[Senate Hearing 112-259]
[From the U.S. Government Publishing Office]
S. Hrg. 112-259
EXAMINING THE PRESIDENT'S PLAN FOR
ELIMINATING WASTEFUL SPENDING IN INFORMATION TECHNOLOGY
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HEARING
before the
FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT
INFORMATION, FEDERAL SERVICES, AND
INTERNATIONAL SECURITY SUBCOMMITTEE
of the
COMMITTEE ON
HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
APRIL 12, 2011
__________
Available via the World Wide Web: http://www.fdsys.gov
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri JOHN ENSIGN, Nevada
JON TESTER, Montana ROB PORTMAN, Ohio
MARK BEGICH, Alaska RAND PAUL, Kentucky
Michael L. Alexander, Staff Director
Nicholas A. Rossi, Minority Staff Director
Trina Driessnack Tyrer, Chief Clerk
Joyce Ward, Publications Clerk and GPO Detailee
------
SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION,
FEDERAL SERVICES, AND INTERNATIONAL SECURITY
THOMAS R. CARPER, Delaware, Chairman
CARL LEVIN, Michigan SCOTT P. BROWN, Massachusetts
DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
CLAIRE McCASKILL, Missouri RON JOHNSON, Wisconsin
MARK BEGICH, Alaska ROB PORTMAN, Ohio
John Kilvington, Staff Director
William Wright, Minority Staff Director
Deirdre G. Armstrong, Chief Clerk
C O N T E N T S
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Opening statements:
Page
Senator Carper............................................... 1
Prepared statements:
Senator Carper............................................... 41
Senator Brown................................................ 44
WITNESSES
TUESDAY, APRIL 12, 2011
Hon. Vivek Kundra, Federal Chief Information Officer,
Administrator for Electronic Government and Information
Technology, Office of Management and Budget.................... 4
David McClure, Associate Administrator, Office of Citizens
Services and Innovative Technologies, U.S. General Services
Administration................................................. 6
David A. Powner, Director of Information Technology Management
Issues, U.S. Government Accountability Office.................. 8
Stephen W.T. O'Keeffe, Founder, MeriTalk......................... 24
Rishi Sood, Vice President, Government Vertical Industries,
Gartner, Inc................................................... 26
Alfred Grasso, President and Chief Executive Officer, The MITRE
Corporation.................................................... 29
Alphabetical List of Witnesses
Grasso, Alfred:
Testimony.................................................... 29
Prepared statement........................................... 98
Kundra, Hon. Vivek:
Testimony.................................................... 4
Prepared statement........................................... 47
McClure, David:
Testimony.................................................... 6
Prepared statement........................................... 53
O'Keeffe, Stephen W.T.:
Testimony.................................................... 24
Prepared statement........................................... 80
Powner, David A.:
Testimony.................................................... 8
Prepared statement........................................... 62
Sood, Rishi:
Testimony.................................................... 26
Prepared statement........................................... 93
APPENDIX
Questions and responses for the Record from:
Mr. Kundra................................................... 107
Mr. Powner................................................... 111
EXAMINING THE PRESIDENT'S PLAN
FOR ELIMINATING WASTEFUL SPENDING
IN INFORMATION TECHNOLOGY
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TUESDAY, APRIL 12, 2011
U.S. Senate,
Subcommittee on Federal Financial Management,
Government Information, Federal Services,
and International Security,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:35 a.m., in
room SD-342, Dirksen Senate Office Building, Hon. Thomas R.
Carper, Chairman of the Subcommittee, presiding.
Present: Senators Carper and Brown.
OPENING STATEMENT OF SENATOR CARPER
Senator Carper. The hearing will come to order. Welcome one
and all, especially to our witnesses today. Thank you for your
preparation. Thank you for your presence. We look forward to
your testimony and the opportunity to have a good conversation.
We will be joined by some of our colleagues as we get into
today's hearing, but sort of as a precursor to today's hearing,
I was driving in to the train station this morning and flipping
back and forth between radio stations, and I happened to come
across a song where the Rolling Stones were singing, ``Hey,
You, Get Off Of My Cloud.'' [Laughter.]
How appropriate. We usually do not have theme songs for our
hearings, but if we did, that actually might work. We actually
want to get people on the cloud, as I understand it, and
hopefully when we leave here today I will understand better
what all that is about.
But our hearing today will examine the President's plan to
fundamentally transform the management of our Federal
information technology (IT) assets. The message of the plan is
clear: We need to cut what we cannot afford and nurture an
environment in which innovative and more cost effective
technologies can be employed throughout our government.
As I have said time and again in this room and other
places, we need to look in every nook and cranny of our Federal
Government--domestic, defense, entitlements, tax expenditures--
and ask this question: Is it possible to get better results for
less money? Or is it possible to get better results for the
same amount of money?
The hard truth is that many programs' funding levels will
need to be reduced. Even some of the most popular and necessary
programs out there will likely be asked to do more with less or
more for the same amount of many.
Many Americans believe that those of us here in Washington
are not capable of doing the hard work we were hired to do, and
that is, to effectively manage the tax dollars they entrust us
with. They look at the spending decisions that we have made in
recent years and question whether the culture here is broken.
They question whether we are capable of making the kind of
tough decisions that they and their families make with their
own budgets. And I do not blame them for being skeptical.
I am afraid that their skepticism has proved well founded
when you look at the kind of avoidable management failures that
we have incurred in Federal information technology over the
past decade or so. The past mismanagement of our Nation's $80
billion annual Federal information technology is not only
intolerable, it is unsustainable.
Late last year, then the Office of Management and Budget
(OMB) Director Peter Orszag said that fixing the broken
management of our Federal Government's information technology
was--and this is a quote--``the single most important step we
can take in creating a more efficient and productive
government.''
I am going to say that again, ``the single most important
step we can take in creating a more efficient and productive
government.''
Based on the information that OMB has released as a part of
its review, I believe he may be correct. The failures of
information technology management in the Federal Government
have in some cases been spectacular. For example, the
Government Accountability Office (GAO) found in January of this
year that those running the National Archives electronic
records investment had not been able to identify potential
costs and schedule problems early and, as a result, failed to
take any action to address them.
GAO estimates that because of these failures in one
troubled project--one troubled project--taxpayers will lose
somewhere between $205 million and $405 million. That is real
money where I come from.
Today we will look at the President's 25-point plan to turn
this ship around. The goals are ambitious, and so are the
timelines. That is a good thing.
Under the direction of our first Federal Chief Information
Officer (CIO), Vivek Kundra, the plan is to be fully
implemented within 18 months of its introduction. That is May
2012, if you are keeping score at home. But the various goals
are broken down into 6-, 12-, and 18-month increments. Today I
am particularly interested in hearing how we are progressing
toward those 6-month goals.
The President's plan centers around three main initiatives:
First, the plan fosters a cultural shift aimed at making
the management and implementation of large Federal IT projects
more effective and more efficient;
Second, the plan pushes the Federal Government to adopt
cheaper, better, and faster technologies;
And, third, the plan demands that we shed or consolidate
the duplicative and wasteful Federal data centers in our
inventory.
The plan is a positive first step in tackling the
institutional and systemic problems that have plagued Federal
information technology management for years. It may not be
perfect, but the President and Mr. Kundra should be commended
for taking on this challenge, and I commend you today.
We look forward to hearing from our witnesses today, about
how we are progressing toward these goals, how agencies are
responding, and what those of us here in Congress can do to
help make this a successful venture.
Today I am also happy to say that my colleagues, as they
come along, will be asking their questions, and if they really
want to give a statement, we will let them, but my guess is
they will probably just want to get right into the flow with
questions and answers.
But my colleagues Scott Brown, Senator Joe Lieberman, and
Senator Collins have joined me in introducing legislation
called ``The Information Technology Investment Management Act
of 2011.'' This legislation calls for greater transparency when
it comes to the cost and performance of our Nation's
information technology investments so that American taxpayers
can see how their money is being spent.
It also demands that agencies and the Office of Management
and Budget be held accountable for a project's failure and work
either to fix them or end them. The time for lazy or wasteful
management of these expensive investments is over. We are going
to demand that projects be on time, on budget, and deliver on
their promises. If they do not, we are going to bring them to a
halt. We are going to end the pattern of throwing good money
after bad.
I hope that our witnesses will include in their testimony
today some brief thoughts and comments about our legislation.
We always welcome constructive criticism.
And with that said, I want to introduce just very briefly
the first panel of witnesses. A couple of you have been before
us more times than you want to remember. If we had to pay David
Powner for every time he has been before us, the budget deficit
would be a lot bigger, so we appreciate especially your being
here.
Our first witness today is Vivek Kundra, who serves as our
Nation's first Federal Chief Information Officer. Mr. Kundra is
responsible for directing the policy and strategic planning of
Federal information technology investments as well as for
oversight of Federal technology spending. Previously, Mr.
Kundra worked as Chief Technology Officer for the District of
Columbia and as Assistant Secretary of Commerce in Virginia
under Governor Tim Kaine.
Our next witness is David McClure--Mr. McClure, good to see
you--who is the Associate Administrator in the Office of
Citizen Services and Innovative Technologies for the U.S.
General Services Administration (GSA). Mr. McClure works to
advance GSA's responsibilities in serving the American people
through open and transparent government initiatives and by
identifying new technologies to improve government operations
and service delivery.
Our final witness for this panel is Mr. David Powner, who
is the Director of IT Management Issues in the U.S. Government
Accountability Office. As Director, Mr. Powner is in charge of
GAO's analysis of Federal IT investments, health IT, and
cybersecurity initiatives. Again, we welcome you.
I am going to recognize Mr. Kundra to proceed first, and
you are welcome to summarize your testimony. All of it will be
made part of the record, and then once the three of you have
concluded, we will start with some questions. Again, welcome.
Thank you so much. And thank you for your leadership.
STATEMENT OF VIVEK KUNDRA,\1\ FEDERAL CHIEF INFORMATION OFFICER
AND ADMINISTRATOR FOR ELECTRONIC GOVERNMENT AND INFORMATION
TECHNOLOGY, OFFICE OF MANAGEMENT AND BUDGET
Mr. Kundra. Good morning, Chairman Carper and Members of
the Subcommittee. Thank you for the opportunity to testify on
our efforts to eliminate wasteful information technology.
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\1\ The prepared statement of Mr. Kundra appears in the appendix on
page 47.
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Effective management of IT is essential in serving the
American people, protecting our national security interests,
and keeping America competitive in the global economy. That is
why for the past 26 months we have focused on reforming Federal
IT to crack down on wasteful spending and boost performance.
Through relentless oversight, we have delivered $3 billion
in life cycle cost reductions. We are eliminating duplicative
infrastructure and have saved millions of dollars through game-
changing technologies and approaches such as cloud computing.
On December 9, 2010, we published the ``25-Point
Implementation Plan to Reform Federal IT Management,'' our
blueprint to address the structural barriers that get in the
way of consistent execution. We have segmented the reforms into
6-month increments with concrete deliverables. I would like to
highlight our progress over the past 124 days in each of the
five key reform areas.
First, we are applying light technologies and shared
solutions to allow agencies to optimize spending and invest in
their mission-critical needs rather than duplicative
infrastructure.
Since 1998, the Federal Government has seen the number of
data centers grow from 432 to more than 2,000. To reverse this
unsustainable growth, we are actively shutting down 800 data
centers by 2015. Additionally, we have shifted to a Cloud First
policy that allows agencies to pay only for the resources that
they are actually using.
Second, we are strengthening program management because no
matter how effective our technologies and policies, the success
of our most complicated, high-profile, and expensive programs
rests on the shoulders of effective program managers. Yet too
often these programs are managed by individuals randomly pulled
across the government who lack the training to successfully
deliver. That is why we have created the IT Program Manager
Career Series to attract the best talent and to make sure that
we are cultivating the top performers.
We have also seen universities like George Mason University
(GMU) and the National Defense University (NDU) stand up
programs that focus on case studies so we do not repeat
historical failures.
