[Senate Hearing 113-418]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 113-418


   MANAGEMENT MATTERS: CREATING A 21ST CENTURY GOVERNMENT
=======================================================================


                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS


                             SECOND SESSION

                               ----------                              

 MANAGEMENT MATTERS, CREATING A 21ST CENTURY GOVERNMENT, MARCH 12, 2014

   MANAGEMENT MATTERS, CREATING A 21ST CENTURY GOVERNMENT--PART II, 
                     OUTSIDE VIEWS, MARCH 31, 2014

                               ----------                              

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


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                          MANAGEMENT MATTERS:

                   CREATING A 21ST CENTURY GOVERNMENT



        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

               John P. Kilvington, Acting Staff Director
         Troy H. Cribb, Chief Counsel for Governmental Affairs
       Lawrence B. Novey, Chief Counsel for Governmental Affairs
               Kristine V. Lam, Professional Staff Member
               Keith B. Ashdown, Minority Staff Director
         Christopher J. Barkley, Minority Deputy Staff Director
                  Patrick J. Bailey, Minority Counsel
            Kathryn M. Edelman, Minority Senior Investigator
                     Laura W. Kilbride, Chief Clerk
                   Lauren M. Corcoran, Hearing Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Carper 



    Senator Coburn 



    Senator Ayotte...............................................    29
Prepared statements:
    Senator Carper 




                               WITNESSES
                       Wednesday, March 12, 2014

Hon. Beth F. Cobert, Deputy Director for Management, Office of 
  Management and Budget..........................................     2
Hon. Daniel M. Tangherlini, Administrator, U.S. General Services 
  Administration.................................................     5
Hon. Eugene L. Dodaro, Comptroller General of the United States, 
  U.S. Government Accountability Office..........................     8

                     Alphabetical List of Witnesses

Cobert Hon. Beth F.:
    Testimony....................................................     2
    Prepared statement...........................................    42
Dodaro, Hon. Eugene L.:
    Testimony....................................................     8
    Prepared statement...........................................    55
Tangherlini, Hon. Daniel M.:
    Testimony....................................................     5
    Prepared statement...........................................    49

                                APPENDIX

Chart submitted by Senator Coburn................................    41
Open recommendations submitted by Mr. Dodaro.....................    74
Responses for post-hearing questions for the Record from:
    Ms. Cobert...................................................    81
    Mr. Tangherlini..............................................   103
    Mr. Dodaro...................................................   109

                         Monday, March 31, 2014

Max Stier, President and Chief Executive Officer, Partnership for 
  Public Service.................................................   122
Shelley H. Metzenbaum, Ph.D., President, The Volcker Alliance....   125
Robert Johnston Shea, Principal, Global Public Sector, Grant 
  Thorton, LLP...................................................   128
Tom Lee, Director, Sunlight Labs, The Sunlight Foundation........   130

                     Alphabetical List of Witnesses

Lee, Tom:
    Testimony....................................................   130
    Prepared statement...........................................   182
Metzenbaum, Shelley H.:
    Testimony....................................................   125
    Prepared statement...........................................   164
Shea, Robert Johnston:
    Testimony....................................................   128
    Prepared statement...........................................   177
Stier, Max:
    Testimony....................................................   122
    Prepared statement...........................................   157

                                APPENDIX

Report submitted by Max Stier....................................   185
Responses for post-hearing questions for the Record from:
    Mr. Stier....................................................   214

 
            MANAGEMENT MATTERS: CREATING A 21ST CENTURY GOVERNMENT

                              ----------                              


                       WEDNESDAY, MARCH 12, 2014

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9 a.m., in room 
342, Dirksen Senate Office Building, Hon. Thomas R. Carper, 
Chairman of the Committee, presiding.
    Present: Senators Carper, Coburn and Ayotte.

              OPENING STATEMENT OF CHAIRMAN CARPER

    Chairman Carper. Good morning, everybody.
    I want to thank our witnesses for joining us this morning. 
It is great to see each one of you.
    And I also want to thank my wife for waking me up this 
morning.
    Normally, I catch the 7:15 train to come down here and get 
here at about 8:45, and I had set my alarm, my wrist alarm, and 
it went off, but I never heard it.
    Fortunately, Martha said to me about 5:45, if you want to 
catch the 6:25 train, maybe you should get up. [Laughter.]
    I said, yikes! And I did.
    The train was on time. So was I.
    Thank you, Martha.
    But I want to thank our staffs for pulling this together 
and helping us prepare for this day.
    I want to thank Dr. Coburn, who is going to join us 
momentarily, for the great work that he has done for years in 
these vineyards.
    I have a statement I will introduce for the record.\1\
---------------------------------------------------------------------------
    \1\ The prepared statement of Chairman Carper appears in the 
Appendix on page 41.
---------------------------------------------------------------------------
    Let me just make a couple quick comments.
    Our folks here on the Committee have heard me say more than 
a few times that the three keys to deficit reduction, if we are 
serious about it, are tax reform that makes more sense out of 
the tax code and actually produces some revenues for deficit 
reduction; entitlement reform that saves money and saves the 
programs for future generations and does not savage old people 
or poor people; and just look at everything we do, everything 
we do, and ask how do we get a better result for less money or 
for the same amount of money.
    And I, from time to time, tell people who have quite a bit 
of money that they are going to have to pay some extra taxes if 
we are going to get the job done on deficit reduction.
    More than a few times they say, I do not mind paying more 
taxes. I just do not want you to waste my money.
    That is what they say: I do not mind paying more taxes. I 
just do not want you to waste our money.
    Dr. Coburn and I have been working for years now, both as 
leaders of the Federal Financial Management Subcommittee of 
this Committee and now as leaders of the full Committee, to 
collaborate with the Office of Management and Budget (OMB), to 
collaborate with the General Services Administration (GSA), to 
collaborate with the Government Accountability Office (GAO), to 
collaborate with the Inspectors General (IGs), at large across 
our government, and to collaborate with other groups, non-
profit groups that have a similar interest as we do.
    How do we get a more effective government, a more efficient 
government?
    How do we create a government that fosters economic growth?
    How do we create a government that is actually sensitive to 
the needs of people, serving the people that put us here in 
these jobs?
    So today, this hearing for me is like a ``throw me in that 
briar patch'' kind of hearing. I am just thrilled to be here 
and look forward to this conversation.
    I look forward to hearing the progress that is being made 
and hear what the blueprint is going forward and how you are 
all working together and how we can be a partner in this and do 
oversight, do rigorous oversight, and how we can be a 
productive and proactive partner in this as well.
    With that having been said, Beth, you are welcome to lead 
off and set the table, and then these guys will follow in your 
wake. Please proceed.
    It is great to see you.

