[Senate Hearing 113-297]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 113-297
 
                 NOMINATION OF HON. KATHERINE ARCHULETA 

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS


                             FIRST SESSION

                               __________

  NOMINATION OF KATHERINE ARCHULETA, TO BE DIRECTOR OF THE OFFICE OF 
                          PERSONNEL MANAGEMENT

                             JULY 16, 2013

                               __________

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                  THOMAS R. CARPER, Delaware Chairman
CARL LEVIN, Michigan                 TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri           ROB PORTMAN, Ohio
JON TESTER, Montana                  RAND PAUL, Kentucky
MARK BEGICH, Alaska                  MICHAEL B. ENZI, Wyoming
TAMMY BALDWIN, Wisconsin             KELLY AYOTTE, New Hampshire
HEIDI HEITKAMP, North Dakota         JEFF CHIESA, New Jersey

                   Richard J. Kessler, Staff Director
       Lawrence B. Novey, Chief Counsel for Governmental Affairs
         Troy H. Cribb, Chief Counsel for Governmental Affairs
               Kristine V. Lam, Professional Staff Member
            Deirdre G. Armstrong, Professional Staff Member
               Keith B. Ashdown, Minority Staff Director
               Andrew C. Dockham, Minority Chief Counsel
                    Laura W. Kilbride, Hearing Clerk



                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Tester...............................................     1
    Senator Portman..............................................     3
    Senator Coburn...............................................     9
    Senator Johnson..............................................    11
    Senator Begich...............................................    19
Prepared statements:
    Senator Tester...............................................    27
    Senator Portman..............................................    28

                               WITNESSES
                         Tuesday, July 16, 2013

Hon. Mark Udall, a U.S. Senator from the State of Colorado
    Testimony....................................................     1
    Prepared statement...........................................    29
Katherine Archuleta, Nominee for Director, Office of Personnel 
  Management
    Testimony....................................................     4
    Prepared statement...........................................    31
    Biographical and financial information.......................    33
    Letter from the Office of Government Ethics..................    50
    Responses to pre-hearing questions...........................    55
    Responses to post-hearing questions..........................    91
Statement of support from Senator Michael F. Bennet..............   108


                 NOMINATION OF HON. KATHERINE ARCHULETA

                              ----------                              


                         TUESDAY, JULY 16, 2013

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 3:31 p.m., in 
room 342, Dirksen Senate Office Building, Hon. Jon Tester 
presiding.
    Present: Senators Tester, Begich, Coburn, Johnson and 
Portman.

              OPENING STATEMENT OF SENATOR TESTER

    Senator Tester. I will call to order the hearing of the 
Senate Committee on Homeland Security and Governmental Affairs.
    I am doing this without the Ranking Member being here 
because I know that Senator Udall has an important committee 
meeting that he is chairing. So that is the reason why.
    I just want to convene this afternoon's hearing to consider 
the nomination of Katherine Archuleta to lead the Office of 
Personnel Management (OPM). Senator Mark Udall, who is a 
longtime friend of Ms. Archuleta is here to introduce her.
    You may proceed, Senator Udall.

               OPENING STATEMENT OF SENATOR UDALL

    Senator Udall. Thank you, Senator Tester, Chairman Tester.
    You and I know Ranking Member Portman well, and I am sure 
he will give us, retroactively, permission for moving ahead. 
That is partly because we have such a great candidate here to 
head the Office of Personnel Management.
    I am truly proud to introduce Katherine Archuleta to your 
Committee and to the Congress as you consider her nomination. 
She has an impressive range of accomplishments that make her 
completely, totally well qualified to be the Director of OPM, 
and I am confident that she will do a tremendous job leading 
this agency.
    The Office of Personnel Management performs critical 
functions affecting the entire Federal workforce which, in 
turn, directly affects the quality of work at executive branch 
departments and agencies.
    And I know all of us want Federal agencies, Mr. Chairman, 
to work efficiently to provide the greatest value to the 
American taxpayer. Having a talented and motivated workforce is 
the key to being successful in that mission, and that is why we 
need a leader like Katherine at the helm.
    If you think about it, OPM's responsibilities range from 
employee recruitment and retention, managing pension benefits, 
and conducting hundreds of thousands of investigations and 
security clearances for current and future Federal employees. 
We need someone managing these responsibilities who is sharp, 
hardworking, and dedicated to the goal of making government 
work as effectively and efficiently as possible. Katherine, I 
can attest, embodies all of these attributes.
    I have known her for many years. We were just talking about 
how many years. We decided we would not talk about how many 
years; we would talk about the quality of those years and what 
we have been able to accomplish together.
    I have tremendous respect for her. She has an impressive 
resume. She has dedicated her life to public service. She has 
always worked to give back to whatever community or State she 
has found herself in and, most importantly, to the country we 
all love--the United States of America.
    She spent the early part of her career working for the 
Denver Public Schools. She continued serving the people of 
Denver at City Hall in two separate administrations--first, 
with Mayor Federico Pena, and over a decade later she came back 
as a senior advisor to then-Mayor John Hickenlooper.
    She has extensive experience here in Washington, D.C., as 
well. She served as Chief of Staff to U.S. Secretary of 
Transportation Pena and, recently, to a good friend of mine who 
I served with in the House and who served as our Secretary of 
Labor, Hilda Solis.
    Finally, interspersed throughout her career in government, 
she has consulted with charities, nonprofits, cities, regional 
governments and businesses to help them pursue community 
development, workplace diversity and crisis management 
strategies.
    As I look at all of this, Mr. Chairman, there is a common 
thread, when you look at Katherine's career and her successes, 
and that is her capacity and her ability to work with 
individuals and organizations, identify priorities and then, 
notably, create the successful environment for the wide-ranging 
implementation of those priorities. That is who we need at the 
helm of OPM, and it is what our citizens and what Americans 
expect and demand.
    What I am saying is that throughout her career she has 
demonstrated a wide capacity to lead, to motivate, and to work 
constructively with a diverse range of people and 
personalities.
    And I hope anybody from the East does not take this in the 
wrong, but I am going to say that as a true westerner, 
Katherine's personal integrity, strong sense of right and 
wrong, and the obvious pride that she takes in her work make 
her a top-notch choice to lead our Federal workforce.
    And, again, as you can tell, Mr. Chairman, Senator Coburn 
and Senator Johnson, I am really honored to have the privilege 
to introduce Ms. Archuleta to this Committee. She is eminently 
qualified for the role the President has nominated her for. I 
fully endorse her nomination, and let me say that I hope the 
Committee will act swiftly to send her nomination to the full 
Senate.
    Thank you, Mr. Chairman.
    Senator Tester. Well, Senator Udall, thank you for your 
statement and thank you for joining us. As I said earlier, I 
know you have another committee to chair. We appreciate your 
taking the time and appreciate your support for Ms. Archuleta.
    And I know that Senator Bennet also sends his regrets that 
he could not be here, but he has filed a statement for the 
record on your behalf.\1\
---------------------------------------------------------------------------
    \1\ The Statement for the Record from Senator Bennet appears in the 
Appendix on page 108.
---------------------------------------------------------------------------
    So thank you very much.
    Katherine Archuleta has filed responses to a biographical 
and financial questionnaire, answered pre-hearing questions 
submitted by the Committee and had her financial statements 
reviewed by the Office of Government Ethics. Without objection, 
this information will be made a part of the hearing record, 
with the exception of the financial data which are on file and 
available for public inspection in the Committee offices.
    Ms. Archuleta has a long history of public service and 
wide-ranging experience managing large groups of employers as 
well as navigating the personnel process at the State, local 
and national levels.
    Some of this you will have heard already from Senator 
Udall.
    Ms. Archuleta served as chief advisor to two different 
cabinet secretaries--first, Chief of Staff to then-Secretary of 
Transportation Federico Pena and, then later, as Chief of Staff 
to then-Secretary of Labor Hilda Solis.
    Ms. Archuleta also served as Senior Policy Advisor in the 
United States Department of Energy (DOE).
    I want to thank you for being here today, Ms. Archuleta. 
Thank you for joining us. Congratulations on your nomination.
    Senator Portman is not here, but I would certainly ask 
Senator Coburn if he has an opening statement.
    Senator Coburn. I will defer. I have a meeting. Actually, 
Senator Portman is here.
    Senator Tester. He is here, OK, and Senator Coburn 
deferred.
    I have just got done with my opening statement on Katherine 
Archuleta, Senator Portman, if you would like to proceed.

