[Senate Hearing 112-614]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 112-614

                    INNOVATING WITH LESS: EXAMINING
           EFFORTS TO REFORM INFORMATION TECHNOLOGY SPENDING

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


                                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

                             SECOND SESSION

                               __________

                              MAY 24, 2012

                               __________

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

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs



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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           ROB PORTMAN, Ohio
JON TESTER, Montana                  RAND PAUL, Kentucky
MARK BEGICH, Alaska                  JERRY MORAN, Kansas

                  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

                                 ------                                
Opening statements:
                                                                   Page
    Senator Carper...............................................     1
Prepared statements:
    Senator Carper...............................................    37
    Senator Brown................................................    40

                               WITNESSES
                         THURSDAY, MAY 24, 2012

Steven VanRoekel, Federal Chief Information Officer, Office of 
  Management and Budget..........................................     4
David A. Powner, Director, Information Technology Management 
  Issues, U.S. Government Accountability Office..................     6
George DelPrete, Principal, Grant Thornton, LLP, on behalf of 
  TechAmerica....................................................    16
Molly O'Neill, Vice President, CGI Federal, Inc..................    17
Nick Combs, Federal Chief Technology Officer, EMC Corporation....    19
Jennifer Morgan, President, SAP America Public Services, Inc.,...    21

                     Alphabetical List of Witnesses

Combs, Nick:
    Testimony....................................................    19
    Prepared statement...........................................    80
DelPrete, George:
    Testimony....................................................    16
    Prepared statement...........................................    68
Morgan, Jennifer:
    Testimony....................................................    21
    Prepared statement...........................................    93
O'Neill, Molly:
    Testimony....................................................    17
    Prepared statement...........................................    73
Powner, David A.:
    Testimony....................................................     6
    Prepared statement...........................................    52
VanRoekel, Steven:
    Testimony....................................................     4
    Prepared statement...........................................    44

                                APPENDIX

Questions and responses for the Record from:
    Mr. VanRoekel................................................   104
    Mr. Powner...................................................   107
Statement for the Record from Project Management Institute.......   108

 
                    INNOVATING WITH LESS: EXAMINING
           EFFORTS TO REFORM INFORMATION TECHNOLOGY SPENDING

                              ----------                              


                         THURSDAY, MAY 24, 2012

                                 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 10:02 a.m., in 
Room 342, Dirksen Senate Office Building, Hon. Thomas R. 
Carper, Chairman of the Subcommittee, presiding.
    Present: Senator Carper.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Our Subcommittee will come to order.
    Welcome, one and all. Thanks to our guests, including the 
ones that are standing in the back. Standing room only--we do 
not always have that over here. You guys are a big draw, I 
guess. We are glad everyone is here.
    This hearing will examine the Obama Administration's 
progress in implementing its plan to transform the management 
of our Federal information technology (IT) assets.
    In a time when we are fighting to create jobs and grow our 
economy while also grappling with historic budget deficits, the 
American people are rightfully skeptical of a government that 
continues to squander too many of our tax dollars that they 
entrust to us. They want better results from Federal programs, 
as do I. It's our job to ensure that we get those results, and 
that they are delivered in a cost-effective manner.
    When it comes to the information technology investments 
that agencies rely on to provide services that Americans need, 
the Federal Government has consistently thrown good money after 
bad. We built an IT infrastructure that is bloated, 
inefficient, and actually makes it more difficult sometimes for 
the government to serve its citizens.
    With more than $80 billion spent each year on Federal 
information technology, can we say that we are getting what we 
are paying for? Can we say that we have looked at every nook 
and cranny of our IT investments and say to all Americans that 
we have managed their money effectively? I am afraid that the 
answer to those questions is no and no. However, having said 
that, all is not lost.
    Nearly 18 months ago, President Obama directed our Nation's 
first Federal Chief Information Officer (CIO), Vivek Kundra, to 
embark on an ambitious effort to bring the Federal Government's 
use of technology into the 21st century and to ensure that we 
are operating in the most cost-effective manner possible. I 
commend the President and Mr. Kundra and his team for the sense 
of urgency and the attention that they brought to these 
problems. We are now on a path, I believe, to cut what we 
cannot afford and nurture an environment in which innovation 
and more cost-effective technologies are being deployed 
throughout our government.
    As we approach the June 2012 deadline for the 
implementation of 25-point plan that Mr. Kundra developed, I am 
reminded of what Vince Lombardi once said. He said a lot of 
different things, but one of the things that he says is ``If 
you are not keeping score, you are just practicing.'' It is 
important that we have a good game plan in place, but we must 
also be clear in keeping score and tracking our progress.
    In keeping score, there are a number of areas that we can 
look to in order to measure the progress of the 
Administration's plan. For example, before President Obama and 
his team came into office, the Federal Government did not know 
how many data centers that we had. Since then, we have found 
out that there are over 2,000 data centers bleeding energy and 
money throughout the Federal Government.
    I am happy to hear that between now and the end of 2012, 
nearly 500 of these data centers will be shuttered, saving us 
$3 billion per year according to the Office of Management and 
Budget (OMB). That is $3 billion, with a B. That leaves us with 
several hundred more to go if we are to reach the President's 
goal of closing nearly 1,000 of these by 2015. But, these first 
few rounds may be the low-hanging fruit or maybe even the fruit 
already on the ground. So, we need to continue pressing hard to 
achieve our goals and the savings that will come from them.
    As we shut down these unnecessary data centers, one of the 
ways we can get more efficient IT spending is by moving the 
government to the cloud. The cloud is an example of the 
innovative tools available to the government that offers an 
efficient pay-as-you-go approach to IT. In it, a low initial 
investment is required to begin, and additional investment is 
needed only as use increases.
    Many Americans already use cloud computing in some form for 
email and when using social networking sites. It is also used 
often by private businesses that are looking for cost-effective 
IT solutions. According to OMB, Federal agencies have moved 
almost 70 services to the cloud, with many more likely to 
migrate as well.
    Another important area where we have a plan and are now 
keeping score is with the Administration's launch of TechStat 
Accountability Sessions, also known as TechStats, in January 
2010. TechStat sessions have enabled OMB and agency leadership 
to turn around, halt or terminate IT investments that do not 
produce dividends for the American people. According to OMB, 
approximately 300 TechStat sessions have taken place since 
2010, with approximately $4 billion in cost savings, cost 
avoidance or reallocation of funding for major investment 
project.
    Of course, no plan is perfect. In a report released today 
by the Government Accountability Office (GAO), the government's 
watchdog, it provides a number of areas in the reform plan 
where more work is to be done. GAO's concerns are ones that I 
want to examine so that we do not risk losing momentum and can 
continue the progress that has been made so far. Very good 
progress, I think.
    As we move forward, a vital component of reforming the 
Federal Government's spending on IT involves learning from the 
private sector. IT has transformed how the private sector 
operates and has revolutionized the way in which it serves its 
customers, who also happen to be our customers. The Federal 
Government has missed out on some of these transformations in 
the past due in part because we often pay more for old 
technology that agencies no longer need. In addition, we have 
seen chronic poor management of large technology investments.
    I hope our private sector witnesses on the second panel are 
able to share with us some lessons from their organizations and 
give us some insights on how we can implement even more 
innovative tools at lower cost to the Federal Government and to 
our taxpayers.
    As I said at last year's hearing on information technology, 
the President's reform goals are ambitious. He and his team 
should be commended for taking on this task, and I commend 
them.
    While there is more work to be done to improve efficiency 
and effectiveness in the Federal Government's IT spending, we 
must not overlook the important action taken over the past 18 
months by OMB to address many of these problems. The reforms 
are being implemented now, coupled with initiatives that the 
Administration has underway or will undertake in the near 
future under the direction of our Federal CIO, Steven 
VanRoekel, who will help put us on the path to a more effective 
and, I hope, a more efficient Federal Government.
    It is important to remember that the Administration cannot 
do this alone, and those of us in Congress have work to do on 
our part to achieve success.
    Last year, I introduced legislation along with Senator 
Susan Collins--and others that will give OMB, agency leadership 
and decisionmakers in Congress the information that we need to 
know whether our investments in new technology are on the right 
track. Our bill is called the IT Investment Management Act. I 
am sure there is an acronym there somewhere. The IT Investment 
Management Act requires agencies to plan investments correctly, 
up front, and alert Congress regarding failing IT investments 
before millions of dollars, or maybe billions of dollars, have 
been wasted.
    I hope that our witnesses today will provide some thoughts 
and comments about our legislation, and we look forward to 
working--with our colleagues and with the Administration, and 
folks in the private sector too, on these efforts and other 
cost-saving measures soon.
    Again, our thanks to our first panel of witnesses and those 
who will succeed you for taking your time to be here today, for 
the leadership that you are showing, for sharing also your 
perspectives on these important issues.
    And now, my script says now I am supposed to recognize our 
Ranking Member Senator Scott Brown for his opening statement, 
but I think he will be brief. [Laughter.]
    But, knowing Scott, I know he will be here, and we will 
look forward to him saying whatever is on his mind once he 
arrives.
    Now, I get to introduce Steven VanRoekel who was appointed 
as the second U.S. Chief Information Officer by President Obama 
on August 5, 2011. Prior to his position in the White House, he 
served in executive positions at the U.S. Agency for 
International Development and the Federal Communications 
Commission.
    Before joining the government in 2009, Mr. VanRoekel spent 
his career at Microsoft Corporation where he worked closely 
with the corporation's co-founder, Bill Gates.
    And, he comes to this position, succeeding Vivek Kundra, 
who has been here many times, and this is someone who helped 
really build, lay the foundation on which our new CIO stands.
    I said it when I was Governor of Delaware, that I stood on 
the shoulders of those who came before me and people like, Mike 
Castle and Pete du Pont and others.
    And, you have some pretty good shoulders to stand on as 
well.
    David Powner. I was kidding David before the hearing 
started. I said if we paid him on a per diem basis for the 
times that he has testified, we would probably have a bigger 
national debt that we already have.
    But, we are glad to see you again, David, and thank you for 
your help and that of your team.
    But, David is the Director of Information Technology 
Management Issues at the U.S. Government Accountability Office. 
He is currently responsible for a large segment of GAO's IT 
work that focuses on development and acquisition, on governance 
and reform initiatives. He is no stranger, again, to this 
Subcommittee. He has over 20 years of experience in information 
technology in both the public and the private sectors, and as a 
result, he has received many GAO awards during his tenure.
    I now want to recognize Mr. VanRoekel to begin his opening 
statement.
    Your entire statements will be submitted for the record. If 
you would like to summarize those, that would be fine. If you 
want to use a little bit more than 5 minutes, that is OK. If 
you want to use a lot more than 5 minutes--that is probably not 
OK, so we will have to rein you back in.
    But, we are glad you are here, and we look forward to 
hearing from you. Thank you.
    Please proceed.