Third, we are aligning the budget and acquisition process
with the technology cycle to make sure that programs are not
out of date the moment that they are launched. The budget
process forces agencies to specify in great detail what they
are going to be building out 24 months before they can even
start a project. The acquisition process routinely adds another
12 to 18 months. We have analyzed funding models across the
Federal Government to identify the necessary changes to the
legal framework for IT funding that enables successful modular
development and to help contain the rise in infrastructure
costs. We look forward to working with Congress to consolidate
commodity IT funding under agency CIOs and to develop budget
models that align with modular development.
Fourth, we are strengthening governance and improving
accountability because for too long we have witnessed runaway
projects that waste billions of dollars that are years behind
schedule. That is why we have scaled the same model that
reduced project life cycle costs by $3 billion and turned it
around poorly performing projects. Already 129 agency employees
have been trained and 23 agencies have implemented the TechStat
model to tap into the ingenuity of the American people and the
collective talent of State and local governments. We have open-
sourced the very software code that the IT Dashboard was built
upon and the TechStat model. Thirty-eight States, including
Delaware and Massachusetts, and multiple countries have reached
out to express interest in adopting these tools to improve
transparency and accountability.
And, fifth, we are increasing engagement with the industry
to demystify the procurement process and dispel common
misconceptions regarding the acquisition regulations. We debunk
the top 10 myths in IT procurement, and we are building a pre-
Request for Proposal (RFP) platform to help overcome the ties
that may occur between agencies and certain vendors. The
platform will give agencies access to the most innovative
solutions and provide a small business the same opportunities
that an industry titan has.
Over the past 124 days, we have focused on execution rather
than just policy development. We must continue to buildupon the
progress to date and scaled practices that we know work to make
Federal IT perform at the level the American people expect. The
Federal Government must be able to provision services more like
a nimble startup and leverage smaller technologies that require
lower capital outlays.
I would like to thank the Members of this Subcommittee and
their staff for putting IT management front and center and
helping transform the landscape of Federal IT.
Thank you for the opportunity to testify. I look forward to
any questions you may have.
Senator Carper. Great. Thank you for that testimony and for
the work that it represents. Thanks so much. Mr. McClure,
welcome.
STATEMENT OF DAVID MCCLURE,\1\ ASSOCIATE ADMINISTRATOR, OFFICE
OF CITIZEN SERVICES AND INNOVATIVE TECHNOLOGIES, U.S. GENERAL
SERVICES ADMINISTRATION
Mr. McClure. Good morning, Chairman Carper and Senator
Brown. Let me introduce myself. I am Dave McClure from the GSA.
I would like to talk about the GSA role in the IT reform agenda
this morning.
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\1\ The prepared statement of Mr. McClure appears in the appendix
on page 53.
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I really want to summarize three main points that I make in
my written statement.
Point No. 1 is that the 25-point IT reform plan and the
Federal Cloud Computing Strategy issued by Vivek are very
constructive, and they are sorely needed steps forward in
improving the way IT is acquired and managed. GSA's role in
this agenda is very clear. We focus on shared, lightweight
technologies, and simplifying the provisioning of IT services
on demand so that we can accelerate agencies' access to modern
technology, get solutions in the hands of users faster, and
lower costs.
Cloud computing is at the forefront of these innovative
technologies today. As Vivek has noted, it offers compelling
advantages when, like any other technology implementation, it
is done well.
Cloud computing is already here in the Federal Government,
and it is an inevitable trend from a technology marketplace
perspective. Many agencies have started implementing cloud
solutions and found significant savings. We have documented
many on our public web page, Info.Apps.gov.
The return on investment has been lower IT operating costs,
improved operational performance, better service delivery, and
increased agility in provisioning changes to computing needs.
Point No. 2, GSA plays a strong governmentwide leadership
in supporting the adoption of cloud computing in the Federal
Government. The Federal Cloud or Project Management Office
(PMO), is housed in my office at GSA, and we have the lead in
facilitating new innovative cloud computing procurement
options, ensuring effective cloud security and standards are in
place, and identifying potential multi-agency or governmentwide
use of cloud computing solutions.
Our cloud computing PMO is active, engaging, and
productive. My written statement outlines six cloud-related
activities. I just want to focus on three of them briefly.
Let us start with the Federal Risk and Authorization
Management Program (FedRAMP) is being established to provide a
standard security approach for assessing and authorizing cloud
computing services and products. Currently this process in the
government is expensive, it is time-consuming, it is a heavy
paper-driven process exercised inconsistently across the
government. An average Assessing and Authorizing (A&A) costs up
to $180,000 and requires up to 6 months to complete. FedRAMP
will allow joint authorizations and increased use of continuous
security monitoring services for government and commercial
cloud computing systems.
Because we can achieve a more consistent security baseline
and a common interpretation, we can leverage the work of one
agency for another, or as we say, approve once and use often.
This should help reduce cost, it should enable rapid
acquisitions, and it should reduce the overall effort of the
government in this area.
I might add that we have developed this with broad
consensus in the government, involving that National Standards
and Technology (NIST), the Department of Homeland Security
(DHS), the Department of Defense (DOD), the National Security
Agency (NSA), and various commercial industry consortia.
Another important governmentwide initiative is
infrastructure as a service. Each year the government spends
tens of thousands and millions of dollars on IT products and
services, heavy focus on maintaining the current computing
infrastructure needs and demands. We have established a Blanket
Purchase Agreement (BPA) with 12 companies, many with multiple
partners who offer storage, computing power, and Web site
hosting as commodities. The benefits include commodity type
pricing for services, allowing customer to easily compare
prices across vendors. It also offers standardized technical
and security requirements that companies are required to meet
across the entire government.
The third area is cloud-based e-mail. We chose to tackle
perhaps one of the most ubiquitous business technologies in use
by all Federal agencies: e-mail. Using a governmentwide working
group, we again took a collaborative approach to building a
procurement vehicle. Once it is released and concluded,
services will be offered to Federal customers via a Blanket
Purchase Agreement. I think it will accommodate a range of
robust, feature-rich e-mail services in public, private, and
highly secured clouds.
So my final point is this: GSA is also walking the talk. A
lot of what we are doing internally within GSA is also very
robust in the cloud space. We are putting in one of the first
cloud-based e-mail systems in the government. We expect a
savings of over $15 million in 5 years. We are reducing our own
data centers from 15 to 3 by 2015. We estimate a $2 million
annual reduction in data center costs as a result. And we host
perhaps some of the most visible Web sites, public Web sites in
government, including USA.gov, which is the Nation's portal or
front door into the Federal Government, as well as Data.gov,
which is one of the first public-facing government Web sites to
be successfully deployed in a cloud environment.
We also host a lot of open-source sharable code solutions
that lower the cost and help implementations in areas like
Challenge.gov, where challenges and contests are being run by
Federal agencies.
So I hope this offers you a brief flavor of what we are
doing at GSA to improve the IT outcomes in the government.
Again, thanks for having me here for testifying.
Senator Carper. Mr. McClure, thank you for testifying.
Mr. Powner, welcome. Thank you.
STATEMENT OF DAVID POWNER,\1\ DIRECTOR OF INFORMATION
TECHNOLOGY MANAGEMENT ISSUES, U.S. GOVERNMENT ACCOUNTABILITY
OFFICE
Mr. Powner. Chairman Carper, Senator Brown, we appreciate
the opportunity to testify this morning on IT acquisitions.
Chairman Carper, I would like to thank you for your oversight
of Federal IT acquisitions. Your many hearings highlighting the
wasteful spending in this area has led to many improvements in
Federal agencies and at the Office of Management and Budget.
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\1\ The prepared statement of Mr. Powner appears in the appendix on
page 62.
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Senator Carper. Very nice of you to say that. Thanks very
much for being a big part of that.
Mr. Powner. OMB plays a key role in this oversight process.
In fact, OMB has been required by the Clinger-Cohen Act of 1996
to track, analyze, and report to the Congress on IT
expenditures, which now total almost $80 billion.
To help carry out this role, OMB established several
oversight mechanisms, including lists of troubled projects,
starting in 2003, that clearly were not as useful or accurate
enough to perform the appropriate level of oversight. Under
Vivek Kundra's leadership, OMB has improved its oversight of
and management of IT acquisitions by: one, creating the IT
Dashboard; two, using this information on the Dashboard to hold
agencies and CIOs accountable; and, three, introducing
comprehensive IT reform. I would like to highlight each of
these efforts and what additional actions are needed.
First, the Dashboard. In June 2009, OMB deployed a public
Web site, known as the IT Dashboard, to improve the
transparency and oversight of approximately 800 major Federal
investments totaling about $40 billion. The Dashboard presents
information on costs and schedule and a CIO assessment, among
others. Today, the Dashboard shows that nearly 40 percent of
the 800 investments are in need of management attention due to
their red or yellow status. More simply put, this equates to
over 300 investments totaling $20 billion that are at risk.
I would like to repeat those numbers. We have 300
investments totaling $20 billion that are at risk.
In addition to identifying troubled IT projects, the
Dashboard is an excellent tool to identify duplicative
investments, which could result in significant savings. We have
ongoing work for this Subcommittee looking at this duplicative
spending.
Despite the improved transparency, data reliability remains
an issue, as our work has shown that Dashboard information is
not always accurate and consistent with agency records. OMB and
agencies acknowledge this and have a number of activities under
way to improve the Dashboard and the accuracy of what is being
reported.
OMB has also improved the management of IT investments
needing attention by holding TechStat meetings. These meetings
started in January 2010 and are led by Mr. Kundra and agency
leadership. Well over 50 of these meetings have been held, and
the results are impressive. Four projects have been canceled
and 11 restructured. OMB has claimed that this has resulted in
a $3 billion reduction in costs. OMB has also identified 26
additional high-priority projects that have undergone extensive
review, which resulted in corrective action plans.
One of the high-priority projects is the National Archives
electronic records acquisition that you mentioned, Mr.
Chairman. Our work for this Subcommittee has highlighted the
mismanagement and major cost and schedule issues associated
with this acquisition. It is one of the projects that OMB is in
the process of restructuring. Although OMB has had significant
results with its TechStat meetings and its high-priority
projects, many more projects are in need of OMB and agency
oversight.
In addition to the Dashboard and TechStat sessions, OMB
issued a comprehensive IT reform plan that includes replicating
these TechStat sessions throughout the government to improve
governance and to strengthen program management. Many of the
reform initiatives are consistent with your many years of
oversight in this arena and our body of work on IT acquisition.
And to its credit, OMB has issued aggressive milestones that
span the next 18 months. Now the challenge lies in
implementation.
In summary, OMB's efforts to improve the transparency of
the IT Dashboard, to improve IT acquisition execution through
its TechStat sessions, and its IT reform initiatives are
encouraging. But the accuracy of the Dashboard information
needs to greatly improve. Even more focus needs to be put on
the $20 billion at risk, and the major IT reform initiatives
now need to be implemented.
I would like to conclude by commending your leadership, as
well as Mr. Kundra's in this area, Mr. Chairman, and I am
pleased to answer any questions you have.
Senator Carper. Mr. Powner, thank you so much, and thanks
again for being a big partner with us in these efforts.
Senator Brown has another hearing that is going on, and he
is going to be coming in and out. But I just want to recognize
him for any comments that he wants to make, and he can go right
into questions whenever he is ready.
Senator Brown. Thank you, Mr. Chairman. I am going to stay
as long as I can. I enjoy this very much, and I appreciate you
pushing forward on this.
I have a statement that I am just going to submit for the
record.
Senator Carper. Without objection.
Senator Brown. Thank you.
I might as well start. Mr. Kundra, according to your
testimony, your high-priority IT project and financial system
reviews have led to over $3 billion in life cycle cost
reductions. How many investments were actually reviewed?
Mr. Kundra. We actually overall looked at over 50
investments.
Senator Brown. Five-zero?
Mr. Kundra. Fifty, yes. So these 50 investments, and one of
the things we focused on was the most troubled investments out
of the IT portfolio. And the reason we introduced the IT reform
plan, the 25-point plan, was to actually now multiply the same
processes across every single department and agency within the
U.S. Government because the challenges at the end of the day,
despite OMB's oversight capabilities, what we want to do is we
want to prevent these investments from getting to the point
where they are years behind schedule or hundreds of millions of
dollars over budget. And that is what we are focused on.
Senator Brown. By then isn't the technology obsolete in
many instances?
