[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]




 
     DATA CENTERS AND THE CLOUD: IS THE GOVERNMENT OPTIMIZING NEW 
    INFORMATION TECHNOLOGIES OPPORTUNITIES TO SAVE TAXPAYERS MONEY?

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT OPERATIONS

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED THIRTEETH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 14, 2013

                               __________

                           Serial No. 113-26

                               __________

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


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



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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              MARK POCAN, Wisconsin
DOC HASTINGS, Washington             TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming           ROBIN L. KELLY, Illinois
ROB WOODALL, Georgia                 DANNY K. DAVIS, Illinois
THOMAS MASSIE, Kentucky              PETER WELCH, Vermont
DOUG COLLINS, Georgia                TONY CARDENAS, California
MARK MEADOWS, North Carolina         STEVEN A. HORSFORD, Nevada
KERRY L. BENTIVOLIO, Michigan        MICHELLE LUJAN GRISHAM, New Mexico
RON DeSANTIS, Florida

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

                 Subcommittee on Government Operations

                    JOHN L. MICA, Florida, Chairman
TIM WALBERG, Michigan                GERALD E. CONNOLLY, Virginia 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
THOMAS MASSIE, Kentucky              MARK POCAN, Wisconsin
MARK MEADOWS, North Carolina



                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on MAY 14, 2013.....................................     1

                               WITNESSES

Mr. David A. Powner, Director, Information Technology Management 
  Issues, U.S. Government Accountability Office
    Oral Statement...............................................     7
    Written Statement............................................     9
Mr. Bernard Mazer, Chief Information Officer, U.S. Department of 
  the Interior
    Oral Statement...............................................    33
    Written Statement............................................    35
Mr. Steve O' Keefe, Founder, Meritalk
    Oral Statement...............................................    49
    Written Statement............................................    52
Ms. Teresa Carlson, Vice President, World Wide Public Sector, 
  Amazon Web Services
    Oral Statement...............................................    56
    Written Statement............................................    58
Mr. Kenyon Wells, Vice President of U.S. Federal, CGI Federal
    Oral Statement...............................................    63
    Written Statement............................................    65

                                APPENDIX

    Statement for the Record Submitted by Facebook, Inc..........    82
    The Government IT Network, The FDCCI Big Squeeze.............    86
    Data Center ``Statistics''...................................    90
    Statement for the Record of Thomas A. Schatz.................    91


     DATA CENTERS AND THE CLOUD: IS THE GOVERNMENT OPTIMIZING NEW 
    INFORMATION TECHNOLOGIES OPPORTUNITIES TO SAVE TAXPAYERS MONEY?

                              ----------                              


                         Tuesday, May 14, 2013

                  House of Representatives,
             Subcommittee on Government Operations,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 2:49 p.m., in 
the Meese Conference Room in Mason Hall at George Mason 
University, 4379 Mason Pond Drive, Fairfax, Virginia, Hon. John 
Mica [chairman of the subcommittee] presiding.
    Present: Representatives Mica and Connolly.
    Staff Present: Alexia Ardolina, Assistant Clerk; Richard A. 
Beutel, Senior Counsel; and Mark D. Marin, Director of 
Oversight.
    Mr. Mica. Well, good afternoon. I am Congressman John Mica. 
I am pleased to chair one of the Oversight and Reform 
subcommittees, which is Government Operations, and have the 
opportunity to be here today.
    The Democrat leader of the subcommittee is the 
distinguished gentleman and Congressman from this district--I 
believe we are in his district----
    Mr. Connolly. Yes.
    Mr. Mica. --Mr. Connolly. So, with that partnership, we 
have the responsibility to conduct various oversight hearings 
and look at government operations.
    But today I call and convene the subcommittee hearing to 
order in this district. And the title of today's hearing is 
``Data Centers and the Cloud: Is the Government Optimizing New 
Information Technology Opportunities to Save Taxpayer 
Dollars?'' And that is the subject.
    And we are here, actually, at the request of the ranking 
member, Mr. Connolly. What we try to do is operate the panel in 
a bipartisan manner, and areas of interest or particular 
expertise, we like to highlight the priorities of Members. And 
Mr. Connolly has been very active and a leader in trying to 
consolidate some of the duplicative and costly data centers in 
the Federal Government. He has been on this issue before I got 
the opportunity to chair this subcommittee, so he has a long 
history. And it was one of his priority requests that we 
conduct the hearing. And, jointly, we decided that this would 
be a great place, Fairfax County, George Mason University, to 
have a field hearing here.
    I apologize for the delay. My plane was on time, but, as I 
told Mr. Connolly, the traffic in northern Virginia is 
horrendous. In spite of my efforts to help with the rail 
connection to Dulles and all, we still have a ways to go. But 
we are delighted to be here.
    The order of business--I will step out of order for just a 
second because we are here at a very distinguished university. 
If I could, maybe I could ask the ranking member to introduce 
the president of this university, and we could inject a few 
comments before we get to the business of the subcommittee.
    Again, we are delighted to be here. I think it is great to 
come to a university setting. I don't know if we have students, 
professors, or others here, but it's an awesome opportunity. I 
see some of us may, in fact, be recorded. And, again, it is an 
actual hearing of Congress and part of our realtime work. So we 
are pleased to be here.
    Would you do us the honors, Mr. Connolly?
    Mr. Connolly. I would. Thank you, Mr. Chairman. And thank 
you so much for being here. And we all apologize for our 
traffic, but when you were both the ranking member and the 
chairman of the Transportation and Infrastructure Committee, 
you were very sympathetic and supportive of our efforts to 
extend rail to Dulles Airport. And we want to thank you for 
your support, because you did get it, about how serious the 
congestion is here.
    It is my privilege to introduce the president of George 
Mason University, Angel Cabrera. We just actually celebrated 
the installation ceremony for our new president. He comes to us 
after many years of serving in the southwest part of the United 
States in other academic endeavors, and we are delighted to 
have him here.
    George Mason University is about a little over 40 years old 
now and in that 40-year time period has grown to become the 
largest single university in the Commonwealth of Virginia, 
which always surprises people at UVA, Mr. Jefferson's 
university, which is over 200 years old, and Virginia Tech, 
also a very large campus. So it just tells you a lot about what 
is going on in terms of academic programs here in northern 
Virginia. And it is a center of excellence, especially for the 
technology community, but for so many other things as well.
    So welcome, President Cabrera.
    Mr. Cabrera. Well, thank you so much.
    Thank you, Mr. Chairman.
    Mr. Mica. You might come over. I don't know, are these live 
right here?
    Mr. Cabrera. Yes. Thank you so much, Chairman Mica and 
Congressman Connolly, for moving the business of Congress 
across the river. And I hope the air of Fairfax will make the 
meeting very, very productive.
    I want to point out that even though we have a problem with 
physical transportation of vehicles, the transportation of bits 
through the Internet couldn't be any faster than it is in 
northern Virginia, which I think is one of the reasons why this 
is a perfect location to have this discussion.
    I would also point out that we are, of course, in one of 
the most educated and one of the wealthiest counties in 
America. Those two things go hand-in-hand. And one of the 
reasons why this area has become probably the world's hotbed 
for the Internet and for cloud computing and other information 
technologies is precisely because we have universities like 
George Mason that right now ranks in the top 200 of research 
universities in the world.
    So it is a privilege to have you here. I wish you a very 
productive meeting. And thank you so much for having chosen 
George Mason University to conduct your business. Thank you.
    Mr. Mica. Well, thank you. And, again, we are pleased to be 
here.
    And we will proceed. We are a little bit late in beginning 
the proceedings, but the order of business will be as follows: 
I will start with an opening statement. I will yield to Mr. 
Connolly. Then we have two panels of witnesses. I will 
introduce the two panels. One is primarily government; the 
second looks like primarily private sector. We will proceed 
with questions after we have heard from the witnesses, the 
first two on the first panel and then the second panel.
    So, with that, we will go ahead and proceed, and I will 
recognize myself to sort of set the stage and talk about the 
topic.
    Today's hearing, actually, again, is the result of some of 
the work of the Democrat leader of the committee. Some several 
years ago, the GAO began some work and looked at some of the 
data center consolidations. In fact, today, coinciding with 
this hearing, there is the release of this report, ``Data 
Center Consolidation: Strengthened Oversight Needed to Achieve 
Cost-Savings Goals.'' And the subject matter contained in this 
report will be discussed by the GAO representative.
    But some of the background here is that GAO reports, in 
fact, that in fiscal year 2011 the government funded 622 
separate human resources systems, costing $2.4 billion; some 
580 financial management systems, costing some $2.7 billion; 
777 supply chain management systems, costing some $3.3 billion; 
and so the list continues. Most of these systems perform, 
unbelievably, the same function.
    To address some of this wasteful duplication, and with much 
fanfare, the OMB, the Office of Management and Budget, rolled 
out a program in 2010 entitled the Federal Data Center 
Consolidation Initiative. Sometimes you will hear me refer to 
it as the FDCCI. But they trumpeted the fact that they thought 
that they could close 40 percent of the data centers by 2015 
and save taxpayers a welcome $3 billion. That would have meant 
that, in closing 1,253 of the 3,133 total Federal database 
centers, we could save that much money.
    To accomplish this savings, 24 of the CFO Act agencies were 
tasked by the OMB to do several things: first of all, to 
conduct an initial inventory of data center assets by April 
30th of 2010; and then, secondly, to develop a plan by June 
30th, 2010; and report quarterly on their closures and savings 
via an online portal called data.gov.
    Today, GAO has released the latest of its three reports, 
the one I referred to. In that report, we will find that the 
GAO uncovered the fact that the program was not being 
effectively implemented, unfortunately, and, also 
unfortunately, that taxpayers are not going to recognize or 
realize the projected savings that were anticipated.
    Specifically, OMB and the agencies, some of the findings--
again, not mine, but theirs--were that the agencies were 
delinquent on finalizing their data consolidation, their 
migration plans. And, also, we have, I think, a chart up here 
that shows the cells in orange, and we see missing data in 
these cells, lots of question marks.
    So we also found in that report that we lacked a basic 
system to track cost savings so that progress toward that $300 
billion cost-savings goal could be measured. GAO states, and 
let me quote them, ``As of November 2012, the total savings to 
date had not been tracked but were believed to be, 
unfortunately, minimal.'' Again, their commentary.
    OMB recently announced its plan to roll up the FDCCI into 
its broader--a new process called PortfolioStat, potentially 
losing focus and motivation to carry out this much-behind 
consolidation of the original intended government data centers, 
again, consolidation.
    At a time of fiscal austerity and tight budgets, it has 
never been more important for the Federal Government to drive 
efficiencies and cost savings through effective management of 
its information technology systems. It is absolutely essential 
that IT assets should be optimized to maximize the return on 
investments, reduce operational risk, and provide responsive 
services to its citizens.
    We must, I believe, accelerate data center optimization by 
urging agencies to complete meaningful transition and 
consolidation plans for their data centers and, also, 
accurately track these savings.
    And another thing that we are going to have to do is 
support broader transition to the cloud solutions for Federal 
IT resources and hopefully drive broader efficiencies in the 
use and deployment of IT data centers. We are going to hear 
from some of the private sector in here a little bit about how 
we might achieve some of that in our second panel.
    So, with that sort of setting the stage for where we are in 
this hearing and, again, the review of what is taking place 
with this consolidation effort, let me now yield to the 
gentleman from Virginia, Mr. Connolly.
    Mr. Connolly. Thank you so much, Mr. Chairman. And thank 
you for your gracious willingness to have this field hearing 
here in the 11th District of Virginia at George Mason 
University. I have very much appreciated the spirit in which 
you and I have been able to work, beginning this year when this 
subcommittee was first formed. And my hat is off to you in 
terms of bipartisan cooperation and comity, and I thank you.
    We have something like 3,100 data centers in the Federal 
Government, and that is an astounding number. It is a stovepipe 
kind of operation, and it is expensive and inefficient.
    And what we are trying to do here is identify ways to 
optimize, you know, the purpose here, through private-sector 
cloud computing, through some remaining Federal data centers 
that may make sense, but to try to achieve efficiencies, 
especially right now when we are in budget contraction.
    It is imperative for agencies to be able to expand their 
scope and to be able to try to replace through better 
deployment of technology lost dollars in their bottom line in 
terms of the budget. If we don't do that, if we are not, you 
know, seized with a sense of urgency about that mission, then, 
you know, Federal agencies are going to have to do less with 
less. And that will not serve the American people very well.
    And so this, while for some a dry topic, is really at the 
cutting edge of, can we organize ourselves in the Federal 
Government to replicate what the private sector has done in 
terms of the utilization of technology, better investments in 
technology, smarter investments in technology?
    We have had hearings, as the chairman knows, on the 
Oversight and Government Reform Committee where it is estimated 
that, of the $81-billion-a-year Federal information technology 
budget, perhaps as much as $20 billion of it is spent in less-
than-optimum ways, some of it maintaining very old legacy 
systems.
    Now, the good news about that, as was pointed out in one of 
our hearings, was that the Chinese don't know how to hack into 
those legacy systems. So maybe that's an upside. But in terms 
of efficiency for the future and making sure that we're ready 
to go for the future, I'm not sure it's the kind of investment 
we want to be maintaining forever.
    And so data center consolidation is one piece of a larger 
piece of Federal IT policy. And as the chairman indicated, I 
requested the GAO report--and we are going to hear about it 
today in testimony from Mr. Powner--on how are we doing. And 
you can see from this chart, as the chairman just pointed out, 
well, I wouldn't give us an A in terms of compliance with 
trying to consolidate and eliminate duplicative data centers.
    For some agencies, it may just be that it is not a 
priority. For others, maybe they don't share the goal. But we 
have got to reach the OMB goal of 40 percent reduction, or 
consolidation, and we want to actually go way beyond that, 
because that still leaves us with 1,100 or 1,200 data centers, 
and it's not at all clear that we need all of them.
    And so this is an important part of a larger picture. This 
bill that I introduced on data center consolidation is an 
entire title of what is known as the FITARA bill that Chairman 
Issa, Chairman Mica, myself, and Ranking Member Elijah Cummings 
have introduced in this Congress that would be the most 
comprehensive rewrite of Federal IT acquisition policy since--
well, in 20 years. And so this is a vital piece of it, and 
that's what we're doing here today, to try to really focus on 
how can we do better at the Federal level. We need to do 
better.
    So thank you all for being here.
    And, again, Mr. Mica, thank you so much for having this 
hearing.
    Mr. Mica. Again, pleased to be here.
    And what we will do is, we have additional statements that 
Members may like to submit. And, also, if the public or anyone 
else is interested in submitting, it has to be done through a 
Member, so in this case it would be Mr. Connolly or another 
member of our subcommittee panel. But, without objection, the 
record will be left open for 7 days, with Mr. Connolly's 
concurrence.
    Mr. Mica. And I also see that Facebook has a written 
statement that they would like to be entered into the record. 
Mr. Connolly asked that that be permitted.
    Without objection, so ordered.
    Mr. Mica. Now we will turn to our first panel of witnesses. 
And we have two distinguished panelists: Mr. David A. Powner, 
and he is the director of information technology management 
issues with the U.S. Government Accountability Office. We refer 
to it commonly as GAO. Then we have Mr. Bernard Mazer, and he 
is the Chief Information Officer of the Department of the 
Interior.
    Now, I think we've got two more witness little plaques out 
there. And I'm not a happy camper, Mr. Connolly, that OMB and 
GSA have chosen not to provide us a witness this morning. And 
they are not going to squirm out of appearing before the panel, 
so we will schedule another hearing. It may not be here, but it 
will be in Washington. And we will call them in either 
voluntarily or however we have to do it, because we do--this is 
about saving taxpayers significant sums of money and achieving 
something that they set out to do. So we need answers, and we 
want it straight from those individuals involved.
    Mr. Connolly. Mr. Chairman?
    Mr. Mica. Yes, Mr. Connolly.
    Mr. Connolly. I concur in your sense of disappointment with 
OMB. I conveyed my disappointment to folks at the White House 
directly and to OMB directly for their nonparticipation today.
    None of that should, of course, detract from the fact that 
we are delighted to have the witnesses we do have.
    Mr. Mica. Yes, and we'll start it, and we'll start it here 
in Fairfax at George Mason, and we'll get to the bottom of it. 
Sometimes it takes more time.
    I understand last night, apparently in response to this 
hearing--and these hearings do actually make things happen, 
believe it or not--GSA, which is a no-show, updated their data 
posting from zero to 74 planned data centers closings on 
data.gov. So we sometimes can get some things moving along. And 
that's part of this process, is the constant oversight that 
we're responsible for in this important committee and 
subcommittee.
    So those are the two witnesses we have from GAO and the 
Department of the Interior.
    This is an investigative panel, and it is part of the 
procedures of the panel to swear in our witnesses. So I would 
ask you to stand, if you can, Mr. Powner and Mr. Mazer. Raise 
your right hand.
    Do you solemnly swear or affirm that the testimony you are 
about to give and provide this subcommittee of Congress is the 
whole truth and nothing but the truth?
    Mr. Mazer. Yes, I do.
    Mr. Powner. Yes, I do so solemnly swear.
    Mr. Mica. Let the record reflect that the witnesses 
answered and responded in the affirmative.
    So, with that, the way we proceed, for everyone's 
information, is first I will call on GAO's representative, Mr. 
Powner, and then Mr. Mazer, in that order.
    And we have a little bit of extra time. We try to hold it 
to 5 minutes. If you have prepared information or background 
data that you would like submitted to the record, just request 
it to the chair, and that will be accomplished.
    So, with that, we welcome you.
    And, Mr. Powner, first, you are recognized.