  TESTIMONY OF STEVEN VANROEKEL,\1\ FEDERAL CHIEF INFORMATION 
            OFFICER, OFFICE OF MANAGEMENT AND BUDGET

    Mr. VanRoekel. Thank you, and good afternoon, Chairman 
Carper, and thank you for the opportunity to testify on the 
Administration's efforts to continually improve the management 
of Federal information technology.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. VanRoekel appears in the appendix 
on page 44.
---------------------------------------------------------------------------
    From my nearly 20 years in the private sector, I know 
firsthand the enabling nature of technology to increase mission 
efficiency. Great American companies look for ways to use IT 
strategically and to do the seemingly impossible--improve and 
expand core services while also cutting costs.
    The Federal Government is no different. Through the 25-
Point Plan to Reform Federal IT, we have jump-started a set of 
discrete actions that have augmented our larger efforts and 
helped turn the corner on advancing the culture of Federal IT.
    As we look forward, we must buildupon our work to date and 
look across agency IT portfolios in their entirety to eliminate 
duplication and shift spending from the costly maintenance of 
outdated systems to more efficient technologies, as you 
mentioned in your opening statement. By doing so, we can 
improve the delivery of mission-critical services as we work 
together with Congress to hold agency IT budgets in check and 
reduce the cost to the American people.
    Today, I would like to highlight three elements of our 
approach to innovate with less.
    First, we are optimizing our IT infrastructure by 
consolidating Federal data centers, shifting to more efficient 
technologies such as cloud computing and rationalizing the use 
of commodity IT.
    We have accelerated our data center consolidation effort 
significantly, increasing our goal by 20 percent from the 
original set in February 2010. To date, 267 data centers have 
been decommissioned, and by the end of 2012, we plan to close a 
total of 429.
    In addition to consolidation efforts, we are also improving 
the quality of service for the data centers that remain in our 
inventory. Ultimately, this allows us to support more efficient 
IT solutions while also creating a more secure Federal IT 
footprint.
    Our consolidation work reflects a larger shift in the 
government's mindset from a capital-intensive, asset ownership 
model to more service-oriented models. Under the 
Administration's ``Cloud First'' policy, there have been many 
successful migrations of services to the cloud, which have led 
to the elimination of more than 50 legacy systems and met our 
initial goals on cloud migration. To accelerate the safe and 
secure adoption of cloud computing, we launched FedRAMP, which 
leverages a ``do once, use many times'' framework to more 
efficiently conduct agency security assessments related to 
cloud procurement.
    In addition to working to optimize the Federal IT 
infrastructure, we are focused on maximizing the overall return 
on investment of Federal IT and are providing agency leadership 
with tools to help them look across their IT portfolios and 
take the necessary actions on which investments to fund and 
which to cut.
    Building on our TechStat reviews, which have resulted in 
the identification, as you mentioned, of $4 billion in cost 
savings and implications, we recently launched PortfolioStat to 
provide tools for agencies to identify and eliminate low-value 
IT investments and adopt shared services.
    Whereas TechStats target individual investments, 
PortfolioStat takes a broader view across the entire IT 
portfolio for opportunities for consolidation and optimization 
to further support agencies in reducing duplication and 
optimizing service delivery, the Federal IT Shared Services 
Strategy provides direction for agencies in moving services to 
this shared approach. Our ultimate goal in eliminating waste 
and duplication is to free up resources to reinvest in the 
future, to help us build a more efficient and effective digital 
government.
    The aim of the Digital Government Strategy that I released 
yesterday is to transform how the government connects with, and 
provides services to, the American people by enabling direct 
access, high-quality digital government information and 
services anywhere, anytime, on any device. And, as we implement 
the strategy, we will help provide the Federal workforce with 
21st century tools to carry out agency missions more 
effectively and at a lower cost.
    We must use IT to improve government productivity and lower 
barriers to citizen and business interaction with the 
government, all while bolstering cybersecurity. With threats 
evolving daily, cybersecurity must be a focus of everything we 
do.
    The steps we are taking to optimize our IT infrastructure, 
maximize the return on IT investments and build a digital 
government will allow us to innovate with less and achieve our 
goals of improving service to the American people while driving 
down cost.
    I appreciate the work this Subcommittee has done in this 
area. Thank you for the opportunity to appear today, and I look 
forward to our discussion. Thanks.
    Senator Carper. Thank you so much.
    And, Mr. Powner, you are now recognized. Please proceed.