 TESTIMONY OF THE HON. BETH F. COBERT,\1\ DEPUTY DIRECTOR FOR 
          MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET

    Ms. Cobert. Thank you very much. Chairman Carper, thank you 
for the opportunity to appear before you and the Committee 
today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Cobert appears in the Appendix on 
page 42.
---------------------------------------------------------------------------
    I am honored to talk with you about how the President's 
Fiscal Year (FY) budget supports the Administration's effort to 
deliver a 21st Century government. Core to this effort is the 
President's Management Agenda, the broad contours of which we 
released last week as part of the budget. The agenda's 
initiatives reflect the Administration's commitment to 
delivering better results for the American people.
    I also appreciate the opportunity to testify along with 
Gene Dodaro and Dan Tangherlini, two individuals whom I seem to 
spend a lot of time with in meetings to great effect. OMB has a 
strong partnership and working relationship with GAO. We 
frequently leverage GAO's findings in our work.
    OMB also works closely with Dan and the team at GSA. They 
are leaders in the Administration's work on effectiveness and 
efficiency.
    When we set out to design the Management Agenda last year, 
we began by listening. We listened to Federal workers, to 
business organizations and unions and Members of Congress and, 
of course, to the American people. With this input, we 
developed a comprehensive, forward-looking agenda to improve 
the way the government delivers for Americans. This is a living 
agenda. We will make adjustments where needed and expand upon 
areas of progress, and we welcome the opportunity to work with 
Congress to promote reforms that will support this agenda.
    The key pillars of the Management Agenda are effectiveness, 
efficiency, economic growth, and people and culture.
    Let me begin with effectiveness. The Administration's 
commitment to an effective government focuses on delivering a 
world-class customer service experience for citizens and 
businesses.
    The budget builds on initiatives already underway to create 
high-quality user experiences for services, such as veterans' 
pension and disability applications, Social Security and 
taxpayer assistance.
    The budget also significantly invests in areas to help 
businesses, for example, enhancing and expanding SelectUSA to 
promote inbound investment in the United States.
    The Administration will also focus on smarter information 
technology (IT) delivery. We have made strides in improving 
management of IT spending through new mechanisms like 
PortfolioStat, a data-driven review of agency IT portfolios, 
but clearly, we have much more to do. To ensure smarter IT 
delivery, we need the best talent working inside government, 
the best companies working with government, and the best 
processes in place to ensure accountability for delivering 
results to the American people.
    Second in the agenda, efficiency. We are increasing the 
quality and value in core operations to enhance productivity 
and increase cost savings. We will expand strategic sourcing, 
using the Federal Government's buying power to save on 
essential purchases. We will also increase shared services 
across the government in human resources, finance and IT. And 
we will expand on successful efforts already underway to 
reorganize and consolidate programs and reduce duplication.
    The Administration is committed to accelerating progress 
and lowering administrative overhead, cutting improper 
payments, saving on real estate costs, reforming military 
acquisition and consolidating data centers.
    Third, our Management Agenda invests in the 
Administration's commitment to economic growth. Making 
government-generated data and the products of federally funded 
research and development (R&D) available to the public can 
promote innovation, job creation and economic prosperity.
    Since 2009, the Administration has released tens of 
thousands of government data sets to the public while ensuring 
strong privacy protections are in place. Private companies have 
used government data to bring transparency to retirement plans 
and help consumers find fraudulent charges on their credit card 
bills.
    We continue to support opening up Federal data, especially 
for high-impact sectors, like education, health care, energy 
and tourism.
    Additionally, we are accelerating transfers of innovation 
from lab to market, for example, by proposing increased funding 