              OPENING STATEMENT OF SENATOR PORTMAN

    Senator Portman. Thank you. I appreciate the Ranking Member 
of the full Committee giving me a moment here.
    I just talked to one of your Senators from Colorado, Mr. 
Udall, out in the hall about you. He said he introduced you. 
And we are glad to have you here.
    I will try to keep this short because I know we have a lot 
of questions, and I see I have a couple colleagues here.
    But I will say you have been nominated to lead an agency 
that has a lot of important responsibilities in the years 
ahead, including in the next couple years. It is core to how we 
recruit people, train people, and retain the Federal workforce, 
which is a focus of Senator Tester and my Subcommittee.
    And, additionally, you have huge health care 
responsibilities coming out of Obamacare but also existing 
responsibilities for Federal employees and also, obviously, 
implementation of the Affordable Care Act (ACA).
    You will be charged with tackling management challenges 
such as this pension claims backlog that our Subcommittee is 
very interested in and the ineffectiveness of some of the 
security background investigations that Senator Tester and I 
did serious legislation on.
    I look forward to hearing how your background prepares you 
for these tasks because they are incredibly important.
    And, again, I look forward to having the opportunity to ask 
some more questions as we get into it and would now, Mr. 
Chairman, like to turn it back to you and my colleagues.
    Senator Tester. Well, thank you, Senator Portman.
    And, Senator Johnson, do you have an opening statement?
    Senator Johnson. No, Mr. Chairman.
    Senator Tester. OK. Well, again, I want to thank our 
witness today, Ms. Katherine Archuleta.
    Our Committee rules require that all witnesses at 
nomination hearings give their testimony under oath.
    Ms. Archuleta, would you please raise your right hand?
    Do you swear the testimony you are about to give to the 
Committee will be the truth, the whole truth and nothing but 
the truth; so help you, God?
    Ms. Archuleta. I do.
    Senator Tester. Let the record reflect that the witness 
answered in the affirmative.
    Ms. Archuleta, you have some family members here today. You 
are certainly welcome to introduce those folks if you want and 
you may proceed with your statement.