TESTIMONY OF DAVID POWNER,\1\ DIRECTOR, INFORMATION TECHNOLOGY 
    MANAGEMENT ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Powner. Chairman Carper, I would like to thank you for 
your leadership in overseeing Federal IT spending. Your many 
hearings and oversight over the years have led to major 
improvements in the transparency of IT spending, with the IT 
Dashboard and to the reform efforts currently underway.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Powner appears in the appendix on 
page 52.
---------------------------------------------------------------------------
    I would also like to commend Steve VanRoekel as he 
continues to push important reform initiatives like data center 
consolidation, consolidating commodity IT, improving governance 
across the Federal Government through TechStat and 
PortfolioStat sessions and, just yesterday, his announcement of 
the Digital Strategy.
    Solid progress has been made on IT reform. I would like to 
highlight this progress and also discuss areas where even more 
attention is needed.
    The December 2010 IT reform plan is an excellent roadmap to 
position the Federal Government to spend the $80 billion it 
invests in IT annually. It is an aggressive plan that focuses 
on 25 specific areas and has very clear 6, 12 and 18-month 
deliverables. Basically, it sets out to achieve operational 
efficiencies for the dollars being invested in live systems and 
to better position the government to manage large-scale IT 
acquisitions.
    An area where progress has been made in operational 
efficiencies is data center consolidation. All major 
departments and agencies have a dedicated and accountable 
program manager and plans that continue to evolve. This area is 
also guided by excellent performance metrics. Specifically, 
1,000 centers are to be closed by 2015, and OMB estimates that 
this will result in $3 billion in savings.
    Regarding managing large-scale projects better, progress 
has been made on strengthening investment review boards through 
TechStat sessions. OMB claims that they have saved $3 billion 
by canceling and restructuring investments through their 
reviews, and agencies are reporting another $900 million in 
savings through nearly 300 TechStat reviews. Again, each area 
has solid progress. However, our review shows less progress 
than what OMB reports.
    Mr. Chairman, prematurely declaring victory in areas where 
more needs to be done will have the wrong consequences. I would 
like to highlight some of these areas.
    On data center consolidation and the ``Cloud First'' 
policy, plans need to be solidified so departments and agencies 
have clear cost-saving targets to work toward. The ultimate 
measure with these initiatives is dollars savings. If the 
government is to reach OMB's $3 billion goal, individual agency 
plans need to better target specific savings. Likewise, in the 
area of cloud computing, agency plans need to focus on what 
systems will be retired and what the resulting cost savings 
are.
    The government spends nearly $55 billion of the $80 billion 
spent on systems in operations, and freeing up funds from these 
initiatives to have more to spend on modernizing the 
government's antiquated systems is critical.
    Turning toward better managing large-scale IT acquisitions, 
we now have better transparency and governance. But, according 
to the IT Dashboard, the CIOs have rated nearly 200 projects, 
or 25 percent of the major IT projects, as red or yellow 
status. This equates to about $13 billion that are at risk.
    In addition to improving project management and governance, 
other areas where additional reform is needed include using the 
improved governance to reduce duplicative IT spending. We 
recently reported on duplicative IT spending at the Departments 
of Defense and Energy. OMB's PortfolioStat initiative can help 
root out duplicative spending.
    Contracting guidance needs to support modular development. 
This area needs to be more aggressively tackled by OMB's Office 
of Federal Procurement Policy.
    Budget models need to align with modular development. 
Multiyear funding and funding by portfolio instead of by 
project are areas that OMB, agencies and the Congress need to 
continue to pursue.
    And, CIO authorities need to be strengthened. Many CIOs in 
the government still do not have the appropriate authority to 
effectively manage IT portfolios at their respective agencies.
    Our report being released today highlights the areas where 
more action is needed and also highlights the importance of 
having solid performance metrics to measure progress.
    Overall, there has been solid momentum, and the reform plan 
is a great start. But, to truly reform, meaning substantial 
operational savings and even less IT projects at risk, means 
that reform must continue beyond the 18-month horizon.
    Executing the plan through the next month is important, but 
even more important is continued diligence in achieving the 
billions that are at stake with data center consolidation and 
other shared service efforts and in turning around the 
performance of about 200 major IT projects that total $13 
billion.
    This concludes my statement. I would be pleased to respond 
to questions.
    Senator Carper. Thank you both.
    I am struck by as I go home, and even around the country, 
when I run into people who said, well, we saw a hearing that 
you were holding with others of your colleagues about how to 
get better results for less money. And, people just say, thank 
you for doing that.
    As it turns out, with the kind of budget deficits we have 
today, it is hard to believe that we had three balanced budgets 
in a row in 1999, 2000 and 2001. We had a change of 
Administration, and all we had for as far as the eye could see 
were surpluses. And, 8 years later, all we could see as we 
looked ahead were deficits. The deficit ballooned a couple of 
years ago to about 1.5 trillion, and we have been reining it 
back in.
    My hope is that by the end, at the end of this year, when 
the elections are behind us, that we will be able to enter into 
a comprehensive deficit reduction agreement, bipartisan, along 
the lines of that proposed by the Deficit Commission led by 
Erskine Bowles and former Senator Alan Simpson, that 
incorporates three dollars of savings on the spending side for 
every one dollar of new revenues. That is something I hope, 
that when we get to the end of the year, that we will actually 
do something very much like that.
    In the meantime, it is important for us to use every day in 
the interim to find ways to get better results for less money 
or better results for the same amount of money, with respect to 
the way we provide health care, whether it is Medicare or 
Medicaid or other programs, with respect to the way we fund our 
defense and pay for the development of new major weapon 
systems, whether it is the way we help ensure that our 
agricultural economy is strong and vibrant, to ensure that 
support our exports to other countries, the way that we clean 
our air and our water in a cost-effective way, the way we have 
real solid return on investments, the way that we look after 
the least of these--the people that do not have a place to 
live, the homeless and folks that are hungry--all those ways, 
to try to make sure that we meet our needs but do so in cost-
effective ways.
    A great tool for realizing this goal of better results for 
less money, or the same money, is information technology. The 
potential is just terrific, and I am encouraged that we are 
beginning to realize that potential.
    And, as we all know, it was not always that way. And, for 
years we spent a lot of money on IT investments for any wide 
variety of purposes, and we did not always get the kind of 
results that any of us wanted, with some notable exceptions. 
With some notable exceptions.
    I think we are on the right track.
    And, Vivek Kundra, if you are out there somewhere, 
listening, bored to tears and wondering what is going on here 
in this Subcommittee, you have done good work and I think you 
got us on the right track, with the help of, frankly, our 
friends at GAO and a lot of other people as well.
    I love to go visit schools. We are going to have a Memorial 
Day recess next week, and I will probably end up in a school or 
two in Delaware. I like to go into elementary schools, and I 
have been in a number of colleges lately with several 
commencements in the last couple of weeks.
    But, I was in a middle school and spent some time with some 
sixth graders, and among the questions they asked is, what do 
you do anyway?
    And, I explained that they have rules in their school, 
rules on their school buses, rules at home. We have rules for 
our country. And I, along with Senator Coons, Congressman 
Carney from my State and a lot of other men and women across 
the country--the President, the Vice President and the people 
who work for them--we get to help make the rules for our 
country, and the other thing we do is we try to help people in 
a wide variety of ways.
    But, when folks that are watching us today from around the 
country, or tonight, and they are saying what is this all 
about, and they are hearing about dashboards and TechStat, and 
they are hearing about commodities, and they are hearing about 
the cloud computing.
    Would you just take a couple of minutes, Mr. VanRoekel, and 
for those people, just make this real and make it relevant in 
their lives?
    Mr. VanRoekel. Absolutely, and thank you.
    You are spot-on in that I think a lot of IT in the past was 
viewed as just a sort of discretionary spend. It is just part 
of the pie, one slice of the pie that we implement to do the 
work of government.
    And, I like to think about IT really as the pan. It is sort 
of the mission of government is sitting in that pan, and it is 
a tool for us to enable us to do better service in the work we 
do in government and, more importantly, service to the American 
people.
    What the Federal CIO does and the CIO community in 
government is really about enabling the mission of government--
providing tools and resources to better service Americans, to 
get benefits to veterans in a better way, provide public safety 
resources, information to citizens on where they live, where 
they work, public and other safety things, economic benefits, 
job training. All the resources of government can be manifested 
in this way.
    And, I am delighted you are meeting with school members 
because I think they embody our future in a way that we do not 
normally see in Washington, which is using technology in such a 
fundamental way to live their lives.
    And, I think it is our obligation as a government to really 
provide the tools and resources for those people because they 
will be the next taxpayers of the future, the next Congress 
people of the future, the next warfighter, the next employer, 
and their government needs to keep pace with that.
    Our goal is really about providing accountability and 
driving down costs and focusing on doing more with less and 
innovating with less. But, at the end of the day, it is about 
really enabling the mission of government through, I think, the 
work we do.
    Senator Carper. I like that--enabling the mission of 
government.
    Mr. VanRoekel. Yes.
    Senator Carper. I am going to use that, if you do not mind.
    Mr. VanRoekel. Please do.
    Senator Carper. The first time I use it, I will attribute 
it to you. After that, it is mine. [Laughter.]
    Let me ask Mr. Powner, if I could; you have been 
complimentary, and rightly so, in terms of the work done within 
the Administration in recent years and working in these 
vineyards.
    And, we also know that today GAO released, I think, a 
report that provides a number of areas in which--and you have 
alluded to this in your testimony--in areas of the reform plan 
where there is more to be done, acknowledging that a good deal 
has been accomplished.
    I think GAO and OMB seem to disagree to some extent on the 
progress made on the IT reform plan though, and I would just 
ask, if you would, just to comment on that.
    Mr. Powner. Yes, Mr. Chairman, I would say for the most 
part--and Steve and I have had plenty of discussions on this--I 
think we are in agreement that there has been really solid 
progress across the board. To the extent of that progress and 
what remains, there might be some differences.
    One tangible example is data center consolidation. I 
mentioned in my oral statement there is great progress there, 
where we have accountable individuals; we have plans in place, 
but we also know that the inventories and plans are not where 
they need to be yet. And, we need to get those inventories and 
plans where they need to be so that we can ultimately 
accomplish this goal of $3 billion in savings.
    So, we push real hard, and that is the role we play in 
making sure that we have the solid plans in place so that 
ultimately we can get those results. That is kind of where we 
disagree a bit.
    I know Steve had a great line, where he said he is on the 
10-yard line and getting ready to drive it into the end zone. 
That is the goal we want.
    I do not know if we would----
    Senator Carper. He is on the other team's 10-yard line, not 
his own.
    Mr. Powner. That is right. He is in the red zone.
    I do not know if we would agree that he is in the red zone 
right now, but he is clearly over the 50. That is OK.
    Senator Carper. Oh, OK.
    Mr. Powner. But, that is OK. That is kind of the 
disagreement that we might have.
    Senator Carper. Does he have any timeouts left? [Laughter.]
    Mr. Powner. But, clearly, we want to commend the 
initiatives to date and all the progress that has been made.
    But, now is not the time to take the foot off the 
accelerator. We want to keep that momentum going forward. Data 
center consolidation is a prime example.
    Senator Carper. I like that. I will use that one too--this 
is not the time to take the foot off the accelerator. That is 
good.
    Why don't you just respond a little bit, if you would, Mr. 
VanRoekel, to what Mr. Powner has said?
    There are areas of maybe some disagreement, but there is a 
lot to agree on. But, just go back to where there might be some 
disagreement.
    Mr. VanRoekel. Yes, I think there is less disagreement than 
there is agreement on progress and things we have done. Every 
time, I think Dave and I always open our meetings with talking 
about our shared goals--the opportunity we have as a community, 
I think, working with Congress, GAO and the White House, 
working together on the important task of driving forward IT 
and efficiencies into Federal IT. The disagreements are 