                  STATEMENT OF DAVID A. POWNER

    Mr. Powner. Chairman Mica, Ranking Member Connolly, we 
appreciate the opportunity to testify on the Federal 
Government's efforts to consolidate its data centers and to 
save taxpayers billions of dollars.
    In a time when we hear too often about fraud, waste, and 
duplicative Federal programs, the Data Center Consolidation 
Initiative is an effort that is good government. Its goals are 
to reduce costs, increase current low-server utilization rates, 
and shift to more efficient computer platforms and 
technologies. The specific goals are very clear and aggressive: 
close 40 percent of the government's over 3,000 data centers 
and save the taxpayers $3 billion.
    This afternoon, we are releasing our third report on this 
initiative. The first two highlighted holes in agencies' 
inventories and plans and made recommendations to ensure that 
inventories were complete and that agency plans clearly had 
comprehensive schedules to close centers and associated cost 
savings.
    For example, last summer, we reported that only three 
agencies had complete inventories: SSA, HUD, and the National 
Science Foundation. And only one agency had a completed plan, 
that being the Department of Commerce.
    While incomplete, these plans still showed great 
opportunities for cost savings. For example, DOD claimed that 
it could save $2.2 billion. In its recent budget submission, 
DOD plans to save $575 million in fiscal year 2014 alone. And I 
think that is represented on your chart up there, fiscal year 
2014.
    This afternoon, I will provide a progress report on closure 
and cost-saving goals and recommendations to ensure progress 
continues. My comments will also address the importance of 
FITARA in this area.
    Data center closures to date and those planned are 
promising. Four hundred centers were closed by the end of 
December, and another 400 are planned to be closed by September 
of this year, as your chart shows up there. And the plan is to 
close well over 1,000 centers by December 2015.
    Despite impressive progress and visibility into the closure 
situation, this is not the case regarding progress and 
transparency toward the cost-savings goal of $3 billion. In 
fact, OMB is not tracking cost savings. This lack of such data 
raises questions about the government's ability to meet its 
overall goal.
    But let's be very clear on the cost savings issue: Closing 
over 800 centers should yield significant cost savings. The 
Department of Agriculture recently reported to the 
Appropriations Committee that it saved nearly $50 million in 
fiscal year 2013. DHS is reporting $20 million of savings in 
fiscal year 2013. And we've already discussed DODs plans to 
save $575 million in fiscal year 2014.
    Now is not the time to take our foot off the accelerator 
regarding associated cost savings, and FITARA would be 
extremely helpful since it requires the tracking and reporting 
of cost savings.
    OMB has recently integrated the data center effort with the 
broader PortfolioStat initiative and is in the process of 
revamping metrics in this area. OMB stated that its new goal is 
to close 40 percent of the non-core data centers and that 
additional metrics in areas like energy consumption are to be 
developed by the data center task force.
    Folding the data center effort under this initiative is 
fine as long as the right metrics are in place, including cost 
savings, and that it provides the appropriate level of 
transparency. Mr. Chairman, having the right metrics and 
transparency moving forward is currently a big question mark.
    Our recommendations are to track and annually report on key 
data center metrics, including cost savings to date, extend the 
time frame for achieving cost savings beyond the current 2015 
horizon because significant savings will occur beyond that 
date, given where agencies are at today.
    Regarding governance, we need better leadership out of OMB 
and the GSA program office if we expect the data center 
initiative to be successful. With OMB, this leadership starts 
with the Federal CIO. In addition, each CIO needs this to be 
one of their top priorities and at any point in time should be 
able to report on closures and cost savings to date and those 
planned for the next fiscal year. If these simple questions 
cannot be answered, we do not have adequate governance at the 
agency level.
    And, finally, codifying the data center optimization 
consolidation effort the way FITARA does will ensure cost 
savings are tracked and reported and that this initiative will 
span multiple administrations.
    I would also like to mention, Mr. Chairman, your comment 
about GSA's data changing, that really shows the importance of 
this committee's oversight. Your staff made a couple of key 
questions to GSA, and clearly we went from zero reported 
centers to 74 in a couple days. And having that reported is 
very important so that we can perform the appropriate oversight 
so, in fact, those 74 data centers do get closed, with their 
associated cost savings, and then we can think about optimizing 
the centers that remain open.
    So this concludes my statement, Mr. Chairman and Ranking 
Member Connolly. Thank you for your leadership on this topic, 
and I look forward to answering your questions.
    Mr. Mica. Thank you.
    [Prepared statement of Mr. Powner follows:]

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    Mr. Mica. And we will hold the questions until we have 
heard from Mr. Mazer. And he is the Chief Information Officer 
at the Department of the Interior.
    Welcome, sir, and you are recognized.

