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

     HOW MUCH IS TOO MUCH? EXAMINING DUPLICATIVE IT INVESTMENTS AT DOD AND
                                      DOE

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

                                    HEARING

                                   before the

                    SUBCOMMITTEE ON TECHNOLOGY, INFORMATION
                    POLICY, INTERGOVERNMENTAL RELATIONS AND
                               PROCUREMENT REFORM

                                     of the

                             COMMITTEE ON OVERSIGHT
                             AND GOVERNMENT REFORM

                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED TWELFTH CONGRESS

                            HOUSE OF REPRESENTATIVES

                                 SECOND SESSION

                                   __________

                               FEBRUARY 17, 2012

                                   __________

                               Serial No. 112-135

                                   __________

    Printed for the use of the Committee on Oversight and Government Reform

             Available via the World Wide Web: http://www.fdsys.gov
                          http://www.house.gov/reform

                      U.S. GOVERNMENT PRINTING OFFICE
    74-041                    WASHINGTON : 2012
    -----------------------------------------------------------------------
    For sale by the Superintendent of Documents, U.S. Government Printing Office,
    http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202�09512�091800, or 866�09512�091800 (toll-free). E-mail, gpo@custhelp.com.

                  COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                     DARRELL E. ISSA, California, Chairman
    DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland,
    JOHN L. MICA, Florida                    Ranking Minority Member
    TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
    MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
    PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of
    JIM JORDAN, Ohio                         Columbia
    JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
    CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
    TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
    JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
    JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
    ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
    PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
    RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
    PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
    SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
    JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
    TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
    DENNIS A. ROSS, Florida              JACKIE SPEIER, California
    FRANK C. GUINTA, New Hampshire
    BLAKE FARENTHOLD, Texas
    MIKE KELLY, Pennsylvania

                       Lawrence J. Brady, Staff Director
                    John D. Cuaderes, Deputy Staff Director
                         Robert Borden, General Counsel
                           Linda A. Good, Chief Clerk
                     David Rapallo, Minority Staff Director

       Subcommittee on Technology, Information Policy, Intergovernmental
                        Relations and Procurement Reform

                       JAMES LANKFORD, Oklahoma, Chairman
    MIKE KELLY, Pennsylvania, Vice       GERALD E. CONNOLLY, Virginia,
        Chairman                             Ranking Minority Member
    JASON CHAFFETZ, Utah                 CHRISTOPHER S. MURPHY, Connecticut
    TIM WALBERG, Michigan                STEPHEN F. LYNCH, Massachusetts
    RAUL R. LABRADOR, Idaho              JACKIE SPEIER, California
    PATRICK MEEHAN, Pennsylvania
    BLAKE FARENTHOLD, Texas

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on February 17, 2012................................     1

                                   WITNESSES

    Mr. David A. Powner, Director, Information Technology Management
      Issues, Government Accountability Office
            Oral statement...........................................     2
            Written statement........................................     5
    Ms. Teresa M. Takai, Chief Information Officer, Department of
      Defense
            Oral statement...........................................    22
            Written statement........................................    24
    Mr. Michael W. Locatis, III., Chief Information Officer,
      Department of Energy
            Oral statement...........................................    31
            Written statement........................................    33
    Mr. Richard Spires, Chief Information Officer, Department of
      Homeland Security
            Oral statement...........................................    39
            Written statement........................................    41

                                    APPENDIX

    The Honorable James Lankford, A Member of Congress from the State
      of Oklahoma: Written statement.................................    68
    The Honorable Gerald E. Connolly, A Member of Congress from the
      State of Virginia: Written statement...........................    70
    Questions for the record for Teri Takai..........................    71
    Questions for the record for Richard Spires......................    75

     HOW MUCH IS TOO MUCH? EXAMINING DUPLICATIVE IT INVESTMENTS AT DOD AND
                                      DOE

                                  ----------

                           FRIDAY, FEBRUARY 17, 2012

                      House of Representatives,
       Subcommittee on Technology, Information Policy,
    Intergovernmental Relations and Procurement Reform,
                  Committee on Oversight and Government Reform,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 9:30 a.m., in
    room 2154, Rayburn House Office Building, Hon. James Lankford
    (chairman of the subcommittee) presiding.
        Present: Representatives Lankford, Chaffetz, Walberg,
    Meehan, and Connolly.
        Staff present: Ali Ahmad, Communications Advisor; Richard
    A. Beutel, Senior Counsel; Molly Boyl, Parliamentarian; Gwen
    D'Luzansky, Assistant Clerk; Laura L. Rush, Deputy Chief Clerk;
    Richard Burkard, Detailee; Jaron Bourke, Minority Director of
    Administration; Jennifer Hoffman, Minority Press Secretary;
    Carla Hultberg, Minority Chief Clerk; Paul Kinkaid, Minority
    Press Secretary; Chris Knauer, Minority Senior Investigator;
    Adam Koshkin, Minority Staff Assistant; and Suzanne Owen,
    Minority Health Policy Advisor.
        Mr. Lankford. The hearing on ``How Much is Too Much?
    Examining the Duplicative IT Investments at DOD and DOE,'' and,
    honestly, to get a chance to look at what the process that we
    can do in IT investments governmentwide, will come to order.
        Oversight Committee existed--let me start all over.
        Good morning.
        We exist to secure two fundamental principles: First,
    Americans have the right to know the money Washington takes
    from them is well spent; second, Americans deserve an
    efficient, effective government that works for them. Our duty
    on the Oversight and Government Reform Committee is to protect
    these rights.
        Our solemn responsibility is to hold government accountable
    to taxpayers, because taxpayers do have the right to know what
    they get from their government. We will work tirelessly, in
    partnership with citizens watchdogs, to deliver the facts to
    the American people and bring genuine reform to the Federal
    bureaucracy.
        This is the mission of Oversight and Government Reform.
        I am going to allow my opening statement to go in for the
    record, instead of doing it orally.
        Mr. Lankford. And I have asked the ranking member to also
    do the same.
        Is that okay with you?
        Mr. Connolly. It is. And it is one of the first in
    Congress, I think, Mr. Chairman. Yes.
        Mr. Lankford. Well, you know what? We can slide that in.
        Mr. Connolly. So I can listen to them instead of ourselves.
        Mr. Lankford. That would be great for this, as far as the
    help on that.
        Mr. Lankford. So other Members will have 7 days to submit
    their opening statements. There may be some others that slip in
    on this and add extraneous material for the record itself.
        Mr. Lankford. I would like to welcome our panel.
        And let me tell you why we are rushing through the
    beginning of this. Votes have been called somewhere between 10
    to 10:15. It is our goal to try to get in the statements of our
    witnesses and do additional questions with them. If we can keep
    close on time, we can get a chance to honor time and not have
    to break for votes and then come back. We can try to conclude
    before we head for votes, which will honor every else's time.
    If we are not able to do that, we will have a nice 30- to 40-
    minute break in the middle of our hearing, and then we will
    come back and conclude at the end.
        So I would like to welcome this first panel of witnesses.
        Mr. David Powner is the director of the Government
    Accountability Office's Information Technology Management
    Issues team. Ms. Teri Takai is the chief information officer at
    the Department of Defense. Mr. Michael Locatis is the chief
    information officer at the Department of Energy. Mr. Richard
    Spires is the chief information officer at the Department of
    Homeland Security.
        Thank you all for being here.
        Pursuant to committee rules, all witnesses are sworn in
    before they testify. If you would please stand and raise your
    right hands, please.
        Do you solemnly swear or affirm that the testimony you are
    about to give to this committee will be the truth, the whole
    truth, and nothing but the truth, so help you God?
        Thank you.
        Let the record reflect all the witnesses have answered in
    the affirmative.
        In order to allow time for discussion, I would ask you to
    limit your testimony to 5 minutes. Of course, your entire
    written statement will be made part of the permanent record, as
    well.
        With that, I would like to recognize Mr. Powner for his
    opening statement for 5 minutes.