typically, I think just mostly in my perspective, a scoping 
kind of disagreement.
    The 25-point plan is a discrete set of actions. If you read 
through the 25-point plan, it lists a very discrete set of 
actions that need to be undertaken. At the end of the day, that 
strategy was really about shocking the system. It was applying 
a change, a tactical change agent to really wake people up and 
to realize here are a set of things we need to go do.
    Federal IT reform does not begin or end with the 25-point 
plan, and we are taking a very broad approach to, and going 
above and beyond, most of the elements of the 25-point plan. I 
think if you look at our work on CIO authorities and 
PortfolioStat and some of the additional things we have done to 
build models and plans around data center consolidation, none 
were listed in the 25-point plan. They are all above and 
beyond.
    And so, we think that we are carrying that great momentum 
that happened before. And, I think at the end of the day we 
will all look back on this time and say incredible progress has 
been made.
    The semantics of the line items are up for discussion, and 
we are certainly having those discussions. At the end of the 
day, it is about the score on the scoreboard, I think, and we 
are focused on that result.
    Senator Carper. Thanks.
    Both of you have a fair amount of experience in the private 
sector, and you bring that experience to the public sector. How 
is that helping you? Maybe, how is it less helpful? And, is 
there anything the private sector could learn from the public 
sector in this regard?
    Mr. VanRoekel. Yes, I lived every day in the private sector 
with the mentality that you had to keep costs low and keep 
value--or in the case of the private sector, profit--high and 
you had to grow the profit line up and to the right and focus 
on results that were going to drive the delta between those 
things and think about that.
    In the public sector, we have sort of an ingrained culture 
of entropy where it is just a shifting cost line, to some 
effect, where people sort of wrap their arms around things they 
have done in the past and are not willing to really change 
that.
    We have been able to add new value to Federal IT over, I 
think, the prior 15 or so years, really by growing the budget. 
We were growing prior to 2009. Federal IT spending was growing 
about 7 percent on a compound annual growth rate.
    In 2009, that stopped. Vivek Kundra and this Administration 
came in and flat-lined Federal IT spending.
    Under my watch in the budget that was recently passed for 
2012, we are actually in the negative territory. We are going 
down in the negative territory.
    But, stepping back out of those, the budget line items, you 
have to ask yourself, have we innovated? Have we done 
innovative things in the last 3 years? And, I think we have, 
and it sort of proves out the ability for us to bring this 
private sector mentality of keep that cost line flat or 
declining while you innovate.
    Had we kept growing Federal IT spending, we would be at 
about $103 billion right now if that average, that line, had 
been growing. And so, we have produced amazing value in that 
delta, I think, in the past 3 years by innovating with less.
    I think what the private sector can learn from the public 
sector is we tackle very unique things in the public sector. We 
are leading the way, I think, on cloud, with FedRAMP, and 
looking at security and the different aspects of cybersecurity 
as they apply. We are the stewards and champions of privacy and 
security for American citizens. I think there could be a lot of 
that brought into the private sector to learn from.
    And, I think a lot of the international aspects--computing 
and the consumerization of technology and cloud computing--are 
driving this sort of international dynamic that we have never 
seen before where the world, when your servers may be in some 
far-flung place and you do not know it, creates unique 
dynamics.
    And so, the private sector working hand in hand with the 
public sector to really foster the next wave, I think, could be 
an important thing that we do together.
    Senator Carper. All right. Thank you. David.
    Mr. Powner. A couple key areas, I would say with my 
experience in the private sector. I think accountability in the 
private sector is much stronger. And, I think some of the 
initiatives in the Federal Government now with, for instance, 
the IT Dashboard, where we have clear accountability for all 
800 major IT projects, is a step in the right direction.
    I think one other area in the private sector, based on the 
experience I had, was modular incremental development. In fact, 
Steve and I were talking a lot about the move toward Agile. 
And, years ago we were doing extreme programming and that type 
of thing where you had deliverables within 90 days. I mean, we 
were not talking about months on delivery, but it was days in 
terms of our software deliveries.
    And, I think the more the government can get in that cycle, 
and clearly, that is in the IT reform plan. There is a lot that 
is in there, and I think some of the initiatives that Steve has 
in place are pushing government to be more agile when it comes 
to software development.
    Senator Carper. All right. One of the questions I often ask 
at a hearing like this; basically, we are interested in knowing 
what in this case the Administration is doing and asking them 
to tell us what they think they are doing well and what the to-
do list still is.
    And, we always like to ask GAO if they agree and where they 
agree and maybe where they do not, and then we like to have a 
conversation like we are having just now.
    But, what I always like to ask is, how about us? The people 
that sit on this side of the dais, how are we doing and what 
can we be doing?
    What are we doing that is constructive and helpful, and 
what could we be doing that would even be more enabling--to use 
your term, Mr. VanRoekel, to be even more enabling?
    So, you can turn the tables on us here.
    Mr. VanRoekel. Yes, thank you for that opportunity.
    I think your opening statement captures a theme that I 
would love to see in the broader context of Congress, which is 
really the ability to view IT as the strategic asset.
    I mean, one comparison to the private sector that we use is 
that innovative private sector companies pretty much as a norm 
view IT as one of the most strategic aspects of their 
operations. They invest in it. Senior management reviews it. 
And, we see that.
    I think there is a bit too much of looking at IT as just a 
discretionary piece of the equation and viewing IT as just the 
simple ability to print a document or check your email on your 
BlackBerry, or things like that, when IT is so much more of 
what we need to embrace to drive the future forward for this 
country.
    One of the stats I love to quote is that over 50 percent of 
the Fortune 500 companies founded in this country's history 
were founded in the worst economic times in this country's 
history. And, if you trace many of them back, including my alma 
mater of Microsoft, founded it in 1975 during a very big 
recession, many of those companies were founded on the premise 
that they could seize on some new, emerging technology that 
would catapult them forward.
    I think many of them, if you trace back, have that and 
follow that similar line. It was that ability to seize on that 
inflection point in technology to really push ourselves 
forward.
    We are in one of those inflection points now. With mobile 
technology, cloud computing and other things, we can do so much 
more for less than we were able to even 3 years ago. And, I 
think it is our time; it is our opportunity now, to really 
seize on that as a country and to foster the private sector to 
do the same that we saw back in those times as well. Government 
is a very powerful enabler of that.
    Senator Carper. Thank you. Mr. Powner.
    Mr. Powner. Mr. Chairman, a couple areas. I know when you 
hold these hearings we see a spike in activity within the 
Federal agencies, so clearly, your oversight on issues. And, 
one tangible example is the IT Dashboard.
    And, I know Vivek Kundra gets a lot of credit for the IT 
Dashboard, but I am not certain we would have the IT Dashboard 
if it was not for this Subcommittee. That work started where we 
were looking at OMB's watch lists and high risk lists and 
trying to raise the level of transparency with IT spending, and 
I think your continued persistence was a major factor in why we 
have the IT Dashboard.
    Now, in terms of using the data on that dashboard--and I 
know we have a report coming out in a couple months where we 
are going to talk about what that dashboard data shows, by 
agencies--I think we need to continue to raise the 
accountability through your hearings with this Subcommittee. 
You have already achieved a lot. There is still a lot of money 
that is on the table.
    And again, I think data centers--I will focus on that one 
also since there is a potential $3 billion in savings, at 
least, that is out there, and we have a report coming out for 
you on that in the near future too. It is going to identify 
some of the holes so that we ultimately get to the goals that 
are on the table.
    And, I do think Steve and I share--we have common goals 
trying to move the ball forward.
    It is important that the money that we are spending on 
these large IT acquisitions, that we really deliver on that, 
because one of your prior questions about what do we get in 
return. I mean, we get better air traffic control, more 
efficient air traffic control. We have better routes through a 
lot of our technology acquisitions.
    You look at IRS right now. IRS is processing tax returns 
this filing system much quicker than they ever have in the past 
because of a key delivery that they just delivered in December 
this year.
    So, there is a lot of good things happening. We just need 
more of that.
    Senator Carper. Good. I love to quote Abraham Lincoln, and 
he used to say, among other things, the role of government is 
to do for the people what they cannot do for themselves.
    The role of the government is to do for the people what 
they cannot do for themselves. And, that is a paraphrase of 
what he said, but I really think that is a big part of our 
role, not our only role, but it is a big part of it.
    As we come to the end of this panel's appearance here, I am 
trying to put it together and just say how do we relate what we 
are talking about here today to Lincoln's view of the role of 
government. And, what I wrote down was information technology 
should be seen as a strategic--I think that was your term--
strategic asset, enabling the mission of government. Enabling 
the mission of government.
    What is the mission of government? To do for the people 
what they cannot do for themselves, and given the kind of 
fiscal crisis and challenges that we face today, to do for the 
people what they cannot do for themselves in more cost-
effective ways going forward. So, that is a pretty good mission 
statement for all of us.
    Do you all have anything you want to add before we excuse 
you and turn to the second panel?
    Nothing at all?
    Thank you so much. Keep up the good work. Much obliged. 
Thank you. [Pause.]
    I am going to ask the Subcommittee to come to order, 
please.
    We welcome our second panel. You heard the warm-up act. 
They were pretty good, were they not?
    I think they provided some good groundwork for us to go 
forward and accomplish some more here.
    I want to briefly introduce our witnesses, and we are glad 
you took time to be with us. For some of you, this is not your 
first visit, and we appreciate your return engagement here.
    First, we will lead off with George DelPrete.
    Mr. DelPrete is a Principal with Grant Thornton and the 
Chair of TechAmerica's Chief Information Officer Survey Task 
Force Group.
    So, you are a chairman as well, Mr. Chairman.
    He brings more than 20 years of experience in strategy and 
technology consulting. He has a record of assembling, of 
supervising and leading effective teams and advising executives 
on how to solve complex business challenges and use information 
technology to improve operational performance. Mr. DelPrete is 
a frequent speaker on topics ranging from shared services to 
portfolio management.
    So, welcome, sir. Nice to see you.
    Molly O'Neill, how are you today.
    Ms. O'Neill. I am good. Thank you.
    Senator Carper. Nice of you to come. Vice President of 
CGI's Federal Civilian Business Unit and also serves as a 
fellow on CGI's Initiative for Collaborative Government. Before 
her work with CGI, she was Assistant Administrator and Chief 
Information Officer at the U.S. Environmental Protection Agency 
(EPA) from 2007 to 2009. In the role of CIO, she was 
responsible for the EPA's information technology infrastructure 
and policies. Ms. O'Neill is a champion of innovation around 
data transparency, around sharing and collaboration. Welcome.
    Ms. O'Neill. Thank you.
    Senator Carper. Mr. Nick Combs, how are you today?
    Mr. Combs. I am fine, Senator.
    Senator Carper. Good to see you. Currently, Chief 
Technology Officer for EMC Federal and serves as a senior 
corporate evangelist--I like that, evangelist--on cloud 
computing, big data and information security issues. He has 
more than 26 years of experience managing, leading and 
developing information technology solutions for the Federal 
Government. He also serves on the Executive Advisory Committee 
of the Government Information Technology Executive Council. 
Nice to see you.
    And, batting cleanup in this lineup is Jennifer Morgan, the 
President of Public Service for SAP America. She is responsible 
for the company's Federal, civilian, defense and State and 
local higher education customers. Ms. Morgan has more than 18 
years of experience in helping to develop, sell and implement 
enterprisewide solutions and has worked with most Federal 
agencies, including the U.S. Department of Agriculture, the 
Department of Homeland Security and the U.S. Postal Service, 
over which we share jurisdiction and we have spent a lot of 
time in this room trying to figure out how to put them on a 
path that is fiscally sustainable and providing the kind of 
services that we need in our country.
    And, recognizing Mr. DelPrete to begin his remarks, I would 
just say try to stay within 5 minutes in your remarks. Your 
entire statements will be made part of the record. If you go 
way beyond that, I will have to rein you in.
    But, we are happy that you are here, and we look forward to 
hearing from you. Thanks so much. Mr. DelPrete.