for the National Science Foundation's public-private Innovation 
Corps.
    The fourth area of focus for the Management Agenda is 
people and culture. A 21st Century government depends on an 
engaged, well-prepared, and well-trained workforce with the 
right set of skills for the missions government needs to 
achieve.
    Despite the challenges of the last few years, Federal 
employees continue to persevere and serve the American people 
with passion, professionalism, and skill. We want to make sure 
that these talented public servants have the right tools and 
are supported by a culture valuing excellence and encouraging 
innovation.
    We will prioritize leadership development. We will recruit 
the next generation of Federal leaders. We will sustain our 
workforce so it can continue to do the work of the Nation for 
decades to come.
    We also want to invest in our Federal workforce by 
developing governmentwide enterprise training and resource 
exchanges. For example, the budget includes financing for the 
Office of Personnel Management (OPM) to expand opportunities 
for leadership development in the Senior Executive Service 
(SES).
    As you can see, the President's Management Agenda is 
ambitious and cross-cutting. In some areas, we are looking to 
extend our progress. In others, we are moving forward in new 
ways.
    As the Administration works to deliver on this agenda, we 
are also committed to driving effective performance management 
across the government, using the framework developed with 
Congress in the Government Performance and Results Act (GPRA), 
and the GPRA Modernization Act. The performance framework 
includes goals and performance reviews at three levels.
    First, Cross-Agency Priority Goals. The Administration has 
established 15 management and mission Cross-Agency Priority 
(CAP) Goals, released this week. These give us the tools to 
bring agencies together on issues that require close 
coordination. These goals will help us to deliver on the 
Management Agenda and on core mission activities, including 
reducing veterans' homelessness, encouraging foreign direct 
investment, improving cybersecurity, and others.
    Second, Agency Priority Goals. Agency leadership have 
committed to nearly 100 Agency Priority Goals focused on a 
range of important issues. These include reducing health care-
associated infections, increasing energy efficient housing, and 
expanding small business access to export financing.
    Third, agency strategic plans and annual reviews. This year 
is the first year we will be releasing updated agency strategic 
plans along with the budget. These strategic plans articulate 
the agency's mission, long-term goals, specific strategies, and 
actions. The reviews allow us to monitor progress in these 
areas.
    All of this information--the CAP Goals, the Agency Priority 
Goals, and the strategic plans--is available to the public 
through Performance.gov.
    The Administration and agencies will be holding regular 
performance reviews against progress. We will be publishing 
this progress on the site as well. In this way, the public will 
be able to see how we are doing and hold us accountable.
    In conclusion, the Administration is focused on improving 
management to drive higher performance in the services the 
Federal Government provides for citizens and businesses and in 
the value achieved with taxpayer dollars. We have put 
effectiveness, efficiency, economic growth and the Federal 
workforce at the center of this effort. With a strong focus on 
execution and accountability, we look forward to working with 
Congress to create a 21st Century government that will make a 
significant, tangible and positive difference in the lives of 
the American people.
    Thank you.
    Chairman Carper. Thanks so much. Thanks for coming all the 
way from California to help lead the team at OMB.
    I have asked Dr. Coburn if he wants to make any kind of 
opening statement. He has said no.
    He is almost always here before me. It is rare that I get 
here before him. Today, he went to a prayer breakfast. He is 
praying--we all need to pray.
    It is often that people say to us in our work, that they 
are praying for us, which is good.
    And one of the things that I always ask them to remember in 
their prayers is to pray for wisdom for us, and this is part of 
what we are up to today.
    Nobody in the House or the Senate has done more to really 
work these vineyards than Tom Coburn, and I am happy to be his 
partner in these efforts.
    All right, Dan, welcome. Great to see you.