                        STATEMENTS OF WITNESSES

                      STATEMENT OF DAVID A. POWNER

        Mr. Powner. Chairman Lankford, Ranking Member Connolly, it
    is a pleasure to be here this morning to discuss our latest
    report that highlights duplicative IT investments. The Federal
    Government spends nearly $80 billion on IT, and it is
    imperative that these investments enable the government to
    better serve the American people.
        The past several years have resulted in major improvements
    in transparency and focus on IT management. First, in June
    2009, the IT Dashboard has been providing cost and schedule
    information on nearly 800 IT investments and has provided a
    level of transparency and CIO accountability that is
    unparalleled.
        Today, over 250 investments, totaling nearly $18 billion,
    are at risk, meaning that agencies are rating these investments
    in either a yellow or red status. Focusing on these at-risk
    investments has made a difference. OMB claims that they have
    saved nearly $3 billion through its TechStat reviews that have
    resulted in poorly performing projects being halted or
    canceled. However, we still have too many investments at risk.
        In addition to the Dashboard, in December 2010 the IT
    Reform Plan was initiated that lays out an excellent roadmap to
    strengthen IT acquisition, governance, and program management.
    It also, if implemented successfully, will result in more cost-
    effective IT operations by focusing on commodity IT, cloud-
    based solutions, and data center consolidation. Over 200 data
    centers have already been closed, and the goal is to close a
    thousand by 2015. OMB estimates that data center consolidation
    will result in another $3 billion in savings.
        The Reform Plan emphasizes IT governance. Reforming and
    strengthening IT investment review boards and executive-level
    governance can greatly help turn around underperforming
    projects, as our many reviews for the Congress have
    highlighted.
        These governance processes can also identify and eliminate
    duplicative spending. This is important because last fall we
    issued a report that highlighted hundreds of investments
    providing similar functions across the Federal Government. The
    numbers here are staggering. For example, last year alone, the
    Federal Government invested in 781 supply chain systems,
    totaling $3.3 billion; 661 human resource systems, totaling
    $2.5 billion; and 580 financial management systems, totaling
    $2.7 billion. We recommended that Federal agencies ensure that
    their IT investments are not duplicative as part of their
    annual budget submissions.
        Mr. Chairman, at the committee's request, we followed up
    this review with a deeper look into IT investments at the
    Departments of Defense, Homeland Security, and Energy.
    Specifically, we looked at over 800 investments at these 3
    agencies associated with human resources, IT, and supply chain
    management. We found 37 investments in 12 categories that are
    potentially duplicative. For example, we found that the Air
    Force had five similar contract management systems, the Navy
    had four similar personnel assignment systems, and Energy had
    three similar back-end infrastructure investments.
        Addressing this duplication is important since DOD and
    Energy have spent $1.2 billion on these 37 investments over the
    past 5 years. Our report highlights the details of these
    investments and makes recommendations to eliminate duplicative
    spending and to further report on efforts to rout out
    duplication.
        The good news, Mr. Chairman, is that each agency has
    actions under way to tackle this duplication. DHS is furthest
    along, having already identified and eliminated duplicative
    investments through various portfolio reviews. For example, DHS
    consolidated six personnel-security-related systems into an
    enterprise system. At DOD, the Navy has implemented an
    executive oversight board, chaired by the Navy CIO, and all IT
    expenditures greater than $100,000 are reviewed and approved by
    the Navy CIO to ensure that they are not duplicative.
        DOE has various working groups addressing the records
    management and back-end infrastructure areas we pointed out
    and, on a broader scale, is holding TechStat sessions that are
    aimed at troubled investments and consolidating commodity IT
    services.
        Mr. Chairman, I would like to commend the leadership of the
    individuals on this panel. We expect further results from each
    agency in the near future as their efforts get more traction,
    but to be clear, we need more tangible results that eliminate
    duplicative spending.
        In summary, Mr. Chairman, it is safe to say that there is
    much more IT duplication out there. It is important that the
    agencies represented here and others use their investment
    governance processes to identify and address duplicative
    spending so that billions of taxpayers' dollars are not wasted.
        This concludes my statement. I look forward to your
    questions.
        Mr. Lankford. Thank you, Mr. Powner.
        [Prepared statement of Mr. Powner follows:]

        [GRAPHIC] [TIFF OMITTED] T4041.004

        [GRAPHIC] [TIFF OMITTED] T4041.005

        [GRAPHIC] [TIFF OMITTED] T4041.006

        [GRAPHIC] [TIFF OMITTED] T4041.007

        [GRAPHIC] [TIFF OMITTED] T4041.008

        [GRAPHIC] [TIFF OMITTED] T4041.009

        [GRAPHIC] [TIFF OMITTED] T4041.010

        [GRAPHIC] [TIFF OMITTED] T4041.011

        [GRAPHIC] [TIFF OMITTED] T4041.012

        [GRAPHIC] [TIFF OMITTED] T4041.013

        [GRAPHIC] [TIFF OMITTED] T4041.014

        [GRAPHIC] [TIFF OMITTED] T4041.015

        [GRAPHIC] [TIFF OMITTED] T4041.016

        [GRAPHIC] [TIFF OMITTED] T4041.017

        [GRAPHIC] [TIFF OMITTED] T4041.018

        [GRAPHIC] [TIFF OMITTED] T4041.019

        [GRAPHIC] [TIFF OMITTED] T4041.020

        Mr. Lankford. Ms. Takai?

                      STATEMENT OF TERESA M. TAKAI

        Ms. Takai. Good morning, Chairman Lankford and Ranking
    Member Connolly. Thank you so much for the opportunity to
    testify this morning on the findings of the GAO report that Mr.
    Powner just spoke of.
        The GAO report highlights 31 business-related DOD IT
    investments that cover a range of areas. And, as mentioned, it
    specifically examined contracts, personnel management, and
    logistics systems. The Department is taking action to address
    27 of the investments reviewed by GAO. The Department has
    looked at the remaining four systems, and we are prepared to
    discuss why those particular areas are actually not duplicative
    but more complementary. And we can go into more detail as you
    desire.
        The Defense Department's IT budget presents a unique
    challenge, not only in terms of its magnitude--it constitutes
    one-half of the Federal Government's overall IT expenditure--
    but in scope and complexity, as well, as you know. The
    Department's fiscal year 1913 budget request of approximately
    $37 billion includes funding all the way from desktop
    computers, tactical radios, human resource systems, commercial
    satellite communications, financial management, and you name
    it. These investments support mission-critical operations both
    in our Pentagon and office environment and on the battlefield.
    Our IT environment is even more complex when one considers that
    we operate in 6,000 locations around the world.
        In this complex environment, the Department's business IT
    systems are essential enablers of a much broader set of
    integrated business operations. For example, paying our
    servicemembers on time is a responsibility shared among various
    members in our organization; it includes both human resources
    and financial professionals. So the business systems challenges
    for us really require a reform not only of our technologies but
    of our processes and our governance and our policies.
        In my written statement, I have described for you the well-
    defined IT investment governance process that the Department
    uses. The Defense Business Systems Management Committee and our
    investment review boards, as well as our acquisition process,
    are major touch points for us to ensure that we are examining
    our IT investments. We use those processes to examine our new
    investments, but starting in fiscal year 1913 it will also
    include our existing IT capabilities and the dollars that we
    spend.
        These processes are important in helping the Department
    accelerate the transition away from our legacy environment into
    our target business systems environment, but there are other
    activities under way within the Department to further support
    this goal.
        But, first, I would like to provide you some specific
    examples of what the Department has done.
        The Army reduced the number of IT applications from 218 to
    77, a 65 percent reduction, during their BRAC move from Fort
    Monmouth, New Jersey, to the Aberdeen Proving Grounds. The Army
    Acquisition Domain has reduced the number of IT systems within
    that portfolio by 41 percent from 2006. The Logistics
    Modernization Program has sunset all 42 instances of the Army's
    Standard Depot System. Additionally, they have sunset all but
    one instance of the Commodity Command Standard System, a system
    comprised of 460 applications.
        The Navy has reduced by 50 percent the number of
    applications across 21 functional areas since 2003. And since
    2008, the Navy has eliminated over 400 legacy networks. The
    Marine Corps has reduced its applications by approximately 30
    percent just over the last year and a half.
        The Air Force has taken an aggressive action, as well, and
    has reduced its IT budget request by $100 million in 2012. Air
    Force Materiel Command headquarters has organized a Tiger Team
    committed to finding software application duplication and
    outdated systems that can be terminated with acceptable risk.
        These efforts, coupled with their ongoing work to reform
    acquisition of information capabilities and consolidating our
    infrastructure, are delivering better results for the business
    operations that our warfighters depend on.
        To continue our progress, an important part of moving
    forward is the infrastructure on which our business systems
    reside. We have developed an IT enterprise strategy and roadmap
    to optimize our DOD IT infrastructure. And we plan to continue
    reducing that infrastructure footprint, creating a joint
    enterprise, developing an enterprise identity management
    system, and reducing the number of data centers to drive our
    networks to enterprise solutions. With the roadmap, we are
    developing implementation plans to establish aggressive
    milestones to accomplish that goal.
        We are actively working with OMB on the data center
    consolidation. To date, we made significant progress in that
    regard. We are working with the military departments, DISA, and
    other components. In fiscal year 1911, DOD closed over 50 data
    centers, and we plan to eliminate more than 125 data centers in
    fiscal year 1912.
        Our focus on improving and designing an enterprise
    architecture and infrastructure will not only help DOD with
    migrating to enterprise solutions, but, more importantly, it
    will provide the Department with an improved ability to secure
    our information networks and our information and data. These
    efforts are key to transforming how we operate, how we acquire,
    and how we manage our IT investment in order to ensure
    efficiency, effectiveness, and security while still providing
    capability.
        I welcome the support of the subcommittee and really look
    forward to working with you and other Members of Congress as we
    strive to meet the challenges of streamlining and improving our
    overall IT capability. Thank you for your interest in our
    efforts, and I would be glad to answer any questions as they
    come up.
        Mr. Lankford. Thank you, as well.
        [Prepared statement of Ms. Takai follows:]