Mr. Kundra. Absolutely. The way that the acquisition
processes actually work right now and the budgeting process,
unfortunately we plan out years in advance and end up locking a
specific technology. And by the time you actually implement
some of these technologies, they are way out of date.
Senator Brown. I know in New York City, for example, they
hired a company, VMware, to come in and actually go and review
all their IT specifications because there were so many
individual fiefdoms and they were not connected. They were not
efficient. They were wasting money. They have apparently saved
a tremendous amount of money through, obviously, the cloud
technology and that whole new way of doing things.
Out of the 50 that you did--how many actually are there
total in terms of the actual investments? You said you looked
at--how many actually are there? What is the big picture?
Mr. Kundra. So where we need attention, as Dave Powner
pointed out, is about 300 or so investments, and what we are
trying to do now is to scale the same exact model we used to
turn around or terminate these poorly performing investments.
So the process we used was coupling the IT Dashboard where we
are shining light on what was going on with these investments
with what we call our TechStat accountability sessions to
really drill down on each of these investments to make sure
that if, for example, you do not have a dedicated project
manager, if you do not actually have a clearer understanding of
what the business objectives or goals are, or you are in the
process of implementing outdated technologies, these are huge
investments that have a major effect on how agencies are
actually being transformed.
One of the problems we have seen throughout these sessions
is that people are looking at these projects at IT projects.
But at the end of the day, they are about transforming how an
agency fundamentally operates.
Senator Brown. So when you are looking at the--when you say
$3 billion is or may be saved in part, this is being done by
canceling some projects, I am presuming. But how much did we
already lose with what was already spent on those investments?
Mr. Kundra. Well, so that is a little more difficult number
to come up with. To give you an example, with financial systems
what we did is we looked at the entire life cycle cost of
financial systems across the Federal Government, and that was
about $20 billion in life cycle costs.
The Department of Defense, for example, had a project
called Defense Integrated Military Human Resources System
(DIMHRS). It was their integrated human resource planning
system. They spent 12 years and approximately $1 billion, and
we ended up killing that project.
Unfortunately, what we do not want to do is be in a
position where we are just killing IT projects because at the
end of the day there is still a business need. They are not
just implementing projects because they felt it was a fun thing
to do. There is actually a business problem.
So the four that we killed, the real victory in my mind is
actually the projects, the 11-plus projects that we looked at
where we de-scoped them. And what I mean by de-scoping is we
said instead of trying to boil the ocean, where people have
bought into this fallacy that these enterprise resource
planning systems are going to balance your books, they are
going to track your assets, they are going to make you coffee,
that you have to actually break these projects down into 6-
month increments. If within 6 months you cannot prove that you
have delivered something of value to your customers, then you
need to either halt that project or you need to fundamentally
rethink it or terminate it. And what we are seeing with these
large enterprise projects is that people are spending years, in
some cases decades, implementing a project that is not working.
Senator Brown. So did we actually save $3 billion, or did
we just not lose more money to cost overruns on these actual
projects?
Mr. Kundra. Well, it is a combination of both because where
we de-scoped the projects in the cases of financial management
systems like the Environmental Protection Agency (EPA), we
actually took that project down and cut it significantly lower.
And also the way we were saving that money in terms of both
cost avoidance and the original life cycle costs is that there
are game-changing technologies, new technologies that have
emerged since the project was originally conceived.
Senator Brown. It always seems like we are a couple of
steps behind. It seems like the government is an easy mark:
Hey, we have this new technology, go buy it. And then we invest
billions of dollars in some instances, or at least hundreds of
millions, and then by the time it actually gets through the
process, it gets implemented, it gets up and running, and it is
obsolete. Then we have to get the updates and upgrades, and it
just seems like we are an easy mark.
I am wondering, in the next 50 investments, is there the
potential for significant cost savings in the future? Or were
these initial reviews just kind of picking off the low-hanging
fruit?
Mr. Kundra. I think there are significant opportunities for
cost savings, in the billions, and here is why. So to your
point, one of the big problems we see is this huge gap between
the public sector and the private sector, and the reason this
gap exists is because the culture in government historically
has been that the government must build its own infrastructure,
it must own the software development. And one of the reasons we
are shifting to the Cloud First policy essentially is to move
away from this philosophy of asset ownership to service
provisioning.
So in the same way that a small startup company would go
out there, and if they are standing up a business, they are not
going to go out there and build their own e-mail system or
their own accounting system. They are going to go to a company
like Quicken Books and fire up an accounting system or go to
Microsoft or Google or any of these other providers and fire up
an e-mail system.
What we need to do is government needs to operate much more
like a nimble startup than it does today, where we are engaging
in these multi-year, multi-billion-dollar IT projects. That is
what we are doing with GSA, putting in place these
governmentwide procurements that actually will allow us to
provision the services.
Senator Brown. Just in closing, and then I will turn it
back to the Chairman in Massachusetts we have amazing companies
that deal with this stuff every day, and it is second nature.
We have the technology leaders in the world. And we are in the
government, and it is like we are sometimes in the Dark Ages. I
am sure this is not the first time we have had a hearing on
this stuff. It is my first experience on it. But I know you
have been working on it for years.
At what point do we actually start to realize these
billions of savings, I mean, real dollars that can be used in
other areas, especially now?
So that was more of a statement than a question, but I
would like to come back. Thanks, Mr. Chairman.
Senator Carper. Thanks very much.
Senator Brown and I hold a lot of hearings in here, and
what we focus on is how do we get better results for less
money. That is really what we do. That is our bumper sticker--
how to get better results for less money. And when you think
about IT projects, sometimes we do not really focus on what we
are trying to do is get better service, better results for less
money.
Give us a couple of examples, and I do not care who leads
off, but give us a couple of examples where you actually can
say these are some projects where we actually got a whole lot
better results for less money, or a little better results for--
better service, maybe, for not a lot more money. Can you give
us a couple good examples?
Mr. McClure. Yes, I would be happy to start. In my case, we
have been one of the first to move into the cloud computing
environment, for example, and I mentioned USA.gov, which is the
public portal for the Federal Government. By moving it into a
cloud environment, we are able to save an estimated $1.7
million a year in computing costs because we moved into a more
agile computing environment. We were able to provision changes
to that system in hours as opposed to months, which means I
could change the Web site and its features very quickly. And,
third, it allowed me to use people in a different way. Rather
than monitoring and running the infrastructure that we owned, I
actually could turn them over to doing more mission-based and I
think more value-added types of services.
So for us it was a cost savings, it was an agility to move
faster, and I was able to free people up to do more value-added
work. And I think that is a common occurrence across many of
the implementations right now.
Senator Carper. All right. Good. Some other examples,
please.
Mr. Kundra. On something as simple as e-mail services, the
U.S. Department of Agriculture (USDA), with 120,000 employees,
and the General Services Administration (GSA), with 17,000
employees, moving e-mail over to the cloud, what they were able
to save is over $40 million. Something as simple as a Web site,
what the Recovery Board did is they saved $750,000 by just
moving to the Amazon cloud.
Health and Human Services (HHS), by looking at electronic
health record grants, moving over to a sales force
implementation, they cut their costs by 60 percent.
So we are seeing huge savings, and it is not just in
dollars. Part of what is happening is we keep building
duplicative infrastructures, so the numbers you look at in
terms of data centers, we went from 432 to more than 2,000, and
part of the reason is because people have been so focused on
building duplicative, redundant infrastructure rather than
lifting up and saying how do we make sure that in the same way
the American people, when they go and book a ticket, whether it
is for a flight or a concert or making a reservation at a local
restaurant, that experience is so much better than when they
are dealing with the government. And the reason is because the
government is so focused on the duplicative infrastructure, and
we are trying to abstract all of that so we can get the
government to focus actually on the customer experience rather
than investing billions of dollars in this duplicative
infrastructure.
Senator Carper. I have not counted the number of times that
``cloud'' has been used in our testimony or our responses to
questions, but there are a lot of people who are following the
hearing today have no idea what you are talking about. Why
don't you just step back--actually somebody had it in their
testimony, a little definition at the bottom of the page, what
we are talking about, which I do not know if it would be all
that helpful to too many people. Just make it real simple and
easy for folks to understand.
Mr. Kundra. Sure. So the most basic way to think about
cloud computing is if you look at the progress that was made
throughout this Nation, it used to be that every house had its
own well and had its own electrical generation system. But as
technology evolved, we ended up with an electrical grid, we
ended up with a water distribution system. So now what happens
is, when you are at home, whether you are plugging in a mixer
or a TV, you consume the electricity that you are actually
using rather than to have to pay for all that infrastructure.
In the same way, cloud computing from a technology
perspective, the simplest way to think of it is that the
government is going to be able to pool its demand and actually
dynamically allocate resources or use resources so that we are
not paying for resources that we are actually not using.
Senator Carper. A friend of mine tried to explain it to me
not long ago, and he said, ``Do you have kids that are old
enough to drive?'' I said, ``Yes, we have a boy 21 and one
22.'' And he said, ``Are they away at college?'' I said, ``One
is, and one is actually in another country.'' He said, ``Do
they ever come home?'' I said, ``Well, they do.'' And he said,
``How many vehicles do you have?'' I told him, and he said,
``Do you need more vehicles when they come home?'' And I said,
``Yes, we do.'' And he said, ``What do you do, go out and buy a
new vehicle so that when they come 2 or 3 weeks out of the year
their car is there for them to use?'' And I said, ``No. We
actually rent a car.'' He said, ``Well, that is kind of like
what this is.'' So that helps me understand it.
I want to try to draw an analogy here and use this analogy
as a way to get to sort of get why do we have this problem. It
has been pervasive throughout the Federal Government. We spend
so much money for these projects. Some of them work quite well,
and too often they do not.
We held a hearing here 2 weeks ago, and the focus of our
hearing was major weapons systems cost overruns. And as it
turns out, GAO told us 10 years ago, in the year 2000, that our
major weapons systems cost overruns was $42 billion. And GAO
testified 2 weeks ago that our major weapons systems cost
overruns is $402 billion. It went from $42 billion in 2000 to
$402 billion last year.
And as we drilled down on why that was happening, we got a
couple of answers. One of those is that sometimes the
technologies that are being proposed to use on these weapons
systems are what they call immature, meaning they have not
really been fully developed.
Second is the agency, the military branch, or service may
not have fully figured out what they want, and they continue to
do modifications to the projects. We call it ``project creep.''
The third thing is we do not necessarily do the best job of
making sure the acquisition folks with experience are bird-
dogging these projects and that they have the kind of clout
that they need in order to blow the whistle when things are
going wrong.
We had an example from a fellow named John Young, who was
the top person in the Bush Administration, the second term, for
acquisition, and we had one of his deputies, his top deputy for
acquisition. He is an Assistant Secretary for Defense. We said,
``Talk to us. How long have you been in your position?'' He
said, so many months. And we said, ``What kind of turnover did
you get from your predecessor?'' And he said, ``Well, I did not
get any turnover. My predecessor left 18 months before I did.''
We said, ``No kidding.''
``Tell us about your direct reports. How many direct
reports do you have?'' And he said he was supposed to have six,
and only two were filled.
So here is like the top person really in the Department of
Defense whose job it is to make sure we are getting our money's
worth. There is an 18-month lapse between when he comes in and
the guy before him left, and only two out of six direct reports
were there. So it turns out the guy who is in that position
today in this Administration, his nomination was held up for 15
months--15 months before he was actually allowed to go to work.
So those are the kinds of problems that have led to $402
billion cost overruns.
When you drill down on it, how have we gotten into the
situation that we are in where we have $80 billion worth of
projects and maybe a quarter or so are at risk? I do not know,
maybe, David, this is good one for you, Mr. Powner.
Mr. Powner. Yes, well, a couple things. One is--and I think
a lot of this is tied to Mr. Kundra's IT reform plan. You could
start with program management. There clearly needs to be
strengthened program management across the government where, to
your point, we define what we want well up front; we have a way
to manage risks.