 TESTIMONY OF KATHERINE ARCHULETA\1\ TO BE DIRECTOR, OFFICE OF 
                      PERSONNEL MANAGEMENT

    Ms. Archuleta. I will proceed with my statement and 
introduce them during my statement.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Archuleta appears in the Appendix 
on page 31
---------------------------------------------------------------------------
    Thank you, Chairman Tester, Ranking Member Portman, and 
Members of the Committee for the opportunity to appear before 
you today. It is a privilege for me to be considered as the 
President's nominee to be Director of the Office of Personnel 
Management, and I thank the Committee for its consideration of 
my nomination.
    In addition, I want to thank my home State Senator, Mark 
Udall, for his gracious comments. We have known each other for 
a long time, and Senator Udall is an incredible leader for the 
State of Colorado, and I am certainly honored to have been 
introduced by him today.
    I, especially, want to recognize and thank my husband of 33 
years, Edmundo Gonzales, and my dear friend, Loida Tapia, who 
joins me here today. I also want to thank my daughter, Graciela 
who, unfortunately, could not be here today.
    Throughout my career, I have given back to my community and 
my country. From my time in local government to my various 
roles in senior leadership in Federal Government, I have been 
passionate about public service. I have been a leader and a 
manager, a small business owner and an employee, a communicator 
and a listener. I have made tough choices about budgeting as 
well as decisions about recruiting outstanding individuals and 
removing those who have failed to perform. I believe in the 
value and the honor of men and women who choose to serve their 
country, both in and out of uniform. And, if confirmed, I will 
approach my work as the Director of OPM with that same sense of 
service and inspiration.
    Having worked at three cabinet-level agencies, I know that 
the one common thread at every agency is that you need top 
talent working at top performance to achieve your mission. That 
starts with recruitment; that is, inspiring people from all 
communities and all backgrounds to join in the noble task of 
self-government in our democracy and hiring the very best from 
all who step forward.
    Talent must be sustained, and employees require training 
throughout their careers. A sense of personal growth and 
contribution helps keep our best employees working in 
government. Employees' development over time and their reports 
of their experience with the Federal human resources (HR) 
system are a constant feedback loop to their managers. Such 
feedback, read poorly, can frustrate and demoralize our 
workforce, and read right, it can support and improve our 
workforce.
    As Director, I will lay out three important goals based on 
my desire to strengthen OPM's fulfillment of its mission--
utilizing top talent, encouraging innovative approaches and 
renewing the commitment to strong leadership.
    One of my first priorities will be to build on OPM's health 
care experience, standing up the Multi-State Plan (MSP) Program 
and implementing the provisions of the Affordable Care Act. I 
realize the importance of the timely establishment of easily 
understandable health care plans.
    I will also prioritize the improvement of the Agency's 
information technology (IT) systems. In past attempts to 
transition retirement services into a digital system, OPM fell 
short. Identifying new IT leadership, using existing agency 
expertise, and seeking advice from experts from inside 
government and the private sector, I believe that OPM can 
successfully update its IT systems. If confirmed by the Senate, 
I will work with my senior management team to create a plan, 
within 100 days of assuming office, on modernizing IT at OPM. I 
will add a chief technology officer (CTO) position specifically 
focused on assessing and improving the technology products that 
OPM uses.
    Finally, if confirmed, I will work throughout my tenure to 
inspire the next generation of Americans to experience the 
nobility and the excitement that public service offers. I will 
work to strengthen and improve the services offered by OPM for 
the Federal community as part of its core mission, from resume 
to retirement.
    At this time, I would be pleased to answer any questions 
the Committee may have.
    Senator Tester. Thank you, Ms. Archuleta.
    We will put 5 minutes on the clock and have as many rounds 
as we need.
    I will start my questioning with the standard question that 
we ask of all nominees. Is there anything you are aware of in 
your background that might present a conflict of interest with 
the duties of the office to which you have been nominated?
    Ms. Archuleta. None that I am aware of.
    Senator Tester. Do you know of anything, personal or 
otherwise, that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated.
    Ms. Archuleta. None that I am aware of.
    Senator Tester. Do you agree, without reservation, to 
respond to any reasonable summons to appear and testify before 
any duly constituted committee of Congress if you are 
confirmed?
    Ms. Archuleta. I do agree.
    Senator Tester. Thank you.
    I have introduced legislation to add the loss of a child as 
a condition that allows an individual to receive time off under 
the Family and Medical Leave Act (FMLA). OPM could generate 
momentum for this small, but I think needed, bill by working 
with the President to establish an Executive Order (EO) to 
provide FMLA leave to a Federal employee in the case of losing 
a child, which may be, in my opinion, the most terrible 
circumstance that could happen to a family or a parent.
    Will you commit to looking at the possibility and 
discussing it again when time allows if you are confirmed on 
this job?
    Ms. Archuleta. Senator, I do commit to you to continue the 
discussions with you and Members of the Committee on this 
important issue.
    I agree with you; there could be no greater loss than the 
loss of a child. And the workforce flexibilities that we need 
to offer to our employees during times of bereavement are 
important ones.
    I know that there are some already in place, like annual 
leave and sick leave and donated time, but I would look forward 
to having further discussions with you on this important topic.
    Senator Tester. Well, thank you.
    Look, you are not in the position yet to fully take control 
of the reins and explore all issues. Senator Portman talked 
about it in his opening statement, and that is the flaws and, 
really, inefficiencies in the process through which our 
government vets the folks who gain access to this country's 
most sensitive data.
    What are your thoughts on the security clearance process 
and the need for reform?
    Ms. Archuleta. Senator, I know that you and Senator 
McCaskill recently held a hearing on this important topic, 
which I followed.
    With regard to the background investigations, OPM, as I 
understand it, has worked very closely with its partners--the 
Office of Management and Budget (OMB), the Department of 
Defense (DOD), and the Office of the Director of National 
Intelligence (ODNI)--to make sure that the backlog of 
background investigations has been reduced. And Federal 
Investigative Services (FIS), has in fact been able to do 
that--in fact, to the point that the Government Accountability 
Office (GAO) has removed it from the High Risk List.
    I also believe, though, that much more needs to be done to 
continue the role of oversight, especially as it looks at its 
contractors. I know this is of great interest to you and to 
other Members of the Committee.
    And I would work closely, if confirmed, with the partners 
to make sure that oversight continues and, in fact, work 
closely with the Inspector General (IG) to make sure that those 
background investigations are conducted properly, and that if 
there is any fraud or falsification of those background 
investigations that the contractors or the persons responsible 
would be held responsible and would pursue the steps necessary.
    I also understand that transparency and cost are very 
important issues and would work with the IG and the Director of 
FIS to make sure that the costs that are being charged to the 
FIS customers are clear and transparent and fully understood by 
the customer.
    I look forward to working with OMB, DOD, and ODNI to make 
sure and advance the role that OPM plays in the background 
investigations and securing our Nation's most sensitive 
information.
    Senator Tester. Thank you.
    There is a $2 billion fund with which OPM finances security 
clearance and background investigations. The OPM General 
Counsel has ruled that the current law precludes monies from 
the revolving fund to be spent on audits, investigations, and 
oversight activities. To say this drives me a little bit crazy 
is an understatement.
    As a result, an audit has never been performed on a $2 
billion revolving fund on their financial statements in their 
entirety.
    There is legislation introduced by myself and others on 
this Committee, and included in the President's Fiscal Year 
2014 budget proposal, to allow the revolving fund dollars to be 
spent on oversight activities. Do you support this?
    Ms. Archuleta. Yes, sir. In my pre-hearing questions, I 
responded to this, and I will respond again in this testimony 
to say that I do support the use of those funds by the IG to 
conduct audits of the Federal Investigative Services.
    Senator Tester. Thank you.
    I would also assume you would work closely with us to make 
sure that this comes to fruition.
    Ms. Archuleta. Absolutely, sir.
    Senator Tester. OK. I will kick it over to you, Senator 
Portman.
    Senator Portman. Thank you, Mr. Chairman.
    I am pleased to hear that because we got testimony saying 
that their hands are tied at the IG's office due to the current 
interpretation from OPM. So the commitment I hear you making 
today is that you share those concerns and that you will give 
the IG access to revolving funds. Is that correct?
    Ms. Archuleta. That is correct, Senator.
    Senator Portman. With regard to health care, as I said 
earlier, you are going to have some significant 
responsibilities when it comes to managing health care 
programs. The Office already does, and it is taking on new 
ones. Hopefully, we will have time to discuss some of these 
programs in more detail, but before we do that let me get a 
better understanding of your experience and your background in 
this topic.
    I listened to your testimony, and we have it before us. You 
talked about having some experience managing change in 
different capacities, and you indicated, as I understood it, 
that you made a commitment to have a chief technology officer 
position that currently does not exist at OPM.
    Having said that, I do think experience is invaluable, 
particularly because you will be asked to hit the ground 
running. So I would like for you, if you could, for the 
Committee, to discuss your background with managing health care 
programs and particularly managing change or reform efforts 
within the health care arena.
    Ms. Archuleta. Senator, my experience of 35 years as a 
leader has offered me the opportunity to see a lot of different 
types of reforms in each of the institutions I worked. As a 
leader, I was responsible for overseeing that change and 
leading a team of experts in each of those areas.
    I think the most important thing that a leader can do is 
assemble the right team, and I can assure you that as the 
Director of OPM I would assemble the right team that could 
advise me on the issues, especially technology reform, which I 
mentioned to you in my opening statement.
    With regard to health care reform, I believe that OPM has 
on board, right now, the experts in health care implementation. 
The long experience that OPM has in implementing health care is 
one that I will rely on as the leader of OPM if I am confirmed.
    My experience is one in which I will utilize the 
experiences I have had as a leader of major institutions, 
working with, as I have mentioned before, mayors, and 
Secretaries, and would utilize the teams that I have put in 
place to bring that expertise to the OPM.
    Senator Portman. So I kind of read between the lines there. 
You do not have the experience in health care, but you believe 
you can put together a team that does have it.
    I would just suggest that this is probably your biggest 
challenge, particularly because under the Affordable Care Act, 
as you know, you are being asked to set up these Multi-State 
Plans. And one major concern is that they have to comply with 
State-level insurance requirements, which is going to be quite 
a challenge.
    So, lacking that experience, how do you anticipate 
navigating through this process, given the diversity of 
requirements and regulations in each State?
    Ms. Archuleta. As you know, Senator, the Affordable Care 
Act mandate to OPM to stand up the Multi-State Plan Program is 
one that has been in process already for 2 years. The timeline 
for the completion of that and notification of enrollees would 
be October 1. So a lot of work has already been done toward 
that effort.
    As I said, the team that is in place at OPM is one that I 
would rely on, should I become the Director of OPM. I would 
rely on their expertise and inform myself immediately of the 
steps that have been taken.
    Senator Portman. We just learned the Administration wants 
to delay key components of the exchanges, specifically the 
Small Business Health Options Program (SHOP) exchange, until 
2015 due to operational challenges. Of course, we know about 
the employer mandate as well.
    We have heard that there are challenges in the Multi-State 
Plans, too. How confident are you that insurers will be able to 
offer these plans in the timeframe laid out by the Affordable 
Care Act?
    Ms. Archuleta. In my briefings with the managers of the 
Multi-State Plan Program, I have been assured that they will 
meet their timeline, Senator.
    Senator Portman. And do you anticipate some more delays in 
this process as we have seen in others, and if so, how would 
you anticipate handling that?
    Ms. Archuleta. Senator, I am not anticipating any of those 
delays. Again, I would point to the tremendous work that has 
been put in place and the collaboration between OPM and the 
Department of Health and Human Services (HHS) in making sure 
that they could stand up the Multi-State Plans in the time 
given.
    Senator Portman. With regard to the President's budget on 
changing the Federal Employees Health Benefits Plan (FEHBP), as 
you know, the Congressional Budget Office (CBO) has taken a 
look at that proposal and indicated that it would cost $1.8 
billion more during the 10-year window.
    My understanding is that the government cost is primarily a 
result of higher contributions toward increased premiums for 
Federal employees, retirees, and their families as a result of 
the proposal. This is in the President's budget, and it is 
something that OPM would be responsible for--seeking authority 
to contract with new types of plans.
    In light of that CBO assessment--$1.8 billion over 10 
years--can you tell me if you will continue to support this 
proposal that CBO has now scored that would have such a huge 
increase in cost to the Federal Government?
    Ms. Archuleta. I have not seen the report by CBO, but I can 
assure you, Senator, that as the Director of OPM, if I am 
confirmed, I will review all the information before me and work 
with you to answer the questions and would be eager to have 
further discussions with you about this issue.
    Senator Portman. Great. Thank you, Ms. Archuleta.
    Thank you, Mr. Chairman.
    Senator Tester. Senator Coburn.