        [GRAPHIC] [TIFF OMITTED] T4041.021

        [GRAPHIC] [TIFF OMITTED] T4041.022

        [GRAPHIC] [TIFF OMITTED] T4041.023

        [GRAPHIC] [TIFF OMITTED] T4041.024

        [GRAPHIC] [TIFF OMITTED] T4041.025

        [GRAPHIC] [TIFF OMITTED] T4041.026

        [GRAPHIC] [TIFF OMITTED] T4041.027

        Mr. Lankford. Mr. Locatis?

                  STATEMENT OF MICHAEL W. LOCATIS, III

        Mr. Locatis. Good morning, Chairman Lankford, Ranking
    Member Connolly, and other members of the subcommittee. Thank
    you for this opportunity to testify today on GAO's report on
    potentially duplicative IT investments.
        The Department of Energy appreciates the work being
    performed by the GAO to identify opportunities to improve
    mission effectiveness and fiscal efficiency. The DOE is
    dedicated to improving our overall IT portfolio management and
    to address areas identified in the GAO report. We are committed
    to ensuring DOE's IT investments make efficient use of taxpayer
    dollars at all times.
        As chief information officer for the DOE, one of my roles
    is to enable science, energy, and nuclear security missions
    through technology that provides tangible, positive outcomes.
    DOE is actively supporting and executing OMB's 25-point plan
    and other strategies championed by Vivek Kundra and now Steven
    VanRoekel. The Federal CIO community greatly appreciates their
    leadership and commitment to service. DOE is also supporting
    GSA by taking advantage of their sourcing and contract vehicles
    whenever we can and providing input to make them more usable
    wherever possible.
        Upon my arrival 16 months ago, I conducted a 45-day
    assessment and identified many opportunities to improve
    effectiveness and efficiencies of our IT. Many of these
    opportunities stemmed from fragmentation and duplication. As a
    result, I partnered with our program offices and moved forward
    to change the way we do business. DOE has implemented an
    Information Management Governance Council that solidifies
    accountability in our senior officials and has already
    delivered tangible outcomes that have enabled us to maximize
    the return of our IT investments and reduce duplication.
        In the areas of duplication, let me highlight three
    examples for you.
        First is our Joint Cybersecurity Coordination Center, or
    JC3. There is nothing more important than our national
    security, and DOE needed to connect its cybersecurity resources
    more efficiently across the complex. We established the JC3 to
    take a collaborative approach to cyber information-sharing and
    analysis and instant response across DOE enterprise and more
    effectively leverage the technical expertise of our national
    laboratories. This has made our cyber programs stronger and
    consolidated a number of duplicative functions.
        The second is our new virtual desktop infrastructure which
    consolidates applications deployed across thousands of desktop
    computers into a small number of servers that deliver
    productivity to virtually any end-user device, including thin
    clients, smart phones, and tablets. The virtual desktop
    infrastructure creates an environment that is energy-efficient,
    inherently more secure, and costs much less to maintain.
        The third is unified communications and desktop
    videoconferencing. We are consolidating into a low-cost, common
    desktop videoconferencing solution that better connects our
    employees. By enabling employees through instant messaging, Web
    conferencing, and desktop videoconferencing, we are targeting
    millions of dollars in travel savings and creating new
    efficiencies through enhanced collaboration and productivity,
    even where travel would not have been previously required.
        In conclusion, the GAO report has identified IT investment
    efficiency improvement opportunities for the DOE. I have just
    mentioned other areas in which we are aggressively breaking
    down silos and enabling the mission through technology across
    the Department.
        Thank you for this opportunity to discuss the report's
    findings. Mr. Chairman, this concludes my statement, and I look
    forward to answering your questions.
        Mr. Lankford. Thank you.
        [prepared statement of Mr. Locatis follows:]

        [GRAPHIC] [TIFF OMITTED] T4041.028

        [GRAPHIC] [TIFF OMITTED] T4041.029

        [GRAPHIC] [TIFF OMITTED] T4041.030

        [GRAPHIC] [TIFF OMITTED] T4041.031

        [GRAPHIC] [TIFF OMITTED] T4041.032

        [GRAPHIC] [TIFF OMITTED] T4041.033

        Mr. Lankford. Mr. Spires?