TESTIMONY OF GEORGE DELPRETE,\1\ PRINCIPAL, GRANT THORNTON, LLP 
                  AND ON BEHALF OF TECHAMERICA

    Mr. DelPrete. Thank you very much. I want to thank the 
Subcommittee for giving us the opportunity to testify this 
morning.
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    \1\ The prepared statement of Mr. DelPrete appears in the appendix 
on page 68.
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    As you mentioned, I am a Principal with Grant Thornton, and 
I have the honor to talk to you today about the 22nd Annual 
TechAmerica CIO Survey. Grant Thornton and TechAmerica worked 
together to produce this survey, providing insight on the 
issues and challenges facing the chief information officer 
community for a number of years. TechAmerica is the leading 
voice for the U.S. technology industry, representing 
approximately 1,200 member companies.
    I will briefly summarize the five issues that were cited in 
the survey this year. There are copies of the survey for folks 
that are interested, in the back of the room this morning.
    I know it is not a focus of the survey--not a focus of the 
session today, but cybersecurity is the top concern among 
Federal CIOs. This is no surprise, as so many security issues 
are handled through cyberspace today, from controlling an 
elevator to moving money to storing confidential data on 
citizens. Outside threats are on the rise. I think we can look 
into our spam filters every morning and see the kinds of things 
that are trying to get us to provide private information to 
them.
    CIOs are very focused on preventing those external threats, 
but one of their primary challenges today is focusing on the 
internal threats. One CIO recently referred to the internal 
issues around cybersecurity as stupid human tricks--folks 
sharing passwords----
    Senator Carper. I am sorry?
    Mr. DelPrete. Stupid human tricks--folks sharing passwords 
inadvertently with one another, putting personally identifiable 
information onto networks where it should not be and also, 
potentially, losing laptops. This is an area of focus for them.
    CIOs also cited cybersecurity as one of the primary issues 
that needs to be resolved to make mobility a reality. Those 
barriers will come down with a consistent, high quality, 
governmentwide security framework, with sound performance 
metrics and processes for sharing threat information.
    CIOs also talked about human capital. Seventy percent of 
survey respondents say the pay and hiring freezes are really 
hampering their abilities to recruit and retain the folks they 
need to fulfill the mission of the CIOs. It is also having an 
impact on their ability to create successful succession plans, 
to ensure that the right kinds of people are in those roles.
    One of the biggest challenges in the IT workforce was IT 
acquisition skills. Folks feel that the skill set is extremely 
lacking and look forward to having an opportunity to try and 
build that skill set.
    Central agency policy was also a key issue that was focused 
on. Survey respondents gave the 25-point plan a C+ on 
feasibility and a C on value to their organizations. Despite 
the mediocre score, CIOs felt like it served as a good cookbook 
of ideas; it spurred a lot of wonderful action and pushed some 
very good thinking and helped centralize some decisionmaking 
around the important IT reform initiative.
    In terms of the improvements, they would like to see it 
more flexible. One size does not fit all. And, there were a 
number of things for them to try to initiate in short 
timeframes, and it placed a large burden on them in being able 
to accomplish that.
    So, they would like to see a clearer statement of central 
agency priorities and overall strategy. They would also like 
seed money for some of the innovations called for in the plan.
    Mobility was also one of the things that is really an 
enabler and game changer for CIOs right now. There are some 
exciting pilots and things happening out in the Federal 
marketplace.
    One of the challenges they see is there needs to be better 
control over the stovepiped proliferation of mobile 
applications. One CIO referred to it like mushrooms sprouting 
after a rainstorm. There are pilots that are happening and lots 
of stovepiped duplication around this area. Great ideas, but 
there needs to be better control and governance around that.
    They also want a framework for development of mobile 
technology because demand is surging and changing quickly. The 
mobility strategy released by OMB yesterday is a positive step 
in bringing mobility further into the forefront of IT reform.
    And, the last issue was on controlling costs. As we heard 
about in the initial panel, IT budgets have remained flat and 
declined for some agencies. The positive thing about this is it 
is forcing some exciting innovations that we have seen in the 
community. There is more centralization of IT duplicative 
infrastructure. Folks are, I think, looking at better ways to 
reduce that cost. The data center consolidation is a wonderful 
example.
    Asked what they would do in the face of 10 percent budget 
cuts, it is the least effective method of cost control. They 
would eliminate services or lower performance, stop or slow 
down modernization, cut staff or contractors.
    IT can be a multiplier of cost savings and effectiveness--
investing more now in order to gain greater benefits in the 
future. Congress should hold managers accountable for return on 
that investment, and the Federal Government should collaborate 
on, and share, IT development and assets, simplify IT's 
management framework and replace duplication with central 
solutions to ensure we stretch our IT dollars and maximize the 
benefits they bring to a more efficient and effective 
government. Thank you.
    Senator Carper. No, we thank you. Ms. O'Neill.