                  STATEMENT OF SENATOR COBURN

    Senator Coburn. Well, congratulations on your nomination. 
You have a very interesting background and a varied history.
    I have just a couple comments on what you said. Why--and 
maybe, Senator Tester, you can explain this to me. IG is funded 
at OPM. Why would they not have access to the revolving fund 
out of their original funds?
    Senator Tester. What we were told in a Committee meeting 
was that to fund the investigation, they needed money to do 
that and that they could not get any money to fund that 
investigation from the general fund, and the General Counsel 
would not allow those dollars to be spent on audits or----
    Senator Coburn. But they could have used other funds?
    Senator Tester. Oh, they absolutely could have.
    Senator Coburn. But they chose not to.
    Senator Tester. Yes.
    Senator Coburn. All right. Thank you.
    One of the things--when they were talking with you about 
background investigations and security clearances, you said you 
would hold the contractor responsible. I have heard that a lot 
in the last 10 years up here. What does that mean to you--
holding a contractor responsible?
    Does that mean terminating the contract?
    Does that mean taking the contractor to court to get 
damages for when they did not perform?
    What does that mean to you?
    Ms. Archuleta. Senator, it means to me that in the review 
of the information or evidence, if a contractor has not 
performed or has falsified information; there would be a review 
of that contract and his or her performance, and appropriate 
actions would be taken. In some cases, that would mean 
debarment.
    Senator Coburn. Yes. The other thing that I would be 
interested in--and I will talk with you in the office.
    Ms. Archuleta. Yes, sir.
    Senator Coburn. We have a meeting at 5. So I will get to 
ask a lot of questions that I will not get covered here today.
    But, you know, how we buy things is one of our biggest 
problems in terms of not being smart about how we contract, 
about putting the rules in the contract. So we will visit about 
all that.
    A recent story in Bloomberg explained that some major 
metropolitan cities across the United States are planning 
cutting their costs by enrolling their retirees who are not yet 
Medicare-eligible into the State exchanges. In concept, what do 
you think about the FEHBP plan being shelved in place of 
Federal employees just going into the exchanges under the ACA, 
at significant savings to the Federal Government?
    Ms. Archuleta. I have not seen that Bloomberg article, 
Senator, but my reaction today would be that the Affordable 
Care Act was designed for individuals without insurance and 
small businesses who could not provide insurance to their 
employees.
    I think there would need to be careful consideration before 
there was discussions about employees who had health care 
insurance, giving up that insurance to join the Multi-State 
Plans or other plans within the exchanges. It was not the 
designated purpose of the Affordable Care Act.
    Senator Coburn. But you would agree if we did that there 
would be significant savings to the Federal Government?
    Ms. Archuleta. As I said, sir, I have not seen that 
information. I would be glad to review that information and 
talk about it further with you.
    Senator Coburn. In response to one of your questions that 
the Blue Cross-Blue Shield-funded study by Avalere, allowing 
more competition in the FEHBP program, could lead to higher 
costs for many enrollees.
    Are you aware the CBO found the President's proposal for 
increased competition would increase the deficit?
    In your testimony, you said that you were aware of that.
    Ms. Archuleta. I am aware that such a study has been 
conducted. I do not know the details of that study.
    Senator Coburn. OK. Fair enough.
    FEHBP currently covers 8 million Federal employees or 
enrollees at a cost of about $30 billion a year. Next year, 
FEHBP will have to meet virtually all of the insurance 
requirements of the Affordable Care Act. And as they do that, 
the average cost of a health plan is going to increase and so 
will the cost of the average government contribution.
    Do you have any sense of the rough cost--the total cost--of 
the increase in FEHBP outlays due to complying with the 
insurance exchanges in the Affordable Care Act.
    Ms. Archuleta. Senator, I do not know the costs, but I know 
that the FEHBP is very concerned about providing the best 
health care services for the least amount of cost.
    I also know that the discussions about modernization of 
FEHBP are ones that are supported by the OPM as well as by the 
President.
    And I would look forward to having further discussions with 
you about what you think should be considered but also in 
moving forward on the modernization of the FEHBP.
    Senator Coburn. OK. My time is expired.
    Senator Tester. Senator Johnson.