But on top of that program management level, what happens
many times--and it has been the subject of many hearings that
you have held, for instance, like what happened at the Census
Bureau--we have a lack of executive accountability. Many times
when a project gets in trouble, they blame the program manager
instead of a key executive who should be overseeing that,
including the CIO. And I think when you look at Vivek's reform
plan, one of the five major areas is governance. There needs to
be better governance over these projects from an executive
point of view. In fact, that is what Vivek is attempting to
implement through his TechStat sessions.
So, Senator Brown, to your point, yes, we have held over 50
meetings, and we have saved $3 billion. But your chart up there
shows that there are 300 that need attention right now, and if
we projected that, I mean, there could be $20 billion of
savings if there is any success like he has had on those first
50.
Senator Carper. All right. Anybody else want to take a
shot? What I want to make sure is that we figure out what the
problems are, the major problems are, and to make sure through
executive action and through legislative action that we are
actually going after the root problems. Mr. McClure.
Mr. McClure. Yes, I think Dave hit it on the head. It is
governance and program management, but those have been the same
problems that we have been pointing to for the last two or
three decades in Federal IT.
I think what this Administration is doing is trying to
focus program management and governance on transparency. You
have to get this stuff out in the open in terms of the status
of projects. It cannot be buried in an agency. It has to be a
fact-based assessment, not an emotional appeal. And it has to
be near real time. We cannot do this reporting months after
something has already occurred.
And, finally--and I think Vivek is doing this with
TechStat--these things have to be focused on problem solving,
not reporting. We can report, but we still miss what do we do
to fix it. So I think we have to change the agenda to problem
solving.
Senator Carper. Good. That is a good point.
Mr. Kundra, before I yield back to Mr. Brown, Senator
Brown, go ahead.
Mr. Kundra. Chairman Carper, I still recall my very first
meeting with you when I started, and one of the things you
pointed out----
Senator Carper. Was it that bad?
Mr. Kundra. It was great. You actually highlighted the need
for reforms, and one of the things I did after I met with you
is studied history, went back to 40 years of challenges in
Federal IT management. And I do not think contractors wake up
every morning and say, ``Hey, how are we going to make sure we
mess up Federal IT this morning?'' And I do not think
government employees wake up every day and say, ``How are we
going to go out there and make sure these projects fail?''
Part of what we saw was that the efforts over the last 40
years, a lot of it was very much around policy, and there has
been great policy historically in place. But the challenge was
a lack of a focus on execution. And the hearings that you have
had have been tremendously helpful, and the fact that you have
reached out to agencies to get them to improve the data
quality, as Dave mentioned, the first thing we wanted to do is
just shine light. And what we did when we launched the IT
Dashboard is we actually put up a picture of every CIO right
next to the project they were responsible for.
Senator Carper. No kidding.
Mr. Kundra. With how they were doing in costs----
Senator Carper. I always joke about when you look up in the
dictionary, you look up a particular word, you have somebody's
picture.
Mr. Kundra. Absolutely. And I was Public Enemy No. 1 for a
couple of weeks, but I think very quickly we realized by
shining light all of a sudden we were exposing some of the
major issues around IT projects.
And in the 25-point plan, we highlight some of the
challenges and areas that we need to focus, but I would point
to one significant area where I think improving or moving the
ball from would make a tremendous difference, which is around
program management, as both David Powner and David McClure have
mentioned. If you think about multi-million-and multi-billion-
dollar IT projects and government officials that are charged
with managing them, and if you compare that to other industries
such as aviation, medicine, and firefighting, you do not set
foot on a 777 unless you have gone through a simulator and
hundreds if not thousands of hours of training. You do not get
to operate on your first patient unless you have gone through
medical school, a residency program with attendings. Or if you
are a firefighter, you actually practice fire drills on actual
fires before you go out there and put out your first fire.
We have not done that historically when it comes to program
management, and I think that is a key area of our reform
agenda.
Senator Carper. Great. Thank you. Senator Brown.
Senator Brown. Thank you.
So, Mr. Powner, just touching base, Mr. Kundra says $3
billion in estimated saving, and GAO says $3 billion in
estimated cost overruns. So does that mean we are basically at
square one or are we actually realizing real savings that we
can actually put back into the Treasury and use in other areas?
Mr. Powner. Well, I think it is probably a mixed bag, as
Mr. Kundra mentioned. I think when we eliminated some of those
projects--there were four that were terminated--I think those
are real savings. The restructuring, that is a little uncertain
about how much real savings there are there. But, again, it
probably--the use of that money moving forward is--we are
familiar with some of those projects that are restructured,
like the National Archives project. That is a good move.
So a couple points here, though, in terms of savings. If we
are really after savings, I think looking at those troubled
projects is one way to go. There is probably another way if you
look at--I am going to shift gears just real quickly here,
Senator Brown. When you look at the Dashboard--and we are doing
this work for this Subcommittee right now. You could look at
duplicative spending associated with that Dashboard, so there
are over 5,000 systems that we are investing in. I can tell you
right now that there are over--in Fiscal Year 2011 we are
funding over 550 financial management systems at $3 billion. So
the question is: Does the Federal Government need over 550
financial management systems?
And I can go right down the line. I could tell you----
Senator Brown. I think you know that answer.
Mr. Powner. Right. And I can give you example after
example. So not only do we need to improve the performance of
what we are spending money on, but there is potential for
duplication when you start looking within and across agencies.
There are 600 H.R. systems in the Federal Government that we
are funding. The Fiscal Year 2011 funding is $2.5 billion on--
--
Senator Brown. That is out of control.
Mr. Powner [continuing]. On 600 H.R. systems. Those are the
things that really need further investigation.
Senator Brown. So noted. Mr. Chairman, that is your next
hearing.
Senator Carper. Our next hearing. [Laughter.]
Senator Brown. Thank you.
How will GAO be tracking the performance of these
initiatives going forward?
Mr. Powner. Well, in terms of--a couple things. Looking at
the performance of these projects, we continue to do work on an
every-six-month basis, we report on the Dashboard, how those
numbers are changing, and the accuracy and reliability of what
is being reported. And then on those duplication numbers, we
are doing work for the Subcommittee where we will be laying
out, by functional area, how many investments there are and
what the total dollars are. And it will raise questions about
what is being done to manage that more effectively.
Senator Brown. So you can certainly make recommendations,
but you do not have any teeth at all to really drop a hammer
down and say, hey, listen, you have to stop this. You are
making the recommendations to us, and then we are going to take
it up the food chain. Is that a fair statement?
Mr. Powner. Yes, clearly, most of our recommendations go to
departments and agencies, and right now Mr. Kundra and I work
very closely together on some of these governmentwide issues,
and I will say that there is a lot going on in his shop right
now. But clearly your oversight hearings help with action on
those items.
Senator Brown. And I know, obviously, with any type of
projects, it takes leadership. And, Mr. Kundra, what is your
plan? Do you plan on staying on as the Federal CIO until the
plan is seen through?
Mr. Kundra. Well, we are focused on executing the plan,
obviously, and I am committed to making sure we are executing.
As a matter of fact, at the end of this month we are going to
be celebrating the accomplishments at each of the agencies
where they have delivered. But what is important here is I can
stay on as long as it is necessary, but what is really, really
important in my mind is that this plan, the way we have
engineered it, it is not dependent on any single individual.
Because at the end of the day, as you correctly point out,
those 300-plus investments, every CIO in every major department
needs to be as focused on execution as we are within the White
House.
Senator Brown. And when you are looking--I know the IT
Investment Management Act that Senators Carper, Collins,
Lieberman, and I are introducing today takes some steps to
codify some of your office's successful initiatives, such as
the IT Dashboard and TechStat sessions. What else can we do,
any other suggestions, to ensure the success of this plan
moving forward?
Mr. Kundra. I think, Senator, one of the areas that will be
really, really helpful, as Dave points out, some of the
duplication, is how we look at funding across the Federal
Government. And what I mean by that is the way Congress
appropriates funding is bureau by bureau, department by
department. I see a huge opportunity here in terms of being
able to look horizontally across the Federal Government, and
whether it comes to the 2,000-plus data centers or hundreds of
whether it is financial systems or H.R. systems, and to take a
step back and fundamentally rethinking how we are funding IT
across the Federal Government. And second would be to actually
empower departmental CIOs by consolidating at least commodity
IT. And when I say commodity IT, what I mean by that is these
financial systems, H.R. systems, e-mail, data centers,
desktops, putting that authority under the departmental CIO, I
think we will see huge results. And we have case studies such
as the Veterans Administration (VA) where we are beginning to
see a much better outcome in terms of the commodity assets.
Senator Brown. How do you maintain a robust security of the
Federal computer networks when you are moving to the cloud
system? How do you make sure that we maintain that high level
of security?
Mr. Kundra. Part of what we are doing actually is looking
at how we contract when we begin to move a lot of these systems
over to the cloud. And what I mean by that is already today, if
you look at 4,700-plus systems, they are outsourced. And we
specifically specified in terms of contracting language how the
systems are managed and what the security requirements are.
Second, one of the things we are doing with cloud computing
is we are trying to make sure that we get real-time data feeds
on the security posture of these providers so that the
Department of Homeland Security and Chief Information Security
Officers can analyze the data and make sure that we are very
aware of what is going on as far as the security posture of
those systems are concerned.
And, third, we are making sure that we come up with a
common set of controls, which is going to be the floor, the
minimum set of controls that are technical in nature, that we
can constantly monitor to make sure that if we are being
attacked in any way or if those systems are being compromised,
that we have that information on a real-time basis.
Senator Brown. Mr. McClure, you have been kind of shy
today, so I figured I would ask you a question. [Laughter.]
GSA has taken a lead role in the Cloud First rollout. How
is GSA assisting agencies in this effort?
Mr. McClure. Well, through a couple of mechanisms. One, as
I think Vivek pointed out, we are putting in contractual
arrangements through our Blanket Purchase Agreements (BPAs) on
things like infrastructure as a service and e-mail that are
cloud based. It allows really the agencies to purchase or
provision these services in a very cost competitive way and
much quicker than going through a full and open competition
process. So we have done all the vetting. We have looked at the
vendors. We have qualified them as being competent in space. We
have done the security reviews. The agencies can purchase what
they need from a mission perspective.
The second thing, I think, that we do is actually put
together the FedRAMP program that Vivek is referring to,
working across government, not just GSA, but we are trying to
put a simpler, more effective, more complete security review
for the government that is consistent across government and
then leverage that once it is done rather than repeating them
over and over and over again.
So I think that will tremendously increase the speed by
which we can get some of the technology solutions in place.
Senator Brown. Mr. Powner, one final. What are the biggest
security risks moving forward toward cloud-based IT services?
Mr. Powner. Well, clearly, security is a great concern. I
would add that, like any project moving forward, you need to
define your security. One option, moving to the cloud, if a
commercial cloud is not adequate, there are private clouds you
could move toward also with greater security.
Senator Brown. Thank you Mr. Chairman.
Senator Carper. Good questions.
Maybe a question for Mr. McClure and for Mr. Kundra. The
President's plan contains, I believe, 25 action items, and 14
of them are set to be completed within, I believe, 6 months of
the plan's issuance. There are about 2 months left on the first
crucial timeline that has been set.
I guess my first question to both of you would be: Do you
think we are on schedule for those 14 items? And if not, which
ones do you think we will not accomplish and why?
Mr. Kundra. Sure, as I think with 124 days behind us and I
believe about 58 days to go, part of what we are really focused
on is three areas:
One, in terms of making sure we are working with Congress
on the budget flexibilities, I think that is an area given that
Congress has been very focused on the 2011 budget and now the
2012, we have not made as much progress as I would have liked
on moving forward in that direction.
The second area that we are very, very focused on right now
is actually on the program manager path, the career track. I
think we are in good shape there. We are very focused in terms
of shutting down the 800 data centers. We have already
identified over 100 data centers that agencies have zeroed in
on that could be shut down this calendar year. We are making a
lot of good progress on----
Senator Carper. What do you do? Do you ask the agencies to
help identify them? Is that the way it is working?
Mr. Kundra. So we have actually put together a Data Center
Consolidation Task Force, and that task force is zeroing in on
each of the departments, and we are looking for opportunities
to consolidate, not just within departments but across the
Federal Government. And so those are the data centers that we
want to shut down, but we want to move forward very, very
aggressively to make sure that assets that are not being
utilized, there is no need to waste taxpayer money on them.