                      STATEMENT OF RICHARD SPIRES

        Mr. Spires. Chairman Lankford, Ranking Member Connolly,
    thank you, and good morning. Today I will discuss efforts at
    the Department of Homeland Security to reduce duplicative IT
    investments.
        The key for an agency to eliminate system duplication is to
    develop an environment at the senior executive level that: one,
    enables a group of executives representing all appropriate
    organizations to work collaboratively to understand agency
    needs in a particular mission of business area; two, completes
    a comprehensive analysis in the mission or business area to
    identify ways to improve both effectiveness and efficiency
    across the enterprise; and, three, has a decisionmaking process
    in which those same executives can effectively drive change
    based on the analysis.
        I have found both in government and the private sector that
    if you can create these conditions, over time executives will
    be able to make the hard decisions on the tradeoffs and
    compromises necessary for the good of the enterprise. I use the
    term ``strategic alignment'' to reflect what is necessary for
    success. In my experience, the best way to achieve such
    alignment is through strong enterprise and portfolio governance
    buttressed by segment enterprise architecture.
        Enterprise governance provides large organizations with the
    ability to effectively make informed decisions that involve
    stakeholders across the enterprise. In smaller organizations,
    it is possible to execute enterprise governance with one
    governance body that represents top leadership. But in larger
    and more complex organizations, we need to break the challenge
    down into what we call portfolios, or logical partitions, that
    can support various elements of an organization's mission and
    business outcomes.
        Portfolios should typically represent functional groupings
    that can drive improvements to mission and business
    effectiveness. At DHS, we are working to implement 13
    functionally oriented portfolios, to include mission support
    functions such as include screening and incident response,
    along with business functions such as finance.
        So how does this work? Each portfolio has a governance
    board of appropriate senior executives that look over a
    multiyear planning horizon and define a set of measurable
    stretch objectives that would significantly improve mission or
    business effectiveness. To achieve those objectives, the
    portfolio governance board must establish capabilities that are
    required to meet such objectives.
        For instance, in a human resource portfolio, a capability
    may be to have an automated end-to-end tracking of all steps in
    a hiring process, with the objective to reduce the average time
    to hire by 50 percent. Once the objectives and capabilities are
    set, the board works with subject-matter experts to define the
    business process changes, IT system changes, elimination of
    redundant systems, and other appropriate program changes to
    achieve a goal end state. Once that goal end state is defined,
    the board sets a transition strategy that defines the step-by-
    step process to go from the current or as-is state to the goal
    or desired state.
        The approach outlined above applies the generally accepted
    Federal Segment and applies Architecture methodology to a
    portfolio.
        At DHS, we are working to implement portfolios to drive and
    improve mission effectiveness while eliminating duplication.
    For instance, a comprehensive HR system inventory revealed 124
    systems, including many duplicative systems. We established an
    HR IT portfolio governance board and recently completed our
    Human Capital Segment Architecture, which will effectively
    shift a large number of these component-based systems and
    services to enterprise or Federal Government solutions.
        Likewise, we identified more than 20 separate common
    operating picture systems supporting the situational awareness
    needs of the Homeland Security mission. Leveraging a portfolio
    approach, this month our National Operations Center will stand
    up an upgraded version of the DHS common operating picture that
    incorporates all components requirements. The plan is then to
    roll out the new common operating picture to DHS operations
    centers across the enterprise over the next year, eliminating
    numerous duplicative common operating picture investments.
        It takes about 3 years of hard work for a portfolio
    governance approach to mature to the point where the portfolio
    has a solid set of business objectives and measures, a defined
    goal end state, and a viable enterprise transition strategy.
    Despite the difficulties, the benefit of this work can be
    tremendous.
        These methods can and should support implementation of the
    Shared First initiative aimed at routing out waste and
    duplication across the Federal IT portfolio.
        Thank you, and I look forward to taking your questions.
        [Prepared statement of Mr. Spires follows:]