TESTIMONY OF THE HON. DANIEL M. TANGHERLINI,\1\ ADMINISTRATOR, 
              U.S. GENERAL SERVICES ADMINISTRATION

    Mr. Tangherlini. Thank you very much, Chairman Carper, Dr. 
Coburn and Members of the Committee and staff. I appreciate the 
opportunity to appear before you today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Tangherlini appears in the 
Appendix on page 49.
---------------------------------------------------------------------------
    And, before I go any further, I am glad to have the 
opportunity to share this panel with Beth Cobert and Gene 
Dodaro. Both have done so much to address the important issues 
we are discussing today.
    As Beth described, the Administration is committed to 
providing the American people with a government ready to meet 
the challenges of the 21st Century. During the last 5 years, we 
have made progress toward meeting that goal, but there is still 
much work to be done.
    The President's Management Agenda looks to continue this 
progress with a focus on four key areas--efficiency, 
effectiveness, economic growth, and people and culture.
    As a provider of real estate, acquisition, and technology 
services to the Federal Government, the U.S. General Services 
Administration is uniquely positioned to help agencies in all 
four of these areas. Today, I will discuss GSA's common sense 
efforts to support this Management Agenda.
    GSA encourages efficiency across government through a 
variety of initiatives which help agencies buy smarter and 
reduce their real estate footprint. The Federal Strategic 
Sourcing Initiative (FSSI) is an integral part of this effort. 
This program creates significant savings by having agencies 
collectively commit to purchase certain commodities at the best 
value. Since we began using this program in 2010, we saved more 
than $300 million for Federal agencies while increasing the 
participation of small businesses and reducing duplication 
across the government.
    At GSA, we have the ability to offer innovative 
technologies and digital services to our partners that reduce 
duplication, increase transparency, and improve efficiency. One 
example is the Federal Risk and Authorization Management 
Program (FedRAMP), which eases the adoption of cloud computing 
for all agencies by providing a standardized approach to 
security assessment, authorization, and continuous monitoring 
for these services.
    Additionally, GSA maintains the Prices Paid Portal. The 
tool is intended to provide greater visibility of the prices 
paid by government agencies for commonly purchased goods and 
services.
    Now we are not just supporting the President's Management 
Agenda through improving acquisitions; GSA is also encouraging 
efficiency by helping agencies to reduce their real estate 
footprint.
    One of the most important ways we are supporting the 
Administration's agenda is by assisting agencies in using their 
space more efficiently through the Total Workplace Initiative. 
This program provides the resources and expertise to assist 
Federal agencies in reducing their office space, fostering 
collaboration, better managing IT spending, and increasing 
energy efficiency.
    GSA has recently transformed our own headquarters in 
Washington, D.C. into a mobile, open work environment which 
serves as a model for what Total Workplace can do for our 
partners. This transformation has allowed us to collapse 6 
leases into a single building, resulting in more than $24 
million in rent savings alone.
    A meaningful opportunity exists for significant savings 
that can be directed toward fulfilling agency missions and 
better serving the American people.
    The President's Fiscal Year budget also includes another 
tool that will enable us to make valuable upgrades to our 
partners' facilities. It is called zero-net budget authority. 
This will enable GSA to invest the rent it collects from 
partner Federal agencies into repair and upkeep of our Nation's 
buildings. Supporting GSA's budget request for the Federal 
Buildings Fund will allow us to continue to make these cost 
saving investments.
    However, when facilities either cannot be sufficiently 
repaired, better utilized, or it is not cost effective to do 
either, GSA helps agencies dispose of excess property. In 
fiscal year 2013, GSA disposed of 213 properties, generating 
about $98 million in proceeds. We will continue to work with 
other agencies to remove more properties from the Federal 
inventory.
    GSA is committed to driving down prices, delivering better 
values, and helping reduce costs so our partner agencies can 
focus their resources on their own important mission.
    GSA is also working to provide the tools and services our 
partners need to serve the American people as effectively as 
possible.
    In support of our fellow agencies, the Office of 
Governmentwide Policy is working toward improving government by 
developing evidence-based policies that are designed to lead 
better Federal mission delivery. GSA's FY 2015 budget request 
will enhance data, analysis, and policy efforts to drive 
progress in right-sizing the Federal fleet, developing the 
civilian acquisition workforce and enhancing cybersecurity 
efforts, among others.
    Another way GSA is supporting the President's Management 
Agenda is Data.gov. This website is the flagship open 
government portal which enables easy access to, and use of, 
hundreds of thousands of data sets from over 180 government 
agencies. This website supports businesses throughout the 
country with valuable information that is unavailable anywhere 
else. By creating an open environment, GSA allows anyone, 
whether an individual or a business, to take public information 
and apply it in new and useful ways.
    GSA is committed to ensuring that we have the most capable 
individuals supporting government efforts as well. Through 
initiatives such as the President's Innovation Fellows (PIF), 
we are working to attract exceptional talent to solving the 
toughest challenges of government. Developed in conjunction 
with the White House Office of Science and Technology Policy, 
this program assigns some of our Nation's brightest women and 
men to specific agencies, to quickly and effectively address 
some of their most difficult and persistent problems. This 
expedited approach is one that GSA is using in support of 
additional projects, and we anticipate expanding, moving 
forward.
    Finally, GSA is also doing its part under the Government 
Performance and Results Modernization Act to assist agencies in 
achieving Cross-Agency Priority goals. These efforts include 
programs that range from cybersecurity to sustainability to 
data center consolidation.
    One particularly crucial priority that Beth and I are co-
leading focuses on Benchmarking Mission-Support Functions. This 
effort will establish common metrics for common administrative 
functions. By establishing benchmarks, the Federal Government 
will be able to assess the effectiveness and cost of similar 
functions. This effort will allow for the identification of 
best practices and services to improve efficiency and reduce 
cost.
    At GSA, we are working to use the size and scope of the 
Federal Government to drive down costs and increase efficiency 
in support of the President's Management Agenda. I believe that 
our agency's work, which is supported by our FY 2015 budget 
request, will be invaluable in furthering the Administration's 
efforts.
    And I appreciate the opportunity to be here today, and I am 
happy to answer any questions you have.
    Thank you.
    Chairman Carper. Thanks so much. We are delighted that you 
are here.
    Have either of you testified alongside Gene Dodaro in the 
past? This is a first for you, Beth?
    Ms. Cobert. I have not yet had that privilege.
    Chairman Carper. OK. Dan?
    Mr. Tangherlini. I believe I have.
    Chairman Carper. It is a great experience, and here in the 
next several minutes you will see why.
    Gene, welcome. Thank you.