                  STATEMENT OF SENATOR JOHNSON

    Senator Johnson. Thank you, Mr. Chairman.
    Ms. Archuleta, again, welcome. I certainly do appreciate 
your stopping by the office and enjoyed our conversation.
    In your past positions as Chief of Staff, Department of 
Labor (DOL) and Chief of Staff, Department of Transportation 
(DOT)--stepping back a little, one of the odd things I found 
about being a U.S. Senator and managing a budget was that in 
terms of the people that we employ as staff members, all we do 
is pay their salary. All their benefits that I was certainly 
used to having to account for in business, and pay for, are 
just taken care of by somebody else.
    How is it handled in the agencies?
    Ms. Archuleta. The personnel costs within the agencies are 
estimated by the director of the budget. Those personnel costs 
are the first and foremost, as you know, that are considered 
within the building of a budget.
    Senator Johnson. But I mean do you know--I mean does the 
agency pay directly for that?
    Is it attached to the individual?
    Ms. Archuleta. The costs are assigned----
    Senator Johnson. So, when you are hiring somebody, do you 
have to factor in it is going to cost you, we will say, $50,000 
to hire somebody and then it is going to cost X number of 
dollars for benefits?
    Ms. Archuleta. The assignment of the number of personnel 
that can be hired within each agency is based on the amount of 
revenues it receives within its budget, and the costs are 
assigned accordingly.
    Through workforce planning is how each of the managers 
estimates what it will cost to bring on the employees. When 
there are budget cuts, as now in terms of sequestration, the 
managers have to plan carefully through their workforce 
planning to be sure that they can afford not only the salaries 
but the benefits.
    Senator Johnson. Well, I guess the point I am getting to is 
managers within agencies--do they understand the total value, 
or the cost, of benefits in relationship to salary levels?
    Ms. Archuleta. Yes, Senator, they do.
    Senator Johnson. So do you have a basic estimate of what 
percentage benefits are in relationship to total salary?
    Ms. Archuleta. No, sir, I do not.
    Senator Johnson. But you are saying managers understand 
what those costs are.
    Ms. Archuleta. The individual managers--for example, at the 
DOL or the DOT--working with each of the agency heads as they 
estimate their budget needs, personnel, and the costs of those 
personnel are estimated first as well as the program costs. And 
those are brought forward to the budget office and then 
certainly to the agency leadership to review.
    Senator Johnson. But, again, you have been chief of staff 
in two agencies, and you are saying you do not understand how 
much benefits are as a percentage of total salary?
    Do you have a ballpark? Any idea?
    Ms. Archuleta. No, sir, I do not. But I do know that as a 
manager I relied on the expertise of each of the staff 
responsible for budget development to determine those costs.
    Senator Johnson. OK. By the way, it is the Department of 
Labor's Bureau of Labor Statistics that publishes those stats.
    I will just give it to you. The benefits for a civilian 
workforce is about 30.9 percent----
    Ms. Archuleta. Thank you, sir.
    Senator Johnson [continuing]. Which is now my question.
    Certainly, one of the issues that my chief of staff is 
grappling with here in Congress, never having really to worry 
about that--now all of a sudden because of the Affordable Care 
Act I think all these offices are trying to figure out how we 
are going to deal with that.
    Do you have any idea how that is going to work within the 
Federal workforce, when you have all these managers or Members 
of Congress now all of a sudden having to account for health 
care benefits?
    Ms. Archuleta. As I said earlier, sir, the Affordable Care 
Act is designed for individuals without insurance, and so the 
cost to the individual agencies are predicted through the 
FEHBP.
    Senator Johnson. Well, would you anticipate as part of your 
role as the Director of OPM, working with Congress in terms of 
how we actually implement the Affordable Care Act in our 
offices?
    Ms. Archuleta. I would look forward to having those 
discussions with you and if there is assistance that you needed 
in estimating those costs.
    I also think that each of the agencies are very well versed 
in what the health care costs are and have been utilizing those 
estimations as they determine their budgets.
    Senator Johnson. OK. Let's talk a little bit about the 
Inspectors General. Certainly, I have come to respect the role 
that not only the Government Accountability Office brings to 
Federal Government but also the Inspectors General.
    Within OPM, you actually have staffed a Senate-confirmed 
IG, correct.
    Ms. Archuleta. Correct.
    Senator Johnson. Can you just give me your outlook in terms 
of how those IGs should be used?
    Ms. Archuleta. Yes. I think there needs to be a positive 
relationship, Senator, with the Inspector General. During my 
time at the DOL, the DOL experienced a very positive 
relationship. I think the oversight role that the Inspector 
General plays is an important one and can offer great insight 
into either management difficulties or changes that should be 
made.
    I expect to build on the relationship that John Berry had 
with the Inspector General, Mr. Patrick McFarland, at the OPM, 
and I would look forward to that relationship.
    Senator Johnson. OK. Thank you.
    Thank you, Mr. Chairman.
    Senator Tester. As you may or may not know, the Veterans 
Administration (VA) is dealing with a lot of issues that 
revolve around mental health with the veterans who are 
returning from theater, especially Iraq and Afghanistan.
    Counseling, marriage, and family therapy professions lack 
both occupational series designations for the Federal 
employment. The VA requested such a series in 2009. OPM has not 
yet created the designations.
    So we learned at a recent hearing that these mental health 
workers are very much urgently needed to help our returning 
veteran population, especially rural vets. Establishing these 
series would go a long way toward expanding mental health care 
across America for our veterans.
    Would you work to make sure that these series are created 
as the VA has requested it?
    Ms. Archuleta. Senator, I would look forward to working 
with you.
    I do not know why that series has not been reviewed and 
approved. I would look forward to working with you on that.
    I think it is very important that the OPM does everything 
it can to help serve our veterans and, in turn, ensure that the 
Veterans Administration can serve our veterans. And I would 
look forward to having further discussions with you about that.
    Senator Tester. I appreciate that very much because there 
is a lack of professionals out in the field----
    Ms. Archuleta. Yes, sir.
    Senator Tester [continuing]. And this would help meet some 
of those needs.
    Currently, Federal employees pay into their retirement 
plans over the course of their careers. My office is contacted 
literally weekly by people who have been waiting 9 or 10 months 
for their pensions to be paid.
    I have been told that OPM tries to pay at interim rates of 
80 percent of estimated pension because the estimated pensions 
are not always accurate. Some folks are getting closer to 40 or 
50 percent from their agencies.
    I have been assured for a few years now that OPM is 
addressing the backlog. This really is not helping the folks 
who dedicate their lives to public service, and it is pulling 
money out of an economy that could be in circulation.
    If confirmed, what would you do to reduce the backlog in 
the processing of retirement applications?
    Reports have that backlog somewhere between 30,000 to 
50,000 pensions. What would you do to reduce that?
    Ms. Archuleta. Senator, in my opening remarks, I mentioned 
the fact that I would focus in on IT modernization, especially 
in the area of retirement services. Bringing the retirement 
services into the 21st Century is most important to relieve the 
backlog. I would ask that staff bring to me within the first 
100 days a plan on how we might modernize the information 
technology at the Office.
    With regards specifically to the annuitants, I know that 
the Retirement Services has worked very hard to reduce the 
number of days between the time of retirement and the 
annuitants' first check. The most important step that is taken 
is to work directly with the HR managers to be sure that they 
have completed all of the information that they are sending 
over to OPM to begin the retirement process. I think that has 
been an important step and they continue to refine that 
process.
    In addition, Senator, I would make sure that we are doing 
everything we can to make sure that first check gets there as 
quickly as possible and working with families that have perhaps 
more complicated retirement processes.
    I would look forward to further discussions with on you on 
this and your concerns.
    Senator Tester. Absolutely. OK.
    OK. So, if folks are getting 40 to 50 percent in many of 
the cases, of their retirement--so why can't employees just 
elect to receive the amount quoted by their employing agency, 
and then if there is an overpayment, it could be settled after 
OPM processes their applications? Why couldn't that be done?
    Is there a problem with that?
    Ms. Archuleta. I think the issues of the administrative 
efforts that are needed to collect those funds would be very 
complicated, sir. And I think in fact I would be concerned that 
many of the annuitants may have spent that money, and it would 
be very difficult for them to pay it back.
    I would, again, welcome the opportunity to hear your ideas 
on this issue.
    Senator Tester. Well, I think what would solve the problem 
is if you could get the backlog reduced to a reasonable number.
    Ms. Archuleta. I think so, too.
    Senator Tester. And I hear you have a commitment for that. 
Senator Portman.
    Senator Portman. Thank you, Chairman.
    You talked earlier about the VA and one of the challenges 
that we have, and this has been before this Subcommittee, 
particularly on mental health issues, brain injuries, post-
traumatic stress disorder (PTSD) and so on.
    And I am surprised Senator Coburn did not already raise 
this with you. So I am going to raise it because----
    Senator Coburn. It is coming.
    Senator Portman. He says, it is coming.
    But this is something that he, frankly, brought to my 
attention initially, and I think it is an issue that relates to 
the VA and particularly problematic there, given the backlogs, 
but it relates to our whole Federal Government.
    There is this thing called official time, and this is a 
practice where employees are being paid by us as taxpayers, 
government salaries funded entirely by taxpayers, to perform 
work that is totally unrelated to their governmental duties. 
And, in response to our advance questions I had about this, you 
stated that you support the reasonable and necessary use of 
official time.
    Senator Coburn recently sent a letter to the Secretary of 
the VA that highlighted the effects that official time is 
having on the VA, given particularly the problem that they have 
on their backlog. They have 257 employees paid by the taxpayers 
to serve veterans who are on 100 percent official time. Many 
were hired initially, by the way, to provide medical services 
to those veterans, we were told.
    Across the Federal Government, official time now accounts 
for $155 million, 3.4 million man hours, according to the 
agency that I believe that you will soon head. That is 
equivalent to over 1,600 employees not coming to work for a 
year.
    So, particularly with regard to VA, given their challenges 
in dealing with the claims backlog, dealing with homelessness, 
dealing with the issues we have talked about today, and 
expanding access to benefits and services being their top 
priority for fiscal year 2014, do you think having 257 full-
time VA employees drawing their full salary by working 100 
percent of their time on official time is reasonable?
    Ms. Archuleta. Senator, I understand that official time 
along with collective bargaining and belonging to labor 
organizations is protected by Federal law. I think that each of 
the departments negotiates with its bargaining units on the use 
of official time, and it is the responsibility of managers in 
the departments to make sure that each of those individuals on 
official time are using that for the purposes as it was 
designated. I would encourage all agencies to be sure that is 
exactly what is happening.
    I am not familiar particularly with the VA situation, but 
should they need any information or tools that OPM could offer, 
I would be glad to offer them if I am confirmed.
    Senator Portman. Can you tell us today you are willing to 
look into this issue?
    Ms. Archuleta. I would very much like to understand the 
numbers that you have quoted to me, sir.
    And I would look at my own experiences with official time 
at the DOL, which was valuable. It helped us to resolve issues. 
It helped us to anticipate issues. That was a positive 
experience at the DOL.
    And I believe that other agencies have other experiences 
that I would like to discuss with them.
    And I look forward to working with the Federal Labor-
Management Council to take a look at the use of official time. 
The Federal Labor-Management Council, sir, has a pilot program 
right now, and it is focused in on goals, engagement, 
accountability, and results (GEAR). And I think that this is an 
area labor and management can work on together.
    Senator Portman. Yes, I think it is about having an 
effective management tool or not, and having this official time 
obviously makes it tougher for DOL to meet their high 
expectations they set for themselves, to increase services and 
benefits and to deal with the backlog.
    OPM is going to have some big challenges ahead, as we have 
talked about, and as Director there you are going to be in a 
position to set what policies are in place to implement 
official time at OPM. What would you plan to do there?
    Ms. Archuleta. I am not familiar with the agreements right 
now on official time at the OPM, but if I am confirmed, I will 
inform myself about those.
    Senator Portman. The Federal skills gap--GAO, in its 2013 
report and the President, again, in his budget stressed that 
identifying and addressing the critical skills gaps are 
undermining agencies' abilities to meet their vital missions. 
Lots of examples here, but the importance of hiring a 
cybersecurity workforce is one that has been talked about by 
GAO.
    What role do you believe OPM plays in helping agencies 
identify and address these critical skills gaps, and what would 
you, as Director, do to approach this issue?
    Ms. Archuleta. The Director of OPM sits as Chair of the 
Chief Human Capital Office (CHCO) Council, and the CHCO Council 
has already begun to analyze the critical skills gaps and is 
designing recommendations for the entire CHCO Council to review 
on these critical skills gaps, especially in the area of 
cybersecurity.
    Senator Portman. Thank you.
    My time has expired.
    I appreciate your being with us today.
    Senator Tester. Senator Coburn.
    Senator Coburn. Thank you.
    Just a little followup on official time--the agency had not 
published a comprehensive list of official time expenditures, 
and it has come under some criticism. Will you commit to do 
that?
    It did it for years, and then all of a sudden did not do 
that. Would you commit to do that so we can see it?
    Ms. Archuleta. Well, Senator, as a private citizen, I am 
not entitled to know the----
    Senator Coburn. I am asking, should you become manager of 
OPM, will you commit to give this Committee an annual report on 
the amount of time that is spent on official time and the 
number of employees?
    Ms. Archuleta. As a manager of OPM, I will review what the 
status is of the report, and I would inform myself on what is 
happening.
    Senator Coburn. But you will not commit to report to us 
official time expenditures in the Federal Government.
    Ms. Archuleta. Senator, because I do not understand at this 
point, because of my limitations as a private citizen and what 
is involved with the official time report, I cannot make that 
commitment. If I am confirmed, I will look into it.
    Senator Coburn. It was done 8 years in a row, and then all 
of a sudden, stopped. So I think it is important information to 
have.
    One other thing I would just like to question on--you are 
going to place a chief technology officer at OPM, and the full 
Committee--Senator Carper and I both--we have been looking at 
chief information officers (CIOs) and technology. And your 
statements to staff in the staff brief was that you would make 
that a co-equal with the chief information officer, and I just 
want to caution you on that.
    You have a chief information officer who is responsible for 
the information. Technology is the way you get it, but it is 
the tool. I would caution you to think long and hard. The chief 
technology officer ought to be brought in under the chief 
information officer because the reason you want a technology 
officer is for the information.
    You do not want an information officer to have technology. 
You want it the reverse. So where we have seen that work in 
other agencies it has been highly effective.
    When we have seen it done like you are suggesting, it is 
not as effective. And so I would just caution you in that 
regard.
    Ms. Archuleta. I would look forward to having further 
discussions with you on that, Senator.
    Senator Coburn. The multi-state exchanges are going to be 
one of your requirements. In fact, the law requires at least 
two national plans in every State within 4 years and one of 
those insurers must be a nonprofit.
    And it looks like there will be national plans in at least 
31 States, with Blue Cross-Blue Shield plans expected to be one 
of the Multi-State Plans, which raises the question whether or 
not it will really result in greater competition since they are 
already in every State.
    The law gives the OPM Director the authority and 
responsibility to certify Multi-State Plans to be offered on 
the exchanges including the authority to negotiate the benefits 
and the rates for the Multi-State Plans.
    So I guess my question is, assuming that you become 
Director of OPM, what is your plan to achieve plans that 
actually lower costs?
    If health insurers do not want to participate and the law 
will not be met of having at least two national plans within 4 
years, what is OPM's duty under the statute if that becomes the 
situation?
    Ms. Archuleta. Senator, I know that the managers of the 
Multi-State Plans Program have been working very hard to 
identify the health providers, and they have, in reviewing the 
proposals that have been submitted to them. Again, I am not 
entitled to know that at this point, but in my discussions with 
them I feel confident that they are going to meet that. They 
are looking at the issues of costs and benefits they want to 
provide, obviously, the best health care plans for the lowest 
costs.
    Senator Coburn. So again, let us say they do not. What is 
your obligation under this statute?
    Ms. Archuleta. Well, the obligation would be to assure that 
it does, sir, and that would be the position----
    Senator Coburn. So this is one of your top priorities, 
right, getting this going.
    So, I guess my question is, how do you do that?
    If you cannot have two insurers, how do you do it?
    What happens to price?
    Ms. Archuleta. The role that I would play, sir, is--and 
because I do not know the details and I am not entitled to know 
the details--is to assure that, if I am confirmed as OPM 
Director, I inform myself as to what all the possibilities are, 
from full success to if there are any issues that are 
concerning in terms of meeting our obligations.
    Senator Coburn. All right. I am out of time.
    Good for you.
    Senator Tester. Senator Johnson.
    Senator Johnson. Mr. Chairman, I want to go back to 
official time. This is news to me.
    Just a quick calculation here--257 employees divided by 
5,200; that is 5 percent of the workforce. Do you think that is 
an appropriate level, to have 5 percent of the workforce----
    Senator Coburn. No, that is at the VA.
    Senator Johnson. That is at the VA?
    Senator Coburn. That is at the VA.
    Senator Johnson. Oh, OK. Never mind. [Laughter.]
    Like I said, it was news to me. OK.
    Senator Coburn. How many are at OPM, though, is a good 
question.
    Senator Johnson. OK. How many are at OPM?
    There you go. He is feeding me questions.
    Ms. Archuleta. I am sorry, sir. I do not have that 
information.
    Senator Johnson. OK.
    Ms. Archuleta. But I would be glad to get that information, 
should I be confirmed, and share it with you.
    Senator Johnson. You, obviously, worked for the Department 
of Labor. I do not know how that works in the private sector--
private sector unions. Mine was always a non-union shop.
    Is that common in the private sector as well--to have 
basically companies pay union representatives full-time to 
represent union interests at the company, within the union?
    Ms. Archuleta. Most of my experience is within the public 
sector--but I am trying to recall that when we worked with 
private industry; like your experience, some had labor 
agreements and some did not.
    Senator Johnson. OK. Let's talk a little bit about the 
Federal Employee Retirement System (FERS). You are going to be 
in charge of the administration of that, correct?
    Ms. Archuleta. Yes, sir.
    Senator Johnson. Within OPM, is there any responsibility to 
take a look at what the unfunded liability of those systems 
are?
    Ms. Archuleta. Yes, and obviously, working closely with OMB 
to determine what that unfunded liability is.
    Senator Johnson. OK. Do you know what those unfunded 
liabilities are?
    Ms. Archuleta. I have not been briefed on that, no, sir.
    Senator Johnson. OK. What is the responsibility of the 
Director of OPM with regards to that unfunded liability and 
trying to close the gap?
    Ms. Archuleta. The unfunded liability or the costs of 
providing those retirement services are calculated within the 
trust fund, sir. And it is my understanding, based on 
information I have been given as a private citizen, that those 
are monitored very closely by not only OPM but also OMB.
    Senator Johnson. But, by and large, is that OMB's 
responsibility?
    Ms. Archuleta. Yes. OPM works very closely with OMB to make 
sure that all of the liabilities under the trust fund are 
covered. Yes, sir.
    Senator Johnson. OK. In response to questions on the Multi-
State Plans and just the implementation of Obamacare, you seem 
pretty confident that OPM and the staff at OPM have that pretty 
well under control. Do you have any concerns about your role in 
the implementation of the Affordable Care Act?
    Ms. Archuleta. In the briefings that I have had to date, no 
concerns have arisen for me. I think, as I said, they are 2 
months away from the actual implementation of MSPs, and so I 
think they are feeling confident. Should there be any concerns 
and if I am confirmed, I would ensure that they brought them to 
my attention immediately, and I would assume that they would.
    They are a very good team, and they work very closely with 
HHS and OMB to assure that this will stand up in time.
    Senator Johnson. Are you aware of the most recent letter 
from James Hoffa to Nancy Pelosi and Harry Reid regarding his 
concern about the implementation of the Affordable Care Act on 
union plans?
    Ms. Archuleta. No, sir, I am not.
    Senator Johnson. So you are not aware of that, OK.
    I have no further questions.
    Thank you, Mr. Chairman.
    Senator Tester. Senator Begich.

              OPENING STATEMENT OF SENATOR BEGICH

    Senator Begich. Thank you very much.
    Good to see you again. I am sorry last time we met it was 
short, but hopefully, it was additionally productive. But thank 
you very much for being here.
    Ms. Archuleta. Thank you, Senator.
    Senator Begich. First off, I have a few questions for you, 
but you know we have had a lot of debate today and last night 
on appointments and process. So I am kind of looking forward to 
getting this done and, hopefully, next week maybe a markup, and 
maybe before the first of August we show that we can actually 
appoint people to pretty important positions.
    So I am looking forward to it.
    Ms. Archuleta. Thank you, Senator. I am, too.
    Senator Begich. Let me say this. You have a tough job in 
the role that you have, and one of the issues we talked about 
was retirements. And I know there is one issue here on 
liability issues, but mine are more of the processing.
    As you know, they are way behind on their processing of 
retirements of Federal employees. There is continual increased 
exodus from the Federal workforce for a variety of reasons. I 
think part of it is we do not get certainty. It is not as great 
a workplace environment as it used to be, and so people are 
trying to find other opportunities and also retire.
    What will you do to ensure that, one, you meet the goals 
and get the backlog out of the way with the retirement that I 
tell you in my State is pretty significant--folks that are 
patiently waiting for their retirement check to start, which 
should not be that complicated because it is basically a 
mathematical issue. So can you give me a----
    Ms. Archuleta. Yes, Senator. The backlog was on track, as I 
understand it, to be reduced in the timeline set forth by OPM. 
The high number of retirements is a result of the U.S. Postal 
Service (USPS) offering early retirements and also because of 
the sequestration budget cuts caused that timeline to be moved 
back. I believe that Retirement Services is working very 
quickly to reduce that backlog.
    With response to your question about the individual 
annuitants, they are also working very hard on the side of the 
HR managers to make sure full information is given before the 
retiree actually departs the workplace. So that is an important 
step.
    Where there are complicated retirement applications that 
involve either court orders or divorces and other issues, those 
take a little bit more time. But I know that---and have been 
assured by OPM that--it is working hard to reduce that.
    Senator Begich. Let me give you a data point because I want 
you to know how serious the problem is. OPM forecasted it would 
provide or process 11,500 retirements for June. In June, they 
only did 8,600--25 percent off. So, in percent, it is a big 
number.
    Ms. Archuleta. Right.
    Senator Begich. In numbers, it is small in the big picture 
of the Federal workforce, but in the job that you have to do it 
is 25 percent.
    So I am hopeful that you will--I know in your testimony you 
gave or made some discussion about trying to bring it even more 
into the 21st Century with electronic improvement, which we are 
anxious for.
    I hope that if you get appointed that you will also, in 
your next budget, show that you want to have this capital 
investment so we can see really what that is about.
    But also setting these goals that this Committee, or at 
least I, can become familiar with on a regular basis of how you 
are achieving bettering this percent because 25 percent is 
unacceptable. Decreasing that, obviously, is a goal.
    So I hope that you would take that as an offer that if you 
are confirmed, that after a couple months you set those 
metrics, that you would be sharing them with the Committee or 
with us individually--about you are improving on that backlog. 
That would be, to me, if not the most important, the pretty top 
important issue for me.
    Ms. Archuleta. If confirmed, Senator, I would be anxious to 
discuss this with you further and to inform the Committee on 
how Retirement Services is reducing its backlog.
    Senator Begich. There is another issue which I know was 
brought up a little bit, on health care under the Affordable 
Care Act. Even if the folks tell you today--and I know you get 
limited information because you are not in the position--that 
things are OK.
    Let's assume you are appointed; you get in; you see that 
implementation is problematic in some area. How will you handle 
that--because, to be frank with you, what we do not want to be 
is surprised.
    I am sure you do not want to be surprised, but the reality 
is once you are there you are going to learn a lot of things, 
and it may be even more robust in the right way than it is not 
or it may be the other way.
    How will you work toward that end?
    Ms. Archuleta. The most important part of my leadership 
style is to hold individuals accountable and to hold all 
individuals responsible for the mission of the Agency. I would 
implement that as the leader of OPM, if I am confirmed, holding 
all of us responsible for the missions that are set forth for 
us and also holding each of us responsible as a team, within a 
team, to make sure that we all succeed at that.
    That is my management style, sir, and one that has been 
successful for me for the last 35 years.
    Senator Begich. Great. Last question, very quickly--there 
are 28 Federal executive boards, and one of their core 
functions is to make sure employees and so forth have emergency 
preparedness, security, employee safety--all those things that 
are important in case of an emergency in an area.
    Alaska, which is fairly far off from everywhere, does not 
have one of these, and I would be very interested to have this 
discussion at a later time.
    It would be different if we were a State next to a State, 
but because we are so far flung off the lower 48, it seems that 
it would be logical to try to figure out how to have one of 
these boards operational and be available for Alaska, just 
because of the uniqueness of how far away in the distance and 
we have over 17,000 Federal workers in Alaska.
    Ms. Archuleta. I would be very interested in having further 
discussions with you on this issue.
    Senator Begich. Great. We will have that conversation.
    Ms. Archuleta. Yes. Thank you, sir.
    Senator Begich. That kind of crosses over to another role I 
have here, which is the Chair of the Subcommittee with 
emergency management jurisdiction.
    Ms. Archuleta. Yes.
    Senator Begich. So we will have a further discussion on 
that?
    Ms. Archuleta. Yes, I would look forward to that, Senator.
    Senator Begich. Great.
    Thank you, Mr. Chairman.
    Senator Tester. Ms. Archuleta, I have a question that deals 
with telework. I just want to know what your thoughts are on 
accountability with telework, particularly as it applies to 
this area--the National Capital Region.
    Ms. Archuleta. Yes, sir. My experience is at the Department 
of Labor, in fact, when telework was introduced.
    We began telework programs at the DOL. We found two 
things--one, that when it was used well, it was very effective. 
There were problems where there was not accountability built 
into the use of that telework.
    As a result, the leadership of the Department instituted 
standards for performance for telework and expectations of 
performance, also to be sure that telework was a joint decision 
between the manager and the employee so that it was not used as 
a tool for anything other than what it was specified to do.
    Senator Tester. So do most agencies have those kinds of 
criteria, or is this----
    Ms. Archuleta. I am not aware of that. I would certainly 
check with the CHCO Council, should I be confirmed, to 
understand what each individual department has and how they are 
using telework. I think in each department it is different.
    Senator Tester. OK. The results of a governmentwide 2012 
Federal Human Capital Survey conducted by OPM showed that most 
Federal employees do not believe that higher job performance is 
recognized in any meaningful way and that poor performers too 
often are not held accountable for sub-par work. From my 
perspective, this is a huge problem.
    What can be done? Especially, specifically, what can OPM do 
to help Federal departments and agencies do a better job of 
recognizing superior performance and helping sub-par 
performance get up to standard?
    Ms. Archuleta. Two very important issues, Senator. Thank 
you for the question.
    In terms of recognizing employee performance in a time of 
sequestration, it is often very difficult because of the 
bonuses and other incentives that have been put on hold. So I 
think managers have to work very closely together to identify 
ways that they can honor the work that is done daily by Federal 
workers.
    And the second question--in terms of poor performers, I 
believe that there are tools in place. I am not sure that all 
managers understand what those tools may be, and I would work 
very hard, if confirmed to make sure that all departments 
understand the tools that are available to them.
    Finally, sir, I would say that working with the CHCO 
Council and the Labor-Management Council, that it would be very 
important to work together--utilizing, for example, the GEAR--
to make sure that the results and the accountability that is 
required to move missions forward is understood by both 
managers and employees.
    Senator Tester. In the last two Congresses, this Committee 
approved legislation offered by former Chairman Lieberman to 
correct a retirement issue now facing approximately 100 Secret 
Service agents and officers. It does not seem like a lot, but 
if you are one of those agents, it is important.
    The story is that these agents and officers were hired 
between 1984 and 1986 and were promised by the Secret Service 
that they would be allowed to retire under the D.C. Police and 
Firemen's Retirement Program. The Secret Service has 
acknowledged that this commitment was made.
    Unfortunately, the Federal Employee Retirement Service came 
online in 1987. It was retroactive to 1984. Long story short, 
these folks are not there.
    Chairman Lieberman's bill would correct that retirement 
issue. The former OPM Director Berry and Secret Service 
Director Mark Sullivan had started to work together to resolve 
this issue before they both left their respective jobs.
    Can you commit how you will help fix this problem?