  TESTIMONY OF MOLLY O'NEILL,\1\ VICE PRESIDENT, CGI FEDERAL, 
                              INC.

    Ms. O'Neill. Yes, thank you, Chairman Carper, for this 
opportunity to appear before you today.
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    \1\ The prepared statement of Ms. O'Neill appears in the appendix 
on page 73.
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    My name is Molly O'Neill. I am the Vice President of CGI 
Federal, a global information technology and business process 
services firm. Prior to rejoining CGI in 2009, I served as the 
Chief Information Officer at the U.S. EPA. On behalf of my 
31,000 colleagues at CGI, I am honored to provide some thoughts 
today around ongoing efforts to reform IT spending across the 
Federal Government.
    CGI applauds the Administration and congressional 
initiatives in not only eliminating wasteful IT spending but 
also to encourage Federal agency investment in the new 
technologies.
    In particular, CGI thanks you, Chairman Carper, as well as 
Senator Brown, Chairman Lieberman, and Senator Collins, for 
your introduction of the Information Technology Investment 
Management Act of 2011.
    The ``Cloud First'' initiative, the 25-point plan and the 
``Shared First'' initiative--all represent positive steps 
forward in this area. However, Federal agencies do face 
challenges as they look to implement new technologies.
    In October 2010, CGI was selected to provide cloud services 
on the governmentwide Infrastructure-as-a-Service (IaaS) 
contract vehicle. Over the next 10 months, CGI's cloud 
computing environment underwent a very rigorous evaluation, 
resulting in a permit authority to operate, allowing CGI to 
begin providing certified cloud services to the government. In 
September 2011, CGI was awarded the first competitively bid 
task order by DHS to move all of its public Web sites to the 
cloud. Since then, CGI has won a number of other additional 
task orders, including projects for GSA and the National 
Archives and Records Administration (NARA).
    Based on these projects and discussions with other Federal 
agencies, we offer up some of the following observations: First 
of all, the cloud helps deliver real cost savings. There are 
two major drivers that lead to the cost savings.
    The first is the speed at which new systems can transition 
and go live in the cloud. For instance, CGI worked with the 
General Services Administration (GSA) to bring 30 systems live 
in less than 90 days. As a result, the agency has reduced its 
server footprint by 50 to 70 percent. In the case of NARA, 
Archives.gov was live 10 days after contract signing, and the 
site was able to handle the crush of 65 million visitors when 
the 1940 census data was released.
    The second is that agencies only pay for the capacity that 
they need. Instead of running data centers continuously at peak 
capacity, cloud clients have lower day-to-day costs and only 
pay for additional capacity when they need it.
    When migrating to the cloud, agencies can also have 
confidence in strong security. The No. 1 cloud question Federal 
agencies ask us is: Is the cloud secure? CGI can answer yes 
because we built our cloud designed to meet the Federal 
security requirements. Specifically, our cloud provides the 
Federal Information Security Management Act (FISMA) compliance 
for low and moderate impact systems, which represent 88 percent 
of Federal agency systems. To date, agencies across government 
have migrated only a tiny fraction of these systems to the 
cloud.
    But, significant acquisition challenges also exist. CGI 
agrees with GAO's assessment that statutory changes are 
necessary to adjust IT budget models. However, the existing 
tools should also be used more widely.
    Agencies have struggled to modify their procurement methods 
for cloud services. The notion for paying for IT services in a 
more elastic fashion is very different from the traditional way 
that government contracts and the models that they use. Many 
agencies are still also pursuing lengthy procurement processes 
rather than using some existing contract vehicles.
    There are a number of new technologies that also can 
provide significant cost savings and springboard the Federal 
Government into this new era of efficiency and transparency. 
Although investment in the cloud, mobility and analytics surely 
will result in cost savings, it is the convergence of these 
technologies that will have the greatest impact on transforming 
government.
    Just imagine a day when a Member of Congress, like 
yourself, can search real-time data to analyze the 
effectiveness of a program anytime, anywhere, because the 
liberated agency data is stored in a secure cloud and made 
available to any device. It certainly beats how things are done 
today.
    Technology alone can produce savings, but how the Federal 
Government procures and delivers IT can offer savings too. 
Cloud computing demonstrates that IT systems can be developed 
and hosted anywhere in the United States.
    The model is not new for CGI. Through three onshore centers 
of excellence--in Belton, Texas; Lebanon, Virginia; and Troy, 
Alabama--CGI provides clients with high quality IT services at 
costs significantly below the average for metropolitan U.S. 
cities, delivering cost savings at approximately 20 to 30 
percent while providing meaningful job growth and economic 
development in those communities.
    In closing, the fundamental shifts in technology can enable 
more effective, efficient and transparent Federal Government. 
Movement to the cloud will result in lower IT costs and the 
ability to share software and services more widely across the 
Federal enterprise. However, the cloud only represents a part 
of what is possible. Congress and Federal agencies must 
capitalize on other ways to save money and maximize the benefit 
by ensuring discipline in spending, leveraging existing 
investments and embracing new technologies.
    Thank you once again for the opportunity, and I look 
forward to any questions that you might have.
    Senator Carper. You are welcome and thank you. You are 
right on the money there.
    Mr. Combs, please proceed. Thank you.

 TESTIMONY OF NICK COMBS,\1\ FEDERAL CHIEF TECHNOLOGY OFFICER, 
                        EMC CORPORATION

    Mr. Combs. Chairman Carper, my name is Nick Combs, and I am 
the Chief Technology Officer of EMC Federal. On behalf of EMC 
and our 54,000 employees, I would like to thank you for 
inviting me to testify today.
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    \1\ The prepared statement of Mr. Combs appears in the appendix on 
page 80.
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    Included in my written comments are many ways that the 
Federal Government can take advantage of capabilities and 
technologies to run much more efficiently, and I encourage the 
Subcommittee to look at those written comments.
    Prior to joining EMC 4 years ago, I served for more than 25 
years in the Federal Government, including time as CIO of the 
National Media Exploitation Center and senior positions within 
the Defense Intelligence Agency. Over the course of my career 
in government IT and commercial industry, I have had direct 
experience resolving many of the IT challenges facing the IT 
industry today, particularly as enterprises transition to cloud 
services, dealing with this massive amount of data, and to 
improve trust and cybersecurity within our architecture.
    Within the Federal Government, all Cabinet-level 
departments and agencies utilize EMC's innovative capabilities 
to deliver transforming IT initiatives within their agencies.
    We are also a leader in the private technology, in the 
private industry, with technology and services to support the 
private and financial industries, with many of our largest 
customers' headquarters in Delaware and Massachusetts.
    Enterprise IT leaders in both government and commercial 
industry are consistently telling us their systems are too 
complex; they are too inefficient; they are too inflexible, and 
they are costly.
    As the leading cloud infrastructure provider, EMC is 
consistently looking for ways to improve its own IT. And, 
through data center consolidation and cloud computing, EMC has 
saved more than $80 million in data center equipment costs and 
another $12 million in power and space cooling, making it 34 
percent more efficient overall in energy efficiency. Imagine if 
we could apply that across the entire government.
    We believe the lessons from EMC's journey to the cloud, as 
well as many of our other customers and partners, are equally 
relevant to the course being chartered by our Federal IT 
leaders. IT transformation within the enterprise can be 
accelerated by aggressively consolidating data centers, 
transitioning legacy systems to cloud-based infrastructure and 
services, and building security into the cloud architecture.
    While Federal agencies are beginning to make critical 
investments in these areas, budget cuts could stifle the 
Federal transformation underway if they are misdirected. A plan 
for up-front costs associated with IT transformation is an 
important issue for Congress. There have to be some investments 
if you want real savings, and we need to make sure we are 
making those investments in the proper way.
    Unless agencies can rely upon realistic, detailed plans to 
acquire technologies to help them do more with less, data 
center consolidation and cloud computing goals may not fully 
gain the traction and Federal savings could remain lower than 
we anticipated.
    Congress has placed Federal IT spending on a diet. In my 
view, diets are only successful if you make smart choices with 
what you consume. While we should buckle down and reduce 
redundant and unnecessary expenditures, we should invest 
strategically in the technologies, services and processes that 
will enable the Federal Government to do more with less over 
the long term.
    Congress, including this Senate Subcommittee and the OMB, 
should be commended for the ongoing efforts to meet these 
challenges head-on. In a recent GAO report, OMB efforts listed 
data center consolidation incomplete due to a lack of agency 
detailed reporting. The good news is we have a lot more work to 
do in this environment. So, let's keep the pressure on in that 
environment.
    Agency CIOs should have budget flexibility in order to 
aggressively shift resources toward cloud computing and away 
from the legacy systems that exist today. As noted in the GAO 
report released this week, Congress and the Executive Branch 
must identify budget models that will allow increased budget 
flexibility through working capital funds or other centralized 
IT operations and maintenance. Last year, the TechAmerica 
CLOUD2 Commission also made this recommendation.
    Cybersecurity is clearly one of the biggest concerns of 
Federal CIOs as they move toward IT transformation services. 
Security must be risk-based and driven by a flexible policy 
that is aligned to the business or mission need. This is one of 
the principal reasons that EMC supports updating the Federal 
Information Security Management Act. Enacting updated FISMA 
legislation that will enable continuous monitoring is essential 
to address today's threat environment as well as to provide an 
effective operational risk management framework for tomorrow's 
cloud computing needs.
    In conclusion, the Federal Government has many unique 
environments, but these diverse organizations can benefit 
greatly from the successes the commercial companies and 
organizations have already achieved through the adoption of 
cloud computing and data center consolidation.
    I believe that now is the time to double down on IT 
investments and efforts to incentivize these cloud transition 
initiatives that improve the security and delivery of our 
government's systems.
    Mr. Chairman, thank you for the opportunity, and I look 
forward to your questions.
    Senator Carper. Thanks so much for your testimony. Thanks 
for your presence and the work that you all are doing in 
Delaware too.
    Ms. Morgan, nice to see you. Please proceed.

TESTIMONY OF JENNIFER MORGAN,\1\ PRESIDENT, SAP AMERICA PUBLIC 
                         SERVICES, INC.