                   STATEMENT OF BERNARD MAZER

    Mr. Mazer. Good afternoon, Chairman Mica and Ranking 
Minority Member Connolly. I would like to summarize my 
testimony and submit the full testimony for the record.
    Mr. Mica. Without objection, we'll submit the additional 
data.
    Mr. Mazer. My name is Bernard Mazer. I currently serve as 
the Chief Information Officer for the Department of the 
Interior. As a representative of the Federal CIO Council, I 
also serve as an executive sponsor of the Federal Data Center 
Consolidation Task Force.
    Thank you for providing the opportunity to testify 
regarding cloud computing and optimization of data centers 
across the Federal Government.
    The Federal Government information technology 
infrastructure is a massive collection of networks. In the span 
of 11 years, from 1998 to 2009, the number of Federal data 
centers drastically increased from 432 to more than 1,100. The 
result was an inefficient Federal data center population with 
unnecessary operations and maintenance costs.
    To reverse this trend, OMB in February of 2010 launched the 
Federal Data Center Consolidation Initiative, referred to as 
FDCCI. A year later, in February 2011, the Federal Data Center 
Consolidation Task Force was chartered. The task force is 
comprised of agency representatives who are working together to 
share progress toward individual agency goals and the overall 
Federal goal of optimization and consolidation.
    Today, the task force has contributed to the FDCCI by 
advising on policy and implementation; sharing information, 
best practices, and lessons learned; and by working with 
agencies to assess the benefits and challenges of cloud 
computing.
    One of the critical roles of the task force has been to 
share best practices. For example, the Department of the 
Interior has launched an IT transformation initiative to 
consolidate IT infrastructure operations at the department 
level, including data center operations, in order to eliminate 
redundancy and speed the adoption of new technologies, such as 
the migration to cloud computing.
    Information provided by the task force has helped evolve 
the FDCCI. Under the March 13th OMB memorandum on 
PortfolioStat, the FDCCI was formally integrated into 
PortfolioStat and shifted the FDCCI focus from consolidation to 
both optimizing core data centers and consolidating non-core 
data centers. Through PortfolioStat, agencies have already 
realized $300 million in savings, some of which is attributed 
to data center consolidation.
    The expected benefits of moving to the cloud can be great 
and are driving the transition from existing hosting 
environments that focus on managing servers to modern cloud-
based environments. These benefits include improving service 
delivery to customers, modernizing computing capabilities, 
enhancing collaboration, and replacing legacy information 
technology infrastructure. Moreover, as agencies refine their 
business processes during cloud migration, they can also 
realize significant cost savings.
    The deployment of cloud tech computing also presents 
challenges, including culture and change management, data 
interoperability and portability, and the lack of expertise or 
experience in implementation of migrating to cloud-computing 
technologies.
    Another challenge agencies have experienced is calculating 
cost savings related to optimization and consolidation. This 
requires calculation of a total cost of ownership which is much 
more comprehensive than just equipment or energy cost. That is 
why the task force, working with participating agencies and GSA 
and OMB, are developing a total-cost-of-ownership model. This 
model is now being used as a planning tool as agencies optimize 
and consolidate their data centers.
    Agencies are at different stages of moving IT applications 
to the cloud and, in doing so, can leverage offerings from the 
Federal Risk and Authorization Management Program, known as 
FedRAMP, that provide a standardized approach to security for 
cloud products and services.
    In conclusion, Federal agencies are continuing to make 
progress toward optimizing and consolidating data centers. 
Since launching the FDCCI, agencies have closed 484 data 
centers as of last week, with plans to close 855 by the end of 
the fiscal year 2013. The progress is being publicly tracked 
through data.gov.
    FDCCIs integration into PortfolioStat is expected to 
strengthen the focus on tracking cost savings, increase the 
number of tracked metrics, facilitate collaboration across 
agencies, expedite implementation of best practices, and should 
result in a consistent method for tracking costs. All of this 
is expected to result in a more accurate assessment of the 
benefits of this initiative.
    I am confident that cloud computing and data center 
consolidation has the potential to provide modernized IT at a 
significant cost savings. It is our job as chief information 
officers to provide the evidence of these benefits to the 
American people.
    Chairman Mica, Ranking Member Connolly, this concludes my 
prepared statement, and I would be happy to answer any 
questions that you may have at this time.
    [Prepared statement of Mr. Mazer follows:]

