year 2008 budget includes a 51 
percent decrease in funding for the Economic Development 
Administration. How will this reduction impact the Department's ability 
to assist economically distressed communities?
    Answer. EDA will maintain its mission to ``lead the federal 
economic development agenda by promoting innovation and 
competitiveness, preparing American regions for growth and success in 
the worldwide economy,'' to the best of its ability, regardless of 
EDA's budget funding levels. The agency will continue to assist 
distressed communities through its grant investments and the agency's 
``soft assets'' such as sharing best practices and technical expertise 
with communities.
    The fiscal year 2009 funding request is based on budget priorities 
to help balance the federal budget. In a difficult budget environment, 
the Administration has made tough choices. EDA has a flexible and 
scalable nature--we can ``ramp up'' operations, as well as ``ramp 
down'' based on available funds.

                           DIGITAL TRANSITION

    Question. As the nation prepares for the transition to digital 
television, I am concerned that there is no focus on the special needs 
of rural American when implementing the converter box program. I am 
particularly concerned that customers are not being properly educated 
about needing a pass through converter box if their communities rely on 
low power or translators for their broadcasting.
    What is the National Telecommunications and Information 
Administration doing to address this concern?
    Answer. To minimize confusion to viewers of low-power stations, 
NTIA has been working closely with organizations representing low-power 
and translator stations to communicate effective messages to consumers. 
First, the materials consumers receive in the envelope with their 
coupons identify which converter boxes will pass through analog 
signals. This information enables consumers to determine on their own 
which retail outlets stock these analog pass through boxes. Second, 
NTIA has added information about the low-power issue to list of 
Frequently Asked Questions (FAQs) on the Coupon Program website 
www.DTV2009.gov. This information includes a list of low-power and 
translator stations by location to help consumers determine, first, 
whether they receive service from one of these stations and, if so, 
whether they need to consider purchasing a pass through converter box. 
NTIA also identifies other options for viewers of low-power and 
translator stations, such as buying a low-cost splitter, which enables 
viewers to use any of the certified converter boxes to view programs 
broadcast in analog and digital.
    NTIA is also working expeditiously to ensure that low-power 
operators in rural areas have resources to assist them with the 
transition in a timely fashion. On March, 5, 2008, NTIA sent a letter 
to all licensees of Class A, low-power and translator stations with a 
fact sheet they could use to inform their viewers about the digital 
transition. The letter also included information about the Coupon 
Program and listed of all approved converter boxes that included analog 
pass through.
    The letter also included additional information about two NTIA 
grant programs to assist low-power facilities. The Low-Power Television 
and Translator Digital-to-Analog Conversion Program currently provides 
$1,000 to eligible low-power stations that must purchase a digital-to-
analog conversion device to convert the incoming digital signal of a 
full-power television station to analog for transmission on the low-
power station's analog channel. To date, NTIA has awarded 232 grants 
under this program. Applications will be accepted until February 17, 
2009.
    Of course, stations that operate at less than full power will 
eventually convert to digital broadcasts. The Low-Power Television and 
Television Translator Upgrade Program established by Congress directs 
NTIA to assist this effort through a program that provides $65 million 
for necessary equipment upgrades to stations in eligible rural 
communities. To implement this program in a timely manner, a technical 
correction to the program authorization is required to permit the 
agency to begin making funds available during fiscal year 2009. On 
April 24, 2008, the Senate Committee on Commerce, Science, and 
Transportation favorably reported S. 2607, which would effectuate this 
technical correction. NTIA will continue to work with the Federal 
Communications Commission, industry and the broadcast community to 
assist low-power television stations and their viewers during the 
transition to digital broadcasting.

                          SUBCOMMITTEE RECESS

    Senator Mikulski. The subcommittee stands in recess until 
Thursday, March 13, at 10 a.m., when we will take testimony 
from the Administrator of the National Oceanic and Atmospheric 
Administration (NOAA) and the Director of the National Science 
Foundation (NSF).
    [Whereupon, at 11:14 a.m., Thursday, March 6, the 
subcommittee was recessed, to reconvene at 10 a.m., Thursday, 
March 13.]
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