    Ms. Morgan. Thank you, Chairman. Chairman Carper, Members 
of the Subcommittee, thank you for the opportunity to share 
SAP's perspective on the Federal Government's use of 
information technology.
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    \1\ The prepared statement of Ms. Morgan appears in the appendix on 
page 93.
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    My organization, SAP Public Services, serves more than 
3,800 public sector agencies in almost 50 States. Like you, we 
believe passionately that IT is part of the solution because we 
know from experience that IT enables faster, more intelligent 
decisionmaking, higher performance, meaningful efficiencies and 
cost savings, and greater transparency and accountability.
    We see several megatrends that are reshaping the role 
technology is serving in government agencies and citizens. One 
is called in-memory processing. From the beginning of time 
until 2003, humanity created an estimated 5 exabytes of data. 
Today, we create that same amount of data every 12 hours. In 
response, industry has created powerful new tools for managing 
and analyzing big data.
    For example, SAP's in-memory technology allows 
organizations to analyze massive amounts of unstructured data 
thousands of times faster than traditional disk-based systems. 
Using this technology, one of the world's leading medical 
research hospitals has reduced the time needed to analyze the 
DNA in cancer tumors from 3 days to 2 minutes. Not only does 
this mean patients and their families receive diagnoses much 
faster; it means that therapies can be tailored to each 
patient's particular condition.
    Another megatrend is mobility--our growing ability to make 
data and applications accessible to anyone, anytime, on any 
device. Obviously, the mobility trend raises challenges for 
Federal CIOs, such as enabling Federal workers to use their 
favorite mobile device securely. Most companies do this for 
their workers. We can do it for the government as well.
    A third megatrend is cloud computing--fast, flexible, cost-
effective IT services on demand. We believe there is enormous 
potential for cloud computing to save the U.S. Government money 
while improving mission performance and creating good jobs in 
our economy.
    Across all of these trends, there is a consistent success 
factor. It is co-innovation with industry partners and 
government. Vendor lock-in is out; co-innovation and teamwork 
is in. Let me give you one example that illustrates the power 
of these trends.
    When Congress and the Obama Administration created the 
Recovery Accountability and Transparency Board (RATB) in 2009, 
to help ensure accountability in Federal stimulus spending, the 
Board had to determine how to manage huge quantities of 
evolving data from a variety of sources and how to best 
represent that information to the public in an easy, 
understandable way on a device of their choosing.
    The Recovery Board turned to SAP and other companies to 
launch a Web site known as Recovery.gov to overcome these 
challenges. We worked with industry partners such as CGI to 
base a solution in the cloud, which was the first Federal Web 
site to launch in the cloud, in the public cloud, and we made 
the data accessible on a variety of devices. Perhaps most 
remarkably, Recovery.gov was launched in 11 weeks when many 
said it could not be done.
    So, how can Congress and the Executive Branch make the most 
of these new technologies and reap the benefits for U.S. 
taxpayers?
    Well, first, we want to recognize and applaud the work that 
is being done by Steven VanRoekel and his colleagues across 
government, who are improving the way the public sector obtains 
and uses technology. The new Digital Strategy announced 
yesterday is another helpful contribution.
    Progress is definitely being made. Still, as the GAO has 
reported, there is more work that can be done.
    For example, the government's IT procurement process often 
takes longer than the technology modernizations themselves. 
This is a real problem when technology innovation cycles are 
getting shorter and the costs of technology are going down. The 
government's acquisition process must be accelerated to address 
this new reality. Faster, more agile IT development is possible 
using commercial, off-the-shelf, repeatable technology.
    Second, Congress and the Administration should encourage 
open dialog and co-innovation between the government and its 
private sector partners. This is not always possible under 
current procurement rules.
    And, third, we would encourage Congress to begin 
systematically building performance and accountability metrics 
into the legislation governing all agencies. IT can be an 
enabler of these accountability measures. You can only improve 
what you are measuring. You have to inspect what you expect.
    In closing, the rapid progress of technology makes it 
possible for government to improve its performance while saving 
money and increasing accountability. SAP appreciates the 
opportunity to be a leader and a partner in this effort.
    Thank you, and I am happy to answer any questions.
    Senator Carper. Thanks so much.
    Was everybody here for the first panel?
    Ms. Morgan. Yes.
    Senator Carper. Yes. Just react to it. Just react to what 
you heard from Mr. VanRoekel and what you heard from Mr. 
Powner--what you agreed with, maybe what you did not agree 
with. Just your reaction to it and things that you think that 
people in my job--Senator Brown and others, Senator Lieberman, 
Senator Collins--that we should be mindful of, but just react 
to it for us in ways that would be constructive, please.
    Do you want to go first, Ms. Morgan?
    Ms. Morgan. Sure. I think that the statement that was made 
that IT is more than just allowing neater technology or just 
the fact of having a mobile device or being able to do more 
electronically. IT is an enabler, but IT has the ability to 
truly change lives.
    IT has evolved rapidly over the last 5 years alone, and it 
is not about organizations and government agencies and 
companies who really drive the requirements of what is needed. 
It is people like us. We, the individuals, the citizens, are 
really driving the technology needs and demands.
    And so, I think IT can become a huge enabler when you are 
talking about farmers, our veterans, students, way beyond, I 
think, what people's perception may have been about IT maybe 3, 
5 years ago.
    Senator Carper. Thank you. Mr. Combs.
    Mr. Combs. Yes, I would agree with Jennifer's comments, and 
I really liked Mr. VanRoekel's comment, or view; IT is a 
strategic asset.
    One of the challenges in the government--and I spent 25 
years there--is how do you keep up with the evolving innovation 
that is taking place. Every 18 months, there is some new 
creation that really changes the dynamics of IT.
    In the government, we were building stovepiped silos of 
excellence for the last 40 years. How do we build this 
innovation? This is where I think the public-private 
partnerships really come into play and to create those 
relationships, break down the barriers to communication that 
exist within acquisition.
    The other thing is GAO made the comment of do not take the 
foot off the accelerator, and I liked Mr. VanRoekel's comments 
that we have the bigger end game in sight. And, I do not think 
that we need to stay focused just on these initiatives, right, 
because it is about more efficient, effective, cost-saving 
environments, and I applaud them for the additional work they 
are doing outside the 25-point plan to drive those 
efficiencies.
    Senator Carper. All right. Thank you. Ms. O'Neill.
    Ms. O'Neill. Yes, and I agree with colleagues over here 
that have just spoken.
    I think one of the key things is getting over the notion 
that IT is a support function. It really is something that is 
totally integrated with the mission of government now.
    And, there is a lot of talk about cost savings, rightfully 
so, but sometimes to the public that means that it is extra 
added support. And, I think efficient, more strategic, better 
investments kind of thing may be some of the better words to 
use because I think, putting my hat in from when I was working 
in the Federal Government. I think there is still a lot of 
push-down from the missions and the programs, thinking that 
technology is still just a support thing; it is just your 
email. Well, it is not. It is just so much more.
    And so, I think those statements earlier today about 
everyone understanding it is a strategic asset. We need to be 
smart about how we purchase it, right, which will help reduce 
costs, but we also need to continue to invest in it so that we 
can put those services out there to the citizens much better.
    The other thing is between the two witnesses, between GAO 
and OMB, there was some disagreement in terms of where they are 
in progress, but the reality is I think OMB put some stretch 
goals out there on purpose. And so, they were pretty out there 
in terms of what they were trying to get done in 12 months.
    And, if you think about the Federal Government not being a 
battleship, to turn a battleship, it is more like an aircraft 
carrier. That is what my friends from the Navy say.
    Senator Carper. I am a Navy guy.
    Ms. O'Neill. OK.
    Senator Carper. When we talk about really hard things to 
do----
    Ms. O'Neill. Right.
    Senator Carper [continuing]. We talk about having to turn 
an aircraft carrier.
    Ms. O'Neill. OK. Right.
    Senator Carper. In naval aviation, when we had a really 
hard thing to do, we would describe it; a really hard thing to 
do was like changing an aircraft engine when you are in flight.
    Ms. O'Neill. Right. So, battleship is easier, right?
    Senator Carper. It is.
    Ms. O'Neill. But aircraft is harder. So, this is like 
turning an aircraft.
    So, I think if you do not put stretch goals out there, 
right, you are never going to get the momentum and the drive 
toward doing that.
    So, from the outside looking in, from the private sector, I 
think those were great stretch goals, and I think there is 
momentum out there. We need to keep the foot on the accelerator 
but at the same time know there is momentum, not just between 
the Federal agencies but also in the public sector and sort of 
the commercial world that is pushing these things down.
    So, the flavor of cloud and mobility and things like that 
are not going to go away, and they should not go away. We need 
to keep the accelerator on, understanding we had stretch goals 
for a reason because we are trying to move that big aircraft 
carrier. And, I think that is why there is a little bit of 
difference between the two.
    Senator Carper. All right. Thank you.
    When I hear someone talk about keeping the foot on the 
accelerator, I think, well, the first thing we have to do is 
find the car. [Laughter.]
    We have to get in the car, turn on the ignition and engage 
the transmission and then find the accelerator.
    Ms. O'Neill. We found the car.
    Senator Carper. We have found the car. We are in the car. 
We have the ignition on. We turn on the radio, have some good 
music, and now we are heading down the road.
    Ms. O'Neill. But, there is a caution--if you put the 
accelerator too far, if you have a lead foot, right, and you 
are going to get picked up for speeding.
    I mean, one of the few things in terms of the cloud itself, 
where maybe we have missed a couple goals, but the reality is--
and I think some of the testimony here--to say we actually 
spent some time between public sector and the government really 
elevating security too.
    So, there are benefits associated with some of the 
slowness, but now sort of the waterfall is opening. The 
accelerator is on. Now, we can sort of push a lot harder.
    Senator Carper. Good. Thank you.
    That is what we call stretching an analogy, I think, or a 
metaphor. OK, Mr. DelPrete.
    Mr. DelPrete. Yes, I think one of my key takeaways from the 
discussion was the shared goals that both organizations have. 
And, I think they identified that the dialog around IT reform 
was really started by the 25-point plan, and there is not much 
in there the chief information officers do not agree with.
    So, whether we have finished 70 percent or 30 percent is 
not really the key point. The key point is that it is forcing 
CIOs to think about important ways to innovate and save money.
    We see a number of outstanding examples through our work, 
through the CIO survey, but also through my work at Grant 
Thornton with our customers, in trying to help them figure out 
ways to reduce the data center footprint. We do not provide the 
data center solutions on the back end. We are a trusted 
advisor.
    We are looking for ways to help them reduce the number of 
firewalls. In one organization, we are taking those firewalls 
from 132 down to 124 to strengthen security but also reduce 
that administrative footprint.
    So, I think there are a number of examples in the 25-point 
plan about how we can use data center consolidation and cost 
control as ways to really improve what CIOs are trying to 
accomplish.
    I think one of the things that is a big challenge--it 
struck me from my work as the chairman of the survey task 
force, and I see it through my work at Grant Thornton today, I 
guess, the lack of authority that many central CIOs have over 
the purse strings. Government as a whole, I think, knows the 
budget of everything but the cost of nothing, and that is 
extremely true for Federal CIOs that we speak with.
    In our discussions of large federated agencies, CIOs 
control as little as one percent, 7 percent, 20 percent of the 
overall budget, yet they are supposed to be accountable for 
making sure that the money is being spent effectively. I think 
that is a conundrum that we all need to work together--
industry, Congress, OMB and the Executive Branch--to figure out 
how to resolve that.
    Senator Carper. The next question, I would ask you to think 
back on what our first two witnesses said and reflect on what 
they have said.
    Some of you know each other. I suspect some of you know 
each other pretty well and have spent a fair amount of time 
together, maybe testified together, but worked together. Just 
in terms of your statements here today and what you have said 
in response to my questions so far, just react to one another 
and where you find particular agreement or maybe where you see 
things a little bit differently. Would you do that?
    And, we will just start with you, Mr. DelPrete.
    Mr. DelPrete. Sure. Absolutely. Again, my role is a little 
bit different than each of the folks here in that they provide 
technical tools to run a data center, provide software, provide 
a storage solution or virtualization solution. I am generally 
working on the front end, to help CIOs figure out how to apply 
these kinds of technologies on the back end to save money. And, 
I agree wholeheartedly with what they have said before.
    We run program manager's offices. We are overseeing some of 
the work that CGI does. We have partnered with a number of 
these folks. I agree with everything they are saying.
    We need to make an investment in order to save money right 
now. We are really at a critical crossroads. Although cost 
control is creating innovation, I think most CIOs feel like 
there are too many balls up in the air and they are going to 
start to hit the ground and crash and burn. So, we need to step 
back and figure out how we can use these kinds of tools to make 
those investments to actually save money.
    Think about something like health IT. You need to invest 
millions to save billions. It is not going to happen unless you 
step back and think about how you can improve and automate a 
lot of what is happening in those spaces.
    I agree that data center consolidation, cloud computing, 
virtualization are critical technologies that are going to help 
further drive change, improve efficiency, create more 
sustainable environments for all of us.
    So, I concur with the comments, and I will open it up to my 
peers here.
    Senator Carper. Please, Ms. O'Neill, just react to what you 
all have been saying to one another.
    Ms. O'Neill. Yes, I think there is a lot of agreement on 
this panel in terms of there are opportunities to save. We all 
have solutions to bring to the table. I think we all want to 
work with the government in more of a partnership, to look 
toward a lot of this innovation out there.
    And, I think the other thing, sort of a theme--and maybe my 
colleagues can react to me--is that I think that we all believe 
the government is on the right path and all of these 
initiatives have started us there. We all hope they move fast.
    And, we have all learned even within our own private 
companies how to use some of these technologies and have a lot 
of lessons to bring to the table, to sit down with the public 
sector. But, we also probably also see how all these things are 
converging.
    And so, one of the things and fears that sort of it goes 
back to is that sometimes in government we have initiatives, 
right, and we tend to want to react to them and put plans in 
place to move them along quickly, but if we took one step back 
and said, how do these fit together, they might have even more 
of an impact.
    That is probably what we are finding in our commercial 
lives back in the private industry--looking at things a little 
bit differently, to say, yes, we want to do data center 
consolidation. And, most of us probably do because, again, as 
Steve said earlier, you are looking at your bottom line and 
cutting the costs there.
    But, how are we using that, and what are we going to do, 
and how are we going to support the next generation workforce?
    Not singularly looking at telework or singularly looking at 
data center consolidation, not singularly looking at cloud. We 
are not singularly looking at cyber. It is all of those things 
together that are going to make us more efficient companies, 
and I think that is what we are looking to help government 
with.
    Senator Carper. All right. Thank you. Mr. Combs.
    Mr. Combs. And, I would agree, but really, we need to focus 
in on measuring. We have to have measurable results in what we 
are doing. And, I think sometimes we get too focused on this 
policy or that policy or this particular initiative.
    And, we need to move to cloud, but what are the results 
that you are actually getting from coming to cloud?
    And, that is my concern. I like to call that term cloud-
washing, and it happens not only----
    Senator Carper. What do you call it?
    Mr. Combs. Cloud-washing, right.
    So, you have all this buzzword, cloud, out there. And, 
everyone in the industry--you will see the same old legacy 
technologies coming in as cloud-ready. Nothing changed in the 
architecture.
    I have seen it on the government side where a 10-year-old 
service-oriented architecture (SOA) projects are defined cloud 
so that they can move the budget from one place to another.
    So, it happens on both sides of the street--the industry 
and the government.
    So, let's stay focused on the measurable results that are 
taking place. We all bring technologies, and we work together. 
We compete in places, and we work together, to deliver the best 
capabilities. And, if we stay focused in on the measurable 
results and not just these terms that come up and down, like 
big data or cloud, let's stay focused and make some success.
    Senator Carper. All right. Good. Thanks for that 
commonsense advice. Ms. Morgan.
    Ms. Morgan. So, it is interesting because I think if you 
had talked to this panel probably even a couple years ago we 
would say we never work together; we competed against each 
other. And, the terms I used was co-innovation and teamwork, 
and over the last couple of years I have seen industry, certain 
partners, really coming together on behalf of government.
    And, that gets people's attention because we are thinking 
differently. We are coming with new ideas, and we are doing 
things we have not--it usually means we are doing something 
new. And so, that is a trend that I think has brought a lot of 
new ideas and innovation that sometimes we do not even expect. 
Sometimes the government helps us see what the use cases are 
for the convergence of our technologies.
    Likewise, we work together in the private sector. EMC and 
SAP are huge partners. We are each customers of each other on 
the private sector side.
    So, now we say, how can we take the great results that we 
have seen in industry and within our own companies; how do we 
take those and apply those and reuse them in public sector, 
because all these topics we have talked about today, whether 