    Ms. Archuleta. I am not aware of all of the issues here, 
Senator, but I would commit to you that I would work very 
closely with the Secret Service Director to make sure that I 
understood these issues and would work very closely with her.
    I also believe that there may be some legislative action 
that must be taken.
    Senator Tester. And would you push for--if, in fact, it 
takes legislative remedy, would you help push to make that 
happen?
    Ms. Archuleta. Yes, sir, I would look forward to having 
that discussion with you to understand the complexities of it.
    Senator Tester. Senator Coburn.
    Senator Coburn. Thank you.
    As you know, when the Affordable Care Act was passed, in 
less than 6 months, Members of Congress and their staff may 
only enroll in health plans created under the Affordable Care 
Act or offered through an exchange.
    FEHBP was not created in ACA. It looks like Members of 
Congress and some of the congressional staff are going to lose 
their FEHBP benefits at the end of the year.
    It does not apply to me. I am Medicare-eligible. So I am 
not asking for this personally.
    Is that your understanding of the law?
    Ms. Archuleta. Yes, sir.
    Senator Coburn. Also, under the law, employees enrolled in 
the exchange cannot receive a subsidy for coverage from their 
employer. Therefore, is it also your understanding that 
congressional staff will be ineligible to receive their current 
employer contribution?
    Ms. Archuleta. I am not familiar with--and I have not been 
briefed on--this because of my role as a private citizen. I am 
looking forward to being briefed on this if I am confirmed.
    Senator Coburn. All right. There is a difference of 
interpretation among some as to whether or not the statute 
requires Members of Congress and all congressional staff or 
only personal office staff to enroll in the exchanges. Do you 
have any opinion about that?
    Ms. Archuleta. No, sir. I look forward to, if I am 
confirmed, being briefed on this issue.
    Senator Coburn. OK. Open enrollment begins in less than 80 
days. Yet, OPM has not issued regulations implementing this 
provision of the law. Has anybody during your briefs at OPM 
told you where those regulations are?
    Ms. Archuleta. No, sir, they have not.
    Senator Coburn. So you have no knowledge about those 
regulations?
    Ms. Archuleta. I know that they are currently at the OPM 
and they are under review.
    Senator Coburn. Are you aware that they have been to OMB?
    Ms. Archuleta. I am not aware of that, sir. Again, I am 
very limited in that information.
    Senator Coburn. Are you aware that they have been to OMB 
and back at OPM?
    Ms. Archuleta. No, sir, I am not aware of that.
    Senator Coburn. Thank you.
    Ms. Archuleta. Again, I am very limited in the information 
that is available to me on that issue.
    Senator Coburn. Do you think that it is a reasonable 
requirement that Members of Congress might want to see that 
ruling before they vote on your nomination?
    Ms. Archuleta. Yes, sir. I have been asked this question 
many times, sir, and I understand the importance of it.
    Senator Coburn. So I think you have sent the message.
    Ms. Archuleta. And you sent me the message, and I 
appreciate it, sir. Thank you.
    Senator Coburn. One other question, and then I will be 
through.
    I had a line of questioning on waivers for rehire of an 
annuitant at full salary. In the year 2000, only 650 Federal 
employees were granted a waiver. In 2011, there were 6,289. In 
2012, there were 5,509.
    In the questionnaire you supplied to the Committee, you 
stated the ability of agencies to re-employ annuitants with a 
waiver of dual compensation rules is a valuable recruitment 
tool--I do not doubt that at all--in order to help to respond 
to emergencies and help fill other needs in the critical short 
term.
    This is also a very expensive recruitment tool, as I assume 
you would agree.
    Given new powers that agencies hold, such as the ability to 
offer phased retirement and part-time annuitant hiring 
authority, do you still generally believe that waivers to allow 
full salary and full pension are needed?
    Ms. Archuleta. I believe, sir, that phased retirement is an 
important tool that managers can use in workforce planning. 
There are some proposed regulations and, I think, comments 
being gathered right now with regard to this proposal, and I 
would look forward to reviewing those comments.
    Senator Coburn. OK. In your questionnaire, you stated that 
the burden is appropriately on the agencies to justify their 
workforce needs and justify that such dual compensation waivers 
are needed. Isn't that kind of passing it back to the agencies?
    Ms. Archuleta. Well, each of the departments, as you know, 
Senator, is required to determine its own workforce needs and 
to manage those workforce needs within its budget.
    So phased retirements may enable them to do more with the 
funds that they have available to them. It certainly is a tool. 
It is not required, but it may be a tool that managers can use.
    Senator Coburn. But it is also--ultimately, the 
responsibility lies with you in approving those.
    Ms. Archuleta. Yes.
    Senator Coburn. The dual waivers.
    Ms. Archuleta. The dual waivers, yes.
    The other thing, Senator, I would mention is that the 
succession planning is also aided.
    Senator Coburn. Yes, I agree.
    So this is the most expensive form of keeping workers with 
institutional memory in the workforce. Should dual compensation 
really be the last resort?
    What are your thoughts about that?
    I mean, the institutional knowledge area is a very 
important area. And if they are really in a bind, I understand 
that, but they can do that under temporary or part-time rather 
than full-time.
    Ms. Archuleta. Well, I think the plan that is presently 
proposed, Senator, about phased retirement, and it is up to 
half-time. That is the proposal that is being used.
    Senator Coburn. OK. All right.
    Ms. Archuleta. Thank you, sir.
    Senator Tester. Senator Begich.
    Senator Begich. No additional questions.
    Senator Tester. I have a few.
    OPM must partner with agencies to ensure effective human 
capital management across government. How will you ensure that 
OPM is an effective partner in strategic innovation to help 
agencies develop and meet their human capital goals?
    Ms. Archuleta. I think the most important tool that we have 
is working with agencies through the CHCO Council and making 
sure that we are aware of the needs within the agencies.
    Obviously, as part of the President's senior management 
team, the communication and collaboration between OPM and the 
departments is a critical relationship.
    Senator Tester. When we spoke in my office and Senator 
Heitkamp and I recently wrote to OPM about retaining Federal 
employees to work in the Bakken Region. It is becoming 
extremely difficult. Manpower is in great need there.
    In many cases, Federal employees in Montana are taken away 
from their normal duties to backfill vacancies in the Bakken. 
It is not just a matter of inconvenience for a few employees. 
It is a matter that agencies are not able to perform their work 
on the ground.
    This is a boom region right now. It is likely to be a boom 
region for some time, by the way.
    Ms. Archuleta. Yes.
    Senator Tester. But what is OPM doing to address specific 
locality pay adjustments, particularly in the Bakken, to 
recruit and retain Federal employees, especially at agencies 
like the Bureau of Land Management (BLM)?
    It is critically important to sustaining the activities out 
there. But if it is done wrong, it could have some long-term, 
incredibly bad effects on things like water, which is pretty 
basic, too.
    So it is important we get the pros on the ground. It is 
important we are competitive in the salary structure. What is 
OPM doing to deal with that issue.
    Ms. Archuleta. Thank you, Senator, for that question and 
the opportunity to discuss it with you again. And I look 
forward to more discussions with you.
    Certainly, the performance to mission is a very important 
role that every department has, and I understand the BLM and 
its mission could be impacted if it cannot hire the people it 
needs to perform its responsibilities.
    I know that recommendations have been given to the Federal 
Salary Council with regard to new locality pay classifications 
and that those recommendations will now be passed on to the 
President's Pay Agent and I will assure that those 
recommendations are reviewed.
    In addition, Senator, I would be excited about continuing 
to have these discussions with you, and your ideas.
    I do know that managers have at their fingertips right now 
some tools like relocation, retention, and recruitment 
incentives, as well as direct hire authority and others, but I 
would want to be sure that BLM and its managers understand all 
the tools it has right now as those recommendations are 
considered.
    Senator Tester. OK. Well, thank you very much.
    Senator Begich, anything else come to mind?
    Senator Begich. Not at this time.
    Senator Tester. OK. Well, I just want to say we have been 
at this for a little over an hour and 15 minutes. I want to say 
thank you. It is not an easy process, but it is absolutely an 
important one.
    Ms. Archuleta. Yes, sir.
    Senator Tester. And I want to thank you for your patience 
and your frankness as we go through it.
    Needless to say, this is a big job you are up for 
confirmation of. There is a lot of hard work that is going to 
be done by you and your staff to make sure that things like 
health care and the backlog and IG oversight, and all the 
things that were talked about here--pension benefits, all those 
kinds of things--are dealt with in a timely manner.
    I wish you the best as you move forward. Hopefully, you 
will get a very timely confirmation. Typically, this Committee 
does exactly that.
    And so I just want to thank you for your time, for your 
commitment to this country, for your public service and for 
your testimony today.
    Without objection, the hearing record will be kept open 
until 5 p.m. tomorrow, July 17th for the submission of 
statements and questions for the record.
    With that, this hearing is adjourned.
    Ms. Archuleta. Thank you, Senator
    [Whereupon, at 4:48 p.m., the Committee was adjourned.]



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