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    Mr. Mica. Well, we'll go ahead with some questions.
    And let me first ask our GAO representative, while one of 
the basic questions is that this whole project was projected to 
save $3 billion, and I think that was by 2015, I think I quoted 
the report as saying that the savings to date had not been 
tracked but were believed to be minimal.
    It seems pretty apparent now we're getting some data in as 
a result of this hearing. But do you think they're going to be 
able to approach the goal and meet the goal? Or what is your 
prediction now looking at----
    Mr. Powner. So a couple comments here.
    If you look at the projected cost savings--at one time we 
had plans that were being updated; now those plans are off the 
table since this is being merged under PortfolioStat. But at 
one time we had about $2.4 billion in very preliminary plans. 
Inventories weren't complete yet. $2.2 billion of that came 
from DOD.
    Now, there were some things where upfront costs needed to 
be considered. But if you look at this chart up here, the Ag 
and the DHS numbers, that comes from a report that goes to the 
appropriation committees. Those agencies are reporting already 
in fiscal year 2013 a savings.
    And if you just project--I mean, 800 closures in DOD alone, 
$575 million in fiscal year 2014 alone. Our thought is this: If 
you extend it beyond 2015 out to--and it's great to have these 
stretched goals near term, but I think $3 billion is very 
realistic. And when this initiative was started, there was a 
goal of $3 billion. At one time, OMB was talking about a $5 
billion cost savings, and they went back to $3 billion.
    So it's somewhere--who knows, really, where it is? But I 
think that's why you need good hard numbers on these closures. 
And if we have over 1,000 centers that we are closing, there 
has to be significant associated cost savings.
    Mr. Mica. Uh-huh. Well, what's interesting, now entering on 
the scene we have this PortfolioStat. I'm wondering if the 
consolidation efforts were to merge with this new thing, is 
this all going by the wayside? Or do you see them as 
compatible?
    Mr. Powner. They're clearly compatible. So if you look at 
the PortfolioStat initiative--and that's something we looked at 
very closely for the Congress--PortfolioStat----
    Mr. Mica. Tell me how that's going to work, how you see it 
working.
    Mr. Powner. Yeah, so what PortfolioStat is, that takes 
commodity IT, so you can think of it more as administrative 
systems, and it puts them in groupings, so HR systems, 
financial management systems, email systems?
    And OMB has an initiative, which we highly commend their 
efforts on that, where they went to each of the agencies, and 
they identified about 100 opportunities at 24 major departments 
and agencies to save $2.5 billion. Okay? And that was the first 
cut in PortfolioStat.
    Now, clearly, when you start looking at consolidating 
commodity IT and moving to the cloud, there is a lot of overlap 
with data center consolidation. So movement to the cloud-based 
center consolidation, PortfolioStat, their shared service 
approaches--all these different terms that they have. But the 
bottom line on all of this, Mr. Chairman, is you have 
significant effort, PortfolioStat and $2.5 billion in savings; 
data center consolidation, $3 billion in savings.
    They did some TechStat reviews looking at troubled 
projects. The committees looked at that. Chairman and Ranking 
Member Connolly, I know you've looked at a lot of the troubled 
projects. But there were $3 billion in savings.
    All of a sudden, you do the math real quickly, and there is 
$7 billion or $8 billion in savings that we could spend more 
appropriately on modernizing government IT operations and 
furthering our mission. So that's why these savings are very 
significant. If we do things much more efficiently and save a 
significant amount of money, it will be in the ballpark of, you 
know, $7 billion to $8 billion, $9 billion.
    Mr. Mica. Okay.
    Now, there are three components to making this 
consolidation effort work, as I understand. One is supposed to 
be OMB and sort of its oversight; GSA, and they have a program 
management office involved; and then we have the task force.
    Now, you said we need better leadership with sort of a 
general statement with the CIOs, but somehow some thing is 
lacking here. We don't even have OMB willing to come in today 
and testify.
    I mean, please be frank with us. Has OMB dropped part of 
the ball, an important part of the ball, that is making this 
not work?
    Mr. Powner. So our report is fairly balanced here, Mr. 
Chairman----
    Mr. Mica. No, no, just be honest. You don't have to be 
balanced.
    Mr. Powner. --OMB, GSA, and the task force, and they have 
done some things well.
    OMB has actually set the goals well. And we've got the ball 
rolling on----
    Mr. Mica. But they're not----
    Mr. Powner. --they're not driving it to closure.
    GSA, they have a program office responsible for plans and 
inventories. Our work over there shows the plans and the 
inventories have not been complete. Okay? We've got agencies 
like DOT where FAA wasn't reporting their air traffic control 
facilities.
    And then when you look at what Mr. Mazer is doing, I think 
he's done a great job with the task force and the like, but we 
pointed out the peer-review process was not where it needed to 
be.
    So all three organizations we felt needed to do more from a 
leadership perspective.
    Mr. Mica. Okay. And since we've got Mazer here, we'll pick 
on him a little. How can their effort be improved? And do you 
cite that here in the report?
    Mr. Powner. Yeah, we did cite that.
    That was a time--so the task force was put in place to 
perform peer reviews of the various agencies. And we clearly 
made a very clear point that we thought there could be more 
peer review going across the agencies to help each other out.
    And I commend Mr. Mazer for his efforts to date and for him 
being here and what he's done to date, but I also think that 
that task force can do better, similar to GSA and OMB.
    Mr. Mica. Well, with that being said, Mr. Mazer, and as 
chair of the task force, where do you see, again, us going from 
here in your particular role? You're an important part of the 
equation.
    Mr. Mazer. Chairman, where I see the role of the task force 
is--we appreciated GAO's examination of the overall FDCCI 
activities. In previous years, they were looking at the paucity 
of information populating what constitutes a data center.
    We are going to take into earnest the incorporation of the 
peer-to-peer reviews. We had those in the past. It will keep 
agencies on course in terms of their schedules and in terms 
filling out their inventory.
    The Federal Data Center Consolidation Initiative task 
force, as it's being integrated into PortfolioStat, it's really 
linked to the shared services activities that we're engaged 
upon, about looking at these duplicative business systems like 
HR and financial management systems. It's related to the 
TechStat activities that we're looking at.
    What the Federal Data Center Consolidation Initiative is 
going to do is identify criteria for examining what will become 
core data centers and what will become non-core data centers. 
Non-core data centers, we're going to encourage those data 
centers either to move to the core data center or to move out 
into the cloud.
    But we're following the approach of optimizing the 
portfolio, which includes applications----
    Mr. Mica. Can you define a little bit better the core and 
the non-core, just for the record?
    Mr. Mazer. Chairman Mica, core data centers are those that 
are capable of delivering enterprise or private-sector-like 
class services. They're reliable, they're secure, they're 
following green IT, and they have the capability to deliver a 
variety of services across an agency or across agencies.
    Non-core data centers are activities that might be specific 
to a location or they might be supporting a particular 
scientific or monitoring-type of system. Many of the non-core 
data centers are, in effect, really small data centers. You 
could sometimes characterize them as closets, so they're 500 
square feet or less, with a lot of cost inefficiencies about 
maintaining those.
    So we're going to encourage those to move to the core. Or 
if they have applications, then we're going to look at the 
promise of moving those out into the cloud.
    Mr. Mica. Okay.
    Well, finally--and I want to give Mr. Connolly plenty of 
time--is there--now, we are considering, again, some update in 
legislation and are working together on that. Have you looked 
at that? Is there anything that we are missing that would give 
us the tools to move forward, from what you have seen, either 
on an agency basis, on the whole consolidation?
    Maybe you've reviewed some of what we have proposed, but--
and we want to pursue giving all the tools necessary to 
expedite this. And sometimes, you know, you have to have 
language that actually mandates certain actions because the 
agencies are so inclined to stay static and not take 
initiatives.
    But maybe you could both quickly comment on, or briefly 
comment on anything you see.
    Mr. Powner. Yeah, so on FITARA and the data center 
optimization section, a couple key things that we're very 
supportive of the bill is in the area of tracking and reporting 
key metrics.
    Not only do you want to track and report closures and cost 
savings--and that is very clear, because there are cost savings 
that need to be had--but you also have aspects of that bill 
that talk about optimization metrics, where you look at energy 
usage and those types of things, higher server utilization 
rates and that type of thing. So, obviously, you want both. You 
want the right metrics on closures and cost savings, but you 
want also the right metrics on optimizing what remains. And, 
clearly, I think that's something that the task force is 
charged to do going forward as part of the PortfolioStat.
    So I see your bill being very consistent with the direction 
that the administration is going. What it does is it mandates, 
codifies it in law, and it will ensure that it will span 
multiple administrations. Because, regardless of whether you 
want to look at this in 2015 or not, this is a long-term 
initiative that will go beyond 2015.
    Mr. Mica. Right.
    Mr. Mazer. Chairman Mica, the administration I don't 
believe has a position yet on the bill, but I have examined the 
bill from a data center perspective, metrics perspective. A lot 
of those cost-tracking metrics are what the Federal Data Center 
Consolidation Initiative is looking at.
    There are some things that we're looking at, about power 
usage effectiveness; we're looking at cost per operating system 
virtualization; we're looking at ratios of employees to the 
amount of servers; and we're also looking at facility and 
storage utilization.
    One of the activities that I feel good about the Federal 
Data Center Consolidation Initiative is, as we're looking at 
metrics, or we're attempting to look at metrics and all that 
that have meaning and salience and trying to comport ourselves 
into the 21st-century information technology.
    Mr. Mica. Great.
    I am a little bit more frosted as we go on and not seeing 
the two other witnesses. We'll have to definitely reschedule 
that, and we may have to have at least one of the witnesses 
back.
    Let me yield now to Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman.
    And I think the answer I just heard to your question of, 
did we get it right on the FITARA bill we introduced, I thought 
I heard both Mr. Powner and Mr. Mazer say we got it absolutely 
right and don't change a word, it's perfect.
    I want to thank our panel for being here.
    Mr. Powner, you've had a chance to look at the legislation, 
which stands for Federal Information Technology Acquisition 
Reform Act, which I referred to in my opening statement. And I 
heard your answers to the chairman's question, that it does 
encapsulate some of the reforms we're trying to make, including 
what the task force is doing, and going even back to the 25-
point plan that Vivek Kundra put out when he was CTO.
    Can you elaborate just a little bit about what it might 
achieve and how, if that legislation could perhaps help us with 
better compliance and better metrics and data center 
consolidation?
    Mr. Powner. Well, I clearly think from a metrics point of 
view it will help significantly, because it makes it very clear 
that cost savings are significant and that has to be reported 
and tracked.
    The other part of the bill that I think will help is CIO 
authority. This is a CIO issue in every department and agency. 
And, clearly, you know, it varies in terms of the progress and 
the reported cost savings that CIOs are currently making. You 
know, we're all trying to get to a position where IT is more 
effectively managed at $80 billion, and we know that's 
understated based on some of the prior hearings that you've 
held. So I think in addition to the data center section, the 
CIO authority section also could play a significant role in 
moving the ball forward in this area.
    Mr. Connolly. At the moment, are you satisfied that OMB has 
consistent methods of evaluation to capture cost and cost 
savings with respect to data centers?
    Mr. Powner. No, I'm not--we're not. In fact, what OMB told 
us is that they were not tracking cost savings and that the 
savings were minimal. So if you're going to establish a goal of 
closures and cost savings, we need to then track that and 
ensure that we actually drive it to closure.
    We have a lot of good plans in D.C. at times in the IT 
area; what we don't do is implement them completely. And, also, 
folks aren't held accountable to implement them completely. 
This is a prime example.
    Mr. Connolly. Well, if they're not tracking cost savings, 
what do they think the consolidation effort is for?
    Mr. Powner. That's a very good question, Mr. Chairman.
    So we did not agree; that's why we made the recommendation 
in our report that cost savings needs to be front and center in 
terms of metrics. And we can talk about optimization goals and 
all this other stuff, but we're optimizing the stuff that 
remains. Okay?
    All those closures, and even if those are all small wiring 
closets, 800 of them, there's a lot of money to be had with 
those. And if we get to a point where we have 1,100 or 1,200 
centers, which would get to the 40 percent----
    Mr. Connolly. Can you refresh our memory, Mr. Powner, on 
how much these data centers expend, what it costs the taxpayers 
every year just on energy consumption?
    Mr. Powner. I don't have good numbers on that.
    Mr. Connolly. Would about $450 million roughly sound right 
to you?
    Mr. Powner. I would have to get back to you on that, but 
likely even higher, though, if you start adding all the 
departments and agencies. You look at DOD alone and you look at 
their centers----
    Mr. Connolly. Yeah.
    Mr. Powner. And, frankly, they're reporting some numbers 
there that they probably would have missed. They don't have a 
complete inventory yet.
    Mr. Connolly. It underscores your frustration, Mr. 
Chairman, which I share. We've got to have some consistent 
measurement by OMB. And, for goodness' sake, obviously cost 
savings are part of the goal here, not the only goal, but a 
pretty important part of the goal.
    And if they're not consistently measuring that or even 
seeing it as a significant factor in making the decision about 
to stay open, to close, to consolidate, then they're not with 
the program. And, certainly, they're not consistent with the 
legislation we've introduced.
    Would that be a fair statement, Mr. Powner?
    Mr. Powner. Yeah, so if you look at the IT budget--we spend 
$80 billion on IT in the Federal Government, and 70 percent of 
that is operations and maintenance, which includes data 
centers. And the challenge going forward is to take some of 
that O&M spend and move it into systems development and 
acquisition so we modernize the government and further the 
mission. But we spend a lot of money keeping the lights on, and 
if we can do it more efficiently in this example, or movement 
to the cloud, we need to do more of that.
    Mr. Connolly. Yeah. Absolutely.
    Mr. Mazer, you are a constituent. I cannot imagine a better 
spokesperson for this whole subject than yourself, hailing, as 
you do, from Annandale.
    But just a couple of questions. You chair the task force. 
What is the mandate of the task force?
    Mr. Mazer. The mandate of the task force, it was initially 
chartered to provide information sharing, examining best 
practices, to examine activities like power usage 
effectiveness, and to follow and optimize--or to follow working 
with the agencies on the schedules and all that for closure on 
activity.
    Mr. Connolly. Okay, but there is a goal, an end goal, which 
is to promote this consolidation.
    Mr. Mazer. It's to promote the consolidation. And it's also 
to promote--this task force, we had a year gap of the peer 
review. But when the peer reviews that we had going forth on 
all that was having one agency encouraging another agency to 
either follow the intention of the schedule or to follow 
intention with the scope or to look at the missing inventory 
elements that are a part of what a data center consists of.
    Mr. Connolly. What are some of--could you enumerate for us 
a little bit the process and the criteria used in the process 
for determining, or for helping to determine in that task force 
process, ``You know, that sounds like an inefficiency. Ought to 
close, ought to consolidate, or go entirely to the private 
sector?'' What are the criteria whereby you look at something 
going, ``That's great, don't change a thing,'' versus, ``That's 
not so great, and maybe it ought to be closed?''
    Mr. Mazer. Well, what we're looking at is, in terms of 
the--you know, initially the task force was chartered to 
reflect on best practices, and a reflection of noticing that we 
are having a problem coming to grips with what we have in our 
inventory. We started working on a series of metrics and all of 
that, in terms of criteria.
    So some of the metrics that we're looking at are how much 
virtualizing we've done of the boxes. And we're establishing a 
standard for the U.S. Government. We're looking at metrics in 
terms of how much floor space that we're using. We're looking 
at metrics in terms of the energy costs that we are looking at 
and establishing a baseline there for those activities. We also 
are looking at metrics in terms of what's the ratio of things 
that are out in the cloud as opposed to things that are 
actually to be put on premises.
    And right now the task force is engaged in establishing 
these metrics as a baseline which will serve as the basis for 
when the PortfolioStat sessions start in the summer so that 
agencies will have a good apples-to-apples comparison of what 
costs are and what we should strive to.
    Mr. Connolly. I assume utilization is one of the criteria?
    Mr. Mazer. Yes, sir. Utilization is a heavy criteria--one 
of the criteria. We've got about nine criteria. I'd be happy to 
submit for you a----
    Mr. Connolly. That would be very helpful, I think, to all 
of us here. Thank you.
    Mr. Connolly. Yeah, because I would think, in some ways, 
utilization alone could be a qualifier or disqualifier. I mean, 
if you find something grossly underutilized, it's a strong 
candidate for consolidation or elimination.
    Mr. Mazer. Yes. Many of our servers are at 5 percent or 10 
percent----
    Mr. Connolly. Yeah.
    Mr. Mazer. --utilization, which does fit the----
    Mr. Connolly. I think that--could you repeat that? Because 
I'm not sure that's fully appreciated. When we're looking at 
data consolidation, it isn't because we're obsessed with 
smaller numbers. It is because we're looking at how efficient 
it is.
    Mr. Mazer. Right. When the teams have gone out and done 
either using automated tools or on-site examination of the 
capacity of servers, many of them are woefully underutilized. 
There's more efficiency by putting multiple operating systems 
or applications on one particular server, particularly given 
the state of technology that it is today.
    Mr. Connolly. Right. Thank you.
    And a final question for now. You mentioned FedRAMP. Could 
you just remind us all what FedRAMP is and give us a status as 
to where it is?
    Mr. Mazer. The status I will defer to my colleagues from 
GSA, but I will tell you----
    Mr. Connolly. Yeah, but they're not here, Mr. Mazer.
    Mr. Mazer. FedRAMP--well, what FedRAMP is looking at is, 
you know, the security is a very important issue concerning the 
U.S. Government and how do we protect our data and our content. 
And what we have done over the past 10 years, with the advent 
of the FISMA laws and all that, is really establish a set of 
controls. And if agencies can subscribe to those particular 
controls, whether it's, like, access, availability, those types 
of activities, then they're saying, okay, they're reasonably 
protected given the categorization of that security.
    FedRAMP is a model where, if anyone can subscribe to these 
set of controls, then they can be delivering that particular 
service. So FedRAMP is a model that, let's say if a private-
sector company says, ``I'd be able to do something for you, the 
U.S. Government,'' they will follow the standards as 
promulgated by FedRAMP, and you'll have an independent auditor 
or a validator come in and say, ``Yes, they're matching these 
controls.''
    And it actually establishes a common baseline, so rather 
than every agency doing its own set of, ``I think the security 
should be this,'' or, ``I think the security should be that,'' 
it subscribes to a standard baseline by which all private-
sector companies should subscribe to.
    Mr. Connolly. So another way of putting it would be, Mr. 
Mazer, that what FedRAMP is designed to do is to set some 
common standards that people, other agencies buy in to. And 
that helps us in terms of the acquisition process because the 
private sector now doesn't have to deal with 100 variations.
    Mr. Mazer. Right. The private sector doesn't have to divine 
the intentions of each individual agency.
    Mr. Connolly. And are we expected to finalize that process 
soon?
    Mr. Mazer. The FedRAMP process is ongoing. There are a 
couple of, they call them--there's an acronym; forgive me if I 
can't break it out--3PAOs, that they are that qualified to look 
at a private-sector company as they are offering cloud services 
to the U.S. Government.
    Mr. Connolly. So can we expect something soon?
    Mr. Mazer. There are three--as services, as agencies are 
migrating to the cloud, they will avail themselves of the 
FedRAMP. The private-sector companies will avail themselves of 
the FedRAMP.
    Mr. Connolly. But you are anticipating we will proceed with 
FedRAMP as planned?
    Mr. Mazer. Yes, sir.
    Mr. Connolly. Thank you.
    Thank you, Mr. Chairman.
    Mr. Mica. Just a final question, a follow-up question. In 
your review, who is getting it right? Examples to look toward?
    Mr. Powner. Agencies that are getting it right?
    Mr. Mica. Yeah.
    Mr. Powner. We can look at some of those agencies. You 
know, typically, DOD is the agency that we point a lot of flaws 
out when it comes to the IT management recently with the IT 
Dashboard. Obviously, there's a lot of opportunity there for 
them to get it right.
    I turn to Mr. Mazer's organization, Interior; they're at 
the top of the list. You know, GSA was a latecomer up there, as 
we mentioned. But you have a number--DHS is also a leader. I 
mean, they were planning on going from 43 to 2 at one time, and 
now their numbers are a little bit different. But DOD, DHS, and 
Interior are clearly leaders up there.
    Mr. Mica. Okay.
    Did you have anything else, Mr. Connolly?
    Mr. Connolly. Not at this time, Mr. Chairman.
    Mr. Mica. Well, what we're going to have to do is thank you 
for being with us. We'll probably submit some additional 
questions to you from the committee. I didn't get to all that I 
wanted answered.
    Mr. Mica. And this is kind of a meat-and-potato hearing, as 
you fellow geeks would love this one, but----
    Mr. Connolly. All the acronyms.
    Mr. Mica. Yes, exactly. Well, I have to sort through them. 
I kept going back to make certain I knew what they were talking 
about. And you've been doing this, focusing on this a lot more 
than I. But very important. I mean, we're talking saving 
billions and actually much more efficiently operating.
    Sometimes when I go back after we have done our hearings 
together, Gerry, we see the debt we're in and the situation 
we're in financially. If we could just start implementing these 
things on a fast track, we could----
    Mr. Connolly. Yeah.
    Mr. Mica. --take that column of losses and get us into a 
much better fiscal condition.
    Now, again, I thank you for coming.
    I want to--particularly, we're going to ask Mr. Powner to 
probably come back when we have the other two witnesses, and 
maybe again you, too, Mr. Mazer. You could see how we have to 
have some other answers from OMB and GSA, who are not with us 
today.
    So, at this time, again, I thank you. We'll excuse you, and 
I'll call up our second panel.
    Our second panel of witnesses I will introduce as they're 
taking their seats.
    We have Mr. Steve O'Keeffe, and he is the founder of 
MeriTalk. We have Ms. Teresa H. Carlson. She is the vice 
president, worldwide public sector, of Amazon Web Services. We 
have Mr. Kenyon Wells, vice president of U.S. Federal, CGI 
Federal.
    Those are our three industry panel witnesses. I think this 
will be an interesting panel. I always think it's great to hear 
from the government witnesses, and we had two key witnesses 
here today who provided us with their perspective. But I think 
those from the outside that are involved in IT and also data 
center consolidation that they undertake for the private sector 
and the public sector, to get their on-the-ground, firsthand 
evaluation and provide that to our subcommittee today.
    So, with that, I welcome again Mr. O'Keeffe, Ms. Carlson, 
and Mr. Wells.
    As I indicated before, this is an investigative panel of 
Congress, so if you haven't done so, we're going to do it now. 
We're going to ask you to stand and be sworn in.
    Do you swear that the testimony you are about to give 
before this subcommittee of Congress is the whole truth and 
nothing but the truth?
    Mr. O'Keeffe. Yes.
    Ms. Carlson. I do.
    Mr. Wells. Yes.
    RPTS MCCONNELL
    DCMN CRYSTAL
    Mr. Mica. The witnesses have all answered in the 
affirmative. Let the record reflect that.
    And again, welcome you. We are fairly informal today, but 
we're trying to make certain that--I read, pre-read some of 
your testimony. Some of it's pretty long, but if you can 
consolidate your points, and if you have additional 
information, certainly your whole testimony will be included in 
the record. And then we'll go through all three of you, and 
then we'll do the questions rather than after each witness 
testifies. So I'm looking forward to all three of your 
testimonies. I have read a little bit of Mr. O'Keeffe's, and 
welcome him at this time, and recognize him. And thank you 
again for participating.

                  STATEMENT OF STEVE O'KEEFFE

    Mr. O'Keeffe. Thank you. Chairman Mica, Ranking Member 
Connolly, and members of the subcommittee, thank you for the 
opportunity to speak to you today. My name is Steve O'Keeffe 
and I am not the voice for the GEICO gecko, as has been asked 
before. I'm, in fact, the founder of MeriTalk, the Data Center 
and Cloud Computing Exchanges. These are public-private 
partnerships focused on delivering tangible increases in 
efficiency in government IT. I have spent more than 20 years 
listening to Federal IT leaders talk about their challenges, 
their opportunities, and their frustrations. You have already 
heard a lot of numbers here today, but I'd like to cut to 
what's really important: tangible savings. I'm afraid the 
Federal IT reform is like a bad reality TV show. There is no 
budget. The actors are powerless. The end is predictable. But 
somehow we still keep watching. We need to change the script.
    As you've noted, it is sad that OMB and GSA are not here. 
So when Vivek Kundra announced FDCCI in February of 2010, we 
talked about this, OMB said that taxpayers would save between 
$3 billion and $5 billion by 2015. That's a lot of hamburgers. 
And so as we set tangible goals we need to report against those 
goals, and I think that's what this is all about.
    Cloud, too, was billed as an IT budget crusher. Today we 
are 18 months from the FDCCI savings deadline, and we have no 
idea how much money we have saved the taxpayer, which is not 
right. I would argue we don't need to keep counting data 
centers. We need to understand how much we've saved, which 
agencies are doing it right, and what we need to do to 
accelerate savings. Let's get straight about this.
    To help surface some answers MeriTalk recently released a 
new study, and I'm Ross Perot-style going to use some charts to 
illustrate.
    Mr. O'Keeffe. The study is called ``FDCCI: The Big 
Squeeze,'' and it is based on a survey of the operators in the 
agencies. What we want to do is learn from people on the 
frontlines what's going on. So a couple of statistics.
    Fifty-six percent of data center leads give their agencies 
a C grade or below on FDCCI. I think earlier Congressman 
Connolly asked if we were getting an A. It seems we're getting 
a C or below. I wouldn't be very excited if my children brought 
that grade home.
    Only half of Feds believe their agency is on target to meet 
the FDCCI number of closures. Ironically in this case, one of 
the questions you asked earlier about electricity savings, Feds 
believe that power is a significant area where we're going to 
save a lot of money. But based on our meetings with Federal 
data center leads, we found that 1 in 20 data center executives 
have an understanding of what they pay for electricity. So 
that's a significant blind spot.
    What about top obstacles? What we see is the Fed site, 
budget constraints, mission-owner objections, and the inability 
to consolidate applications as the biggest obstacles to 
progress, which gives me the impression that the model for the 
data center leads should really be that beatings will continue 
until morale improves. They have no ability, they're not 
empowered to change the equation.
    So it's great to point out what the challenges are, but 
let's go on the positive side and look at what we should do in 
order to remedy the situation. We call this our five-point 
plan.
    And the points are, number one, don't hide. Our concern is 
that by merging FDCCI with PortfolioStat we are going to be 
gerrymandering the metrics. And so we are concerned about that. 
We need to set realistic goals in the open and publish real 
status on success and failures. And yes, failures if that's 
what transpired. OMB has a total cost of ownership model. I 
think Mr. Mazer referenced it. In this era of open government, 
why does OMB insist on keeping this a secret? Why not publish 
the TCO model so we can find out where the money is?
    Number two, there is no money. Recognize that there is no 
new money to fund data center optimization. And so with that, 
we need to empower the CIOs to rationalize applications and 
maybe trust new approaches because we know the old ones have 
failed.
    Number three, application rationalization. If you do not 
cut the number of applications, you will not cut the number of 
data centers. The Army is running over 100 operating systems 
because it has so many legacy platforms. I think GAO flagged 
this. Uncle Sam does not need 622 HR systems. I think we can 
all agree on that.
    Four, marry IT and facilities. Wouldn't it seem logical 
that the data center lead should understand and own the budget 
for the total data center environment? GSA owns most of the 
facilities and pays the electricity bills. Why not publish the 
energy bills for each data center so we'd have a better sense 
for how to proceed? There are a series of new energy contracts 
out there, the energy savings performance contracts, and we'd 
like to see those moving forward more aggressively.
    Five, public-private partnership, please. Why don't we 
recognize that government is not the only organization that 
operates data centers? We can learn a huge amount from 
industry. Organizations like NASDAQ have put forth data center 
consolidation optimization initiatives. Let's look at some of 
those metrics.
    Now to cloud. The onramp to Federal cloud, FedRAMP, is 
horribly congested. We talked about problems with traffic 
earlier. In fact, you can hear the honking on the digital 
highway right now as software companies line up trying to get 
through cloud certification.
    After almost a year in operation, GSA's FedRAMP team has 
only certified two cloud service providers. How are agencies 
supposed to move to cloud when there are only two applications? 
It's just not feasible. If the cost of FedRAMP certification 
and the delays outweigh the volume of business that solution 
providers receive from agencies, that industry will take 
another road. That said, cloud acquisition vehicles are sorely 
needed.
    In closing, it's time to get real about Federal IT 
modernization. Are the agency CIOs really in charge, and 
therefore accountable for results? This question has very real 
implications for FITARA. Richard Spires' recent experience at 
Department of Homeland Security makes all CIOs question whether 
they have authority or not.
    We are ready and willing to discuss our initiatives and 
recommendations. We look forward to working with you to deliver 
improved efficiency in Federal IT, and welcome any of your 
questions. Thank you for the opportunity to talk today.
    Mr. Mica. Well, thank you. Thank you for your testimony and 
your candor.
    [Prepared statement of Mr. O'Keeffe follows:]

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    Mr. Mica. Let's turn next to Teresa Carlson, vice president 
for Amazon Web Services.
    Welcome, and you're recognized.

                  STATEMENT OF TERESA CARLSON

    Ms. Carlson. Good afternoon, Chairman Mica and Ranking 
Member Connolly.
    Mr. Mica. She is not coming in very loud.
    Ms. Carlson. Good afternoon, Chairman Mica and Ranking 
Member Connolly. My name is Teresa Carlson, and I'm the vice 
president, Amazon Web Services World Wide. Thank you very much 
for inviting me to testify today on the Federal data center 
optimization and transition to cloud computing, and to discuss 
how the U.S. Federal agencies can do more with less and to save 
taxpayer dollars. I'd like to submit my written testimony for 
the record.
    Mr. Mica. Without objection, your entire statement will be 
part of the record.
    Ms. Carlson. Also, I wanted to thank the university for 
having us here today. I spent many, many Saturdays and Sundays 
here at swim meets with my sons, and it is in beautiful Fairfax 
County, and it is a beautiful day. So I really appreciate them 
having us here as well.
    Companies that leverage Amazon Web Services in the 
commercial sector range from large enterprises, such as 
Bristol-Myers Squibb, Shell, NASDAQ, to innovative startups 
like Pinterest and Dropbox. Throughout the U.S. Federal 
Government, agencies and departments are adopting AWS for a 
wide range of technology infrastructure services and 
applications, to include groups like the U.S. National 
Institutes of Health, NASA's Jet Propulsion Laboratory, and the 
U.S. Department of the Navy, Navy, and the U.S. Securities & 
Exchange Commission.
    AWS is passionately committed to sharing the benefits we 
can achieve as a cloud provider to Federal Government agencies, 
and our economies of scale have resulted in the rapid 
innovation of public cloud services and lowering the price for 
our customers. Specifically, we have lowered our cloud 
computing prices 31 times since 2006. Let me repeat, 31 times 
with no one pressuring us to lower those prices. We lowered 
those prices based on our savings and providing them back to 
the customer.
    Given the proven secure and game-changing efficiencies of 
cloud computing, we believe that the FDCCI should be directly 
linked to the Office of Management and Budget's ``Cloud First'' 
policy in order to be truly successful in the data optimization 
model. While there is no doubt that since Federal Government 
workloads can continue to operate in government-owned data 
centers, there are a very large number of workloads that should 
be more suitable and efficiently managed in large-scale 
commercial cloud platforms. Therefore, the adoption of cloud 
computing services should be a central part of the Federal 
strategy.
    One way to think about cloud computing is that instead of 
buying and owning and maintaining their own data centers or 
servers, Federal agencies can acquire technology resources and 
compute power and storage on an as-needed basis and dispose of 
it when it's no longer needed. In fact, we have something 
called a Trusted Advisor service where we actively work with 
our customers to turn off servers when they're not being 
utilized, and they actually don't even have to worry about what 
their electric bill is because that's part of the service we 
provide and it's part of the pricing model, so they'll know 
that in real time. And users only pay for what they use by the 
compute hours, or storage-gigabyte, and they are not locked, 
they are not locked to any long-term contracts. They can choose 
long-term contracts, but they are not locked into anything like 
that.
    There's many, many examples of Federal agencies that have 
begun to embrace the cloud. A couple I'd like to highlight for 
you today is NASA's Jet Propulsion Lab. When the Mars Space 
Lab, also known as the Curiosity, successfully landed last 
year, public cloud computing infrastructure from AWS was 
utilized in support of various aspects of the mission, 
including the public outreach around the landing itself, so 
that everyone in the United States and the world could enjoy 
that landing, as well as the data and image pipeline--the 
pipeline management dealing with all the new data streaming 
that was actually coming down from Mars. Tom Soderstrom, the 
CTO of NASA JPL, described it this way: JPL has leveraged cloud 
services to dramatically reduce IT costs, and in the process 
increasing their agility and decreased the time to science 
while enabling JPL to have complete flexibility when using 
those computing resources. In fact, we worked with them in a 
very short period of time to get that set that up. It did not 
take much for them to procure and set that up.
    The U.S. Department of the Navy CIOs office recently 
initiated a pilot project to move unclassified data to the 
commercial cloud environment. The Secretary of the Navy's 
public-facing information portal is now on AWS, and they also 
have an initiative to work on a strategy to migrate all public-
facing sites. And he's already said that--CIO Terry Halvorsen 
stated that the Department has achieved a 50 percent reduction 
in cost to operate this portal.
    Let's imagine for a moment, if that level of cost savings 
could be applied to all Federal IT spending, how much money 
could that actually be? And I believe it' a lot more than those 
$3 billion that were initially brought up.
    The reality is that cost savings is only part of the 
picture and that what we think is a fundamental and clearly a 
need to transition to cloud computing and this will be a big 
part of the optimization for the data center consolidation. 
There are many companies out there that have already taken full 
advantage of that in a commercial site like Netflix to move 
their entire infrastructure to the cloud.
    We think there is exciting opportunities out there to 
actually do a lot more with cloud services. We support what 
you've done already in both FITARA and FDCCI, and we appreciate 
having the opportunity today to speak to you and are prepared 
to answer any questions. Thank you again.
    Mr. Mica. Well, thank you also.
    [Prepared statement of Ms. Carlson follows:]

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    Mr. Mica. And we'll turn now to our final witness on this 
panel, Mr. Kenyon Wells, vice president of U.S. Federal, CGI 
Federal.
    Welcome, and you are recognized.

                   STATEMENT OF KENYON WELLS

    Mr. Wells. Thank you. Thank you. Thank you, Chairman Mica, 
Congressman Connolly. Thank you very much for the opportunity 
to appear before you today. My name is Kenyon Wells, and I'm 
vice president at CGI Federal Incorporated, a global 
information technology and business process services firm. I'm 
honored to provide some thoughts today about ongoing efforts 
for Federal agencies to optimize their use of their data 
centers and move to greater use of cloud computing technology.
    CGI applauds the subcommittee not only for its continued 
efforts to eliminate wasteful IT spending, but also for its 
recognition that continued investments in IT will save money, 
improve efficiency, and provide better services to U.S. 
citizens and businesses. In particular, CGI thanks the 
leadership of this subcommittee, as well as Chairman Issa, 
Ranking Member Cummings, and the full Oversight and Government 
Reform Committee for bringing many important issues to light 
with the introduction of H.R. 1232, the Federal Information 
Technology Acquisition Reform Act, and for the open and 
transparent manner in which that legislation was drafted.
    In February of this year, CGI became just the second 
company to be granted a FedRAMP cloud security provisional 
authority to operate. CGI is now delivering more than $100 
million in secure cloud solutions to dozens of Federal 
programs, in addition to many other cloud implementations for 
State government and commercial clients. Based on these 
projects and discussions with other Federal agencies, CGI 
offers the following observations.
    First, there is significant progress, but more can be done. 
There are two major drivers that lead to immediate cost savings 
for agencies in adopting cloud computing. One of these is the 
speed with which new systems can transition to go live in the 
cloud. For example, CGI worked with GSA to bring 30 systems 
live in less than 90 days. As a result, that agency program 
reduced their overall server footprint by 50 to 70 percent.
    The other immediate cost-savings driver is that agencies 
only pay for the capacity they need. So instead of running data 
centers that continuously provide peak capacity that is always 
underutilized, CGI's cloud clients have significantly lowered 
day-to-day costs and pay only for added capacity when it's 
needed. These immediate savings are a great achievement, but 
longer term the consolidation of data centers and migration to 
the cloud are but a step in the journey towards Federal IT 
modernization and consolidation. These more holistic efforts 
will eventually deliver savings that dwarf the numbers we are 
talking about for FDCCI today.
    Second observation. Cost savings are often difficult to 
quantify. A lot of what we are talking about here today, we 
have seen some of the reality as to why agencies struggle with 
it. And as the GAO report indicates, many agencies do struggle 
to determine just how much they save under consolidation 
initiatives. The challenges here are exacerbated by the lack of 
baseline IT costs on an agency-by-agency basis. Additionally, 
there are some initial costs associated with moving the cloud 
computing or closing down data centers which can delay the 
initial cost savings even though an agency will save 
significantly in the long run.
    Third, significant acquisition challenges exist. In 
discussions with numerous agencies on this topic, CGI has seen 
many that have struggled to modify their procurement methods 
when purchasing cloud services. Cloud computing not only 
represents a fundamental change in how IT services are 
delivered, but also how they are procured. A focus on using 
readily available contract vehicles could significantly 
accelerate cloud migration. Additionally, Congress and the 
administration could provide agencies with more freedom to 
enter into innovative agreements with industry to allow 
government to significantly reduce its upfront costs on the 
public-private partnership we're talking about.
    Many of CGI's commercial and State government clients have 
entered into an agreement where CGI assumes the initial 
transition costs so those clients can start saving on day one. 
If the Federal Government wants to do more with less, then it 
should embrace new methods of contracting that shift that risk 
and upfront costs to industry partners.
    Finally, strong leadership and interdepartmental 
cooperation increase the results from cloud. CGI commends DOD, 
DHS, and GSA for their collaboration as members of the Joint 
Authorization Board overseeing the FedRAMP program, which 
represents a significant and necessary step forward as the 
Federal Government looks to implement the cloud. FedRAMP's 
common-risk framework for all agencies is a critical piece of 
the puzzle that eliminates the needs for highly customized 
solutions that often hold no real extra benefit and severely 
increase cost.
    Moving forward, FedRAMP's continuing monitoring process is 
more frequent and more detailed than those already in place at 
most Federal agencies, which will create more confidence in 
security around commercial providers who receive their P-ATO. 
This will be followed on by the new DHS-led efforts around 
continuous monitoring which will only help push this effort 
forward so that agencies and Congress know both what IT assets 
an agency has and how they're secured.
    Thank you once again for the opportunity to participate in 
this important hearing. Since I'm a few seconds under, I'll add 
two additional things. One, thank you very much for holding 
this hearing here in my alma mater, though this campus looks 
very different than when I was here a couple of decades ago. 
And finally, since it is a few days from Mother's Day, I want 
to thank my mother and brother who surprised me by attending 
today, and thank her for making me come to this school and 
therefore be here. So I would look forward to any questions.
    [Prepared statement of Mr. Wells follows:]

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    Mr. Mica. Well, we have a lot of mothers to be thankful 
for. But it's nice to have some of your family with you, and a 
successful alumni return and be a witness today.
    Interesting perspective from the private sector. Mr. 
O'Keeffe, your first--or your five-point recommendation seemed 
to differ a little bit from what I got out of Mr. Powner. I 
asked about the compatibility of what was going on with 
PortfolioStat, and it was interesting. I guess under 
PortfolioStat agencies are no longer required to submit the 
previously required consolidation plan and the memorandum does 
not identify a cost-savings goal. And you, of course, in your 
first recommendation said that's not the way to go. So I guess 
you differ a little bit with the testimony we had from GAO.
    Mr. O'Keeffe. I think it's very important to be consistent. 
If we said we were going to save--if we said we were going to 
save $3 billion, or $5 billion, or however many billion dollars 
it is----
    Mr. Mica. Don't try to count.
    Mr. O'Keeffe. --don't keep changing the rules. So I think 
we just need to be consistent in terms of what we're doing. And 
I'm, again, also very interested to see this TCO model which 
Mr. Mazer talked about.
    Mr. Mica. The secret TCO model.
    Mr. O'Keeffe. Right. I don't see why that wouldn't--this is 
an era of open government. Why can't we see the way the 
agencies are measuring or OMB is measuring efficiency?
    Mr. Mica. We would have liked to ask that question to OMB 
today, but we will ask it at a future hearing.
    Mr. Connolly. In the spirit of open government they're not 
here.
    Mr. Mica. Oh, and I have to--first of all, I have to 
compliment this panel, Mr. Connolly. My experience has been 
that it's been like pulling teeth to get anybody from the 
private sector to come before any of our investigative or 
oversight hearings. I mean, they run like scalded dogs from us 
because they're so afraid of the agencies coming down on them 
for some reason or participating with us. So I thank you. I 
think you are providing a very valuable public service and 
insight, and I think it's important that we hear from people 
who are dealing with government on a day-to-day basis, see how 
things work and don't work, and then make recommendations to 
us. Again, I thought, Mr. O'Keeffe, excellent points here.
    Now, the other problem we have is, I think you highlighted 
in one of your recommendations--and GSA owns most of the 
facilities. I guess they pay the power bills and things like 
that. So there is not the accountability. There is no 
incentive. How do you change that now? And then we have pending 
legislation. I asked the question of the other panelists, do we 
need to do more to beef up the pending legislation?
    So first I will ask that, then I have another question. 
Have you read any of the proposed legislation? I think some of 
you actually participated. It's a fairly open process. Will it 
resolve some of these issues? I don't think it's going to 
resolve that one.
    Mr. O'Keeffe. If I might, I mean, I think that the language 
of FITARA was great. But the message in terms of empowering the 
CIO, which is critical in terms of the success of the program, 
runs contrary to what we have seen from an experience 
standpoint. I mentioned the experience with Richard Spires who 
recently was put on leave at Department of Homeland Security, 
and then resigned, very recently, and it just doesn't seem as 
though that there is real support for the CIOs to stand up 
against the components and the mission owners. And if that's 
the case, then, you know, given the experience with Richard 
Spires, I'm not sure other Federal CIOs are going to rush to 
stand up, because the support hasn't been there. So the 
language, I think, of FITARA is good, but I think we have to 
show that support.
    Mr. Mica. Should we beef up the language and empower the 
CIO more or----
    Mr. O'Keeffe. I think we absolutely should empower the CIO 
more. But again, language is one thing, you know, it's actions 
which are going to be more important.
    Mr. Mica. It's interesting, because actually some of my 
first work many years ago was looking at government 
organizations and restructuring governments, primarily local 
governments, and after some years of doing that, you know, we 
could write the best charter of government and guidelines and 
everything, and then you get lousy people, they couldn't 
implement. And sometimes you would have lacking legislative 
authority, or a charter, and you get people who are creative 
and innovative, and they could succeed.
    So sometimes it's hard to craft that. But we want to make 
certain that we give them the tools to be able to do the job. 
So there is a disconnect between the facilities, the energy, 
things of that sort, so maybe there could be some change there. 
That's a tougher one, Mr. Connolly. I kind of think of things 
again that would empower a CIO to move forward.
    The thing that drives you nuts with government, you've seen 
it, is people are making a decision, or then the lack with this 
FedRAMP and the certification of--well, for cloud 
participation. We are up to two, you say?
    Ms. Carlson. Yes, two.
    Mr. Mica. And how long has that taken?
    Mr. O'Keeffe. Almost a year.
    Mr. Mica. A year.
    Ms. Carlson. We've been going through the FedRAMP process. 
We are very close, but it's a very long process, and I do 
really appreciate what, you know, the FedRAMP office is doing, 
because security is obviously very important.
    The one thing is, once it's there, they need to be able to 
utilize it, because as you begin to set more and more controls, 
every agency can stack and put more controls on top of the 
FedRAMP process, and you really don't have a FedRAMP process. 
You just have a FedRAMP process plus, plus, plus.
    Mr. Mica. And it goes on and on.
    Ms. Carlson. And it goes on and on, and it never, you know, 
comes to fruition. And then I think the second thing is the 
``Cloud First'' policy. In order for this to really make sense, 
I do think they need measurements, respect to what Steve was 
saying, they need measurements in there to say, here is the 
real process we've made toward ``Cloud First,'' you know, 
around the application, consolidation effort as well, because 
you're only going to truly get there when you begin to take a 
look at what are those applications that you've done? How are 
you looking at the total picture as actually the consolidation 
effort?
    Mr. Mica. Does anybody know how many cloud certification 
requests are pending?
    Mr. Wells. There are over 80.
    Mr. Mica. Over 80?
    Mr. Wells. Yes, and many of those were just in the last 
couple of months.
    Mr. Mica. Okay.
    Mr. Wells. There were about 40 the beginning of December.
    Mr. Mica. Okay, so a huge number. So we need to get, first 
of all, some stability in the certification process, and people 
certified, then some motivation, and some empowerment of those 
charged with this responsibility to move forward, and again, 
some accountability in the system.
    Mr. Wells. Yes.
    Mr. Mica. I'm going down O'Keeffe's recommendations here. I 
thought it was a good summarization of some of the things that 
we needed. But do you not need 600 HR systems? That got me, 
because we started looking at Office of Personnel Management, 
and I think they have blown either a third of a billion or a 
half a billion dollars. And finally I was told--were any of you 
involved in that? No? Then they finally settled on a smaller 
contract after blowing lots of money and attempts, smaller 
contract, and then they discarded that.
    Now I understand they are going back to almost hand 
processing. That's the Office of Personnel Management for the 
Federal Government. And then we've 600 HR systems on top of 
that. So I can't even begin to imagine how much we spend in 
sort of a mundane process, not that there aren't variations for 
background checks and all kinds of information to be combined.
    The other thing is on retirement systems. That whole area, 
again, is just unbelievable money that's been spent, and I 
guess my comments were actually the hand processing for 
retirees is what they have gone back to, very costly. They just 
hired more and more personnel and abandoned IT as a solution. 
Is that----
    Ms. Carlson. The opportunity there, especially with cloud 
computing, is the ability to not have to spend millions of 
dollars to test out systems. So with the cloud computing model 
you can set up and design something in a very small way without 
spending a lot of money. And the minute that works you move it 
into the test adaptive environment, and then right from there 
you can move it into production and then scale it. So you don't 
have to build a system for complete scale and then try to 
deploy it.
    So again, that's another opportunity because your cost, if 
you fail, you can fail fast, use those failures as 
understandings, and then recover, and you don't even have to 
throw away all that code. It actually can be utilized for the 
success that you need.
    Mr. Wells. And then taking that one step further, that 
makes sense, complete sense for custom application. But getting 
back to the retirement systems and the HR systems and all the 
other common systems that every agency has to use, moving 
toward software as a service, where you actually have a handful 
of applications that have been precertified and FedRAMP 
certified, that then agencies don't have to start from scratch, 
they don't have to reinvent the wheel. They'll have a handful 
of those, so hopefully more than that, enough to make it a 
competitive market space, but something they know works so that 
at least we can streamline it.
    Mr. Mica. A final question, and actually motivated by Ms. 
Carlson, is she had cited those that she felt were getting it 
right, and she talked about Jet Propulsion Lab, NASA, Navy. Are 
there good examples? I think it's always good to see who is 
doing things well and what steps they've taken, how they got to 
that success and--go ahead.
    Mr. Wells. I can add an additional one: Department of 
Homeland Security.
    Mr. Mica. Which is stunning to me, because I think it's one 
of the loose cannons of Federal Government, but that's another 
matter.
    Mr. Wells. As was discussed earlier, has certain 
challenges, both based on the size and the politics involved, 
but there is some very good work being done there. And a couple 
of years ago they purposely went down their own data center 
consolidation into two large DC1, DC2 data centers, and more 
recently when they decided to embrace cloud, they decided to go 
two different routes. One, build a private cloud on site in 
government infrastructure, since so much of their stuff is so 
sensitive; and second, to conduct a procurement to select a 
government community cloud, an external provider who has all 
the appropriate certifications. We were lucky enough to win 
that contract.
    Mr. Mica. Well, I'll have to go back and look at that, 
because I think almost all of our terrorist incidents, even the 
Boston, we still can't connect the dots. Maybe Homeland is 
doing a good job, but they haven't connected to State, and--I 
mean, other agencies. And it's very sensitive information. I 
don't know, but you're just talking about the practical 
implementation standpoint.
    Mr. Wells. Right. So, for example, they started with a 
couple of very small Web sites. They got comfortable with it, 
started adding more. Now all of DHS' public sector----
    Mr. Mica. And it is a newer agency, so...
    Mr. Wells. Correct.
    Mr. Mica. Mr. O'Keeffe, any----
    Mr. O'Keeffe. NOAA has also done a very good job, the 
weather guys.
    Mr. Mica. NOAA.
    Mr. O'Keeffe. Have put forth, you know, excellent progress 
in terms of modernization
    Mr. Mica. Just their IT. We still have a lot of people.
    Mr. O'Keeffe. They've consolidated a lot of their data 
centers. They've built a $2.4 billion data center out in 
Martinsburg, West Virginia, and they are operating at 
tremendous levels in terms of energy efficiency and such.
    Mr. Mica. Well, I could go on. I have a whole bunch of 
questions I would like to get. Let me let Mr. Connolly have a 
shot here. I went well over my time.
    Mr. Connolly. Thank you, Mr. Chairman. It was actually a 
very interesting line of questioning.
    Ms. Carlson, in your prepared testimony, I would like to 
cite something you said, because, Mr. Chairman, I think it sort 
of encapsulates the whole challenge of cloud for the Federal 
Government. And you say, ``One way to think about cloud 
computing is that instead of buying, owning, and maintaining 
their own data centers and servers, Federal agencies can 
acquire technology resources such as computing power and 
storage on an as-needed basis and dispose of it when it no 
longer is needed. Many industry experts refer to this as a 
utility model of obtaining and using IT capability analogous to 
how the government obtains access to water, gas or electrical 
power. Users to only pay for what they use.''
    That's a pretty commonsense model. What's your 
understanding of how the government looks at that? And, for 
example, the task force, to the extent you're aware of their 
process, are they also looking at junk the whole thing and go 
private sector using this model?
    Ms. Carlson. I think it's a very good question. I think 
some are really evaluating that, as they begin to look at this 
different heavy lifting that they're trying to do when they can 
have what I call more mission for the money. You know, why not 
utilize your dollars for the true mission and not worry about 
building out infrastructure and these tools? And it's a very 
common model that you use now, and, you know, hundreds of 
thousands of customers and 190 countries, that for government, 
it is still an ``ah ha'' moment when we actually show them that 
they can provision virtual machines like that on a portal. They 
just can't believe it.
    And as Mr. Wells was saying, when that's configured in 
FedRAMP all they have to do is go provision it. They don't have 
to wait 6 months for the supply chain management. It's there 
and available. And it's very, I mean from a mission 
perspective, it's really a game changer for the U.S. Federal 
Government.
    Mr. Connolly. And I want to acknowledge that it may not 
always be appropriate, but it is an option that needs to be on 
the table.
    Ms. Carlson. That's correct. And we don't suggest that they 
just jump in. We suggest they take the opportunity to learn, 
because it is a big culture shift and we understand that. And 
the agencies that are getting there, it has taken them a little 
bit of time, but they're gradually moving more and more, and 
their really smart architects and engineers and research 
scientists now, are really--they enjoy the fact that they have 
capacity on demand as they need it and then they can shut it 
down. And they can see how much it costs. They can look at a 
portal and know immediately how much they're spending and the 
servers that aren't being utilized, and they can be turned off. 
And we help them with that. And that's really the key. We want 
them to be able to reduce costs so they can do more and to have 
all of the other components around security.
    Mr. Connolly. And I'm going to come back to that. Mr. 
Wells, you look like you wanted to talk to that point as well.
    Mr. Wells. We're in absolute agreement with this. And if 
you think about the overall Federal portfolio, what could go to 
the cloud, what can't, you know, under FISMA they have to 
categorize all of their applications low, moderate, or high. 
Low basically is, obviously, a system that, you know, doesn't 
have quite the same level of barriers as the others. FISMA 
moderate means normally there is Privacy Act data in it. PII, 
the kind of stuff we're worried about for identity theft, HIPAA 
data, confidential but unclassified, confidential business 
information, regulatory data, stuff that you really don't want 
to get out. And there are a number of controls put in place, 
defined by NIST, to do that. Low and moderate together is 88 
percent of the entire Federal portfolio; 12 percent is 
classified FISMA high. That 12 percent is normally national 
security or critical infrastructure protection, the stuff 
that----
    Mr. Connolly. I want to make sure we all understand what 
you just said. So what you're saying is that in data 
evaluation, 88 percent of the Federal market, in this market, 
would lend itself to private sector cloud computing.
    Mr. Wells. Correct. And that's for FISMA moderate. A 
FedRAMP FISMA moderate is a higher bar than a normal FISMA 
moderate. A normal FISMA moderate certification, as defined by 
NIST, has 252 controls. When the FedRAMP program sat down with 
all the different agencies to try to come up with what they 
would all accept, they ended up with 298 controls. And so it's 
a much higher bar, and they tried to get every agency to say, 
all right, what's the unique thing that you absolutely have to 
have. Fine, we'll incorporate that under the standard. But 
still many of those agencies will take that FedRAMP-certified 
infrastructure, or application, and they'll still want to do 
their own security checks on it again. That, I think, will be 
unnecessary as we go forward. Now, the FedRAMP process is still 
in the early stages.
    Mr. Connolly. Excuse me, but if they want to do that, for 
example, your services allow for that.
    Mr. Wells. Oh, absolutely, absolutely. That's a 
requirement.
    Ms. Carlson. In fact, we create a package and we make it 
very easy. And we sit down and they go through each and every 
control. And I actually might say that there's a lot of 
commercial companies that work and utilize that FISMA and 
FedRAMP process. We have many that say they go through the 
controls of the commercial company, because they think it is a 
Good Housekeeping seal of approval for security.
    Mr. Wells. It is the one area that I can say the Federal 
Government is probably ahead of the commercial sector from IT, 
and if the controls are followed and applied, it may not always 
be done in the most efficient method possible, but it is much 
more secure.
    Mr. Connolly. You mentioned, Ms. Carlson, JPL, and you said 
they achieved significant savings, dramatically saved IT costs, 
I think were your actual words.
    Ms. Carlson. Yes.
    Mr. Connolly. Could you just elaborate a little bit on 
that, because I think that's one of the things we're looking 
for--and I'm going to go back to Mr. O'Keeffe, if I may, Mr. 
Chairman--to talk about cost savings. But we need models.
    Ms. Carlson. Yes.
    Mr. Connolly. Where you can look at the reluctant players 
and say, don't be so afraid. It works. And you will be the 
better off for it. Tell us a little bit about JPL, your 
experience with JPL.
    Ms. Carlson. Yes. So one quick thing about JPL is they were 
seeing a trend where their engineers and researchers were 
trying to build their own OSs, their own operating systems, and 
it was highly inefficient. They were concerned about security. 
They knew that they were trying--they needed capacity when they 
needed it. So they started looking toward a cloud computing 
model to fulfill that. And then as a result, they gained a lot 
of knowledge over the last few years. But this one particular 
program that I talked about, and they can tell you the exact 
dollars better, but they said they paid 10 percent of the 
original cost by using a cloud computing model.
    They also have talked about another major Mars program that 
they ran. The program manager told me, if it hadn't been for 
the utilization of cloud computing, they would have had to shut 
the program down, because the original Mars Curiosity kept 
going, but they didn't think that the little buggy would go 
very long, like 2 months, and it was still running around 
taking pictures after 6 months, 7 months. And all of that 
amazing data being streamed from Mars, they wanted the ability 
to take advantage of that for educators, researchers, but they 
couldn't store it, they couldn't manage it, it was very costly. 
So as a result, that was another reason they looked to cloud.
    And I wanted to point out where we've seen the real push in 
cloud in the Federal Government is more on the program side, 
because the programs begin to say, I don't have enough money, 
like, I don't have enough money. So they look for options to 
keep their programs going, and then they begin to find that 
there are new realities out there of how they could deliver IT 
and really transform it. They think NASA JPL is a great 
example.
    And another one is Health and Human Services that's doing 
across the board, and many of their agencies are utilizing 
cloud now, especially for open and transparent programs like 
the 1000 Genomes, the oxygen database, BioSense. They're 
starting to look for ways that they can provide citizen 
services that are effective, that again reduce cost, and be 
able to scale when they need to scale things.
    Mr. Connolly. And, Mr. Wells, you actually have, you are 
one of the two companies certified so far for----
    Mr. Wells. Correct.
    Mr. Connolly. --this activity. Presumably in your 
experience with Federal clients, you have also been able to 
identify significant cost savings for the client.
    Mr. Wells. Correct, and I think a lot of it comes back to 
what Teresa was just describing as far as the elasticity and 
that sort of thing. For example, I was mentioning the DHS Web 
sites earlier. One of those is FEMA.gov, and Ready.gov, which 
is their disaster preparedness site. And moving that into the 
cloud, out of one of their data centers, used to be that they 
had to build the infrastructure in their data center to the 
peak capacity they would ever think they would need. But when 
it's not hurricane season or when there is not a major 
disaster, they need less than a tenth of the power for those 
Web sites that they do need when there is a disaster.
    So when Superstorm Sandy was coming ashore, the President 
held a press conference, and he said, go to Ready.gov, there is 
disaster preparedness information there, take a look at that. 
And that was up and running in our cloud and we instantly saw a 
huge spike, nearly a hundredfold increase in the amount of 
activity on that. And the elasticity of the cloud allowed us to 
spin up those services and spin them back down a few days later 
when they weren't necessary.
    Mr. Connolly. That's a great example. I would think 
particularly applicable to you, Mr. Mica, coming from Florida, 
in terms of the spiking in hurricane season and then coming 
down.
    Mr. Wells. And one other cautionary aspect of that tale 
which I will throw out there is that at the same time we saw 
all of this incredible spike and people flooding to the site, 
the spike in the number of attacks on those sites--denial of 
services attacks, attempts at hacking, et cetera--spiked as 
well. And the people in our security operation centers were 
watching it and were having to do some things to make sure that 
there was no interruption in service. But coming back to even a 
public-facing Web site that most of the year may not seem so 
critical, for a brief period is absolutely mission critical. 
And it's a sad testament, but it's the world we live in, that 
as soon as people started paying attention to it, people 
started attacking it, but that is the case.
    Mr. Connolly. Sure. Yeah. Well, that's another hearing for 
us, cybersecurity, because it's an incredible problem.
    Mr. O'Keeffe, I was really struck by your presentation, 
thank you. And I thought the point you made with Chairman Mica 
was an excellent one. It isn't, while hopefully we do have it 
right, I mean, the idea that we have 250-plus CIOs in 26 
agencies tells you what you need to know in terms of 
accountability.
    Mr. O'Keeffe. Right.
    Mr. Connolly. And decision making. We have to change that. 
But that alone, and maybe hopefully legislatively we've got 
that right. Enumerating the authorities of powers of that 
designated CIO, even that doesn't necessarily solve the 
problem, because what you're getting at is a culture, and 
changing a culture is always difficult. What are the 
attributes, if we were to have a successful cultural change, in 
the CIO you would look for, given private sector experience in 
the Federal Government.
    Mr. O'Keeffe. Well, I think metrics are very, very 
important. The CIO is not an IT person. They are not putting 
together wires. They are not provisioning systems. This is a 
business professional. And so what we need to do is establish 
some real metrics.
    I think that everybody is afraid of accountability, and so 
what we see is that people run away from coming up with any 
metrics at all. No metrics at all is better than any kind of 
metrics whatsoever because you are going to be held accountable 
for them. So I think we have to--let's look at the private 
sector. When we look at data center consolidation, whether it's 
NASDAQ, or Dow or whoever it may be, private sector 
organizations, they've done data center consolidations. And, 
you know, it's not a one-time operation. It's an ongoing 
operation. How long does it take to consolidate data centers or 
optimize data centers? How much does it cost? How much money do 
we have to put into the process in order to get something out 
of the process? Looking at things like PUE, it's another 
acronym, but it's a metric which shows the power efficiency of 
data centers.
    I think what we need to have is a practical framework in 
order to move the ball forward. And we need to make sure that 
when we commitments that we measure ourselves against those 
commitments. And sometimes we're going to fail, but let's be 
open about what's actually transpiring. So I think, you know, 
as far as the CIO role across agencies go, they need to have 
authority, and with authority, was it Spiderman said, with 
great power comes great responsibility.
    Mr. Connolly. Well, and one of the things I have heard from 
Mr. Spires and others who were CIOs, or are CIOs, from the 
private sector in the Federal Government, we need more 
flexibility and authority to award contracts, to make decisions 
about this system, not that system, close that, open that, you 
know, not dictatorial powers, but everything by committee means 
the path of least resistance, the least risky, but also the 
lowest payoff kind of outcome. And again, briefly, you might 
want to comment on that as well, in terms of the powers that we 
want to infuse CIOs with.
    Mr. O'Keeffe. I think you're exactly right. You know, a 
camel is a horse built by committee. And so in many 
circumstances what we see is a lot of different camels running 
around the Beltway. And so we need to be prepared to take, you 
know, to take some chances on new approaches, whether that's, 
you know, cloud computing or what you will. I think that the 
cholesterol that we see in programs like FedRAMP, the cure can 
be worse than the disease. So if we don't simplify what's going 
on, then we're never going to see any real progress.
    Mr. Connolly. And that's my final question, actually, about 
FedRAMP. By the way, I would say to you, Mr. Mica, that 
sometimes we're the problem. I mean, if you want to understand 
why we have a risk-averse culture in the Federal Government, 
Congress has to bear some responsibility here. The minute 
somebody makes a mistake, if somebody thinks there's political 
advantage in exploiting that mistake, we have a hearing and we 
haul you before Congress and we threaten you with subpoenas. 
Well, who the hell wants to take a risk and face all of that? 
And we know in the private sector, I spent 20 years in the IT 
world of the private sector, some things work and some things 
don't. And a lot of what is considered highly successful today 
started out failing. And it took a lot of, you know--and if 
private sector entities had not--if they had the tolerance for 
failure we've in the Federal Government, a lot of this would 
not have happened, I submit.
    But final question. FedRAMP. The idea that there are 80 
pending applications--and my guess is, by the way, there could 
have been more, people got discouraged.
    Mr. O'Keeffe. That's right.
    Mr. Connolly. Who wants to wait that long? And only two 
have been approved? What's your sense of the problem? What's 
the nature of the problem and what should we do to try to 
accelerate the certification process?
    Mr. O'Keeffe. I think perfection is the enemy of the good, 
and so we're trying to solve for every scenario, and that's 
just not practical. So we need to simplify the process. That's 
really it.
    Ms. Carlson. Yeah, I agree. I agree with that. I think it 
can evolve. I don't think it has to be perfect out of the gate. 
But I believe it's already, by the way, a very, very solid 
process. And they need to be confident in what they've 
developed already and get it out there and try it. It doesn't 
mean that you can't come back around and hold the companies 
accountable once they've gotten the FedRAMP. They need to be 
able, which we do, we have to show that we're patching and 
doing everything appropriately.
    But I believe they need to be confident in what they 
develop, and also the agencies probably need to get more 
involved because the FedRAMP office themselves is not going to 
be able to do everything, so the agencies are going to have to 
work with the FedRAMP office and the vendor to certify in an 
appropriate way, along with the three PAOs.
    Mr. Wells. I think the process is slowly getting better, 
just to say something positive out there. But it is important 
to remember that the FedRAMP requirement was in the end the 
result of something of a political process, again. The JAB 
wanted to make sure that this standard would be acceptable to 
all of the various agencies out there, so whenever someone 
would throw in a new barrier, they would add it to the list. So 
the bar is high. And the bar should be high. But if they had a 
little bit more authority, or there was agreement on, you know, 
amongst all the agencies that let's bring this down a couple of 
notches, it would streamline the process a great deal. But 
let's also recognize this is a brand new process with a brand 
new program that is, you know, trying to do something really 
groundbreaking across the entire Federal market space. So while 
I'd love for it to go better, I do want to give them some 
recognition that they're trying something very ambitious.
    Mr. Connolly. Very helpful. I want to join the chairman in 
thanking our panel. I think it's very thoughtful, very 
insightful.
    I will add, though, and I know Mr. Mica shares this, there 
is no way Congress is going to continue to allow this process 
to go forward without cost saving being a major criterion. The 
idea that it's sort of incidental to the process and sometimes 
not even impacted at all is a stunning thing to learn in the 
current environment, and by the way, takes an efficiency off 
the table.
    You know, you cited in your testimony, Ms. Carlson, that in 
some cases there could be 50 percent effectuated savings. Well, 
you know, in an $80 billion IT budget, let's just project and 
extrapolate that out: 50 percent saving across the board means 
we've taken $80 billion, not changed the appropriation one bit, 
but it's worth $120 billion, I mean, in terms of its buying 
power and so forth.
    But we're actually shrinking budgets, and so we've got to 
look for efficiencies, and I think the private sector is going 
to help us figure that out, because I don't know that left to 
our own devices we're going to do it.
    Mr. O'Keeffe. Just one point. As far as appropriations go, 
one of the challenges is exactly on the Hill, inasmuch as if 
you look to close data centers and they're closed in specific 
people's districts, that's not real popular. So that's, you 
know, that's definitely a factor in this equation, right? If 
you try to close--you know, the whole point in closing data 
centers is you have to shut them. And if that data center is in 
a specific district, that can be a problem, so it can be 
somewhat of a circular discussion.
    Mr. Connolly. Mr. Chairman, I thank you so much for your 
indulgence, and thank you so much for holding this hearing.
    Mr. Mica. Well, it is interesting, very educational for me. 
A couple of final points. I can't remember, I read several of 
these reports in some other background information, I guess one 
of the problems that was identified someplace, and maybe it 
was--I thought it was in GSA, they said that the quality of the 
people who are involved in evaluating some of these systems in 
all is not the level that they need, because some of these 
people, you know, they're buying paper clips and office 
supplies and stuff. And I know this is kind of touchy. Isn't 
GSA the one that's doing the certification, or responsible for 
it? Have you seen some of that or is that--anybody want to 
comment on it?
    Ms. Carlson. I mean, the individuals we have worked with, I 
don't agree with that. I think the individuals we've been 
working with in the FedRAMP process----
    Mr. Mica. They get it?
    Ms. Carlson. Yeah, they are very good. And they have the 
three PAOs and they have been--I mean, they have been very 
professional. And like Mr. Wells says, this is a really 
important process, and they haven't put anyone in there that I 
don't feel has been competent.
    Mr. Mica. The other thing too, Gerry, is we are asking 
people to dismantle sort of the standard operating safe 
procedure, buy a couple more hard drives, hire a few more 
people, as opposed to dismantling a lot of what they've got. 
And then of course Mr. O'Keeffe just said the politics of--I've 
tried FAA, I've tried some of the consolidation of the centers, 
like one in Florida, is like the, you know, every card in the 
world is pulled out to keep some things that are unnecessary in 
today's IT world, and computer and technology world. But it's 
very tough, so we end up being the problem.
    Well, again, I think we've gotten some good testimony. Just 
fascinated hearing--I guess if Amazon could get a little bit 
more experience under their belt, maybe they could get 
certified. For a mom-and-pops startup, I understand the 
difficulty you're incurring. But we should look a little bit 
more at that if we could get--yeah, and if 88 percent, you 
know, we could probably take it down a few more notches. We're 
not risking the national treasury or secrets. We could have a 
little bit more efficiency in this process.
    Well, again, I think it's most informative. I'm still 
disappointed we didn't have a couple of the key players here. 
We will convene another hearing, and we will talk to our 
leaders. If we have to bring them here voluntarily, we will; if 
we have to bring them involuntarily, we will. But we will have 
a follow-up hearing. I think it's very important.
    Mr. Connolly. Mr. Chairman, I also want to thank your 
staff. They have been very, very helpful and cooperative. We 
really appreciate it.
    Mr. Mica. The beatings will not continue?
    Mr. Connolly. No more beatings.
    Mr. Mica. The sequestration will be eliminated.
    So think you so much for joining us today and providing us 
with your testimony. Mr. Connolly, no further business? No 
further business before the Subcommittee on Government 
Operations. This hearing is adjourned.
    [Whereupon, at 4:46 p.m., the subcommittee was adjourned.]

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