Senator Carper. As the Postal Service struggles with trying
to figure out how to be vibrant and play a critical role in the
21st century, they are looking to close down not just post
offices but also distribution centers. And there is a pushback.
Are you getting pushback on these efforts to close the data
centers? Or is it pretty much a fait accompli?
Mr. Kundra. I think once we release the locations and the
names, I am sure there is going to be a lot of robust
discussion back and forth.
Senator Carper. OK.
Mr. Kundra. But I definitely expect that we will be before
this Subcommittee talking about this.
Senator Carper. All right. Good enough.
Mr. McClure, any thoughts on that question?
Mr. McClure. Yes, I think some of the things that I
discussed in the statement today are helping the Cloud First
strategy. The infrastructure as a service offering, the cloud
e-mail offering, the ability for agencies to get software in
the cloud off of our apps.gov Web site--these are all helping
the agencies meet, I think, the Cloud First deadlines that the
Administration has set.
We also are helping create a pre-RFP collaboration platform
so that industry and government can actually talk about
solutions before we enter into the laborious contracting and
procurement process. I think that will be very helpful.
The final area I think we are helping is in data
consolidation in that we do a lot of the leg work for Vivek and
collecting a lot of the information. And we can step back with
Vivek and look, similar to what Dave is doing, on where we see
real opportunities for cloud and consolidation across
government, not just within a single agency but across
government, and that is really where I think a lot of progress
can be made as well.
Senator Carper. OK. I think you have spoken to this. I am
going to drill down on it just a little bit more. Each agency
is supposed to identify three must-move systems to the cloud
within the first 3 months of 2011, and let me just ask again.
Have all the agencies met this goal? I think you may have
responded, but have all the agencies met this goal?
Mr. Kundra. Yes, they have submitted--I think we have about
75 systems that have been identified that will move to the
cloud, and part of what agencies are doing right now is making
sure that they are looking at their security requirements,
procurement strategies, to actually begin migrating over to the
cloud.
Senator Carper. All right. Thank you.
Again, another question for Mr. Kundra and Mr. McClure. I
am sure you are both aware of news over the past couple of days
concerning Google's claim that their Apps for government cloud
product received Federal Information Security Management Act
(FISMA) certification and accreditation from GSA. According to
press reports, the Department of Justice (DOJ) notified Google
in December 2010 that its Apps for government was, in fact, not
FISMA compliant. To help provide some greater clarity on this
issue, I would just like to ask both of you, if you would, to
comment on the recent reports and discuss how OMB and GSA are
addressing the concerns that are raised by them.
Mr. McClure. Sure, I would be glad to bring some clarity to
it. In July 2010, GSA did a FISMA security accreditation for
Google Apps Premier. That is what the Google product was
called, and it passed our FISMA accreditation process. We
actually did that so that other agencies could use the Google
product, and we do one accreditation, and it is leveraged,
again, across many agencies.
Since that time, Google has introduced what they are
calling Google Apps for government. It is a subset of Google
Apps Premier. And as soon as we found out about that, as with
all the other agencies, we have--what you would normally do
when a product changes, you have to recertify it. So that is
what we are doing right now. We are actually going through a
recertification based upon those changes that Google has
announced with the Apps for government product offering.
Senator Carper. Mr. Kundra, any comment, please?
Mr. Kundra. Well, from an OMB perspective, we do not
actually get involved in individual procurements. We are more
focused on the broader policy around this shift to cloud
computing.
Senator Carper. All right. I appreciate what you both have
said here today, but given the potentially serious nature of
the news, I have asked my staff to followup with your offices
today on this issue so we can try just to get to the bottom of
it. And I would also like--I am going to ask that you respond
to any questions for the record that the Members of the
Subcommittee may have on this same issue.
Another one for Mr. Kundra and Mr. McClure and then I will
close it with a short question for Mr. Powner.
Today the continuing resolution (CR) introduced in the
House, H.R. 1473, gives, I believe, $8 million to the
Electronic Government Fund. This fund, which is often referred
to as the E-Government Fund around here, pays to operate the IT
Dashboard, USAspending.gov, among other things. And I
understand that your original request was for around $34
million.
Given this steep cut, will the E-Gov Fund continue to
operate as it has in the past? Or can we expect some of these
Web sites to go dark?
Mr. Kundra. Well, I think given the original request versus
where we are right now, we are still evaluating the
implications, but we are going to have to make some tough
decisions around which systems are going to have to go offline
versus what can be supported with the $8 million fund. Since
this is very recent news, we have not had a chance to actually
sit down and prioritize systems.
Senator Carper. All right. Senator Brown has already asked
a question about what further can we do to be helpful,
supportive, and constructive, and I am going to come back to
that and ask you what will be really the last question I ask of
you. But before I ask that--and you have given us some thoughts
already, but I want to just ask you to reinforce and re-
emphasize some of your points.
In each of your minds, what are the metrics for success for
the President's plan? What are the leading indicators that the
Congress and the American people can look to in, say the next
14 or so months to tell us if we are successful or not? Mr.
Powner, do you want to go with that first?
Mr. Powner. In terms of the IT reform plan, I would say
getting more of those projects into the green would be one
large area, and also in the data center arena, the goal to
reduce 800 data centers by 2015, that in the next year or 18
months, to Mr. Kundra's point that we are making progress on
that, that is a stretch goal, but the stretch goals are very
good.
Senator Carper. Good. All right. Mr. McClure.
Mr. McClure. Well, I think the IT reform plan covers so
many different things that there are a lot of different ways to
look at the measurement of its success. For example, we know we
need to, as Dave has mentioned, and Vivek, that we need to
improve program management in the government. That is not
something you solve overnight. So some of these will have
longer-term success measures than others. But I think the real
things for us to focus on and we are focused on is looking at
real cost savings, No. 1. No. 2, making sure as Vivek goes
through the TechStat that poorly performing projects cease or
at least they are repaired or fixed before they proceed. And
then, last, I think the measures for IT that are really golden
are whether it is improving the business, the operations of
government.
So we really ought to be looking at the operational metrics
of government and the service delivery of our programs. That is
what IT is supposed to be helping do.
Senator Carper. All right. Good. Mr. Kundra.
Mr. Kundra. I would say three quick things.
No. 1 would be to improve the yield on the $24-plus billion
we spent on infrastructure, whether that is through shutting
down the 800 data centers or shifting to cloud.
Second would be to make sure that the money we are spending
on large-scale IT projects that we actually terminate, turn
around, or halt poorly performing projects that could yield
billions in savings.
And third, I think creating an ecosystem where we introduce
Darwinian pressure as far as startup companies and innovative
technology companies that can come and compete for Federal
business.
Senator Carper. All right. Thanks.
Senator Brown, while you were out of the room, I told the
panel that the last question I had for them is really one that
you have already asked, but it is a real good question, and I
just want to come back to it again. It is one I often ask
panels in discussions of this nature.
Again, just re-emphasize for us, underline for us the
things that we need to continue doing on our side as one of the
three branches of government to get to, in this arena, better
results for less money. Mr. Powner.
Mr. Powner. Well, a couple points here. Mr. Chairman, we
have been at this for many years, but right now we have the
best transparency we have ever had with the IT Dashboard. So I
think your bill that would codify some type of--where that
transparency continues, that is clearly needed. And also, each
year that we are up here, we are always talking about hundreds
of projects totaling near $20, sometimes $25 billion at risk--
that has not changed over the years. We now have probably the
best reform plan we have ever had, so in terms of the best
transparency and the best plan, now is the time to execute to
those plans. So I think your oversight hearings focused on
those areas, along with your legislation, is very helpful.
Senator Carper. All right. Thank you. Mr. McClure.
Mr. McClure. I would agree totally. I think the role of the
Committee in shining transparency on exactly what is happening
in the government is a change lever that the Congress needs to
utilize as much as it possibly can.
Second, I think the budget process is a difficult one in
the technology area because we assume that technology projects
magically begin and end within a budget cycle, and many can but
not all do. And yet we restart or recalibrate the discussion
through the budget process. So aligning some of the budget
needs with the technology cycles I think is something that the
Congress should look at as well.
Senator Carper. All right. Thank you. Mr. Kundra.
Mr. Kundra. I think, Mr. Chairman, you are commended to
really bringing a focus on Federal IT, which is not necessarily
the sexiest subject in government. So I really appreciate the
focus that you have brought over the many years.
The areas that I think would be really, really helpful, I
think the bill that you focused on and what I have seen working
with your teams, seems to be transformational.
Second would be the focus on the budget authorities;
especially consolidating commodity IT under departmental CIOs
would be extremely helpful in moving this conversation forward.
Senator Carper. Great. All right. That is very helpful.
Thank you.
Senator Brown, any last questions before we excuse this
panel? All right. Gentlemen, thank you so much for joining us
today and for the good work that is going on, and let us just
not relent. Let us keep it going. Thanks so much.
All right. Panel No. 2. I like to say we were saving the
best for last, but those first guys were pretty good. We will
see.
The first witness on our second panel is Steve O'Keeffe,
Founder of MeriTalk Online, a Government IT network that
focuses on driving the Government IT dialog. A 20-year veteran
of the Government IT community, Mr. O'Keeffe has worked in both
government and industry. In addition to MeriTalk, Mr. O'Keeffe
has founded Telework Exchange, GovMark Council, and O'Keeffe &
Company. Nice to see you. Welcome.
Rishi Sood--is that correct?
Mr. Sood. Yes.
Senator Carper. Has your name ever been mispronounced?
Mr. Sood. Every day.
Senator Carper. OK. All right. Hopefully not here. Mr. Sood
is Vice President of Gartner Incorporated, a major information
technology research and advisory company. Mr. Sood has spent
the past 17 years at Gartner, but his recent focus has been
dedicated to cloud computing and cybersecurity policy in
government.
Our final witness is Mr. Al Grasso, President and Chief
Executive Officer of MITRE Corporation. Nice to see you. MITRE
Corporation is a leading not-for-profit organization which
provides high-level analysis and information related to
information technology and modernization.
We welcome you all. Thank you for your preparation and your
willingness to spend this time with us, and we look forward to
hearing your testimonies. Again, your entire statements will be
made part of the record. If you would like to summarize, that
would be just fine.
I am told we are going to have a vote at noon, high noon,
so that will give us an opportunity to complete each of your
testimonies, and then what I will probably do is just run--if
we only have one vote, I am just going to go to recess for a
few minutes, run and vote, and then come back and we will ask a
few questions.
Mr. O'Keeffe, would you like to lead us off? Thank you.
STATEMENT OF STEPHEN W.T. O'KEEFFE,\1\ FOUNDER, MERITALK
Mr. O'Keeffe. Thank you, Senator Carper.
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\1\ The prepared statement of Mr. O'Keeffe appears in the appendix
on page 80.
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Senator Carper. What did you say?
Mr. O'Keeffe. Thank you.
Senator Carper. I am just kidding. [Laughter.]
You were not born in Mississippi, were you?
Mr. O'Keeffe. No, I was not born in Mississippi. Just next
to it.
Thank you for the opportunity to testify here today. It is
great to be back. My name is Steve O'Keeffe, and I am the
Founder of MeriTalk, the online Government IT community. We are
here today to talk about OMB's 25-point plan to fix Federal IT,
and I would like to start with a quick comment about cloud
computing, which is central to OMB's plan.
As you mentioned, this is not Mick Jagger's cloud that we
are supposed to get off. In fact, many Federal agencies have
already jumped on the cloud. This is not pie in the sky, if you
will pardon the puns. Cloud----
Senator Carper. That is pretty good. I think you are on a
roll here.
Mr. O'Keeffe. Here we go. Cloud----
Senator Carper. You are going to be a tough act to follow.
I hope you guys are taking notes.
Mr. O'Keeffe. I will be here all day.
So cloud is delivering very real savings and enhancing
agility at Federal agencies like National Aeronautics and Space
Administration (NASA), Jet Propulsion Laboratory (JPL),
Department of Health and Human Services (HHS), and the
Securities and Exchange Commission (SEC). This is not
experimental stuff. These are very real savings.