TESTIMONY OF THE HON. EUGENE L. DODARO,\1\ COMPTROLLER GENERAL 
  OF THE UNITED STATES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Dodaro. Thank you very much, Mr. Chairman, Dr. Coburn. 
Nice to see both of you today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Dodaro appears in the Appendix on 
page 55.
---------------------------------------------------------------------------
    I appreciate the opportunity to talk about the President's 
Management Agenda.
    I will focus my remarks this morning on three areas. One is 
where items in the agenda are consistent with GAO's work. 
Second, I want to underscore the fact that effective 
implementation is essential to successfully achieving any of 
the items in the agenda. And, third, I want to highlight a few 
areas that while they are receiving some attention I believe 
deserve even greater attention.
    First, on areas that comport with our work, I would cite 
the information technology area as one example. We have to 
eliminate the waste that goes on in IT purchases and get a 
better return on our investment. It is essential to improving 
services.
    The suite of new tools that have been put in place by OMB 
have been effective, but we think they need to be expanded to 
broader areas and more diligently applied, and they can yield a 
lot better benefits.
    Improper payments. Last year, the estimate of improper 
payments was over $100 billion by the Administration. That 
estimate is not yet complete. And I am particularly concerned 
that half of the improper payments are occurring in the health 
care programs of Medicare and Medicaid that are among the 
fastest growing programs in the Federal Government.
    So we have to get a better handle on this issue, or the 
size of this problem, in my opinion, may grow rather than 
shrink despite the Administration's concerted efforts. We need 
to address root causes and have more preventive controls in 
place.
    Strategic sourcing. Strategic sourcing is an area where the 
Federal Government is only leveraging a fraction of its 
purchasing power. And I am pleased to see it included in the 
agenda, but we think more aggressive goals can yield very 
significant savings. Even a 1 percent increase can lead to $4 
billion a year in savings.
    We have studied private sector efforts. They are getting 10 
percent a year on a regular basis. So I think this has a lot of 
potential.
    Strategic human capital management. I am very pleased to 
see the focus on that in the agenda. There are critical skills 
gaps across government. There are succession planning 
challenges that are very significant. And there are morale 
problems.
    This is an area that really needs attention. I am very 
concerned about this area and the potential it has for causing 
additional performance problems if not properly attended to 
over the next few years.
    Last, the area I would cite as an example is the focus on 
defense weapons systems acquisitions issues and services 
acquisitions issues. This is an area we have had on our high-
risk list for a while.
    Best practices are being put in place in policy, and they 
are starting to have some effect, but they are not having the 
full effect yet in bringing down the life cycle costs of the 
weapons systems portfolio going forward.
    Now, in terms of effective implementation, in addition to 
the examples I have cited, we have focused a lot, working with 
Beth and OMB and the agencies, on the high-risk list.
    We have had a series of meetings with OMB and the agencies 
on the high-risk list, and GAO. I have personally participated 
in those meetings along with Beth. We had one on real property 
with Dan. And they are very constructive, productive meetings.
    We focus on the five criteria to get off the list and the 
focus on what needs to be done. One, you need to have 
leadership commitment. You have to have the capabilities and 
the resources. You have to have a corrective action plan that 
really gets to the root cause of the problem. You have to 
monitor progress to make sure you are on track. And you have to 
actually start fixing the problem. You do not have to have it 
all fixed, but you have to have it fixed enough for us to 
consider taking it off the list.
    So those efforts will continue and, hopefully, pay large 
dividends in the future.
    In the area of GPRA implementation, both Beth and Dan have 
mentioned that, and that is very significant, particularly to 
help address overlap, duplication, and fragmentation. You also 
need a good program inventory.
    Efforts have been started to put in place the inventory of 
programs across the government, but there was too much 
flexibility, in my opinion, given to the agencies. And so the 
inventory is limited in its ability to compare across the 
government, and it does not include relevant tax expenditure to 
allow for even a broader degree of checks on overlap, 
duplication, and fragmentation. It also needs to be expanded 
beyond the 24 largest departments and agencies.
    There are additional efforts that could enhance better 
collaboration among the agencies. I think that is a very 
important component.
    These strategic reviews that agencies are about to begin 
this calendar year are important, and they are supposed to 
identify other Federal programs and activities and resources 
that are relevant to helping them achieve their objectives. So 
that should help flag overlap, duplication, and fragmentation 
as well in the Federal Government.
    And there is a greater focus on enhancing better 
performance information. As I have testified before on our 
overlap and duplication analysis, we often find performance 
information lacking on many programs and activities, and even 
detailed budget information is not available to know how much 
is being spent on programs that are aggregated and usually 
rolled up into larger figures.
    Now in terms of areas that I think are getting some 
attention, that are on the Administration's radar screen, but I 
think really need even greater attention by the agencies and 
the Congress:
    First, is we are still not able to give an opinion on the 
government's consolidated financial statements. The Federal 
Government owes the public a proper accounting for the 
resources that are spent on their behalf, and we have been 
unable to do that because of serious financial management 
problems at the Department of Defense (DOD) and at the Treasury 
Department in terms of eliminating transactions among 
governments and properly compiling the consolidated financial 
statements.
    Now this year we saw the Department of Homeland Security 
(DHS) for the first time get an unmodified opinion, and right 
now, most of the individual departments and agents, 23 out of 
the 24, can get unmodified opinions. So there is a lot of 
progress at the individual agency level.
    DOD owns about a third of the reported assets and about 16 
percent of expenditures. So, without DOD coming into alignment 
and being able to pass an audit, we are going to continue to 
have problems.
    Second, overlap, duplication, and fragmentation. There is a 
lot of effort that OMB has put on in this to focus the 
performance officers of individual departments and agencies on 
following up on our recommendations. And some progress has been 
made, but there are many opportunities that have not been 
exploited.
    And I think those discussions have to elevate because of 
the problems across departments and agencies. OMB and Congress 
are going to have to get involved to solve some of the real 
significant problems across multiple agencies. It is just not 
going to happen without more intervention of that nature.
    And, last, cybersecurity. I know there are efforts underway 
on this challenge, but it is a serious problem that grows every 
year in terms of the significance of the threats. There is a 
need for concerted efforts on the part of the Administration, 
but also the Congress needs to pass legislation in this area to 
better give the authority that is necessary to the Department 
of Homeland Security and to provide a framework for greater 
information-sharing between the private sector and the public 
sector.
    So I appreciate the opportunity to be here today and appear 
with Beth and Dan, in particular, and would be happy to answer 
any questions.
    Chairman Carper. I am going to yield to Dr. Coburn in just 
a second.
    I just want to say, once again, Mr. Dodaro has given a tour 
de force. I do not see how he sits here. And it is not just 
once or twice he does this. I mean, year after year he comes, 
and he testifies without any notes, and he is very thoughtful 
and comprehensive.
    I just feel very fortunate that you are in the position 
that you are in, and I feel fortunate in the position that we 
are in.
    So, Dr. Coburn, take it away.

              OPENING STATEMENT OF SENATOR COBURN

    Senator Coburn. Thank you.
    I would like to make just this statement first--that very 
rarely do we have before us people that I think both Chairman 
Carper and I have such confidence in, and that is a credit to 
you, but it is also credit to the President in terms of his 
selection.
    So I recognize the effort, the professionalism, and the 
expertise that all of you bring to the table. It is appreciated 
and is wonderful to have people of your caliber in these 
positions.
    I have a lot of things I want to talk about and questions I 
want to ask, but I think let me first followup on Gene's 
comment.
    This is a little floor chart that comes from, I think, 1909 
on Duplication Nation.\1\ This is not a new problem. And they 
were talking about savings thousands, even millions, of dollars 
back then.
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    \1\ Chart submitted by Senator Coburn appears in the Appendix on 
page 41.
---------------------------------------------------------------------------
    But the point is, if we talk about the GPRA Modernization 
Act, OMB made a critical mistake in their definition of the 
program.
    And this is the point I would make with you. You cannot 
manage what you cannot measure.
    In our discussions with you and Sylvia, we talked about the 
Taxpayers Right-to-Know Act, and that has passed the House. We 
have a lot of co-sponsors in the Senate, it is bipartisan. We 
have four Democratic co-sponsors in the Senate. My hope is to 
get Senator Carper on that.
    And I know we have some concerns about the efforts that 
that would mandate.
    But the point I would make to you, which goes along with 
what Gene had talked about, is until we know what is there and 
the people running the programs know what is there, you are 
never going to be able to manage them.
    And this is a tough way of getting there. I recognize it. 
But there is no other way it is going to get there.
    You are always going to have the constituent agencies 
saying why they cannot, and this bill says, here is what you 
must.
    The other thing I would make, in reference to what Gene 
said, is it is not just that the American people are owed it. 
The Constitution mandates an explanation of where we spend our 
money and how we spend it. I mean, that is a requirement of the 
U.S. Constitution.
    And Gene mentioned, for example, improper payments. The 
Death Master File (DMF) is a big problem in that, and yet we 
still have not solved the Death Master File problem.
    We have legislation. We could pass that legislation. 
Congress has not done it, to give the authority so we can 
actually utilize the data across the government to know who is 
alive and who is not.
    I mean, we are still paying billions of dollars out to dead 
people, every year, because we failed to do the simple things.
    So I would just come back to the following point; there are 
a lot of ways to skin this cat.
    And I have a lot of confidence in what you are doing at 
OMB.
    My staff is young, and so when they read through this, they 
said, well, where are the metrics, and having not a fine 
appreciation for management.
    But I would just draw this corollary. In the early 70s, I 
built and ran an almost $100 billion business. The only way I 
did that was knowing where the money was going out, who was 
responsible in each area and holding each of them accountable 
to that.
    That is where we need to get in the Federal Government, and 
I know all of your goal is to get there.
    The question is, how do we get there more quickly, and how 
do we take the tough medicine--which I think the Taxpayers 
Right-to-Know is tough medicine.
    But once it is done everything else that Gene has to do, 
Dan has to do, and you have to do, Beth, becomes much easier 
because now you know what is there. The second thing is the 
American people know.
    So, in reading through the Management Agenda, the only real 
question that I have about it is, where are the specific 
metrics that the American people can see and Congress can see 
as to how you are performing because that is the thing that is 
missing?
    I know you all know what that is, but that is not put 
forward for us to know. And until we can see it and until the 
American people can see it, we are not going to have the 
transparency in government that is necessary to combine both 
the legislative branch to give you the other things you need.
    A lot of questions, and I think we will probably come back, 
and I will have a second chance.
    The other thing that I would just mention to Dan is one of 
the things that should have come out of the President's budget 
is a recommendation to change the Budget Act so that when we 
purchase real property we can purchase it instead of lease it.
    The way we score it under the present Budget Act is the 
entire cost of the building is taken as a hit in the year that 
it is purchased rather than amortized over the life of the 
building, which means, now what do we do? We rent the vast 
majority of Federal space.
    And every manager will tell you if you are a good manager 
you can own a building cheaper than you can lease it because 
that profit differential in there for the asset holding is 
potential savings to the Federal Government.
    So there is a lot of areas that I want to cover, and I will 
come back with specific questions when it is my turn again.
    Thank you.
    Chairman Carper. Boy, I almost do not know where to start.
    I will start with us. I will start with Tom Coburn and Tom 
Carper and the folks we serve with here. Sometimes people call 
us T.C.-squared, and sometimes people call us other things, 
too. [Laughter.]
    Senator Coburn. Me more than you.
    Chairman Carper. No. [Laughter.]
    Gene mentioned it is great to have a good game plan. What 
is really even better is to have a good game plan and the 
ability and the determination to implement it.
    This is a shared responsibility. This is a team sport, and 
we are part of the team. We do oversight, and that is our job, 
but we are also a part of that team and part of that shared 
responsibility.
    Some of what is needed to get results out of any 
organization is leadership. Your example is terrific 
leadership, and we have many other examples throughout our 
Federal Government. But, as Tom and I know, there are still 
gaping holes in this Administration.
    And we worked hard, especially in the Department of 
Homeland Security where we have jurisdiction, to fill those 
gaping holes. We worked very closely with Sylvia Mathews 
Burwell to make sure that she had the kind of leadership team 
that she has and to be helpful, and GSA as well.
    We still have too many holes. In some cases, the 
responsibility is ours. We have people that have been nominated 
and vetted here in the legislative branch. We have voted on 
them, reported them out, and they are just awaiting action on 
the floor.
    But in a number of instances, the ball is in the 
Administration's court, and we just need the Administration to 
do its job.
    We have a responsibility to do ours.
    But, in terms of morale, getting things done and follow-
through, having Senate-confirmed leadership in these positions, 
as you know, is just critically important, more important than 
I ever imagined when I came here.
    OK. each of you have mentioned improper payments. I want to 
dwell on that just for a moment.
    People say to me, why do you spend so much time talking and 
thinking about improper payments?
    Who was the guy that they used to say, why do you rob 
banks? Willie Sutton.
    Willie Sutton, yes.
    They said, why do you rob banks?
    He said, that is where the money is.
    Tom, we had--and I am sure you had in your office--last 
week, we had a delegation from Delaware from the Veterans of 
Foreign Wars (VFW) and some really smart people.
    And one of them actually had a spreadsheet that he had 
prepared in order to try to point out some ways that we could 
save some money and be able to direct that money toward helping 
veterans. To my delight and pleasure, one of the areas that he 
had highlighted was improper payments. He actually knew that 
improper payments were, I think, $121 billion just a few years 
ago, down to $108 billion, down to $106 billion.
    And he said, that is still $106 billion, and you have to do 
something more about that.
    As we know, almost half of that $106 billion is in the 
health care area, and I was pleased to see the Medicaid piece 
of that continue to trend down in the most recent results. I 
was concerned to see an uptick, a significant uptick, of about 
10 percent in the Medicare portion.
    And let's just start there and ask a question. Why? Why did 
that happen, and what can we do about it? What can we do about 
it? Anybody?
    Beth, do you want to start?
    Ms. Cobert. Sure, I will start.
    One of the things that we do in OMB in reviewing improper 
payments is to go through each of the areas in a quite 
disciplined way to actually understand both what caused 
improvements--so are there lessons that we can learn that we 
can either extend in that area or apply to others? Or, in the 
place of where we have seen slip-back in progress, what is 
causing it and what are the actions we can take?
    In looking at Medicare, we saw that rise and had the same 
level of concern that you expressed. There are a couple of 
different factors that we saw and that we are working with 
Health and Human Services (HHS) to address.
    For example, one of the factors driving the change and the 
uptick in Medicare was some change in some of the requirements 
for getting the payments in terms of in-person visits and 
others, which actually led to errors in how people had done the 
paperwork. That counts as improper payments. They have tried to 
address those going forward.
    But we have an active program with HHS and the team at the 
Office of Federal Financial Management (OFFM), that works on 
this, to go through each one of those, make sure there is an 
action plan in place, work with the IGs, and address them. So 
we are working through that with them on Medicare and also to 
see what we can do to sustain the progress on Medicaid.
    Chairman Carper. All right. Dr. Coburn and I have co-
authored legislation. We call it the PRIME Act, P-R-I-M-E Act. 
At large, it relates to how do we get better health care 
results for less money or the same amount of money, a lot of 
smart ideas, some we have come up with, some our staff has come 
up with, others that we have just gotten from you and from GAO.
    Gene, I am going to come to you on this.
    The PRIME Act--we have appended that as a part of the 
sustainable growth rate (SGR) fix, the ``doc fix'', legislation 
that is coming out of the Finance Committee. And, hopefully, we 
can get that done and, in doing so, address many of the 
provisions or concerns that are part of the PRIME--reasons why 
we introduced the PRIME Act.
    Gene, let me yield to you on this.
    One of the hard things we deal with sometimes when Tom and 
I introduce legislation like this, and others too, that is 
designed to save money, it is tough to get a score out of the 
Congressional Budget Office (CBO) that actually verifies or 
certifies that we are saving money. It is really weird that we 
do these program provisions and bills and amendments, and 
instead of getting credit for saving money, it comes to us from 
CBO as an added cost, which just drives us crazy.
    Gene.
    Mr. Dodaro. We have a number of open recommendations in the 
Medicare improper payment area that I will submit for the 
record\1\ but a couple that I remember----
---------------------------------------------------------------------------
    \1\ Information submitted by Mr. Dodaro appears in the Appendix on 
page 74.
---------------------------------------------------------------------------
    Chairman Carper. Go ahead.
    Mr. Dodaro. One is to have providers that are entering in 
the program post a surety bond. So, if there are problems with 
that provider, if they do not prove to be a legitimate provider 
or their billing practices are not correct, the program at 
least will have some money to offset what those costs will be. 
That has not yet been implemented as I recall.
    Second, the Centers for Medicare and Medicaid Services 
(CMS) had put in place a number of additional automated tools, 
but they had not trained up their people properly to be able to 
effectively use the tools.
    And then, third, they need some additional predictive 
analytical technologies to prevent the improper payments in the 
first place. You have such a big volume of transactions and 
relatively small amounts that you have to have IT skills in 
order to do this properly. They are making investments, and 
they are trying, but they just really need to expedite those 
efforts.
    So those would be three things I would offer.
    Chairman Carper. In terms of how to make continued progress 
here, any advice for us? And then I am going to yield back to 
Dr. Coburn.
    But in terms for making extra progress here, what further 
do we need to be doing?
    Mr. Dodaro. I would suggest having a focus on what IT 
investments that they are making and what they expect to get 
out of it.
    And they have estimated that they are going to save tens of 
billions of dollars, but we do not see the metrics necessary to 
demonstrate the level of savings.
    So I would suggest a dialogue on those issues.
    Chairman Carper. All right. Thank you.
    All right, Dr. Coburn.
    Senator Coburn. Beth, let me come to you. You talked about 
$1.6 billion in savings from PortfolioStat, but GAO reports 
that the actual potential for cost savings is around $5.6 
billion--$5.8 billion. Why is it that GAO is finding much 
greater potential savings than you are?
    Ms. Cobert. We are continuing to work the PortfolioStat 
process at the overall agency level, and one of the things we 
have been pleased by is to see agencies actually take this up 
inside their organizations.
    As we continue to look at IT, we are looking at new areas 
in terms of how we can improve and capture savings, whether it 
is through better efficiency within data centers in addition to 
consolidating them, better ways of bringing systems together, 
more use of the cloud.
    So we think there is more room to run in terms of making 
progress against those, and it is our commitment to continue to 
look at that and see how we can continue to make progress 
particularly on the more commodity parts of IT devices, 
consolidated mobile purchases, et cetera.
    From my experience in the private sector, this is one you 
just have to keep going at because some of the underlying costs 
of storage and of transmission continue to fall, capabilities 
continue to rise. And so you cannot be satisfied with the ideas 
you identified last year. You have to keep generating the next 
set of them.
    Senator Coburn. OK. What specific actions do you plan to 
take to actually improve the IT dashboard and to make sure that 
TechStats are used to catch and fix IT projects before they 
fail--because part of our problem is we do not catch it until 
it has failed. So where is the plan on that?
    Ms. Cobert. We have a comprehensive effort underway to look 
at IT management, particularly around the application delivery 
side, which is more the TechStat side of things versus the 
PortfolioStat side.
    And the issue that you have teed up exactly around doing 
TechStats earlier in the process is one of the ones that we are 
working toward. You want to get in there and look at them early 
and see what you can be doing.
    Another place that we are looking at in terms of improving 
TechStat and sort of the delivery side of IT is thinking about 
how we adapt our methodologies to the more agile development 
model that exists today.
    If you go back not that many years in time, the right way 
to build an IT system was to actually spend a lot of time, 
think about requirements and then deliver against those 
requirements. That was actually best practice.
    If you look out in what companies are doing today--actually 
governments, when they are doing it well, are doing today--it 
is a different development model. It is much more about pilots 
and prototypes.
    How do you start to get a sense of requirements? You pilot 
the IT tools and the software tools, and that will allow you to 
be much more flexible.
    As we think about a process like TechStat, you do not want 
to be measuring compliance with requirements. You want to be 
looking early about how we are looking at needs and what are we 
doing to do that and, importantly, how are we incorporating 
continuous learning and feedback in that loop.
    So this issue about restructuring and thinking about when 
you do TechStats and how you do that is one of the things we 
are looking at as part of our overall IT delivery efforts.
    Senator Coburn. Will you commit to keep the dashboard both 
current and accurate because it is neither right now?
    Ms. Cobert. We understand, and we are committed to trying 
to make improvements against the dashboard.
    Senator Coburn. OK. The other question I have concerns 
chief information officers. You all did not mention that at all 
in your plan, and the role of the Chief Information Officer 
(CIO); in other words, having somebody that is accountable.
    And in several of the agencies, the CIO does not even have 
the authority.
    Has there been any thought given to giving OMB direction to 
what that role should be so you have a person that is 
accountable?
    That is what our intent was when we did that, and yet, in 
several agencies, they have gone totally around that, and we 
still do not have an identifiable patient with which to hold 
accountable.
    Ms. Cobert. The part of the IT delivery effort that we have 
underway where I talked about best process is, in fact, 
thinking about how do we structure that to get that point of 
accountability that you are describing.
    And, in fact, it is both the CIO and how the CIO works with 
program leadership, how they work with the Chief Financial 
Officer (CFO) on the financial side on what they are 
delivering, how they work with the chief acquisition officers 
to make sure you are using contracted resources and you have a 
contract that is well structured.
    But we need to think about how we get that point of 
accountability to drive things forward. So that is one of the 
issues as we think about process that we are working through.
    Senator Coburn. