[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                                  2012 

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS
                              FIRST SESSION
                                ________
    SUBCOMMITTEE ON COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES
                    FRANK R. WOLF, Virginia, Chairman
 JOHN ABNEY CULBERSON, Texas               CHAKA FATTAH, Pennsylvania
 ROBERT B. ADERHOLT, Alabama               ADAM B. SCHIFF, California
 JO BONNER, Alabama                        MICHAEL M. HONDA, California
 STEVE AUSTRIA, Ohio                       JOSE E. SERRANO, New York
 TOM GRAVES, Georgia
 KEVIN YODER, Kansas

 NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full 
Committee, and Mr. Dicks, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
             Mike Ringler, Stephanie Myers, Leslie Albright,
                    Diana Simpson, and Colin Samples,
                           Subcommittee Staff
                                ________

                                 PART 5
                                                                   Page
 U.S. Department of Commerce......................................    1
 U.S. Department of Justice.......................................   99
 National Science Foundation......................................  157
 National Aeronautics and Space Administration....................  231

                                   S

                                ________
         Printed for the use of the Committee on Appropriations


























PART 5--COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS 
                                FOR 2012
                                                                      























  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                                  2012

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS
                              FIRST SESSION
                                ________
    SUBCOMMITTEE ON COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES
                    FRANK R. WOLF, Virginia, Chairman
 JOHN ABNEY CULBERSON, Texas               CHAKA FATTAH, Pennsylvania
 ROBERT B. ADERHOLT, Alabama               ADAM B. SCHIFF, California
 JO BONNER, Alabama                        MICHAEL M. HONDA, California
 STEVE AUSTRIA, Ohio                       JOSE E. SERRANO, New York
 TOM GRAVES, Georgia
 KEVIN YODER, Kansas       

 NOTE: Under Committee Rules, Mr. Rogers, as Chairman of the Full 
Committee, and Mr. Dicks, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
             Mike Ringler, Stephanie Myers, Leslie Albright,
                    Diana Simpson, and Colin Samples,
                           Subcommittee Staff
                                ________

                                 PART 5
                                                                   Page
 U.S. Department of Commerce......................................    1
 U.S. Department of Justice.......................................   99
 National Science Foundation......................................  157
 National Aeronautics and Space Administration....................  231

                                   S

                                ________

         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 65-531                     WASHINGTON : 2011


















                          COMMITTEE ON APPROPRIATIONS

                    HAROLD ROGERS, Kentucky, Chairman

 C. W. BILL YOUNG, Florida \1\        NORMAN D. DICKS, Washington
 JERRY LEWIS, California \1\          MARCY KAPTUR, Ohio
 FRANK R. WOLF, Virginia              PETER J. VISCLOSKY, Indiana
 JACK KINGSTON, Georgia               NITA M. LOWEY, New York
 RODNEY P. FRELINGHUYSEN, New Jersey  JOSE E. SERRANO, New York
 TOM LATHAM, Iowa                     ROSA L. DeLAURO, Connecticut
 ROBERT B. ADERHOLT, Alabama          JAMES P. MORAN, Virginia
 JO ANN EMERSON, Missouri             JOHN W. OLVER, Massachusetts
 KAY GRANGER, Texas                   ED PASTOR, Arizona
 MICHAEL K. SIMPSON, Idaho            DAVID E. PRICE, North Carolina
 JOHN ABNEY CULBERSON, Texas          MAURICE D. HINCHEY, New York
 ANDER CRENSHAW, Florida              LUCILLE ROYBAL-ALLARD, California
 DENNY REHBERG, Montana               SAM FARR, California
 JOHN R. CARTER, Texas                JESSE L. JACKSON, Jr., Illinois
 RODNEY ALEXANDER, Louisiana          CHAKA FATTAH, Pennsylvania
 KEN CALVERT, California              STEVEN R. ROTHMAN, New Jersey
 JO BONNER, Alabama                   SANFORD D. BISHOP, Jr., Georgia
 STEVEN C. LaTOURETTE, Ohio           BARBARA LEE, California
 TOM COLE, Oklahoma                   ADAM B. SCHIFF, California
 JEFF FLAKE, Arizona                  MICHAEL M. HONDA, California
 MARIO DIAZ-BALART, Florida           BETTY McCOLLUM, Minnesota
 CHARLES W. DENT, Pennsylvania
 STEVE AUSTRIA, Ohio
 CYNTHIA M. LUMMIS, Wyoming
 TOM GRAVES, Georgia
 KEVIN YODER, Kansas
 STEVE WOMACK, Arkansas
 ALAN NUNNELEE, Mississippi
   
 ----------
 1}}Chairman Emeritus   

               William B. Inglee, Clerk and Staff Director

                                  (ii)















  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                                  2012

                              ----------                              

                                       Wednesday, February 9, 2011.

                      U.S. DEPARTMENT OF COMMERCE

                                WITNESS

TODD ZINSER, INSPECTOR GENERAL
    Mr. Wolf. Good morning. The hearing will come to order.
    I want to welcome all the subcommittee members who will be 
here shortly for the first hearing of the 112th Congress. We 
have many familiar faces returning to the subcommittee and some 
new members as well, our new ranking member, Mr. Fattah, who 
has served on the Committee for nine years, and there have been 
others who have served on it for a number of years. We have new 
members, Mr. Austria of Ohio, Mr. Graves of Georgia, and Mr. 
Yoder of Kansas.
    The President's budget for fiscal year 2012 will be 
released on February 14 and we intend to pursue an aggressive 
hearing schedule through the months of March and April. And 
this will be a year of severe budget austerity and the 
subcommittee intends to have the hearings with heads of all the 
major departments and agencies to justify their requests and 
help us to identify areas in which spending can be reduced with 
the least impact.
    We are anxious to hear the agencies that come up because in 
many respects they know a lot better than, quite frankly, we 
will know. And we want to hear them to tell us from a priority 
basis where they think we can make these cuts.
    In addition, we will have a few selected thematic hearings, 
the first of which will be a hearing on prisoner reentry and 
recidivism this Friday.
    Our witnesses this morning are Mr. Todd Zinser, the 
Inspector General of the Department of Commerce, and Ms. 
Cynthia Schnedar, the Acting Inspector General of the 
Department of Justice.
    Before I recognize the witnesses to present their 
testimony, I would like to recognize my colleague, Ranking 
Minority Member, Mr. Fattah, for any comments he would like to 
make.
    Mr. Fattah. Thank you, Mr. Chairman.
    It is an honor to serve with you on this Committee and 
under your leadership. I look forward to working with you 
towards the goals of the Committee, which over the years have 
been bipartisan.
    I came on to the Committee when you were in a leadership 
role and you have returned to that role. And throughout, you 
have remained consistently interested in a whole range of 
issues covered by the Subcommittee.
    So I look forward to working through it. There will be some 
very tough decisions as we go forward, but I am convinced that 
we can arrive at those decisions in a bipartisan way, keeping 
the nation's interest foremost in our minds.
    Thank you.
    Mr. Wolf. Thank you.
    Welcome, Mr. Zinser. We want to thank you for appearing 
before the Committee this morning to present the top management 
challenges facing the Department of Commerce.
    Your office issued a December 2010 report, Top Management 
Challenges Facing the Department, which focused on a range of 
issues including NOAA satellites, the $7.9 billion that 
Commerce received under the American Recovery and Reinvestment 
Act, the 2010 Decennial Census and IT security.
    All these efforts include rather large sums of money, so 
part of what the Subcommittee will ask you today is where you 
think there may be opportunities for saving.
    And, again, as I mentioned at the outset and when we met 
with the Secretary of Commerce, we would like to hear their 
comments. I guess in a real world if nothing had to be cut, it 
would be one thing.
    But based on the reality, and this Subcommittee has been 
given an allocation, and based on the reality of where we are, 
we in an open spirit want to hear from the Department to say 
the same way that we would around our kitchen table if we were 
being eliminated, okay, you know, maybe we will cancel the trip 
to Disney this year or maybe we will not get a new car, but we 
want to maintain the priorities of our family to make sure the 
family stays strong and we do everything the same way we want 
to do with the departments.
    So there may be things that the departments would like to 
have and maybe we would even like you to have them, too, but 
under the circumstances. So how do we maintain the sciences, 
maintain strong law enforcement, do what we have to do, but 
still reach the budget numbers?
    So we hope you will share with the Committee some of the 
recent oversight work that you have done. Mr. Zinser, if you 
would just summarize remarks, your full statement will appear 
in the record.
    Mr. Zinser. Thank you, Chairman Wolf, Ranking Member 
Fattah, and members of the Subcommittee. Thank you for inviting 
me to testify this morning about our oversight of the 
Department of Commerce.
    The department is responsible for a highly diverse set of 
technical and scientific programs that range from issuing 
patents to operating weather satellites to conducting the 
census and managing our ocean resources.
    The President's budget request for Commerce for fiscal year 
2011 was $8.9 billion. In December of 2010, we issued our most 
recent top management challenges report. Our report discusses 
eight areas.
    Two of the areas, IT security and acquisitions and 
contracts, are issues for all federal departments.


                              it security


    In these two areas, the Department of Commerce is playing 
catch-up. With respect to IT security, the department will 
require additional resources compared to previous years. The 
management reforms underway in the area of acquisitions and 
contracts, however, should actually result in cost savings to 
the department. For example, the department has set a target of 
$50 million in annual savings through more strategic 
purchasing.
    Our December report identified six additional management 
challenges.


                 noaa environmental satellite programs


    First and most important are NOAA's two multi-billion-
dollar satellite systems that are part of the national critical 
infrastructure. The Joint Polar Satellite System is a new 
program transitioning from its troubled predecessor, called 
NPOESS. NOAA is at a critical juncture in the transition and 
delays in the program, which could result from any interruption 
in funding, will further increase the risk of serious gaps in 
satellite coverage for the collection of weather data and 
forecasting.
    The Geostationary Operational Environment Satellite Series 
is at a less critical state in its development, but must avoid 
a return to the cost overruns and schedule delays that the 
program has suffered in the past.


                 american recovery and reinvestment act


    The next item on our list relates to the Recovery Act. In 
fiscal year 2010, the National Telecommunications and 
Information Administration awarded 232 grants totaling $3.9 
billion under the Broadband Technologies Opportunities Program. 
The agency was successful in awarding the grants and obligating 
the funds within the deadline, but only about five percent of 
that money has been spent so far. This is a huge challenge and 
presents a significant amount of risk for fraud, waste, and 
abuse.
    The second area of the Recovery Act that must be closely 
watched are nearly 200 projects involving construction costing 
an estimated $1 billion funded through grants or contracts 
administered by NOAA, the National Institute of Standards and 
Technology, and the Economic Development Administration. As you 
know, Mr. Chairman, construction projects are inherently 
susceptible to cost overruns, schedule delays, and fraud 
schemes.


                    u.s. patent and trademark office


    The next management challenge included in our report is the 
U.S. Patent and Trademark Office. It has an annual budget of 
approximately $2 billion funded through a complex set of user 
fees. Everyone agrees that the current backlog and pendency of 
patent applications is unacceptable and that there is much work 
necessary to improve the operations of the agency.
    According to PTO, in fiscal year 2010, the backlog of 
applications totaled 726,000 and it took an average of three 
years from the time an application was filed to make its way 
all the way through the process. Secretary Locke and Under 
Secretary Kappos have a number of reform efforts underway and 
Congress is working on reauthorization, but it is a significant 
and complex problem.
    One initiative that bears close watching is an IT 
modernization project for processing patent applications, which 
PTO estimates will cost almost $300 million over the next 
several years. PTO does not have a very good track record when 
it comes to IT projects and will require close oversight should 
the project move forward.


                     2020 decennial census planning


    The final three areas in our report include NOAA's 
stewardship of marine resources, the nearly $900 million, 13-
year renovation of the Commerce headquarters building, and 
planning for the 2020 decennial census.
    Of these three areas, the most critical for this 
subcommittee, Mr. Chairman, is the 2020 decennial. The 2010 
decennial cost taxpayers approximately $13 billion. According 
to estimates by the Census Bureau and GAO, the cost of the 2020 
census, if it is done the same way, could possibly double to 
between 22 and 30 billion dollars. Such costs are not 
sustainable, and Census must develop more cost-effective 
approaches to the 2020 count.
    Even though all the 2010 results have yet to be delivered, 
we strongly recommend that the department, the Census Bureau, 
and the Congress treat the 2020 decennial with a sense of 
urgency if we expect to develop the plans and systems necessary 
to avoid unacceptable levels of risk and cost for the 2020 
census.
    Mr. Chairman, that concludes my summary and I would be 
happy to answer any questions.
    [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
                        NOAA SATELLITE PROGRAMS

    Mr. Wolf. Thank you very much.
    Your December 2010 report included a section on NOAA's 
environmental satellites focusing on two programs, NPOESS or 
the JPSS Program, and GOES-R.
    Last year, the Administration proposed a major 
restructuring of the NPOESS Program. According to the report, 
when NPOESS was begun in 1995 as a joint program between DoD, 
NASA, and NOAA, it was estimated to cost $6.5 billion and 
included six satellites, the first of which was to launch in 
2008. That is the history.
    Now the JPSS Program is estimated to cost $14 billion. That 
is an estimate from 2008. It may actually be even higher. The 
first satellite will not launch until 2014. So here we were at 
2008, now we are 2014. And now instead of buying six 
satellites, the government is only purchasing four. In short, 
the program cost has doubled. We are getting less capability 
than originally planned and we are six years behind schedule.
    Can you briefly summarize the problems with the NPOESS 
program that led to its restructure and can you outline how you 
intend to proceed with your oversight of the program?
    Mr. Zinser. Yes, sir. I think the problems date back a 
number of years. I think that the plan was to merge governance 
of the program between NASA, DoD, and Commerce because there 
are Defense satellites as well as civilian satellites that NOAA 
and NASA are interested in.
    And the governance issues, I think, were a problem. The 
satellites were not a priority for the Defense Department and 
there were problems getting decisions made.
    I think the complexity of the instruments was a huge cost 
driver. There was one instrument in particular that ran into 
problems in its development. And at the end of the day, this 
marriage between Defense, NASA, and NOAA just didn't work. And 
so to solve that, the decision was made to divorce from DoD, 
and the increase in the cost to this subcommittee is basically 
the result of cost shifting from DoD to the Commerce 
Department.
    As far as our oversight is concerned, right now the 
critical issue is this transition to JPSS, the name of the new 
program. And one of the things that is happening right now is 
there is going to be a launch of what they call the NPOESS 
Preparatory Project, the NPP. That is scheduled for a launch 
this fall. It was originally going to be a test satellite to 
test the instruments in orbit, but they have turned it into an 
operational satellite to actually go up and serve in an 
operational capacity. So we are watching that very closely.
    One of the issues we identified, for example, was there are 
problems right now with the ground system and the instruments 
on the satellite communicating with the folks on the ground. 
They are focusing on that issue right now and trying to resolve 
it.
    Assuming there is no further delay in resolving those 
issues, that satellite will launch in October. We are watching 
that very closely.
    Mr. Wolf. Well, are you confident that they have everything 
together now? I mean, this has been going on for quite a while 
and the numbers continue to go up. Who is the contractor, the 
lead contractor?
    Mr. Zinser. The lead contractor was Northrop Grumman, and I 
think Raytheon was also a contractor.
    You know, one of the problems they had even in the lab, was 
probably six or seven years ago. They were working on NOAA-19, 
and the contractor, Lockheed Martin Space Systems Company, 
dropped the satellite and damaged it. And that caused some 
considerable cost overruns there.
    Mr. Wolf. Do you believe that NOAA is on the right path 
now? I mean, are you confident you would stake your reputation 
on that, that they are on the right path?
    Mr. Zinser. I do think they are on the right path, sir. I 
think that it is an inherently complex program. It is very, 
very critical and we have dedicated staff to overseeing the 
program. I have staff embedded in this transition. We are 
watching them very closely.
    Mr. Wolf. This is about 25 percent of the budget for the 
Commerce Department, maybe a little bit more.
    How much of your staff is dedicated, 25 percent? How many 
people do you have on your staff, how many do you have that are 
dedicated to this and from a percentage basis?
    Mr. Zinser. My staff is fairly small.
    Mr. Wolf. So the answer is you do not have very many 
people?
    Mr. Zinser. I have two people who have been watching the 
program on a daily basis. They are supplemented with audit 
teams as we identify specific audit work that needs to be done.
    Mr. Wolf. And how many people do you have on your staff?
    Mr. Zinser. I have about 150 total. That has increased. I 
have some extra on my staff because of the Recovery Act. I got 
some supplemental funding for Recovery Act that has allowed me 
to hire temporary people, but base is about 150.
    Mr. Wolf. But if this is such a large portion of the 
budget, should you have more people looking at it?
    Mr. Zinser. Yes, we should. One of the things I had to do 
last year was to dedicate a significant amount of staff to the 
decennial census. And now that that is completed, we will be 
able to shift resources over to some of these programs such as 
the Satellite Program and PTO. PTO has got a lot of issues too.
    Mr. Wolf. Okay. Likewise, the GOES-R Program has 
experienced difficulties with a $1.5 billion cost overrun to 
$7.7 billion. And you can see why the American people get very 
skeptical, $1.5 to $7.7 billion, fewer sensors, two satellites 
instead of four, and a three-year schedule slip.
    In addition, your report highlights additional areas of 
concern, namely the infrastructure of the NOAA facilities to 
accommodate another ground system.
    Will you please provide us with a high level overview of 
the GOES-R Program and the critical problems at this juncture.
    Mr. Zinser. Well, the GOES-R Program, as I mentioned in my 
statement, is not at such a critical stage of development as 
NPOESS is. GOES-R has satellites up there. NOAA has set a 
policy that they want three satellites in orbit at any point in 
time. One covers the eastern part of the country, one covers 
the western part of the country, and then they have a third 
satellite up there as kind of an on-orbit spare. Those are all 
in place, and there is not the risk of gaps in coverage that 
there is with NPOESS.
    The department very wisely has outside independent teams 
that they have enlisted, experts in the field that come in and 
do evaluations of the program on a regular basis. Those teams 
have offered recommendations to NOAA in terms of managing the 
program. We are following up on those recommendations to see 
whether or not NOAA is implementing them.
    Mr. Wolf. Are the same people running the program now the 
people that were there at the beginning pretty much?
    Mr. Zinser. Pretty much, sir, yes.
    Mr. Wolf. Even though they may be wonderful people that you 
would like to have part of your family, maybe you would put 
different people in charge, because this has been going on for 
so long.
    I have one last issue and then we will go to Mr. Fattah and 
the other Members. And then we have a lot of other questions we 
will get to near the end.

                    EXPORTS AND INTERNATIONAL TRADE

    The Administration is making a big play to have exports. 
America is hollowing out. Our manufacturing base is pretty much 
eroding. We are literally eroding before our eyes. We used to 
think we were leading the world in high tech. We are no longer 
leading the world in high tech.
    So I support what the Secretary of Commerce wants to do. 
Every time he talks to us, he talks about exports and exports 
and exports because we want to create American jobs, 
manufacturing in Philadelphia and Kansas and in Texas.
    There is something I would like you to look at. I have been 
meeting with a number of companies, and I wonder if you know 
about this one company the other day said they have a product. 
They are very aggressive in exporting abroad. And I am trying 
not to name the product because they are afraid of having to be 
the focus of the attention.
    They were at a trade fair in Germany. Their competitors had 
a coffee bar, meaning they were giving, I guess, Jacobs coffee 
to someone, which is not exactly a bad thing to do. They were 
prohibited, they said, by the Foreign Corrupt Practices Act to 
even have a coffee bar. And so, therefore, they felt they 
really--they almost cannot compete.
    Since we have both the IG for the Justice Department and we 
have the IG for the Commerce Department--the Foreign Corrupt 
Practices Act is administered in the Justice Department, 
correct?
    Ms. Schnedar. Correct.
    Mr. Wolf. I would like to get both of you on a quick basis, 
maybe a one week or two week basis so we are not pushing this 
thing off, because if we want to create jobs in America, not in 
China, not in Mexico, not in Timbuktu, but here in River City 
where we live, and there is almost a ``de minimus'' thing like 
``can I give you a cup of coffee,'' ``can I give you a pen with 
the name on it,'' and if we are going to start prosecuting 
companies under the Foreign Corrupt Practices Act, then you are 
putting American companies who are creating jobs for Americans 
at a disadvantage.
    So without getting into too much detail, since both of you 
are here, like Esther in the Bible, for such a time like this, 
you both come together. If you can team up and look at this, 
the Foreign Corrupt Practices Act, and we can get some people 
to talk to you, I guess off the record. The company is afraid 
to say anything because they do not want to get the Justice 
Department to come in and crack down.
    But based on different things that I am hearing, if you can 
look at working with Mr. Zinser, you can look at your 
commercial attaches and see what they do and come back to the 
Committee in two weeks to give us kind of just a preliminary 
feedback, is this really such a problem, because if we are 
prosecuting for giving a cup of Jacobs coffee and they cannot 
compete with the Germans and the French and the Italians, then 
the Administration is not going to be able to create these jobs 
that they're talking about and doing, creating jobs here in 
America so we can make things here and export there.
    I am tired of going into stores and seeing China, China, 
China, China, China. Let's reverse it. But if we are really 
going to do what we say, and the President said the other day 
we are going to look at all these regulations, let's really 
look at this and see.
    So if both of you maybe in two weeks could come back to 
us----
    Mr. Zinser. Sure.

    1. Commerce and DOJ IG should coordinate a quick review of the FCPA 
regarding its implementation, particularly with respect to whether it 
is being overly or aggressively enforced and thereby hurting U.S. 
businesses abroad.
    On March 2, 2011, the Office of Inspector General (OIG) delivered a 
letter, dated March 1, addressing this matter to the subcommittee.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Wolf [continuing]. Just maybe both of you come up to 
the Committee and tell us what you found. Is this a real 
problem? We will give the information that we have. Are there 
some changes that we need in the Foreign Corrupt Practices law? 
Is the enforcement being overly aggressive?
    So would you mind working together on this since Justice 
enforces the Foreign Corrupt Practices Act and you provide 
oversight on the Foreign Commercial Service?
    Mr. Zinser. We would be happy to do that.
    Mr. Wolf. Very good. Thank you very much.
    Mr. Fattah.
    Mr. Fattah. Thank you, Mr. Chairman.
    I concur with the chairman's concern about this, and I look 
forward to your report on it.

                          2020 CENSUS PLANNING

    But let me go back to the census projections because 
obviously the census is a duty that we have as a government 
given to us through constitutional mandate.
    You say that in the next census in 2020 the cost could be 
as much as twenty-two to thirty billion if we conduct the 
census as we conducted it this time?
    Mr. Zinser. Yes, sir. That is the estimate.
    Mr. Fattah. Assuming we did the same thing and it did not 
cost us that amount this time, why would it cost us so much?
    Mr. Zinser. Well, you are projecting the costs over the 
next ten years, so you have somewhat of an inflation factor. 
And when you are dealing in billions of dollars, those add up 
pretty quickly. But the big cost driver for the decennial is 
the cost of the temporary workers that the Census Bureau 
employs.
    So, for example, the non-response follow-up operation that 
employed about six hundred to seven hundred thousand temporary 
workers cost over a billion dollars itself, about a billion and 
a half dollars itself. And those costs are going to increase 
simply for inflationary purposes, number one.

                        NOAA SATELLITE PROGRAMS

    Mr. Fattah. Now, on the Satellite Program, DoD is out 
completely, right, so that raised the cost from about seven to 
eleven billion, is that----
    Mr. Zinser. Well, actually, even when the Defense 
Department was involved, they had their own satellites in the 
program. Those have been taken out. So the costs would have 
been much more than $11 billion had the Defense Department 
stayed in there.
    Mr. Fattah. And so from a taxpayer's standpoint, there's a 
need for the Satellite Program, right----
    Mr. Zinser. Yes, sir.
    Mr. Fattah [continuing]. For early warning purposes for a 
whole variety of reasons? But there is almost a profit center 
involved in these satellites and the weather reports that are 
generated because you have companies, right, that then sell 
this data for weather forecasting purposes for which the 
taxpayers do not receive any remuneration; is that accurate?
    Mr. Zinser. The weather data is made available to private 
companies that then sell the weather forecasting and do the 
forecasting for various media outlets.
    Mr. Fattah. Has there ever been any analysis of what, if 
any, cost sharing there could be between the taxpayers and the 
for-profit entities involved here so that we could recoup some 
of the dollars? Because the chairman is right, this has been 
going on since the early days of the Bush administration, if 
not before. What was the original name of the Joint Polar 
Satellite Program?
    Mr. Zinser. It was called NPOESS.
    Mr. Fattah. Right. The costs have gone up. So at some 
point, because a lot of members here are very concerned about 
the cost of the Federal Government enterprise, if we have 
activities that we need to undertake to provide warnings for 
communities around major weather events, but we could recoup 
some dollars in the ongoing operations of these satellites, it 
would seem that we might want to explore that.
    Are you aware that anyone has ever made any judgment about 
what the economic value is of this weather information?
    Mr. Zinser. We have not looked at that, sir. I think it is 
actually the other way around. I think NOAA issues contracts to 
people so that they can provide this kind of information to 
local communities.
    Mr. Fattah. Okay.
    Mr. Zinser. I think it is actually working the other way 
right now, but that would be a good review to do.
    Mr. Fattah. All right. Thank you very much.
    Mr. Wolf. Thank you, Mr. Fattah.
    And, Ms. Schnedar, we will hear your full statement. We 
separate it out so we just do the Commerce Department. You will 
have the opportunity----
    Ms. Schnedar. Thank you.
    Mr. Wolf [continuing]. For a full statement. Mr. Culberson.
    Mr. Culberson. Thank you, Mr. Chairman.
    And I sincerely want to thank you for the work that you do. 
We in Congress are so inundated with information and have such 
a huge realm of responsibilities, the taxpayers we represent 
get so frustrated with the waste as we do that the Inspectors 
General Offices truly, I think, is one of the most essential 
and valuable parts of the Federal Government.
    We really appreciate what you do. It is very hard to get 
good information and we really, really appreciate the work that 
you do, all of you, all of your staff.
    This, it seems to me, Mr. Chairman, is kind of a classic 
illustration of what is often so wrong with the Federal 
Government. The people, as you mentioned, Mr. Chairman, in your 
questions that, some of the people that have made the decisions 
that manage this program are still there. They are still 
running the program.
    There was, as I understand, Inspector General Zinser, the 
Satellite Program was initially designed to be run both by the 
Defense Department, NASA, and NOAA. The costs got too high. 
Defense Department pulled out.
    I gather they have their own separate--they have their own 
weather satellite system today?
    Mr. Zinser. Yes, sir.
    Mr. Culberson. And they are not relying on NOAA or NASA?
    Mr. Zinser. They actually share data. There are Defense 
Department satellites up there and there are civilian 
satellites up there.
    Mr. Culberson. Right. Defense Department, DoD has their own 
weather satellites?
    Mr. Zinser. Yes, sir.
    Mr. Culberson. Because they found the Civilian Satellite 
Program to be unreliable obviously and costs a lot of money and 
the problems. It reminds me of when the Air Force decided to 
pull out, they no longer launch their payloads through our 
manned Civilian Space Program after the horrible Challenger 
disaster.
    And the unclear chain of command, sounds like there is 
nobody clearly in charge. Nobody has really been held 
accountable for these vast cost overruns.
    And as the chairman pointed out--I was unaware of this, Mr. 
Chairman--that the, make sure I understood, just the Joint 
Polar Satellite System alone represents 25 percent of the 
Department of Commerce's budget? Did I hear that? Was that 
right?
    Mr. Zinser. I do not----
    Mr. Culberson. Just this one satellite system.
    Mr. Zinser. If you take the entire cost of the program over 
a number of years, right now the estimate is close to $12 
billion. The annual appropriation, the annual request from the 
Department of Commerce last year, was $8.9 billion.
    Mr. Culberson. It is just extraordinary. I mean, it is 
clearly an essential satellite system that we have got to have, 
but we are as--I have got to be able to reason together and 
find a far more efficient, effective, and particularly in this 
new era of austerity, cost-efficient way to manage these 
programs and get these absolutely essential weather satellite 
systems launched and that we not only get it launched, but we 
have a capable system that is going to last for many years.
    As the chairman said quite correctly in the private sector, 
this would just--this is just not acceptable.
    Are the folks in charge of this program at NOAA and the 
Department of Commerce career civil servants unionized, career 
civil servants protected by civil service laws so they 
essentially--nobody has been reassigned or fired at all over 
any of this?
    Mr. Zinser. Well, they have a large staff that works in the 
satellite service. It is a large part of NOAA. They have 
different services. The satellite service is a large part of 
that.
    I am not familiar with the past history in terms of 
personnel actions and personnel moves and things like that.
    Mr. Culberson. You are not aware of anybody being fired or 
reassigned as the chair--the chairman asked anybody reassigned. 
To your knowledge, has anybody ever been fired over this kind 
of grotesque mess--excuse me--this kind of grotesque waste of 
our kids' money?
    Mr. Zinser. I do not know the answer to that, sir. Not to 
my knowledge since I have been there. I am starting my fourth 
year, so----
    Mr. Culberson. No one has been fired in the time you have 
been there?
    Mr. Zinser. I do not think that anyone has been fired 
directly for the cost overruns or schedule delays or problems 
that----
    Mr. Culberson. Right.
    Mr. Zinser [continuing]. NPOESS has experienced.
    Mr. Culberson. I am still infuriated no one has ever been 
fired for 9/11. It still galls me. I mean, has anybody ever 
been fired, to your knowledge, for--for example, who made the 
decision to spend how many billions of dollars on those hand-
held computers the Census was going to use to go door to door 
and wasn't that like thrown out the window and how much money 
of our--how much of our children's money was wasted on that 
foolishness? And nobody was fired for that either?
    Mr. Zinser. There were some reassignments or some 
retirements, but I do not think anybody was fired, sir.
    Mr. Culberson. How much money was wasted on the hand-held 
computer fiasco?
    Mr. Zinser. Well, the original contract was about $600 
million, and I think the reason that they scrapped it is 
because of the problems they ran into to finish the development 
to where it would meet the original intent. The cost of that 
was rising to about a billion dollars, and so they decided to 
not go forward with it.

                    PROGRAM DUPLICATION AND OVERLAP

    Mr. Culberson. It is a pattern we see throughout the whole 
Federal Government and I am convinced--as someone who 
represents a district in Texas, we have no state income tax, 
virtually no labor unions. You work at will. People can be 
fired if you are incompetent or you screw up the job. And you 
reward people for good performance with bonuses, but there are 
consequences if you do not do your job.
    And there is a clear chain of command. Typically in any 
kind of a big organization with making big decisions like this, 
you have got a General Patton. You have got somebody clearly in 
charge. There is none of this with the DoD and NOAA and NASA 
overlapping. Nobody is in charge. Nobody gets fired. Everybody 
gets reassigned. Nobody is responsible.
    And, of course, I suspect Congress also had something to do 
with this and that the original program--was the original 
design giving DoD, NOAA, and NASA that sort of overlap, was 
that a policy decision made by Congress or by the agencies? 
Before I pick on the agencies too much, I suspect a lot of that 
may come from this side of the table I have no doubt.
    Mr. Zinser. To the best of my understanding, it came out of 
the national performance review that was done under the Clinton 
administration.
    Mr. Culberson. So it was done through the Executive Branch?
    Mr. Zinser. As far as I know, but, again, Congress----
    Mr. Culberson. Oversight.
    Mr. Zinser [continuing]. Congress appropriates and Congress 
oversees the program.
    Mr. Culberson. True. True. We are all human. I know of only 
one human in history that was perfect, Mr. Chairman, and, you 
know, we are all human. And we are all overwhelmed and we, all 
of us, are devoted to do the best we can for our kids and our 
grandkids, but this is just unacceptable. And I am really glad 
the chairman has brought this to our attention.
    And I hope, Mr. Chairman and members, as we move through 
this, we could really rethink the way that the--for example, we 
are, and I cannot stress this enough, Mr. Wolf, who I just 
revere and admire so much, the chairman points out quite 
correctly that our kids, we as a country, I hope, are not--
well, I hope we have not already gone over the cliff.
    I share Mr. Wolf's concern that the level of debt, the 
level of deficit, the level of unfunded liabilities is already 
so huge, I hope we can pull out of what looks like, I hope, is 
a very scary time ahead. We are going to have to rethink 
outside the box the way we have approached problems in the 
past.
    And in conclusion, Mr. Chairman, I appreciate the time. I 
hope we will rethink the way, for example, that decision making 
is allocated on these programs. You know, we are going to have 
to, I think, to look at combining some of these functions of 
NOAA with NASA with a clear chain of command, with a 
responsibility if this is--if we are talking about satellite 
systems and outer space, I do not know why all of that is not 
done under NOAA.
    Why isn't the Coast Guard doing fisheries and oceans--
excuse me--done under NASA and then the Coast Guard doing the 
oceans? And, quite frankly, in these huge programs where 
somebody screws up, there needs to be accountability. There 
needs to be--people need to be fired.
    We need to revisit the way the civil service system 
operates and the unions and the inability to hold people 
accountable because we can withhold money and change the way 
the program is managed, but really to the extent that we can do 
so, we need to rethink the model. And we are going to have to 
come up with dramatic savings. It is not the deficit that is 
going to kill us, the debt, it is the unfunded liabilities, in 
particular the entitlement programs. And we have got an urgent 
task before us.
    I just thank you because truly in this age of austerity we 
are about to enter into, the work that you do is absolutely 
vital to the critical job that we have in oversight. And I 
thank you.
    Mr. Zinser. Thank you, sir.
    Mr. Culberson. And I thank you for the time, Mr. Chairman.
    Mr. Wolf. Thank you.
    I am going to go to Mr. Austria. But Mr. Culberson just 
triggered a thought. Is there any overlap on the climate 
research issue between what NOAA is doing versus what NASA is 
doing?
    Mr. Zinser. There is overlap, sir. I do not know precisely 
what it is, but I know that there is research being done at 
NOAA and research that is----
    Mr. Wolf. But is there any that they are both looking at 
the same thing. I want to protect NASA to the best of our 
ability. But if there is something that NOAA is doing on a 
climate issue, maybe you can look at that and just get back to 
the committee.
    Mr. Zinser. Yeah. There are three data sets that exist in 
the world on climate data. NASA owns one, NOAA owns one, and 
the other one is at East Anglia University over in England.
    Mr. Wolf. But what Mr. Culberson just kind of triggered, 
though, are there any areas that--I know iron sharpens iron and 
competition is good, but are there any areas that are so 
relatively simple that they are both doing that you could then 
come together not to eliminate doing it, because I think 
looking at climate issues is very, very important, but if it is 
being done at NOAA and NASA, that way, there would be more 
money for research and development----
    Mr. Zinser. Understood.
    Mr. Wolf [continuing]. In space or others. So if you could 
just look to see----
    Mr. Zinser. Sure.
    Mr. Wolf [continuing]. What programs are similar. Then when 
the NASA people come up, we can ask.
    Mr. Zinser. Okay.
    Mr. Wolf. Mr. Austria.
    Mr. Austria. Thank you, Mr. Chairman.
    Thank you, excuse me, to the inspector general for being 
here today.
    Just to kind of follow-up on what Mr. Culberson was 
alluding to as far as reducing our deficits by improving 
efficiency and rooting out things like waste and fraud and 
abuse, let me ask you, because I know in your testimony, you 
made reference to improving efficiencies.
    And I appreciate the plan that you have laid out before 
this committee in managing acquisition more effectively, 
increasing accountability with the Stimulus Program, improving 
U.S. Patent and Trademark Office processing times, preventing 
cost overruns with the Commerce headquarters renovation, et 
cetera. And we can go on and on.
    And we are all tightening our belts. And right now when we 
talk about the delays that are happening right now, how do you 
propose that we are going to be able to be accountable for the 
taxpayer dollars when we are talking about this transition to 
whether it be JPSS and the developing of that program on the 
ground goes, not experiencing any further delays?
    In your opinion, you know, roughly how much taxpayer money 
could be saved or has there been any tracking of the tax 
dollars that--the cost of these delays has cost the taxpayers 
and then making these improvements that you have laid out, how 
much that might save the taxpayers?
    Mr. Zinser. Yeah. I do not think there is an overall 
calculation on what we are going to save by reducing delays. I 
know that the department is engaged in a process very similar 
to what the chairman talked about where they have sat down and 
they have gone through a process trying to determine which 
programs are essential, which programs are less essential, and 
they have put them into a number of different buckets. And they 
are doing that kind of analysis to be prepared for the budgets 
that they are anticipating.
    Mr. Austria. Is that information or that data available to 
be able to be viewed or when it is available or will we be able 
to view that?
    Mr. Zinser. I think the department would be prepared to 
share that information in connection with the budget request 
that is coming up next week.

                            CENSUS PLANNING

    Mr. Austria. I think that would be very helpful.
    Let me follow-up on the gentleman from Pennsylvania and his 
questions on the census because I think it is an important area 
that, you know, I have asked myself a lot of questions about 
this.
    And being a new member of Congress, you know, the cost of 
the census has always been higher than the census preceding it 
largely because we know there has been an increase in 
population to account for that.
    But in your current fiscal and the current fiscal 
environment, we need to, again, getting back to saving the 
taxpayers wherever possible, and it would seem that with the 
technology that is out there today that in today's age where 
everybody is using a cell phone, a BlackBerry, an iPad, the 
technology that exists, that the census workers are still 
walking door to door with paper and pencil.
    Are there technologies or other efficiencies that could be 
embraced by the bureau to improve their operation and reduce 
the cost of this necessary exercise?
    Mr. Zinser. Yes, sir. That was the biggest disappointment 
about 2010 was the fact that the Census Bureau could not get 
that technology ready for use. That would have saved money, 
would have saved a lot of money. They did not successfully 
implement that acquisition.
    In addition to hand-held devices like that, we have been 
encouraging the Census Bureau to come up with some way to use 
the Internet in the census. They have resisted that. And I 
think that they are trying to do some pilot testing in these 
early years of the decade to figure out how to use the Internet 
for the census.
    There are things that they could do to maximize the use of 
administrative records that already exist about the population, 
if only to update their address list. Right now, to update 
their address list very late in the decade, they send three 
hundred, four hundred thousand temporary workers out to locate 
every address in the country. The post office has that 
information; the Social Security Administration has that 
information. So there are things that they could do along those 
lines, which we are encouraging them to do and which we 
included in our testimony.

                    PROGRAM DUPLICATION AND OVERLAP

    Mr. Austria. And, I mean, we all know, and I will conclude 
with, we all know that there are cuts that are coming to 
programs. Chairman Rogers has said that these will be the most 
severe reductions in the history of this Congress. And I have 
asked the question to businesses, to the colleges, to some of 
the military, sites across my district, and now I would like to 
ask you the same question.
    You know, where could we cut in your department? If the 
cuts are coming, you know, can you help us identify those areas 
that maybe we can look at that are less efficient or wasteful 
as far as cutting and what reductions would be least disruptive 
to your operation and also maybe those areas that we should not 
be cutting that you think we are seeing progress as far as 
cost-effectiveness and as far as efficiency?
    Mr. Zinser. Yes, sir. As I mentioned, the department is 
trying to prioritize where they could cut their programs. But I 
also think that the chairman was pointing out--and Mr. 
Culberson--that there is overlap. There is overlap. The 
Commerce Department does things that other departments do, and 
I think that is probably a good place to start focusing.
    I know that the President, for example, mentioned export 
promotion in his state of the union address. Earlier last year, 
the President signed an executive order that set up the 
National Export Promotion Cabinet. That cabinet has 16 
different agencies on it. So you know there is overlap in 
responsibilities across the government. I think that is a ripe 
berry to look at.
    Mr. Austria. Thank you, Inspector General.
    Thank you, Mr. Chairman.
    Mr. Wolf. Mr. Serrano.
    Mr. Serrano. Thank you, Mr. Chairman.
    Mr. Chairman, if I was to tell you that I am happy to see 
that party in the majority, I would be lying to you. But if I 
had to see someone chairing the committee other than our side, 
I am glad it is you. You know, the relationship we have and, 
well, we get along and we work together. So I did not want to 
say that in the mike. There is a reason to my madness, you 
know. I did not want that recorded.

                            CENSUS PLANNING

    Mr. Chairman, as you know, I always have a disclaimer that 
I do at the beginning of any census questioning and it is that 
I have one brother, no sisters, and he has been working for the 
Census Bureau since 1980. I came to Congress in 1990, so he got 
the job way before I was in Congress.
    My understanding is that the 2010 census came in almost $2 
billion under budget. Although I understand you have some 
concerns about the financial management of the census, I am 
more interested in knowing why it was so far under budget. Is 
it a result of the recession or are there other reasons?
    Mr. Zinser. Yes, sir. We----
    Mr. Serrano. Are we going to find out later that they 
should have spent that money and on a different job?
    Mr. Zinser. I do not think you are going to find out that 
they should have spent all of that money. I would offer two 
points. One is that I do not think the Census Bureau does a 
very good job budgeting in the first place, so the budget that 
they finally came up with, after they scrapped the hand-held, 
and revised their budget, was kind of fat actually. That is my 
view.
    But, secondly, the Census Bureau--to their credit--did do a 
good job with the money they were provided to get people more 
aware of the census through media and to increase the response 
rate through the mails. The fact that the response rate was up 
in the 70 percent range contributed a great deal to the cost 
savings they did realize. It cost 45 cents to mail something 
back. It cost $80.00 to send a census worker out to get that 
information door to door.
    Mr. Serrano. Now, this is probably not a fair question to 
ask you since we are talking about the Commerce Department, but 
is that true for many departments that they over budget? Is it 
the old belief that you ask for more hoping to get what you 
really need and in this case, you got what you asked for?
    Mr. Zinser. I think that the census is a separate issue 
from the other departments. Sure, I think that there is some 
padding that goes on in budget requests in general. But for the 
Census Bureau, I do not think their budget was done in bad 
faith. I just do not think they are very good at projecting 
their costs. And as we saw, there is a mix of good management 
and there is a mix of poor budgeting in that $1.6 billion 
figure that was returned to the Treasury.

                              IT SECURITY

    Mr. Serrano. Right. In part of an IG report about IT 
security, there are said to be security weaknesses that 
undermine the department's ability to defend its systems and 
information. That is on page one.
    Can you specify these weaknesses and how they are affecting 
the department's functions? And I apologize if any of these 
questions have been asked already.
    Mr. Zinser. Yes, sir. The department has been working very 
hard on improving its IT security, but there are 
vulnerabilities that still exist. For example, last year as 
part of our audit work, we went through and did what we call 
vulnerability scans on computers. Well, the department did the 
same thing earlier in the year. Their scan showed like 1.3 
vulnerabilities per computer. Our scan showed almost five 
significant vulnerabilities per computer. So they are just not 
bringing the skill level and the talent to the table necessary 
to really do what is needed to be done on IT security.

                      RECOVERY ACT GRANT PROGRAMS

    Mr. Serrano. Do I have time for one more question?
    Mr. Wolf. Sure. Go ahead.
    Mr. Serrano. There is a mantra that I deal with on a daily 
basis here, for my 20 odd years in Congress, and that is what 
about the territories. And I always want the territories, 
Puerto Rico, Guam, Samoa, Virgin Islands, the Mariana Islands, 
treated equally. Granted they are not states, but as equal as 
possible under the Constitution.
    What is your sense, if it is within your purview to comment 
on this, of how the Commerce Department deals with the 
territories?
    Mr. Zinser. Yes, sir. The one area that I am most familiar 
with would be in the grants that are made by the department, 
especially grants under the Recovery Act, for example. And I 
know that the department was very conscientious about making 
sure that all the states and territories were represented in 
the grants that were delivered for the various Recovery Act 
programs.
    I do not have those numbers exactly, but I have never 
received a complaint or any concerns that the territories were 
not getting some kind of fair shake from the department.
    Mr. Serrano. You say that with sort of a smile on your 
face. I am wondering if that is just your style or you know 
they were reading my press releases.
    Mr. Zinser. No.
    Mr. Serrano. Okay. Just checking.
    Mr. Zinser. I was not reading your press releases.
    Mr. Serrano. Maybe they heard my request. Thank you so much 
and thank you for your service.
    Mr. Zinser. Thank you, sir.
    Mr. Serrano. Thank you, Mr. Chairman.

                              IT SECURITY

    Mr. Wolf. Thank you.
    I am going to go to Mr. Yoder. But before I do, if I could 
follow-up on a thing that Mr. Serrano asked for. Were you there 
when Secretary Gutierrez's computers were stripped in China?
    Mr. Zinser. Yes, sir, we did look into that.
    Mr. Wolf. Can you tell the Committee so everyone knows, 
particularly new members, how the Secretary of Commerce's 
computers were literally stripped and how extensive was that 
because, quite frankly, there are members of Congress now who 
travel to China. The minute you are off that airplane and you 
are into the airport, they are stripping your computer and you 
are bringing it back on your cell phone and your BlackBerry. 
But can you tell us so everyone can be educated what happened 
to Secretary Gutierrez----
    Mr. Zinser. Yes, sir.
    Mr. Wolf [continuing]. And how extensive that was both when 
he was in China and how it impacted back on the computers in 
the department?
    Mr. Zinser. Yes, sir. Well, there were newspaper reports 
that Secretary Gutierrez had his computer compromised in China. 
We went down and looked into that. What he told me personally, 
was he did not take a computer to China. Now, his staff has 
taken computers with them. They have taken their BlackBerries 
with them. And what happens is it is such a problem that they 
have set up policies now where if you want to take a BlackBerry 
to China, you get a special BlackBerry with nothing else on it 
and you take that with you. It is scanned before you go. You 
take it with you. It is scanned after you come back so that 
that particular device is isolated and is not incorporated or 
introduced into the rest of the networks. And that precaution 
is set----
    Mr. Wolf. This is the Chinese Government where the 
Administration gave a state dinner to President Hu Jintao who 
was the one who cracked down in Tibet. I went to Tibet 13 years 
ago. I went in with a trekking group. They have plundered 
Tibet. They have executed Buddhist monks and nuns. And the man 
who literally has the policy in effect is the man that we gave 
a state dinner to.
    But they are spying against us and every member should 
know, every staffer should know, and it is hard for the 
Congress, when they go to China, if they get off their airplane 
and they walk into the airport, they are stripping your 
computer.
    Now, did that computer come back into the network with the 
other computers in the department?
    Mr. Zinser. Not that we know of, sir. We do not think that 
it was ever infiltrated into the department. Now, that is not 
to say that the department has not found occasions where 
foreign governments have taken information out.
    Mr. Wolf. Well, that was my next question. How many cyber 
attacks have been against the computers in the Department of 
Commerce in the last two years and was China ever involved?
    Mr. Zinser. I do not have the exact numbers. I do know that 
there are a number of countries that----
    Mr. Wolf. Was China one?
    Mr. Zinser. Yes, sir.
    Mr. Wolf. And how often does China hit your computers?
    Mr. Zinser. I do not have that information. I can tell you 
that, for example, a couple years ago, the number of attempts 
to get into PTO computers alone totaled about a million in a 
year.
    Mr. Wolf. And do we believe that it was in some cases by 
the Chinese Government?
    Mr. Zinser. I do not have that information. I would----
    Mr. Wolf. What would your guess be if you were under oath 
and you had to put your hand up and there was a Bible in front 
of you and asked the question? Would it be your expectation? 
The answer was that the Chinese Government was partially 
involved at some times?
    Mr. Zinser. Yes, sir. That would be one of the countries I 
would suspect. Yes, sir.
    Mr. Wolf. Just for the record, my computer was stripped by 
the Chinese. They came in and got my computer and 17 other 
Members, the International Relations Committee, and they took 
everything off. And the FBI acknowledged it was the Chinese 
Government that did it.
    And I think every Member should know and hopefully the 
department now, based on the Gutierrez case, has laid the word 
out that, and I hope it is government-wide now, that when other 
agencies, the trade people, the Justice Department people, that 
when they go to China and countries like that, and there are 
other countries, Syria and other places that they do the same 
thing. So is that the policy now government-wide?
    Mr. Zinser. As far as I know, it is, sir. I know the NSA, 
for example, has come around and has done a lot of outreach in 
the last couple of years, with departments trying to make sure 
that that effort is coordinated across the government. I know 
they came to the Department of Commerce.
    Mr. Wolf. Okay.
    Mr. Culberson. Mr. Chairman, if I may on that point.
    Mr. Wolf. Yeah.
    Mr. Culberson. Real quickly, guys, the problem is so severe 
that Google, when I visited Google headquarters, tells me they 
forbid--that when a Google executive visits China, they can 
only take a stripped down laptop that only has an Internet 
browser on it to China and then as soon as the individual 
returns, the computer is destroyed. It is that aggressive and 
that bad.
    Mr. Wolf. I have been told, too, that you really cannot 
clean it, that they can embed it whereby you can never actually 
technically clean it. So maybe the Chinese, even those who 
think that it has been cleaned, now feel very good, but the 
Chinese are having a day.
    Mr. Yoder.
    Mr. Yoder. I will pass, Mr. Chairman.
    Mr. Wolf. Thank you.
    Mr. Schiff.
    Mr. Schiff. Thank you, Mr. Chairman.
    And I just want to join my colleagues in extending my 
congratulations on your becoming chairman. I remember when I 
first was elected to Congress, I think you were chairing CJS at 
the time. And I came to testify, I was not a member of the 
committee obviously at that time, during Member Day. And I know 
that member testimony is not often the most scintillating of 
testimony and I know mine was not, but I was struck how 
diligently you listened to all the members that came to testify 
and how seriously you took their concerns. And I appreciated 
that commitment to your colleagues and have ever since. And 
congratulations.
    And, Mr. Serrano, what you said about the microphone 
reminded me when I was in the State Senate and the Senate 
president was giving an outgoing speech about one of the 
members and extolling their marriage. They were leaving the 
Senate. He said all these wonderful things about the member who 
was literally walking out the door and saying thank you, thank 
you, thank you. The minute the departing Senator left the room, 
the Senate president turns to the recorder and says, reporter, 
destroy that transcript.
    Mr. Serrano. By the way, was I the ranking member when he 
was so nice to you?
    Mr. Schiff. I do not recall because I think that you would 
not listen to anything I had to say. You gave me the back of 
your hand.
    Mr. Fattah. You were that memorable.

                    U.S. PATENT AND TRADEMARK OFFICE

    Mr. Schiff. I wanted to ask Mr. Zinser about the Patent 
Office. As you mentioned in your testimony, since 2000, patent 
pendency has increased ten months. The backlog has doubled. In 
the same period, the number of patent examiners has also 
doubled, but the number of patents has not kept up.
    I have been hearing about this problem for years from 
California high tech companies and I have been working on this 
issue for some time to try to address the backlog. Many of the 
stakeholders are willing to pay higher fees if they have the 
confidence in two things. One, that the fees would actually go 
to reducing the backlog, that the fees will not be diverted to 
pay some other government function unrelated to patents and, 
second, that the Patent Office will be efficient enough to use 
it effectively to reduce the backlog.
    What I would be interested to get a sense of is the 
relatively new head of the Patent Office has initiated some 
reforms. Do you see any signs of progress that the backlog is 
now moving in the right direction or is it still getting 
longer?
    If we were somehow to, in order to raise fees, commit that 
the revenues would go to the Patent Office and insisted that 
they develop a five-year plan to eliminate the backlog and that 
we have certain milestones to meet, is there a mechanism that 
could be used to make sure that we did not just increase patent 
quantity, but we also had patent quality at the same time? What 
is your sense of where the office is now and what will be 
necessary to remove the backlog?
    Mr. Zinser. Yes, sir. I think they have made progress on 
the backlog. I think the number that I have seen is that they 
have reduced it by about twenty or thirty thousand applications 
last year. And I think it is headed in the right direction. The 
issue of whether additional funding would help reduce the 
backlog, I think, is probably just part of the answer.
    I know that the reforms that the secretary and Mr. Kappos 
have initiated are fairly new and they have to be tracked, but 
I also know that the secretary is tracking it. He has set up 
this effort called his balanced scorecard, where each of the 
agencies are coming in with their performance metrics.
    And one thing that PTO has is data. They have a lot of data 
about their operations. And I think the key is to figure out 
which of those data points are important to track and to really 
see whether those data points are valid. And that is the kind 
of work we are going to do in following up on those reforms 
that they have put in place.
    Mr. Schiff. How much of an issue is it that you mentioned 
that they have not been very good at anticipating the revenues 
and without a good model to anticipate their revenues, they 
cannot make planning decisions about how many patent examiners 
to hire and whatnot? How much has that impeded their 
operations? How much is the uncertainty about whether they can 
keep all the fees they generate an obstacle to their long-term 
planning?
    Mr. Zinser. I do not think the issue of them keeping their 
fees is--I know it is a historical issue for the folks in the 
patent world, but the recent history of this committee is that 
PTO has been appropriating all the fees that it has collected, 
basically.
    I think where the uncertainty comes in is in projecting 
what their revenues are going to be. There is uncertainty 
there, and what happens is it impacts their various business 
decisions on increasing staffing or what they spend on other 
contracts. There is uncertainty about their incoming revenue, 
so that creates uncertainty about some of their business 
decisions throughout the year.
    Mr. Schiff. Thank you, Mr. Chairman.

                        NOAA SATELLITE PROGRAMS

    Mr. Fattah. Mr. Chairman, when you get a chance.
    Mr. Wolf. Go ahead.
    Mr. Fattah. I just wanted to follow-up with something the 
chairman asked earlier because I thought it was a very 
important point given the extraordinarily large cost relative 
to the Satellite Program and the relatively small amount of 
your own resources that you have allotted to it.
    Now, I am a big fan of inspectors general. I worked with 
Chris Shays who co-sponsored the bill that created these 
inspectors general and juiced them up years ago with a lot of 
resources.
    The question is, given your response, you are the 
taxpayers' watchdog in the agency, right?
    Mr. Zinser. Yes, sir.
    Mr. Fattah. So here you have got this program in which 
there are satellite cost overruns. And when the chairman asked 
you-- and I do not mean to put you on the spot. I mean, I am 
searching for how we get at some of these issues. He said, 
well, you only have two people watching over what is a multi-
billion dollar program out of your entire staff.

                        IG'S RESOURCE ALLOCATION

    So my real question is not about that in particular, but 
how you rationalize your allocation of your resources to watch 
over the dollars in these agencies inside the Commerce 
Department. So you have got the department. You have got its 
various agencies.
    How do you go about as the public's watchdog deciding where 
you are going to apply your resources and are you, you know, 
are you majoring in the minors, are you focused on the major 
dollars where there could be efficiency improvements?
    I am not as concerned about fraud. I assume that most of 
the people in the government are trying to do the right thing 
and if there is fraud, we have a Justice Department that will 
get the bad guys eventually. But in the meantime, efficiency is 
a big deal.
    Mr. Zinser. Yes, sir.
    Mr. Fattah. And the intelligence community has satellite 
interests. DoD has satellites. NASA has satellites. NOAA has 
satellites. In the private sector, they put up satellites, 
right? And I know the chairman was talking about the Chinese. I 
mean, they are getting very proficient. I mean, we should know 
how to get a satellite up, right?
    And so my question is what is your rational basis, as the 
IG, for determining how you are going to apply your resources 
to look over the public's money? And I would assume you would, 
you know, just rationally put more people focused where the 
money really is.
    Mr. Zinser. It is an excellent question, sir. My philosophy 
has always been that I am going to deliver the best oversight I 
can deliver with whatever resources the Congress gives me, 
number one.
    We have a very diverse department. And the first thing I 
have to make sure of is that I do the work that is mandated by 
statute. For example, I have financial statement audits I have 
to do. The IT security audits are required by statute. I am 
required by statute to go out and audit a public safety 
interoperable communications program. Within the last couple of 
years, Congress has required that I audit the decennial census. 
Even the top management challenges report that we issued, that 
is required by law.
    So I have my statutory requirements. Then I get requests 
from time to time from members of Congress to do work, and I 
make that a priority. The secretary and the administrators ask 
me to do work. I make that a priority.
    Last year, for example, we looked at an acquisition that 
NOAA did on their west coast operations center. That was 
requested by Senator Cantwell. And, in fact, that is one of the 
jobs that we did that resulted in a very significant review by 
the secretary of how they do acquisitions in the department. So 
I think we got a lot of mileage out of that review.
    Mr. Fattah. And if I could, I mean, so that is a great 
answer. You are doing what you are mandated to do. And that 
might take you away from looking at a multi-billion dollar 
expenditure like the Satellite Program because you have to go 
chase these things that the Congress has told you to do and to 
perform on a regular basis, right?
    Mr. Zinser. Yes, sir.
    Mr. Fattah. So if we want to find more efficiency where 
greater dollars are being expended, we will have to provide 
some relief or direct you in that way, right?
    Mr. Zinser. Yes, sir. Well, one thing I did do, and I have 
been here three years now, one thing I did do when I got this 
job and saw the Satellite Program, I did go out and find 
expertise, people that----
    Mr. Fattah. I know. I am trying to get to an answer here. I 
mean, Jesse James said he would rob banks because that is where 
the money was, right?
    Mr. Zinser. Yes, sir.
    Mr. Fattah. So if we are looking for efficiencies, we would 
have to have the watchdog looking where the money really is and 
not looking where, you know, the peanuts are, right?
    Mr. Zinser. Yes, sir.
    Mr. Fattah. So thank you.
    Thank you, Mr. Chairman.
    Mr. Serrano. Betty Sutton.

                         RECOVERY ACT AND BTOP

    Mr. Wolf. Thank you, Mr. Fattah.
    Mr. Zinser, Commerce received $7.9 billion in February 2009 
as part of Public Law 111-5, the American Recovery and 
Reinvestment Act. This amount was almost as much as the $9.7 
billion in base funding provided to the department in 2009.
    When you exclude the $1.9 billion increase provided for 
census in fiscal year 2009, the $7.9 billion in stimulus 
funding was nearly the same amount as the Commerce Department's 
base budget.
    As of December 31, 2010, the Department has obligated about 
$5.9 billion in the Recovery Act funds as the law stipulated 
that most of the funds had to be obligated by September 30, 
2010.
    However, even though about 92 percent of the funds have 
been obligated as of December 2010, only about $1.7 billion has 
actually been expended or about 22 percent of total funding 
provided nearly two years ago.
    Can you explain why there has been such a lag in sending 
these funds out the door and, secondly, does Commerce keep 
track of how its Recovery Act funds may have stimulated the 
economy and is any of this money able to be reclaimed, 
something that has not been used, because the purpose of the 
stimulus bill was actually to stimulate and create jobs? Can 
you explain why there has been such a lag in sending the funds 
out and can any be claimed?
    Mr. Zinser. Yes, sir. The discrepancy between the amount 
obligated and the amount spent is largely explained by the 
Broadband Program.
    Mr. Wolf. Okay.
    Mr. Zinser. The Broadband Program was the largest program 
of that pot of money. And they were required to award the 
grants and obligate the money by the end of last fiscal year, 
by September 30.
    Mr. Wolf. Right.
    Mr. Zinser. And it became very schedule driven, but they 
did it. Now the spending will occur over the next two or three 
years as the grantees actually start spending money on those 
projects. So that explains most of the discrepancy and why the 
money was obligated but has not been spent.
    Mr. Wolf. Were there matches involved then because with the 
localities having such a difficult time, you are hearing 
California, and different states are having a tough time in 
localities?
    Mr. Zinser. Yes, sir. We are very concerned about that. The 
Broadband Program itself awarded 232 grants, $3.9 billion. The 
amount of match for those grants was about $1.4 billion, which 
has to be spent by the grantees. Whether it is a private sector 
company or a state or a county, those grantees have to come up 
with that matching amount.
    Mr. Wolf. Is there a time factor involved in that match?
    Mr. Zinser. The way the program is run, I do believe that 
they have to show their match invested in the project all along 
the way. And when we go out and do audits, for example, of 
those grants, that is one of the things we look at, to see 
whether or not the match is actually being provided by the 
grantee.
    Mr. Wolf. Are there localities that are now having a 
difficult time making the match?
    Mr. Zinser. For the Broadband Program, the funds just went 
out there, so we have not completed any audits on individual 
grantees yet. But I know in past grant programs, even in better 
economic times, there were a lot of problems with grantees 
providing their match.
    Mr. Wolf. Would there be a way, not to be a disincentive to 
the grantee obviously if this is something legitimate they are 
doing, but is there any thought of doing a kind of a checkup on 
everyone saying, okay, guys, you got the grant September 30 
last year, we want to see in 60 days that you can comply? And 
if you cannot, tell us now because that money could be 
recovered.
    If it could be recovered, it would certainly impact on the 
debt--I mean, we are not trying to hurt anyone. Again, I am not 
trying to say, you know, get somebody. But if a locality really 
will not be able to make the match--in the transportation bill, 
we used to have what we call a use or lose. If you did not use, 
and I know you were at Transportation then, and if you did not 
use it over a period of time----
    Mr. Zinser. Uh-huh.
    Mr. Wolf [continuing]. You lost it. And this economy is 
very tough. So there may be a locality that had this great 
idea, but now the tax base--I saw Camden, New Jersey has had to 
lay off 50 percent of their policemen.
    Mr. Zinser. I think it is a very high risk area, sir, and--
--
    Mr. Wolf. Well, could you do that then? Could we request 
that you--again, this is not to be punishment. I just want to 
make that clear. But if someone knows they are not going to be 
able to make it, and if they are going to be able to make it, I 
think they should continue, but if they are not going to be 
able to make it, to let you know in a period of time so that 
the money could be reclaimed. And then if it were reclaimed, 
there may be a program that, you know, members here would like 
to continue that would allow it to continue if they knew this 
money were coming in.
    So is there a way for you to do that, to check, send a 
letter to everybody and say can you tell us within 30 days?
    Mr. Zinser. Yeah. Either our office could do that or the 
program office itself that is supposed to, in NTIA, that is 
supposed to be keeping track of these things.
    Mr. Wolf. Well, maybe we should ask them if they can do it 
because, you know, based on what you told Mr. Fattah, I know 
you have got a lot to do. But maybe we should just ask them.
    Mr. Zinser. We could follow up with them as well.

                  RECOVERY ACT AND CONSTRUCTION GRANTS

    Mr. Wolf. Okay. Good.

    2. Can you ask NTIA to send a letter to all applicants to 
determine whether or not they are able to meet their match 
requirements?
    On March 9, 2011, my office transmitted a memorandum on 
this subject to Lawrence Strickling, Assistant Secretary for 
Communications and Information and Administrator for NTIA. We 
provided a copy of the memo to the subcommittee on March 14.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Wolf. NIST received $360 million for its Construction 
Grant Program in the Recovery Act. Does NIST have the 
experience with construction funds and----
    Mr. Zinser. They do have experience actually contracting 
with construction companies to build research facilities. What 
they do not have a lot of experience with is part of that 
Recovery money is actually a grant program where they are 
granting money to other parties to do construction. That is a 
fairly new function for NIST and we do not think they have a 
lot of experience doing that. So that is a risk area that we 
have identified.
    Mr. Wolf. And so what is going to be done about that?
    Mr. Zinser. Well, we have got it on our work plan to go out 
and audit the program, specifically looking at NIST's 
capability of overseeing those construction grants.
    Mr. Wolf. Well, have they begun construction? This comment 
says that as of December 2010, it looked at, at that time, it 
could have changed, that only $46 million or 13 percent of the 
$360 million has been expended.
    Mr. Zinser. Yes. It is very similar to the Broadband 
Program where the money has gone out and now the grantees are 
in the process of spending it, and it has been a slow process.
    Mr. Wolf. And are the matches there too? Probably not as 
much in----
    Mr. Zinser. I do not know the answer to that. I know that 
the construction grants primarily went to universities.
    Mr. Wolf. Okay.
    Mr. Zinser. There is a whole list of universities that 
received these monies. I do not know the grant requirement for 
those funds, but I can let you know that.

    3. Are the recipients of the NIST construction grants 
required to come up with a match?
    The NIST construction grant program requires recipients to 
provide at least a 20 percent match, with the remaining 80 
percent of the grant amount provided by NIST. For the 16 
construction awards funded through the program, the matches 
ranged from 20 to 88 percent, with the median (and most common) 
match being approximately 50 percent.

    Mr. Wolf. Okay. Who will be responsible for the ongoing 
operations and maintenance of these facilities? Will it be the 
federal government or the organization that got the money?
    Mr. Zinser. For the Grant Program, it would be the grantee.
    Mr. Wolf. The grantee.
    Mr. Zinser. For the facilities that NIST is constructing 
itself, I think it is probably a mix. The answer is probably a 
mix of responsibilities.

                    U.S. PATENT AND TRADEMARK OFFICE

    Mr. Wolf. Okay. Before I go back to Mr. Fattah and then to 
the other members, too, let me go back on the patent issue.
    Last year, the director of the U.S. Patent and Trademark 
Office voluntarily, and I stress the word voluntarily, there 
was no mandate by Congress, gave the Chinese Government our 
entire patent database and continues to provide regular updates 
to the Chinese with new patent applications.
    Now, anybody here who has a company that has left to go to 
China, just think about it. Was that a good idea to give, 
voluntarily give the Chinese Government our entire patent 
database and to give them a regular update to the Chinese with 
new patent applications? Do we do this to the Russians, to the 
Macedonians? Was that a good idea?
    Mr. Zinser. I am not familiar with that. I do know that PTO 
does share information with other governments. I was not 
familiar with that particular issue.

                         USPTO AND IT SECURITY

    Mr. Wolf. Could you look into that? And have you looked 
into the policy impact on Chinese theft of U.S. intellectual 
property?
    Mr. Zinser. We can look into that. I do know that part of 
our emphasis on IT security, for example, is the fact that PTO 
would be such an economic target by other countries. That is 
why we are emphasizing IT security.
    Mr. Wolf. To think PTO just gave them the database so they 
did not have to be inconvenienced, the Peoples Liberation Army. 
Just give it to them so they could have more time to do other 
things? I mean, it does not make any sense to me.
    When the Patent and Trademark Office comes up, we are going 
to ask. Does that sound like a good idea to voluntarily give it 
to them? If you could check on it.
    Mr. Zinser. I will, sir.

    4. If USPTO fees are raised, would that help reduce the 
backlog?
    We have not yet conducted audit work analyzing USPTO's 
proposed 15 percent surchage on fees, the activities to which 
these additional revenues would be directed, or how those 
activities would reduce the patent application backlog and 
pendency. This fee increase was proposed in USPTO's FY 2011 
budget request and was expected to generate an estimated $244 
million. According to the President's FY 2011 budget request 
(p. 2), the proposed interim fee increase ``. . . would fund 
the required hiring along with an attendant investment in 
information technology (IT). The USPTO will also create an 
operating reserve in FY 2011 to fully fund the cost of patent 
hiring in FY 2013 and maintain the reserve to protect the 
agency against unforeseen disruptions in revenue. Together, 
these will allow the USPTO to deliver on its pendency, quality, 
IT, and international objectives.'' The FY 2012 budget (p. 135) 
states that it would extend the interim increase for patent 
fees to fund the continued implementation of the 2010-2015 
Strategic Plan.
    In short, the quetion is best directed to the agency. The 
question could be expanded along the following lines: Of the 
collections expected from the 15 percent surcharge, what 
amounts would be directed at which activities, how do those 
activities relate to reducing USPTO's patent backlog and 
pendency challenges, and what measurable outcomes would be seen 
with respect to pendency and backlogs?

    Mr. Wolf. And see who else we voluntarily give it to.
    Mr. Zinser. Yes, sir. I know at some point, the information 
about patent applications is made public. I do know that.
    Mr. Wolf. Of course, there are 30 Catholic bishops in jail 
in China today. If you go into an internet cafe in Beijing and 
type in the Dalai Lama or type in freedom, nothing happens. So, 
I mean, it is not a good idea. So if you can look at it and get 
back to us about that, I would appreciate it.
    Currently all patent applications are made available on 
line for the world to see in 18 months even though the average 
backlog has grown to more than 35 months.
    Have we ever considered the impact of posting vendors' 
trade secrets on line for up to two years before it is granted 
the patent?
    Mr. Zinser. I do not know the answer to that, sir. I will 
have to find out.
    Mr. Wolf. I mean, they are stealing. We know what they are 
doing. I know what they are doing, if the Patent Office does 
not know, but here we have all patent applications are made 
available on line for the world, i.e. the Chinese, i.e. the 
Russians, i.e. the Syrians, i.e. the Iranians, i.e., you could 
put whoever you want to put in.
    And what is the impact of posting a vendor's trade secrets 
on line for up to two years before he is granted a patent? If 
you could look at that and check for us, I would appreciate it.
    Mr. Zinser. Okay.
    Mr. Wolf. Do you think PTO is doing everything it can to 
protect American intellectual property from cyber intrusions 
prior to public release of the patent applications at 18 
months?
    Mr. Zinser. I think they are getting better. I think they 
are paying attention to cyber security. I think they are 
getting better----
    Mr. Wolf. Better meaning they went from zero to 15 or zero 
to 87? I mean, because these are jobs. Everyone is concerned 
about losing jobs to China factories.
    I saw the other day this company in Massachusetts, the 
Evergreen Company, you may have seen it, just leaving. They got 
a bailout from the State of Massachusetts and they left. And 
they are laying off 800 employees in Massachusetts. Just 
literally they are walking off to China. I do not think it is 
an interest over at the Patent Department frankly. I think they 
are really--this is not their interest.
    But if you could look to see, and I would like to get a 
report maybe even before the Patent Office comes up, as to 
whether or not you think they are doing everything they can on 
that.
    Mr. Zinser. I do think that by this time next year, they 
are going to be ahead of the department in terms of their IT 
security.
    Mr. Wolf. Okay. Mr. Fattah, you want to go ahead?
    Mr. Fattah. I am willing to pass and submit whatever other 
questions I have for the record.
    Mr. Wolf. Okay. Fine. Okay.
    Mr. Serrano, okay.
    Let me just cover a couple of the----
    Mr. Serrano. If I could just submit some questions for the 
record.
    Mr. Wolf. Sure. Sure. Without objection.
    And I do not want to keep the Justice Department too. So we 
will have some questions, too, for the record on the broadband 
issue that you cover we assume there.

                           2010 CENSUS BUDGET

    Also, I think you may have covered this, but I want to ask 
it because I think Mr. Serrano referenced it, too, and I think 
it was a good question.
    Could you talk to us about the $1.9 billion budget savings 
being described by the census? Are they really cost savings or 
was it the census budget for certain activities was not very 
accurate? So I think you covered it, but was that a----
    Mr. Zinser. I think it was mixed, sir. I think that we have 
reported in the past, and GAO has reported, that the census 
budget estimation is not very good. And when the hand-held 
computer was scrapped and they had to revise their budget 
estimates for the decennial, the estimate shot up $3 billion.
    One thing that they did do right, I think, is they promoted 
the census. They increased awareness. They used appropriations 
for a media campaign that I think kept the response rate at a 
level such that it did save a lot of money.
    So I think you had a mix of bad budgeting and a response 
rate that helped reduce costs or keep costs contained.
    Mr. Wolf. Do you think that the head of the Census should 
be a career person rather than a political appointee? I mean, 
you have changed a lot and it seems that--and I know it may 
sound opposite of what we were talking about earlier, but if 
you keep changing and changing and changing and changing it----
    Mr. Zinser. One of the things that have been proposed--I 
think it was in a bill last year--was to put the Census Bureau 
as a term similar to what they did to the FAA administrator so 
that the term would overlap----
    Mr. Wolf. That is a good idea.
    Mr. Zinser [continuing]. Overlap the administration and----
    Mr. Wolf. The FBI is ten years. The director of the FBI is 
ten years.
    Mr. Zinser. Yes, sir. I think the proposal was for the 
census director to be five years.
    Mr. Wolf. Now, whose bill is that?
    Mr. Zinser. I think Representative Maloney put the bill in 
the House, and Senators Carper and Coburn put it in the Senate.
    Mr. Wolf. That sounds like a good idea. And if you bring 
the right person in and confirm them by the Senate, so 
obviously they have to go through that, but I think the change 
has made so much of a problem that--so maybe we will take a 
look at that.

                           PSIC GRANT PROGRAM

    Would you provide, on the Public Safety Interoperable 
Communication grants, would you provide the Committee with an 
update on the program? And we again understand the funds were 
all obligated by September 30th. But have any of the funds been 
actually spent?
    Mr. Zinser. On the public safety interoperable 
communication grants, that program is a couple years old now 
and was funded by the auctioning off of spectrum. We had a 
requirement to go out and do annual reports, and we are 
obligated to go out and audit about 25 of the grantees.
    The only problem we saw in that program is that the way the 
program started out, the department allocated the money to the 
states before the states really had an idea what they were 
going to do with it. And so they had a time deadline to do the 
projects. We found that they were not going to be able to 
complete their projects, so the Congress extended the deadline. 
And so far, the audits that we are conducting show that the 
projects are on track and that the problems we found have been 
corrected.
    Mr. Wolf. Okay. So you do not think that this money that is 
not being used ought to be rescinded and returned to the 
Treasury, the funds, if it has not been used at this time, or 
do you think it is moving along?
    Mr. Zinser. I think the PSIC Program is probably moving 
along, sir.

                    U.S. PATENT AND TRADEMARK OFFICE

    Mr. Wolf. Okay. Telework, this Committee was the one who 
pushed the Department for telework. And maybe you can just give 
us an update, and we will ask the PTO, but give us--and maybe 
you can tell us how you think--I have been a strong supporter 
of telework. I think it is important. There is nothing magic 
about strapping yourself into a metal box and driving 35 miles 
to sit before a computer when you can do it in another place.
    But if you can give us that and also if you can give us 
some information because I have been a supporter and have 
defended it and have been criticized by some of my colleagues 
on the Floor at times, which is all fair, but I maintain that 
from a continuity of government standpoint, because with 9/11, 
this place shut down, heavy snowstorms, the earthquake in 
California, if you did not have telework. Can you see how it 
has worked and if it improved productivity? Has it reduced sick 
leave? And if you could give us the raw truth on what it has 
done.
    Mr. Zinser. We do plan to do some work this year on PTO's 
Telework Program.
    Mr. Wolf. Okay.
    Mr. Zinser. I think that they've put in place a very robust 
program and are relying on it as a key human capital tool. So 
we are going to do an audit of that program to try to measure 
how well it is succeeding.
    Mr. Wolf. And Mr. Schiff asked a good question too. The 
Patent Office increased the number of patent examiners from 
4,258 in fiscal year 2005 to 6,225 in fiscal year 2010. Yet, 
the backlog persists.
    Why does it persist? And in your view, has PTO taken the 
necessary aggressive steps or should we bring in an outside 
group? Should we bring in a group of former Patent Office 
directors just to look to see because the backlog is 
increasing? The funding has been there. It really has.
    I know sometimes outside groups will come in and say, well, 
you know, but this committee has on both sides of the aisle, I 
have given everything that they have needed. They have got a 
pretty nice building down there too. Could have probably saved 
some money if the atrium had been a little lower maybe, but the 
backlog continues. And that changes too. I mean, I think we 
have changed, we have been changing PTO administrators often 
too. Maybe there ought to be a set term there too.
    What do you think the reason is?
    Mr. Zinser. Well, it is very complicated. I think one of 
the things that you look at is the increase in patent 
applications themselves. I think those have gone up. I think 
you factor in that some of the patent applications have 
increased in complexity themselves. As technology gets more 
complex, I think the patent applications get more complex.
    I think there have been labor issues there with the 
employees and the working conditions, and one which I think has 
been successfully worked out is the telework. But the idea of 
reaching out to outside parties--I think Mr. Kappos is doing 
that. I do not have a list of his efforts along those lines, 
but I have heard him talk about the outreach efforts he is 
making to people outside the little patent PTO circle.

             INTERNATIONAL TRADE/COMMERCIAL FOREIGN SERVICE

    Mr. Wolf. Okay. We can ask him.
    One last question and then I will go to Mr. Yoder to see if 
he has anything.
    How many Commercial Foreign Service, this is on the export 
issue, how many Commercial Foreign Service officers does the 
U.S. post abroad compared to Germany and Japan and other 
developed countries? Would you know that?
    Mr. Zinser. I do not have that data at my fingertips, but I 
can get that for you, sir.
    Mr. Wolf. Mr. Yoder, do you have any?
    Mr. Yoder. I do not have anything.
    Mr. Wolf. No? Okay. Thanks.
    I think that is pretty much--

                          2020 CENSUS PLANNING

    Mr. Serrano. Mr. Chairman.
    Mr. Wolf. Yes, Mr. Serrano.
    Mr. Serrano. Can I go back on my----
    Mr. Wolf. Sure, yeah.
    Mr. Serrano [continuing]. Decision not to ask another 
question?
    Mr. Wolf. Sure, yeah. No. Go ahead.
    Mr. Serrano. I do not know, sir, if you have this 
information because it is related to the census but not 
directly to the Census Bureau. I have been involved as an 
elected official with the census in 1980, 1990, and 2000 and 
2010, and I have never seen the outside involvement from the 
media and different groups throughout the country in 
advertising the need to fill out your form and return it.
    For instance, I was asked to do about four PSAs including 
one which was a very serious effort by Telemundo nationwide 
asking people to return census forms.
    Were those collaborations with the Census and, if not, do 
we have any idea of how much money was spent by non-public 
organizations or non-public funds were spent on promoting the 
census? I mean, I know it is not dollars that you keep an eye 
on, but it is just----
    Mr. Zinser. Well, the use of media to raise awareness of 
the census really was not introduced until 2000. And so 
whatever awareness campaigns existed before that probably did 
exist out in the local communities.
    Mr. Serrano. Right.
    Mr. Zinser. I am not sure that there is a lot of money--
private money or non-government money--spent on raising 
awareness of the census. I think it all came from the 
Government. The media campaign, I believe, cost about $180 
million. But beyond that, there is assistance provided by 
private parties. They provide meeting facilities to have 
rallies to get the word out about the census. And people 
volunteer their time to help promote the census. But I am not 
aware of actual private money being used to promote the census.
    Mr. Serrano. So when CBS says as a service of CBS or a 
service of NBC, you see these things that say make sure you 
turn in your census, or when Channel 4 asks you to return your 
census form, that was an ad for the Census Bureau and not 
something that Channel 4 did locally?
    Mr. Zinser. Yeah. That may have been something Channel 4 
did locally. I do not know what occurred in each of the various 
localities. But when the Census Bureau procured the ad in the 
Super Bowl last year, for example----
    Mr. Serrano. That is different. I understand.
    Mr. Zinser [continuing]. Part of that deal was for the on-
air talent to actually say some things about the census. That 
was part of the deal.

                    PROGRAM DUPLICATION AND OVERLAP

    Mr. Serrano. Right. Okay. That I understand. All right. 
Thank you so much.
    Mr. Wolf. Thank you.
    The last question is, and, again, you do not have to answer 
it, you can just talk to the staff, are there any, specific 
areas in Commerce that you see as duplicative or wasteful, 
similar to what Mr. Fattah was saying, if there are different 
things in different areas?
    Again, the whole purpose is not to hurt anything but to--
based on where we are and the reality of maybe something could 
be postponed or pushed off for a while and the money could be 
put on to a program like the exports that the Secretary thinks 
important or whatever the case may be, but----
    Mr. Zinser. Sir, I think there are a lot of opportunities 
in Commerce just to reduce overlap inside the administration of 
the department. For example, every department has a CIO. NOAA 
has four CIOs. There are three or four different operation 
centers for IT security in the department. There are 
duplications even within the Department of Commerce that could 
be consolidated and perhaps save money.
    Mr. Wolf. Well, if you will let the Committee know and, 
again, depending on what authority we would have, obviously we 
have to talk to the authorizers, too, but we can deal with 
that, again, not in a way that hurts the Department.
    And I think as I told the Secretary, we want to really be 
cooperative and help. And, you know, I think he is doing a good 
job personally and I have been impressed with him and on the 
export issue and other issues and things that he really thinks 
are a priority.
    And so, anyway, I thank you for your testimony. I 
appreciate it very, very much. And you do not have to stay, but 
you can go if you want to go. You can stay if you want to stay, 
but I----
    Mr. Zinser. Okay.
    Mr. Wolf. Anybody else have any other last questions?
    [No response.]
    Mr. Wolf. Great.
    Mr. Zinser. Thanks again.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Wolf. Thank you.
    Ms. Schnedar, I appreciate your patience and you can 
proceed. Your full statement will be in the record and proceed 
as you see appropriately.
                                       Wednesday, February 9, 2011.

                       U.S. DEPARTMENT OF JUSTICE

                                WITNESS

CYNTHIA A. SCHNEDAR, ACTING INSPECTOR GENERAL

   MANAGEMENT AND PERFORMANCE CHALLENGES AT THE DEPARTMENT OF JUSTICE

    Ms. Schnedar. Thank you. Mr. Chairman, Congressman Fattah, 
and members of the subcommittee, thank you for inviting me to 
testify. While my written testimony focuses on the top ten 
challenges facing the Department, today I will focus on three 
challenges: counterterrorism, the development of information 
technology systems, and grant management.
    Counterterrorism continues to be the highest priority of 
the Department and our reviews have consistently found that the 
Department must improve its information sharing and 
coordination efforts in order to be able to respond more 
effectively to the threat of terrorism. For example, we found 
in a recent review that while the FBI had taken the appropriate 
steps to prepare to respond to a potential incident involving a 
weapon of mass destruction, or WMD, the Department as a whole 
and its other components were not adequately prepared. We found 
that the Department had not developed coordinated response 
plans, had not designated anyone to have central oversight on 
this issue, and had provided little to no training for 
responding to a WMD incident.
    In another example we conducted a review which found that 
the FBI and ATF had developed separate and often conflicting 
approaches to explosives investigations, explosives related 
activities, such as training, information sharing, and forensic 
analysis. These conflicts resulted in unnecessary competition 
and duplication of effort, and also could result in problematic 
responses to terrorist incidents involving explosives. In a 
2009 audit we found that the FBI did not consistently nominate 
known or suspected terrorists to the terrorist watch list in a 
timely manner and did not update or remove watch list records 
as required. We recently initiated a new review of the FBI's 
management of the watch list to assess its progress in this 
area.
    The Department has taken steps to address the deficiencies 
we have identified in these and other reviews relating to 
counterterrorism and we believe it is important that the 
Department continue to focus its efforts on improving its 
ability to combat terrorism.
    Another significant challenge the Department faces is the 
planning and implementation of information technology, or IT, 
systems. Our audits have found that the Department has 
experienced significant problems in developing and implementing 
these IT systems in a timely and cost effective fashion. For 
example, when the FBI awarded a contract to Lockheed Martin in 
March 2006 to develop the Sentinel Case Information System, the 
FBI estimated that it would cost a total of $425 million and be 
completed by December 2009. The FBI later revised its budget 
estimate to $451 million and its estimated completion date to 
June 2010. In our most recent report on the development of 
Sentinel we found that Sentinel is at least two years behind 
schedule and at least $100 million over its original budget.
    Since issuing its stop work order to the prime contractor 
Lockheed Martin in July the FBI has adopted a new agile 
methodology in which it has assumed direct management of 
Sentinel development and significantly reduced the role of 
Lockheed Martin as the prime contractor. We remain concerned 
that the FBI's new projected estimate that it will finish 
within its original budget appears optimistic. We will continue 
to report on the status of this project.
    We have found similar problems in other Department IT 
development projects, including an ineffective requirements 
planning process, requirements being modified after much work 
has been done, and defects identified in the user acceptance 
stage that were costly to correct.
    Other federal agencies are also experiencing IT development 
problems and there are no quick and easy solutions. But the 
Department's track record in this area is uneven and we believe 
the Department must focus on this increasingly important 
challenge.
    Another significant challenge that the Department faces is 
that of grants management, and this has been heightened 
recently because the Department was required to award $4 
billion in grants under the Recovery Act at the same time that 
it awarded $3 billion in grant funding from the Department's 
annual appropriations. Our reviews have found that the 
Department generally issued the Recovery Act grant funds in a 
timely, fair, and objective manner. We also found that the 
Department has been trying to improve its regular grant 
management practices by working to implement a series of 
recommendations that we provided them in 2009.
    However, our audit work has continued to identify areas 
where the Department could further improve its management of 
grants. For example, we found that the Department needs to 
implement better controls to ensure that it correctly scores 
and ranks grant applications. We also found that the Department 
was not consistently documenting its reasons for making 
discretionary awards, including its reasons for deviating from 
the ranking provided by peer reviewers, and was not 
consistently implementing a process to eliminate conflicts of 
interest among its peer reviewers. In addition, we found 
significant deficiencies in the use of grant funds by some 
grantees, and we recommended that the Department issue 
additional guidance to grantees to help correct this problem.
    In sum, the Department has made progress in addressing many 
of its top management challenges, but important improvements 
are needed in these areas. These challenges are not easily 
resolved and will require constant attention and strong 
leadership by the Department. To aid in this effort the OIG 
will continue to conduct vigorous oversight of Department 
programs and provide recommendations for improvement.
    This concludes my prepared statement, and I would be happy 
to answer any questions.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      FOREIGN LANGUAGE TRANSLATION

    Mr. Wolf. Thank you. Thank you very much. Your office 
reported in late 2009 that the FBI was failing to meet hiring 
targets for linguists in critical languages. In fact we were 
told they only made the hiring targets in two of fourteen 
critical languages, and the average time it took to hire a 
contract linguist increased to nineteen months. What are the 
major obstacles to correcting this problem? And what can the 
FBI do to get more qualified linguists on board more quickly?
    Ms. Schnedar. One of the obstacles we found in the delay in 
hiring was the background check process. And we thought there 
were things that they could do to simplify that process. There 
also was additional outreach efforts they could do in order to 
identify linguists and bring them on board. We did make a 
series of recommendations.
    What's interesting, we did an audit in 2005 and we found 
that the hiring was actually worse in 2009 than it was in 2005. 
So this is----
    Mr. Wolf. So it actually got worse?
    Ms. Schnedar. It actually got worse between 2005 and 2009. 
So, and many of the recommendations that we made in '05 and '09 
were actually similar. So we are going to go, this is something 
we're going to be tracking very carefully and we will have to 
go back in at some point and see how they are doing in this 
area.
    Mr. Wolf. Well we would like to see what your 
recommendations were to the Bureau. And what is the impact, how 
much material is not being reviewed? And does the FBI have 
sound practices in place for prioritizing what material gets 
translated and what goes into the backlog? Because if they are 
actually doing, there is more almost to review now than there 
was in '05, in some respects. So are they missing much?
    Ms. Schnedar. We did find, I should point out between '05 
and '09 the number, the length of the backlog did go down. But 
we found in '09 there was still significant amounts of 
materials that were not being reviewed in a timely fashion. And 
we found that part of the problem was tracking all of the 
materials they were collecting and then prioritizing it. And we 
made recommendations about how to implement a system that would 
improve, would help improve that. We, they are trying, 
implementing some of those reforms now. We have not gone back 
in to do another audit to assess that. But we do know they are 
trying to implement some systemic changes at this point.
    Mr. Wolf. Well maybe you can let us know before the 
Director comes up that way we can----
    Ms. Schnedar. Yes, we would be happy to talk with you about 
that.

                HIGH VALUE DETAINEE INTERROGATION GROUP

    Mr. Wolf. Has your office reviewed the implementation of 
the HIG, the High Value Interrogation team, the new interagency 
terrorist interrogation unit that is found under the auspices 
of the FBI? If you could tell us your findings? And if not, I 
would like you to look into it. Have you looked into the HIG?
    Ms. Schnedar. No, we have not conducted an evaluation of 
that.
    Mr. Wolf. If you could I would appreciate it. At the time 
of the creation of the High Value Interrogation team, as you 
know it was the subject of a lot of controversy. And the 
Christmas Day Bomber, the High Value----
    Ms. Schnedar. Yes.
    Mr. Wolf [continuing]. Interrogation Team was not 
implemented, was not used. And at the time of the creation I 
wrote to the Attorney General and the Director of the National 
Intelligence to urge that the HIG be colocated at the National 
Counterterrorism Center. Have you been out to the National----
    Ms. Schnedar. I have not myself personally been out there.
    Mr. Wolf. Yes.
    Ms. Schnedar. So.
    Mr. Wolf. Well then, you know what the Center is?
    Ms. Schnedar. Oh yes, absolutely. We have done many reviews 
and I am very aware of what it is.
    Mr. Wolf. Yes.
    Ms. Schnedar. I just have not physically visited it.
    Mr. Wolf. I was told at that time that it was not possible. 
It is in my district and it is very large, if you have not been 
there.
    Ms. Schnedar. Yes.
    Mr. Wolf. That they could not do it because of space 
limitation. I believe that by having the HIG at that location, 
because that is where the information is coming in, and if you 
are going to send a team out, whether it be to Yemen or 
wherever, the fact that they are almost colocated with the team 
as the information is coming in, would you look at whether or 
not the HIG could be strengthened by being at the National 
Counterterrorism Center?
    Ms. Schnedar. Yes, we could look at that, too.
    Mr. Wolf. And also, although they have expanded that quite 
extensively, is there someone, is there some function at the, 
and again it is a large, it is large. It is not a little place. 
Is there a function at the Counterterrorism Center that should 
be some other place in comparison to the HIG? Because if the 
HIG is there, had the HIG been on the site on Christmas Day, 
that team could have been sent out. There could have been a 
person who spoke the language, who understood the culture who, 
and that was not the case. And so it was just the FBI person 
working on Christmas Day in the Detroit office who may not 
have, who may be a wonderful person but may not have been the 
very best person that our country has. And you could have 
missed operations and things like that, or maybe they would not 
have read the Miranda rights right away. Who knows what the 
circumstances were? But I think if you are going to have the 
High Value Interrogation Team it ought to be used and I think 
it ought to be there. So if you can look at it there, should it 
be there? And then is there any other function out there that 
you could move to some other place? And have the HIG there on 
site?
    Ms. Schnedar. That is something we can certainly put in our 
queue. I would say we do, we will have to finish, there are 
some ongoing reviews that are coming near completion. So we 
would not have a team immediately available. But we would 
certainly prioritize that.
    Mr. Wolf. But this is really a priority, though.
    Ms. Schnedar. Yes.
    Mr. Wolf. Because on 9/11 when the Pentagon was hit, 
thirty-some people from my congressional district were killed 
in the attack on the Pentagon.
    Ms. Schnedar. Yes, we would----
    Mr. Wolf. And if we missed, if we miss something, and so I 
think this is really a priority. And with the funding that the 
committee has given with regard, this committee funds that. The 
FBI is the lead agency with regard to that. I think it is 
really a priority because if we are missing this, so----
    Ms. Schnedar. Yes, we would treat it as a priority. We 
would just, we do need to take a little bit of time to assemble 
the team and get started on that.

                          GUANTANAMO DETAINEES

    Mr. Wolf. I would hate to think of something happening, 
though, in the meantime, that we missed it. And then we would 
obviously say, ``Why did we not do this thing?'' In spring of 
2009 the Attorney General made arrangements to secretly release 
a number of detainees held at Guantanamo Bay into the United 
States. It is my understanding that an apartment was secured 
for these detainees in Falls Church, Virginia, very near my 
congressional district. This was released when my, this release 
was stopped when my office became aware of the effort and made 
inquiries to the Department and the White House. Has your 
office ever looked into whether or not they were going to 
release detainees and allow them to have an apartment in 
Northern Virginia?
    Ms. Schnedar. No, we have not looked at that issue.
    Mr. Wolf. Could you look into that?
    Ms. Schnedar. That is something that we could also look at 
here as well. I do, I am not as familiar with how much of that 
would be, we would have to talk to your staff and get a little 
bit more information. I mean, we are aware of what we read in 
the news but we have not done----
    Mr. Wolf. Well the Attorney General made the decision. And 
if you cannot look at it no one----
    Ms. Schnedar. No, we certainly can look at it. I would just 
want to talk to your staff and get additional information and--
--
    Mr. Wolf. Sure. Sure, we can----
    Ms. Schnedar [continuing]. Try to assemble, you know, put 
that, again, try to put our resources to that as soon as we 
can.
    Mr. Wolf. Sure. We can, we can do that, give you the 
information. Mr. Fattah.

                           COUNTER-TERRORISM

    Mr. Fattah. Thank you very much. And obviously the first 
place is to start at this counterterrorism responsibility 
because obviously we agree that that is the principal 
responsibility of the FBI now. After 9/11 there was a lot of 
debate about whether that was going to be the primary focus, 
whether or not we need to think anew about the overall mission 
of the agency. How do you see it being fulfilled within the 
context of the other priorities that the FBI has? We are almost 
ten years out now, and obviously the agency has done an 
extraordinary job in terms of protecting the country. 
Counterterrorism fits in, and still the FBI can carry on its 
other duties. Do you think that the right fit of 
responsibilities are there?
    Ms. Schnedar. Yes, that is I think one of the major 
challenges for the Department, is it has shifted a lot of its 
resource and attention to counterterrorism and at the same it 
has, you know, many needs, such as violent crime, organized 
crime, detention, incarceration. You know, it has many demands 
on its attention. We have found that overall the Department has 
I think made some major transformational changes and that is 
going well. However, there are many improvements that can be 
made to increase information sharing among the programs that 
relate to counterterrorism, and then those programs need to 
talk to the programs that are doing non-counterterrorism work 
as well. And so we continue to do these reviews that find areas 
where improvements can be made.
    Mr. Fattah. Now the Congress has suggested that it is going 
to make some substantial cuts, and part of that is going to be 
an attempt to limit those cuts on national security issues. Now 
in the FBI it appears that a significant part of this budget, 
around, I don't know, $4.5 billion or so, really seems to be 
related to national security. So I would suspect that a 
significant reduction at the FBI would have some impact on the 
agency's ability to conduct its counterterrorism mandate?
    Ms. Schnedar. That is correct. I think one of the things 
the Department of Justice is doing, just as the Inspector 
General for Commerce said, I know that they are currently doing 
the internal process of listing what all their programs are 
and, you know, prioritizing and that type of thing, too. And 
what will be impacted with budget cuts. But I think that, 
again, we have consistently emphasized that counterterrorism is 
a top challenge and one that, you know, attention must continue 
to be focused on.

                         INFORMATION TECHNOLOGY

    Mr. Fattah. Now I know that you are the watchdog over the 
taxpayers' money so I am going to go to some of these more 
unpleasant areas. Looking at the long list of IT projects that 
are challenged, three of them were found in the Department. One 
you have mentioned already, I want to go to that, the Sentinel 
program. So not only is it over budget, it is a couple of years 
behind schedule. And you said that a lot of the 
responsibilities the agency is taking in house. And these are 
challenging systems to set up, I understand. The question is, 
going forward, here is a project which is already over budget. 
And you say in your review you are wondering whether or not the 
expertise exists inside the Department, because what you have 
got to do is you have got to figure out who is going to use 
this, what they are going to use it for, and design a system 
that can capture all of this information and make it work on a 
day to day basis. So given that a half a billion dollars is a 
lot of money, the real question is if the agency does not have 
the internal capabilities, should we not be looking to provide 
the resources so it can have those capabilities? Or, if one 
contractor did not work out, normally, at least in the 
businesses that I am familiar with, you go find their 
competitor and you give them a shot at it.
    Ms. Schnedar. Well I think part of what we are concerned, 
or our major concern, is how much can they deliver with what 
they have left to spend? They have brought it basically more in 
house. They have this new agile methodology where they have 
assumed control, they have reduced the number of contractors, 
they say they are talking directly to the subs. But there are 
still many things that have not been delivered. For example, 
initially Sentinel was supposed to deliver eighteen forms, 
electronic forms, that could be completely, you know, used 
easily by the agents and the analysts. To date they have only 
delivered four of those, and of those four forms they are not 
even completely functional. They still have to print them out 
and, you know, keep a signed copy in their records.
    So with the money that they have left and the time that 
they have left one of the things that we are evaluating is what 
is it that the ultimate end product, are they going to be able 
to deliver what the agents and the analysts need to truly be 
effective in the field? And I think that is something that with 
some of the estimates we believe have been a little optimistic 
about that. And we have stressed to them that they need to do 
more consistent reporting. There are several reporting 
mechanisms that they have had, such as earned value management 
and some others, that they did not use consistently. And we 
think that is one of the things that they should be doing in 
order to keep on track with this project.

                              DNA BACKLOG

    Mr. Fattah. Let me skip ahead now to the DNA backlog, which 
is mentioned in your full blown statement.
    Ms. Schnedar. Yes.
    Mr. Fattah. What is it that you believe can be done to 
actually move this backlog? Is it more resources, and how much 
more resources? And, I know we spend a lot of time talking 
about cutting. But if we have to invest more money to deal with 
this problem, which is in effect to keep people safer and to 
make sure our criminal justice system works, what do we need to 
do to solve the problem?
    Ms. Schnedar. Part of it is, additional analysts would 
help. DNA analysts who could review that. But in addition they 
can improve their process. We found, again, there is another IT 
system that has failed in the laboratory. They had an evidence 
tracking system that has not gone anywhere. And I think that 
would have helped them expedite and improve their process. And 
there were better methods of tracking, even doing it in the old 
way, I think we found they could improve the way that the 
evidence was being tracked as it went through. So even with the 
resources they have they could make some improvements, but 
again they also will need additional resources to significantly 
cut that backlog.
    Mr. Fattah. Crime, serious crime is on the down swing in 
the country, which is good news. But there are still a lot of 
challenges. Only yesterday I visited the Center for Missing and 
Exploited Children, which is an agency funded in large measure 
by the Justice Department that helps track down about 2,000 
children who are reported missing each day in our country. So 
there are a lot of issues that we cannot deal with on the 
cheap. I mean, they have a fairly extensive program there to 
reach out, and they have a lot of cooperation from various 
entities inside the Justice Department. And I know the chairman 
has been out to visit, and I went out to visit yesterday. I was 
quite impressed with the work they are doing. But it obviously 
costs money. But to my way of thinking, locating children who 
have been kidnapped is worth the dollars that we spend to do 
it.
    So I want to thank you for your answers, and maybe we will 
go back around again. Thank you, Mr. Chairman.

                           HUMAN TRAFFICKING

    Mr. Wolf. Thank you, Mr. Fattah. And I agree with what Mr. 
Fattah said, and it just triggered another thought, too. We 
were going to ask the Attorney General about it. I saw they 
just put out something on sexual trafficking. There are reports 
that anywhere from 100,000 to 300,000 women and young girls are 
sexually trafficked in the United States. Some people think it 
is in Albania, but it is also in Annandale, Virginia. It is all 
over. And can you look at this whole issue of sexual 
trafficking? I hope that we can carry language in there 
directing that every U.S. Attorney's office have a task force 
to deal with this issue, and bring in the faith community.
    But could you look at the whole issue of sexual trafficking 
and how effective you think the Department has been? And I know 
that the argument sometime, and Mr. Fattah's comment is true, 
it is that well, we are working on counterterrorism, we are 
working on this, that is really a local issue. But these women 
and young girls are being trafficked across state lines.
    In Northern Virginia and in the Northern Virginia suburbs I 
saw a list of some of the places, and we have given them to the 
U.S. Attorney Neil McBride. But it is kind of frightening the 
number of places whereby there are young girls sexually 
trafficked. And if you could kind of look into that? And also 
to see are there things, more things the Justice Department 
could be doing, in the sense that much of this is on the 
internet, and things like this. But----
    Ms. Schnedar. Yes. And I would also want you to be aware 
that we did do a review, it was maybe three years ago, on some 
of the grant money that was given to organizations to be 
extended to victims of human rights trafficking. And we did 
find some deficiencies in that, in that they were not good at 
doing outreach and actually finding the victims, and that they 
needed to do a better, we made some recommendations there as 
well. And we would be happy to give you some information----
    Mr. Wolf. Okay.
    Ms. Schnedar [continuing]. On that report.
    Mr. Wolf. Okay. If you would? Mr. Yoder.
    Mr. Yoder. Thank you, Mr. Chairman. Thank you for your 
testimony today, and I appreciate hearing all this. I am a new 
member of Congress and a new member of the committee, so I am 
trying to----
    Ms. Schnedar. Well I am a new IG, so there you go.

            INFORMATION TECHNOLOGY CONTRACTING/FBI SENTINEL

    Mr. Yoder. Well good, we will learn this together. And 
having gone through the process of visiting with constituents 
and listening to the frustrations, we hear over and over and 
over again that Americans are just frustrated that Congress 
cannot find a way to balance the budget, and cut spending. It 
just, to most Americans it just seems inconceivable that this 
continues to run on and on and on and on. And it is boiling 
over to anger in the country.
    And so I appreciate the work you do because it helps me 
understand where some of these holes are. And I took particular 
note of your discussion, and gentleman discussed earlier, 
regarding the overruns on the technology projects. And you 
noted the twenty-six projects across the federal government 
that experience problems such as significant cost increases, 
schedule delays. And then you listed a few here. And I am 
trying to understand how we got to this point, and where the 
error was, and who is to blame, and how we fix the problem 
going to forward, and how we stop the run on spending. It seems 
like there are cases like this all across government.
    You have cited the Sentinel project. And at first read, 
when I first read this paragraph, it appeared to be that 
Lockheed Martin was not doing their job. And that there had 
been an agreement, the agreement was to come in under a certain 
cost, and that actually did not occur. But as I read further 
into your report I took particular note of the reasons for the 
cost, the reasons for the delays, the cost overruns. And you 
cited, and in the LCMS proposal or project, but you said it was 
similar to what you find in all of the projects. And you said 
specifically we have found ineffective requirements; planning 
process; requirements being modified after much work had been 
done; defects identified in system integration and user 
acceptance that were costly to correct; and the failure to 
adequately address in a timely fashion the difficulties the 
contractor was having in meeting schedule and cost 
requirements. So that makes it sound like it is completely 
internal and that it is our fault in our management of these 
projects, which I take particular note of the idea that we 
would bring more of these projects in house and more control as 
opposed to outside control of these projects. And it appears to 
be the client, the Federal Government in this case, that is 
making decisions that are costly because they are making them 
after the fact. So poor planning is what you are citing.
    And so I guess I would first ask, is this a correct 
assessment of what is happening here? That these costs are 
being overrun because of decisions that are being made in the 
Department that are driving up the cost of the project?
    Ms. Schnedar. Well we cannot say that the contractors are 
without blame. But we do feel that in many of the systems that 
we have looked at the Department could be doing a much better 
job of exercising its oversight of the contractor; of making 
sure it has a tight set of requirements and that it sticks to 
that; that it looks to find the defects early rather than at a 
later stage where it is costly to correct. So we really do find 
a lot of areas for improvement for the Department.
    Mr. Yoder. Well in particular in the Sentinel project you 
note that the original budget was $451 million. That we have 
spent $405 million of the $451 million. Two phases have been 
completed. And you believe that the most challenging work for 
that project still remains. So even the current estimates 
appear to be way under what this is going to cost, if we are 
only halfway through and we are estimating to be hundred 
million over budget. It sounds like it is going to be much, 
much greater than the budget. Do we have, does the Department 
or do you have an estimate of where we think this thing is 
actually going to end up?
    Ms. Schnedar. We do not have a current cost estimate. I 
think one of the things we are tracking is what will be 
developed in the next nine months? For example, I mentioned 
that not all the forms have been developed. There is also, 
initially the plan was to migrate the existing system, the ACS 
database system, into a new system. And now the FBI has said it 
is not going to migrate, it is going to build an interface 
between the two. So they are basically in essence changing some 
of the requirements. So we have to see--or modifying some of 
those. We have to see what it is that, and this is one of the 
things that we have auditors on the scene now assessing this, 
what is it that ultimately, how will it be different from what 
was originally envisioned? And how much will that cost?
    Mr. Yoder. When do you think that occurs?
    Ms. Schnedar. Well we are continuing in the Sentinel 
project. We are working on our eighth report now, and so our 
next report should be coming sometime spring or summer. But the 
FBI is estimating, it is hoping to make a lot of major strides 
within the next year. And, you know, so that is one of the 
things we will be tracking. How much will they be able to do in 
that time period?
    Mr. Yoder. And then, noting that a lot of this appears to 
be decisions that were made within the Department that we have 
just discussed here, are there things that go into these 
contracts that can help the private contractor remain 
accountable? Not having seen this specific contract, are there 
things in here that say you receive a bonus if you can do it 
under budget and under time? You know, in the private sector 
there are all sorts of projects that, there are incentives for 
the producer of the outcome to do it quicker, in a quicker 
time, under budget. Are there things like that? Or is it 
essentially just a contract to produce a product, and it may 
come under budget or it may not? How do we keep the private 
contractor regulated and making sure they come under budget or 
within budget?
    Ms. Schnedar. I do not know off the top of my head, 
although I am sure our auditors know, are there incentives or 
penalties built into the contract that they had with Lockheed 
Martin. I do know that one of the things we have reported on is 
that they were not doing enough of these, you know, reporting 
mechanisms that were made to do assessments as they go along. 
How is the project going, and what do we need to change? But I 
can get back to you with that answer about this, incentives and 
penalties.
    Mr. Yoder. And then what would be your recommendations to 
this subcommittee and to this Congress? How do we try to root 
this kind of stuff out? We cannot just order that it get done 
in a timely fashion. I mean, that is what the whole point of 
the executive branch is. So what can Congress do to put in 
better controls and better accountability with the financing of 
these projects?
    Ms. Schnedar. I do think oversight is a key provision, what 
this committee is doing here today. It focuses attention on the 
issue. I think it holds the FBI's feet to the fire. This is the 
critical system that the FBI needs, so understandably it is 
something that the committee wants to fund but to make sure it 
is done as cost efficiently as possible. And again, we have 
done work in this area, the GAO has done work in this area. And 
I think that also helps in that regard.
    Mr. Yoder. Okay, thank you. Thank you, Mr. Chairman.
    Mr. Wolf. Thank you, Mr. Yoder. Following up on what Mr. 
Yoder said, though, is there one thing that can be done? This 
really is not new. I was on this committee before, and then I 
left years ago, and came back. I mean, it is the same thing. I 
think one of the last meetings I had we had some of the, we had 
Glenn Fine was up here, I think, a whole groups in this room. 
And I believe the Director was there, and now we are at this 
point. Do you really believe--I do not, to be honest with you--
do you really believe that the expertise is in the FBI to do 
this? I mean, the FBI does a great job. I think Director 
Mueller, I am one of his biggest fans. I think he has done an 
incredible job. No one is perfect, and he came in at a very, 
very difficult time. So I have always been very supportive of 
the Bureau.
    But that is not what the Bureau does. The Bureau does not 
put together comprehensive technical systems like this. And 
now, just to give you a case history, the administration, the 
President has frozen federal pay. Do you think you are going to 
bring a great person in from whatever high tech company is out 
there to come in now to, I mean, is this really, so is it 
really real that this will be done by the expertise? Or are 
they going to have the ability to go out and find the very best 
person out there to kind of do this?
    Ms. Schnedar. In our last report, and I think this is still 
our opinion, we do think that their current estimates appear 
optimistic. And it is a difficult task if they have to finish 
what they are going to do in the time that they have to do it.
    They have made more efforts to bring expertise in but it is 
not something they can do themselves. They will have to work 
with contractors in order to do this.
    Mr. Wolf. Well I think Director Mueller will want to 
resolve this before he leaves, and his term will be up at the 
end of this year. I think September, if my memory serves me, or 
October of this year. Is that correct? I think he----
    Ms. Schnedar. Yes, it is September, I believe----
    Mr. Wolf. And so I think the Director, who again I am a fan 
of, will want to resolve this. Is there three of the very best 
minds, somebody at MIT, and somebody at Caltech, or somebody 
elsewhere, can come in for thirty days to kind of look at this 
system? Because it is important, what they wanted to do. But I 
do not have the confidence that there is the expertise in the 
Department or in the Bureau to really resolve this thing. And I 
know Director Mueller is going to want to resolve it before he 
leaves, because he was the initiator of it. Is there something, 
what would your recommendation be? Rather than just throwing 
rocks at the place and telling him it is all screwed up, what 
would be the way to bring it in? Would we bring in three of the 
very, and I am reluctant to mention a company because I do not 
know the answer. But somebody? This is not, I mean, other 
companies, other places are doing these things. And so to bring 
in to kind of be an advisor to the Bureau, particularly since 
they have had the problem with Lockheed Martin?
    Ms. Schnedar. The recommendations that we have made are 
that they should, you know, redefine the requirements now that 
they are at the crossroads, if they have switched to this new 
agile methodology. And I think refocus on what it is they 
really need, and what they can get done. We do know that they 
have consulted each other, they have had assessments done by 
companies such as MITRE. They have had, you know, some outside 
expertise that is brought in. They have a fairly new person in 
charge of this project who comes from the private sector.
    Mr. Wolf. Where did he come from?
    Ms. Schnedar. From Lehman. And then he was with Microsoft 
before that. He's, I forget his background off the top of my 
head.
    Mr. Wolf. Did he take a pay cut from Lehman to come in?
    Ms. Schnedar. I would assume he would have had to take a 
pay cut. So, and part of that problem, too, bringing in the 
people from the outside, then they must become familiar with 
the government contracting process. I know he commented in an 
article about, you know, some of the difficulties he was 
encountering in learning the government contracting system. 
Where some of the obstacles that he became aware of after he 
entered the FBI.
    So I think again, part of it is again this continual 
assessment of what it is they are doing. Continual tracking, 
you know, to keep it on track which with this agile methodology 
they are doing two-week sprints, where they report to each 
other, you know, report out what they do every two weeks. So 
that, you know, could be a positive step. Again, it's still 
fairly new and we're in there assessing.
    Mr. Wolf. I think I know the answer. But how many people 
have been, how long have you been at the Department?
    Ms. Schnedar. Oh, I have been twenty years now at the 
Department.
    Mr. Wolf. How many people have been involved in this 
program, responsible for it since it was initiated by the 
Director?
    Ms. Schnedar. Since the virtual case file?
    Mr. Wolf. Yeah.
    Ms. Schnedar. Three to four is what my auditor is telling 
us.
    Mr. Wolf. So that would be about----
    Ms. Schnedar. Well it was approximately ten years. It has 
been quite a while, so.
    Mr. Wolf. Yeah.
    Ms. Schnedar. And we have done, this is our eighth report 
on Sentinel, and we did a report on the virtual case file 
before that. So we certainly----
    Mr. Wolf. I think they have a dart board with Glenn Fine's 
picture on it in the FBI. I think.
    Ms. Schnedar. And this is something we will continue to 
follow closely, so.
    Mr. Wolf. Well, but I think it has got to be more than 
follow it closely. Because it is, because people lose 
confidence, and also it deals with the national security of the 
nation. And my sense is, maybe you can be in touch with the 
subcommittee staff to see if you know or the people that you 
know who could tell who would be the very best person or the 
team that you could bring in. Not to do it, but to assess, and 
make an evaluation. Otherwise, I think in fairness to Director 
Mueller, who has done a good job, this is something it would be 
ideal to get finished and resolved before he leaves. So.
    Ms. Schnedar. Yes, we would be happy to do that.

                            GANG ENFORCEMENT

    Mr. Wolf. The DEA's El Paso Intelligence Center, EPIC, has 
become a valuable resource for federal, state, and local law 
enforcement providing intelligence related to a broad range of 
criminal activity. You did a review. What did it show?
    Ms. Schnedar. We found that overall they do produce a 
useful product and I think that users in the field found to be 
useful. However, we thought that not all users were aware of 
it. They could do a better job in their outreach to state and 
locals so that they are aware of that product. And we did find 
some areas where they could increase the type of information 
that they uniquely track, such as drug seizures, and try to 
gather that information together and conduct more analysis of 
it so that we could share that information and it could be used 
in the field.
    Mr. Wolf. Gangs, about eight years ago gangs were running 
rampant in Northern Virginia. I offered an amendment to set up 
a gang task force. We brought in the FBI, DEA, ATF, and 
Marshals Service. To a family that lives in an area that is 
gang infested, they are impacted like a, almost like a 
terrorist is in them. They are afraid. There were neighborhoods 
in Northern Virginia that I would talk to the families that 
lived in them and they were afraid to send their kids to 
school.
    The Congress in its wisdom has voted to abolish earmarks so 
there will be no opportunities to deal with this. And I might 
say, just for members, as you look in terms of the earmark 
issue, I was the author of the Iraq Study Group, which was an 
earmark, which the administration, we wanted to look at how the 
War was run so we put together the Baker-Hamilton Commission to 
look at this.
    On this gang issue I really worry, and I personally believe 
we almost need a new concept, a new idea. Gang membership has 
increased by more than 20 percent from 2005 and gangs now total 
more than one million members out of the population of over 300 
million in the country. Gangs are now developing a working 
relationship with U.S. and foreign based drug trafficking 
organizations and other criminal organizations. Your office did 
a review of anti-gang intelligence coordination in the 
Department. What is a weakness? What should be done? How do we 
really deal with it? Because, again, a person that lives in a 
neighborhood where they are afraid, they are impacted the same 
way that somebody would be afraid with regard to Al-Qaeda. I 
mean, their kids sending to school. What can we do and are we 
doing to really deal with the gang issue? And what did your 
analysis come up with?
    Ms. Schnedar. We did look at two gang intelligence centers 
in the Department, the National Gang Intelligence Center and 
GangTECC, which is a more tactical basis.
    Mr. Wolf. Right.
    Ms. Schnedar. We found with NGIC that its products were not 
as useful as they could be. They were, one person described it 
as they were writing history instead of writing leads. And we 
thought they needed more discussion with the field and back and 
forth so they could understand how their product was actually 
used and make it useful.
    We also found that the two centers, even though they were 
colocated, were not talking to each other and were not sharing 
information. And that they could, if they could work together 
they could be more effective.
    Since we issued our report they have made efforts to make 
them more cohesive. They have not fully merged them but they 
have placed them within the special operations division and 
there has been some change in that area. But, you know, it is 
not a complete merger as we initially recommended.
    Mr. Wolf. Do you think that we are doing everything in the 
country to deal with gangs that we could be doing or should be 
doing?
    Ms. Schnedar. I think that with the Department they 
certainly have made a lot of strides. But again, it is some of 
the problems that we have found in other areas. There needs to 
be more information sharing, more coordination. And this also 
goes to budgetary questions as well. The more that they can 
combine some of these different centers and work together and 
coordinate, they will actually have a better product in the 
end.
    Mr. Wolf. Okay. Mr. Schiff.

                              DNA BACKLOG

    Mr. Schiff. Thank you, Mr. Chairman. I want to ask you 
about a couple of areas, about DNA as well as the gun 
trafficking along the Mexican border. In terms of DNA, I 
understand now from Justice, and I want to see if you can 
confirm this, that they have now eliminated the offender 
backlog. I know your report is pending, but will your report 
conclude that in fact the offender backlog is a thing of the 
past?
    Ms. Schnedar. They have said they have eliminated the 
backlog. We have just begun that review, so I cannot tell you 
yet if that is actually true and if it will stay eliminated. 
Our review will take a few months to do, but we just initiated 
that review. And it was really following our previous report on 
the forensic DNA backlog.
    Mr. Schiff. And on the casework backlog, what is the status 
of that now? Is that moving in the right direction?
    Ms. Schnedar. They have implemented many reforms. Again, 
there is also still a resource question. And one of the things 
that we intend to do is after we finish the offender backlog we 
are going to go back in and look at the case backlog because we 
think this is an important area that we need to continue to 
monitor.
    Mr. Schiff. When you look at the casework backlog can you 
in particular look at a subset of that and determine if there 
is any backlog in rape kits? I have been informed over the last 
few years that there is not a rape kit backlog problem in the 
federal government but I want to confirm that that is true.
    Ms. Schnedar. I would have to double check and get back to 
you with the answer to that. I do know we found backlogs in 
general in different types of forensic DNA cases, but I will 
have to look at that and get back to you.

                        ATF'S PROJECT GUNRUNNER

    Mr. Schiff. In terms of the situation, the mutually 
destructive trade with Mexico in drugs and guns, I am 
interested to get your thoughts on an issue that you wrote 
about, and that is the current requirement that handgun sales 
of two or more within a certain period of time have to be 
reported but long gun sales do not.
    As I am sure you know, the administration--well ATF--sought 
an emergency rule that would allow them to require notification 
of long gun, multiple long gun sales, that would apply in some 
of the border states and track the current requirement for 
handgun sales. The administration, I was disappointed to see, 
at least temporarily has turned that down. Can you shed some 
light on the impact of not having that information? And 
whether, if you had to choose one or the other, to be informed 
of multiple handgun sales or multiple long gun sales, which is 
of greater significance in terms of information we need to 
combat the terrific violence in Mexico?
    Ms. Schnedar. Well we did find on the southwest border that 
the long guns were the more prevalent gun that was used in 
trafficking, and that is what is being reported out of the 
information that is being gathered through the cases and the 
arrests that are being made. And I do not know if I had to 
choose if it is better to choose one or not, because what is 
the cause and what is the effect of reporting, I do not know. 
But we did find that there was a need for that information and 
recommended that the ATF consider ways in which to capture that 
information.
    Mr. Schiff. Well if the long guns are the more prevalent 
weapons, would it make sense that that is where the more 
valuable information would be?
    Ms. Schnedar. My only question is if, does reporting cause 
a shift from one to the other? I do not know. But yes, I do 
think it is information that the ATF says would help it in 
fighting crime on the southwest border.
    Mr. Schiff. I mean, right now if someone makes, you know, 
multiple, multiple purchases of an AK-47 there is no notice 
requirement. And it is discretionary, I guess, on the gun 
seller's part? Is that right?
    Ms. Schnedar. There is not a requirement to report that by 
the gun seller, that is correct.
    Mr. Schiff. Your report has indicated a lot of problems 
with Operation Gunrunner. What do you think can significantly 
be done to enhance both Mexico's ability and our ability to 
prosecute not just the straw purchases, as difficult as that 
has proved to be, but frankly to follow them up the chain to 
those that are trafficking large numbers of weapons. What is 
missing that we can do? Is it manpower, or is it sharing 
information? What are the biggest obstacles? Whenever I meet 
with Mexican law enforcement officials this is obviously what 
concerns them most significantly. They just, they are getting 
massacred. And you know, significantly with American made 
weapons. And they do not feel like we are doing much to deal 
with that problem.
    Ms. Schnedar. We did find that the ATF should shift its 
focus less from the straw purchase to the organized trafficker. 
In fact, prosecutors that we spoke with told us they would 
prefer to see these kind of cases and that they are more likely 
to prosecute them. Sometimes the straw purchasing cases may not 
even rise up to the level of meriting a prosecution for various 
reasons. We found that they could be using OCDETF more, they 
could be coordinating more with ICE, they could be talking more 
between headquarters and their fields. Again, information 
sharing, to share this type of information, to build those 
cases instead of focusing on the straw purchases, which give 
you a lot of numbers but do not necessarily have the same 
impact as the organization traffickers.
    Mr. Schiff. Well sometimes, having been a prosecutor, 
unless you can go after the low guy on the totem pole, you 
cannot roll them up to get the higher person, to get the higher 
person. I mean, what is preventing them now from going after 
higher level people?
    Ms. Schnedar. I do think that we have seen a bit of a shift 
since we have done our report. I think they are trying to 
encourage those type of cases. I think sometimes the low level 
cases are the low hanging fruit, they are easier to do. It does 
take organization, it takes intelligence sharing between 
agencies and between components of ATF in order to build these 
more complex cases. And again, we did heavily recommend that 
they work more with OCDETF in order to build those type of 
cases.
    Mr. Schiff. And would it be within your jurisdiction, or 
one of the other agencies, to look at, you know, the very 
significant amount of money that we have been providing to 
Mexico for work on their side of the border to see how 
effectively that is being utilized to deal with the same 
problem?
    Ms. Schnedar. The Merida Initiative, I believe, is 
administered through the Department of Justice. So that would, 
I would believe that would be in our jurisdiction. We have not 
done a look at money going directly to Mexico. We are looking 
at the OPDAT, the overseas training for prosecutors, and 
ICITAP, the overseas training for law enforcement. But that is 
a more global look at what they are doing globally, not 
specifically at Mexico. And that is an audit that is underway 
now.
    Mr. Schiff. Well if there were one or two priorities that 
you think we should focus on in terms of trying to more 
successfully combat this traffic, what would your 
recommendations to the committee be?
    Ms. Schnedar. Well our recommendations to ATF were, again, 
to increase information sharing and to focus more on going 
after the gun trafficker rather than the straw purchaser. And 
also with Mexico there is a real, I think they could improve 
its gun tracing program. They are not sharing information in a 
timely fashion and I think building that program in Mexico, and 
that also would be helpful.
    Mr. Schiff. And what information sharing problem are you 
referring to on our side? Is it on our side of the border? Is 
it between U.S. and Mexican officials? I mean, what is, where 
is the breakdown that we can address?
    Ms. Schnedar. We found some weaknesses in the liaison 
program, and that they were not building the relationships and 
explaining some of the need to get the Mexican gun information 
in a timely fashion. They had distributed some equipment to the 
Mexicans but hadn't given them training on how to use it. So we 
found that there were improvements that could be made. And part 
of that is just relationship building between the two 
countries.
    Mr. Schiff. So it is not so much an information sharing 
problem within U.S. agencies, but rather between U.S. and 
Mexican agencies?
    Ms. Schnedar. Well we also found it within U.S. agencies as 
well. For instance, ATF is not talking to ICE a lot. And there 
is a lot of overlap there, and there are cases that they could 
be prosecuting together, sharing information, having a stronger 
case together. And that they needed to implement a system for 
doing that. And then we found the ATF field was not 
coordinating with headquarters, and that that information 
needed to be shared that way as well so that it could be shared 
throughout the ATF when it needed to be.
    Mr. Schiff. Are there, I mean in addition to the people 
located at Justice, are there, is there one or two of the U.S. 
Attorneys in the region who are sort of the point people on 
this?
    Ms. Schnedar. The southwest border U.S. Attorneys' offices 
are all very involved with the cases flowing out of Gunrunner 
and we did speak to a number of Assistant U.S. Attorneys in the 
southwest border states. So they are very aware of what ATF is 
doing and they did give us suggestions which we incorporated 
into our recommendations for ATF.
    Mr. Schiff. Thank you, Mr. Chairman.
    Mr. Wolf. Thank you, Mr. Schiff. We will try to go through 
these fairly fast, and if anybody has anything just say 
something. Any particular areas you think that the committee 
ought to look at with regard to targeting for cutting, please 
let us know. Again, not to be harmful. Just if there is 
something we are trying to balance off to protect things that 
are really important, to make sure that we can take from one to 
give to another in order to do what I think everyone in the 
country would like.
    On the Gunrunner question too, and I am going to have a 
series of questions on that we will just submit for the record, 
but since 2009 we have appropriated more than $65 million for 
Project Gunrunner. You note in your November 2010 report ATF's 
expansion of the e-trace system to trace guns in Mexico has 
yielded very limited information of intelligence value. Could 
you tell us what you mean? I mean, nothing? What is----
    Ms. Schnedar. We found that a lot of the trace information 
that is coming back from guns that are seized in Mexico is 
stale and not useful. And I think of that is they need to 
increase, improve their relations with Mexico to get a better 
system for getting the information in a more timely manner so 
that it can actually be usable.
    Mr. Wolf. Is that because it is dangerous to go down to 
Mexico? Or is that because there are not enough ATF people down 
in Mexico?
    Ms. Schnedar. I think again, part of it was building those 
relations between the people running the tracing project for 
ATF, and with Mexico, and a lack of training----
    Mr. Wolf. Have we brought them up here? Have they come up 
here and have we gone down there?
    Ms. Schnedar. I know we have had ATF down there. Yes. ATF 
has certainly been to Mexico. I do not know if Mexico has come 
to the U.S. for training on e-trace. But there has, we feel 
that there are many, just additional outreach effort, training 
systems that could be put in place to get these done more 
quickly and so that it could be more useful.
    Mr. Wolf. Maybe they should be invited up here. How many 
people does Mexico have working on this issue? Do you know?
    Ms. Schnedar. I do not know that. I could find that out and 
let you know.

                       FEDERAL BUREAU OF PRISONS

    Mr. Wolf. Well there will be a number of other questions on 
that. Bureau of Prisons, in your audit of the Bureau of Prisons 
furlough program published last September one unresolved issue 
was a need for BOP to have a more effective means of 
coordinating with the union on policy changes. According to 
your audit the collective bargaining agreement expired nine 
years ago, and BOP contends that it will not have another 
agreement in place until 2017. Is that accurate?
    Ms. Schnedar. That is what they said to us at the time of 
the audit. I do know they are focusing increased attention to 
it since we issued our audit, so----
    Mr. Wolf. Probably. Still awaiting implementation is a 
policy that would assure that victims of crime are notified 
when an offender is approved for a medical furlough. This 
notification has waited seven years for implementation and may 
not be implemented for another seven years. Why? That is a big 
issue.
    Ms. Schnedar. Yes, it is. It is a big issue. Since we 
issued our report they did jump this issue to the top of the 
queue and negotiate it. So they did implement a policy where 
that notification now takes place. However, there are other 
recommendations we have made in other reports that have not 
been implemented that they have told us it is due to delays in 
negotiating with the union. And we think they need a better 
mechanism to bring these issues to the table and get them 
negotiated in a timely manner.
    Mr. Wolf. Has that, because of the delay, has that 
jeopardized the safety or security of anyone? Are there any 
cases where certain things happened that would not have 
happened if that had been implemented?
    Ms. Schnedar. I do not have a particular case to point out 
to you. But we, I would say that some of the policies that we 
think have not been negotiated yet can affect prisoner safety, 
inmate safety and guard safety. So we think it is an important 
issue.
    Mr. Wolf. Wow. I mean, it seems like it would, that would 
be something you would deal with pretty quickly.
    Ms. Schnedar. Yes. And we certainly have pointed this out 
to the Department. I will say that this is something that has 
received renewed attention since our report came out.
    Mr. Wolf. Okay. Over the past twenty-five years the U.S. 
prison and jail population has skyrocketed to an all time high, 
with 2.3 million people incarcerated, we are now number one in 
the world in incarceration, confining 23 percent of the world's 
prisoners. Meaning we have in our jails and prisons 23 of the 
world's prison population. Therefore, it has become imperative 
that the U.S. modernize its expensive, unsuccessful, and 
unsustainable correction policy. The goal of the Serious and 
Violent Offender Reentry Initiative and the Prisoner Reentry 
Initiative, programs which have now concluded, was to reduce 
recidivism among offenders released back into the communities. 
Your report on these programs provided lessons that can be 
applied to the existing Second Chance Reentry Initiative. While 
I am concerned about your findings that DOJ sometimes had 
difficulties awarding the grants consistently and assuring that 
grantees did not spend funds on unallowable expenses. Did these 
programs have the intended effect of reducing recidivism? That 
is the purpose of it.
    Ms. Schnedar. We found that they could not say. And part of 
that was they did not have good measures. First of all, they 
were not even using a uniform definition of what constitutes 
recidivism. And so in order to measure that they need to 
implement better performance measures. They had not collected 
the data to allow us to make that assessment.
    Mr. Wolf. But this is a big issue. This is, the whole issue 
of recidivism. And there was a report we are going to have a 
hearing on Friday, I mean that is a big issue.
    Ms. Schnedar. Yes, it is.
    Mr. Wolf. I have a couple of others on a different subject, 
but let me try to stay on that for a second. Has your office 
investigated the dramatic decline in prison industries 
participation over the last decade?
    Ms. Schnedar. We have not done a review on that. We have 
done a review on the e-waste recycling program that they had, 
which had some health and safety problems. And that is a 
program itself that has declined over the last few years.
    Mr. Wolf. Has your office looked at the impact of the loss 
of prison work on inmates' violence against guards?
    Ms. Schnedar. No, we have not done a review of that.
    Mr. Wolf. I hope you will look at, you know the Congress is 
really to blame here and not the administration, on the whole 
working in the prisons. But if you put a man in prison for 
years and give him or her no work and no dignity, no skill, you 
are just going to have recidivism. And so if you could look to 
see what the impact has been on the ending, basically, of the 
Federal Prisons Industries, and what that impact has had, or 
potentially would have, on recidivism.
    Having a robust work program in our nation's prisons is an 
important priority. We learned from your investigation that 
prior to 2009 UNICOR's management of the electronic waste 
recycling program resulted in numerous violations of health, 
safety, and environmental laws, as well as BOP policies. What 
were they, and what changes are being done based on your 
report?
    Ms. Schnedar. The electronic waste recycling was basically 
the breaking up of computers, and the cadmium and lead were 
being exposed. Some of these, many of these corrections were 
made actually prior to the start of our report. But we did make 
additional suggestions. They were not wearing proper protective 
gear. They did not have proper work stations with proper 
ventilation. Inadequate training, inadequate inspections, they 
were not, they ignored some of the early warnings that came in. 
So they have put in a series of reforms to correct many of 
these issues.
    Mr. Wolf. Well, I would hope that we could convince the 
Congress to support a program of developing more work in the 
prisons, and having perhaps industries who are no longer making 
or manufacturing products in the United States. For instance, 
oversimplification, there are no televisions made in the United 
States. I am sure you have a television set, you may even have 
two.
    Ms. Schnedar. Two, that is all.
    Mr. Wolf. So if we could have, and I am using this just as 
an example, manufacture televisions in prison so you are not in 
competition with American industry, you are in competition with 
something in Mexico or China, something like that. I would like 
to see in the federal prison system everyone works. And with 
that they get a skill and a training, and they have money that 
they can keep so when they get out of prison they have money to 
take with them, send money to their families, also use it for 
restitution. But I really think it is a tragedy that there is 
so little now because of the narrowing and hollowing out of the 
prison industries. So if you could look into that and give us a 
report of what you think or what you are seeing with regard to 
that, I would appreciate it.

                         CIVIL RIGHTS DIVISION

    Next is the Black Panthers. Because of mounting evidence of 
improper activities in the Justice Department Civil Rights 
Division and the extremely troubling dismissal of the Black 
Panthers voter intimidation case, I felt it was essential that 
your office investigate the division. Inspector General Fine 
assured me that there would be an examination of the types of 
cases brought by the voting section and that any changes in 
these cases over time; any changes in voting section 
enforcement policy or procedures over time; whether the voting 
section has enforced civil rights law in a nondiscriminatory 
manner; and whether any voting section employees have been 
harassed for participating in the investigation of a particular 
matter. Will this investigation include all these issues? And 
when can we expect your review?
    And I want to kind of put out, so you know how strongly I 
feel about this. When the Voting Rights Act came up in the 
Congress I was the only member of Congress from the State of 
Virginia that voted for the Voting Rights Act. When I voted for 
it I was criticized by the Richmond Times Dispatch, and ripped 
apart in many newspapers in my area. I voted for the Voting 
Rights Act and I continue to be a strong supporter of the 
Voting Rights Act.
    But I want to see the enforcement of the Voting Rights Act. 
And no one should be intimidated, whether they stand in front 
of polls in Philadelphia, Mississippi, and there is a 
Philadelphia, Mississippi, or Philadelphia, Pennsylvania. And 
so we have been pursuing this and pursuing this and pursuing 
this. So when can we see your review of what you have found?
    Ms. Schnedar. Our scope is the same as you just, as was 
described to you previously by Inspector General Fine. And we 
are working on it, we are in the middle of it. We are looking 
at documents, interviewing witnesses. It is very hard to 
predict when we will have it. It is still, you know months 
away. But I cannot give you a precise date because sometimes 
one thing leads to another in an investigation, so I cannot 
predict with certainty when it will be done. But we certainly 
have prioritized this and are trying to get it done as quickly 
as possible.
    Mr. Wolf. Okay. Well again, as the only member of that 
delegation that voted for the Voting Rights Act, I feel 
passionate about this. And I just, I just want to see that this 
thing is done in an appropriate way. There will be some other 
questions on that issue, too.

                       SEXUAL ABUSE OF PRISONERS

    I have just one or two more, and then I will go back to Mr. 
Fattah. Let us see, prison industries, we have covered that. We 
have the Marshals Service, in your September 2009 report 
entitled, ``Department of Justice Efforts to Prevent Staff 
Sexual Abuse of Federal Inmates,'' you recommended that the 
U.S. Marshals Service develop and implement a policy that 
ensures a zero-tolerance policy standard aimed at preventing 
staff sexual abuse of federal prisoners. Has this policy been 
implemented?
    Ms. Schnedar. They did take steps to implement this policy. 
And I know they, I do not know if it has been distributed 
throughout the Marshals Service. Yeah, they have not, it is not 
a closed recommendation so they have not finished with their 
steps to implement it. But they have, they are taking steps to 
distribute that, to develop the policy and distribute it 
throughout the Marshals Service.
    Mr. Wolf. As you may or may not know Congressman Bobby 
Scott and myself were involved in what we called the Prison 
Rape Bill. And some of the stories of prisoners being raped are 
just unbelievable. I have been really disappointed in the delay 
of the administration to finalize these regs. And but I think 
we will wait to go into that when the Attorney General comes 
up.

               EXPLOSIVES COORDINATION BETWEEN FBI & ATF

    And I guess the last question I may have, or last two and I 
will go back to Mr. Fattah, is the ATF and the FBI, and you 
covered this briefly in the opening, share jurisdictions for 
investigation of federal explosive crimes. Disputes between the 
two have arisen where there is an absence of clear jurisdiction 
with respect to a particular investigation. In what situations 
has there been an absence of clear jurisdiction? And I keep 
reading about it in the paper. They do not want to work 
together? What is the problem? And cannot they resolve this, or 
either give all to one or all to the other? Or, I mean, how do 
you work that out?
    Ms. Schnedar. With explosives they have given FBI 
jurisdiction if it involves a terrorist incident and the rest 
falls to ATF unless there is some other FBI preexisting 
interest. And what we found was the guideline just was not very 
clear, the memorandum was not clear, and they were racing to 
the scene and, you know, trying to beat each to the scene in 
order to gain jurisdiction.
    The Deputy Attorney General has issued a new policy but we 
think a part of this will depend on implementation. And I think 
the policy probably needs to be a little clearer about how the 
delineation will fall and we are continuing to track that to 
see how that works.
    Mr. Wolf. Does the expertise reside equally in both of 
them?
    Ms. Schnedar. Well the ATF I think has built, you know, 
they both have experts. You know, probably the ATF has more 
explosive experts but the FBI has them as well. And again, we 
found overlap in their labs, in their training, in their canine 
programs. So there is a fair amount of overlap.
    Mr. Wolf. Is not everything almost terrorism now in a way, 
whether it----
    Ms. Schnedar. That is the problem. How do they know when 
they are responding to the scene if it is a terrorist case or 
not? And that is where a lot of the conflicts arise.
    Mr. Wolf. Well maybe you can help us resolve it? Or maybe 
we should write something in. I am, I am supportive of both of 
them. But somehow there ought to be a delineation. That time 
that you are arguing could better be used from some other way. 
And you are always seeing news stories about the conflict and 
you constantly hear about it. And there ought to be some 
mechanism to kind of resolve it.
    And let me go to Mr. Fattah, and I think that would pretty 
much take it to the end.

                 RESTORING CONFIDENCE IN THE DEPARTMENT

    Mr. Fattah. Well I do want to not necessarily delve into it 
but want to take note of your written testimony describing the 
efforts that the Department has taken to restore confidence in 
the Department in terms of some of the issues that arose in 
Senator Stevens' case and other issues relating to professional 
conduct of attorneys, and other issues that have raised some 
public concern about activities inside of the Department over 
many years. I think that the Department has done a great deal 
in this regard, so I want to take note of it.
    But I want to go back to a question that we asked of your 
colleague from the Department of Commerce about your general 
resources. How many staff people do you have?
    Ms. Schnedar. We have 430.
    Mr. Fattah. Okay. And how do you rationalize, and I know 
you are in an acting capacity, but how has it been 
rationalized, how and under what circumstances you would pursue 
the work as the watchdog for the public, and is it the case 
that you have a number of mandated responsibilities that 
prescribe most of these resources? Or do you have more of a 
free hand, a discretionary hand, about where to apply your 
resources?
    Ms. Schnedar. Our current work plan was developed by 
Inspector General Fine, who left a week and a half ago. But I 
was his Deputy so I was part of that planning process. And we 
intend to continue with the same planning process. Some of our 
reviews are mandated, but that is not the majority of what we 
do. We do a very careful work planning process. We look at the 
Department's top ten challenges and we try to find reviews that 
fall within those top ten challenges. We also consider very 
seriously any requests from committees with jurisdictions, 
congressional requests that are appropriate for us to take on. 
And we, you know, then we have to divide our resources between 
our investigations to look at, you know, any corrupt law 
enforcement agents. And we look at the numbers coming in to 
make sure we have enough there. And then with our program 
reviews we try to identify those that would have the most 
impact.
    We also firmly believe in doing follow up reviews. So as in 
foreign language translation we will go back in after two or 
three years to see if they have actually implemented the 
recommendations that we made, if there has been improvement. 
And so we certainly try----
    Mr. Fattah. I assume that the dollars that we spend are 
well spent?
    Ms. Schnedar. We believe they are very well spent. We do 
think that inspectors general in general are cost savings 
because we do identify----
    Mr. Fattah. Okay. So this should not be an area that when 
we are looking at cuts that we should be enthusiastic about?
    Ms. Schnedar. Yeah, I think any inspector general would 
tell you yes, we are cost savings. So.
    Mr. Fattah. Okay. All right. Thank you very much.
    Ms. Schnedar. Thank you.
    Mr. Fattah. Thank you, Mr. Chairman.
    Mr. Wolf. Thank you, Mr. Fattah. Where did Mr. Fine go?
    Ms. Schnedar. He is taking some well deserved time off. He 
probably will find an opportunity in the private sector, but he 
has not identified yet what he will be doing.
    Mr. Wolf. I thought he was going to open up a bed and 
breakfast up in Vermont, or something like that.
    Ms. Schnedar. Well he thought about taking on coaching a 
basketball team, but he has decided instead----
    Mr. Wolf. Give him my best. I appreciate, you know, his 
service.
    Ms. Schnedar. I certainly will.
    Mr. Wolf. And thank you and thank all your people. And 
there will be questions that we will just submit for the 
record.
    Ms. Schnedar. Thank you.
    Mr. Wolf. Thank you very much. Okay, the hearing is 
adjourned. Thank you.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                       Thursday, February 10, 2011.

                      NATIONAL SCIENCE FOUNDATION

                                WITNESS

ALLISON C. LERNER, INSPECTOR GENERAL

       Opening Remarks of Chairman Wolf and Ranking Member Fattah

    Mr. Wolf. Good morning. The hearing will come to order. I 
want to welcome everyone today to our hearing on the state of 
management challenges at our science agencies.
    The witnesses are Allison Lerner, Inspector General, 
National Science Foundation, and Paul Martin, Inspector 
General, National Aeronautics and Space Administration.
    I want to thank you both for being here to go over the 
current budget and activities of the inspectors general. We 
will be looking to the IGs for guidance on where money can be 
put to very good use for program improvements and positive 
outcomes.
    We are going to need your help redirecting that. We are 
going to discuss management challenges and identify their 
implications, which are important to effective and efficient 
programs.
    Ms. Lerner will provide some brief overview and answer 
questions from the Subcommittee, and then we will turn to Mr. 
Martin and proceed the same way.
    Before we begin with Ms. Lerner, I would like to first turn 
to the ranking member, Mr. Fattah, for any opening comments.
    Mr. Fattah. Thank you, Mr. Chairman.
    I thought yesterday was quite productive in terms of 
hearing from the IGs and look forward to this morning's 
testimony, starting with the National Science Foundation.
    So I will reserve and we can get right to it. Thank you.
    Mr. Wolf. Thank you, Mr. Fattah.
    Ms. Lerner.

              Opening Remarks of Inspector General Lerner

    Ms. Lerner. Mr. Chairman and members of the Subcommittee, I 
appreciate this opportunity to discuss the Office of Inspector 
General's work to promote the efficiency and effectiveness of 
the National Science Foundation's programs and operations and 
to safeguard their integrity.
    My testimony will focus on two of the six top management 
challenges facing NSF in fiscal year 2011, improving grants 
management and strengthening contract administration, as well 
as some recent reviews our office has conducted of NSF's 
operational expenses.
    With regard to the first challenge, in 2010, NSF did more 
than 55,000 awards at over 2,100 institutions. Since most of 
these awards are made as grants, it is essential that the 
foundation's grants management process be robust enough to 
ensure the highest level of accountability and stewardship.
    Previous audits have found that the agency needs to improve 
its oversight of awardees and NSF has taken action to address 
these concerns including establishing an Award Monitoring and 
Business Assistance Program to provide necessary oversight.
    That program's impact is limited as it can reach fewer than 
ten percent of the institutions receiving awards. In this time 
of increased concern about accountability and federal programs, 
it will be a continuing challenge for the agency to find new 
and cost-effective ways to ensure that awardees are 
accomplishing their goals and expending their federal funds 
appropriately.
    In addition to grant administration, we have focused 
considerable attention on contract administration at NSF, 
particularly on the agency's efforts to manage and recompete 
its largest contract and its ability to manage high-risk 
contract reimbursement contracts.
    NSF obligated $283 million for such contracts in fiscal 
year 2010 and the monitoring of cost reimbursement contracts 
was a significant deficiency in both the foundation's fiscal 
year 2009 and 2010 financial statements.
    These contracts are high risk because of their potential 
for cost escalation and because NSF often pays contractors 
before they incur costs. This risk is compounded by the fact 
that the agency has made advanced payments to contractors that 
do not have adequate accounting systems or approved accounting 
system disclosure statements.
    The risk of fraud, waste, and abuse on these contracts will 
continue to be high until NSF implements fully adequate cost 
surveillance procedures.
    NSF's use of contingencies and budgets for its large major 
research equipment and facilities construction projects is an 
emerging management challenge.
    Two recent audits of cooperative agreement proposals for 
large construction projects found that the awardees' budgets 
contained more than $169 million of unallowable contingency 
costs and that $55 million or 33 percent of this $169 million 
was funding from the American Recovery and Reinvestment Act.
    In addition, although the NSF allows awardees' project 
officers to hold contingency funds for allocation during 
construction, we found that there were no barriers to prevent 
the funds from being drawn down in advance and/or used for 
purposes other than contingencies. As a result, there is an 
increased risk of fraud and misuse of these funds.
    We are working with the agency to resolve the recent audits 
and have started additional work in this area.
    My office also examines how NSF spends money internally for 
its own operations and activities. In light of the current 
economic climate, it is essential that we carefully study these 
expenses to identify opportunities for cost savings, so our 
funds can be put to better use within the foundation.
    In this vein, we recently examined expenditures in two 
areas, both of which might yield cost savings with additional 
oversight and control.
    Our recent review of charges on NSF purchase cards for 
refreshments for panelists and others attending meetings at NSF 
identified nearly half a million dollars in food-related 
payments in both 2008 and 2009.
    NSF pays for these refreshments out of program funds in 
addition to the compensation it is already providing to 
attendees to cover their expenses including meals.
    One-fourth of the purchases we reviewed exhibited at least 
one typical fraud indicator. In addition, we found there is no 
foundation level oversight or coordination of refreshment 
purchases and that purchasing practices vary widely across the 
agency.
    We recommended that NSF assess the prudence of these 
expenses and that if it decided to continue providing 
refreshments it centralize their purchase to improve control 
over the process.
    Our review of NSF's Independent Research Development 
Program, which provides travel funds to temporary employees at 
NSF such as IPAs to travel to their home institutions and 
attend conferences, found that NSF could not tell without 
substantial effort how much it expends annually on IR&D travel 
or how such travel is used across the foundation's various 
divisions.
    In addition, some participants used IR&D funds for more 
trips or longer trips or spent more on travel than proposed in 
their plan. Because of the weak oversight of the IR&D funds and 
the potential for abuse, we are currently auditing this 
program.
    Thank you. I would be happy to answer any questions.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Wolf. Wow. Thank you very much.

                         RESPONSIVENESS OF NSF

    You raise a lot of issues. Are they paying any attention to 
you?
    Ms. Lerner. I think they are doing what they can to improve 
these areas. They do have, as I noted in grants management, a 
program in place to do some monitoring of awards, but we think 
that it is time to think of ways that they can do more.
    And one of the things that our office is starting to do is 
to develop a data analytic type capability that will enable us 
to do continuous monitoring of costs. NSF does this to a 
limited extent and we are hoping that if our efforts are 
successful, we can bring them along so that they can do more of 
that and hopefully have another cost-effective way of staying 
on top of how grantees are spending their funds.
    In the contract area, we have been working with NSF for 
quite some time. And they have made some progress. They have a 
new procurement executive coming on board, I believe this 
month. They have come up with some new policies and procedures 
for overseeing cost reimbursement contracts, but those were 
implemented relatively late in the fiscal year, and the auditor 
who conducts the financial statement audit has not had a chance 
to evaluate their effectiveness. We will be doing that this 
year.
    So they are attempting to tighten up their procedures over 
cost reimbursement contracts. They have also entered into an 
agreement with DCAA to do some of the much needed audits at the 
pre-award stage and across the life cycle of awards so that 
there will be better assurance that money is being spent 
appropriately.
    So they are paying attention. There is just a lot of ground 
to cover and some real room for improvement.
    Mr. Wolf. How many people do you have on your staff?
    Ms. Lerner. Approximately 72 employees.
    Mr. Wolf. I guess I should get it out of the way early. I 
have been a little disappointed. I am going to tell the NSF 
people that when they come up. I have been a strong supporter 
of NSF. I think America needs to be invested in----
    Ms. Lerner. Absolutely.
    Mr. Wolf [continuing]. Math and science and physics and 
chemistry and biology, et cetera, et cetera, and I have always 
supported increased funding.
    About two years ago, we put language in asking the NSF to 
look at best practices with regard to having students get 
interested in science. The indications are that if they lose 
interest before fifth or sixth grade, you will lose them.
    Ms. Lerner. You are out of the pipeline.
    Mr. Wolf. It has been two years and they have never 
completed the report. Mr. Bement, who I always had a great 
amount of respect for, just left town without finishing it.
    We cannot get the NSF to respond to this. This is a very 
minor thing. We have done the same thing for prisons. We have 
asked the prison systems to look at best practices, and the Pew 
Foundation and the state governments helped us to come up with 
a report. We have asked NSF to do the same thing on what is 
working in education to get young people through first through 
fifth grade, and it has been two years.
    And we cannot get an answer. Mr. Bement left town without 
the courtesy to call to say where the report is. The new 
director has never been up.
    And so I am beginning to think that it is a very sloppy 
operation out there. As another example, I remember initially 
the National Science Foundation fought strenuously against 
moving their headquarters. They did not want to move to their 
current location.
    Senator Robb had moved them out to the Arlington area, and 
they fought it and fought it and fought it. And now it is 
there, and someone said there may be some effort to move them 
again.
    Is there any thought of that?
    Ms. Lerner. The two buildings that the foundation is in, I 
think the Stafford One lease expires in 2013, I think Stafford 
Two in 2014. So the process is in place to find a new building 
for the agency.
    Mr. Wolf. To move again?
    Ms. Lerner. It is uncertain at this point whether they will 
move again or whether the current lender will be able to get 
the current space up to standards where they could remain is my 
understanding. But, yes.
    Mr. Wolf. Well, they wanted to stay on Constitution Avenue 
in an old building that was falling down----
    Ms. Lerner. Yes.
    Mr. Wolf [continuing]. So they could be close to the White 
House.
    Ms. Lerner. Right.
    Mr. Wolf. If they come in and ask for money for that, I 
personally would not be very supportive. I mean, I think they 
ought to spend their time on science.
    Well, you just let the word go back. I do not know who is 
here from the NSF, if anybody is, but I am really so 
disappointed in Dr. Bement and the current leadership now for 
not even having the courtesy to come up and discuss the status 
of the education report.
    It was requested in the fiscal year 2009 language, and we 
cannot even get them to act. So if the Congress cannot get them 
to act, I wonder if you are able to do it.
    Ms. Lerner. I meet with the director tomorrow at one 
o'clock and I will make sure he understands your concerns. So I 
will do what I can.
    Mr. Wolf. Well, if they really care about education----
    Ms. Lerner. Right.
    Mr. Wolf [continuing]. And getting young people to be 
involved in the sciences----
    Ms. Lerner. Right. And I know they do. So I do not know why 
they would not be getting back to you and communicating with 
you on that or completing the work that you asked them to do. 
But I will certainly have that conversation with the director.
    Mr. Wolf. Somebody ought to tell Mr. Bement, too, who I 
really admired. I am really disappointed in him. He left town 
literally without cleaning up and dealing with this issue. And 
we have discussed it. We have had conversations. We have raised 
it in hearings. It is in the hearing record. It was in the 
bill. And he leaves town and does not do a thing. How hard you 
work on the last day is as important as all the work you have 
done before.
    Ms. Lerner. Right.
    Mr. Wolf. You ought to stay until five o'clock or five-
thirty and clean up everything. This was an act of Congress 
with regard to the sciences. This is not a----
    Ms. Lerner. Right.
    Mr. Wolf [continuing]. Pork barrel project. We want young 
people to be involved in science. Last year, China graduated 
700,000 engineers. We only graduated 70,000. Half of them were 
foreign students. We want America to be number one. And here is 
something that could get young people involved, and NSF cannot 
even give us an answer.

                      POSSIBLE NSF BUDGET SAVINGS

    Making cuts in programs that are inefficient, ineffective, 
or simply low priority is one of the ways to meet our critical 
deficit reduction needs while still allowing necessary 
flexibility for important NSF programs that advance our 
national competitiveness.
    Using the knowledge you have gained by reviewing programs 
for waste, fraud, and abuse, and I think you have covered this, 
can you give the Subcommittee some specific areas that we could 
look at that would not hurt the sciences----
    Ms. Lerner. Right.
    Mr. Wolf [continuing]. But would allow us to make some 
necessary spending changes that would help save some money for 
the American taxpayer?
    Ms. Lerner. Right. Well, I think at a minimum, the half 
million dollars that is spent on refreshments for panelists is 
something that should be looked at carefully.
    Mr. Wolf. Well, if you could give us a list in addition.

    The OIG does not have a basis for saying that one NSF 
program should be funded over another program. We will continue 
to examine NSF's external funding, particularly in regard to 
contingencies and contracting, as well as the Foundation's 
expenditures for its operations such as travel in order to 
identify opportunities for cost savings and funds put to better 
use.

    Ms. Lerner. In addition to that? We will do what we can. 
And we are looking for more and more areas. So if you would 
like our thoughts beyond what we have identified in the light 
refreshment area, we will respond.
    Mr. Wolf. I think that is important, but I am thinking of 
more extensive even----
    Ms. Lerner. Right.
    Mr. Wolf [continuing]. Than that. Has your office studied 
how the NSF measures the downstream outcomes from federal 
grants and tech transfers? What is the economic impact of 
National Science Foundation investments?
    Ms. Lerner. Not in the period that I have been there. But 
we have been having conversations just in the past month or so 
figuring about how my office can get a handle on measuring how 
NSF measures performance and outcomes because we think it is 
critical that someone be looking critically at what processes 
and what infrastructure is in place. So we will be expending 
more time and effort in that area in the coming months.

                  NSF'S MANAGEMENT OF STIMULUS FUNDING

    Mr. Wolf. Two years after the enactment of the stimulus 
bill, less than a third of NSF stimulus funding has been spent. 
This is the lowest stimulus expenditure rate across the entire 
government.
    Ms. Lerner. Right.
    Mr. Wolf. What does the extremely low outlay rate tell you 
about the stimulating impact of these funds?
    Ms. Lerner. From NSF's view of the money it received from 
the Recovery Act is that, yes, what they do will have a certain 
stimulative effect to the extent that you have additional 
people. You are able to bring on additional investigators or 
folks to do the scientific research that is being funded. But 
their focus has been as much on the reinvestment, the second 
area that will come from the work that they are performing.
    They have also structured their awards, I think they ranged 
from two to five years, so that is part of the reason you see 
the obligations, the rate being as low as it is.
    Mr. Wolf. But the outlays of the stimulus funds have been 
even lower than NSF's own projections.
    Ms. Lerner. And I do not know the precise reasons for why 
it is lower than their own projections. I know they do monitor 
the issue very carefully. But there are a variety of different 
lengths of projects and the scientific projects.
    In some instances, you have some that are cost heavy at the 
beginning, others where costs are more spread out evenly over 
time, and some where the majority of expenses come later in the 
project. So I can only presume that that is playing out in the 
slow pace of the obligation rate.
    Mr. Wolf. Most of the NSF funds were used for research 
grants. So some of the outlay problems may be due to inactivity 
on the part of the grantee.
    What is NSF doing to identify inactive grantees and recover 
these awards?
    Ms. Lerner. They are monitoring those pretty carefully. 
They have a 99 percent plus reporting rate from the entities 
who are required to report on a quarterly basis. So they are 
getting the quarterly reports, and I presume they are looking 
at the quarterly reports.
    We have asked that where there were areas, we were very 
concerned with situations where you had awards that had been 
made, and it had been a year and no costs had been incurred. 
And so we have tried to stay on top of the agency and ensure 
that they were monitoring those awards.
    And due to their own interest and the pressure that we were 
putting on them, they have reached out to the recipients where 
they have not had any expenditures at all to determine if there 
is a rational reason for it.
    Mr. Wolf. Has any of it been reclaimed?
    Ms. Lerner. Any reclaimed, I do not believe that any has at 
this point.
    Mr. Wolf. Because there are so many others who are waiting 
for an NSF grant.
    Ms. Lerner. Right.
    Mr. Wolf. The number of people who apply is much higher 
than the number of people that receive.
    Ms. Lerner. Yes. Right.
    Mr. Wolf. So if someone has applied and got a grant but has 
not acted on it----
    Ms. Lerner. Right. NSF is obviously more on top of the 
precise details of this than I am, but my understanding is when 
they did look at the situations where there had been that 12-
month window without--the burn rate was not what it should be, 
that there were appropriate explanations for it in the 
instances where they followed up.
    So I do not believe that any amounts were reclaimed. That 
certainly would have made sense and----
    Mr. Wolf. Wouldn't it make sense to reclaim something to 
demonstrate to people that if they are going to get a grant and 
they have this great idea to save America----
    Ms. Lerner. Absolutely.
    Mr. Wolf [continuing]. And do something for math and 
science, they ought to move on it rather than getting a grant 
and then laying back? I would urge you to ask them to reclaim a 
couple to stimulate the others to move ahead. If you had a 
stimulating bill, you want to stimulate.
    Ms. Lerner. And we did push them to do that when they were 
looking at this issue. And the feedback that we got was that 
there were appropriate reasons for----
    Mr. Wolf. For every one, every single one?
    Ms. Lerner. There were only a small number of these is my 
understanding and that there were----
    Mr. Wolf. How many were there?
    Ms. Lerner. There were, I think, fewer than 20.
    Mr. Wolf. Could you give us a list of the 20?

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Lerner. Sure. I will give you a list of however many it 
was. My recollection is it was fewer than 20, but, yes, we will 
give you a list of that.
    Mr. Wolf. Okay. Thank you.
    Mr. Fattah.
    Mr. Fattah. Thank you very much. Thank you, Mr. Chairman.

         NSF POLICY ON REFRESHMENTS FOR MERIT REVIEW PANELISTS

    I guess on the front end of this, some could suggest that 
there is no federal law here or no constitutional mandate for 
us to be involved in basic research?
    I agree with you in your testimony, your written testimony, 
that this is a critically important area for the Federal 
Government, and it is one of the things that I am most proud of 
in terms of investments that we make as a country.
    The National Science Foundation is the premier entity in 
the world, and obviously the work that your office is doing to 
improve its efficiency is important.
    In defense of the coffee and doughnuts, I want to say that 
there are probably some areas where you could cut, but I am not 
sure that we should be inviting the most knowledgeable 
scientists in the world to sit around and talk about finding a 
cure for cancer and not offer coffee or some need.
    I think we need to not be foolish about our efforts here. 
This is a very important entity, and part of what you do is the 
collaboration of scientists. There are no earmarks here. This 
is all----
    Ms. Lerner. Right.
    Mr. Fattah [continuing]. Rigorously reviewed, peer reviewed 
research that in so many ways has helped move our country 
forward. So I just think that the totality of the budget at the 
National Science Foundation is less than we would spend in half 
a month or that we are spending in half a month in Afghanistan.
    Ms. Lerner. Uh-huh.
    Mr. Fattah. So we ought to be careful as we go forward. And 
I want to get into some of the real work that I think that you 
have been involved that has saved money, the recompete and the 
major construction efforts in Antarctica, and if you could also 
comment on the decision not to go forward in South Dakota in 
terms of the investment there.
    But I would just say that I hope that in the future, we can 
always afford to take the best minds in the world, put them 
over at the National Science Foundation for a day-long or two-
day meeting, and I think it is quite appropriate that there be 
coffee and orange juice and whatever else they need so that we 
can get the best of their thinking.
    Ms. Lerner. Great.
    Mr. Fattah. But please respond.
    Ms. Lerner. Sure. And, as you know, on the issue of 
refreshments, I think that is a management decision. The 
situation that we found was just a wide variety in amount spent 
per person across the agency. So there are some areas where you 
could still provide refreshments, but save a decent amount of 
money there.
    Beyond that, the----
    Mr. Fattah. The recompete and----
    Ms. Lerner. The recompete----
    Mr. Fattah. Right.

            RECOMPETITION OF THE ANTARCTIC SUPPORT CONTRACT

    Ms. Lerner. The recompete is an issue that we have been 
monitoring very carefully. It is a delicate thing for an IG to 
do when there is an open procurement. But we have been very 
concerned.
    NSF is not an agency that ordinarily has a lot of very 
large contracts. We are a big grant making agency. But every 
ten years or so, we have this enormous contract that has to be 
competed and has to be competed well. And we have been dealing 
with the flaws in the process of the last competition for the 
past 12 years. And so what we were hoping is that they would 
get it right this time.
    And I am sure you are aware that there has been one 
extension that they have had to grant to the current contract 
because they simply did not get their act together sufficiently 
in order to make the award at the time when they needed to so 
that the new contract could take place and where a second 
extension has now been necessary.
    NSF has really finally recognized that senior management 
has to pay attention to this process and make sure that it 
works or it is going to slip again. And they have a group of 
senior managers that meets I believe on a biweekly basis to 
stay on top of the process.
    They have a plan with dates. They had a plan the first time 
around, but there were no dates associated with it after they 
missed the first year, after they missed the first effort to 
get the contract in place.
    So they have a plan with dates. It is a plan that can work 
so that there will not need to be a third extension, but there 
is very little room for error in that plan because of the 
challenge that you have, the window of opportunity you have to 
do the transition. There is six months when nobody can get down 
to the pole. So there is a limited window when you can do a 
transition for a contractor.
    If there is any slippage in the current schedule there is a 
chance that it would have to be extended once again. So we are 
monitoring their progress. I know NSF management is monitoring 
their progress. There are some issues that are not within their 
concern.
    I am very happy to see that pursuant to our advice they are 
getting pre-award audits done of the proposals that are in the 
competitive range which should hopefully help eliminate some of 
the problems that plagued the past contract. But getting those 
pre-award audits is going to take some time.
    They have budgeted a certain amount of time there based on 
conversations with DCAA about how much time they think they 
will need to do the work. But, I can tell you, you can think 
you know how much time it is going to take to get in to do an 
audit. But, until you get in there and start looking at the 
books, you really do not know what you are going to find.
    So if it turns out that DCAA needs more time to do those 
very important audits, then the schedule may not be able to 
hold. So we are monitoring on that and we are hopeful that if 
everything works and the planets align that they can have a new 
contractor in place and avoid a third extension. But, I do not 
know if that will pan out.
    Mr. Fattah. Thank you, Mr. Chairman.
    Mr. Wolf. Mr. Culberson.
    Mr. Culberson. Thank you, Mr. Chairman.
    And thank you so much for the work that you do. The 
inspectors general are really vital to help us do our job 
better and to help us be good stewards of the taxpayers' 
dollars.
    I am devoted as the chairman is and other members of this 
committee to the National Science Foundation and to ensure that 
they are given as much support as we can possibly give them in 
this environment that is difficult, but we are all going to 
work hard to make sure that NSF is protected and want to be 
sure the money we are sending them is well spent.

              NSF'S GRANT FUNDING ELIGIBILITY REQUIREMENTS

    I wanted to ask about two areas, if I could. Could you talk 
about the level of funding we have been giving NSF and in your 
opinion from what you have seen and analyzed and the number of 
grant requests they receive what percentage of the requests 
that they receive are they actually able to fund? Do you know?
    Ms. Lerner. Yes. It is about a 25 percent success rate.
    Mr. Culberson. Twenty-five percent of the----
    Ms. Lerner. This year.
    Mr. Culberson. Twenty-five percent of the eligible grant 
requests that they receive, they are able to fund. And I assume 
that there are criteria. You cannot even apply for a grant 
unless you meet certain criteria. You are----
    Ms. Lerner. It would depend on the program. There are many 
different programs, but there are two main criteria that NSF 
looks for, broad impact and intellectual merit. But beyond 
that, I am sure that individual programs may have specific 
criteria as well.
    Mr. Culberson. Oh, excuse me. What I was talking about is 
the eligibility of the applicant to even receive the grant 
because one of the things I know that you are concerned about 
and mentioned in your report is the ability of NSF to ensure 
that the money is being well-spent.
    Ms. Lerner. Right.
    Mr. Culberson. That the recipient is actually doing what 
they said they were going to do----
    Ms. Lerner. Right.
    Mr. Culberson. With the money----
    Ms. Lerner. Yes.
    Mr. Culberson [continuing]. Which is vital. And I think 
your report said that NSF is only looking at a very small 
fraction, seven percent, I think you said, of the----
    Ms. Lerner. Through one particular program. Kind of the 
jewel in their crown of monitoring only is able to touch about 
seven percent.
    Mr. Culberson. And the institute of this program in 2004, I 
think you said in your testimony----
    Ms. Lerner. Yes.
    Mr. Culberson [continuing]. That to try to track how the 
money is being used by the recipient.
    Ms. Lerner. Yes.
    Mr. Culberson. Is there an eligibility requirement, though, 
before you can even apply? I mean, are there certain----
    Ms. Lerner. I do not know that there are----
    Voice. There are a couple. There is the new awardee guide 
and some reviews of the institutions, but the institution 
eligibility is different than the PI eligibility.
    Ms. Lerner. Right. A lot of our awards are made to 
institutions and not individuals with the exception of certain 
programs, career programs or things like that, so----
    Mr. Culberson. What I was driving at is just to ensure that 
they are not making awards to people that are not able to 
fulfill the request, certain minimum requirements to--like any 
other job----
    Ms. Lerner. Right.
    Mr. Culberson [continuing]. You have got to be a licensed 
law enforcement officer before you can apply to be a, you know, 
Texas state trooper, for example.
    Ms. Lerner. Right. And NSF is required to check the 
excluded parties list which is the list of people that are 
excluded from receiving federal funds before they make any 
awards, so they have a process.
    Mr. Culberson. Why are they excluded? What is excluded? For 
what reason will they be excluded?
    Ms. Lerner. The excluded parties list is a listing of 
individuals who have been suspended or debarred from doing 
business with the government for any number of a wide variety 
of reasons. Sometimes just lack of present responsibility, 
sometimes because they have committed crimes or civil crimes.
    Mr. Culberson. Those folks for sure?
    Ms. Lerner. So they are supposed to accept that.
    Mr. Culberson. But, I mean, there is a standard. You know, 
you come in----
    Ms. Lerner. Yes.
    Mr. Culberson [continuing]. To apply for a job at a, like I 
say, use Texas, you know, if you are going to be a state 
trooper, you got to meet certain criteria. What are the minimum 
criteria of eligibility to even apply and receive a grant from 
the NSF? Are they in your opinion satisfactory?
    I know, for example, you award a grant to any of the major 
universities of any of our districts----
    Ms. Lerner. Yes.
    Mr. Culberson [continuing]. It is going to be handled 
competently----
    Ms. Lerner. Right.
    Mr. Culberson [continuing]. Professionally----
    Ms. Lerner. Right.
    Mr. Culberson [continuing]. In a way that we would all be 
proud of.
    Ms. Lerner. Right.
    Mr. Culberson. What is NSF doing to make sure that there is 
nobody even coming to the door asking for money that is not 
capable of doing the work?
    Ms. Lerner. I think that is certainly something that is 
examined in the merit process when the panels look at the 
proposals. They will look at the people who are the proposed 
collaborators. I do not know if there is the----
    Mr. Culberson. I do not know if they have a minimum set of 
criteria of eligibility.
    Voice. It depends on the program. Some programs, if you are 
talking the PI, the person, there are some programs that do 
have criteria for those people.
    Mr. Culberson. Uh-huh.
    Voice. You are talking institutions. There are criteria 
around their financial systems, but most of the requirements 
are placed back on the institution----
    Ms. Lerner. Right.
    Voice [continuing]. To manage the awards.
    Mr. Culberson. Okay.
    Ms. Lerner. Yes. The burden is on the institution to----
    Mr. Culberson. Okay.
    Ms. Lerner [continuing]. To oversee this.

                              ICE BREAKING

    Mr. Culberson. Let me also ask, and the chair has been very 
generous with the time, about the Ice Breaker Program.
    Ms. Lerner. Yes.
    Mr. Culberson. And that has been a concern of mine since I 
first got on this committee several years ago when Mr. Wolf was 
the chairman before. The Bush administration just issued an 
executive order that transferred responsibility for the Ice 
Breakers from the Coast Guard to the NSF which really alarmed 
me because, of course, they need to be replaced. It was a 
massive amount of money. They were in bad shape and needed to 
be replaced. And that just shifted that huge liability back on 
to the Coast Guard.
    And I think Frank LoBiondo, Mr. Chairman----
    Ms. Lerner. Yes.
    Mr. Culberson [continuing]. Helped fix that. There was a 
Coast Guard reauthorization done, is that correct, about three 
or four years ago, right be----
    Ms. Lerner. Right.
    Mr. Culberson. Does that sound right, like about four or 
five maybe years ago?
    Ms. Lerner. Yes. That sounds about right.
    Mr. Culberson. And the reauthorization, because I remember 
pestering, Mr. LoBiondo was wonderful about that, the Coast 
Guard is responsible again for those Ice Breakers?
    Ms. Lerner. That is my understanding, yes.
    Mr. Culberson. Is there adequate money to get the Ice 
Breakers upgraded, repaired? Are they in good shape?
    Ms. Lerner. I think there have been----
    Mr. Culberson. Do our scientists have the ability to get to 
Antarctica? Are we leasing Ice Breakers? What is the status of 
that?
    Ms. Lerner. My understanding at this point is that the two 
ships that the Federal Government has, the two Ice Breakers 
that they have, neither are capable of functioning. So we are 
relying on leases.
    Mr. Culberson. Out of commission?
    Ms. Lerner. They are both out of commission and in the 
process of getting refitted so that they can function again. 
There is talk of procuring a new Ice Breaker. I gather that 
that is in motion right now. But currently we are relying on 
leased Ice Breakers.
    Mr. Culberson. And that may be a good solution.
    Ms. Lerner. Right.
    Mr. Culberson. I mean, have you all looked at that? It is a 
huge expense. And have you looked at it?
    Ms. Lerner. The Department of Homeland Security IG has done 
an audit of that process. I think they just completed that.
    Mr. Culberson. That would be something worth looking at, 
Mr. Chairman.
    Ms. Lerner. Yes. We can provide you with a copy of their 
report.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Culberson. And it may indeed----
    Ms. Lerner. Yes.
    Mr. Culberson [continuing]. Be more cost effective to----
    Ms. Lerner. Yes.
    Mr. Culberson [continuing]. Lease them. I think other 
nations are using leased Ice Breakers.
    Ms. Lerner. Right.
    Mr. Culberson. But ours are completely out of commission. I 
did not know that.
    Ms. Lerner. That is my understanding.
    Mr. Culberson. Okay.
    Ms. Lerner. Yes.

     ATTEMPTS TO IMPROVE THE EFFICIENCY OF THE MERIT REVIEW PROCESS

    Mr. Culberson. Any areas I know the committee asked you 
about that you could identify--if they have already asked you, 
forgive me.
    Ms. Lerner. Yes.
    Mr. Culberson. I was hung up and could not get here. Areas 
that you find we could help make the money we are able to give 
to the NSF to reach those grant recipients and how can we save 
money at the NSF and ensure the money reaches the folks that 
need it----
    Ms. Lerner. Right.
    Mr. Culberson [continuing]. And not diminish our already 
diminishing abilities in science?
    Ms. Lerner. Well, I think one thing that NSF is doing right 
now that is really exciting and that could lead to some savings 
and some efficiencies in their merit review process, they have 
an ongoing pilot of using Second Life as a way to conduct 
panels so that every panel does not have to be done at NSF.
    You have I think about 19,000 scientists that come to NSF 
every year to do merit review panels at NSF. You know, that is 
a lot of people coming through. A lot of time and effort to get 
them here, a lot of time for them away from their work.
    So NSF has a pilot right now where they are using Second 
Life to evaluate proposals. And they have done it, I gather, in 
about six instances and it seems to be working well. And I do 
not think that is a----
    Mr. Culberson. Yeah. If I could----
    Ms. Lerner [continuing]. Solution----
    Mr. Culberson. Forgive me. I am sorry----
    Ms. Lerner. Yeah.
    Mr. Culberson [continuing]. For interrupting. And the 
chairman has been very generous and----
    Ms. Lerner. Yes.
    Mr. Culberson [continuing]. I am going to pass because he 
has been so kind with the time. We want to make sure everybody 
knows what Second Life is. That is basically a virtual reality 
world where you sit----
    Ms. Lerner. A virtual reality world.
    Mr. Culberson [continuing]. Playing Avatar and we are all 
sitting----
    Ms. Lerner. You have an Avatar and they----
    Mr. Culberson. Looking at each other.
    Ms. Lerner [continuing]. Are doing merit review by Avatar, 
exactly.
    Mr. Culberson. Time talking to each other.
    Ms. Lerner. You can talk to each other----
    Mr. Culberson. We can all look like----
    Ms. Lerner [continuing]. So you get the camaraderie. You 
have the ability to talk and the feedback that is----
    Mr. Culberson. Real time.
    Ms. Lerner [continuing]. In place from some of the people 
participating is that you have that ability to interact. You 
lose that if you try and do panels by mail. You just lose that 
human connection which is an important part of the merit review 
process. But with this Avatar situation, you have that, but you 
do not have the time to go out to dinner in the evening or 
lunch.
    So something is lost, but you gain people not having to 
travel. You may be able to attract some people who would not be 
able to take the time and effort to come to NSF and 
participate. So I think that that is a pilot program that they 
should really look at expanding and utilizing where appropriate 
across the foundation. I think it would be an efficient way.
    Mr. Culberson. Get a real-time meeting like this, we can 
all be----
    Ms. Lerner. Right.
    Mr. Culberson [continuing]. 21 years old and in perfect 
physical condition.
    Mr. Fattah. Mr. Chairman, maybe we could have our hearings 
like that, you know.
    Ms. Lerner. Well, and the beauty is it costs about $3,600 a 
year to have the agreement with the entity that runs Second 
Life and the average panel costs about $10,000. So you save. 
You know, you do one panel this way and you have paid for a 
whole year's worth of the ability to use this. So I think it is 
exciting and wonderful.
    Mr. Fattah. Let me ask a serious question about that. What 
about the security of the----
    Ms. Lerner. That is something that I want to have a 
conversation with NSF about and make sure that all the 
procedures are in place.
    Mr. Fattah. Thank you.
    Mr. Wolf. Have you found out that Second Life has been as 
successful as the panels coming in? Has anyone looked at that 
to see that the Second Life--is it teleconferencing? Is that 
pretty much what it is?
    Ms. Lerner. It is teleconferencing and then some because 
you have these Avatars sitting talking.
    Mr. Wolf. Right.
    Mr. Culberson. Virtual world.
    Ms. Lerner. Right.
    Mr. Wolf. Do you then check to see that it has been as 
successful as it is when the panelists come in? Has anyone 
looked at the comparison?
    Ms. Lerner. My understanding is that the groups that have 
done this, some have found it to be useful and the panels have 
worked well. Some of the feedback that I have seen from the 
participants is very positive. Some missed the human touch.
    Mr. Wolf. Sure.
    Ms. Lerner. So I think that is why it is in pilot right 
now. And it is the sort of thing that has been tried in a 
focused area. It seems to me to make sense to expand it out, 
continue monitoring it. But the potential in that program is 
great for efficiencies and good ways to get the people who 
might not be able to commit to----
    Mr. Wolf. Sure.
    Ms. Lerner [continuing]. Flying to D.C., especially in 
crazy weather like we have had lately, and participating.
    Mr. Wolf. It makes sense.
    Mr. Aderholt.
    Mr. Aderholt. I do not have anything.
    Mr. Wolf. Mr. Austria.

        TRENDS IN GRANT APPLICATIONS, EXTENSIONS AND AWARD RATES

    Mr. Austria. Mr. Chairman, just I appreciate, as a new 
member, the Second Life is very interesting. I appreciate the 
things that you are doing in helping provide opportunities to 
research and science and engineering for our universities and 
colleges. Just a quick follow-up on the number of grants. You 
mentioned 25 percent.
    Ms. Lerner. Yes.
    Mr. Austria. How many of those are extensions and how many 
of those are new grants? And when you say 25 percent, is the 
number of requests increasing, decreasing? What is it made of 
because it seems like this is the way of the future?
    Ms. Lerner. Right. Right. And can I get back to you with 
what the answer is for that? I do not have all of those facts 
committed to memory.

    The OIG does not maintain its own information regarding the 
number of proposals, nor does it track trends. The most 
comprehensive source for the number of proposals submitted to 
NSF is the ``Report to the National Science Board on the 
National Science Foundation's Merit Review Process, Fiscal Year 
2009.'' The report is available at: http://www.nsf.gov/
publications/2010/nsb1027.pdf. That report's executive summary 
(attached) provides an overview of awards made and some trends 
indicated in FY 09.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Austria. In general, I assume that the requests of 
grants are increasing; is it?
    Ms. Lerner. Yes, I believe so. I mean, do we----
    Voice. The requests for grants are pretty stable.
    Ms. Lerner. Right.
    Voice. The issue is how much can we fund them because of 
the money.
    Ms. Lerner. Right. The number, if you heard my colleague, 
is pretty stable, but the issue is how many can be funded. And 
with more money, the success rate goes up or not.

                    NSF PORNOGRAPHY SCANDAL FOLLOWUP

    Mr. Austria. Let me just touch on another area. You know, 
soon after you came into the position as inspector general, 
there was some significant things that happened as far as 
within NSF with employees, with taxpayer dollars, with the 
computers, with going to inappropriate sites, things like that.
    Can you maybe just brief this committee or assure this 
committee that proper safeguard has been put in place to 
prevent that from happening in the future? And are you able to 
detail those safeguards that you put in place to assure that 
that does not happen again?
    Ms. Lerner. Well, most of those incidents predated my 
arrival at NSF, but we were in the process of dealing with the 
agency and ensuring that it made the changes that were 
necessary to plug some of the holes that allowed situations 
like that to occur.
    So it is the agency's problem to fix. And as the IG, I 
cannot fix the problems for them, but I can make sure that they 
do. I am there to oversee and make sure that they do the right 
things. So as a result of that, they have put in place e-mail 
filters, and let me pull my little note here, e-mails and 
internet filters so that we will not have situations where 
someone can sit for eight hours a day for multiple days a week 
and watch porn at their desk.
    They have also beefed up their IT security training so that 
people are more aware of what they can and cannot do. They have 
circulated information out to NSF staff that they should report 
issues like that to my office so that if there are any further 
problems, we will become aware.
    We have followed up fairly regularly with the IT security 
staff to make sure that they are doing what they said they were 
going to do to ensure that these problems will not happen 
again.
    They have Blue Coat technology in place on most of their 
networks. They have a separate high speed network that is used 
by limited people for limited purposes that does not yet have 
Blue Coat technology, but we are working with them to make sure 
that they do what they can to ensure that that network will not 
be able to be used inappropriately.
    But it is a situation where you fix one hole and another 
one appears. So I think that it requires constant vigilance on 
the part of NSF management and on my office to ensure that we 
do not fix one problem and then have another one.
    Mr. Austria. And I appreciate your efforts to address that 
and put those safeguards in place. And I did not mean to imply 
at all that it was under your watch that all this occurred.
    Thank you, Mr. Chairman.
    Mr. Wolf. Mr. Fattah.
    Mr. Fattah. Well, this is a little bit toward the 
substantive area, which is not your involvement, but I do want 
to commend the agency. I have been paying some attention to the 
work related to neuroscience, both on the cognitive side and on 
the brain injury side. And given that our colleague, 
Congresswoman Giffords, was speaking in her own voice 
yesterday, I think that we should acknowledge the great science 
that really is going on as part of the efforts of the agency. I 
know you have a tough job because in all this good news, you 
are looking for the bad news. And that is what auditors do. 
That is what your job is.
    But given the $10 billion, both the annual and the stimulus 
dollars, and the thousands of awards, I think that it is pretty 
clear that this is a first-class operation. And obviously in 
any operation including our own here in the Congress, there are 
times when we have unpleasant circumstances that we have to 
deal with. So we appreciate the work you do in helping to make 
the National Science Foundation the premier entity in the 
world.

                             CYBER SECURITY

    I am all for Second Life, Mr. Chairman, but I think that we 
should be concerned about security issues. This is taxpayer-
paid research and, as you know, you were talking yesterday 
about cyber security issues. And, particularly, we have a great 
deal of espionage by economic competitors and others. I know 
that we are for intellectual curiosity, and we are for sharing 
information, and we want to be friends to the world, but we 
want to get the first benefit of our research here in the 
United States of America and not have it shared. So just in the 
chase for efficiency, we ought to be careful and make sure that 
we do things that actually protect the long-term public 
interest.
    Ms. Lerner. Right.
    Mr. Fattah. Thank you.
    Mr. Wolf. Well, I think Mr. Fattah makes a very good point. 
I would share that too. And it leads me to ask the question, 
have there been any cyber attacks against your computers?
    Ms. Lerner. Yes, there have.
    Mr. Wolf. By what countries?
    Ms. Lerner. I do not know. We were not able to tell because 
the computers were wiped before our folks were able to look at 
them and----
    Mr. Wolf. Who wiped the computers clean?
    Ms. Lerner [continuing]. NSF IT staff and----
    Mr. Wolf. Did they not tell you who did it?
    Ms. Lerner. I do not know that they know. What we 
understand is that some NSF material--and there was an article 
about this in Nextgov--turned up on a server in the former 
Soviet Union. And so my office is very concerned about how that 
happened and how the computers came to be wiped before we were 
able to see if we could work with prosecutors and get to the 
bottom of what happened there. And we are going to be working 
with the agency to ensure that situations like that do not 
happen again and that the IT security processes are tightened 
up.
    Mr. Wolf. When did this happen?
    Ms. Lerner. Over Christmastime.
    Mr. Wolf. We are going to ask the FBI to look at it, too, 
if we can. My computer was stripped by the Chinese, and there 
were 16 other Members of the House whose computers were 
stripped in addition to the International Relations Committee.
    A number of government agencies went out of their way to 
urge me not to say who had done it, but they knew it was the 
Chinese.
    I am sure NSF and NSA know who did it. And I think we 
should find out.
    Have there been other attacks over the last several years?
    Ms. Lerner. Not of that nature that I am aware of.
    Mr. Wolf. You have checked to see how many cyber attacks--
--
    Ms. Lerner. NSF is supposed to activate a CERT that 
includes participation by my office when a situation like that 
occurs. And they have not activated that cert.
    My office has been increasingly concerned about the quality 
and the caliber of IT security within the foundation. And we 
are going to be expanding our efforts to evaluate the controls 
that are in place so that we can all be assured that adequate 
security, you know, that----
    Mr. Wolf. Is there information given to NSF employees when 
they travel to China or Russia or Syria or whatever, not to 
take their BlackBerries or their telephones?
    Ms. Lerner. I am not aware of that. I am not aware of that. 
I am not aware. I can----
    Mr. Wolf. Shouldn't there be a policy? Has there been 
anyone from the NSF that has gone to China, Syria or Russia in 
the last year?
    Ms. Lerner. I know there have been folks who have been to 
China. I do not know in the last year, but certainly in the 
past couple of years.
    Mr. Wolf. But 30 seconds after you go through----
    Ms. Lerner. Right.
    Mr. Wolf [continuing]. The terminal, you are compromised.
    Ms. Lerner. Right.
    Mr. Wolf. Could you ask the Bureau to see how many other 
attacks have occurred, and could you tell us what the travel 
policy is? Maybe when the director comes up here, they could 
tell us what the policy is for----

    Since 2007, NSF's Computer Incident Response Team (of which 
OIG is a member) was activated two times--once in 2007 and, 
most recently, in 2011.
    NSF informed my office that it does not have specific 
information security policies for NSF employees traveling 
abroad, though it did note the following:
    --All NSF staff are required to take annual IT security 
training.
    --All mobile ICT equipment (laptops, Blackberries, etc.) 
issued by NSF to staff are encrypted and password protected.
    --The Department of State must approve the travel of NSF 
staff travelling on official business to any country. OISE 
coordinates the ``country clearance'' process. When clearance 
is requested for travel to China, State provides warnings/
guidelines related to use of mobile devices in China, and this 
is shared with each traveler.
    --The NSF overseas offices (Beijing, Tokyo, Paris) operate 
under Embassy umbrella and are therefore subject to all 
Department of State requirements for USG officials in each 
country.

    Ms. Lerner. Absolutely.
    Mr. Wolf [continuing]. NSF employees who travel abroad----
    Ms. Lerner. We will absolutely do that.
    Mr. Wolf [continuing]. Because I think Mr. Fattah is very 
accurate.
    Ms. Lerner. That is why our office was very concerned when 
we got word of this attack and then went to look into things 
and found that the machines had been wiped. So I think it is an 
area where we are going to be spending a lot of time.
    Mr. Wolf. And NSA did that?
    Ms. Lerner. Not NSA. NSF.
    Mr. Wolf. But who wiped them? Your own people?
    Ms. Lerner. Not my people. NSF IT staff is my 
understanding.
    Mr. Wolf. Why did they do that?
    Ms. Lerner. Because they believed it was standard operating 
procedure in a situation like that. So we have a lot of work to 
do in that area to ensure that they know how to handle an 
attack like this.
    Mr. Wolf. Well, maybe what we will do is just ask the FBI 
and their cyber people to come over to the National Science 
Foundation, and I think you should be there. They can give 
everybody a briefing as to what is going on and then look to 
see that your computers are sound and safe. We will do that. We 
will make a call this afternoon and connect the Bureau with 
your office.
    Ms. Lerner. Great.
    Mr. Wolf. Okay.

                         CONTRACTING PRACTICES

    You have done a lot of work documenting NSF's problems 
monitoring cost reimbursement contracts. But before we talk 
about those implementation problems, I want to talk about why 
NSF is using this type of contract vehicle to begin with. With 
cost reimbursement contracts, the risk is on the government, 
and they are the most difficult and expensive to administer. 
Yet, NSF relies on them almost exclusively.
    Do you think NSF has adequate justification for its use of 
cost reimbursement contracts, and could they effectively meet 
program goals using a different contract vehicle?
    Ms. Lerner. I think there may be some instances where--
obviously the preferred method of contracting to use is fixed 
price contracting. I believe there are probably some instances 
where cost reimbursement contracts makes sense for NSF, but it 
has to be done right. It has to be done rigorously.
    I really question the use of advanced payments in here, but 
it cannot be done without the groundwork to ensure that we know 
how the costs are going to be charged and how we are going to 
be billed and there is agreement on that from the outset.
    And when NSF fails to get cost accounting disclosure 
statements, fails to have accounting systems audited, pays in 
advance on the high-risk contracts, you have just got a recipe 
for real problems. They could utilize the contracts when 
appropriate if they did things the right way. And I would have 
much less concern. I would still prefer that they rely more on 
fixed price contracts, but I understand there are certain 
instances when that just does not make sense.
    Mr. Wolf. Through audits of existing contracts, you have 
found that the accounting controls needed to determine whether 
NSF is overpaying its contractors often do not exist.
    Until those accounting controls are fixed, what can we say 
about the chances that NSF has been making improper payments 
under those contracts? And if you can answer that, then do you 
know what the magnitude of these improper payments could 
possibly be?
    Ms. Lerner. I certainly think there is a risk of improper 
payments in the situation that we have found when there is no 
approved accounting system in place. The magnitude of it could 
be--I could not speculate as to that.
    Mr. Wolf. Could be what? Try to finish that sentence.
    Ms. Lerner. It would be pure speculation on my part.
    Mr. Wolf. Well, let's speculate for a moment.
    Ms. Lerner. You know, it could be anything. I mean, it 
could be minor and it could be tremendously major. The problem 
is we just do not know.
    Mr. Wolf. What should we do to know?
    Ms. Lerner. Well, what I would like to do is under 
contracts, if I can, when we start our data analytics 
capability, we can monitor payments under the contracts on a 
real-time basis in a meaningful way and even potentially get 
down to the transaction level. So I think improved use of data 
analytics both by my staff and by NSF staff would give everyone 
a lot better sense that the money is being used appropriately.
    Mr. Wolf. This may be a controversial question, but I say 
this as a supporter of the NSF, and I think Mr. Fattah and Mr. 
Culberson are, too. In the CR that the House is marking up, we 
are doing everything we can to protect NSF. I believe America 
is falling behind in science, so I am with you.
    But should we ask GAO to look at how these contracts are 
being done? I mean, would it be helpful, not in an adversarial 
way, to have the GAO come in to look at some of these things? 
You know, iron sharpens iron. The intention is not to catch 
somebody, not to embarrass anyone. But should we ask the GAO 
just to look at these things?
    Ms. Lerner. Well, GAO has already come into NSF. In fact, 
one of the reasons that there is a significant deficiency in 
contract management of cost reimbursement contracts is because 
GAO looked at that issue across the government and focused a 
lot on several agencies including NSF in the 2009 time frame 
and found some real problems with what NSF was doing. They were 
looking at NSF in addition to I think it was about ten other 
different federal agencies.
    So they have come in and looked and pointed out problems, 
but certainly I think there could be value in having them come 
in in a nonadversarial fashion and look a little more deeply 
and carefully at----
    Mr. Wolf. Well, why don't we just ask the GAO to do that, 
just to make sure that, as Mr. Culberson said, every dollar 
that is available is used in such a way that America can have a 
renaissance, be number one in the sciences, innovate and do all 
the things we want to do. So, we will ask that GAO do that. You 
can go back and tell NSF that we are not trying to catch 
anybody. I am sure that every congressional office could be 
looked at up here, and they could----
    Ms. Lerner. Right.
    Mr. Wolf [continuing]. Probably all be run better if 
somebody came in to tell them better ideas. On another topic, 
your office has identified problems with the way that NSF 
allows grantees to access contingency funds that are built into 
the construction budget. Specifically, regular project funds 
and contingencies are intermixed, and the grantee does not need 
NSF approval to spend contingency money.
    How does this policy encourage poor fiscal management?
    Ms. Lerner. We are very concerned about that. This is a 
brand new issue. It first surfaced in an audit that was 
conducted by DCAA for us. It was issued at the end of 
September. It surfaced again in another audit that DCAA did in 
January. And we are trying to get a handle around the issue 
right now, how NSF has done this, how it has happened.
    Contingencies, I can certainly see in conducting a project 
why there might be a need for some contingent funds, funds for 
contingencies. But why NSF instead of holding the funds 
internally and providing them when they are needed to the 
awardee, why NSF just takes what looks to us to be a very 
generous estimate of what those contingencies would be and 
allows the awardee to handle it with very few constraints on it 
is concerning to us.
    So we are trying to understand better why NSF is doing what 
it is doing, how contingencies are handled by other federal 
agencies, and we are going to look specifically at some closed 
projects to see how the contingency funds that they had were 
actually spent. Were they used for contingencies or do they 
just cover cost overruns that relate more to problems with 
project management than to actual contingencies. So we are 
trying to dig very deeply into this issue that has just 
surfaced.
    Mr. Wolf. Okay. I just have a couple more questions, and we 
will submit others for the record.

                           GRANTS MANAGEMENT

    Some of NSF's basic grant management activities decreased 
over the course of the last fiscal year. Site visits, for 
example, were down by 20 percent.
    What do you believe is the cause for this decrease in 
oversight activity? Is it tied to the workload burden of 
simultaneously managing stimulus grants with normal NSF 
activity and what do you believe has been the impact on the 
management of NSF grants generally?
    Ms. Lerner. NSF has indicated that they, instead of doing 
the 30 site visits that they planned, they were only able to do 
24 because of staffing, because of lack of resources. I do not 
know precisely how much money they have, but it seems to me 
that getting people out to do those visits should be a priority 
to NSF management.
    But I am concerned and have been concerned about the extent 
to which NSF staff has been stretched. You have got people who 
really care about what they do and who try to do the best they 
can, but they have a lot of work to do to start with.
    And then with the stimulus activity being added on to it 
and no additional hiring being done in the administrative 
group, I think that people are being pushed to a level that is 
beyond their capability to do their job as well as they should.
    And we are starting a job right now to look at the extent 
to which the span of control of individual program officers has 
increased over time so that we can get a sense of how much 
these people used to have to do in the past and how much they 
are having to do now and what NSF is doing to make it so that, 
if as we suspect, they are having to do a lot more right now 
with less, what can NSF do to work smarter.
    I do not have the immediate answers, but I think it is a 
real concern that these people are stretched and we need to 
position them to be able to do their jobs well.
    Mr. Wolf. Okay. I just have one last issue and then I will 
go to Mr. Fattah or any other members that have anything. And 
we will have other questions which we will submit for the 
record.

                DISSEMINATION OF STEM EDUCATION FINDINGS

    NSF spends a lot of money and effort on research about how 
best to implement STEM education, creating model programs and 
developing curricula. But there are already many schools out 
there that are highly successful in STEM education and have 
figured out effective curricula and methods.
    That is why I had suggested that NSF get together some 
experts, identify those success stories, and focus on getting 
their methods replicated.
    Does this make more sense than investing so much effort in 
reinventing what these schools have already done?
    Ms. Lerner. It would certainly seem, you know. I know that 
there is a lot of question about overlap and effectiveness of 
those programs. And I think you raise a good question there.
    Mr. Wolf. Well, hopefully we can do that. We will ask them 
and you can raise it with them.
    I worry about, the country and whether we are falling 
behind.
    Ms. Lerner. Right.
    Mr. Wolf. I mean, China graduated 700,000 engineers. We 
graduated only 70,000. Norm Augustine's Gathering Storm report 
talks that about how last year, China graduated more English 
speaking engineers than we graduated.
    Ms. Lerner. Right.
    Mr. Wolf. And America is falling behind.
    Ms. Lerner. Right.
    Mr. Wolf. And, yet, we know there are things out there that 
are working. When I go into schools and talk to the young 
people, there are some very positive things being done around 
the country that we could put out so that people could know 
where to go and so.
    Okay. Well, thank you for your testimony. Based on that, we 
will ask the FBI to look at the cybersecurity incidents. Tell 
them to keep us informed of any cyber attacks that are made. I 
think it should be publicized and not hidden, what attacks have 
been made and by what countries. Our FBI knows and NSA knows.
    Ms. Lerner. Right.
    Mr. Wolf. They know. They may not want you to say, but we 
should let people know.
    So we will ask the bureau to come over and do that. And 
then we will ask GAO to come over and look at some of these 
questions that we have raised.
    Mr. Fattah, do you have any thing else?
    Mr. Fattah. I know we are going to move on. I want to ask 
some questions for the record.
    Mr. Wolf. Sure.

          DEEP UNDERGROUND SCIENCE AND ENGINEERING LABORATORY

    Mr. Fattah. One of the more successful efforts your office 
was involved in was looking at the ocean observatory 
initiative. And if you could supply some additional information 
about----
    Ms. Lerner. Certainly.
    Mr. Fattah [continuing]. The issues there. And in South 
Dakota, I mentioned this earlier, I am on Energy and Water 
also, so----
    Ms. Lerner. Uh-huh.
    Mr. Fattah [continuing]. There was a project which in the 
National Science Foundation and the Department of Energy were 
going to collaborate----
    Ms. Lerner. Right.
    Mr. Fattah [continuing]. And which you have now decided, 
maybe for very good reasons, not to, and I do not know to what 
degree your office was involved, this is a program decision, 
so----
    Ms. Lerner. Exactly.

    As the Ranking Member Mr. Fattah noted, NSF's participation 
in DUSEL would be a program decision. The OIG does not have 
information pertaining to that matter.

    Mr. Fattah. But if you have any information, we would be 
interested in it. And on the chairman's point, one of the great 
programs that you have in terms of the development of 
scientists, this is women scientists, is a program where 
different institutions around the country have really become 
the focal point for getting young girls into----
    Ms. Lerner. Right.
    Mr. Fattah [continuing]. STEM education. And I do not know 
whether you have looked at this for any particular reason, but 
I did want to mention it because I think it is one of the 
things that may be right up the chairman's alley around some of 
the things that can be done to get populations that previously 
have not necessarily been at the very forefront of people's 
minds in these areas engaged around them.
    So thank you for your testimony.
    And I thank the chairman.
    Mr. Wolf. Thank you, Mr. Fattah.
    Thank you very much.
    Ms. Lerner. Thank you, gentlemen.
    Mr. Wolf. Do you have any follow up?
    Mr. Culberson. If I can very quickly.
    Mr. Wolf. Sure.

                       CYBER SECURITY, CONTINUED

    Mr. Culberson. I just wanted to confirm, make sure I 
understand that I heard you say you are increasingly concerned 
about cyber security at NSF. I heard you say that they do not 
have, it sounds like, any standardized policy for dealing with 
a threat once it is discovered. They thought it was standard--
--
    Ms. Lerner. They have a policy, but I do not know if it is 
the best policy and I do not know if it is always followed.
    Mr. Culberson. Okay. And also I did not hear you mention 
that they have any standardized policy to protect against 
attack. Apparently everything you mentioned were things they 
discovered after the fact.
    Ms. Lerner. They have patches, I mean, and they have 
monitoring. They were aware of the incident that occurred in 
December before the news occurred, hit the paper, but because 
they could see----
    Mr. Culberson. After the fact.
    Ms. Lerner. They could----
    Mr. Culberson. But my question is----
    Ms. Lerner. Well, they could see the information being 
pulled out of the computers. So they are monitoring, but I 
think----
    Mr. Culberson. Right. But my----
    Ms. Lerner [continuing]. They were not necessarily 
sensitive to why it might have been going.
    Mr. Culberson. Yes, ma'am. Is NSF in the room? Sure. Okay. 
Great. We love you. We are devoted to you. But these are things 
when you come up, because truly you guys--our investment in the 
sciences and our space program and in encouraging kids to 
become scientists and engineers is what is going to save this 
Nation. So we are devoted to you. But this is really alarming.
    And the chairman is exactly right and Mr. Fattah. All of us 
are devoted to you, but this has got to stop. I mean, you have 
got to have obviously a policy in place to protect against 
attacks, which it sounds like you do not have, to handle them 
afterwards. Obviously there has been serious breaches of 
security attacks on NSF computers.
    And we are also, I can tell you, Mr. Chairman, very 
concerned about when NSF comes in to talk to us that you are 
paying for work in advance before the work is done, that you 
are giving large sums of money to grantees before the research 
is done and do not have good accounting procedures in place to 
make sure that the money is actually being spent for the 
purpose for which either the contractor or the grantee applied 
for because dollars are so scarce.
    We are in a whole new environment. This is an age of 
austerity unlike anything this country has ever faced before. 
We want to help you and we are going to do everything we can to 
help you, but we just want to be absolutely certain, the 
committee wants to be certain every dollar we give you is 
actually reaching scientists and researchers that are going to 
do the work intended and that you are good stewards of our 
precious dollars and you are protecting the valuable 
intellectual property that you are stewards of.
    Thank you.
    Mr. Wolf. Thank you very much.
    Ms. Lerner. Thank you all.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Wolf. We are now going to hear from Paul Martin from 
NASA.
    Why don't you proceed as you see fit. Your full statement 
will be on the record, and then there will be questions.
                                       Thursday, February 10, 2011.

             NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

                                WITNESS

PAUL K. MARTIN, INSPECTOR GENERAL
    Mr. Martin. Thank you.

              Opening Remarks of Inspector General Martin

    Chairman Wolf, Ranking Member Fattah, and members of the 
Subcommittee: Today NASA finds itself in a state of significant 
uncertainty, particularly with respect to its Human Space 
Program. The immediate challenge facing NASA is managing the 
Agency's broad portfolio of space, science, and aeronautics 
projects amid the continuing lack of clarity about its budget 
in 2011 and in the out years.
    Last month, we sent a letter to Congress describing 
conflicting directives in NASA's 2010 Authorization Act and the 
continuing resolution that prevents the Agency from terminating 
Constellation contracts or initiating new space exploration 
programs.
    NASA officials told us that by March 1st they anticipate 
spending up to $215 million on Constellation projects that had 
they been given a free hand, they would have considered 
canceling or significantly scaling back.
    Moreover, by the end of this fiscal year that figure could 
grow to more than $575 million if NASA is unable to move beyond 
the planning stages for its new Space Exploration Program.
    In our letter, we recommended that Congress take immediate 
action to address this situation, and we encourage this 
subcommittee to support a legislative solution as soon as 
possible.
    Moving on to the broader focus of this hearing, the OIG has 
identified the following as key issues facing NASA in 2011: The 
future of U.S. spaceflight; acquisition and project management; 
infrastructure and facilities management; human capital; 
information technology security; and financial management.
    My written statement contains a detailed discussion of 
these six challenges. Rather than restate that testimony, I 
offer three observations to provide context for our submission.
    First, with respect to spaceflight, NASA's top priority is 
to safely complete the Space Shuttle's two or three remaining 
flights.
    In addition, NASA is directed in the Authorization Act to 
develop a new space launch system and multipurpose crew vehicle 
that use Constellation and Shuttle technologies, ``to the 
extent practicable.''
    At the same time, the agency continues its efforts to 
foster development of commercial cargo and crew capabilities. 
One key unanswered question is whether NASA will receive the 
level of funding necessary to address both of these priorities 
on an aggressive yet realistic time table.
    Second, NASA has historically struggled with establishing 
realistic cost and schedule estimates for its science and space 
exploration projects. The James Webb Space Telescope is the 
most recent example of this problem.
    In 2003, NASA said it planned to launch the Webb Telescope 
in 2011 at an estimated cost of $1.6 billion. However, last 
November an independent review concluded that the earliest 
possible launch date was September 2015. But even this date 
depended on the project making critical management changes and 
receiving an additional $500 million over the next two years. 
The new total estimated life cycle cost for the Webb Telescope: 
$6.5 billion.
    And third, it is important to keep in mind when evaluating 
NASA's performance that for some projects it really is rocket 
science. And I say that both a bit humorously and a bit 
seriously. The engineering required for many of NASA's science 
and space exploration projects is complex and visionary, but 
the agency must do a better job to manage costs and scheduling.
    To its credit, NASA has made a concerted effort over the 
past several years to improve its management practices and 
address these systemic weaknesses. Nevertheless, significant 
challenges remain.
    The Office of Inspector General is committed to providing 
independent, aggressive, and objective oversight as NASA seeks 
to meet these challenges.
    I would be pleased to answer the Subcommittee's questions.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Wolf. Thank you very much.

                   FINDING SAVINGS IN THE NASA BUDGET

    From your perspective as Inspector General, what areas of 
the NASA budget would you recommend we look into as possible 
sources of budget savings?
    I think you have a subcommittee made up of people who are 
very, very supportive of NASA. I do not have a NASA facility in 
my congressional district, but, I think it is very, very 
important and I think that contribution to the country has been 
very, very important.
    And so knowing these tight times, what would you recommend 
that we look at if you have to eliminate? Also, in the process, 
are there programs where there is an overlap? Are NOAA and NASA 
doing the same thing, whereby NASA could do more of it and we 
could reduce the NOAA budget? Or NOAA would do it, and we would 
free up the NASA budget to put a man on Mars and keep faith 
with aeronautics? What are you thinking when you look at it 
from your perspective?
    Mr. Martin. Thank you, Mr. Wolf.
    Let me tee up three areas. The first would be what I cited 
in my oral remarks and what we mentioned in our statement. And 
that is the conundrum created by the conflict between the 
holdover language in the CR that does not allow NASA to 
terminate the current Constellation contracts and begin a new 
program with the directives contained in NASA's 2010 
Authorization Act.
    There are big dollars at stake. I think NASA, to its 
credit, is doing what it can at this point to redirect those 
Constellation contracts to areas that it hopes will be part of 
the next Space Exploration Program, but they need to be freed 
from these constraints. So I think that is the first issue. 
And, again, there are significant dollars there.
    Secondly, and I also touched on this, NASA must do a better 
job with its project management both in its cost estimations at 
the front end and its project management as the project moves 
forward.
    I think the taxpayers, and certainly this Committee and the 
public, have the right to know that if we are going to do 
really ground-breaking technological science like James Webb, 
and it really is ground-breaking, NASA needs to inform the 
public we can do James Webb, but we can do it for $3 billion or 
$5 billion.
    And so NASA and Congress can make a decision with the 
limited resources whether that is where we want to expend our 
dollars. But to go into a program, even something as visionary 
as James Webb, and estimate that it is going to cost $1.6 
billion and then find yourself ten years later multiple years 
behind schedule and several billion dollars above estimate is 
just not the way to run a railroad.
    So some of these projects are incredibly expensive and 
incredibly visionary and incredibly important. And NASA should 
be on the cutting edge, but they need to do a better job at the 
front end saying this is our business case, this is our best 
cost estimating, and as the project moves forward managing 
those resources.
    And, third, I would cite as an area for possible cost 
savings, NASA has at least ten facilities, NASA Centers spread 
out across the country. I would cite the aging infrastructure. 
NASA has over 5,400 buildings, laboratories, warehouses, and 
facilities. Eighty percent of NASA facilities are over 40 years 
old. There is a tremendous amount of what they call deferred 
maintenance. NASA spends about $300 million every year just 
fixing the roof and plugging the holes, sort of mandatory 
maintenance. There is $2.5 billion worth of deferred 
maintenance, major renovations, repairs, or demolitions and 
construction that need to happen.
    In the 2010 NASA authorization bill, Congress directed NASA 
to deliver a report by October of this year taking a hard look 
at NASA's facilities, trying to identify redundancies, areas 
that we could downsize (I do not like to use the word right 
size) but looking at ways to handle this infrastructure problem 
because, again, with $2.5 billion in deferred maintenance, 
given the tight economic times, that number is only going to 
increase.
    So those would be the three areas I would cite.
    Mr. Wolf. Okay. Well, it would be helpful if you had the 
report before October. Maybe you could ask NASA to update the 
Committee or the Subcommittee on a continuing basis.

          OIG FINDINGS ON CONSTELLATION SPENDING UNDER THE CR

    On the Constellation spending, I have a question. NASA 
Headquarters told us they disagree with your findings, and they 
believe that they have appropriately targeted their contracts 
to activities that would be directly applicable to the new 
exploration program or are required to maintain a minimal level 
of program readiness.
    How do you respond to this contention? How do the data and 
methodology you used differ from what NASA is using to reach 
the opposite conclusion? I think this really has to be 
resolved. You cannot have he said, he said. We have got to 
resolve this thing. So what is your response to the NASA 
comments?
    Mr. Martin. I read the two-page NASA clarification, and I 
find it a bit ironic. Here is our methodology in coming up with 
the numbers that are in our letter.
    We went to the NASA people, the people running the 
Constellation Program, the people at Headquarters who the 
Constellation Program reports to, and we said given the 
conundrum created by the CR, the provision in the CR, along 
with the new directive in the NASA 2010 Authorization bill, if 
you were freed, if you had the ability to close down 
Constellation contracts and move in this new direction, what 
spending that you are doing now wouldn't you do.
    These are their numbers. These are their answers. They are 
not our answers. They are not the Inspector General's policy 
call about which money is not being used efficiently. That is 
our methodology, asking the program people.

         CHALLENGES WITH COST ESTIMATION AND PROJECT MANAGEMENT

    Mr. Wolf. NASA continues to experience major challenges in 
accurately estimating costs and then managing programs to stay 
within the estimates. In the fiscal 2010 review of NASA's 
costliest projects, the GAO found that 10 of the 19 projects 
have experienced overruns, with an average budget overrun of 
over 19 percent and an average schedule delay of 15 months. 
NASA implemented a new cost estimation policy in 2009 that is 
intended to produce more rigorous and realistic budget 
projections for major missions.
    When do you believe we can begin assessing whether this 
policy has actually improved the accuracy of NASA's cost 
estimates?
    Mr. Martin. I think given the dollars involved and the 
importance, we need to start doing that right now. I think with 
two or three years under their belt, we will have some sense of 
whether their new procedures are effective.
    Again, as I mentioned at the outset, some of these more 
innovative, visionary projects, whether the technology is not 
mature and whether there is just not sound management 
practices, it is a very big issue.
    We have recently opened a new audit that is going to 
examine the role of project managers at NASA: do they have the 
appropriate experience, the appropriate training, are they 
given the appropriate authority to make the difficult calls as 
they manage these projects.
    Mr. Wolf. Okay.

              IMPLEMENTATION OF THE NASA AUTHORIZATION ACT

    We have been concerned about the Administration's hostility 
toward manned spaceflight and exploration over the past two 
years. The President's fiscal year 2011 budget would have 
effectively ended NASA's exploration program. However, the NASA 
authorization that the Congress passed explicitly mandates a 
strong exploration program.
    Do you believe that NASA is, to the best of its ability, 
complying with the exploration provisions of NASA's 
authorization of last year?
    Mr. Martin. I do. Again, we have the conundrum that we 
articulated in our January 13th letter. I think they are doing 
about as well as they can under the constraint and the 
prohibitive language in the existing CR to try to effectuate 
what the new directive is in the 2010 authorization. But, 
frankly, they are between a rock and a hard place.
    Mr. Wolf. Have they come up to speak to the authorizers? If 
they do not agree with you, obviously they have not come up to 
say that.
    Mr. Martin. Excuse me. They do agree. They agree with the 
bottom line that NASA, this provision, the holdover provision 
in the CR needs to be removed. There is complete agreement.
    What they are dickering with a bit are the numbers. We 
cited it as politely as possible, ``potential inefficient use 
of taxpayers' funds,'' the $215 million number and the $575 
million number. That is what they are attempting to clarify. 
But they are not attempting to clarify, they agree a hundred 
percent, that this limitation in the current CR needs to be 
removed.
    Mr. Wolf. Do you have any recommendations on how NASA can 
achieve its exploration objectives beyond low earth orbit?
    Mr. Martin. Mr. Wolf, I really do not. As a lawyer and as 
an Inspector General, we do not do policy. We do not, you know, 
say ``commercial crew development'' versus keeping it in house 
at NASA. That is not really our role there.
    Mr. Wolf. Then do we bring in four or five of the best 
minds in the country who are not connected to the issue that 
can look at this thing? Because we need a strong space program 
for military reasons and for other reasons.
    How do you bring clarity? Quite frankly, I am not so sure, 
with due respect to the Congress, that the Congress knows 
precisely what to do. If you had a very serious disease that no 
one could figure out, we would send you up to Johns Hopkins or 
maybe bring some of the very best people in the country to look 
at your case to make a recommendation.
    We know we want to have a manned space exploration program. 
I think everyone in the country agrees, except for maybe a 
handful. The science advisor at the White House may not be in 
that group, but everybody else agrees.
    How do we do it without this back and forth?
    Maybe you cannot answer that now, but it has got to be 
answered. You cannot just kick the can down the road.
    Mr. Martin. It needs to be answered. After spending about a 
dozen years at the Department of Justice, I have been Inspector 
General, at the NASA OIG for about a year now and it has just 
been fascinating.
    But there are starkly different policy-based visions, and I 
think everyone is of good faith, about what is the most 
appropriate and effective use of the taxpayers' money moving 
forward. Should NASA really be a test bed of research and 
innovation and should it fund the commercial sector for some of 
the low earth orbit both cargo and crew?
    And NASA should think about this. Some of the legislative 
language they use funds the R&D for some of these sort of game 
changing technologies that could get us to Mars and beyond, is 
that NASA's primary role while encouraging commercial, or 
should NASA continue as it has historically by building or 
contracting out and keeping under its purview the actual, you 
know, rockets and flight instruments themselves. And these 
visions really are conflicting. I think the Authorization Act 
attempts to bring them both together.
    Mr. Wolf. Do you think it did?
    Mr. Martin. I do not know about the science yet. But I do 
not know in these funding times whether this compromise, this 
sort of shotgun marriage, is going to be funded adequately to 
achieve this, on the kind of timetable that Congress is looking 
for, the capability to move beyond low earth orbit. I just do 
not know.
    I am not sure you can split the pie that NASA is going to 
get and say, well, we are going to give this amount to 
commercial crew and we are going to give this amount to NASA to 
fund its own heavy lift system.
    Mr. Wolf. Well, just think about it. If there are things 
that NASA is doing that are not part of the organic act, you 
could then take those resources to put them into what the 
authorization said.
    But let me just turn it over to Mr. Fattah.
    Mr. Fattah. Thank you, Mr. Chairman. You said that what 
NASA is doing is, in large measure, actually rocket science, 
which I thought was a great line.
    Mr. Martin. We used to use that, excuse me, over at the 
Department of Justice where we are saying it is not rocket 
science. Well----
    Mr. Fattah. I got you. And I want to use that analogy, I 
want to use that analogy in my own way. Which is that, you 
know, I really love the programs side of this. You have got a 
much tougher job. And people are generally not fans of 
auditors. So I want to focus on the purpose of NASA, all right? 
Because I went to the greatest high school in the world, 
Overbrook High School in Philadelphia. And we got a lot of 
attention because a great basketball player went there, Wilt 
Chamberlain. But we had another guy by the name of Guion 
Bluford, who ended up being an astronaut. He led one of the 
shuttle missions and he did not even get the same attention as 
a great basketball player, but he is a fantastic scientist. He 
went to Penn State, too. And I note that you went to Penn 
State. And I spent a few years on the Board of Trustees at Penn 
State. And it is a great university. The Creamery on the campus 
is the best deal.
    Mr. Wolf. And who is the coach there now? I am not sure 
who.
    Mr. Martin. I think they have a new coach.
    Mr. Wolf. I went to Penn State, and the same coach who was 
there when I was there----
    Mr. Fattah. He is still there. He is still there.
    Mr. Martin. When our children go to Penn State he will 
still be coaching.
    Mr. Fattah. But let me just try to work with this rocket 
science deal, right? Because I think that sometimes those of us 
here in the Congress kind of forget that we are all kind of 
human and there are realities to some of this. We went to build 
the Capitol Visitor Center. I was in the Visitor Center this 
morning. When the first budget was released, it was going to be 
$200 million and it was going to be finished in 2005. Well, you 
know, it came in at $600 million, $600.5 million, and it cost a 
lot more money, and this was not rocket science. This was just 
brick and mortar, right here, on earth, right?
    So you know, when you are talking about taking a human 
being and sending them out into space, it is a challenging 
thing. The technology for how to get that done, originally when 
President Kennedy set the original mission, nobody knew how to 
do it then. I mean, it kind of was the investment in our belief 
in ourselves that moved the country into this effort 
successfully. And I think that it is a challenge.
    When we went to Iraq, I do not know if you recall, but 
there were estimates given to the Congress about what the war 
was going to cost us. And it did not pan out that way. So I do 
not want anyone here to think that because NASA misjudges the 
finances on a particular project that somehow, that is 
different than the rest of the government. Because we often 
miss the mark. But it is not so much in the numbers. It is 
really in the overall purpose that we have to kind of keep 
focused on here. Right?
    So the Chairman says, you know, look, we need to have a 
space program. I mean, we are not in this world all by 
ourselves. We have allies, and we have potential adversaries, 
actual adversaries. We have circumstances that we have to 
manage on behalf of a great nation. So we have a responsibility 
here, and we just ought to be careful about how we proceed.
    Now you say that, and I think your letter to the Congress 
was a courageous act because the truth is that we can want to 
tilt the blame in any particular direction. It is really that 
Congress has been the one that has provided the lack of 
clarity.
    Now it is good that we have an authorizing bill, and our 
committee waited for us to have one. And I think that that is 
the direction we are going to head in. And we are going to make 
the wedding, shotgun or not, work out. That is our job, to make 
it work. But we have to take our foot off first base. So in the 
case of Constellation, at some point having the agency waste 
money that we know is a waste on a project that we have 
determined is not going to happen does not make any sense, 
especially in a climate where we say we do not want to waste 
money, that we want to cut spending.
    So we just need to assert the truth in the simplest fashion 
here. One is that there is not going to be in the realm of 
science a kind of perfection around cost that we may desire. We 
cannot even find it in the normal activities of the government, 
so we are not going to find it in this particular activity in 
which costs are in many ways immeasurable. I mean, when you 
start talking about taking a human being now, and not in lower 
orbit but into deep space, and the technology leaps that we 
will have to make to do that, which is what I think is really 
grand about what the President has put forward. It really is to 
set a mark and a destination that would cause the agency to 
kind of renew its commitment and renew the country's covenant 
with it to really be the premier science agency in the world in 
terms of space flight.
    So I think that we should invest in the technology. And 
just like it was true many years ago, we did not know what the 
end result was going to be, and we did not know exactly how it 
was going to work out, but there was a belief in our ability to 
do it. So I just think that as you go and you look through your 
work--and I think it is appreciated--the main point, I think, 
is your letter to the Congress, that we need to provide some 
clarity. And we cannot steal second base without taking your 
foot off first. And we need to, if we want to save money, we 
have now passed an authorization, the White House has signed 
it, the United States Government has a firm commitment about 
how we want to proceed. So what we need to do therefore is stop 
spending money on something we have already decided we are not 
going to do. And that would seem to be the most commonsense way 
to proceed. And that is not rocket science.
    So I want to thank you for the work you are doing. I know 
that you are relatively new to this work in NASA. I am 
interested in this facilities issue because I do not have a, 
like the chairman, I do not have a NASA facility in my 
district. So this is not a jobs issue for me. There are no 
people working in my district relative to the space industry. I 
think this is purely a matter of national imperative. And we 
should be thinking about, you know, how we can, within the 
question of moving forward, if you have got forty-year-old 
facilities, I mean, there is no question. There was an article 
last week about one of our economic competitors and major 
investments in space. We should not be proud of the fact that 
the majority of these facilities are forty years-plus in age, 
and we should be looking to how we can make some sense about 
how we go forward.
    And I know that some of my colleagues here from Alabama and 
Texas and Florida have a particular interest, but I think we 
have to think about how we modernize the agency with a modern 
mission. I do not see how it can possibly be a partisan matter. 
This is a matter that really should unify the country and unify 
the Congress.
    So I want to thank you for your testimony. I do not have 
particular questions, Mr. Chairman. Thank you.
    Mr. Wolf. Mr. Culberson.
    Mr. Culberson. Thank you, Mr. Chairman. We really 
appreciate your work. We are all devoted to the space program 
but because, as if you were in earlier have heard us talk about 
the scale of the financial problem the country faces is an age 
of austerity really unlike anything we have ever faced before. 
Is NASA in the room? I hope NASA is in here somewhere. Is NASA 
here? Oh, okay. Because it is important that NASA hear what we 
are discussing and the questions that they can anticipate. And 
I know we will be, we will have, the chairman is going to sit 
down and the ranking member before we actually bring the 
administrator in.

                      CONFLICTING VISIONS FOR NASA

    I wanted to, if I could, ask about a couple of areas, 
Inspector General Martin. The, I heard you say a moment ago 
there are starkly different policies, ideas, about the 
direction NASA should go, whether or not it focuses on 
commercial and R&D, or is space exploration. Did you mean 
within the agency you are aware of starkly, are you talking 
about in general with Congress and the administration, or 
within NASA?
    Mr. Martin. I was just responding to the Chairman's 
suggestion, should we bring a panel in. You know----
    Mr. Culberson. Oh, okay----
    Mr. Martin [continuing]. The facility of that. I think 
Congress, through its Authorization Act, has brought some 
clarity to what is the objective, what is the mission.
    Mr. Culberson. Okay.
    Mr. Martin. I am just saying if you brought a panel in----
    Mr. Culberson. Right.
    Mr. Martin [continuing]. You would have the problem of some 
might be for----
    Mr. Culberson. Okay.
    Mr. Martin [continuing]. A more commercial route versus 
keeping it in house. And that is the tension.
    Mr. Culberson. One thing I know that has concerned me and 
other members of the subcommittee and the Congress was that the 
administration abruptly about a year ago just announced that 
they were essentially shifting completely over into this 
commercial arena without coming to Congress, without any prior 
warning. We were, of course the Congress strongly resisted 
that. And we as a Congress have endorsed very strongly the idea 
of a manned space flight program as the principal mission of 
NASA, space exploration and a manned space flight program. And 
with Mr. Wolf's leadership we were able to get that language in 
the authorization bill that NASA was going to build a heavy 
lift vehicle to go beyond low earth orbit and to develop a 
manned capsule.
    However, I continue to get reports back from NASA field 
offices, from the flight centers, that there is a continuing 
problem, it was particularly bad last year with the NASA 
administrators, people at headquarters, despite what Congress 
had put in the law, continue to attempt to shut down major 
sectors of the work being done on the heavy lift rocket. Could 
you talk about that? Is that still going on? Is NASA and the 
administration following the statute?
    Mr. Martin. Well again, I think you tee up the problem 
which is detailed in our letter. We have two conflicting 
statutes. We have the CR, which directs NASA----
    Mr. Culberson. Right.
    Mr. Martin [continuing]. And----
    Mr. Culberson. Specifically the Constellation.
    Mr. Martin. Correct. And so they need to keep funding those 
Constellation contracts, be it Ares I, Ares V, or the Orion 
crew vehicle. So under law, under the existing law, they are 
required to continue funding. Now there is discussion about 
what amount you have to keep funding them. I mean, they had 
projections of hundreds of millions of dollars for each of 
these parts of the Constellation contracts. I think they have 
appropriately scaled those back trying to anticipate what is 
going to be the architecture for the heavy lift that is called 
for in the Authorization Act. But these are in direct conflict.
    Mr. Culberson. The statute signed by the President though, 
let me make sure I understand, would that not be a later 
enacted statute, the authorization act signed into law, that, 
the CR is of course ongoing and still in effect. But then we 
passed a statute that is very specific. You are an attorney----
    Mr. Martin. I am.
    Mr. Culberson [continuing]. And I just recall in looking in 
other cases where you have conflicting statutes the one that 
was signed later and is more specific wins.
    Mr. Martin. I think as a general rule of statutory or 
congressional construction, that would be correct. But I think 
you, the problem here is you have an authorizing act that sets 
the policy direction. And then you have an appropriations act 
which talks about how you are able to spend the funds. And so 
the conflict is on the policy level.
    Mr. Culberson. But both, the CR language was statutory, I 
think.
    Mr. Martin. Yes.
    Mr. Culberson. Excuse me, the language in the last 
appropriations bill that you are referring to was statutory, 
and this is a later enacted statute. It is more specific.
    Mr. Fattah. But Mr. Chairman, maybe I can help you out 
here?
    Mr. Culberson. No, please. Help me. I would love to get 
this straight.
    Mr. Fattah. Let me help you out here. It does not matter 
what you say in that authorizing bill. What counts is what the 
appropriators have said. And what we have said in this instance 
is to the contrary. We have said in the CR that they cannot 
initiate any new program----
    Mr. Culberson. Mm-hmm.
    Mr. Fattah [continuing]. Or cancel any existing program. So 
you have an authorizing bill that says that we have worked this 
out and we know which way we want to go. That is where the 
conflict comes in.
    Mr. Culberson. Yeah, and we are going to try to fix that, I 
think.
    Mr. Fattah. In a couple of weeks, we are going to pass a 
new CR. We can fix it or we can pass a new bill.
    Mr. Culberson. I think we are, in fact. I know Chairman 
Wolf----
    Mr. Fattah. Whatever we are going to do. But they cannot 
solve this problem. This is our problem. And we have to decide 
how we want to proceed.
    Mr. Culberson. Yeah, I just wanted to explore it with Mr. 
Martin.
    Mr. Fattah. Right.
    Mr. Culberson. You are right, Mr. Fattah. And I think that, 
I am confident the bill that we are going to pass is going to 
give clarification of that, to ensure that the authorization 
act is the one that prevails and that we follow. The question 
of clarity then absolutely is essential. And the cost 
estimates, are you satisfied that NASA's ability to, that the 
programs and the policies that they have put in place are going 
to give us more realistic cost estimates at the outset of these 
major flagship missions?
    Mr. Martin. I am hopeful. I am hopeful. Of course, as an 
IG's office we are going to keep auditing and reviewing and 
pushing them that way.
    Mr. Culberson. Right.
    Mr. Martin. And to just comment on something Congressman 
Fattah indicated, I think NASA needs, the American people need, 
to have a visionary agency. So I was not being overly critical 
that they are starting a project like James Webb.
    Mr. Culberson. Oh we understand, sure.
    Mr. Martin. I just think we need to be more disciplined 
about how, and sort of put up front. Because one of the 
problems you run into with these significant cost overruns in 
the James Webb Space Telescope Program is it is frankly going 
to eat the lunch potentially of other important science 
programs. There are only so many dollars to go around.

             FINDING SAVINGS IN THE NASA BUDGET, CONTINUED

    Mr. Culberson. Mm-hmm. Do you have specific recommendations 
that you could give us? There is a, the committee is going to 
produce a continuing resolution very rapidly. It is being 
written right now. Specific ideas or recommendations that you 
could give us for cost savings for the agency that would enable 
us to meet the charge that Chairman Wolf has to produce savings 
for all the agencies under our jurisdiction while preserving an 
agency that is vital to the national security of the country 
and that we are all devoted to. Have you got specific 
suggestions, Mr. Martin, that you could give Chairman Wolf and 
our very capable, professional staff, like, right now that 
could help us find some savings without damaging or injuring 
NASA's core mission?
    Mr. Martin. I would be pleased to work with Diana and Bob 
and the staff to try to come up with some discrete answers, I 
have mentioned three overarching issues here.
    Mr. Culberson. We need real specific----
    Mr. Martin. Right.
    Mr. Culberson [continuing]. Real quickly.
    Mr. Martin. We will do what we can.

        Recommendations for Budget Savings Within NASA Programs

     Removal of the language in the Continuing Resolution 
currently funding NASA that prevents the Agency from terminating 
Constellation Program contracts or initiating new space exploration 
programs. This will allow NASA to more efficiently allocate its funds 
to address the directives in NASA's 2010 Authorization Bill that 
require the Agency to develop a Space Launch System and Multi-Purpose 
Crew Vehicle.
     NASA must exhibit greater discipline in managing its 
science and space exploration programs by, among other things, 
developing firm requirements, establishing more realistic cost and 
schedule estimates, and ensuring technologies are sufficiently mature 
before proceeding through development.
     NASA should take a realistic look at its sprawling 
infrastructure and aging facilities, assess those aspects it needs to 
retain and potentially upgrade, and develop an aggressive plan to 
``right size'' the Agency's footprint to meet future challenges. Absent 
such an effort, NASA's facilities will not be used effectively or 
efficiently, and the Agency's deferred maintenance expense will 
continue to grow from its current estimate of $2.5 billion.

    Mr. Culberson. Yeah. And again, as we always stress, while 
protecting their core mission. I frankly, Mr. Chairman, really 
want to discuss this further. I have mentioned this to you 
before, and I want to talk to other committee members about it. 
I think ultimately in this environment, this age of austerity 
that we are entering which is unlike anything the nation has 
ever faced before, that we are going to need to look very 
carefully, as Mr. Wolf said, at combining some of the functions 
of, for example, NOAA. Why is not NASA responsible for the 
polar satellites, and the weather satellites? And the Coast 
Guard, for example, responsible for the oceanography mission of 
NOAA? That we are going to have to think about consolidating 
all sorts of things. The facilities that are 80 percent of them 
over forty years old. We are going to have to look very, very 
hard at how do we protect the core function of NASA to have a 
vigorous, not just vigorous, the very best manned space flight 
capability in the world. And the very best robotics missions in 
the world.
    And in my mind the statute, the statute is there. We I 
think are going to need to protect the decadal survey missions. 
One way in my mind, and I wonder if you could just offer any 
comment, Mr. Martin, and I will pass on and yield my time, Mr. 
Chairman. If can you comment on the, if we are short of money 
and we were going to focus on manned space flight, and then we 
wanted to try to preserve the very, the best robotic missions, 
the most important robotic missions like Webb and others. To my 
mind we should focus on the decadal survey recommendations 
because that is an independent recommendation of all the best 
scientists in the world prioritizing the missions in separate 
categories, and would allow us to preserve NASA's ability to 
fly those top missions in an era where we just really do not 
have the money. Could you comment on that?
    Mr. Martin. I cannot comment on, you know, the priorities 
in the science program or really, you know, some of these major 
policy decisions. I can offer that NASA takes quite seriously 
the results of the decadal survey. And tees up to the extent 
they can, they have different tiers of priorities. The National 
Science Foundation, or whoever puts the decadal survey 
together, does. I know NASA takes those recommendations quite 
seriously.
    Mr. Culberson. Well I look forward to working with you, and 
thank you for what you do. And coming up with some short term 
recommendations, and then for the longer term as we produce a 
bill for the 2012 fiscal year. Thank you very much.
    Mr. Martin. Thank you, sir.
    Mr. Wolf. Mr. Bonner.
    Mr. Bonner. Mr. Chairman, Mr. Serrano and I just came from 
meeting with the Inspector General of the Securities and 
Exchange Commission. And since we both got to this a little bit 
after Mr. Martin had started his testimony I am going to tee 
this up with first of all by saying I think everyone on this 
committee, Democrat, Republican, all sections of the country, 
certainly value what NASA means to our country, both our past 
and certainly for the future. But in talking with the Inspector 
General of the SEC he was going through some examples of some 
of the things that he had uncovered in terms of troubling 
expenditures, waste. A $15 million lease in Manhattan, which 
the gentleman from the Bronx pointed out in Manhattan terms is 
not that much money, but in Mobile, Alabama terms or in the 
Bronx terms it is a lot of money. $15 million for a lease of an 
office that they have not had a single employee in for the last 
five years.
    Can you give us, because again we all support NASA. But 
have you uncovered during your time as the Inspector General 
some examples that as taxpayers we all should be concerned 
about that the agency needs to be more focused on in this time, 
as Mr. Culberson said, of austerity? How can the, how can NASA 
look inside and find some of its own misappropriations of 
funds?
    Mr. Martin. Right. I do not want to repeat the areas about 
project management and about the conundrum created by the 
conflicting legislation. So those would be things I would put 
out number one. NASA also has a program called the SBIR 
Program. And these are grants for small business innovative 
research. And we have done a recent audit looking at the 
internal controls there. Our recommendation is that NASA can do 
a much better job improving the internal controls to ensure, 
number one, that the right people are getting the grants that 
they are qualified for. Number two, that they are producing 
meaningful research. And number three, that the expenses that 
they are charging the government are appropriate. We found over 
$2 million in unallowable or unsupportable costs.
    We also made recommendations about the lack of internal 
controls. NASA is just one of eleven federal agencies that are 
involved in the SBIR program. And some of the criminal 
investigations we have done over time have found individuals 
who would apply for an SBIR grant through NASA would also apply 
through another agency, turn the same term paper, the same 
research into both, and collect from both. So the agencies 
involved in this program need to talk and need to cooperate 
more to ensure that that kind of fraud does not occur.
    Mr. Bonner. And then just one more question at this time. 
You said in your written statement, the third paragraph, ``the 
most immediate challenge facing NASA's leadership is to manage 
the agency's portfolio of space and science missions amid the 
continuing lack of clarity caused by conflicting legislative 
directives in the authorization act and a holdover provision in 
NASA's fiscal year 2010 appropriation law.'' You have, in 
talking with Mr. Fattah and also with Mr. Wolf, you have 
addressed that as a concern. And I know your role as the 
inspector general is different than the administrator's role or 
the President's role or our role in Congress. But as the father 
of a fifteen-year-old daughter, and a soon to be this weekend 
thirteen-year-old son, I sometimes am having conversations, I 
am in no way drawing an analogy that NASA is our child. But we 
are proud of what NASA has accomplished. And I draw analogies 
to when my kids come to me telling me they want to do this, 
that, and the other. And my wife and I always say, ``Well, when 
you make up your mind come back to us and we will talk.'' Is 
the most immediate challenge the conflict between the 
authorization law and the appropriations, the CR? Or is it that 
we have yet to have someone like President Kennedy did in the 
1960's help give us a vision of where NASA will go in the next 
forty years?
    Because we all touch on it. We are concerned about what our 
friends and some of the people who are not our friends in other 
countries are doing in terms of investing in their space 
programs. Do we have a, from your perspective, I know you are 
not policy. But from your perspective, having been on the job, 
do you see a clarity of vision and purpose for NASA today? 
Because I know I am older than you are. But when I was a child 
and could sit around the TV set, and people would come from all 
over the community to watch those space launches, and those 
first steps on the moon, and the exciting days of the shuttle 
program. Even if we did not know all of the science that was 
being conducted, and all of the research that was being done 
that would change our life, there was an excitement about that 
vision. I do not see the vision, personally. But I would love 
for you to tell me I am wrong.
    Mr. Martin. Well again, as an inspector general, and as an 
inspector general who has been on the job for a little over a 
year I do not think I am qualified----
    Mr. Bonner. That is a long time.
    Mr. Martin. On some levels it seems like yesterday, on some 
levels it seems like a lifetime ago. I cannot really address 
that. I think it would be inappropriate for me to address and 
kind of check the vision of NASA and NASA's employees. I will 
say that NASA, excuse me, that the Congress has provided a 
roadmap and a blueprint in its 2010 Authorization bill and 
frankly has given marching orders for NASA. Now to what extent 
NASA at large has embraced those marching orders? I think they 
are absolutely following them. But again, when I talk about the 
most critical issue facing NASA it is a short term issue. NASA 
has to know what its funding stream is going to be. It needs to 
be freed from the constraints of funding the prior 
Constellation program so that it can begin to put resources 
into the new blueprint outlined in the 2010 Authorization Act.
    Mr. Bonner. Thank you, Mr. Chairman.
    Mr. Martin. Thank you, sir.
    Mr. Wolf. Thank you. I think Mr. Bonner really made a good 
point, though. And I feel the same way, too. I remember when I 
came to Washington and my parents came to visit me. We actually 
drove by John Glenn's house, and it was so exciting to say, 
that he lived in Arlington, by Little Falls. And I think you 
are exactly right. There is not that feeling anymore. Mr. 
Serrano.
    Mr. Serrano. Thank you, Mr. Chairman. I too apologize for 
my brief appearance here, being late and then leaving early. 
But you know how that works with all these subcommittees. And 
thank you for your service and for your testimony.

               IMPACT ON NASA OF MAJOR BUDGET REDUCTIONS

    Inspecter General Martin, I do not envy, and this is in no 
way an attack, they know me better than that. I do not envy the 
majority party in the role they have taken to cut across the 
board incredible amounts of dollars. And some of those cuts 
will affect people and we will deal with that as time goes on, 
and they are very painful. But NASA, and any cuts to NASA, 
dramatic cuts to NASA is a very interesting situation. Because 
when the President talks about competing with other countries 
in the future and staying on top of our game, NASA to me is 
right there at the center of that competition and that 
preparation.
    And it is interesting that we are discussing this here 
because the chairman has made a career, and I say that in a 
respectful way, of singling out what happens with the People's 
Republic of China, and how they treat their people, and how 
they interact with us, and how they in many cases attack us. 
And so we can bet that right now in China, and I am beginning 
to sound like him, there is the equivalent of NASA, not 
worrying about budget cuts, but worrying about how strong they 
are going to become in what they do and what they produce and 
what they invent. Because NASA has given us a lot, and it is 
not just Tang or Velcro, it is much more than that. Although 
those are very important.
    So without putting you in the middle of the budget cutting 
debate, you looked for waste, you looked for fraud, but you 
also must have an idea of how much an agency could sustain in a 
cut. Can NASA sustain the cuts that we hear may be proposed and 
remain viable? When the President says we have to compete he is 
basically saying there are some areas you could leave alone. 
Could we accomplish that? Or are we all dreaming that the cuts 
will come across the board and affect everybody the same? How 
much of a cut can NASA take? Not in dollars, but in getting 
away from their mission?
    Mr. Martin. I am going to apologize up front, Mr. Serrano. 
I cannot really address that because I do not know what level 
of cuts that the Congress is anticipating. But in addition it 
is a question really of prioritizing what the Congress does not 
want NASA to do. NASA can only do so much with the sizable 
budget that the Congress appropriates. So what science, what 
sort of visionary science programs or projects, or satellites, 
or missions to Mars does the Congress not want to make a 
priority for NASA? It is----
    Mr. Serrano. And do you feel we have given NASA too much to 
do? Or do you think they can handle their mission right now?
    Mr. Martin. Well again that is----
    Mr. Serrano. Before the cuts.
    Mr. Martin. Yes. I do not think you have given NASA too 
much to do. NASA, again, and I keep using the word, really is a 
visionary place with people who are excited. There is no place 
like it in the United States, on earth, for both its history 
and its importance. So there are people clamoring to work at 
NASA and they can come up with, as Carl Sagan would say, 
billions and billions of projects to do. So no, I do not think 
you have given NASA too much to do.
    Mr. Serrano. Right. And I, this may shock Mr. Culberson 
because he does not remember the last time I agreed with him on 
something, although we agree on a lot, especially on 
immigration, but that is another issue. He is cutting 
immigration funding enforcement, too.
    Mr. Martin. I hung up my DOJ hat.
    Mr. Serrano. Yes, right. But I agree that maybe part of 
what we do is take a closer look at where there is overlapping 
responsibilities. Why are satellites handled by two folks when 
only one folks?
    It reminds me of this whole technology that you are so good 
at dealing with. I mean, there used to be an iPod, and there 
used to be a cell phone. And now each one of them can take 
pictures, can get you music. And you wonder, ``Okay, do I need 
them all? Or do I just need one?'' You know? I have a Walkman. 
I still have seventy-eight records, you know? Do you know why 
they were called albums? Do you know why? Because the seventy-
eights used to go into an album, and you put six of them, which 
were twelve songs, and it was an actual album. I am the king of 
worthless information. Okay. I am. I have information you do 
not need.

                       ETHICAL CONFLICTS AT NASA

    Let me ask you a question on this whole issue of ethical 
responsibilities. There was a report that showed there were 
contractors working alongside NASA employees, and then in many 
cases NASA employees then went on to get jobs in the private 
sector that may or may not have been influenced by their 
working along with these folks. Now this is an issue across the 
government. The whole idea of contractors, and what rules they 
follow as compared to the federal employees, and how much they 
get paid, and their benefits, and what does that. So is there 
anything being done about looking at what ethical issues may 
come up in having that kind of a situation, where you have 
these folks working side by side and then some folks leaving 
later?
    Mr. Martin. It is an incredibly important issue and one 
that the Office of Inspector General stresses. We, our 
investigations division in particular, attacks any allegations 
of improper ethical conduct. I think the Agency does a pretty 
good job in ensuring that the employees, especially those that 
are dealing first hand with the contractors, are aware of their 
ethical responsibilities and obligations. But it is, as you see 
in the cases that we do, where senior members of NASA are 
convicted for improper use and improper influence. And so it is 
something that we just need to be continually vigilant on.
    Mr. Serrano. So we know the number of contractors that work 
alongside NASA employees? I mean, is it a large number? Is----
    Mr. Martin. It is a very large number. Eighty-five percent 
of NASA's funds are pushed out to contractors.
    Mr. Serrano. Okay. Thank you, Mr. Chairman.

                      NEED FOR ENTITLEMENT REFORM

    Mr. Wolf. Thank you, Mr. Serrano. I am going to call on Mr. 
Aderholt, but I wanted to say that I am glad Mr. Serrano said 
what he said. I think he makes a very, very valid point. I 
think we are coming to a time when both parties are going to 
have to address this, as well as the audience, which is made up 
of probably a lot of contractors and people in the business. 
Everyone is going to have to face this. Simon and Garfunkel 
sang a song in Central Park called ``The Boxer.'' And it says 
``a man hears what he wants to hear and disregards the rest.'' 
The reality is we can never solve these problems until you deal 
with the entitlements, if you do not look at Medicare, 
Medicaid, and Social Security.
    I gave a speech on the floor the other day saying that if I 
had the opportunity to serve on the Bowles-Simpson Commission, 
I would have supported the recommendations. Because I am afraid 
of what is taking place. You are going to squeeze programs that 
are so important to keep up. And as Mr. Serrano says, the 
Chinese now have 200,000 engineers working on their space 
program, and we only have about 90,000 or 95,000. We are 
falling behind. And as a father of five and grandfather of 
fifteen, I worry about where this country is.
    And so we need to deal with that. In the Senate, you had 
Tom Coburn, who I think is a good senator, and Dick Durbin both 
support what was in the Commission recommendations. Until you 
deal with the entitlement issue, you are making all of the cuts 
out of a very small, one-fifth or maybe one-sixth piece of the 
budget.
    There is a piece by Niall Ferguson, a great historian, who 
says great nations decline rapidly once the decline begins. I 
do not want to stand by and see my country basically decline. I 
will send a copy of the piece to every member of the Committee. 
I was disappointed with the President. The President set up 
this commission and then he walked away from it. He should 
force the Congress to address it, and the Congress should force 
him to address it. I think we can do it in a bipartisan way 
that literally saves the country.
    But if we, and as Mr. Serrano said, are not putting the 
money into math and science and physics and chemistry, into the 
space program, and investing, the decline comes. And I do not 
want to see our nation decline. Willie Sutton the bank robber 
said he robbed banks because that is where the money was. To 
make the necessary savings, to have a renaissance in this 
nation and to have a space program that has the excitement that 
Mr. Bonner is talking about really requires that we deal with 
the entitlements. The member who tells you he is going to solve 
the problems here by going after earmarks and waste, fraud, and 
abuse has missed the whole point. And I think the constituents 
have to say, well, that is not going to solve the problem. 
Otherwise we will see this nation begin to slip. And I do not 
want to be here, or ten or fifteen years from now sitting on a 
rocking chair in the Shenandoah Valley, while my grandkids come 
up and say, ``You know, you were there. How did you deal with 
it?'' The answer is that we should come together in a 
bipartisan way to deal with Medicare, Medicaid, and Social 
Security so we can continue to have other investments.
    If we continue the current process without looking at the 
entitlements, I will tell you another group that is going to 
suffer. The poor. In the tax bill that the Obama administration 
and the Republicans in this Congress supported that I voted 
against about a month ago, the 2 percent reduction in the 
payroll tax for social security gave a break to Jimmy Buffet 
and Warren Buffett. That cost us $112 billion, and the Obama 
administration and the Congress, Republicans and Democrats, 
said they were going to make up for that by borrowing from the 
general fund. The general fund is broke. We borrow from China. 
China that has Catholic bishops in jail, Protestant pastors in 
jail, has plundered Tibet and is spying against us. We are 
borrowing from them, and we are borrowing from the Saudis who 
are funding radical Wahhabism, which led to 9/11 and led to 
what is taking place in Afghanistan and Pakistan. And here we 
gave the Buffet brothers or cousins, or if they know each 
other, a big opportunity under Social Security. So the poor 
will suffer, too.
    So I think you have got to deal with these entitlement 
issues. In a certain period of time, about twelve to fifteen 
years, every penny that comes in will go for Medicare, 
Medicaid, Social Security and interest on the debt. There will 
be no money for the space program, no money for education, and 
no money for anything else. Mr. Aderholt.

     OIG FINDINGS ON CONSTELLATION SPENDING UNDER THE CR, CONTINUED

    Mr. Aderholt. Thank you, Mr. Chairman. One of the first 
questions you asked, I think the chairman asked you about the 
methodology of your findings. And basically how, again just 
briefly, what was that methodology to, that you, how you 
arrived at your findings?
    Mr. Martin. You are talking about the Constellation letter 
that we sent to Congress?
    Mr. Aderholt. Yes.
    Mr. Martin. We went to the program. We went to NASA 
Headquarters and we went to the Constellation program people 
and asked them this specific question: if you were not bound by 
the language in the CR, which aspects would you walk away from, 
or diminish, reduce? These are their numbers. These are their 
answers. These are their numbers.
    Mr. Aderholt. All right. So, you know, of course I am from 
Alabama and of course represent the area around Marshall. So 
you spoke with the folks there at Marshall?
    Mr. Martin. We did. The Deputy Program Manager of the 
Constellation program and the Associate Administrator at NASA 
Headquarters.
    Mr. Aderholt. Here in Washington?
    Mr. Martin. Correct.
    Mr. Aderholt. In your letter that was dated on January 13, 
2011 you state that the upper stage and related avionics 
elements of the Ares program are ``insufficient use of 
funding,'' citing a conversation with unnamed NASA officials. 
When you talked with them did they offer evidence that provide 
that these elements were not applicable to the new heavy lift 
system?
    Mr. Martin. No, we did not.
    Mr. Aderholt. And as far as the letter to Congress 
contradicts NASA's ninety-day report to Congress, which states 
that the Ares project five segment boosters, J-2X upper stage 
engine, and the Ares I upper stage malfunctioning concepts and 
instrument unit assembly also could be applicable for SLS. How 
do you reconcile those two things?
    Mr. Martin. I am sorry, I am not sure I followed all of 
that. But NASA has not decided yet, again we do not do policy, 
we do not say liquid fuel, solid fuel, that is not what the 
Inspector General does. But clearly NASA has not decided yet 
which architecture it is going to use to implement the launch 
program directives as well as the crew capsule directives in 
the Authorization Act. They have an idea and Congress has given 
them the impetus to look first at shuttle technology and 
existing Constellation technology. So again, in this letter we 
are not making a judgment call. We asked the program people if 
you were freed from the constraints of the language in the CR, 
which aspects of Constellation that you are funding now would 
you either reduce, diminish, or defer? These are their answers.
    Mr. Aderholt. Okay. Why are these two contracts for the 
heavy lift vehicle being recompeted when number one, they are 
crucial to the HLV, and number two, appropriation language says 
existing contracts should be utilized?
    Mr. Martin. You really need to ask the Administrator or the 
General Counsel. I know they are looking at the issue of 
whether or not they can extend the current Constellation 
contracts and morph them into the new vehicles that are 
directed under the Authorization Act, or whether they would 
need to recompete.

                         COMMERCIAL SPACEFLIGHT

    Mr. Aderholt. NASA is paying private companies to resupply 
the Space Station with commercial resupply funds, yet none of 
these private companies have proven that they are capable of 
going to the Space Station. Could you share your concern with 
that?
    Mr. Martin. I do not really have a concern with that. 
Again, it is a policy call where NASA and the Congress is going 
to put NASA's money. I will note that one of the companies, 
SpaceX, Space Exploration, had two successful flights, first in 
July, and a second in December. The December flight with a 
dummy capsule that they called the Dragon capsule. That is the 
name for their, at some point, potentially crew-based capsule. 
Leaving the atmosphere, circling the earth twice, and splashing 
down. So I think they are still perhaps, you know, it depends 
on who you ask, anywhere from one to three years away from 
being viable and certified to take cargo from the earth up to 
the Space Station. But again, it is not my policy call that 
that is where NASA should put its money or they should build 
their own.
    Mr. Aderholt. Okay. All right. That is all I have got right 
now. I may have some follow up.
    Mr. Fattah. Mr. Chairman.
    Mr. Wolf. Mr. Fattah.
    Mr. Fattah. Let me explore some of this question about 
privatization or commercial crew, if you would. You said about 
85 percent of NASA's dollars are now contracted out to private 
sector companies? In fact, some of the private sector companies 
that are involved in the Constellation also are involved in 
commercial crew, right? That is to say that this notion as if 
this is a foreign effort that we would rely on the private 
sector which is, you know, the big push here and which is part 
of the compromise that is in the authorization is that there 
would be commercial crew and that there would be this 
continuation of some parts of Constellation, even though it is 
not said like that. But it is this whole heavy lift capability.
    But that in truth, the same company, a lot of the same 
companies that either contract with NASA now would be competing 
on the commercial side, right? So is that an accurate 
reflection?
    Mr. Martin. My understanding is that is accurate, yes.
    Mr. Fattah. Right. So that NASA has always had a close 
reliance and connection and has been intertwined, it has been a 
public/private venture from way back under the, you know, I 
mean there was a time in Philadelphia with the GE reentry 
systems for the original moon flights. There were thousands of 
engineers, Mr. Chairman, who worked in Philadelphia on the 
reentry system. So I think that in the public debate about 
this, somehow we act as if NASA has been acting as a government 
entity with government bureaucrats building spaceships and now 
that the administration wants to use commercial companies to do 
it, it is really commercial companies that have been 
intricately involved in this activity from day one and will be 
going forward. That this really is a question in the decision 
package related to whether or not we want to use the private 
sector. Because that is the great engine of innovation in our 
country, and use entrepreneurial activities and risk taking to 
deal with some of the kind of normalized lower space, low orbit 
travel. And then to use what would be much more risky, and 
obviously require heavy investment, something only the 
government could do, is to focus on going into deep space and 
to Mars or to an asteroid, and so on.
    So that this notion that we have not come to some agreement 
I think is defied by the fact that we passed the authorization. 
I mean, there is a deal. We call them deals in our business. 
There is a deal for how we are going to go forward. And all we 
need to do now is to effectuate or actualize it in the 
appropriations process, and then we can go on. And I think then 
the agency will have clarity. Because beating up on an agency 
for not having clarity when we are the ones who created the 
confusion just does not make any sense to me.
    So Mr. Chairman, I think that the sooner we do the CR, and 
whatever clarity that can be arrived at in which the House and 
the Senate and the White House can decide how to go forward, 
then we can get NASA to kind of lift off and not be kind of 
mired down. And it is kind of hard to reconcile the scientists 
with the politicians. And some of this has to do with jobs. I 
guess it is almost like an earmark. If you have a NASA 
facility, you have got a lot of jobs, and you have got a lot of 
interest. But we have got to have the national interest rise 
above that and think about where we are going, what we are 
doing. And we should get started because our competitors are 
not standing still. So we risk our own decline. And none of us 
as Americans should be interested in that. We should be trying 
to move our country forward, and NASA should be at the front 
edge of that.

           CHINESE INFORMATION SECURITY ATTACKS AGAINST NASA

    Mr. Wolf. Thank you, Mr. Fattah. Keying off of that, I just 
have one last question and then I will go to the other members. 
China uses information stolen from other countries to make up 
for gaps in its own technical knowledge. This allows the 
Chinese to make programmatic advances much faster than would 
otherwise be possible while simultaneously eroding the 
competitive edge of our own programs. To what extent can we 
trace recent advances in China's space program to theft of 
information from NASA?
    Mr. Martin. Mr. Chairman, I cannot make that direct 
linkage. I can tell you----
    Mr. Wolf. Well, but I would like you then to look at it, to 
come back----
    Mr. Martin. I would be pleased to look at it.
    Mr. Wolf. If you can come back in thirty days and tell us, 
we would appreciate it.
    Mr. Martin. I can tell you that NASA as an agency is 
probably one of the top three or four targets of both economic 
and foreign government cyberattacks.
    Mr. Wolf. That was my next question. Can you tell us about 
the cyberattacks against NASA?
    Mr. Martin. They are frequent and they are detrimental.
    Mr. Wolf. And what country is making the attacks?
    Mr. Martin. Different countries. They have been traced to 
China. They have been traced to Russia. They have been traced 
to Estonia and other parts of Eastern Europe. They have been 
traced to Africa.
    Mr. Wolf. And how often does that take place?
    Mr. Martin. I cannot tell you the frequency, but it is not 
infrequent. And again, it is detrimental. I was pleased to 
inherit a very, very robust computer crimes division in the 
IG's office. And we have had our special agents flying to 
Estonia and China and other parts of the world to work these 
cases. So we take this incredibly seriously.
    Mr. Wolf. I know the press is here and covering this. Can 
we honestly say that China or whoever is doing the 
cyberattacks? I know it is China. But whoever is doing the 
cyberattacks, there have been detrimental impacts to our space 
program that have also given information out that helps others. 
Is that right?
    Mr. Martin. There have been improper releases of NASA data 
that have been traced to computers or individuals in the 
countries I identified, yes.
    Mr. Wolf. And China has been part of the process of 
cyberattacks against NASA?
    Mr. Martin. Yes.
    Mr. Wolf. Yes.
    Mr. Martin. Now China as a government or Chinese citizens? 
I cannot make that----
    Mr. Wolf. It is the same. They have got one of the most 
comprehensive cyber programs in the People's Liberation Army 
and the government. It is China. I think we have got to say it. 
It is the same country that is spying against us, that has 
cyberattacks against us, that has Catholic bishops and 
Protestant pastors in jail, and is shooting people and taking 
their organs to sell for $50,000 to $55,000. Anyone who is out 
there and wants to see the video, we will show you the video of 
the Chinese People's Liberation Army executing people, then 
taking their corneas and kidneys out. So it is the same 
government.
    But I think this is something we have to face. So if you 
can get back to us in less than thirty days about the threat 
from China. Just tell us, both in a classified version and then 
an unclassified version. Then we can let other members know 
what takes place with regard to that. Thank you. Mr. Bonner or 
Mr. Aderholt.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Bonner. Mr. Chairman, I have got one question that I 
might submit for the record but I will pass to Mr. Aderholt who 
has one final question.
    Mr. Wolf. Sure, sure. Without objection then.

                       JAMES WEBB SPACE TELESCOPE

    Mr. Aderholt. In an IG report released last year you cited 
that four-year delay and $5 billion overrun for the James Webb 
Space Telescope. Do you believe or anticipate there will be 
further delays or cost overruns for the program?
    Mr. Martin. There was an independent review that I 
mentioned in my opening statement that was done in November of 
last year that anticipated that the earliest they could launch 
that incredibly important, incredibly sophisticated space 
telescope was September 2015. But that was only if, as the 
panel said, critical management changes in NASA's operation of 
the program were made, and an additional $500 million was added 
to the money that was already in the budget, the NASA budget 
for that. So do I think there are going to be additional 
delays? I would think so. I do not see where the Congress is 
going to come up with an additional $500 million on top of what 
is budgeted already for the Webb telescope.
    Mr. Aderholt. Okay, thank you.
    Mr. Wolf. Thank you very much for your testimony. The 
hearing is adjourned.
    Mr. Martin. Thank you.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]






















                               I N D E X

                              ----------                              

       Testimony before Appropriations Subcommittee, Feb. 9, 2011
                         Department of Commerce
                    Inspector General Todd J. Zinser

                                                                   Page
2010 Census Budget............................................... 50-51
2020 Decennial Census Planning...............................4,30,53-54
American Recovery and Reinvestment Act...........................     3
Census Planning.................................................. 36,37
Exports and International Trade...............................25-26, 30
IG's Resource Allocation......................................... 43-44
International Trade/Commercial Foreign Service...................    53
IT Security................................................3, 38, 39-41
NOAA Environmental Satellite Programs............................     3
NOAA Satellite Programs................................23-25, 30-33, 42
Program Duplication and Overlap........................33-35, 36-37, 54
PSIC Grant Program............................................... 51-52
Recovery Act Grant Programs......................................    38
Recovery Act and BTOP (Broadband Program)........................ 44-46
Recovery Act and Construction Grants.............................46, 48
U.S. Patent and Trademark Office....................3, 41-42, 48-49, 52
USPTO and IT Security............................................ 49-50

                         Department of Justice
              Acting Inspector General Cynthia A. Schnedar

AFT's Project Gunrunner.........................................133-136
Civil Rights Division...........................................138-139
Counter-Terrorism...............................................123-124
DNA Backlog................................................125-126, 132
Explosives Coordination between FBI & ATF.......................139-140
Federal Bureau of Prisons.......................................136-138
Foreign Language Translation.....................................   121
Gang Enforcement................................................131-132
Guantanamo Detainees.............................................   123
High Value Detainee Interrogation Group.........................121-123
Human Trafficking................................................   126
Information Technology..........................................124-125
Information Technology Contracting/FBI Sentinel.................126-131
Management and Performance Challenges at Department of Justice...99-101
Restoring Confidence in the Department..........................140-141
Sexual Abuse of Prisoners........................................   139

                      National Science Foundation
                  Inspector General Allison C. Lerner

Attempts to Improve the Efficiency of the Merit Review Process..207-209
Cyber Security.............................................213-215, 220
Contracting Practices...........................................215-217
Dissemination of Stem Education Findings.........................   218
Deep Underground Science and Engineering Laboratory..............   219
Grants Management...............................................217-218
Ice Breaking....................................................181-182
NSF's Grant Funding Eligibility Requirements....................179-181
NSF's Management of Stimulus Funding............................170-171
NSF Policy on Refreshments for Merit Review Panelists............   177
NSF Pornography Scandal Followup................................212-213
Opening Remarks, Ranking Member Fattah...........................   157
Opening Remarks, Inspector General Lerner........................   157
Opening Remarks, Chairman Wolf...................................   157
Possible NSF Budget Savings......................................   169
Recompetition of the Antarctic Support Contract.................178-179
Responsiveness of NSF...........................................167-169
Trends in Grant Applications, Extensions and Award Rules.........   209

             National Aeronautics and Space Administration
                    Inspector General Paul K. Martin

Challenges with Cost Estimation and Project Management..........243-244
Chinese Information Security Attacks Against NASA...............260-261
Commercial Spaceflight..........................................258-260
Conflicting Visions for NASA....................................248-250
Ethical Conflicts at NASA........................................   255
Finding Savings in the NASA Budget.....................242-243, 250-254
Impact on NASA of Major Budget Reductions.......................254-255
Implementation of the NASA Authorization Act....................244-248
Need for Entitlement Reform.....................................256-257
Opening Remarks, Inspector General Martin.......................231-232
OIG Findings on Constellation Spending Under the CR........243, 257-258

                                  