So maybe to kick off, why should we modernize Government
IT? The Federal Government currently spends north of $80
billion, with a ``B,'' on IT. That is a lot of jingle--33
percent more than the gross state product of Delaware,
incidentally.
Despite talk about doing more with less, these numbers
continue to grow. I have been in the Government IT community
for over 20 years, and every year the budget seems to go up.
Agencies are spending nearly half their IT budgets, some
$35.7 billion, supporting legacy technologies in need of
modernization. And so to the 25-point plan. Like many others,
my first review of OMB's 25-point plan ended in confusion.
Twenty-five points. Really? When I was a small boy in school, I
had profound challenges remembering the Ten Commandments, and,
of course, there were only 10 of those.
As we did last year for the Committee's open government
hearing, MeriTalk launched a survey of the Federal IT community
to get government and industry perspectives on the 25-point
plan. We asked respondents to rate each point of the plan based
on whether it was, one, desirable and, two, doable. And taking
a leaf out of Ross Perot's book--for those people who remember
the election--we have charts again, and I think those are in
front of you, Senator Carper.
The net up-front is that the community feels that all
points are desirable, but there are some serious questions
about executability. Interestingly, government employees are
less optimistic about doability than their industry
counterparts.
We asked the community to rate each point in the 25-point
plan, and as you can see from the All Respondents chart, the
scattergram, the community does not place equal value on all
points. Interestingly, the evolutionary, nurturing and easy-to-
understand points score best--Katie doing Vanna White here--
with Point 7, design a formal IT program management career
path, topping the charts.
The most revolutionary initiative rated lowest. See Point
3, Cloud First.
Other disruptive initiatives did not fare that well either:
Point 1, data center consolidation, hit roughly in the middle
of the pack. And Point 2, enabling a governmentwide marketplace
for data center availability scored poorly as well.
Now, let us look at civil versus defense. As you can see in
the charts, civil and defense respondents march very much in
lockstep. Point 7, design a formal IT program management career
path, and Point 10, launching a best practices collaboration
platform, top the charts. Interestingly, civilian agencies are
more focused on Point 16, reducing barriers to small innovative
technology companies, a point that Vivek hit pretty hard, I
think. Due to their dynamic mission, defense agencies have
embraced this approach long ago. DOD demonstrates a greater
appetite for shared services as well as optimism for
executability.
Now to government versus industry. Interestingly, with the
exception of government being less optimistic about the ability
to deliver, government and industry are almost precisely on the
same page. The exceptions include that industry prioritizes
Point 8, requirement to scale IT program management career
path, as well as Point 15, requirements to issue guidance and
templates to support modular development. It is no great
surprise that these points are important to contractors that
are interested in getting it done.
Closing out the survey, we asked what one thing would
respondents recommend that the government do to improve Federal
IT. Both government and industry suggested that we attach
accountability to objectives. Other hot recommendations: allow
CIOs to retain funds they save, eliminate unfunded mandates,
and reduce the number of objectives. Clearly, less is more.
The net take-away from the study: To increase the impact of
efforts to fix Federal IT, we need to simplify the message and
focus on the three C's--consolidate, connect, and calibrate.
Consolidate: Less is more.
Connect: The Federal Government's senior IT professionals
are not equipped for nor experienced at driving change. We need
to communicate the why, how, and what it means for your career
in order to successfully operationalize desired change.
Calibrate: We need to set goals that we really can and mean
to measure, and we need to follow through on measurement and
hold executives accountable. We need to recognize that the
changes on the table are not easy. We should set realistic
timelines, and we need to establish venues and tools to support
Federal IT professionals as they move through the profound
changes.
If the definition of insanity is doing the same thing and
expecting a different outcome, then Mr. Vivek Kundra deserves
high praise for introducing much-needed new thinking into
Federal IT. Federal IT professionals estimate that data center
consolidation and cloud can drive upwards of $14 billion, again
with a ``B,'' in efficiency savings.
Mr. Kundra is asking for $25 million to fund the Federal IT
fixes. The return on investment on this $25 million is hundreds
of dollars for pennies invested. The point here is not that we
should focus on the easiest or most popular initiatives. OMB
needs to prioritize and focus hardest on the programs that
offer the highest return on investment. That means cloud and
data center consolidation. We need to listen to feedback from
the community, set a clear vision, and build an operational
framework to realize the changes that we seek.
Thank you for the opportunity to testify.
Senator Carper. We thank you. Thank you very much.
Mr. Sood, please proceed.
STATEMENT OF RISHI SOOD,\1\ VICE PRESIDENT, GOVERNMENT VERTICAL
INDUSTRIES, GARTNER, INCORPORATED
Mr. Sood. Chairman Carper and distinguished members of the
Subcommittee, thank you for the opportunity to speak to you
today. My name is Rishi Sood, and I am Vice President of
government research at Gartner. Gartner is the world's leading
information technology advisory and research firm and is a
valuable partner to 60,000 clients and 11,000 distinct
organizations, including the Federal Government.
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\1\ The prepared statement of Mr Sood appears in the appendix on
page 93.
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In examining the President's plan, I would like to focus on
the growth in Federal IT spending, the elements of the plan
that will have an immediate impact, and reform issues that will
be important over the long term.
To begin with, Federal IT spending has exploded over the
past decade. According to my research at Gartner, traditional
IT spending by Federal Government organizations was
approximately $32.2 billion in 2001. This year it will reach
$80.1 billion. This is an increase of over 248 percent over the
past 10 years.
While much of this IT expansion is justified by growing
Federal operations, insufficient analysis has been given to the
cost effectiveness of IT spending. Additionally, some of the
spending increases have not been effectively coordinated,
resulting in some cases in technology sprawl across the Federal
Government.
Given this dramatic rise in Federal IT spending, there are
a number of questions that need to be addressed. What is the
value and cost effectiveness of IT spending? To what extent is
accountability adequately built into the IT spending? And what
steps should be taken to invest the right amount in the right
applications while avoiding costly mistakes?
While these questions are always important, they are even
more important in light of the current budget battles and
fiscal constraints that will affect Federal IT spending. Not
only will Federal agencies face slower growth in IT spending
over the next decade, but there also may be cutbacks to current
levels of IT spending. Urgent action is needed to improve IT
spending because reforms will take time to show results.
In the end, however, the value of IT comes from the impact
of technology on government operations, increased productivity,
lower cost of service delivery, and increased customer service.
To succeed in these times, government must harvest the upside
potential of IT while limiting the downside risk of
implementation failures.
Let us discuss some of the parts of the reform that will
have an immediate impact.
President Obama's 25-point reform plan is a strong path
forward to align the needs of Federal Government organizations
with budget realities. The reform creates guardrails needed to
guide technology operations while continuing to promote
innovation and accountable technology use. In many respects,
the reform plan lays the initial foundation needed to answer
the questions raised earlier: value, accountability,
application size, and mix.
Several of the areas of the reform plan will likely be most
important for Federal technology management practices. These
include:
No. 1, the focus on an empowered CIO position. Empowered
CIOs are needed to set enterprise goals, push standardization
through the organization, and drive more efficient technology
use. By strengthening the CIO position, there will be greater
accountability for achieving targeted agency goals.
No. 2, move to a data center consolidation plan. The
increase in data centers across the Federal Government has been
dramatic. The task now is to consolidate these data centers to
drive down costs and increase efficiency. Harvesting economies
of scale is critical for the effective allocation of
information technology investments.
And, No. 3, the focus on shared services. The move to
shared services provides an important means for Federal
agencies to maximize the value of technology, create a
services-led approach to technology delivery, and build more
efficient IT services across the government enterprise.
Now let us look at some of the longer-term reform issues in
front of us. The President's reform plan includes other
strategically important goals that will likely require a longer
time horizon to implement. These include additional investments
in government personnel. The Federal Government will need to
invest in Federal contract officers, acquisition officers, and
program managers to drive and execute real change in
procurement, acquisition, and management of technology
projects.
No. 2, technology vendor outreach, partnerships, and buy-
in. An effective technology and service provider community is
an essential part of Federal success with IT. As larger reforms
take root, it will be vital for the Federal Government to
increase its outreach to the vendor community, continue to work
in partnership approach with this community, and to secure a
strong buy-in for the changes ahead.
And then, No. 3, an agile approach to IT. One of the most
difficult yet important aspects of the reform plan involves
building a modular approach to technology investments. This
will span multiple parts of the technology life cycle and will
likely require more effective and detailed use of newer
methodologies, like EVM and PPM, to support these goals.
In addition to the issues described above, it will be
important for Federal officials to recognize the following:
No. 1, timing. The reform plan includes goals for 6-, 12-,
and 18-month time periods. While these goals are laudable, they
may be overly ambitious. The Federal Government is an enormous
enterprise, and it is difficult to achieve significant
structural changes in a short time horizon.
No. 2, assisting agencies through the change. While some
agencies have embraced the changes proposed, other agencies may
be more resistant to change. As the reform plan moves forward,
proper incentives and disincentives will be critical in moving
agencies in a cohesive fashion.
And then, No. 3, technology as a silver bullet. In the end,
it must be recognized that information technology represents
the best mechanism to improve government efficiency and lower
the cost of service delivery. Consequently, IT must remain an
important area of continued aggressive investment. The critical
issue now is to protect and incentivize the IT reforms noted
here so that Federal IT will maximize results while minimizing
mistakes.
Thank you for your time, and I look forward to your
questions.
Senator Carper. Thanks. That was great testimony. Thank you
so much.
Mr. Grasso, welcome. Very nice to see you.
STATEMENT OF ALFRED GRASSO,\1\ PRESIDENT AND CHIEF EXECUTIVE
OFFICER, THE MITRE CORPORATION
Mr. Grasso. Thank you. Chairman Carper, Senator Brown,
honorable Members of the Subcommittee, thank you for giving me
the opportunity to appear in front of you today on this very
important topic.
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\1\ The prepared statement of Mr. Grasso appears in the appendix on
page 98.
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As you mentioned, my name is Alfred Grasso. I am President
and CEO of the MITRE Corporation. Our company's 50-plus years
of experience, contributions, and accomplishments have given us
a perspective that I believe is highly relevant to the topic of
information technology planning and management.
Information technology-intensive programs operate in an
environment of rapid technology evolution where new generations
of technology are introduced in months rather than years.
Unfortunately, currently the Federal acquisition processes and
budget cycles are not well matched to these timelines. OMB's
25-point plan is a positive step in the IT reform process.
As I observe the state of IT management in the Federal
Government, I am struck by the amount of attention paid to the
failures versus time analyzing the successes for critically
important lessons. There is a strong tendency to impose new
policies, processes, and reporting requirements in an effort to
avoid future failure. These requirements introduce a burden
that reduces agility, imposes costs, and delays the delivery of
capability.
In an interesting study conducted at the Defense
Acquisition University, students determine that a ``null
program''--that is, a program that delivers absolutely nothing
but satisfies mandatory reporting and process requirements--
takes about 3 years to complete under the current rules. A
system that requires 3 years to deliver nothing is clearly
fundamentally flawed.
The 25-Point Implementation Plan to Reform Federal
Information Technology Management is based on practices that
work. We applaud OMB, Mr. Kundra, and the Federal CIO Council's
leadership on this topic. However, experience leads us to
observe that additional steps can be taken both to enable
successful implementation of the plan and to expand on some of
the important goals defined in it. With that in mind, enduring
change will require the following:
First, establish IT governance that includes authorities
and flexibilities where they best contribute to the success or
failure of these programs, without losing transparency into how
these portfolios are performing.
Second, build and empower PMOs by incentivizing and
professionalizing key management and technical roles to
motivate people to adopt these roles as careers, not simply
jobs.
Third, define and build IT capabilities that are both
secure and resilient.
The first step is to establish a governance model that
combines a comprehensive portfolio management and budgeting
approach with close coupling to the end user. The goal from my
experience is to provide the authority for CIOs to manage their
budgets as a portfolio, with the flexibility to shift resources
to address changing needs, changing technology, and increasing
agility.
Fundamentally, the problem is this: The investment decision
process occurs 12 to 24 months before the budget is actually
made available, but the scoping, planning, and foundational
technical work necessary to make a sound investment decision
cannot be taken that far in advance and without some limited
budget authorization. The 25-point plan proposes to work with
Congress to realign this process, and we agree that is an
important thing to do.
I strongly encourage Congress to take the necessary steps
to realign the budgeting model and allow CIOs and portfolio
managers to exercise the strategic decisionmaking that their
peers in the private sector have had for years.
In addition, the plan raises the need to align the delivery
and technology cycles through incremental delivery. Again, I
agree. However, it is critical that the increments be defined
by sound, up-front architecture and systems engineering and the
timing of increments be linked with the operational tempo.
Sound systems engineering performed early in a program's life
cycle has a strong correlation with improved project cost
estimation and schedule planning. Likewise, alignment with the
operational tempo ensures that technology drops have clear
business value and leverage IT infrastructure to support future
cost-effective delivery of capabilities.
The second critical step is to establish strong program
management offices by incentivizing and professionalizing the
key roles for successful IT program delivery. In my past
testimony to this Subcommittee, I emphasized the importance of
maintaining strong technical and management capabilities within
the PMOs.
It continues to be my experience that successful programs
are characterized by a strong government PMO capable of acting
as a strong technical peer with contractor counterparts on
systems engineering topics. The individuals assigned to these
program offices must view their position as a career and not
simply a job. Incentives play a key role in attracting and
retaining competent program office personnel. Establishing a
career progression gives individuals the opportunity to secure
greater responsibility and pay commensurate with increased
degrees of proficiency.
The third area of extreme importance is securing
information systems and ensuring their resilience. This should
be a critical aspect of any investment, and it warrants major
investments in its own right. All too often security is
regarded as an afterthought, and all too frequently concerns
about system vulnerabilities are used to justify making less
transformational investments and adhering closely to the status
quo.
It is critical that the architecture and design of IT
systems address both vulnerabilities and the capabilities
required to withstand a breach. These factors should be key to
the evaluation of any IT investment to avoid additional costs
downstream. This is a topic on which the Federal CIO, the CIO
Council, and the Congress can provide more leadership. They
should send a clear message that government information
technology investments must not only be aligned with business
needs, deployed incrementally and managed properly within
budget and schedule, but also must be architected, developed,
and operated with a clear eye on protecting public and private
data and continuing the critical services government performs
for the public.
Achieving the results expected of the 25-point plan
requires a major transformation that spans many aspects of the
Federal Government's operations. The many elements of the 25-
point plan reflect two sets of related priorities: Adopting new
technology that enables greater efficiency and establishing an
enduring foundation of capabilities to plan, manage, and
execute IT programs more successfully. I believe the latter
represents both the greatest challenge and the true imperative.
Without the opportunity, authority, and resources to accomplish
these goals, the success rate in adopting new technology will
continue to suffer.
I am supportive of the direction of the 25-point plan as
well as other similar action plans developed and being
implemented across many agencies today. I am encouraged by this
Subcommittee's clear interest in taking steps to codify methods
and operating models that we know to be successful and on the
increased emphasis on develop foundational capabilities that
will endure beyond contemporary solutions.
I believe if these steps are taken, the promise of the 25-
point plan can be realized, and the priority it lays out will
have lasting value.
I respectfully request that my prepared statement be
included in the record, and I would be pleased to answer any
questions.
Senator Carper. And we will be pleased to make your
prepared remarks part of the record.
That was an excellent summary.
Thank you for your testimony, all of you. It was just
superb.
You may have heard that a vote has started, and I am going
to run and vote, and we will just recess for a little bit. When
I come back, the first question I will ask you--you can be
thinking about this. I am going to ask you to reflect on the
testimony of each of the other two witnesses appearing with you
and some things that you think that you really agree with or
maybe you are not sure about. And if there is anything you
would like to look back to the testimony of our first three
witnesses, to comment on what you heard there that might be
appropriate to raise. We will start with that, and we will
probably go for about, 15, 20 minutes and then adjourn.
All right. Thanks very much. I will be back in about 10
minutes. [Recess.]
I am going to ask that we reconvene. Thank you for your
patience and for bearing with us, and now let us resume.
Just before I left, I indicated that my first question was
going to be to ask you to reflect on what your colleagues here
at the table have had to say and for each of you just to do
that, and if you have any reflections on some of the testimony
and the answers that the first panel provided for us, I would
welcome either of those.
Mr. Grasso, would you like to lead us off, please?
Mr. Grasso. Sure. There were several points that have been
made throughout the day here today that I think are especially
valuable, and, in fact, one reflects a question that you asked
earlier. I think it should be no surprise to anybody that what
is presented in the 25-point plan is a significant change
agenda. And when it comes to change, there is indeed quite a
bit of resistance to change because it imposes on people's
equities in some cases and threatens others.
So we look at things like data center consolidation and so
forth, while we have, I think, admirable objectives, there is
no doubt in my mind as we progress in this area that there will
be obstacles in achieving those objectives. But I believe, with
the proper level of leadership, attention, and perseverance,
that we could overcome those obstacles.
What we really do need to do is to ensure that the right
incentives are in place for everybody so that we are all moving
in the same direction.
Senator Carper. Talk a little bit more about that, please?
Mr. Grasso. All too often there are individual incentives.
Everybody around the table is incentivized for their own
personal career growth for a number of reasons. There are
organizational incentives and there are incentives that are
given to contractors in supporting the activities.
So if you look at those three different incentives, today
many of the individual incentives really are less focused on
the outcome of the activity, and they are more focused on what
I would call a career track for an individual.
If you take a look specifically in the military, the job
rotation and the assignments a person has been in is more
important perhaps than staying in an assignment for a long
enough period to see an outcome fulfilled. So we are finding
folks rotating more often than should be.
Inside industry, if you have a successful program manager
on an important program, rest assured that person will be
rewarded from a career perspective while on that program and as
he or she transitions out of that program. It is often not the
case where someone can get rewarded by staying on the same
program for a number of years beyond what would be typical for
that kind of assignment inside of government. So the incentives
need to be properly aligned to ensure that they are indeed
pursuing what they believe to be a very strong career track.
And the last point I would make is the topic of
accountability. We all need to be accountable for these
outcomes, and I think it is important to recognize that the
successful outcome is one for which a number of stakeholders
are involved. And there needs to be a shared sense of
accountability, not just the CIO is accountable and he or she
will succeed. All of the stakeholders need to share that level
of accountability and need to be incentivized to do so. So I
think those are some key points that were made.
One last point that I think Rishi made is the business
value. We talk about IT sometimes exclusive of the value that
it delivers to transform the business and to deliver new
capabilities or perhaps to deliver current capabilities more
effectively. So we need to ensure that the IT community and the
mission side are very closely connected to ensure that it is
delivering the business value that it was intended to deliver.
Senator Carper. Good. Thank you. Those are very good
points. Thank you. Mr. Sood.
Mr. Sood. I think there was really valuable testimony by
fellow panelist Mr. Grasso here that really focused on sort of
the governance issues, that focused on really the program
management and career path issues associated with maintaining
this course across the Federal Government. I think that is a
vital aspect of the reform plan, the amount of investment that
we are putting back into the agencies and the personnel within
those agencies.
I also think Mr. O'Keeffe has provided some really valuable
data straight from governments directly, straight from the
agencies and the vendor community directly in really
interesting ways, not just what we should be doing and what is
appropriate and what they think is appropriate about the reform
plan, but also what is doable. And that juxtaposition between
what can be done or should be done and what can be done over a
short period of time I think is very valuable. It gives you a
sense, I think, as Chairman of this Committee, really to look
at the level of resistance that might be focused on some of the
major reform plan items and the need to really push and lead
those issues forward.
I just want to make another comment, though, that was
specific to the earlier panel, the government panel directly,
because I think they made a number of points which were talking
about transparency about this process, about the fact that you
have been dedicated to holding these hearings and really
shining a light, if you will, on this process.
The combination of the IT Dashboard, the combination of the
TechStat strategies, the combination of the hearings you are
holding I think truly are making some of those first steps
toward reforming the entire process and getting the level of
waste and the level of efficiency out of the IT pantheon. So I
applaud those efforts.
Senator Carper. Thanks for saying that. Thank you. Mr.
O'Keeffe.
Mr. O'Keeffe. I wish you had told me there was a test
beforehand. I would have paid more attention.
Senator Carper. This is a pass/fail course. [Laughter.]
Mr. O'Keeffe. I think there has been some very valuable
testimony, and the perspectives of my fellow panelists here
have been terrific.
I think that the incentive point that Mr. Grasso makes is
right on the money. We need to look at why people are going to
be incented, what we refer to as ``What's in it for me''
(WIIFM)?
There are programs that have been launched at various
Federal agencies where if you uncover savings opportunity, you
get to keep 50 percent of that money. And what has the result
been? No savings opportunities have been uncovered because they
already have 100 percent of the money, so why would they want
to identify a program in order to lose half the budget?
If you look at things like data center consolidation--and
John Collins has been involved in some of those meetings--we
are looking at the ability to consolidate data centers in other
agencies' data centers. Well, we had a data center lead from an
agency out in Austin, Texas, who said that--he called around to
agencies in the area in Austin and San Antonio to identify what
other agencies might have space so he could consolidate into
them. And what he found was nobody had any space. Why would
they have space? Because if they allow him to consolidate into
their data center, they lose that space and effectively they
lose budget.
So I think we need to look at some of the fundamental
incentives. What are the carrots? What are the sticks? And,
importantly where is the dog bone here? How are agencies like
GSA eating their own dog food? Which I think is tremendously
important.
I think Rishi's perspective in terms of organizations like
Gartner can provide terrific crossover from what has happened
in the commercial market so we can identify best practices for
government, which are critical.
I also think there were some interesting perspectives
shared from GAO saying there are 600 H.R. systems in the
Federal Government, $2.9 billion. Clearly there is an
opportunity for synergies and shared services.
There are 4,700 systems currently outsourced. Vivek
mentioned that. So when we talk about security, clearly there
are security issues that exist in the current model. In many
circumstances agencies are using security as a way not to move
to cloud, and I have participated in testimony myself where we
talked about the problems with leaky systems as they exist
today on premise.
I think some of the numbers about how many agencies have
moved to cloud first are also very interesting. I would be
curious to get more transparency into that, and also the
discussion about the 14 items on the 25-point plan that are up
in 6 months. I think the question about how far we have moved
on those is a little unfair inasmuch as we are not sure what
funding has been attributed to the 25-point plan.
So I think just overall, as we look at--I am just looking
up here at the crest above your head: E Pluribus Unum; From
many, one. And so this notion of what we are trying to do as a
Federal Government, I think we need to look at it as, how can
we all work together in order to move the ball forward? And,
critically, as we look at cloud computing, E Pluribus Unum
really could be a motto for cloud computing inasmuch as the
notion of everyone doing their own thing is not going to solve
the problem. We do absolutely need to bring the resources
together in order to provide a better, more effective, more
efficient solution, not just for IT but for America.
Senator Carper. That is great. Believe it or not, your
reference to those Latin words behind me is giving me an idea
for my closing thought. So that is good.
This is really a question for all three of you, if I could,
and let me just start with Mr. O'Keeffe. First, we want to
thank you and your team at MeriTalk for the information you
were able to provide today regarding the agency officials'
feelings about the 25-point plan. Very interesting. You find in
this detail that both government and industry want
accountability attached to the objectives of the plan, and they
also suggest CIOs be able to retain funds that they save.
I want to ask each of you on the panel to discuss these two
ideas. How do you propose we insert stronger accountability and
stronger financial incentives into the management of Federal
IT? And I will ask, Mr. Grasso, for you to lead off, and then I
will just say I studied as an undergraduate--at Ohio State, I
studied some economics, my professors would say not nearly
enough, But I got an MBA at Delaware and studied a little more
economics. But I have always been fascinated by how do we
harness market forces to drive good public policy behavior. I
have always been fascinated with that.
So, Mr. Grasso, when you said in your remarks--I think you
talked about aligning the incentives. I look at almost
everything, almost every issue that comes before us here. How
do we have the incentives aligned? But would you want to take a
shot at that? How do you propose that we insert stronger
accountability and stronger financial incentives into the
management of Federal IT? You have already commented on this a
little bit, but you might want to add to it.
Mr. Grasso. Mr. Chairman, this is obviously a very tough
topic. If we had the answers, we would probably be employing
them as we speak today. But from an accountability perspective,
all too often we measure accountability by activity and not
necessarily by outcome, partly because activity is measurable
We could measure that you did something and how well you did
that something. But did all of those activities lead to the
outcome that you had desired.
Senator Carper. I like to say we measure progress--or we
incentivize progress.
Mr. Grasso. That is exactly right. So I would say it would
be a good first step to really develop a set of shared outcomes
that are defined well enough and not so far into the future
that it will be several careers before you could achieve those
outcomes, but outcomes that are indeed measurable, as is in
this plan, where you have 6-month increments. You are not just
measuring progress, but there is a very specific, tangible
outcome which connects the entire community together and would
be a shared success for the community. So that means that it is
an outcome that has responsibility of the developer to deliver
something, the user to accept it and to start using it, and the
test community to ensure that they have a program that is in
place in the right time sequence.
If we become more outcome focused than activity focused, I
think attention to accountability will increase significantly.
Senator Carper. Good. Thank you. Mr. Sood.
Mr. Sood. Yes, just to dovetail on Mr. Grasso's points
there, I will go back to my written testimony that really
focused on the business value of IT. I think too often in the
reform or in the discussions about the reform plan, there has
been focus on whether Project X or Project Y should be canceled
or not and what are the cost savings associated with that.
I think in many respects CIO Kundra made a very important
point, that when he did the first pass of the at-risk project
list and took a look at the four that were terminated and the
11 that were reformed, if you will, the more important side of
that was the 11 that were reformed because at the end of the
day the business need is still going to be there for whatever
the technology initiative initially was there.
So being able to tie back incentives and being able to tie
back that process to what is really the impact on the agency's
specific business process or the outcome that they are trying
to achieve I think is a fundamental part of how we look at
reform. It is not simply about taking the 2,000 data centers
and moving them down to a manageable 1,000 or what have you. It
is really about how efficient those data centers are and how
much are we leveraging the economies of scale in running those
data centers so that they are impacting real business issues.
Senator Carper. All right. Thank you. Mr. O'Keeffe.
Mr. O'Keeffe. I think to accountability, transparency is
the answer. We need better data. The IT Dashboard is a great
move. There are still some significant fidelity issues in terms
of the quality of that data. But the best way to drive
accountability is transparency, and I think that has been
talked about. We need to continue to invest in those resources.
We need to make sure that we do not make claims about what
is out there that is not out there. And so if you look at
things like the subcontractor database that was announced in
the Washington Post 6 to 8 months ago, the quality of that data
still is not particularly good. So we need to make sure that
people are rewarded, which goes back to incentives.
I think that when you look at IT people--and we are hiring
them right now--they are very difficult--very good quality IT
people are very difficult to hire, especially if you look at
people, for example, who are building mobile applications, some
of the more progressive disciplines. And so the public sector
needs to work out how to incent these people to work in the
government and to stay in the government. There are many, many
excellent IT people in the Federal Government. But if you have
a culture where you cannot afford to hire the best and,
candidly, you have significant challenges getting rid of people
that do not perform, then what kind of culture does that breed?
I think there are many opportunities for the government to
incent and motivate these IT executives and professionals and
practitioners. This should not be about the beatings will
continue until morale improves. And if there are too many
unfunded mandates, it is very difficult to get out of bed in
the morning and feel good about what you are doing.
So we do not have the ability to open up the pocketbook and
just lavish money on these people, as many private sector
organizations are. But we can look at things like telework
where we can give people the flexibility to work from home. We
can look at some of the prizes that are out there right now
where we can reward innovation coming from the government. And
I think we also need to look at what we are outsourcing. So
maybe some of these more interesting, more engaging projects,
instead of outsourcing those to contractors, we could be
looking at providing those exciting projects for government
employees to work on.
Senator Carper. All right. All good ideas. Thank you.
A question for Mr. Sood and Mr. Grasso. In your testimony
today, you both noted how the President's plan incorporates a
number of commercial best practices and attempts to bring them
to government. One example of this is a move to segmented or
modular development of IT projects.
What concerns do each of you have about the ability of
government to embrace this approach, how we can make sure that
agencies have what they need to make this particular piece of
the President's plan successful?
Mr. Grasso, do you want to lead us off?
Mr. Grasso. Sure. If we take a look at the technology that
we are accustomed to in our everyday lives today, whether it be
the cell phone maybe in your pocket, whether it be the iPad in
your briefcase, or the laptop, those have become commodities to
us. We are turning those around anywhere from every 9 months to
every 3 years. But we are able to do so because they are built
on a very strong foundation and platform that evolves over
time, and we do not necessarily have to retrain ourselves, nor
do we have to restructure our own internal home infrastructure
to accommodate these things.
The platform itself is evolving to allow forward
interoperability of new technologies. It is done because the
interfaces are very clearly defined. The modularity of
components are very clearly defined, and a marketplace has been
created where you have many contributors and innovators that
are working inside this platform and this framework that allow
it to evolve. So we believe, I believe that it is critical that
we are able to do this going forward on the government side of
the house.
On the government side of the house we have progressed
quite a bit, but I come from a world where we buy everything
all together. If you need to buy a new software system, you buy
the hardware that goes with it and the infrastructure that goes
with it then you are evolving the entire thing. You are not
building on top of a platform. So we need to change that
thinking that exists today for which fundamentally we need to
be interdependent. We need to allow service providers to
provide that platform, that infrastructure, and build the
value-added applications on top of it, allow that
infrastructure to, in fact, evolve on its own and feel
confident that those interfaces that evolve will allow my
future applications to also evolve so that I do not necessarily
have to design the underlying infrastructure each and every
time I upgrade.
Senator Carper. All right. Good. Thanks. Mr. Sood.
Mr. Sood. Yes, I would just say that agility with respect
to IT is going to be the fundamentally most important way by
which we really reform Federal Government IT spending over the
longer term. But in many respects, it represents sort of the
antithesis of the way the Federal Government has historically
really looked at IT spending. We have looked at these
wholesale, big-bang approaches typically that last over a 2-
year procurement cycle, and the items or the requirements that
you set up front might be obsolete by the time that procurement
cycle is over and done with.
Having a more agile approach really will change that
flexible nature, that foundational nature of Government IT
spending, but the problems or the concerns I guess I would have
is: How is Congress going to adapt the budgeting part to
coincide with this agile approach to IT? How are we going to
invest in the next group of contract officers, acquisition
officers, and program managers that are really trained and
seasoned to apply some of those techniques to their projects?
How do we take detailed methodologies like earned value
management or product portfolio management and really apply
that to the agile structure so that, to CIO Kundra's point
earlier, we do not get into this road where we are finally
assessing these projects 3 or 4 years later and they have spent
$20, $50, $100 million without proven results? We need results
or at least a review of results over a much more manageable
timeframe.
Senator Carper. All right. Thanks.
The last question is, and this would be for everybody: I
want, if you would, to just think sort of the big-picture here
again as we close out, and I just wanted you to think outside
of what you already talked about and ask could you go beyond
what you submitted in your testimony or even said orally, but
are there any other final areas of concern in Federal IT reform
that are not getting enough air time? What are the things that
might be flying under the radar, if any, that could come back
to bite us later on down the road? We will just close with that
one.
Mr. O'Keeffe, any last thought there on that?
Mr. O'Keeffe. Well, I think a couple points. Cybersecurity
is not in the 25-point plan, and the comment from Mr. Kundra is
that it is baked into everything. Teri Takai, the CIO for the
Department of Defense, asked that question when the 25-point
plan was revealed, so I think we need to make sure that we are
mindful of what is going on in security.
I think the feedback to date on FedRAMP has not been
terrific, and so there is an opportunity to do better.
I think it is great that GSA is listening to the feedback
from its colleagues in government.
I think the biggest thing to fear is fear itself and that
we need to recognize this is changing very quickly. This whole
community is changing very quickly. We need to be mindful of
what can be a Luddite mentality. The people who oppose some of
these changes are often referred to as ``box huggers,'' people
that want their PC wherever it may be and they want to be able
to go touch it.
If you look at what has happened in the automotive
industry, there is going to be significant change in industry.
At one point there were Packards and there were Bugattis and
there were a whole series of different cars, Tuckers and what
you will. And ultimately we are going to consolidate that in
the IT market to a number of players that we cannot subsist.
And I think in closing if we do not change--here was a
superpower at one time that----
Senator Carper. There was a what?
Mr. O'Keeffe. There was a superpower at one time that was
structured under a monarchy and did not really recognize the
value of democracy. And there was a revolution that you are
probably aware of, which established a new superpower. And I
think what we need to do is to recognize that the world is
changing, and if we try to hang onto the way of the past in our
society and also specifically in the IT changes that will
enable that, then it will not be good for our future.
Senator Carper. All right. Thank you. Mr. Sood.
Mr. Sood. That is an excellent question, and I appreciate
the opportunity to address it.
I think in many respects we in the Beltway get really
focused on federally specific issues, and we are very insular
in that nature. I think in many respects we need to take a step
back and see what we can learn from others, see what we can
learn in the 50 labs of innovation that take place across State
and local government and see what we can learn from global
public sector central governments like the United Kingdom or
Australia and what they are doing with their technology
innovation. Or even take some of the lessons, as I mentioned in
my written testimony, of commercial best practices and really
not adopt them in government but adapt them for the best
practices within government. I think that is sort of a
fundamental issue that we could use more enlightenment on,
shine more of a spotlight on, as to what are really the
innovations that are taking place outside of the Federal
Government here that we could be learning from.
Senator Carper. OK. Good. Thanks.
Mr. Grasso, you get the last word.
Mr. Grasso. Throughout this discussion, I have heard the
term ``compliance'' used quite a bit, and I would offer that
compliance is necessary but it is not sufficient. We need to do
things right, but we need to also do the right thing.
So earlier in this discussion we talked about FISMA
compliance with Google. What I would tell you is when it comes
to compliance, compliance is often based on a number of
experiences and best practices and, thus, a set of processes to
avoid issues that were seen in the past.
When you look at topics like cybersecurity, if you comply,
you will avoid past problems. But it is not sufficient because
we are learning new things each and every day. So we need to do
business differently. So we need to go beyond simply
compliance. We need to create an environment where we empower
individuals to take the initiative, to assume that change, if
you are doing the right thing, is actually a good thing.
We talked about incentives earlier. Many individuals are
incentivized to strictly comply to all of the rules. It puts
them inside of a box, if you will, and sometimes while they are
doing things right per the process, they are not necessarily
doing the right thing.
So I think we just need to be very, very careful. We talk
about this plan being really a plan of change. We need to
create an environment and a culture where change is acceptable
and that we learn from our failures so that, in fact, we can
succeed with the changes that we plan in the future.
Senator Carper. Well, my thanks, our thanks really to each
of you for coming back and testifying before us today and in a
number of cases and for really giving us a lot to think about
and, frankly, a lot to help us.
You mentioned in your last comment there, you mentioned the
word ``culture,'' and one of the things that I am endeavoring
to do and this Subcommittee is actually endeavoring to do, is
to try to change-bit-by-bit the culture in our government. And
I said earlier in my opening remarks, I believe I mentioned, a
lot of people think we operate under a culture of spendthrift,
and what we are trying to do is to move away from that toward a
culture of thrift where we really ask the question, ``Is
possible to get better results for less money or for not much
more money.'' And I think in most cases it is.
One of the ways it has dawned on me is that one of the ways
to get better results for less money is just by doing a better
job in the way we develop and build these IT projects. That can
really help us a lot. That is sort of a basic concept to
understand, but it is really true.
So thank you all. I am going to followup with a few more
questions in writing. One of the questions I will probably
followup in writing is: Some of the witnesses said very
complementary things about our legislation, which Senators
Brown, Collins, Lieberman, and I have introduced. I really
would welcome your thoughts if there are some things that are
missing or some things that ought to be taken out. So we are
always interested in constructive criticism.
Again, thanks for your testimony and for helping to light
the way for us here in the Legislative Branch.
With that, we are adjourned. Thank you.
[Whereupon, at 12:56 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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