        [GRAPHIC] [TIFF OMITTED] T4041.034

        [GRAPHIC] [TIFF OMITTED] T4041.035

        [GRAPHIC] [TIFF OMITTED] T4041.036

        [GRAPHIC] [TIFF OMITTED] T4041.037

        [GRAPHIC] [TIFF OMITTED] T4041.038

        [GRAPHIC] [TIFF OMITTED] T4041.039

        [GRAPHIC] [TIFF OMITTED] T4041.040

        [GRAPHIC] [TIFF OMITTED] T4041.041

        [GRAPHIC] [TIFF OMITTED] T4041.042

        [GRAPHIC] [TIFF OMITTED] T4041.043

        [GRAPHIC] [TIFF OMITTED] T4041.044

        [GRAPHIC] [TIFF OMITTED] T4041.045

        [GRAPHIC] [TIFF OMITTED] T4041.046

        Mr. Lankford. I thank all of our witnesses for testifying
    today.
        Let me recognize myself for 5 minutes, and let's have some
    conversation on this as well.
        I have a couple thoughts here. One is, Mr. Powner, you
    mentioned the Dashboard at this point. What I would like to
    know, for all of you that have integrated with that as well,
    has that been helpful, and what is missing from that? Is there
    a next level for that use in the Dashboard, and is it a helpful
    tool?
        So anyone can jump in and be able to respond to that.
        Ms. Takai. Well, let me start, and I am sure my colleagues
    have the same view.
        We have found the Dashboard process to be very, very
    helpful. It does really--I think it really, in many ways, takes
    the OMB desire for transparency and really gives us the
    opportunity to be able to put priority on that Dashboard
    process. So it does give the kind of transparency that we all
    need, but it also gives it at a higher level, which I think is
    helpful.
        In terms of going forward, I think our major challenge is
    to make sure that we are taking the best advantage of that
    Dashboard process internally, to make sure that we are driving
    the kind of process change that is needed.
        Mr. Lankford. Not every agency is engaged in that; is that
    correct, Mr. Powner?
        Mr. Powner. Yeah, I think--a couple things. I think the
    improved transparency is very important from an oversight
    perspective, whether you are at OMB, if you are an agency, or
    if you are in the Congress. The one thing that the Dashboard
    did is I think it greatly increased CIO accountability. What it
    says is, for all major investments--there are 800 of them
    across the major departments--is the CIO is ultimately
    accountable. So Ms. Takai has her pictures next to her 72 major
    investments. That actually was a good thing for some agencies
    where we needed more CIO accountability. It was very helpful
    moving forward.
        Mr. Lankford. The issue is, is the number right? Are there
    other projects that need to be there? Obviously, not every
    agency has not that large of an investment. Ms. Takai has very
    large, complicated, numerous projects on it. Should that work
    its way down to other agencies and say, okay, this is large for
    your agency, instead of setting a single standard for every
    agency?
        Mr. Powner. Well, there are 7,200 investments, so there are
    800 major and the rest are non-major. I think over time, as the
    Dashboard matures, it would be helpful to get insights into
    those non-majors. But, again, we probably ought to do that in a
    step-wise fashion to get the majors correct first.
        Mr. Lankford. Sure. But the question is, what is ``major''
    to the Federal Government or what is ``major'' to your agency,
    if there a difference there. You can look at each agency and
    say, you know, I know you don't reach this level, but give us
    your five largest, most significant projects that are on there,
    whatever dollar amount that is, and those are your majors.
        Mr. Powner. No, that is an excellent point. It does differ.
    And, in fact, several non-majors at DOD would clearly be majors
    at other agencies.
        Mr. Lankford. Right.
        Ms. Takai, where you going to mention something as well?
        Ms. Takai. I would like to add to Mr. Powner's comments,
    that the visibility and transparency is important, not only for
    us as CIOs, but actually what we would view as more important
    is the visibility to the business process owners and the
    business process changes that really have to happen for any IT
    implementation to be successful.
        The success of these large-scale business systems are
    really more around, can we change the processes and can we
    actually make the business changes that we need, the
    necessarily just being dictated by the dynamics of the
    technology implementation. And the Dashboard really brings the
    opportunity for us to have the dialog at a much different level
    than if it were just delegated to being a technology
    discussion.
        Mr. Lankford. Okay. We may have some other time for other
    questions as we go from here. Let me address one thing with
    DHS, because I have a lot of very positive things and just
    ideas I want to get a chance to kick around.
        DHS had the Secure Border Initiative network. I know that
    is a long-term--that is not your favorite project to talk about
    because it was this long-term project that ended up spending a
    billion dollars and then getting folded down and saying, ``This
    didn't work,'' on it.
        That is something every agency deals with, to experiment,
    to try. Technology is always going to be out on the leading
    edge of saying, how can we accomplish that. The issue is, how
    can you--how do we integrate--well, let me rephrase it a couple
    ways. One is, it is integrating off-the-shelf technology,
    commodity IT stuff, when it is appropriate. And the second one
    is, how do we anticipate through our process of going through
    contracting to try to find areas saying, ``This is outside of
    our expertise,'' and so we don't end up with a dead-end and a
    billion-dollar debt and we don't have anything at the end.
        So, two separate projects: integrating the commodity IT
    stuff, where appropriate; and the second one is, how do head
    off a dead-end before we get there?
        Mr. Spires. That is a great example, sir, to bring up,
    SBInet. There were a lot of things that DHS did wrong early on
    that program.
        I would like to say, in the follow-on of what we are
    doing--because the concept of fixed towers with the kinds of
    surveillance equipment on those towers to monitor the southwest
    border is still a concept that the Border Patrol within CBP
    really wants. And so we are actually moving forward with a new
    program, but we are using, as you say, commodity--just not IT,
    but commodity technologies. And, in fact, we are about ready to
    go out with a request for proposal to the industry based on
    market research we have done, okay, in order to procure what we
    are calling ``non-developmental solutions,'' meaning solutions
    that already exist somewhere in the world, to be able to do
    this kind of surveillance work.
        I think that is where the government really needs to look.
    How is it that we can leverage things that already exist within
    industry or within other governments or within other agencies
    rather than, to your point, rather than going out and trying to
    build things custom? And I believe this is a good example.
        And I have worked closely with Mr. Mark Borkowski on this,
    who is the program manager of that new initiative. And we were
    both aligned, if we go with that RFP and we get something that
    is developmental in nature in any way, we are just not going to
    award. We are only going to award if it is truly non-
    developmental, that exists somewhere, and that you can just
    field this thing. All right? And that I think is more what we
    need to do as a government.
        And we need to have the discipline, though, to make sure
    that we have the requirements approach. When we work with the
    business owners, we have to work with them in such a way--and
    this is part of good governance--so that they understand it is
    much better for them to perhaps give a bit on their
    requirements, okay, get 80 percent of the solution that is off
    the shelf, rather than requiring us to try to build that
    additional 20 percent custom. If you start with the 80 percent
    solution that is off the shelf and then work with the vendor
    community for existing products over time for them to upgrade
    their products to address more and more of our requirements,
    that is a much less costly and it is a much less risky approach
    to delivering IT.
        Mr. Lankford. Okay. Thank----
        Mr. Spires. Hopefully I have gotten to----
        Mr. Lankford. No, that is great. We are working on
    solutions on that.
        Let me recognize Mr. Connolly.
        Mr. Connolly. Thank you, Mr. Chairman.
        And immediately after this round of questioning, I am going
    to have to leave to go to the floor. We are going to be voting
    shortly. We have 1 hour of debate, and then we are going to
    vote.
        Welcome all, to the panel.
        And, Mr. Chairman, let me respectfully invite you again to
    consider H.R. 1713, the Federal Cost Reduction Act I introduced
    a number of months ago, to try to codify what Vivek Kundra
    started in terms of the data center consolidation and to ensure
    taxpayer savings with that consolidation. And I would love to
    have your cosponsorship, but certainly I think it might be
    timely after this hearing to hold a hearing on that, if you
    would.
        And, again, I want to thank you all for being here.
        Mr. Powner, how do you feel the data center consolidation,
    the closure and consolidation, is going? And what is your
    estimate of, in a sense, the utility savings--because I gather
    that is the lion's share of the savings from these
    consolidations--what we might expect to achieve with it?
        Mr. Powner. Well, we have had a good start on data center
    consolidation. And I know Mr. Spires chairs a committee that,
    governmentwide, that looks at this.
        A couple key things that our work has shown--and we have
    done several reviews of the data center inventories and plans.
    One, we need to ensure that we are capturing all the inventory
    out there and then have solid plans for consolidation. And the
    numbers are fine, Ranking Member Connolly, where we have X
    number of centers that we closed to date, so that is good
    progress and we have good goal of a thousand centers by 2015.
        But, ultimately, it is about saving money. So we really
    need to look at those plans in terms of when can we start
    seeing the dollar savings through those consolidation efforts.
    And that is something that we are currently reviewing for the
    Congress when we are looking at those detailed consolidation
    plans.
        So, good start, but we still need to see--the ultimate
    measure is a reduction in costs associated with these centers
    and more efficiencies going forward.
        Mr. Connolly. Right, because the efficiency and the cost
    savings was sort of the name of the game.
        Mr. Powner. That is right.
        Mr. Connolly. Do you believe we can build on that? The last
    time we had Vivek Kundra here, which was the swan song before
    this committee, he actually expressed some enthusiasm for this
    bill I referred to and actually agreed that we could do more as
    we move out to the future. Your sense of that?
        Mr. Powner. Clearly, we need to do more. I think the IT
    Reform Plan, which data center consolidation is front and
    center, there were very clear deliverables 6, 12, and 18
    months. But if you look at the data center consolidation
    initiative, that is a long-term initiative. That will go beyond
    18 months, and we need to keep the momentum beyond 18 months.
        I commend the administration for the stretch goals on the
    6, 12, and 18 months, but we need to have a plan that would go
    beyond 18 to truly achieve those cost efficiencies.
        Mr. Connolly. Yeah. Which I think means more ambitious
    numbers in terms of consolidation than even originally
    envisioned in the 25-point plan, would you agree?
        Mr. Powner. Yeah, I actually think if we would hit that
    1,000 center reduction mark we would see some great
    efficiencies with that.
        Mr. Connolly. And let me start with you, too, but invite
    your colleagues to comment. Cloud computing. It is estimated
    that--well, it is an inevitable part of the Federal future. The
    question is, how much, how fast, and how secure. And there are
    also some liability/legal questions depending on where the
    cloud is located, what company is registered, in what country,
    how our data and how other laws affect us.
        But assuming all of that, what is your sense of where we
    are headed in cloud computing for our Federal agencies? And
    what concerns might you have from a legislative point of view,
    cybersecurity for example, that ought to be on our plate?
        Mr. Powner. So, a couple things with cloud computing.
    Similar to data center consolidation, I mean, their efforts--
    the IT Reform Plan calls for the major departments and agencies
    to consolidate three services to the cloud. That is a good
    start. Again, we want to consolidate those services. I think
    Mr. Locatis has a number of initiatives looking at commodity IT
    where he is looking at this. Ultimately, it is about cost
    savings, when it is all said and done. It is not about three.
        From a security perspective, a couple key things. If there
    are great security concerns, you can start with private clouds
    over public clouds. I know Mr. Spires has a number of
    initiatives where he is focused more on the private clouds,
    where you can put your security requirements in. Some of the
    initiatives at GSA with FedRAMP, that will clearly help.
        I do think security needs to be front and center when we
    move to the cloud, but between FedRAMP and some of those
    initiatives or considering the private clouds, you can address
    those security concerns and still move to the cloud.
        Mr. Connolly. Mr. Locatis?
        Mr. Locatis. Yes, we----
        Mr. Connolly. Could you speak up?
        Mr. Locatis. Oh, absolutely.
        We see this now as an opportunity for the data center
    consolidation effort to intersect the cloud offerings that are
    being offered by the private sector, private cloud offerings
    that can be FISMA-certified. And so, in our first round of data
    center consolidation, we closed three data centers. We will
    have another two data centers--we don't have the size that the
    Department of Defense has, but we are aggressively approaching
    that. And we have saved approximately $7 million through those
    data center closures.
        But now in our next round of planning, this is where we are
    looking at infrastructure as a service and working with the
    private sector through the security issues that you discussed
    to break through, working very closely with GSA on their
    sourcing capabilities, contracts, procurements, the FedRAMP and
    FISMA processes.
        Mr. Spires. I might add, sir, that we at DHS are taking a
    very aggressive approach to the cloud. As Mr. Powner noted, we
    have private cloud capability within our two enterprise data
    centers, which is our target for all of our consolidation
    initiatives, so that ties to what Mr. Locatis said as well.
        The next is between data center consolidation and
    leveraging cloud services, particularly for commodity IT. We
    are rolling out nine different cloud offerings in our private
    cloud, including such things as email as a service, development
    and test as a service, infrastructure as a service--very
    aggressive.
        On the public cloud side, we are going more slowly because
    of the security concerns at this point. We are moving our
    public-facing Web sites to the public cloud, however, because
    it is non-sensitive data, and then we are going to assess. As
    FedRAMP matures and we see that the public cloud service
    providers begin to meet FISMA low and moderate capabilities, I
    think you are going to see a much more aggressive approach by
    ourselves and by other agencies over the next 2 to 3 years.
        Mr. Connolly. I am actually--Mr. Chairman, I know I am over
    my time--but I am glad to hear that. My own feeling is that,
    actually, though it may see counterintuitive to us in the
    public sector, frankly security may be better in the private
    sector, because they live or die on their reputation and on
    their protection of data and on taking care of clients.
        And sometimes in the public sector, you know, we may have a
    bad moment in terms of a compromise, a cybersecurity
    compromise. The consequences are--you know, perhaps it affects
    your promotion, but, I mean, it is--you know, whereas in the
    private sector, literally you can go out of business if you
    screw up.
        And so I think there may be some advantages in the private
    sector, and I think the approach you have outlined makes a lot
    of sense.
        Thank you, Mr. Chairman.
        Mr. Lankford. Thank you.
        Mr. Walberg?
        Mr. Walberg. Thank you, Mr. Chairman.
        And I appreciate the ranking member's questions on that
    area and you giving latitude to continue that process, because
    that was a concern that I wanted to hear about, as well. And I
    appreciate, Mr. Spires, your response specifically as we look
    at security issues across the spectrum.
        Let me ask Mr. Spires, specifically what distinguishes--you
    know, we have seen that you have the best record of not having
    redundancies and you have done a good effort there--what
    distinguishes DHS from the other agencies in terms of its
    identification and elimination of overlapping or duplicative IT
    investments?
        Mr. Spires. Sir, I would go back to the testimony. I put a
    tremendous effort on setting up what we call these functional
    portfolios. And so, as I am sure you are well aware, within DHS
    we have 22 separate components, some very large like the Coast
    Guard and CBP and some relatively small like our health affairs
    organization. But what is interesting is that a lot of the
    functions of DHS crosscut those components.
        And what I have tried to really do as the CIO is make sure
    that we look functionally at DHS, not just vertically from the
    organizational standpoint. Because when you look functionally,
    whether we are doing screening or incident response if you were
    on the mission side or whether we are doing the business
    functions like finance and HR, you see a tremendous amount of
    duplication when you look at it from that functional
    perspective.
        So I am just a big believer, if you bring the right
    executives together in a functional area and get a dialog
    going, or a structured dialog, over time they see the
    commonality, okay, they start to recognize it, they start to
    see the advantages of working together rather than continuing
    in their stovepipes.
        Mr. Walberg. That gets them beyond the turf mentality----
        Mr. Spires. Well, I mean, this is not easy. As I said, it
    takes 3 years or so, in my experience both in the private
    sector at IRS and now at DHS, to get this to really work well,
    but it does work. And we have seen tremendous improvements.
        We are right now--in fact, screening is a great example,
    passenger screening or people screening. You know, we have six
    different components doing this screening. Okay? And we have
    systems in each of these components, all right, that are
    essentially duplicative. And now even the Deputy Secretary is
    taking this on. We are working together. We have the right type
    of governance model set up with this portfolio around screening
    to really look at, where can we consolidate, where can we
    standardize in order to eliminate this kind of duplication?
        It is a very different way of looking at an agency's
    functions. And I think in any federated kind of agency--and,
    certainly, my colleagues here are also at federated agencies--
    this kind of process can work to help eliminate duplication.
        Mr. Walberg. Well, I applaud that, and may it continue and
    expand.
        And I would then move to Ms. Takai and Mr. Locatis. On the
    reverse side, with much duplication or concerns of duplication
    in your agencies, what are the causes that you have come to
    ascertain at this point in time for the duplication?
        Mr. Locatis. Well, as Richard said, he has 3 years, so we
    have really studied the Department of Homeland Security
    governance model and, in fact, implemented many of the same
    work groups and governance capabilities, including our
    Information Management Governance Council, which has
    accountability at the Under Secretary level of our three
    primary programs.
        The other thing we have done is looked at it from an
    interagency sharing perspective, where can we leverage
    capabilities in other agencies and not duplicate or reinvent
    the wheel. And it is not just in the technology areas; it is
    the investment in people, process, and technology for running
    operations. So one of those examples is, the Department of
    Energy did not create its own payroll system. It leverages the
    Defense Finance and Accounting Services' capability and buys
    those services directly from DOD versus creating our own
    capability.
        So another important piece of this is working across the
    departments to leverage shared services and not making the
    investment at all but simply subscribe to it where you have a
    center of excellence, like DFAS within DOD.
        Mr. Walberg. Ms. Takai, again, what causes for duplication
    have you addressed?
        Ms. Takai. Well, historically at DOD, our information
    technology spend was very decentralized and very focused on
    mission capability in our services and then, clearly, what was
    necessary in our forward deployed areas. And the business
    systems were also distributed from the standpoint of the
    funding and the decisionmaking process.
        So, in answer to your question in terms of what happened in
    the past to get us to this point, I think that that particular
    model really caused a sense of uniqueness in different
    organizations and then the funding to actually look at that.
        I think to the point that, you know, both Mr. Locatis and
    Mr. Spires have made, those are the things that we are working
    to really change. You know, we recognize that spending in a
    decentralized fashion, not taking a view of what our overall
    portfolio management should be, has led to the duplication that
    we have today.
        But our larger challenge is actually getting past the
    process piece, which says that we don't need to have specific
    systems that do personnel processing differently, because each
    of the services actually does do personnel processing a little
    bit differently. And so our challenge is to really be able to
    address those process issues, as well.
        The other challenge that we have is always the demand
    from--we need to have capability at the tactical edge. And I
    think back to the question, Mr. Chairman, that you asked about,
    that really then gets us into not only looking at the business
    systems piece of it but some of the forward technologies that
    you talked about and our ability to really look at different
    processes in order to be able to introduce commercial
    technology, as well as the challenges there.
        The last item I would point to is that, to the discussion
    on our ability to move forward on some of these areas and the
    way that we are addressing the cloud strategies, it is a
    challenge for us particularly across all of our networks--
    classified, secret, and top-secret--to really understand the
    way forward in terms of working with our commercial partners
    from a security perspective. The ramifications for us from a
    national security perspective and making sure that our data are
    secure are significant.
        And so we are moving forward in that direction. We are
    looking to take advantage of the same things that DHS is from
    the standpoint of FISMA and then the recent FedRAMP process.
    But we are walking through that methodically, because we do
    have to be very concerned about the protection of our
    information, you know, as a national asset.
        Mr. Walberg. Thank you.
        Thank you, Mr. Chairman.
        Mr. Lankford. Thank you.
        Mr. Meehan?
        Mr. Meehan. Thank you, Mr. Chairman.
        I am grateful for the opportunity to be here this morning
    to listen to your testimony and to speak with you. I think you
    are some of the most powerful people in Washington because you
    are the folks that understand these systems, or purportedly do,
    and any institution I have ever been associated with always
    comes down to somebody saying, who understands how to get
    information out this and move it efficiently? And I appreciate
    the challenge that you have, as well.
        I know it is easy to pontificate up here, but I often
    struggled when I would have authority in the Department of
    Justice or otherwise over numerous agencies. There seemed to be
    a lot of discussion about systems, that it often went back to
    situations in which individuals had their own little turf to
    protect. And I don't know how we get beyond turf protection and
    get to the real issue of evaluating what is working.
        Mr. Spires, I particularly appreciate the work that you and
    your folks are doing. I just sat through--in my capacity not in
    Oversight but in my capacity on Homeland Security, we had the
    occasion to listen to testimony from the director. We were
    looking at budget issues. I know there are a lot of good
    efforts that are being made to create efficiencies at DHS.
        I also have the fortune of visiting within my district
    numerous businesses from time to time, and I am very pleased to
    have an industry leader, SAP, in my district. And we were
    talking, I asked him, you know, what are you really doing? And
    one of the things we spent some time talking about was some of
    the systems they have been using effectively in DHS. In
    particular, I think they are working for the Customs and Border
    Patrol. They were very proud to have had the one group that had
    a clean audit, based on going back and using that.
        Now FEMA is coming out and looking at a system. If one
    system is working, why are we looking at a new approach to try
    and have FEMA--why aren't we just taking what is working at CBP
    and using it with FEMA?
        Mr. Spires. Sir, that is a very good question. We are in a
    situation of evaluating for FEMA right now what is the best way
    forward for them for financial management. I believe the system
    you referred to at Customs and Border Patrol is their financial
    system; that is a SAP system.
        Mr. Meehan. Yeah. Yeah.
        Mr. Spires. Because of the contractual relationships that
    we have, we cannot take, for instance, the system we have at
    CBP and leverage it for enterprise use. That is a contractual
    issue, the way it was set up, sir. So we can't just use----
        Mr. Meehan. You mean we are dealing with a legacy issue, so
    to speak?
        Mr. Spires. It is a legacy--yes. The way these contracts
    were originally set up, we just cannot do that. We have wanted
    to do that, and we have not been able to.
        Mr. Meehan. Because, you know, in industries, there are
    liquidated damages for non-performance. Is there any kind of
    circumstance under which--if you are looking at a better
    system, do people go back and look at systems that aren't
    working and, therefore, have the ability to break through
    previous contract provisions for non-performance?
        Mr. Spires. Well, I don't think in this case it is an issue
    of non-performance. Okay? FEMA is looking to upgrade its
    system. It is on a legacy system that is, frankly, outdated. It
    does not provide all the functionality they need.
        We are assessing our options. As you probably are aware, we
    have gone through a number of procurements that even predate my
    tenure on trying to look at an enterprise capability for
    financial management across DHS, and we have just never been
    able to even get to an award because of protests and some legal
    issues that we ran into. I hate to say that, but that is the
    truth.
        Mr. Meehan. Well, I would be interested to hear what we can
    do to help you in that regard. Because, Ms. Takai, I would be
    interested in your observation, again. It is incredible how we
    get little bits of information from time to time and you seize
    on things, but because of my work on this committee, I am aware
    of, you know, the Air Force circumstances right now, with the
    effort.
        My recollection was--I asked my staff to look into it, and
    they did give me a little information about the Expeditionary
    Combat Support System. We are talking about a system now that,
    to my information, is--you are billions of dollars into it,
    they are coming back to us for $90 million more. Why aren't we
    looking across the board to see--there are other things working
    right here in other parts of the Department of Defense.
        And how is it that we continue to be locked into these
    silos? Is it because they are protecting their interests with
    the lawyers?
        Ms. Takai. Well, let me address the logistics question that
    you are asking, the question around logistics systems, and then
    come back to the broader question.
        First of all, the ECSS system, as it is--you know, they
    have to have an acronym or you can't be from DOD--is one of the
    logistics systems that is under a review of a set of eight
    logistics systems in the Department. And the acquisition
    technology and logistics organization is actually doing a
    review right now to look across that portfolio to say, where is
    there duplication and where can we actually look at a different
    way and a better way of doing it?
        I think, second, there are two answers to your question of
    how does this happen. One of them is that, in some cases,
    again, we do have unique requirements. So, for instance, in our
    operation, what Air Force has to do from a material logistics
    process is not necessarily the same in terms of doing
    maintenance in our man, train, and equip organizations, isn't
    exactly the same as what a TRANSCOM operation has to do in
    terms of being able to make sure that there are supply lines to
    our forward deployed troops.
        So I do think there is some terminology that are
    differences, and they are legitimate differences.
        But there is also this situation, I think to the point that
    you are making, where there are processes embedded in terms of
    the way that we do things. It may not necessarily be a single
    individual, but it certainly is a single organization. And the
    question that has to be weighed is, what is the ability of a
    large organization to make a charge, even in some fairly what
    we would consider straightforward business processes, in order
    to be able to implement standard technology versus keeping the
    processes that we have today and actually being able to use a
    more standard solution?
        It is a challenge. You know, both Mr. Locatis and I were in
    State government in several States. We saw it from a State
    government perspective, just in terms of being able to draw
    departments and agencies together. Same kind of experience in
    the private sector. And it really is around that ability to
    change from the way we are used to doing things today, the way
    that we know works, to something that is even a little
    different that may yield the same result but makes
    organizations uneasy in terms of their ability to make that
    change.
        Mr. Meehan. Well, I know I probably share the sentiments of
    my colleagues on this committee. If you have suggestions about
    things that you think would make your job easier to do to get
    to these efficiencies, I am sure that we would entertain those
    suggestions and include them in our own deliberations.
        Thank you, Mr. Chairman. I yield back.
        Mr. Lankford. Thank you.
        We are going to do a quick second round of some questions.
    As you have probably guessed, the votes have moved around
    again. They will be closer to 10:45 now. That will give us a
    little more buffer time to be able to pummel you with a few
    more questions and try to get some of this information on the
    record, as well.
        I want to follow up on a comment that Mr. Spires made
    about, we would like to take a system from over here and use it
    over here but the contract doesn't allow it. It leads me into a
    couple issues that I have on keeping contracting officers
    engaged in what technology is needed. They cannot be
    specialists in every single area that they are dealing with all
    their different contracts on.
        What are you doing to keep those contracting officers
    engaged on--a couple of things. One is to say, watching for
    when it comes down, who has the expertise in this area? Is it
    actually accurate for what we are looking for, so we are not
    having to get a system and then redo the system and go, no,
    that doesn't work and let's redo it again, and how to get
    through all that process.
        And then to be able to protect in the future in our
    contracts that if we are using it over here, we can also use it
    over here. Now, I understand these private vendors want to sell
    it in 15 different places. I get that. But within an agency,
    especially, there has to be some level of flexibility, even if
    it is to say, if we use it here and we use it over here, we pay
    you another fee but it is a smaller fee than it is over here,
    but we are not blocked out and have to start all over again
    when it is a very simple difference.
        You talked before about supply chains and financial
    management and managing human capital. Those are fairly
    consistent with minor adaptations on them. So how do we start
    developing contracts so that we can actually not reinvent the
    wheel time after time with the exact same vendor over and over
    again?
        Mr. Powner. Within DHS, I partner very closely with our
    chief procurement officer--he is a peer of mine--Mr. Nick
    Nayak. And two things that he is really taking on to address
    your very points. One, he has created a special cadre of
    contracting officers who do nothing but work closely with us
    and specialize on IT. Okay? So that doesn't make them
    technology specialists in IT, but over time they start to
    understand the complexities of helping us buy IT, right, and
    work closely with our programs. And I think that is a best
    practice that a number of other agencies are adopting, as well.
    So that is not an immediate fix, but over time it does make a
    big difference. And the individual that heads that organization
    works with us every day, okay, very, very closely.
        I would say to your other point, we are also working on
    standard contract language now that covers exactly what you
    suggested. I am amazed, I walk in here and there is a number of
    these issues where I say, we would to leverage this capability
    we have in one component in DHS in another and we can't because
    the contract does not allow us. And so we are forced back into
    having to go out in full and open competition when, if it was
    set up right in the first place, we could do exactly what you
    suggested.
        So we are putting standard contract language in. When we go
    out with these procurements, it can be at least leveraged DHS-
    wide. And, in fact, we are working in the Federal CIO Council
    with OMB, can we come up with standard language that allows us
    to even issue contracts that could be leveraged by other
    agencies as well.
        So we are taking that issue on.
        Mr. Lankford. Yeah. Long term, that is obviously what is
    going to help us the most. I mean, if companies are competing,
    they are going to give us a much lower bid at the beginning,
    thinking, if I can get this and do it well, and I can also
    multiply it out, if I can get this to five other agencies and
    it would be cheaper in all those and beat all those contracts
    as well, it is to their benefit, it is to the Federal
    Government's benefit because we will get cheaper contracts all
    the way across the board as it is duplicated out.
        My concern is--and this is just interaction with some
    different guys that do programming and do some of the writing.
    Everyone who does that, especially for their own agency that
    has tapped for it, seems to have the perspective, ``They didn't
    do it as well as we would do it, and so we are not going to
    take their stuff; we are going to start all over and do our
    stuff.''
        Now, I am not saying that is an arrogance. Quite frankly,
    they are tenacious about security, they are tenacious about the
    coding and to make sure everything is correct on that, which is
    great. We need those gifts. But it also seems to lock people
    into, ``It needs to be done by me because I know us better than
    other things.'' When it is a supply chain, it is fairly
    consistent, when you give them the whole lot.
        Mr. Powner. I would just comment, and Ms. Takai really hit
    upon this issue of this idea of uniqueness, right, and how
    unique are my requirements. And I think we really need, through
    the CIO community and through the leadership of agencies--and
    this is where it gets difficult, to your point, particularly on
    these standard capabilities and what I would consider back-
    office--finance and HR and others--these are very similar.
    Right? And if we can get to the 80 or 90 percent solution, we
    can get to the kind of environment you want where we are
    leveraging each other's capabilities, we are not having to
    build new. And I think we really need to take that on as a
    government.
        Mr. Lankford. Okay. Thank you.
        Let me yield to Mr. Chaffetz.
        Mr. Chaffetz. Thank you.
        And thank you, Mr. Chairman, for holding this hearing.
        My apologizes for stepping in a few minutes late. If this
    is--I hope it is not redundant, but that is sort of the theme
    of what we are talking about today, so I won't feel too bad
    about it.
        I want to start with the Department of Defense, a question
    about the Defense Finance Accounting System, or DFAS. Is there
    any progress being made with that?
        I mean, my understanding is there is a facility in Indiana,
    a lot of good people working there, a lot of good stuff, but it
    is still so manual. It really hasn't come into the 21st
    century.
        Can you give me an update on what is happening there?
        Ms. Takai. One of the challenges for us is to continue to
    move DFAS forward. And we are making significant progress in
    terms of both the utilization of the system and the system
    itself. It is going to be very critically important to us as we
    move forward on our audit readiness requirements. And so it is
    a major part of the finance portfolio that the chief management
    information officer is looking at.
        Mr. Chaffetz. And we don't have time here, but I would
    appreciate it if somebody on the staff somewhere could update
    me on where it is at and where it is going and what the
    timeframe looks like. And I am looking forward to actually
    coming and visiting that facility at some point.
        I also want to ask the Department of Defense again, we have
    been looking in my subcommittee within Oversight at the
    duplication and the problems and challenges between the
    different agencies within our departments, within DOD, on the
    health care and the sharing of that information, so that when
    somebody is actually--you know, somebody has been serving in
    the military and they are going back into their private life,
    getting those records back to their doctor sometimes will take
    in excess of a year. And I just don't understand why it is so
    complicated and why it has been so tremendously expensive.
        Ms. Takai. Well, on that particular front, I think you are
    aware that we have made considerable progress in terms of
    looking at the way forward. In fact, there is an initiative now
    which has been signed out and actually has the visibility of
    both the Secretary of the Veterans Administration as well as
    the Secretary of Defense. And they have a joint project now to
    look at a combined electronic health records----
        Mr. Chaffetz. What I can't get is a commitment as to the
    timing, as to when this is actually going to get completed. Do
    you have any idea when this is going to get completed?
        Ms. Takai. Well, we can certainly come back. I know the
    group is today working on putting all of their plans together.
    So if you will let us, we will come back to you with the detail
    on DFAS and then also with the project plan for the electronic
    health records.
        Mr. Chaffetz. I would certainly appreciate it, because it
    is such a major problem. I had an opportunity to talk to then-
    Secretary Gates about this issue and the concern of the timing.
    And I was shocked at--A, I was pleased that he knew what the
    timing issue was. But to try to cut it to the timeline that he
    had talked about, which would still be over a year to get these
    records into the hands, is just unacceptable to me, and I do
    want to continue to follow up.
        Going now to the Department of Energy, there is evidently--
    I had an organization, group, Energy Enterprise Solutions. And
    I don't suspect that you know about every contract, Mr.
    Locatis--is that how you pronounce it?
        Mr. Locatis. It is pronounced ``Locatis.''
        Mr. Chaffetz. ``Locatis.'' My apologies.
        They had had a performance-based contract, and there is
    some sort of dispute there. I was just hoping that you could
    give us some assurance that you would look at that personally.
    If you are willing to make that commitment, I would appreciate
    it if you would look at that contract and get personally
    involved in that, if you would be so kind.
        Mr. Locatis. I am reviewing it now.
        Mr. Chaffetz. Okay. Thank you. I do appreciate you doing
    that.
        The last thing, Mr. Chairman, I wanted to ask about--and
    stop me or let me know if this has been talked about. OMB is
    having some challenges because there are different coding
    mechanisms for accounting. And when I talk to the outside
    interest groups, you know, the people that want good, open,
    transparent government, it is very difficult to compare the
    individual data because they use different coding within
    different departments, a certain number of digits.
        Where on the radar screen, between the four of you all, is
    this? And I am sorry I didn't do a good job of articulating it,
    but where is this on your radar screens?
        Ms. Takai. Well, let me start.
        Certainly, as it relates to being able to report and work
    with OMB on the IT budget line items, we have been working very
    closely with them, because it is an issue in terms of our
    internal reporting and working with OMB. And certainly that is,
    you know, a major part.
        I think the second piece is, for us within DOD, we are
    concerned about just the overall coding and reporting for our
    effort around being audit-ready.
        So those are two efforts, certainly, for us inside DOD and
    working with OMB that have escalated the importance.
        Mr. Chaffetz. Mr. Chairman, my time has expired.
        And I will do a better job of articulating or perhaps
    putting in a letter that I would love to share with you all
    about the concern from OMB, particularly--again, this is the
    genesis coming from outside the groups that want to be able to
    compare apples to apples on line items amongst the various
    departments. You obviously represent some of the largest
    departments in our Federal Government, so I would like to
    follow up with you on that, as well.
        But I appreciate your commitment and your service. It is a
    very difficult, fast-paced sector but vital to good government
    and to making sure that they operate.
        And so I appreciate you holding this hearing, Mr. Chairman.
    Thank you.
        Mr. Lankford. Thank you.
        Ms. Takai, one last question, as well. You brought up the
    famous ``audit'' word on DOD. Where are things on that? Give us
    a timeline and progress on when it will be auditable and
    tracking.
        Ms. Takai. The Secretary has tasked us to move up the prior
    plan, which was to be ready by 2017, to be ready by the
    beginning of 2015. And so the organization has put in place a
    number of different activities and a number of different
    measurements to get there. So we are all geared up, and we are
    ready to go.
        Mr. Lankford. Terrific. I appreciate that.
        And as I have mentioned at the very beginning, on the IT
    Dashboard as well, I appreciate all that you are doing there,
    but also keeping it up to date. It is one thing to report and
    it is another thing to keep those reports up to date. And that
    is always a wonderful, I am sure, extra thing on your desk, but
    try to continue to push. There are some elements that have been
    out there that have some lower scores but they are not being
    kept up to date, and so we don't know how to be able to track
    that. And so that is important, to be able to keep that up as
    well.
        I appreciate the success stories that you are sharing. I
    hope that this also is indicative of a forum of sharing ideas
    across our Federal agencies. I am confident that you all get
    together as well, that you are establishing your own TechStat
    reviews within your own agencies and doing all those dynamics
    to try to identify some of these things. But as we identify
    this, please encourage your peers on ways of being able to
    share good ideas on how we can resolve this, as I am confident
    that you are. But as you solve some of the issues, share the
    solutions. And it is not bad to be able to brag when we are
    saving money and making things more efficient.
        So, with that, I adjourn this hearing, and we are
    concluded.
        [Whereupon, at 10:40 a.m., the subcommittee was adjourned.]

        [GRAPHIC] [TIFF OMITTED] T4041.001

        [GRAPHIC] [TIFF OMITTED] T4041.002

        [GRAPHIC] [TIFF OMITTED] T4041.003

        [GRAPHIC] [TIFF OMITTED] T4041.047

        [GRAPHIC] [TIFF OMITTED] T4041.048

        [GRAPHIC] [TIFF OMITTED] T4041.049

        [GRAPHIC] [TIFF OMITTED] T4041.050

        [GRAPHIC] [TIFF OMITTED] T4041.051

        [GRAPHIC] [TIFF OMITTED] T4041.052