the example Molly used of imagine if you could see on an iPad 
at any time, real time, information about what is happening in 
your congressional district. You can look into it. You can dive 
down into the very detailed piece of information at that exact 
moment.
    Well, that is the convergence of mobility. That is the 
convergence of big data. And, likely, it is the convergence of 
pulling that information from the cloud. So, it is all of those 
together that really bring out the true power of what is in 
front of us.
    Senator Carper. Good. Thanks.
    Thank you all. That was good.
    I have about two or three more questions, and I think I 
will just ask these of the entire panel if I could.
    Each of you represents a company, if you will, that has had 
success in working with the Federal Government in implementing 
information technology projects. Could you take just a couple 
minutes to provide maybe one--at least one, maybe two--
examples, not too complex, if you will, but of the type of work 
that your organization has done or is currently doing with the 
Federal Government?
    Do you want to go first, Ms. Morgan, please?
    Ms. Morgan. Sure, happy to.
    So, the example I used in my testimony was what we had done 
with Recovery Board, and what was exciting about that was 
everybody said: Oh, you cannot stand up a Web site. It is going 
to just cost so much money. It is going to take months and 
months and months.
    And again, working with kind of a motley crew of folks who 
we had never worked with before, coming together and getting 
that done and showing you can make things happen for a lot 
cheaper than you think it takes to get it done.
    So, I think that the measurement and the accountability of 
getting that done and also what the result of that is doing and 
what it is showing in terms of it is a platform that is 
repeatable across government. What they are doing is they are 
providing measurement and accountability for the stimulus 
funds. That is no different from other programs across all 
agencies within the Federal Government.
    That same capability, that same approach is something that 
could be reused to look at higher programs as an example. If 
you shine a light on something, fraud and transparency really 
tend to have better results when it comes to accountability.
    That is one example.
    I think another example is a lot of times when we talk 
about technology we assume it is solely the role of an IT 
individual or CIO. And, while that is very true--those folks 
really own that--we have found that the best successes and 
modernizations come when the business owner takes 
responsibility for understanding what it is that they want to 
deliver, what their customer--their constituent, needs to get 
out of that capability.
    We have worked very closely with USDA on that, and we found 
that the ownership at the business levels within the Office of 
the CFO and the partnership that they have with the CIO creates 
much better communication, much better governance and allows 
things to happen more effectively.
    Senator Carper. Those are good. Thanks.
    Mr. Combs, maybe an example, if you would.
    Mr. Combs. Yes. I am very fortunate in my job. I get to 
travel around the country and talk to most of the CIOs in the 
government, and I would like to use a couple of examples. EMC 
is helping these companies build their cloud strategy, their 
transformation strategy in moving forward.
    If you look at the Postal Service--and I would not want to 
be the CIO of the Postal Service--$7 billion deficit, 38,000 
post offices around the Nation, 80 percent of those post 
offices are losing business. We want to move toward technology 
services, but you have rural America that wants to get their 
mail every day. You want to cut down Saturday mail, but to save 
two billion dollars one day. Yet, the bulk mail carriers want 
that--those ads--to be delivered Saturday morning, and it 
drives the economy because people are going out and spending. 
So, it is a very complex situation.
    So, EMC is working with them to develop their strategy 
forward. And, they have two major data centers--in San Mateo 
and Eagan, Minnesota--and I spent a lot of time out there 
helping to modernize those facilities to make them more 
efficient.
    I just got back last month from Stennis, Mississippi, with 
the Navy's Meteorology and Oceanography Command. And, we talk 
about consolidation and shared data services, and most of that 
is taking place within the department. But, if you look at what 
the Navy is doing there, they have to work with NOAA; they have 
to work with Department of Air Force, to bring in all of this 
meteorology data in a shared services architecture and to keep 
our ships safe at sea.
    So, we are working on some very great projects across the 
board. We are actually working with SAP on NASA and data center 
consolidation. They have 115 data centers that they need to 
consolidate down.
    We rolled out a system architecture that is being 
replicated across--it was started at Marshall in Alabama, and 
now it is being rolled out in Kennedy and Johnson.
    So, we are building the reference architectures to make 
things a lot more efficient in our government.
    Senator Carper. Again, those are great examples as well.
    And, you pretty well nailed the postal--some of the 
challenges we face in postal. I like to say, though, that the 
situation is dire with the Postal Service, but it is not 
without hope. We can fix this, and we appreciate your help in 
doing that. Ms. O'Neill.
    Ms. O'Neill. Well, I already mentioned the fact that we are 
providing the cloud service. So, we are proud of our 
investments there, in the future there and the opportunity.
    The other thing that I know that you are aware of that we 
work with the Recovery Audit Contractor (RAC), and we are 
looking at fraud, waste and recovering fraud, waste and abuse, 
the monies associated with that for the Medicare program. And, 
we are doing that, not just for the Federal Government but also 
for some States as well.
    Senator Carper. Oh, good.
    Ms. O'Neill. So, we are very proud of that work.
    So, I will pick a third, if that is OK, since you are aware 
of those----
    Senator Carper. Sure.
    Ms. O'Neill [continuing]. Which is we also run the Central 
Data Exchange.
    Senator Carper. RAC, for people who do not know, deals with 
the Recovery Audit Contractor. Where we have overpayments, 
mispayments, improper payments, sometimes fraud, we go out and 
try to recover that money.
    Ms. O'Neill. Right, and that is interesting because that is 
a benefits-based contract.
    Senator Carper. Tell folks what benefits-based means.
    Ms. O'Neill. So, for benefits-based contracts, instead of 
us doing things on time and materials and having the government 
spend the money on the infrastructure to put the automation and 
the tools, to look for and identify areas where there has been 
fraud, waste and abuse, CGI actually invested in that, and the 
only thing that we get paid out is a portion, a very small 
portion, of whatever is not just identified but actually 
recovered. And so, it is a benefits-based model and a very 
unique kind of project----
    Senator Carper. One of the benefits that flows from this, 
we have found, is not just recovering some of the money that 
has been misspent or overspent, but we actually get good ideas 
for how not to make those same mistakes, especially on health 
care, like pay and chase. We pay money for claims--in some 
cases, dead doctors providing services for dead patients. You 
get the drill. But, one of the things we have learned is how do 
we do that less frequently so that we will not spend all of our 
time chasing the money.
    Ms. O'Neill. Right. So, we do not look at the back end. Now 
we have been able to take what we are learning from that and 
put it to the front end. We do not pay it out to start with.
    Senator Carper. There you go.
    Ms. O'Neill. So, a fantastic project, and we are very proud 
to support the Federal Government in that.
    Senator Carper. Thank you.
    Ms. O'Neill. So, I will give you one more----
    Senator Carper. Go ahead.
    Ms. O'Neill [continuing]. Just because I think it 
demonstrates the shared services aspect of some of the things 
that Steve VanRoekel was talking about.
    So, we actually run something called the Central Data 
Exchange for the U.S. EPA. Of course, it's----
    Senator Carper. It is your old shop.
    Ms. O'Neill. Right. So, I am very proud of it as well, 
having been part of that for many years even before I was at 
EPA.
    Senator Carper. How many years? Twelve? Thirteen?
    Ms. O'Neill. The Central Data Exchange has been up since 
2003.
    Senator Carper. OK.
    Ms. O'Neill. But, it has formed--what is interesting, 
originally built for the Federal Government to exchange 
information, to get environmental data, with industry. Now, all 
50 States are moving electronically into CDX. And, we were able 
to take CDX and now it exchanges data within the Federal 
Government. So, it is a shared service on environmental 
information exchange between State government, Federal 
Government, industry.
    And then, we were able to repurpose it for 
FederalReporting.gov, which we are working with our partner 
over there on the other side, which we mentioned earlier--to 
repurpose it so that we are not building something fresh again 
to support FederalReporting.gov.
    So, if you take a look at what the first panel was talking 
about, about shared services, we were able to get the 
FederalReporting up in a matter of weeks, as was mentioned 
here, and start receiving that data right away. So, it is 
something that we are very proud of.
    So, we are looking for innovation and reuse. So, it is not 
to all of our best interest to redevelop things for the 
government either. It is to be able to identify those things 
that are already out there and that can be repurposed to 
support the mission and move things in government a lot faster.
    Senator Carper. Good.
    Mr. DelPrete, if you have maybe one example you would like 
to share.
    Mr. DelPrete. Sure. It is hard to just provide one example, 
but, yes.
    We focus on performance and accountability, and one of the 
things that we are doing right now is rationalize their IT 
infrastructure--I talked earlier about CIOs and federations not 
having control of IT dollars being in an environment where 
there are 10 help desks in one building or 15 IT contracts for 
commodity IT. It just does not make sense. There is duplication 
in spending.
    One of the things we have done at the Department of 
Interior (DOI) is worked with them to restructure the way that 
the CIOs are organized within the department. Secretary Salazar 
put out a memo and created an IT transformation strategy that 
would make CIOs within various departments report up to the 
central CIO.
    And, in doing that, we are looking at the redundancy in 
some of that infrastructure and architecture and laying out a 
transformation plan that will enable them to bring that back 
into the department. And, we have a target savings goal of $100 
million by 2016. So, we are the trusted advisor helping them 
through that challenge.
    We also do a lot of work with the Recovery Board, using a 
combination of software and human analysis to look at grants 
money and where it is going out and try to identify instances 
of improper payments, as was mentioned by others before.
    We are also working with Patents and Trademarks right now 
to lay out a series of templates to enable them to do Agile 
development and keep track of that Agile at 90-day intervals.
    I think that was more than one example.
    Senator Carper. We will let you slide.
    I think maybe my last, or next to last, question is this. I 
asked this to the first panel too, and I oftentimes ask this 
question. If you were in our shoes, if you were sitting up here 
and you were serving your State in the U.S. Senate and you were 
on this Committee, or Subcommittee, what would you do 
differently, more of or less of, to make sure that the 
Legislative Branch of our government is doing its share as we 
try to, among other things, use IT as a strategic asset in 
enabling our government to do its work, its job?
    Do you want to go first, Ms. Morgan?
    Ms. Morgan. Sure.
    Senator Carper. I would just say--let me just add, 
everything I do I know I can do better. And, I like to say, if 
it is not perfect, make it better.
    And, it is not just for me; it is not just for us in my 
office and our Subcommittee, but everything we do in government 
we can do better. So, give us a thought or two, how to do our 
job better in this regard.
    Ms. Morgan. I think just the more that we can bring 
successes to the forefront for you to see.
    And, many times there will be a success out there. But 
then, it is, OK, how do you take that and how can it be reused 
in other agencies? And, that is where the complexity begins.
    Just from a procurement perspective, a policy perspective, 
it is hard to take the vision that we all know is out there and 
actually put it into action.
    So, I think it is helping us take these ideas that we have 
and take many of these--many of us do some of these small proof 
of concepts or pilot projects to prove out a concept. But, once 
it is proven out, how do we then unleash the power within that?
    And, I think that is where, unfortunately, bureaucracy 
tends to get in the way, and that is where you can help us 
understand how we can maybe move some of those barriers and get 
the technology and get the innovation out further in 
government.
    Senator Carper. OK. Thanks. Mr. Combs.
    Mr. Combs. Thank you for the question, sir.
    The first thing is the financial reform needed to allow the 
flexibility in the budget process. As a government civilian and 
retired Army personnel, working on an annual budget--in 
research and development you can have 2-year budgets. Working 
on a single-year budget makes it difficult.
    The establishment of these funds that transcend Fiscal Year 
(FY) boundaries would allow organizations, as long as they are 
targeted toward efficiencies with measurable results, all 
right, and you can put the caveats in there. I think the 
ability to establish those funds really needs to be driven by 
Congress.
    The other one is we have to protect our infrastructure. 
General Alexander identified a billion, or a trillion, dollars 
as leaving the U.S. economy every year because of cyber 
criminals. All right.
    I think our biggest risk to our Nation is the exodus of 
intellectual property that is taking place, and I will give you 
an example.
    General Motors does their auto design on our system, and it 
is a completely closed network. The minute that design hits the 
internet, it is rolling off assembly lines overseas, and they 
did not have to do any of the research and development that 
took place to drive that innovation.
    We have to move to continuous monitoring so that we can 
infect it. If we cannot get agreement on all the cyber bills 
that are out there, let's look at what we can agree upon and 
move those bills forward to better protect our Nation.
    And, the last I would say is make it easier for the 
commercial industry to work with the government. We have the 
capabilities out there.
    In your home State, we have worked with the financial 
industry for years on financial crimes. Those capabilities can 
easily be pulled in to deal with cyber criminals or health care 
payment issues, right--to develop those, to take those 
commercial capabilities and adopt them to military. We have to 
be able to work closer together, public-private relationships, 
to move forward.
    Those are three areas that I think that you guys could 
provide a lot of benefit.
    Senator Carper. Those are great points. Thank you. Ms. 
O'Neill.
    Ms. O'Neill. Yes, three, very quickly. Continued oversight 
is great because it brings--it not only makes the government 
and private sector accountable but also brings attention to the 
importance of IT. And, I think all of us would agree that is 
something that this Subcommittee is very helpful with.
    The other thing--and it was just mentioned, but to push and 
foster and help us bring private and public sector together 
more, especially as we go down this road--is this very 
important inflection point, as Steve VanRoekel said, right now 
that we are in, with this convergence of technology to make 
sure that we do not go down the roads of siloism and that we 
learn from each other, whether it is on the security because 
the government is doing a lot with security around the cloud 
that the public sector has not gotten to yet and the commercial 
sector has not gotten to. But, to provide those opportunities 
for us to share ideas in a much more collaborative way would be 
very, very helpful.
    And, the other thing is to help push accepting different 
models for delivery, and I mentioned that in both my written 
testimony and my oral testimony, to say we have to break down 
some barriers and reeducate on the acquisition side in terms of 
looking at models for delivery that are different, that are 
much more cost-effective, so that we can save some money in 
core business that we have been doing for a while and invest 
more in the technology--in the new, emerging things that are 
going to transform government.
    Senator Carper. Good. Thank you.
    And, the last comment from Mr. DelPrete.
    Mr. DelPrete. I absolutely concur with what my colleagues 
have said today.
    I think we need to continue the dialog on this very 
important issue. Eighty billion dollars is not a drop in the 
bucket, and we need to make sure it is spent in the right ways.
    Reform the IT acquisition rules. We do not have the right 
people there, and we do not have the right rules. They are much 
too restrictive for us to take advantage of the great 
technologies that are out there.
    We need to change the IT budget process. Working capital 
funds, multiyear money--there are lots of creative ways to give 
CIOs more flexibility and accountability for how those IT 
resources are spent.
    We also need to continue to take steps to reduce the 
redundant infrastructure and centralize where it makes sense, 
but we should only do that if we have a real good business case 
and we know what we are getting into, with clear performance 
metrics of where we are going to end up, and we continue to 
measure that each step of the way. Thank you.
    Senator Carper. I thank you.
    My wife would like to, at some point in her life--she has a 
bucket list. I think most of us do. One of the things on her 
bucket list is to go to the Olympics, and the Olympics are in 
London this summer.
    In some of the Olympic competitions, they are competing 
against like the stopwatch, in swimming or track or whatever. 
And, in some cases it is how high they can go over a hurdle. 
Sometimes, the judges actually give scores, and you know how 
they raise their score cards and give scores.
    Sometimes I have thought about asking our staff, both 
Democrat and Republican staff, just to hold up their scores for 
the panels and tell you how you did. This has been a really 
good one. I am not going to embarrass them to do that today.
    This has been a very helpful panel, and certainly the 
folks, the two folks, who preceded you, just did an exceptional 
job.
    And, what you have done is to make relevant, not just to 
folks in my job, but I hope for the people who may have been 
watching us from other places around the country, to make 
relevant what we are trying to get done here, to maybe explain 
in ways people can better understand and to better explain what 
our responsibilities are on the legislative side to be a 
partner here, a good partner, but at the same time to hold 
folks accountable for getting the work done.
    I like to say, in adversity lies opportunity. That is 
Einstein. That is not me, but in adversity lies opportunity.
    And, we face plenty of adversity in our country and 
certainly in our Federal Government, but there is real 
opportunity as well, and there is real opportunity in the way 
that we harness information technology to really serve the 
people of this country better.
    I think we are getting--we are in the car. We found the 
car. We are in the car. Got the key in the ignition. The 
ignition is on. The motor is running. The radio is on. And, we 
have the car in gear. And, we have got the foot on the 
accelerator. And, we are going to go some place. In fact, I 
think we already are.
    Thank you very much.
    With that, we are adjourned.
    [Whereupon, at 11:42 a.m., the hearing was adjourned.]



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