[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]


 
                      THE FISCAL YEAR 2010 BUDGET
                      FOR DEPARTMENTAL MANAGEMENT
                         AND OPERATIONS AT DHS

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

                                HEARING

                               before the

                      SUBCOMMITTEE ON MANAGEMENT,
                     INVESTIGATIONS, AND OVERSIGHT

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 4, 2009

                               __________

                           Serial No. 111-20

                               __________

       Printed for the use of the Committee on Homeland Security
                                     
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  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
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                     COMMITTEE ON HOMELAND SECURITY

               BENNIE G. THOMPSON, Mississippi, Chairman

LORETTA SANCHEZ, California          PETER T. KING, New York
JANE HARMAN, California              LAMAR S. SMITH, Texas
PETER A. DeFAZIO, Oregon             MARK E. SOUDER, Indiana
ELEANOR HOLMES NORTON, District of   DANIEL E. LUNGREN, California
Columbia                             MIKE ROGERS, Alabama
ZOE LOFGREN, California              MICHAEL T. McCAUL, Texas
SHEILA JACKSON-LEE, Texas            CHARLES W. DENT, Pennsylvania
HENRY CUELLAR, Texas                 GUS M. BILIRAKIS, Florida
CHRISTOPHER P. CARNEY, Pennsylvania  PAUL C. BROUN, Georgia
YVETTE D. CLARKE, New York           CANDICE S. MILLER, Mississippi
LAURA RICHARDSON, California         PETE OLSON, Texas
ANN KIRKPATRICK, Arizona             ANH ``JOSEPH'' CAO, Louisiana
BEN RAY LUJAN, New Mexico            STEVE AUSTRIA, Ohio
BILL PASCRELL, JR., New Jersey
EMMANUEL CLEAVER, Missouri
AL GREEN, Texas
JAMES A. HIMES, Connecticut
MARY JO KILROY, Ohio
ERIE J.J. MASSA, New York
DINA TITUS, Nevada
VACANCY

                    I. Lanier Avant, Staff Director

                     Rosaline Cohen, Chief Counsel

                     Michael Twinchek, Chief Clerk

                Robert O'Conner, Minority Staff Director

                                 ______

       SUBCOMMITTEE ON MANAGEMENT, INVESTIGATIONS, AND OVERSIGHT

             CHRISTOPHER P. CARNEY, Pennsylvania, Chairman

PETER A. DeFAZIO, Oregon             GUS M. BILIRAKIS, Florida
BILL PASCRELL, Jr, New Jersey        ANH ``JOSEPH'' CAO, Louisiana
AL GREEN, Texas                      DANIEL E. LUNGREN, California
MARY JO KILROY, Ohio                 PETER T. KING, New York, (ex 
BENNIE G. THOMPSON, Mississippi,     officio)
(ex officio)

                     Tamla T. Scott, Staff Director

                       Carla Zamudio-Dolan, Clerk

                    Michael Russell, Senior Counsel

               Kerry Kinirons, Minority Subcommittee Lead

                                  (ii)


                            C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Christopher P. Carney, a Representative in Congress 
  from the Sate of Pennsylvania, and Chairman, Subcommittee on 
  Management, Investigations, and Oversight:
  Oral Statement.................................................     1
  Prepared Statement.............................................     2
The Honorable Gus M. Bilirakis, a Representative in Congress from 
  the State of Florida, and Ranking Member, Subcommittee on 
  Management, Investigations, and Oversight......................     3
The Honorable Anh ``Joseph'' Cao, a Representative in Congress 
  from the State of Louisiana....................................    15
The Honorable Al Green, a Representative in Congress from the 
  State of Texas.................................................    16

                                Witness

The Honorable Elaine C. Duke, Under Secretary for Management, 
  U.S. 
  Department of Homeland Security:
  Oral Statement.................................................     5
  Prepared Statement.............................................     6

                             For the Record

Prepared Opening Statements:
  The Honorable Bennie G. Thompson, a Representative in Congress 
    from the State of Louisiana, and Chairman, Committee on 
    Homeland Security............................................     4

                                Appendix

Questions and Responses:
  Responses from Hon. Elaine C. Duke.............................    25


                    THE FISCAL YEAR 2010 BUDGET FOR 
             DEPARTMENTAL MANAGEMENT AND OPERATIONS AT DHS

                         Thursday, June 4, 2009

             U.S. House of Representatives,
       Subcommittee on Management, Investigations, 
                                     and Oversight,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:03 a.m., in 
Room 311, Cannon House Office Building, Hon. Christopher Carney 
[chairman of the subcommittee] presiding.
    Present: Representatives Carney, Green, Bilirakis, and Cao.
    Mr. Carney. [Presiding.] The Subcommittee on Management, 
Investigations, and Oversight will come to order. The 
subcommittee is meeting today to receive testimony on the 
fiscal year 2010 budget for the departmental management and 
operations of DHS.
    On May 7, 2009, President Obama delivered his fiscal year 
2010 budget request to Congress. His vision for the Department 
of Homeland Security was clear: The safety and security of our 
nation is a top priority, and we must achieve this goal through 
our spending of scarce homeland security dollars in a fiscally 
responsible manner.
    Since its inception, the department has struggled with 
management and operational challenges that include integrating 
22 separate and distinct agencies into one, managing one of the 
largest workforces in the federal government, ensuring that the 
department's acquisition policies are sound, economical and 
fair, and creating one unified DHS culture.
    The committee has continually taken the position that the 
department's low morale, lack of common culture, and the lack 
of diversity stem from a series of flawed policy approaches to 
establish an internally consistent human resources architecture 
for the department as a whole.
    While the department recently moved up one spot from the 
prior year in a recently released 2009 best places to work 
rankings, it was still ranked 28th out of 30. There is much 
work to be done to bring the department up to the same 
standards of morale expected of its federal peers.
    The department continues to face acquisition and 
procurement challenges. Currently, there are more than 200 
vacant positions in DHS contracting. And within the next 5 
years, more than 25 percent of the DHS contracting workforce 
will retire or will be eligible for retirement.
    Although the department has been disjointed and lacks a 
common culture, we are now seeing efforts to consolidate its 
operations both physically to the St. Elizabeths project and 
systemically through its data centers and financial management 
integration efforts.
    As we recently saw with the release of the right-wing 
extremism report, mistakes are still being made by the 
department. However, we witnessed a swift response, which 
indicates that the privacy, civil rights, and civil liberties 
of those it seeks to protect are an important aspect of the 
department's work. I will be interested today in hearing how 
the department's budget reflects the need to ensure that such 
an incident never happens again.
    As we move forward with the new departmental leadership, 
new priorities, and a new budget, unfortunately, some things 
remain the same. Our nation is still at risk from terrorist 
attacks, both homegrown and abroad, and the Department of 
Homeland Security must be ready to fulfill its mission to 
protect the American people from threats both foreign and 
domestic, both natural and manmade.
    The president's fiscal year 2010 budget requests for the 
department in general and the management and operations 
directorates in particular recognize these realities and 
provide us with a financial framework for addressing them. Last 
month, Secretary Napolitano testified before the full committee 
about how she plans to implement the president's proposed 
budget department-wide.
    Today, we will hear how the undersecretary for management 
intends to work with the secretary to incorporate the budget's 
priorities into the department's operational and management 
functions, including its human capital, procurement, security, 
financial and information technology missions.
    What I would like today is an honest assessment of the 
department's needs. If more resources are needed, I expect the 
undersecretary to tell us that.
    I look forward to hearing today's testimony regarding the 
president's budget and how the department intends to use 
proposed funds to build a stronger and more secure America.
    [The statement of Mr. Carney follows:]

  Prepared Opening Statement of the Honorable Christopher P. Carney, 
  Chairman, Subcommittee on Management, Investigations, and Oversight

         On May 7, 2009, President Obama delivered his Fiscal Year 
        2010 Budget Request to Congress.
         His vision for the Department of Homeland Security was clear: 
        the safety and security of our Nation is a top priority and we 
        must achieve this goal through spending our scarce homeland 
        security dollars in a fiscally responsible manner.
         Since its inception, a short six years ago, the Department 
        has struggled with management and operational challenges that 
        include integrating 22 separate and distinct agencies into one; 
        managing one of the largest workforces in the federal 
        government; ensuring that the Department's acquisition polices 
        are sound, economical and fair; and creating one unified DHS 
        culture.
         Having said that, the Department has also come a long way, in 
        a very short period of time.
         Although the Department is not ranked where it wants to be in 
        federal government employee satisfaction surveys, it is moving 
        upward.
         Although the Department continues to face acquisition and 
        procurement challenges, it is attempting to expand its 
        acquisition workforce to better confront it needs.
         Although the Department has been disjointed and lacking of a 
        common culture, we now see its efforts to consolidates its 
        operations, both physically through the St. Elizabeths project 
        and systematically through its data center and financial 
        management integration efforts.
         Although, as we recently saw with the release of the 
        Rightwing Extremism Report, things still fall through the 
        cracks; however, we also witnessed a swift and effective 
        response, which indicates that the privacy, civil rights and 
        civil liberties of those it seeks to protect are an important 
        aspect of the Department's work.
         As we move forward with new Departmental leadership, new 
        priorities, and a new budget, unfortunately, some things remain 
        the same.
         Our Nation is still at risk from terrorist attacks both 
        homegrown and abroad and the Department of Homeland Security 
        must be ready to fulfill its mission to protect the American 
        people from threats both foreign and domestic, both natural and 
        manmade.
         The President's FY 2010 requests for the Department in 
        general, and the Management and Operations Directorates in 
        particular, recognize these realities--and provides us with a 
        financial framework for addressing them.
         Last month, Secretary Napolitano testified before the Full 
        Committee about how she plans to implement the President's 
        proposed budget Department-wide.
         Today, we will hear how the Under Secretary for Management 
        intends to work with the Secretary to incorporate the budget's 
        priorities into the Department's operational and management 
        functions, including its human capital, procurement, security, 
        financial and information technology missions.
         I look forward to hearing today's testimony regarding the 
        President's budget request and how the Department intends use 
        the proposed funds to build a stronger and more secure America.
    Mr. Carney. The chair now recognizes the ranking member for 
the subcommittee, the gentleman from Florida, Mr. Bilirakis, 
for an opening statement.
    Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it.
    Madam Secretary, I am pleased you could appear before us 
today to discuss the president's 2010 budget request for the 
department's Management Directorate and your plans for the 
coming fiscal year. I look forward to your testimony.
    I am particularly interested in hearing about efforts at 
the department to become more efficient and effective in both 
achieving the department's vital mission and using taxpayer 
resources.
    There are a number of very necessary, but costly projects 
underway at the department, including the St. Elizabeths 
project and SBInet. And I look forward to working with you to 
highlight areas in which we can ensure the department is as 
nimble and efficient as possible and avoids cost and time 
overruns.
    I am also interested to hear your plans to address the 
concerns of the more than 200,000 employees who work at the 
department. The 2008 Federal Human Capital Survey showed 
improved results for DHS, but I am sure that you and I will 
agree that more work needs to be done to recruit qualified 
candidates and retain them once they are on board, including 
better training programs and defined career paths.
    You indicate in your written testimony that you are 
striving to make DHS a place where people want to work. And I 
am interested to hear how you plan to work with the 
department's new chief human capital officer to achieve this 
important goal.
    As the newest federal department and one with a very 
challenging and critical mission, there is much work to be done 
to ensure that the ``One'' one, DHS culture, advocated by both 
Secretaries Chertoff and Napolitano, is achieved. I look 
forward to working with you and the members of this committee 
to ensure you have the resources and authorities you need to 
get the job done.
    To that end, I hope the committee will consider a 
comprehensive authorization bill for the department this year. 
Thank you again for being here, Secretary Duke, and I look 
forward to your testimony.
    Thank you, Mr. Chairman. I yield back the balance of my 
time.
    Mr. Carney. Thank you.
    And other members of the subcommittee are reminded that, 
under committee rules, opening statements may be submitted for 
the record.

                             For the Record

   Prepared Statement of the Honorable Bennie G. Thompson, Chairman, 
                     Committee on Homeland Security

    I want to thank Chairman Carney for conducting this hearing on the 
President's Fiscal Year 2010 Budget Request for the Management and 
Operational functions of the Department of Homeland Security.
    I would also like to thank Under Secretary Duke for being here 
today to testify in support of the President's request.
    This hearing is the first in a series of hearings that each 
Subcommittee will conduct, in an effort to further explore how the 
President's proposed requests will be used to further the Department's 
mission.
    As I stated during the Full committee Budget Hearing with Secretary 
Napolitano, the President submitted a very comprehensive budget that 
answers a lot of the questions we've had about where the Department 
wants to go.
    In particular, the budget includes a number of critical 
programmatic changes that I support and would like to highlight.
    The transfer of the Office of Intergovernmental Programs to the 
Office of the Secretary makes sense and will surely enhance DHS' 
ability to coordinate with State, local, and tribal governments.
    I also support the requested increase for the Office of 
Procurement. The acquisition workforce must be expanded in order to 
meet the Department's needs. In previous years, over 40% of DHS' budget 
went out the door to contractors to perform a host of functions, 
including policymaking. This over-reliance on contractors has 
undermined DHS' ability to execute its missions and the hiring of new 
acquisition professionals should help stem that tide.
    Furthermore, I fully expect, the Human Capital Office to use its 
allocation to increase diversity among the Department's workforce so 
that it will be more reflective of the public it serves.
    In these tough economic times, I am committed to working to help 
secure a budget for the Department that keeps on our commitment to 
fiscal responsibility while strengthening the security of our Nation.
    Thank you and I look forward to your testimony today.

    Mr. Carney. I now welcome the undersecretary for 
management, Elaine Duke. Elaine C. Duke currently serves as the 
Department of Homeland Security's undersecretary for 
management. In this role, Ms. Duke is responsible for the 
management and administration of the Department of Homeland 
Security.
    She oversees management of the department's $47 billion 
budget, appropriations, expenditures of funds, accounting, and 
finance. It is quite a plateful.
    Ms. Duke also administers control over the department's $17 
billion in acquisition and procurement. She is responsible for 
directing human capital resources and personnel programs for 
the department's 216,000 employees.
    She administers control of the department's enterprise 
architecture through strategic use of information technology 
and communications systems. And she is responsible for 
oversight of the department's facilities, property, equipment, 
and other material resources.
    Prior to her appointment as the undersecretary for 
management, Ms. Duke served as the deputy undersecretary for 
management. She was the department's chief procurement officer 
from January 2006 until her appointment as deputy 
undersecretary for management in October of 2007.
    Ms. Duke was the department's deputy chief procurement 
officer from October 2004 to December of 2005, when she 
championed the creation of the Acquisition Professional Career 
Program to rebuild the federal acquisition workforce for the 
21st century.
    Ms. Duke assisted in the standup of the Department of 
Homeland Security while at the Transportation Security 
Administration, where she served as the deputy assistant 
administrator beginning in August of 2002.
    Ms. Duke spent a great deal of her career with the U.S. 
Navy, where she held various acquisition positions of 
progressive responsibility. She began her career as a 
contracting officer for the U.S. Air Force. Ms. Duke holds a 
bachelor of science degree in business management from New 
Hampshire College and a master's degree in business 
administration from Chaminade University in Honolulu, Hawaii.
    We welcome you and look forward to your testimony.

STATEMENT OF THE HONORABLE MELAINE C. DUKE, UNDER SECRETARY FOR 
                   MANAGEMENT, DEPARTMENT OF 
                       HOMELAND SECURITY

    Ms. Duke. Good morning, Mr. Chairman, Ranking Member 
Bilirakis, and members of the committee. Thank you for the 
opportunity to come and talk to you about the fiscal year 2010 
management directive budget.
    DHS and its many component agencies fulfill a broad mandate 
and conduct many different activities but with a single, 
unified security mission. In order to meet its priorities and 
support the department, the management directive has delineated 
six lines of business that are responsible for significant 
enterprise-wide functions. These six lines of business produce 
integration and standardization and efficiencies throughout the 
department.
    Allow me to highlight just a few of Management 
Directorate's recent accomplishments. In competition of federal 
acquisition contracts within DHS, we were able to increase our 
percentage of competed contracts from 69 percent in 2007 to 75 
percent in fiscal year 2008. That surpassed our competition 
goal of 68 percent, and we are on target in 2009 to keep that 
level of competition up.
    We have exceeded all our small business contracting goals. 
We have began to actively and aggressively manage the Working 
Capital Fund within the CFO's office. We have established a 
program review board to look at our major acquisition programs. 
We are on target to review 17 programs this year.
    Additionally, with the start-up of the acquisition program 
management division, we have been able to increase the number 
of certified program managers running acquisition programs, 
level one, from 20 percent a few years ago up to near 90 
percent this year. That is a significant step in getting a 
handle on our requirements of our acquisition programs, which I 
have talked with this committee before about how important that 
is to successful procurements.
    While we still have vacancies within the contracting career 
field, through our acquisition intern program and other efforts 
have nearly doubled the size of the 1102, the contract 
specialist workforce, from about 700 about 4 years ago to over 
1,100 now, with about 200 vacancies remaining.
    When we can get those filled, we will have doubled our 
workforce in 4 years, which, given the challenging recruiting 
of that market, we were really proud of that. And thank you for 
your support of the intern program. That has contributed 
significantly to that.
    Our fiscal year 2010 budget really is focused on two areas. 
One is integration, one DHS, and the second is oversight and 
control. We are not building a management budget that seeks to 
build a big bureaucracy. In fact, my budget from my immediate 
office is staying flat, at 13 full-time equivalents, 13 people.
    What we are trying to do is use the offices of management 
to build the building blocks that a new department like DHS has 
to have to successfully move forward in implementing its 
initiatives. Some of the initiatives we have in the president's 
2010 budget on the integration front include the DHS 
headquarters consolidation, which includes St. E's and the 
other consolidation in the D.C. area.
    A DHS-wide enterprise records management system, which is 
critical to moving forward in terms of our appropriate records 
and retention policy, this is very important in light of the 
president's transparency initiatives.
    Right-sizing human capital, focused on getting better 
diversity, better staffing processes within the department. And 
within this chief information officer, several initiatives, 
including continuing the data center, development and 
migration, using single sign-on, putting all our--we have a 
huge emphasis on security in this budget, including moving a 
lot of our initiatives behind the trusted Internet connections 
to really improve DHS's security.
    On the oversight and control initiatives, we have under 
Homeland Security Presidential Directive 12, which talks about 
managing of employees and contractors. We have a centralized 
$25 million for that to be able to issue cards to about half 
our employees in fiscal year 2010.
    We continue our acquisition workforce. And we have a new 
initiative on selective acquisitions, which is really our 
attempt to get a handle on highly classified programs within 
DHS. This is a new initiative, very much needed.
    So I look forward to talking with you about these 
initiatives and answering your questions. And I do truly 
appreciate this opportunity.
    [The statement of Ms. Duke follows:]

                 Prepared Statement of Hon. Elaine Duke

    Chairman Carney, Ranking Member Bilirakis, thank you for the 
opportunity to come before you today to discuss the fiscal year 2010 
budget for the Management Directorate within the Department of Homeland 
Security (DHS).
    DHS and its many component agencies fulfill a broad mandate and 
conduct many different activities within a single, unified security 
mission. DHS performs critical tasks from protecting transportation 
hubs to conducting maritime rescues, from aiding disaster victims to 
securing the borders and enforcing immigration laws. Within this broad 
portfolio, the Department aims to secure the American people from all 
hazards--including terrorist threats and natural or accidental 
disasters--and to work effectively with its many Federal, State, local, 
tribal, and private sector partners to lead the collaborative effort to 
secure the Nation. DHS undertakes the mission of securing the United 
States against all threats through five main action areas, each of 
which is strengthened by this budget:
    Guarding Against Terrorism--Protecting the American people from 
terrorist threats is the founding purpose of the Department and DHS' 
highest priority. Our budget expands DHS efforts to battle terrorism, 
including detecting explosives in public spaces and transportation 
networks, helping protect critical infrastructure and cyber networks 
from attack, detecting agents of biological warfare, and building 
information-sharing partnerships with State and local law enforcement 
to mitigate threats.
    Securing Our Borders--DHS prevents and investigates illegal 
movements across our borders, including the smuggling of people, drugs, 
cash, and weapons. In March, the Department announced a new initiative 
to strengthen security on the southwest border in order to disrupt the 
drug, cash, and weapon smuggling that fuels cartel violence in Mexico. 
Our budget strengthens those efforts by adding manpower and technology 
to the southwest border. This budget also funds smart security on the 
northern border and facilitates international travel and trade.
    Smart and Tough Enforcement of Immigration Laws and Improving 
Immigration Services--DHS welcomes legal immigrants, protects against 
dangerous people entering the country, and pursues tough, effective 
enforcement against those who violate the Nation's immigration laws. 
Our budget contains funding to strengthen our employment eligibility 
verification systems, target and crack down on criminal aliens, and 
expedite the application process for new legal immigrants.
    Preparing for, Responding to, and Recovering from Natural 
Disasters--The Department must aid local and State first responders in 
all stages of a natural disaster--preparing for the worst, responding 
to a disaster that has occurred, and recovering in the long run. This 
budget contains funding to strengthen DHS assistance for local first 
responders and the communities and families affected by disasters.
    Unifying and Maturing DHS--DHS must continue to evolve in order to 
operate in unity and with maximum effectiveness across the wide range 
of the Department's security and other missions. This budget contains 
funding to initiate consolidation of mission support activities that 
will remain off-site from the St. Elizabeths campus, reducing the many 
small and widely scattered leased locations and supporting the goal to 
build ``One DHS.''
    The Management Directorate provides the business framework that 
enables the Department to achieve its mission. It does so by providing 
policy, guidance, operational oversight and support, and innovative 
solutions for the management needs throughout DHS. While the Management 
Directorate does not serve on the frontlines, our role remains critical 
to the Nation's security. We enable the Department to achieve its 
mission by ensuring the provision of high quality, efficient, and 
integrated management services.
    In order to meet its priorities and support the Department, the 
Management Directorate has delineated six lines of business that are 
responsible for significant enterprise-wide functions. These lines of 
business achieve management objectives by implementing and integrating 
functional support and services to DHS Offices and Components. The 
Management lines of business include:
    Office of the Chief Administrative Officer (OCAO)--Responsible for 
asset management, mail screening and delivery, occupational safety and 
health, environmental planning and management, historic preservation, 
energy management, records, directives, forms, printing, library 
services, and graphics. Priorities include:
         Improving, consolidating, and reducing operating costs 
        for DHS facilities;
         Effective and efficient management of real and 
        personnel property; and
         Providing operational support for all OCAO functions 
        to DHS Headquarters.
    The OCAO makes sure that Department employees are fully equipped to 
work and in the safest conditions possible. The Chief Administrative 
Officer manages over 86 million square feet of Real Property and $11.8 
billion of personal property and ensures that the buildings, vehicles, 
and equipment employed by DHS are ready to support the mission.
    Office of the Chief Financial Officer (OCFO))--Responsible for 
departmental compliance with Federal budget planning, formulation, and 
execution practices, accounting, and financial reporting. The Chief 
Financial Officer also reports directly to the Secretary on financial 
management matters. Priorities include:
         Integrating financial management systems across the 
        Department;
         Implementing financial internal controls consistent 
        with Federal standards; and
         Facilitating departmental authorization and 
        appropriation efforts.
    The OCFO works with partners throughout the Department to determine 
how funding will be allocated and prioritize budgetary needs. The OCFO 
attempts to ensure that every dollar spent is accounted for and that it 
is tracked according to Federal standards.
    Office of the Chief Human Capital Officer (OCHCO)--Responsible for 
Department-wide human capital policy development, planning and 
implementation functions. Priorities include:
         Proud to Protect--Becoming a premier employer that 
        attracts and retains high-quality, diverse talent.
         Reflecting the Nation We Serve--Increasing diversity 
        at all levels throughout DHS to better reflect the composition 
        of the Nation.
         Leading Through Learning--Building Department-wide 
        capabilities and systems that provide employee training,
         Capturing and Sharing Human Capital Resources, Best 
        Practices and Innovation--Implementing consistent, but 
        flexible, human capital policies, programs and practices.
    A critical task faced by the Department today is to build, sustain 
and develop a world-class workforce that keeps the Nation safe. The 
Department recognizes that advancing our critical mission clearly 
depends on our most valuable asset--our people. If you work at DHS, the 
Chief Human Capital Officer affects many aspects of your daily life and 
is dedicated to ensure that you and your colleagues meet your full 
potential as employees and, collectively across the DHS human capital 
community, realize the DHS human capital vision--Unparalleled Mission, 
Unparalleled Talent, Where People Want to Work.
    Office of the Chief Information Officer (OCIO)--Responsible for 
information technology operations and infrastructure, enterprise 
software applications, and information security. Priorities Include:
         Improving information sharing across DHS and its 
        external partners,
         Ensuring the security of our IT systems and 
        information through a comprehensive defense-in-depth IT 
        security strategy, and
         Expanding citizen access to DHS through e-Gov 
        initiatives.
    The Chief Information Officer is responsible for the oversight and 
management of information technology used throughout the Department. 
The OCIO contributes directly and substantially to the operational 
missions of the Department, by ensuring that information is shared 
reliably, rapidly, and securely throughout the Department, as well as 
with the broader Homeland Security Community.
    Office of the Chief Procurement Officer (OCPO)--Responsible for 
acquisition and procurement policy, strategic sourcing, and investment 
oversight. Priorities include:
         Implementing a unified DHS acquisition support 
        program,
         Maintaining best practices for major program 
        acquisition and management, and
         Ensuring compliance with all Federal laws and 
        regulations governing procurements.
    To deliver mission operations capabilities, the OCPO establishes 
contracts for critical goods and services required for the men and 
women of DHS to do their jobs. Each year the OCPO ensures sound DHS 
business deals through thorough investment review and program 
management practices. Their efforts facilitate the decisive execution 
of dollars in support of major mission areas attempting to avert 
threats to the Nation's border and citizens.
    Office of the Chief Security Officer (OCSO)--Responsible for 
protection of the Department's personnel, property, and facilities. 
Priorities include:
         Developing and implementing comprehensive DHS security 
        policies, procedures and programs;
         Conducting defensive activities to identify espionage 
        or terrorist collection efforts; and
         Overseeing employee suitability operations, background 
        investigations, and security training briefs.
    The Homeland Security mission requires the Department to possess 
and work with extremely sensitive information. The OCSO works to ensure 
that the Department's buildings and physical security systems are 
worthy of the trust and confidence of the American people who rely on 
them.
    Some of Management's 2008 fiscal year accomplishments include:
    Our Chief Procurement Office implemented a centrally funded and 
managed Acquisition Professional Career Program modeled after the 
highly successful Navy Intern Program. This program features three, 
single year rotations through various Components and provides the 
participants with all the experience and training they need to become 
journeyman-level acquisition professionals.
    The percentage of DHS obligations awarded through competitive 
contract actions increased from 69 percent in FY 2007 to 75 percent in 
FY 2008. This surpassed the FY 2008 competition goal of 68 percent by 
seven percentage points, allowing us to realize a 75 percent level of 
competition two years ahead of a FY 2010 target.
    Management's Office of Security reduced vulnerabilities to DHS 
facilities by bolstering personnel assigned to the Technical Security 
Counter-Measures Program, allowing increased capacity for critical 
security sweeps. We increased training for State and local government 
as well as private-sector personnel who handle classified and sensitive 
information from the Department.
    The Chief Administrative Office collaborated with the General 
Services Administration (GSA) to expeditiously bring the Master 
Planning, Environmental Impact Statement and National Historic 
Preservation Act Section 106 Consultations to a successful conclusion 
for the DHS Consolidated Headquarters at St. Elizabeths West Campus.
    The OCAO achieved milestones with delivery of a Consolidated Remote 
Delivery Site to provide mail and courier services to DHS Component 
locations in the Washington, DC metropolitan area thereby improving 
efficiency, strengthening accountability, and reducing risk to DHS 
employees by screening for chemical, biological, radiological, nuclear, 
and explosive threats.
    We developed a transition-planning approach for DHS to ensure 
operational continuity before, during, and after the 2009 Presidential 
administration transition and change in DHS political leadership.
    The Office of the Chief Financial Officer developed and implemented 
a comprehensive, web-based DHS Financial Management Policy Manual with 
nearly 30 new CFO policies.
    Our CFO managed the Working Capital Fund (WCF) to provide cost-
effective support services throughout DHS. The CFO successfully 
implemented a number of key initiatives that have resulted in more 
effective and efficient management of the WCF, including the 
establishment of a WCF Governance Board which has resulted in better 
management of the fund by engaging senior leadership of both customers 
and service providers in a focused policy and planning process to 
assess internal controls over financial reporting.
    The Management Directorate established the Program Review Board 
(PRB), chaired by the Deputy Secretary and comprised of senior career 
leadership of each Component, which institutionalized an analytically-
based, open and transparent Program and Budget Review process.
    The Office of the Chief Information Officer's Enterprise 
Architecture governance process resulted in more than $90 million in 
cost avoidance/savings and achieved ``Green'' on the OMB scorecard.
    The CIO removed 77 percent of DHS third quarter FY 2008 Exhibit 
300s from the OMB Management Watch List and achieved 75 percent of 
Level One investments within 10 percent of planned cost and schedule.
    Through the CIO's efforts, the Department received a B+ on the 
Congressional FISMA Report Card on ``Computer Security'' for 2007 
compliance, the highest grade for compliance since the Department was 
established in 2003.
    The CIO completed the migration of DHS headquarters data center to 
Stennis Data Center to reduce data center operations cost across the 
Department.

FY 2010 Budget
    In total, the Under Secretary for Management fiscal year 2010 
budget request is for 976 positions, 869 FTE, and $741,913,000. A large 
portion of the USM budget is designed to assist us with integration and 
to continue to unify into one DHS. This request sets the way forward 
for:
    DHS Headquarters Consolidation--$75 million. The initial phase of 
this project to consolidate leadership, policy, program, and operations 
coordination at the St. Elizabeths campus in Washington, DC, has been 
funded and is underway with the remaining phases in beginning design. 
In FY 2010, we propose to initiate consolidation of mission support 
activities that will remain off-campus, reducing the many small and 
widely scattered leased locations. The on-campus and off-campus parts 
of this project both support the goals of a consolidated headquarters 
for DHS.
    HSPD-12 Card Issuance--$25 million. Office of the Chief Security 
Officer is requesting resources for HSPD-12 Card Issuance. The 
requested funds will be used to provide enterprise Public Key 
Infrastructure certificates, procure enrollment / card issuance work 
stations, card stock, and required support for the issuance of 
smartcards. Completion of smartcard issuance efforts will provide the 
infrastructure and baseline technology to support other DHS security 
programs.
    Enterprise Records Management System--$3.1 million. DHS records are 
officially maintained through manual, paper-based processes. This 
includes many records developed or transmitted electronically that must 
be printed and filed. Implementation of this first phase of an 
electronic records management system will ensure that DHS personnel 
have access to timely and accurate information for decision making and 
to efficiently document government processes while preserving the 
public interest in the course of normal business and in cases of 
emergency. This system, once fully implemented, will streamline record 
retention activities, from creation to disposal and including retrieval 
for use and responses to FOIA requests.
    Right-sizing Human Capital Programs--$3.3 million. The Office of 
the Chief Human Capital Officer will use these funds to meet the 
demands and needs of a growing Department and additional funding to pay 
for Working Capital Fund Shared service costs. The new positions will 
allow the CHCO to meet the key goals of the FY 2009--2013 Human Capital 
Strategic Plan, which include becoming a premier employer while 
attracting and retaining high-quality employees; enhancing diversity at 
all levels of the organization to reflect the composition of the 
Nation; enhancing the training, education and professional development 
of our employees; and implementing flexible yet consistent Department-
wide human capital policies, programs, and practices to strengthen and 
unify departmental operations and management.
    DHS-Wide Acquisition Workforce Program. The Office of the Chief 
Procurement Officer is requesting $7 million and 50 FTE for training, 
certifying, and retaining an appropriate workforce of acquisition 
professionals. To address the shortage of contracting professionals, 
DHS is expanding the Acquisition Workforce Program and adding the 
Student Career Experience Program positions to form the core of the 
procurement workforce.
    DHS Selective Acquisition Transactions. The Office of the Chief 
Procurement Officer is requesting $9 million and 12 FTE to establish 
the initial capacity to provide contract support for all DHS classified 
acquisitions.
    Acquisition Program Management Policy. The Office of the Chief 
Procurement Officer is requesting $9 million and 10 FTE to expand 
Department Management Teams that support DHS program offices in 
delivering timely and effective acquisitions that currently comprise 
the Division.
    Personnel Security Adjudication Team--$3 million. The Office of 
Chief Security Officer is requesting resources to create a DHS 
Personnel Security Adjudication Team that will allow DHS the ability 
and flexibility to adjudicate the sudden increase of completed 
background investigations in a proactive manner.
    Special Access Program Control Office (SAPCO) Staffing--$5 million. 
The Office of the Chief Security Officer is requesting resources to 
create a SAPCO and to expand Sensitive Compartmented Information (SCI) 
Oversight. SAPCO will develop and implement policy and procedures for 
DHS SAP governance and will serve as the single point of contact for 
coordinating component requirements. The SCI Oversight expansion will 
limit the systemic risk to the Department's most critical form of 
intelligence information.
    Improve Financial Accountability--$2.5 million. This program 
increase provides 20 Positions and $2.495 million for increased 
staffing and support necessary to meet the demands of reviewing and 
conducting independent analysis for the majority of programs within DHS 
along with increased financial and budget support for the Department.
    External Evaluations of Programs--$3 million. The requested program 
increase is for the Office of Program Analysis and Evaluation (PA&E) to 
support a series of external evaluations of programs to be conducted 
periodically by Federally Funded Research and Development Centers (or 
other independent parties outside the Department). These funds will 
enhance the PA&E mission to provide information on key analytical 
issues to Department leadership and the Administration.
    Data Center Development/Migration--$58.8 million for the CIO and 
$141.2 million for Components. Increased funding in FY 2010 will focus 
on further migration activity of Component systems, applications, and 
disaster recovery to the DHS Enterprise Data Centers for central DHS 
management. FY 2010 funding will provide essential data center 
capability enhancements and support services to facilitate Components 
migrations from legacy Component data centers into the DHS Data 
Centers. Collocation and consolidation will provide a number of 
benefits over the environments that currently exist within the 
disparate Component computing facilities. Reducing the overall 
computing asset footprint will result in reduced system maintenance, 
management, and administration costs. Merging of existing operations 
and maintenance contracts will further reduce overhead and 
administrative costs as well as improve the confidentiality, integrity, 
and availability for mission critical systems and data.
    Network Security Enhancements--$10.4 million. This funding will 
mitigate high risk areas within the DHS firewall. This request will 
establish critical Policy Enforcement Points across the DHS Network, 
improve DHS Security Operation Center capabilities (i.e., remediation 
forensics), and establish robust classified facilities with highly 
skilled analysts. Network Security Enhancements will identify all 
internet connections for remediation by migrating legacy connections 
behind the DHS Trusted Internet Connections (TICs).
    Internet Gateway Enhancements--$8.4 million. Additional funding 
will diminish elevated threat areas for DHS at the perimeter. This 
request will implement a High Assurance Guard to support mission 
requirements for accessing social networking sites and establish the 
DHS Email Disaster Recovery capability where 100 percent of email 
traffic will be behind the two DHS TICs.
    Single Sign-On (SSO)--$4.2 million. Increased FY 2010 funding will 
be utilized to initiate the application integration efforts and the 
Single Sign-On project. This funding will leverage best-of-breed 
technologies to improve timely, secure operator access to mission 
applications for DHS employees as well as Federal, State, Local and 
Private Sector Partners. This implementation will be closely aligned 
with the Homeland Security Presidential Directive (HPSD) 12: Policy for 
a Common Identification Standard for Federal Employees and Contractors. 
Specifically, funding will establish an implementation team to oversee 
and execute the application integration and establishment of the core 
infrastructures for the SSO Gateway and Service Oriented Architecture. 
By implementing SSO, DHS computer users will be able to log-in to their 
systems with only a single set of credentials in order to access 
multiple applications, minimizing the need for a user to log-in 
multiple times for different applications.
    COMSEC Modernization--$6.7 million. This funding will replace 100 
percent of legacy COMSEC equipment across the DHS enterprise, improving 
DHS ability to share classified information across the Homeland. 
Additionally, the request upgrades critical communications nodes to the 
Federal Government and to the States in support of the Infrastructure 
Protection Program under HSPD 63. COMSEC support is also essential to 
the maintenance of secure communications required in NSPD 3-10.
    I look forward to working with you to make certain that we have the 
right resources to protect the homeland and the American people and 
that we make the most effective and efficient use of those resources. 
Thank you for inviting me to appear before the Committee today. I look 
forward to answering your questions and to working with you on the FY 
2010 Budget Request and other issues.

    Mr. Carney. Well, I want to thank you for your testimony.
    And I will remind each member that he or she will have 5 
minutes to question Ms. Duke. And I will begin with myself for 
5 minutes.
    Now, last week, the secretary announced the apartment of 
Jeff Neal as the new human capital officer, and he will be the 
department's seventh human capital officer in 6 years. This 
high-rated turnover, obviously, has hindered some of the human 
capital efforts and caused this subcommittee and, indeed, the 
full committee a bit of concern here, quite a bit of concern, 
actually.
    What is Mr. Neal going to do to fix this problem? You know, 
first of all, with the turnover at the leadership, but, you 
know, I understand you continue to have recruiting problems 
even in an economic environment like this one. It seems to me 
that this is a perfect opportunity to get some of the best and 
brightest available. I hope that is going to be the case.
    Ms. Duke. I think it is a perfect opportunity. As you know, 
with legislation last year, this administration had the choice 
of filling this position, again, with a political or a career. 
Secretary Napolitano chose to fill it with a political 
appointment, but with someone with federal experience. Mr. Neal 
has significant federal experience in human capital.
    So what he is going to bring to the table is both being 
able to support the agenda of this administration, which is 
very much focused on human capital, but also he knows the 
federal system. I think some of the challenges we have in human 
resources really are federal challenges.
    And how do we work with Office of Personnel Management and 
really look at, how can we keep the basic tenets of the 
fairness and transparency of federal hiring, but make it more 
efficient? So I think he is going to be a great representative 
to that federal initiative of really looking at--we talk a lot 
about acquisition reform, and I am looking forward to human 
resources reform.
    Mr. Carney. Because as you know, the department has been 
plagued for the last several years with dissatisfaction and low 
morale, some people say insufficient training, et cetera. Can 
you say specifically how he is going to address those issues?
    Ms. Duke. Well, I am going to work with him personally. I 
chair the diversity council and the recruiting council. I think 
that one of the basic things we have to do is really fill our 
vacant positions, because people love the work they do, so we 
have the basic foundation. We have to get where we have a 
better--I think a better balance of quality of life, family and 
work.
    And so one of the things we will be working on is 
recruiting. That is one of my top two priorities for human 
capital. The second thing is diversity. I believe a more 
diverse workforce will bring a better representation for this 
country, and that is, we have targeted recruiting events. And 
Mr. Neal will be directly involved in that.
    And the third thing is a much more tactical, but that is 
actually improving within DHS how we do hiring, so that for the 
area--you know, we hire for 3,500 of the headquarters 
functions, doing that more effectively.
    Mr. Carney. Good, good. The human capital strategic plan, 
it is supposed to be from fiscal year 2009. We are all moving 
into fiscal year 2010 and we haven't seen it implemented. Do 
you have the budget for it? Do you have the personnel in place 
to implement the plan? How does it stand?
    Ms. Duke. We do have an increase--it is called right-sizing 
human capital--that gives us an increase in personnel, in human 
capital that I think can move forward.
    One of the challenges we have in managing the budget is 
really the systems issues. So in human capital, there is the 
H.R. I.T., which is looking at reducing the number of systems. 
And that is funded through the working capital fund, and it is 
currently in there.
    But I think that we really have to have the discipline to 
put the upfront costs to migrate to systems. For instance, we 
had eight personnel systems when we started as a department. 
Now we are down to one. To have that discipline to put the 
money up front, of course, you know, make sure the components 
are willing to put the money up front and get to efficient 
systems.
    Mr. Carney. Okay. I have just one more for this round.
    I was pleased to see that the president's fiscal year 2010 
budget creates the new office within the office of procurement, 
the Office of Selective Acquisitions. I think that is really 
remarkable, and it requests 24 new positions to staff the 
office. This new office will provide, as you know, contracting 
support to the department's classified programs.
    And given my personal interest and background in management 
operations in homeland security intelligence issues, I was 
really happy to see this office created. I believe it fulfills 
a significant gap the department needs to have filled.
    However, do we even have the proper facilities yet to do 
this? Do we have a skiff even created for the procurement 
program? Do we have the necessary contracting officials with 
the necessary clearances to do these programs?
    Ms. Duke. The fiscal year 2010 president's budget has money 
to get skiff space that will house about 17 people. So that is 
in the budget. It has the FTEs.
    And the FTEs that you see in the CBO budget are contracting 
people. We were able to recruit a woman that is very qualified. 
She was doing this for the Navy, and she is with us now and is 
the head of contracting for this new office. So I feel 
confident that, with the president's budget, we can stand up 
that office.
    Now, we also in future years will have to build the other 
business functions around the experienced contracting function.
    Mr. Carney. Does a skiff exist? I mean, is there physical 
skiff yet for them?
    Ms. Duke. We are hoping to be able to maybe where DOD has 
moved out. There are some areas in Crystal City and other 
places, but we have not secured the space yet.
    Mr. Carney. Okay. All right. Thank you.
    I now recognize Mr. Bilirakis for 5 minutes.
    Mr. Bilirakis. Thank you, Mr. Chairman.
    Madam Secretary, my constituents are rightly concerned 
about getting the most bang for their buck when it comes to 
federal spending, especially when it comes to homeland 
security. They want to know that their tax dollars are being 
spent wisely.
    Will the budget request support efforts or initiatives to 
ensure that the programs we are funding with their money are 
operating as efficiently and effectively as possible? And how, 
if at all, have projects under the Efficiency Review Initiative 
impacted the fiscal year 2010 budget request? And how will the 
findings of the initiative inform and guide future budget 
requests?
    Ms. Duke. I think there are two initiatives in our 
president's budget that will specifically look at--they all 
contribute to it, but specifically at spending taxpayer dollars 
well.
    One is the increase of the acquisition program management 
directorate in the chief procurement office. We want to double 
the number of acquisition program reviews we do from about 17 
to about 40 in fiscal year 2010, and that is important because 
we spend--our top acquisitions, 50 acquisitions total about $55 
billion in costs. So that is a big, high-risk chunk we want to 
manage.
    A second area we are looking at is in the program analysis 
and evaluation division of the CFO's office. There is about a 
$3 million request actually to do independent assessments 
through like a federally funded research development center, 
someone of our programs to make sure that, before we even put 
them in the budget, they have the right metrics and objectives 
to actually deserve to be in the budget.
    And I think those are two specifically addressed at your 
question.
    Mr. Bilirakis. Thank you very much.
    I was pleased to read in your written testimony that 
becoming a premier employer that attracts and retains high-
quality talent is a priority for the department. Unfortunately, 
the department has fallen short of that goal in the eyes of its 
employees, especially when it comes to employee learning and 
development, a critical goal of the office of the chief human 
capital officer.
    A May 20th article in the Washington Post noted that, in 
many cases, federal workers value strong leadership and 
straight answers from their bosses even more than higher pay 
and improved benefits. That is very admirable.
    The article referenced a study from the Partnership for 
Public Service that found DHS employees rate the department 
very poorly in this regard. How would the budget request 
improve training and learning opportunities for leadership 
managers, and supervisors within the department to help improve 
job satisfaction and performance among all department 
employees?
    Ms. Duke. Well, I think there are two ways. Within the 
human capital budget, we do have a training budget. And there 
are several centralized programs, the national security 
professional program, which trains employees that are in 
national security professional positions under the executive 
order, to look at national security from more of a holistic, 
not just a DHS perspective.
    We have our fellows program, which is targeted at 13s, 15s. 
So we are trying to--those are examples of where we are trying 
to make sure we have training opportunities for the employees 
themselves.
    The second thing we learned from the employee survey is, 
some of the dissatisfaction was actually based on a very more 
fundamental thing of supervisors not knowing how to be a 
supervisor. When we saw that people were saying that 
supervisors aren't dealing with problem employees or rewarding 
employees that do well, we went back to the supervisors and 
learned that there was a fundamental--they didn't know how to 
do it.
    So we have developed supervisory training, not the real 
glossy, you know, self-actualization, but how do you deal with 
federal employees in rewarding and taking care of problems? And 
this is becoming a mandatory course.
    And I actually think knowing the fundamentals is really 
going to help. And that is a lot of our initiatives. You know, 
they don't sound really impressive, but if you skip over them, 
it is kind of a Maslow's hierarchy thing. We have to deal with 
the basics. And that is what you see in our president's budget.
    Mr. Bilirakis. Very good. Thank you.
    Mr. Chairman, will there be a second round?
    Mr. Carney. Yes.
    Mr. Bilirakis. Okay, very good. Thank you. I yield back the 
balance of my time.
    Mr. Carney. Okay.
    The chair recognizes the gentleman from Louisiana, Mr. Cao, 
for 5 minutes.
    Mr. Cao. Thank you, Mr. Chairman.
    Madam Secretary, I am looking through your testimony, and 
there is a section that states, ``Smart and tough enforcement 
of immigration laws and improving immigration services.''
    Before coming here to Congress, I was an immigration 
lawyer. And one of my worst experiences as an immigration 
lawyer was to come to the New Orleans district office. The 
people there are rude, and they are downright inefficient. I 
have not seen a federal office that shuts down at 2 p.m., 
oftentimes leaving people hanging, waiting, or what have you.
    What plans do you have to improve efficiency and to 
improve, I guess, the quality of the personnel at the district 
offices, especially in USCIS districts?
    Ms. Duke. Well, to be honest, that is the first that has 
been brought to me, but I will certainly take it back. The main 
area we have been focusing on, USCIS, is a business 
transformation program, where we are in the process right now 
of actually transforming the processes, with a contract with 
IBM that we are going to built an I.T. system that will 
actually manage the processes.
    This is going to be good customer service from an 
efficiency standpoint because we will be able to do case 
management, meaning an individual will be in the system once, 
regardless of a number of benefits they are looking for. We 
will be able to do online payment, online form processing. That 
does not address the human side that you just brought up. And I 
will bring that back and look into it.
    Mr. Cao. Thank you very much. And I have also noticed that 
the fees for various applications in recent years have gone up 
dramatically. And it reaches a point where it might be 
prohibitively expensive for many of the immigrants to apply.
    For instance, an application for a green card now runs 
close to $1,100. When you factor in application costs, when you 
factor in fingerprinting fees, on top of that, you have 
attorney's fees that these people have to pay for. I want to 
know, what is the rationale behind the increase in the fees so 
dramatically in the last couple of years?
    Ms. Duke. I believe the last--the CIS is fundamentally fee-
funded. And so that the increase in the fees that they had was 
basically to cover costs.
    Now, that doesn't mean we sit back with the current state 
and say, ``We can just keep increasing fees.'' I think both the 
last administration and this administration is fully committed 
to making sure CIS is running for efficiency.
    In fact, part of the commitment of getting the last fee 
increase was that we would move forward with the CIS business 
transformation program to try to make things more efficient and 
bring down actual costs.
    I know it is a huge initiative of the secretary. And we are 
just going to continue to try to look through that. And we do 
realize--we have seen immigration--we are challenged right now 
in the CIS, because the number of immigration applications is 
going down, which decreases revenue, so we are faced with that 
fiscal reality and really is trying to decide what to do with 
it.
    Mr. Cao. That is the only question I have, Mr. Chairman. I 
yield back my time.
    Mr. Carney. Thank you.
    The chair now recognizes the gentleman from Texas, Mr. 
Green.
    Mr. Green. Thank you, Mr. Chairman. I thank you and the 
ranking member.
    This is an important hearing today. And I thank the 
undersecretary for appearing today.
    I am not sure whether this is your first time before the 
committee, but I welcome you to the committee. And I assure you 
that my desire is to be as helpful as I can to you, to do all 
that I can to make your tenure in office and your office a 
success.
    To this end, I would like to have somewhat of a dialogue, 
but forgive me if it becomes more of a soliloquy.
    I would like to acknowledge that we should only employ 
capable, competent and qualified people. We should only hire 
for procurement purposes those who are capable, competent and 
qualified. I understand that big companies can do big things, 
that big companies can provide great innovation.
    But many times the innovation was originated with a small 
company. Small companies are known for being original, 
originating new ideas. I think that probably one of the 
supreme, superb and sterling examples of this would be a very 
popular phone that we--many of us carry that really innovated 
technology that was originated by a small company.
    I mention these things because I think that we have to look 
beyond the horizon of the big into the area of the small so as 
to make sure we capture all of these innovations that are out 
there.
    I was at a meeting not too long ago with the chairman, 
Chairman Thompson, and we had a large company, big company 
represented. The president and CEO was in attendance, and we 
had small companies there, as well.
    And this CEO had an opportunity to hear some of these 
purveyors, these small companies, talk about the innovations 
that they have produced. And you could see in his demeanor, in 
his body language that he was pleasantly surprised with what he 
heard.
    It is not unusual for the person at the top to have the 
vision. But for some reason, many times that vision is not 
given the opportunity to see the entire horizon because we have 
policies and procedures and intellectual property that has to 
be protected so the person at the top is sometimes sheltered to 
the extent that he doesn't have the opportunity or she will not 
have the opportunity to see all of these innovations that 
exist.
    These innovations are important to us. So my question and 
more of an encouragement is, is this, that we try to find new 
and creative ways to allow small, capable, competent and 
qualified businesses. Don't want anybody to do business that is 
not prepared to do business and who is not capable, competent 
and qualified. But those that are ought to be given 
opportunities.
    And my question, in summary, is, how do you propose to 
enhance the opportunities for capable, competent, and qualified 
small businesses to have a marriage, perhaps, with large 
businesses such that they can produce off-springs of innovation 
that can make a significant difference for us?
    Ms. Duke. Well, actually, I am glad you brought that up. 
And I have had many conversations with Chairman Thompson about 
small business and appreciate his support.
    This is one of the areas we are most proud of. DHS 
continually exceeds the federal goals for all the small 
business contracting goals, but we are never done. So some of 
the main areas for small business is in the technology, kind of 
the emerging technology. The best places are small business 
innovative research program, where we actually can fund 
businesses as they develop solutions. This is in the earliest 
stages.
    Within our contracting, what we are doing is always 
looking--we have a robust small business office in the 
headquarters that reports via me to the deputy secretary. We do 
outreach regularly.
    We are also looking at setting aside programs. We have 
often set aside specific contracts, but we are looking at 
setting aside programs where, for instance, professional 
services will award only to service-disabled veteran companies 
so that they can--themselves, because it is sometimes hard for 
them to compete even against--even within small business 
program, you have many categories.
    So we find like small businesses, some of the service-
disabled vets, which is the hardest goal to meet, they can't 
compete against some of the bigger small businesses. So we are 
looking for the niche opportunities where then competition 
would be restricted as we issue task orders among those.
    So this is a huge area. And we constantly look for outreach 
opportunities to help small businesses understand the 
complicated federal bureaucracy, and we will continue to do 
that.
    Mr. Green. Thank you, Mr. Chairman. My time is expired.
    Mr. Carney. I thank the gentleman from Texas.
    I will begin the second round of questions here. Ms. Duke, 
the department currently is undertaking quite an enormous task, 
I think, of consolidating its 24 data centers into two 
locations. The budget request is $200 million for this effort. 
Can you tell me the status of the project, why it was 
necessary, and how much you anticipate it ultimately costing?
    Ms. Duke. The project was necessary for two basic reasons. 
The first is efficiency. We have to get down to--we shouldn't 
be spending our tax dollars that we receive for maintaining 
facilities. And so this is just an efficiency from a facilities 
measure.
    The second area that I think is even more important is the 
security measure. DHS, like other federal agencies, is under 
constant attack from cyber threat. And it is not just at the 
high side, the highly classified programs. It is just trying to 
gather information.
    And so by focusing our security efforts on two data 
centers, a primary and a backup, we can use our limited dollars 
to keep those at the highest level of security, which is 
constantly evolving. We all hear about the new threats and 
really make it a security initiative.
    It is actually also a building block to standardizing data 
and keeping--what we found is, we are keeping the same data 
multiple times, each program because of our stove-piping. So 
the third piece of data center consolidation is going to be 
that we are going to start looking at, where are we keeping 
data? And let's keep it once and then give access to it from 
different programs to try to further make things more efficient 
and consistent.
    In terms of the $200 million, that does do the majority of 
the migration. We believe the cost of maintaining Stennis is--I 
think there is about $58 million in the budget. That includes 
some upgrades. But just the annual operation of maintenance is 
about $35 million.
    Mr. Carney. I am concerned about redundancies here and 
having backup. You know, does one center back up the other and 
vice versa? You know, going from 24 to 2 is quite a reduction, 
and we have to be sure we protect that. And can we be assured 
that we are going to have redundancy?
    Ms. Duke. Yes. And I think that the--it will be about $30 
million in power upgrades, and facility upgrades that were 
planned in the 2010 president's budget will really go a long 
way to make sure that we have a great primary center. And 
backup redundancy is absolutely a part of our plan.
    Mr. Carney. You may know that physically located right next 
to one of the data centers--you have this picture, too, I 
imagine--are fuel storage tanks, which causes some concern, 
obviously. Depending on what kind of fuel is in those things, 
it can be exceptionally explosive.
    How are we mitigating that? I mean, that is really a 
concern.
    Ms. Duke. I would have to get back to you on that. I do not 
know specific plans for the fuel tanks. I will get back to the 
committee.
    Mr. Carney. Thank you very much.
    Look, during the H1N1 outbreak, there was significant 
controversy regarding what the department's frontline employees 
at CBP and ICE and TSA could wear personal protective 
equipment, in order--such as gloves and respirators and masks 
and things to do their job.
    The guidance received was inconsistent and changed actually 
several times during the course of the outbreak. What has the 
department done to rectify this situation? Can you share with 
us the most recent communications, et cetera?
    Ms. Duke. We have continued--the guidance has changed, 
because the medical evidence has changed, and we have continued 
to work with CDC and Department of Labor, OSHA.
    Our most recent guidance, I personally issued two pieces of 
guidance. One was on April 30th, and it dealt with mandatory 
use for persons in high-risk situations. The CDC guidance then 
was modified based on the change in H1N1. And I issued 
additional guidance or revised guidance to the component heads 
on May 29th, last Friday, that addresses both the fact that 
mandatory use is no longer required per CDC guidance and it 
addresses the permissive use of personal protective equipment.
    Mr. Carney. Okay. Now, given what you told us about the 
supervisors, are you satisfied or comfortable that the 
supervisors will be giving this directive down to the frontline 
workers?
    Ms. Duke. I am satisfied with that. I have talked with each 
of the major component heads, of course, are CBP, ICE and TSA. 
And I have talked with each of them. And I issued it only to 
the component heads so that they could deploy it within their 
components, but they have assured me they are doing that.
    Mr. Carney. Okay. Thank you.
    The chair now recognizes Mr. Bilirakis again.
    Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it.
    Madam Secretary, on May 27th, the Director of the Office of 
Personal Management announced that President Obama plans to 
institute pay-for-performance throughout the federal 
government. Please discuss the benefits of pay-for-performance 
versus the current title five grade and step system. Have you 
spoken to OPM Director Berry about how this would work at DHS? 
And would you plan to use the chapter 97 flexibilities provided 
in the Homeland Security Act of 2002?
    Ms. Duke. The difference between pay-for-performance and 
step increases is just step increases, if you are performing 
satisfactorily, you get paid for longevity. And someone 
performing just satisfactorily and someone performing 
exceptionally gets the same pay increase based on annual 
anniversaries.
    Pay-for-performance tries to distinguish between just 
satisfactorily performance and outstanding performance. So it 
is obviously--it is more akin to what is used in industry.
    I think it would address a lot of the--it has the potential 
to both address or make worse a lot of the issues that were 
brought up in our employee survey. It has the possibility to 
make better because employees complaining that they don't get 
adequate rewards for performing at an exceptional level.
    The issue is of fairness. And so as we do pay-for-
performance, if we do--and I have not talked to Mr. Berry 
personally--we are going to have to make sure that it is on 
clear enough standards, any pay-for-performance, so that it 
doesn't appear to employees, whether it is reality or just 
perception, that there is unfairness in the process. And I 
think that is the biggest thing that has caused pay-for-
performance to be kind of controversial, as it appears to be 
subjective.
    So I think the important thing of pay-for-performance, when 
instituted, is that it has clear objectives so that both the 
employee, the supervisor, and other people can see that that 
employee did, indeed, exceed on objectives and in a somewhat 
either qualitative or quantitative way, not just because a 
supervisor prefers them.
    Mr. Bilirakis. Thank you, Madam Secretary. And I would like 
to keep in touch with you on this issue. Thank you.
    Mr. Carney. Does the gentleman yield back?
    Mr. Bilirakis. Yes, I do.
    Mr. Carney. Okay. That is all right.
    The chair now recognizes the gentleman from Louisiana 
again, Mr. Cao.
    Mr. Cao. Thank you very much.
    And I apologize, Madam Secretary, for keep beating on 
USCIS, but my experiences with the agency have not been very 
positive. And another area of my concern is the length of time 
that it takes to process some of these applications.
    Let me give you some examples. An application for 
naturalization, at least at the district office in New Orleans, 
I would say it takes about a year-and-a-half. An application 
for, I guess, adjustment status between marriages with an 
immigrant with a U.S. citizen's spouse can take as long as 4 
years, especially when the spouse comes from countries that 
might be suspect, such as the Middle East, some of those other 
areas where we might have concerns in regards to terrorism.
    You know, I appreciate the agency's concern for our 
security and possibly to weed out fraud, which I know is a 
major problem when we are dealing with immigration cases. But 
to me, it seems that the length of time to process and 
adjudicate some of these category of cases, you know, is 
somewhat extensive.
    And I am just wondering whether or not it is a particular 
problem at the district office in New Orleans or whether or not 
this is a national problem in connection with all district 
offices. Can you provide me with some insight in that regard?
    Ms. Duke. Well, speed of benefits is always going to be an 
issue. It is like small business. You know, you are never 
satisfied. You always want to get better.
    Two specific areas that--as undersecretary for management, 
I am involved in working with CIS to improve, one is lack of 
feedback. So it is one thing to take 6 months; it is another 
thing to not know it is going to take 6 months and not know how 
much longer.
    So there are two things that this transformed CIS system is 
going to deliver. One is more feedback, so that the applicants 
actually know the status and they know if there is a problem or 
they know if there is--you know, it is just kind of in the 
infamous, I guess, federal black hole.
    The second thing that is going to be huge, because we find 
that a lot of people applying for benefits apply for more than 
one benefit. And under the existing CIS system, every time you 
enter the immigration system, you are a new case, a new person. 
And under case management, although it sounds simple, when you 
apply for a benefit, you will have a number, and that number 
will stay with you.
    So when you apply for a second benefit, you are not going 
to have to start over with, you know, verifying and doing all 
the security. All that information will transfer to your next 
benefit or related immigration benefit. And that is going to be 
huge so that, if you do need multiple benefits, your 
information will be stored and they will only start and get the 
extra information they need for the different benefit.
    And that is probably the single most thing that will help, 
in terms of the time for--and actually be an electronic system 
that--via a paper-based system, I think is really going to 
help. It will also add some transparency to it and allow us to 
better track kind of the notional cases you are talking about 
or the examples you are talking about from New Orleans through 
better management information.
    Mr. Cao. Thank you very much.
    And I yield back my time, Mr. Chairman. Thank you.
    Mr. Carney. Thank you, Mr. Cao.
    We now recognize Mr. Green again for another 5 minutes.
    Mr. Green. Thank you. One of the great challenges that we 
face has to do with FEMA and HUD.
    But before I go on, let me compliment you on your 
testimony. You have 13 pages, and it is quite substantive and 
quite inclusive. And you address our having to prepare for and 
respond to natural disasters.
    I want to go a little bit beyond what you have here. FEMA 
and HUD, FEMA has as its mission immediate short-term 
assistance, in as quickly as possible, stay no longer than is 
necessary, and then HUD, as it relates to housing, HUD becomes 
the provider of choice.
    There has been some question as to when FEMA's aid ends and 
HUD's begins. There have been, as I understand it, 
conversations, dialogue has taken place to try to come up with 
some means by which we can know when FEMA will no longer 
provide temporary housing and HUD will step in and start to 
provide the long-term assistance that HUD provides.
    Have you looked at this question? And if you have, how are 
we hopefully going to resolve the question of FEMA temporary, 
HUD long term, and when they actually end and begin?
    Ms. Duke. Yes, definitely. And Secretary Napolitano is very 
engaged in this. I mean, the issue--and it was highlighted by 
Katrina--I mean, FEMA, you talked about having competent in 
place--FEMA is not in the long-term housing business. It is in 
the response and recovery, just as you said.
    What happened is, temporary housing is only temporary if it 
is returning to a permanent solution. So if somebody is 
rebuilding their home, then it is temporary housing.
    But in the case of Katrina and some other of the major 
disasters, there--the people in temporary housing were not 
returning or had nothing to return to. Either they weren't 
rebuilding or they didn't have something before the disaster, 
so there was nothing to return to.
    So I think the main thing we are working on is really 
just--both HUD and DHS agrees there should be a handoff in 
those cases and really just working out how that can happen 
seamlessly so that the person needing the housing, the victim 
of disaster isn't, you know, disadvantaged by the transition.
    And how do we define at what point does temporary housing 
end and when HUD takes over? And it is not necessarily a 
timeframe. It more has to do with the reasonable expectation?
    Mr. Green. Conditions.
    Ms. Duke. ----of end to the temporary need versus a more 
permanent need. And that is what we are working with HUD on 
now. And I think you will see that continue to be a better 
relationship.
    Mr. Green. Well, I thank you for your efforts in this area, 
because one of the most disenchanting aspects of this is when 
we find persons who are housed temporarily and they are being 
told--it always seems to happen this way--right around some 
significant event or holiday that they are going to have to 
move and we find ourselves, members, asking for extensions of 
time.
    And to be candid, the FEMA reps have been fairly responsive 
in granting extensions, but it does create quite a bit of 
disruption and turmoil in the lives of the people who are 
trying to gain stability after having suffered a tragedy.
    So the appeal, I suppose, is that we do as expeditiously 
this work as we can so that we don't continue to have people 
who are uncertain as to what will happen next. If we can just 
give people a degree of certainty, they will have a degree of 
confidence. And that degree of confidence will allow them to 
start to rebuild their lives in the community that they happen 
to be in, that the school of choice may be the one that is 
right nearby, but if you are not going to live in that 
community very long, then you have to look for another school.
    So I thank you for the comments, and my hope is that we can 
move expeditiously on this point. I sit on, by the way, 
Financial Services, so I happen to see it from both sides, 
Homeland dealing with FEMA, Financial Services dealing with 
HUD.
    Ms. Duke. And I agree. And because every family's situation 
is unique, Mr. Green, we have added, a little while after 
Katrina, case services that are almost like social services 
that we can actually counsel individual families based on their 
needs and their financial situation and their social situation.
    So that, I think, was a huge step on the department's part 
in terms of the human side of the effects of a disaster on a 
family.
    Mr. Green. Mr. Chairman, thank you. My time is expired.
    Mr. Carney. Thank you, Mr. Green.
    Ms. Duke, I had a question on the QHSR. As you know, the 
review is due in December of this year. And in fiscal year 
2009, President Bush's budget requested a total of $1.65 
million for the completion of a QHSR. Is the department on 
target to meet the December completion deadline?
    Ms. Duke. Yes, we are.
    Mr. Carney. Okay. That is heartening. Is it going to be, 
from your perspective, a thorough, complete review? Or is it 
going to be more skeletal, as it was explained to us about a 
year ago?
    Ms. Duke. I think it is going to be a complete review from 
purposes of base-lining, mission alignment. What we did 
choose--there was kind of a two paths to go with variance in 
both. One is to try to solve world hunger, which would mean 
working out a lot of interagency-type work. And, you know, the 
department made the decision that we have--we want to get our 
own house in order from a mission alignment standpoint first.
    So the QHSR is very comprehensive from a DHS perspective, 
but it does not go out--because it would probably add 2 years 
to it--to the really broader scope of federal alignment based 
on, you know, the interactions. So it does do the touch points, 
but we are looking forward to doing this step of DHS mission 
alignment and then, in the next one, even broadening it more to 
the interagency, which I think is critical.
    Mr. Carney. Well, I agree 100 percent on that. I look 
forward to reading the report, in any case.
    Finally, I do want to return back to the data centers and 
certainly the physical location of those tanks. It is a huge 
concern of mine and almost anybody who has seen it. Please--you 
can do, give us a plan on how we are going to mitigate that. We 
could have an enormous crisis on our hands if we don't get that 
taken care of soon.
    And if we caught you flat-footed on that one, I apologize. 
It is just something that has been a concern, and we really 
have to get that taken care of, either moving the tanks or 
relocating the center, whatever we have to do to secure that 
building.
    Ms. Duke. I will get back to you with that. And I 
apologize, I don't have an answer for you right now.
    Mr. Carney. Okay, well, seeing as I am the only one left, 
and I have no more questions, we will adjourn here in a moment. 
But we do have more questions, and I imagine we will. We will 
give them to you and expect an expeditious return in writing.
    Thanks for everything you have done. And, you know, we look 
forward to working with you for years to come.
    Ms. Duke. Thank you, Mr. Chairman.
    Mr. Carney. The committee stands adjourned.
    [Whereupon, at 10:56 a.m., the subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              


                        Questions and Responses

Questions from the Honorable Bennie G. Thompson, Chairman, Committee on 
                           Homeland Security

   Responses from The Honorable Elaine C. Duke, Under Secretary for 
                               Management

    Question 1.: Last week, Secretary Napolitano announced that the 
Department reached its second Efficiency Review milestone. According to 
her announcement, effectively immediately, all of the Department's 
professional services contracts exceeding one million dollars will 
undergo a mandatory review before a new contract is awarded or an 
existing contract is renewed. When is this review scheduled to be 
complete and how will the Department use the results of the review to 
help formulate new acquisition polices?
    Will the Efficiency Review include an assessment of large contracts 
to determine if they are efficient and consider unbundling large 
inefficient contracts to provide more opportunities for small, 
minority, and disadvantaged businesses?
    Response: The Workforce Assessment initiative is a focused effort 
to review the balance between in-house and contract DHS resources. The 
desired end result of the initiative on Workforce Assessments is to 
ensure that DHS operates in the most economical and efficient manner 
possible, seeks the appropriate balance of Federal and contract 
employees, and ensures that our contracts do not inappropriately 
include functions that must be performed by Federal employees. This 
efficiency initiative is not designed to assess large contracts to 
determine if they are efficient or to consider bundling issues with 
contracts.
    DHS has taken a number of significant actions to ensure 
competition. This includes putting controls in place for the SBA to 
review all DHS proposed contract actions over $2 million for bundling; 
further, for upcoming procurements including those to be re-competed 
and those reviewed as part of the efficiency initiative, DHS will 
conduct market research to determine which projects can be set-aside 
for small, minority, and disadvantaged businesses in accordance with 
FAR 19.5, 19.8, 19.13, and 19.14 and our small business review policy.
    As part of the Department's efforts to achieve that end result, all 
professional services, as well as administrative and management support 
contracts with an annual value in excess of $1 million are now required 
to be reviewed by the Head of the Contracting Activity, and such 
contracts with an annual value in excess of $50 million must be 
reviewed by the Chief Procurement Officer. The purpose of the review is 
to assure that these contracts do not include inherently or nearly 
inherently governmental requirements, personal services, or impact core 
functions that must be performed by federal employees.

    Question 2.: The Department has already received approximately $1.2 
billion for its Data Center consolidation and the FY 2010 budget 
requests an additional $200 million. The Data Centers located in 
Clarkesville, VA is expected to be contract-owned and contract-run. 
Given the sensitive nature of the Data Center's contents and the 
importance of its upkeep, why did the Department choose to contract out 
this facility?
    Response: The Department has not received $1.2B for Data Center 
consolidation. The Department has received a total of $253.4M toward 
this effort, broken down in the following manner:

                    DHS Data Center Migration Funding
------------------------------------------------------------------------
                                         Total Funding
                      --------------------------------------------------
     Fiscal Year        Appropriated to  DHS     Appropriated to  DHS
                                 HQ                   Components
------------------------------------------------------------------------
         FY 2007                   $53M                          $0
------------------------------------------------------------------------
         FY 2008                 $72.3M                         $0M
------------------------------------------------------------------------
         FY 2009                 $46.1M                        $82M
------------------------------------------------------------------------

    The conference report accompanying the 2007 DHS appropriation bill 
(House Report 109-699) offered the following guidance in how DHS should 
acquire the second data center services
        To provide for continuity of operations and fulfill back-up 
        requirements, the conferees direct the secondary facility and 
        infrastructure be at a separate remote location and the site 
        selection be conducted in a fair and open evaluation process.''
    DHS chose to enter into a contract for a complete data center 
managed service with a focus on the technology service elements, but 
also inclusive of necessary hosting support. This strategy places more 
emphasis on the needed outcomes for data center consolidation and 
operation. Use of a contract for managed services offered the following 
benefits
         Entailed a fair, open and competitive process in 
        keeping with Congressional guidance.
         Hosting at a contractor owned and operated facility is 
        provided as an element of the technology service offerings, 
        eliminating the need for traditional and lengthy Federal 
        facility acquisition process through the General Services 
        Administration.
         Decreases financial risk, as DHS pays for managed 
        services only as required.
         Provides for migration services.
         Provides for technology refreshment as an element of 
        the service.
         Provides for ``cloud-like'' services such as 
        Infrastructure as a Service, Platform as a Service and 
        virtualization.
         Allows for sole occupancy by DHS. Contract terms 
        require the facility to be dedicated to DHS and no other 
        tenants.
         All security features and processes defined by DHS 
        under the terms of the contract.
         Addresses contract exit strategy through an option to 
        negotiate a sale or lease of the facility.

Oversight
    Data Center 2 (DC2) is contractor-owned and contractor-operated, 
however the Government retains sufficient oversight of the Center and 
its operations through the following processes:
         Government personnel are assigned for onsite oversight 
        of DC2 operations
         Government personnel conduct Quality Assurance 
        Surveillance Plan (QASP) inspections to provide oversight and 
        assurance of all physical and operational areas:
                 Network Services
                 Physical Facilities and Services
                 Security Services
                 Other support areas (e.g. Installation of 
                equipment)
        DHS Security Team provide final approval to initiate work at 
        DC2 for all onsite contract support personnel
    DHS HQ staff work to verify, track, and monitor all invoices and 
financial matters relevant to DC2

    Question: How will the funds in the budget be allocated?
    Response: The funds in the budget will be allocated as follows:

------------------------------------------------------------------------
    Component        OMB  Approved           Elements of Migration
------------------------------------------------------------------------
           CBP             $38.65     10% of Production System Racks to
                                                             Migrate.
------------------------------------------------------------------------
         HQ DC             $58.80     Stennis and EDS Upgrades and O&M.
------------------------------------------------------------------------
          FEMA              $7.90     All systems out of Denton, Texas
                                            and Northern Virginia DC.
------------------------------------------------------------------------
             FLETC          $6.00                     100% Migration.
------------------------------------------------------------------------
           ICE             $33.85      100% out of Dallas, Rockville,
                                      Broomfield & Oak Ridge. 25% out of
                                                              ICE HQ.
------------------------------------------------------------------------
          NPPD             $10.00      Implement Data Replication and
   (NCSD/NCPS)                         Production Environment at EDS.
------------------------------------------------------------------------
NPPD (US--Visit)            $0.00     Migrate 100% of DOJ Dallas; Start
                                          migration of DOJ Rockville.
------------------------------------------------------------------------
           TSA             $11.40     50% of Atlantic City Data Centers,
                                                             5% of HQ
------------------------------------------------------------------------
          USCG             $22.40     17% of USCG's Operations Center
                                                        will migrate.
------------------------------------------------------------------------
         USCIS             $11.00     CIS will migrate 50% out of Dallas
                                        and Rockville. 0% of Manassas
                                                           (Verizon).
------------------------------------------------------------------------
          TOTAL           $200.00
------------------------------------------------------------------------


    Question 3.: Unfortunately, the Committee continues to receive 
complaints regarding the long delays that occur with respect to 
adjudicating EEO Complaints. To your knowledge, will any CRCL funds be 
used to improve the Department's EEO process?
    Response: The President's Budget for FY 2010 includes funding to 
support DHS EEO Programs and Diversity activities. CRCL intends to 
dedicate nine positions requested in the President's Budget to support 
CRCL's expanded efforts to identify and eliminate barriers to EEO, 
including promoting standardized EEO and Diversity Programs policies 
and practices throughout the Department. These positions will enable 
CRCL to more effectively: promote proactive measures throughout the 
Department to avoid EEO complaints (thereby reducing the EEO complaint 
inventory and enabling increased efficiency in processing current 
complaints); improve the processing of EEO complaints prior to 
adjudication (to lower average processing time of EEO counseling, EEO 
complaint acceptances, and EEO investigations); and to recruit 
additional staff to adjudicate EEO complaints.

    Question 4.: Although the Department recently received $200 million 
for the DHS Headquarters Consolidation, that money was part of the 
American Recovery & Reinvestment Act stimulus funds. The FY 2010 
budget, only requests $75 million for the consolidation effort, which 
is not scheduled for completion until 2016. If Congress chose to 
increase funding to accelerate the schedule, what funding amount would 
be sufficient? Will the Department's capacity allow for an acceleration 
of the schedule?
    Response: The $75 million requested in the FY 2010 budget is to 
commence the equally critical mission support consolidation effort for 
those functions/occupancies that do not relocate to St. Elizabeths. 
Currently DHS and Component headquarters functions are housed in over 
40 locations. Our plan proposes to reduce the total number of locations 
down to about eight, including federal space at St. Elizabeths, the 
Nebraska Avenue Complex, the U.S. Secret Service building, and the 
Ronald Reagan Office Building. Additionally, we plan to retain two long 
term leases currently housing TSA and ICE. Our remaining requirements 
for mission support and projected growth would then be accommodated in 
two long term lease locations. A prospectus to begin this mission 
support consolidation effort will be submitted to the Congress in the 
near future. This plan addresses our critical need for a consolidated 
headquarters and also addresses our future needs for the growth and 
evolution of the department.
    On a macro level, the schedule for the mission support 
consolidation is tied to the occupancy schedule of functions relocating 
to St. Elizabeths. As mission execution functions move out of their 
existing locations to St. Elizabeths, remaining mission occupancies can 
be transitioned to a final mission support consolidation location and 
the existing lease(s) terminated. Accordingly, with the final moves to 
St. Elizabeths scheduled for FY 2016, the mission support functions 
would move at that time as well to minimize vacancy risk to the Federal 
Government and align with lease expirations. On a micro level, it is 
possible to accelerate the mission support migration unilaterally or in 
conjunction with an acceleration of the St. Elizabeths development 
completion.
    While it is possible to accelerate the mission support 
consolidation independent of the St. Elizabeths development, the 
Federal Government via GSA would assume additional vacancy risk and the 
lease locations would remain until the mission execution functions 
moved to St. Elizabeths.
    Acceleration of the mission support consolidation in conjunction 
with an acceleration of the St. Elizabeths development presents 
additional challenges as well as opportunities.
    The amount of funding to accelerate the mission support 
consolidation is $251 million. If this funding were received in FY2010 
DHS would have the capacity to utilize the majority of the accelerated 
funding within the FY 2010 and the balance within FY2011, which is why 
we have requested these funds be identified as no year funds as in 
previous requests.
    The Department appreciates the strong support received from the 
Congress in the FY 2009 appropriation and the American Recovery and 
Reinvestment Act for the DHS Consolidated Headquarters development at 
St. Elizabeths. The funds provided will allow construction of Phase 1, 
U.S. Coast Guard Headquarters to include the new 1.1 million gross 
square feet office building and the renovation of certain historic 
buildings for shared use services such as a cafeteria, fitness center, 
etc. The funding also allows design to commence the follow-on phases 
(Phases 2 and 3) and GSA is in the process of getting these contracts 
initiated.
    The acceleration of St. Elizabeths funding would have no impact on 
Phase 1 completion currently planned for FY 2013 as construction 
funding has already been provided and GSA is poised to achieve an FY 
2009 award for a Design-Build Bridging contract. It will take all of FY 
2010 to advance the designs for Phase 2 (DHS HQ, FEMA and the NOC/
Collocation of Component Operations Centers) and Phase 3 (Remaining 
components) to a point where GSA will be in a position to award 
construction contracts for the future phases.
    We understand that the funding for this project competes with other 
priorities within the department and the Administration's overall 
budget priorities and believe the current phasing provides the right 
balance of consultation and execution to effectively and efficiently 
complete the development.
    Should construction funding for the remaining phases be provided in 
FY 2010, it is questionable as to whether a contract could be awarded 
during FY 2010. However, with the remaining St. Elizabeths funding in 
hand, it is possible to award a construction contract for the remaining 
development in FY 2011 that has the potential to reduce the total 
development by up to one year (FY 2015).

    Question 5.: There is a shortage of acquisition personnel 
throughout the Federal Government and the Department has not been 
spared from this fate. As a result, the budget for the Office of 
Procurement seeks to increase FTEs for the DHS Intern program from 100 
to 150. However, our Committee oversight has revealed that the greatest 
need for acquisition personnel is at the mid and senior level.
    How will the Department use funds from the budget to address the 
lack of journeyman level acquisition personnel?
    Response: Fifty additional FTE's for FY-2010 was requested for the 
Acquisition Professional Career Program (APCP) (aka DHS Acquisition 
Intern Program) to continue the build up to a full compliment of 300 
participants (100 annually) required to meet the Department's entry 
level accession plans.
    To address the mid-career recruitment issues, the Office of the 
Chief Procurement Officer (OCPO) is exploring several courses of 
actions. The first is building a business case to recruit from non-
traditional mid career sources, such as purchasing agents and 
purchasing clerks that have recently been laid off from private 
industry due to the economic downturn. The business case looks at the 
total cost of hiring individuals with purchasing experience outside the 
federal sector and training them up quickly in the particulars that 
result from federal processes, laws and regulations. Additionally, the 
Department has partnered with the Federal Acquisition Institute on a 
mid-career recruiting initiative that hopes to bring fresh ideas on 
targeted pools of candidates and resources and flexibilities in hiring 
available to government agencies. The Department is also attempting to 
identify mid-career recruits from within the employee ranks in other 
jobs series and targeting them to ``bridge'' into the procurement 
profession. All programs are in the concept phase but show great 
promise.
    To address the senior level shortages, the Office of the Chief 
Procurement Officer continues to appropriately encourage the use of the 
re-employed annuitant authority and will continue to centrally 
advertise in professional trade magazines for efficiency. Additionally, 
OCPO has employed a central recruitment strategy for senior level and 
hard to fill vacancies by hiring a recruitment coordinator dedicated to 
working with the Heads of Contracting and Level I Program Managers to 
identify personnel requirements and hard to fill vacancies. In 
coordination with the human resource specialists, the coordinator will 
employ innovative techniques and use recruiting technology tools to 
assist in filling these senior level positions.

    Question 6.: The budget includes a $3.1 million request for the 
implementation of a department-wide contract records management system. 
The budget requests two FTEs to implement this system Department-wide. 
I am concerned about whether the requested personnel increase is 
sufficient. Please explain how the Department plans to achieve this 
important goal with such a small staff allocation.
    Response: The additional 2 FTE/3Postions requested for the 
Electronic Records Management System (ERMS), will provide the Program 
Office with adequate FTE to support the initial activities of the ERMS 
project. We anticipate this to be sufficient for the first year, 
however based on the complexity of the project and the significant 
change management plan that will be needed, additional FTE's may be 
requested in future year budget requests.
    In addition, DHS HQ is also working with all Components to identify 
the appropriate number of FTE needed to rollout and sustain the ERMS 
effort department wide. It is estimated through the synergistic effort 
of all Components and the DHS HQ office, a total of 25 FTE will be 
realized through the lifecycle of the ERMS program.

    Question 7.: There is an $8 million request for the Privacy Office. 
This is only $1.2 million over the FY09 enacted amount of $6.8 million. 
Given the FOIA backlog, amount of training done by the office, and the 
number of reports the office produces, please explain how this minimal 
increase will allow the Office meet its obligations?
    The budget request for the Privacy Office asks for an increase of 2 
FTE. Please explain why an office that is involved in training 
throughout each DHS component, drafting quarterly reports, conducting 
privacy impact assessments, and providing training to fusion centers 
would only need an increase of 2 full time employees? Please explain 
why this office was not provided with more than 2 FTEs and how, in 
light of this allocation, it will adequately complete its mission?
    Response: In FY10, the Privacy Office is requesting $7.9M. This is 
an increase of nearly 50% above its 2008 expenditures. The Privacy 
Office is using much of this increase to hire new professional staff: 
between now and the end of FY10, the Privacy Office anticipates hiring 
seven additional full-time, Federal employees. This will bring the 
total complement for the privacy and FOIA functions to 36 FTE, in 
addition to some minimal contractor support.
    I am confident that this budget and workforce level will permit the 
Privacy Office to complete its statutory responsibilities to the 
highest standards. The Department has already shown remarkable progress 
in reducing the FOIA backlog, and the Privacy Office's FOIA staff is 
adequately staffed to provide the guidance necessary to assist the 
components to further reduce and ultimately clear the FOIA backlog. The 
quarterly reporting is now fully integrated into the Privacy Office's 
routine. The next annual report, moreover, will be both timely and 
thorough. Finally, the Privacy Office continues to meet all its 
statutory obligations to provide training. Inside the Department, the 
Privacy Office coordinates training efforts closely with DHS' component 
privacy officers and privacy points of contact; while they are not 
formally part of the Privacy Office budget, they extend the reach of 
the office throughout the Department. Where appropriate, the office 
further leverages its relationships with other Federal partners: for 
the fusion centers, for example, the Privacy Office has partnered with 
the DHS Office for Civil for Civil Rights and Civil Liberties, the 
Department of Justice's Bureau of Justice Assistance, and ODNI's 
Program Manager for the Information Sharing Environment. Together, they 
are developing and providing training required under the 9/11 
Commission Act for both I&A analysts as well as for State and local 
fusion center representatives.
    The Privacy Office currently achieves all these responsibilities 
while setting the bar within the Federal Government for it 
comprehensive compliance program. The addition of seven new employees 
will only increase their performance.

    Question 8.: According to the Department's Inspector General, GSA 
offers a shared service solution to federal agencies for a significant 
portion of HSPD-12 implementation, including card issuance. GSA 
estimated it would cost the Department approximately $17M to issue 
cards to each employee, and $7.5M in annual maintenance, if the 
Department chose to utilize the GSA shared service solution. With these 
numbers in mind please explain:
    How does the Department justify the $25 million request when GSA is 
offering a solution that they estimate will cost only $17 million?
    Response: Initial Department estimates were for 150,000 employees 
and contractors. However, since that time additional workforce 
populations have been identified and the Department has hired a 
significant number of new employees and contractors. The most recent 
DHS workforce estimate is a total of approximately 250,000 employees 
and contractors nationwide.
    Based on the estimated population of 250,000, an initial issuance 
($49) and maintenance ($3 per month * 59 months) for the population 
through GSA would total $56.5 million over a five-year period. [GSA 
Cost = 250,000 * $226/ea = $56.5 million]
    Additionally, GSA issuance would not provide the four PKI 
certificates that are necessary for backend integration, logical access 
control system (computer login with Personal Identity Verification 
(PIV)) or physical access control (use of PIV with facility entry 
reader) integration.
    DHS would still need to develop and maintain its backend identity 
management system (IDMS) in order to support physical access control 
and logical access control validation and interoperability. Recent OMB 
guidance recommends that agencies develop backend IDMS in order to 
support usage and interoperability of the PIV cards.
    The GSA cost estimate also does not include reissuance, which would 
be required for a significant amount of the workforce due to turnover, 
lost or damaged cards, and renewals.

    Question: What metrics/analyses were used by the Department to 
determine the $25 million included in the budget for HSPD-12 card 
issuance?
    Response: Please see attached cost analysis spreadsheet.

                               Attachment

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      FY2010 Estimate (135,000 Individuals        FY2011 Estimate (105,000 Individuals
------------------------------------------------------------------                   Badged)                                    Badged)
                                                                  --------------------------------------------------------------------------------------
                                                   Unit Cost           Number of Units             Cost            Number of Units            Cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Qty Additional Personnel Credentialed Per                              135000 Issuances                            105000 Issuances
                                     Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
         Qty Reissuance/Renewal/Damaged/Lost                          36250 Reissuances                           62500 Reissuances
--------------------------------------------------------------------------------------------------------------------------------------------------------
Initial Issuance Support and Workstations
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Card Issuance Workstation (CIWS)             15,672.67         192 Workstations          3,444,947         190 Workstations         3,068,598
                                        Lease/Installation/Maintenance
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Surge Labor Suppo$70/$74/$77                      60 Contractor8,169,969                      57 Contracto8,169,969
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Surge Labor Supp4,216,160.72de TraveFor Surge Support          4,216,161        For Surge Support         4,015,391
--------------------------------------------------------------------------------------------------------------------------------------------------------
       Program Management Office Support            783,064.61                      N/A            783,065                      N/A           783,065
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                Training              2,584.24             150 Sessions            387,636             150 Sessions           387,636
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Scheduling Software Hosting and Licensing                             For up to            144,716                For up to           144,716
                                      Fee                                 200 Locations                               200 Locations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Interfaces Development for Connection to                                   3 Interfaces            142,853
                         Vetted Databases
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    Issuance Consumables
--------------------------------------------------------------------------------------------------------------------------------------------------------
                          PIV Card Stock                 13.12                  171250 Cards     2,246,800                  167500 Cards    2,197,600
--------------------------------------------------------------------------------------------------------------------------------------------------------
                           Badge Holders                  3.00                   136000            408,000                   130000           390,000
                                                                          Badge Holders                               Badge Holders
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Lanyards          1.12          136000 Lanyards            152,320          130000 Lanyards           145,600
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     Printer Consumables                  3.68              For 171250 Cards       630,234              For 167500 Cards      616,434
--------------------------------------------------------------------------------------------------------------------------------------------------------
 Annual Enterprise Back-End System Costs
   Required to Support Technical Solution
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maintenance of Identity Management System            70,000.00                      N/A             70,000                      N/A            70,000
                                   (IDMS)
--------------------------------------------------------------------------------------------------------------------------------------------------------
   Card Management System (CMS)/Identity            800,000.00                      N/A            800,000                      N/A           800,000
                Management System (IDMS) License Fee
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     IDMS Server Hosting             16,634.50                      N/A             16,635                      N/A            16,635
--------------------------------------------------------------------------------------------------------------------------------------------------------
Treasury Certificate Authority Maintenance          350,000.00                      N/A            350,000                      N/A           350,000
                                      Fee
--------------------------------------------------------------------------------------------------------------------------------------------------------
                  PKI Support (Treasury Liaison,                                     4 Contractor1,008,843                       4 Contracto1,008,843
         Registration, Technical Support,
  PKI Engineering, Policy and Oversight)
--------------------------------------------------------------------------------------------------------------------------------------------------------
     Communications (VPN) to Support PKI            120,000.00                      N/A            120,000                      N/A           120,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Maintenance of IDMS Interface to                                            N/A              5,550                      N/A             5,744
                    Certificate Authority
--------------------------------------------------------------------------------------------------------------------------------------------------------
        PKI Certificates and Maintenance                  3.20        250000 Identities          1,470,000        250000 Identities           220,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maintenance of HQ and Component Interfaces                                 5 Interfaces             83,522             5 Interfaces            85,529
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Logical Access Ent1.40ise Midd250000 Identities            348,750        250000 Identities           348,750
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    TOTAL                                                       25,000,000                                 22,944,509
--------------------------------------------------------------------------------------------------------------------------------------------------------


    Question 9.: In early March, this subcommittee held a hearing on 
the DHS workforce. In that hearing, we received testimony about the 
benefits of a rotation program that assigns employees to other 
positions within their components and within the Department to further 
knowledge, collaboration and leadership skills.
    For the record, do you believe this kind of program would benefit 
the employee and the Department?
    Response: Yes. To carry out the Department of Homeland Security 
(DHS) mission effectively, it is imperative that Departmental offices 
and Components share a common understanding of DHS goals and how 
Components contribute to achieve those goals. Rotational assignments 
provide for better understanding of Department-wide perspectives and 
facilitate successful interoperability.
    Rotations are an integral part of the development of future leaders 
at DHS and as such, have been built into numerous enterprise-wide 
programs including: the Department's Senior Executive Service Candidate 
Development Programs, the DHS Fellows program, and the DHS National 
Security Professional Development (NSPD) program.

    Further, would any portion of your budget request be allocated to 
furthering such a program?
    Response: Yes. Investing in a Rotational Program that spans the 
Department is an efficient way to develop and retain strong leadership 
within the organization. The Chief Human Capital Officer has hired a 
Program Coordinator to manage the DHS Rotations Program throughout the 
Department. In addition, by the end of the current Fiscal Year the DHS 
University Learning and Development website will house a Library of 
Rotational Assignments .

    Question--General Background 10.: The Committee is pleased to see 
that the Department of Homeland Security (DHS) reached its second major 
Efficiency Review milestone last week. As part of the Efficiency Review 
process, Secretary Napolitano issued a mandatory review of all new 
contracts for professional services. However, the budget request does 
not specifically identify resources for this effort.
    Response--General Background. The Secretary's announcement of the 
efficiency initiative on Workforce Assessments is one of five 
initiatives launched on May 26. The Workforce Assessment initiative is 
a focused effort to review the balance between in-house and contract 
DHS resources, ensure that DHS operates in the most economical and 
efficient manner possible, improve contract oversight and ensure that 
our contracts do not inappropriately include functions that must be 
performed by federal employees.
    As a part of that larger efficiency initiative, DHS now requires 
that all professional services contracts with an annual value in excess 
of $1 million will be reviewed by the Heads of the Contracting 
Activity. In addition, professional services contracts with an 
estimated annual value in excess of $50 million will be reviewed by the 
Chief Procurement Officer.

    What resources will DHS use to conduct this review?
    Response: Existing resources within the Office of the Chief 
Procurement Officer will be used to conduct this review.

    What is the desired programmatic outcome of this review?
    Response: The overall intent of this initiative is to ensure DHS 
operates in the most economical and efficient manner possible. 
Specifically, DHS will conduct a series of comprehensive assessments of 
organizational resources to determine the most effective balance of 
contractor and federal employees, while maintaining appropriate 
oversight.
    The specific purpose of the contract reviews is to assure that any 
new DHS professional services contracts do not include inherently 
government functions, personal services, or otherwise adversely affect 
core capabilities that must be performed by federal employees. The 
reviews will also assure that there is adequate Government contract 
oversight of contractor employees and sufficient Federal employees to 
ensure performance in accordance with the terms of the contract. The 
larger organizational efficiency and manpower management reviews 
included in the initiative are being designed, consistent with our 
human capital resource planning process, to seek the most efficient 
organization and developmental needs and to then transition to that 
organization, taking into account the total workforce, existing gaps 
and weaknesses, economies and efficiencies.

    Do you anticipate cost savings as a result of the review, and if 
so, how much?
    Response: We do anticipate significant savings. While the 
Department cannot quantify the exact performance improvements or 
operational cost savings that will be realized, DHS is working with 
OMB, as a member of its Multi-Sector Working Group, to develop 
Workforce Assessment performance and cost metrics and anticipates that 
the overall Workforce Assessment initiative will yield significant cost 
savings. These savings will be achieved by employing the most efficient 
and effective balance of Federal employees and contractor requirements. 
OMB's June 11, 2009 FY 2011 budget guidance requires agencies to (a) 
freeze at the FY 2010 request level (if the FY 2010 budget request is 
lower than the FY 2011 amount in the FY 2010 Budget) and (b) achieve a 
5 percent reduction from the FY 2011 level in the FY 2010 Budget. In 
conjunction with the reviews of contracts included in the DHS Workforce 
Assessments, the 5 percent reduction should reduce contract spending by 
ending contracts that are inappropriate, ineffective, wasteful, or not 
otherwise likely to meet the agency's needs, and by using strengthened 
acquisition oversight practices and resources.

    Question 11.: The Department's HSPD-12 implementation process has 
been significantly delayed in the past. In fact, the Department has 
never once met one of the Federal government-mandated deadlines.
    Response: The Department has met Federal government-mandated HSPD-
12 deadlines set forth by OMB:

------------------------------------------------------------------------
            Date                             Agency Action
------------------------------------------------------------------------
           8/26/05            Provided list of other potential uses of
                                               Standard to OMB
------------------------------------------------------------------------
          10/27/05              Complied with FIPS 201, Part 1
------------------------------------------------------------------------
          10/27/06            Began compliance with FIPS 201, Part 2
------------------------------------------------------------------------
          10/27/07            Verified and/or completed background
                              investigations for current employees and
                                                   contractors
------------------------------------------------------------------------
          10/27/08            Completed background investigations for
                              Federal department or agency employees
                                        employed over 15 years
------------------------------------------------------------------------

    Additionally, before beginning card issuance, DHS spent the time 
necessary to develop the technology required to support the DHS PIV 
cards. This technical solution will enable the DHS PIV cards to be used 
for physical and logical access and will allow the cards to be 
electronically validated in real time.

    Will the current budget request allow the Department to get back on 
track?
    Response: The current budget request will allow the Department to 
remain on track to complete issuance of badges to approximately 150,000 
by 2010. However, the Department will require additional resources in 
fiscal year 2011 to complete the badge issuance to the remaining 
Department personnel, which is currently estimated to be an additional 
105,000.

    How does establishing a separate line-item request for HSPD-12 
assist the Department in its efforts?
    Response: The $25 million will provide a unified and collaborative 
DHS-wide effort through a Component-supported, centrally managed 
deployment approach to HSPD-12. This will help gain significant 
economies of scale by reducing overall program cost through the use of 
shared resources and coordinated planning across components. Central 
management and execution of this program is expected to save $20M in 
the initial issuance of HSPD-12 cards. It will also support the 
establishment of a performance-based acquisition strategy that enables 
the Department to meet DHS and OMB milestones and timelines.

    Question 12.: Has the Department conducted any investigations or 
analysis of the potential privacy and civil liberties liabilities posed 
by the implementation of HSPD-12? If so, what steps have the department 
taken to mitigate privacy-related concerns?
    Response: Since the issuance of HSPD-12, the DHS Privacy Office has 
worked closely with the Office of Security to ensure the directive is 
implemented in a manner that respects privacy.
    On October 13, 2006, the Department published an initial Privacy 
Impact Assessment (PIA) entitled ``Personal Identity Verification,'' 
(PIV) which assessed DHS's ``role in the collection and management of 
personally identifiable information (PII) for the purpose of issuing 
credentials to meet the requirements of HSPD-12.'' It examined the 
Department's efforts to comply with credentialing standards created by 
the National Institute for Standards and Technology related to privacy.
    That PIA concluded that substantial ``consideration has been given 
in establishing the DHS HSPD-12 PIV system to ensure that the system is 
compliant with applicable E-Government of 2002, Privacy Act of 1974 and 
Freedom of Information Act provisions, and the PIV Program has worked 
closely with the DHS Privacy Office and the Chief Information Officer 
to ensure all requirements have been met in a timely manner.''
    An update to the initial PIA was signed on April 2, 2009, to, among 
other things, examine the Department's use of a more robust, second-
generation Identity management system for HSPD-12. This new PIA 
contains analysis and steps the Department has taken to enhance privacy 
related to (1) the System and the Information Collected and Stored 
within the System; (2) Uses of the System and the Information; (3) Data 
Retention; (4) Internal Sharing and Disclosure; (4) External Sharing 
and Disclosure; (5) Individual Access, Redress, and Correction; (6) 
Technical Access and Security; and (7) Technology.
    Finally, on June 26, 2009, the Department published an update to 
the System of Records Notice in the Federal Register (74 FR 30301) 
entitled ``DHS Personal Identity Verification Management System 
SORNDHS/All-026.''
    The compliance documents discussed in this response are available 
to the public online on the DHS Privacy Office's website, www.dhs.gov/
privacy.

    Question 13.: In reviewing the plan to migrate various components 
from their current locations to the two established Data Centers it 
appears as if some components will be 100% transferred from where they 
are now by the end of FY2010. While I appreciate the quick progression 
of the project, I have some concerns. The DHS IG has reported several 
additions to the current capabilities including items such as 
additional telecommunications circuits, computer floor space and 
redundant equipment.
    What measures are the Department taking to ensure that all of the 
equipment and Data stored at these facilities is appropriate?
    Response: This question appears to be directed towards the 
questions raised in the recent Office of Inspector General (OIG) 
report, DHS' Progress in Disaster Recovery Planning for Information 
Systems.
    The OIG's report examined disaster recovery, which the data center 
consolidation effort is designed to improve. The report indicates that 
establishment of DHS' two enterprise data centers is significant 
progress towards improvement; however, the report did not portray a 
fully accurate picture of the DHS enterprise data centers. Of the seven 
recommendations contained in the OIG's report, three focused on the 
data centers.
    OIG Recommendation # 1--Provide necessary resources to ensure that 
the DC1 and DC2 have the connectivity, equipment, and computer room 
floor space to act as alternate processing sites for each other.
        Necessary connectivity existed at the time of the OIG 
        examination, and the situation has improved since. Both the 
        Stennis Data Center (DC1) and the EDS Data Center (DC2) have 
        redundant connections to the DHS wide area network, OneNet. 
        Both DC1 and DC2 have redundant connections to the Internet. 
        The two centers have long been interconnected by virtue of 
        their OneNet connections and have ample capacity for current 
        inter-center communications. Nonetheless, DHS has installed a 
        high-speed link between the centers in anticipation of greater 
        center-to-center communications. Installation of that link was 
        ongoing at the time of the OIG's information collection.
        Floor space at both centers is adequate for projected needs. 
        During the course of detailed, on-site discovery efforts at 
        older data centers targeted for consolidation, DHS CIO found a 
        much lower use of space than earlier data calls revealed. Two 
        examples of this trend are the space used by several elements 
        of DHS at the Department of Justice data centers and space used 
        by the Transportation Security Agency at their older data 
        center. In both these cases, actual floor space consumed was 
        approximately 25% of original estimates. Consequently, space at 
        DC1 and DC2 is adequate.
        OIG report indicates agreement with DHS CIO concerning both the 
        connectivity and space issue. Specifically, ``These 
        recommendations will be considered resolved.''
    OIG Recommendation # 2--Provide redundancy to eliminate reported 
power and telecommunications single points of failure at DC1
        DC1 was constructed with modern backup power systems consisting 
        of an uninterruptible power supply (batteries), diesel 
        generators and automatic switching systems to invoke the backup 
        capability in the event of a failure in utility power. This 
        capability is routinely tested, and was fully and successfully 
        demonstrated during Hurricane Gustav. There are, however, 
        essential power capacity improvements needed at DC1. A large 
        percentage of the funds requested for the DHS CIO under 
        Security Activities are for these power improvements. Thus, 
        support of the President's budget is fully consistent with the 
        OIG report.
        The NASA Stennis Space Center, on which DC1 resides, did indeed 
        have a telecommunications redundancy shortcoming revealed 
        during Hurricane Katrina. Specifically, both the 
        telecommunications routes serving the facility were impacted by 
        the storm. Subsequently, NASA established a new tertiary 
        northbound telecommunications route that would be impervious to 
        the kinds of disruptions that a worst-case scenario, such as 
        Hurricane Katrina, might present. DHS has made full use of this 
        northbound route for redundant telecommunications services.
        Again, OIG report indicates agreement with DHS CIO. 
        Specifically, ``These recommendations will be considered 
        resolved.''
    Recommendation # 6--Re-perform risk assessments at DC1 and DC2 and 
continue to do so whenever there has been a significant change to the 
system configuration or the operating environment.
    DHS undertook thorough due diligence in examining risk at both DC1 
and DC2. Prior to commencing operations at DC1, the Federal Protective 
Service undertook a risk assessment with positive results. The Navy 
examined the facility and certified it for processing of sensitive 
information. DC2, as a contractor owned facility was not subject to an 
examination by the Federal Protective Service. However, the DHS Office 
Security had dedicated participation on the evaluation team that 
reviewed contractor proposals for DC2, fully supporting the selection. 
Furthermore, the DHS Office of Security conducted a comprehensive on-
site review of DC2 security conditions. DC2 received support from the 
Defense Security Service for processing of sensitive information at the 
facility.
    A number of the specific circumstances cited in the OIG's report 
were not representative of the full context of industry practices or 
facility history. For many years, the Stennis Space Center has been 
home to a number of computer processing centers for other agencies with 
demonstrable reliability and safety. The facility DHS occupies at the 
Stennis Space Center did undergo an environmental study with favorable 
findings. Hurricane Katrina tested the facility's readiness in the most 
stringent possible way. Only telecommunications was found lacking and 
that has been resolved as indicated above. Fencing at DC1 is a desired 
improvement and funds to do so are in the President's budget. DC2 fuel 
tanks are in proximity to the diesel generators that they serve, which, 
in turn, are in proximity to the facility to which they provide backup 
power. This is the common industry practice for data center facility 
generator installation and the tanks are constructed with a variety of 
safety features. DC2 fire suppression does use water, which is not an 
uncommon industry practice. The DC2 fire suppression system is a dry-
pipe system that requires two-stage activation. Risk in this regard is 
further mitigated through a comprehensive smoke detection system.
    DHS will undertake renewed risk assessments periodically and as 
environmental circumstances dictate.

    The Department has already entered into two multi-year contracts 
totaling over $1 billion for Data Center consolidation, shouldn't these 
items have been dealt with in the initial contract?
    Response: As outlined in the text above, telecommunications 
circuits, computer floor space and redundant equipment issues raised in 
the OIG report were all considered during the acquisition and 
implementation phases for data center services. DHS did undertake 
significant due diligence to verify that these concerns were addressed.

    Question 14.: President Obama's budget request for the Department 
of Homeland Security includes only $75 million for the Headquarters 
Consolidation Project. According to the budget justification, none of 
this funding will be used for the St. Elizabeths portion of the 
project. Instead, this funding will be used to consolidate expiring 
leases around the National Capital Region. The American Recovery and 
Reinvestment Act included a sizable amount ($650 million) of funding 
for the St. Elizabeths project, an amount nearly equaling what would 
have been the President's Fiscal Year 2010 request.
    Please explain why the FY10 budget request does not include 
additional construction funding for the St. Elizabeths project.
    Response: The department is grateful for the generous level of 
funding provided by the Congress in the Fiscal Year (FY) 2009 
appropriation and the American Recovery and Reinvestment Act (ARRA). We 
understand that the funding for this project competes with other 
programs within the department and the Administration's overall budget 
priorities.
    The provided funds will be used to construct St. Elizabeths (St. 
E's) Phase 1, the United States Coast Guard Headquarters (USCG), a new 
1.1 million gross square feet office building plus the renovation of 
selected historic buildings that will be adaptively restored for shared 
use services such as a cafeteria and fitness center. The funding also 
allows the design to begin for follow-on phases 2 (DHS HQ, FEMA and the 
NOC/Collocation of Component Operations Centers) and 3 (Remaining 
components).
    It will take all of FY 2010 to advance the designs for Phase 2 and 
3 to a point where the General Services Administration (GSA) can award 
construction contracts for these phases. Consequently, we did not 
request construction funding for Phases 2 and 3 in the FY 2010 budget 
because we will not be in a position to execute these funds in the year 
they are appropriated.

    If the funding in the American Recovery and Reinvestment Act is 
truly meant to be stimulative, shouldn't the FY10 budget include 
additional funding for construction at St. Elizabeths?
    Response: The ARRA brought the FY 2010 request for St. E's forward 
into FY 2009 aligning the funding with the planned schedule to produce 
the stimulating effect the Act intended. Given the time necessary to 
develop and advance the designs for Phases 2 and 3 to a point where 
construction contracts can be awarded additional funding can not be 
used during FY 2010. Since GSA is responsible for construction/
renovation of the ``warm lit shell'' of the buildings and DHS is 
required to fund the tenant improvements (TI), any additional funding 
for construction at St. E's would need to be provided to GSA.

    By not including additional funding for St. Elizabeths in the FY10 
budget, is the President using the stimulus to ``rob Peter to pay 
Paul?''
    Response: Not including additional funding for St. E's in the FY 
2010 budget is not robbing Peter to pay Paul. The ARRA brought the FY 
2010 request for St. E's forward into FY 2009 aligning the funding with 
the planned schedule. Given the time necessary to develop and advance 
the designs for Phases 2 and 3 to a point where construction contracts 
can be awarded additional funding can not be used during FY 2010.

    Why is the FY10 request focused solely on lease consolidation?
    Response: The $75 million requested in the FY 2010 budget is to 
commence the equally critical mission support consolidation effort for 
those functions/occupancies that do not relocate to St. Elizabeths. 
Currently DHS and Component headquarters functions are housed in over 
40 locations. Our plan proposes to reduce the total number of locations 
to about eight, including federal space at St. Elizabeths, the Nebraska 
Avenue Complex, the U.S. Secret Service building, and the Ronald Reagan 
Office Building. Additionally, we plan to retain two long term leases 
currently housing TSA and ICE. Our remaining requirements for mission 
support and projected growth would then be accommodated in two long 
term lease locations. A prospectus to begin this mission support 
consolidation effort will be submitted to the Congress in the near 
future. This plan addresses our critical need for a consolidated 
headquarters and also addresses our future needs for the growth and 
evolution of the department.
    The funds already provided will be used to construct St. Elizabeths 
(St. E's) Phase 1, the USCG HQ plus the renovation of selected historic 
buildings that will be adaptively restored for shared use services such 
as a cafeteria and fitness center. The funding also allows the design 
to commence for follow-on phases 2 (DHS HQ, FEMA and the NOC/
Collocation of Component Operations Centers) and 3 (Remaining 
components).
    It will take all of FY 2010 to advance the designs for Phase 2 and 
3 to a point where the General Services Administration (GSA) can award 
construction contracts for these phases. Consequently, we did not 
request construction funding for Phases 2 and 3 in the FY 2010 budget 
because we will not be in a position to execute these funds in the year 
they are appropriated.

    Wouldn't the inclusion of additional money for St. Elizabeths in 
the FY10 budget accelerate the project by up to one year, saving 
additional taxpayer dollars in the out years and advancing the priority 
of fostering a ``One DHS'' culture?
    Response: The inclusion of additional money for St. E's in the FY10 
budget will not advance Phase 1 completion which is currently planned 
for FY 2013 because construction funding has already been provided. GSA 
will award the Design-Build Bridging contract in FY 2009. It will take 
all of FY 2010 to advance the designs for Phase 2 (DHS HQ, FEMA and the 
NOC/Collocation of Component Operations Centers) and Phase 3 (Remaining 
components) to a point where GSA will be in a position to award 
construction contracts for these phases.
    Should construction funding for the remaining phases be provided in 
FY 2010, it is questionable as to whether a contract could be awarded 
during FY 2010. However, with the remaining St. Elizabeths funding in 
hand, it is possible to award a construction contract for the remaining 
development in FY 2011 that has the potential to reduce the total 
development by up to one year (FY 2015).
    Given the National Historic Landmark (NHL) status of the campus, 
the current phasing provides the right balance of consultation and 
execution to effectively and efficiently complete the development.

    Question 15.: Are you comfortable with the level of cooperation 
between DHS and the General Services Administration on the St. 
Elizabeths project?
    Are there specific areas that need attention or improvement to 
which Congress should pay particular attention to avoid missteps or 
cost overruns?
    DHS is comfortable with the level of cooperation from the General 
Services Administration (GSA) for the St. Elizabeths program. When the 
St. Elizabeths program moved from the planning to the execution phase, 
GSA National Capital Region (NRC) assigned a Deputy Regional 
Commissioner to lead the St. Elizabeths development. The individual 
assigned brings a wealth of experience to this program from his 
experience as the GSA Project Executive for design and construction of 
the FDA White Oak Campus development. He demonstrates a keen 
understanding of the complexities associated with the St. Elizabeths 
program and displays a customer focused no-nonsense approach toward 
scope, schedule and budget accountability. The DHS Program Management 
team and the GSA team, led by the Deputy Regional Commissioner, 
executed a partnering agreement that ensures both parties agree to work 
together to achieve a successful program delivering the scope on 
schedule and within budget.
    DHS does not have any specific areas that need attention or 
improvement from Congress at this juncture and we will provide you with 
updates and status reports to keep you apprised of the programs 
progress. We will immediately notify Congress if a situation arises 
that requires particular attention to avoid missteps or cost overruns.
    Question 16.: The budget includes $25 million for the Department to 
meet the mandate to issue HSPD-12 compliant identification cards by 
October 2010.
    Please discuss the Department's progress to date in meeting this 
requirement.
    Response: The Department has developed a scalable technical 
solution that will support nationwide deployment. DHS has established a 
centralized Identity Management System (IDMS) that consolidates PIV-
related information and will support interoperable usage of the PIV 
cards across the Department. This system is required in order to 
support real-time validation of PIV card information.
    To date, the Department is in the process of completing issuance to 
the approximately 10,000 personnel at DHS Headquarters, and is on track 
to complete this by September. Additionally, the Department has 
established several pilot issuance location at Component Headquarters 
facilities. DHS is continuing to roll-out PIV card capabilities at the 
Component level and, based on FY10 funding, will be able to continue to 
do so on a larger scale.

    For what will the FY10 funding be used?
    Response: The $25 million will provide support for a centralized 
approach to HSPD-12 implementation to include:
         Initial DHS PIV card issuance effort
         Initial quantities of card stock, badge holders, and 
        consumables
         PKI certificates for the Department
         Managing the back-end IDMS and infrastructure
         Providing guidance and coordination for DHS-wide 
        centralized deployment efforts
    Will the Department be able to meet the October 2010 deadline?
    Response: The Department will be able to complete PIV card issuance 
to approximately 150,000 employees and contractors, i.e., the majority 
of the estimated DHS workforce. The Department will need to complete 
badging for the remaining estimated 105,000 employees and contractors 
in fiscal year 2011. It is important to note that the initial estimates 
for the employee population at DHS were approximately 150,000; however, 
further data calls and growth of the Department have resulted in larger 
employee numbers and estimates for contractor numbers.
    Question 17.: Through its HR Access Program, the Transportation 
Security Administration (TSA) has developed an online ``Candidate 
Dashboard'' to allow potential Transportation Security Officers to 
track the status of their application. According to TSA, this has 
served to give candidates a better understanding and expectation of the 
hiring timeline while also eliminating frequent calls to TSA's 
personnel helpdesk and to the airports.
    As you work to develop ways to streamline the hiring process at 
DHS, have you considered implementing a tool such as the ``Candidate 
Dashboard'' to make the process a little more user friendly?
    What other initiatives do you plan to implement to prevent talented 
and motivated people from slipping away due to the lengthy and 
complicated Federal hiring process?
    Response: Modernization of our hiring process is one of the top 
human capital priorities of DHS. The TSA Candidate Dashboard is an 
interim solution that provides status visibility to many applicants. 
DHS will deploy an enterprise staffing solution that streamlines the 
application process, provides real time status, and provides hiring 
officials more control over the hiring process. This solution will 
surpass the guidance included in the latest OMB directive regarding 
modernization of the federal hiring process.
    In 2008, DHS began the enterprise-wide implementation of a modern, 
automated end-to-end hiring system that not only provides applicants 
real time status of their application, but also allows prospective DHS 
employees to apply from any commercial job board or social networking 
site that DHS utilizes, in addition to USAJobs. We call this system 
``TALENTLink.'' TALENTLink is part of the DHS enterprise-wide Human 
Resources Modernization Strategy and was selected by a diverse team of 
subject matter experts from across the Department.
    Rather than focus on one segment of DHS employees, TALENTLink 
allows all applicants from outside or within the government to easily 
and quickly apply for DHS jobs via a streamlined process. This approach 
enables a broad basis from which to attract the best talent to DHS. The 
TALENTLink system and supporting processes are fully OPM compliant and 
provide immediate and ongoing communication with the candidate on the 
status of their application. TALENTLink is interactive and provides 
visibility, accountability, and comprehensive help desk support 
throughout the entire hiring process for managers, recruiters, and 
applicants.
    We will eliminate outdated manual HR processes and replace 
expensive fragmented HR systems across DHS with TALENTLink, the 
integrated departmental hiring system, which dramatically increases 
efficiency, improves the quality of hires, elevates the DHS brand as an 
employer of choice, and reduces operational costs by a minimum of 45%.
    DHS has implemented several innovative initiatives to assist 
applicants and hiring managers in navigating the federal hiring process 
by:
     Eliminating the requirement for applicants to write 
cumbersome ``essays'' on knowledge, skills, and abilities when applying 
for DHS jobs;
     Streamlining the recruitment and selection process for 
Senior Executive Service positions;
     Standardizing vacancy announcements by using plain 
language terminology to the extent possible;
     Allowing Veterans to submit appropriate documentation in 
lieu of a Form DD-214 when a Veteran is on terminal leave. (A time when 
they can apply for jobs but have not yet been issued a DD-214);
     Developing a streamlined ``EZ'' Job Application Form for 
collecting applications at job fairs; and
     Coordinating DHS wide hiring efforts through Human Capital 
Council members.

    Question 18.: The American Recovery and Reinvestment Act (stimulus) 
provided more than $2.7 billion to the Department and its components.
    Please discuss efforts underway within the Management Directorate, 
be it through your office, the Office of the Chief Financial Officer, 
or the Office of the Chief Procurement Officer, to ensure that there is 
appropriate oversight of how this funding is distributed.
    Response: DHS Management, the Office of Inspector General (OIG), 
and the Government Accountability Office (GAO) have identified 
management challenges that DHS must mitigate to effectively manage 
Recovery Act funds. DHS is currently implementing corrective actions to 
address identified risks across DHS, as outlined in the FY 2009 DHS 
Internal Control Playbook. To mitigate risks and remediate known 
deficiencies, DHS is implementing the following key strategies:
        Acquisition Management:
         The DHS Acquisition Review Board (ARB) is the forum 
        through which Department executives assess a program's progress 
        against defined management criteria throughout the acquisition 
        lifecycle, bring essential issues to the Acquisition Decision 
        Authority (ADA), and recommend decisions and courses of action 
        to the ADA, who exercises final ARB decision authority. All 
        Recovery Act initiatives are undergoing a review by the Under 
        Secretary for Management's Senior Management Council using a 
        ``Mini-ARB'' format. The purpose of the Mini-ARBs is for the 
        program or Component to provide an accounting of how the ARRA 
        funds are being used independent of or within existing programs 
        and to provide a briefing on the impact of the influx of ARRA 
        funds to an existing program baseline in terms of cost, 
        schedule, performance and scope changes. The program also 
        reports on the procurement strategy and plan for the ARRA 
        funding and addresses the Accountability Measures as tracked by 
        the Administration. The review, authorizations, and action 
        items are documented in an Acquisition Decision Memorandum 
        (ADM).
         OCPO will perform special procurement oversight 
        reviews of contracts that were awarded using ARRA funds. OCPO 
        will selectively identify approximately ten of the largest DHS 
        contracts funded with ARRA funds for review, and will also 
        include a statistical sample of all other DHS contracts funded 
        with ARRA for review. The reviews will focus on compliance 
        with: (a) all ARRA procurement-related requirements; (b) key 
        requirements of the Federal Acquisition Regulation, Homeland 
        Security Acquisition Regulation, and Homeland Security 
        Acquisition Manual; and (c) good business practices. The first 
        review will be initiated during the first quarter of Fiscal 
        Year 2010, with subsequent review(s) performed based on the 
        findings of the first review as well as the rate of subsequent 
        DHS expenditures of ARRA funds.
         To ensure that DHS contracting personnel understand 
        the special requirements that apply to use of Recovery Act 
        funds, the Chief Procurement Officer issued transmittal 
        memoranda highlighting key aspects of Office of Management and 
        Budget guidance (initial and updated). OCPO also issued 
        Advisories explaining how to implement the unique Federal 
        Acquisition Regulation requirements and provided two training 
        sessions for contracting personnel assigned to Recovery Act 
        procurements.
         In order to track progress on solicitation milestones 
        and accomplishment of the Department's targets for competition 
        and fixed price contract awards, the Senior Accountable 
        Official solicits and compiles information from Component 
        operational offices for each planned Recovery Act solicitation 
        and interagency agreement (IAA). This information includes the 
        contract type, level of competition, estimated dollar value of 
        the solicitation, and whether each contract awarded by the 
        Component or by the servicing agency receiving the IAA will be 
        a fixed-price contract. Upon receipt, the Senior Accountable 
        Official scrutinizes Component input and where discrepancies 
        are discovered, clarification is sought. With respect to 
        competition, anticipated Component sole source awards are 
        questioned to ensure there is sufficient justification to 
        warrant a non-competitive acquisition strategy. Current 
        projections indicate that a minimum of 87% of Recovery Act 
        procurement funds will be awarded competitively. DHS plans to 
        solicit and compile Component information on a monthly basis to 
        track progress against the plan; additional information may be 
        solicited as determined necessary.

Financial Management:
         Develop, implement, and monitor policies and 
        procedures around financial reporting processes. Provide 
        training and communicate new policies and procedures; and
         Improve current processes by implementing internal 
        controls.
         To ensure the accuracy of the data presented on 
        www.Recovery.gov, DHS proposes to implement a multi-phased 
        Business Intelligence (BI) pilot to assist with reporting. The 
        pilot is a collaboration among DHS' Office of the Chief 
        Financial Officer, Office of the Chief Procurement Officer and 
        Office of the Chief Information Officer and includes a data 
        warehouse and reporting tool adhering to OMB's architecture 
        guidance.

Grants:
         The Chief Financial Officer will obtain a Delegation 
        of Authority from the Under Secretary for Management for 
        responsibility of assistance award policy and oversight. This 
        Delegation of Authority will complete the transition of grants 
        oversight from the Chief Procurement Officer to the Chief 
        Financial Officer;
         Complete pending grant management policies;
         Initiate a Grant Officer Certification and Warrant 
        program;
         Establish infrastructure for oversight and monitoring;
         Develop an OMB Circular A-133 Resolution Process; and
         Initiate development of an OMB Circular A-133 Audit 
        Resolution Tracking System.

Improper Payment Information Act (IPIA):
         Expand the IPIA risk assessment, sample testing, and 
        corrective action work to include targeted sampling of current 
        period Recovery Act payments. Perform additional management 
        control procedures on the Recovery Act vendor payments as part 
        of DHS' Recovery Audit work.
    The FY 2009 DHS Internal Control Playbook outlines the DHS strategy 
to design and implement an effective internal control system to support 
the DHS mission, eliminate internal control weaknesses, and build 
management assurances. DHS has focused its management assurance efforts 
on the design and implementation of internal control to eliminate 
pervasive material weakness conditions and to stabilize the DHS control 
environment. DHS will expand this process to also provide assurances 
over the Recovery Act. OMB Circular A-123 assessments support the 
management assurance process and will incorporate the Recovery Act in 
FY 2009. Control evaluation matrices will be completed to assess 
grants, property, and financial reporting functions. Issues identified 
by OMB Circular A-123 assessments and IPIA assessments will result in 
the development and implementation of Mission Action Plans, which 
outline remediation actions.

                                 
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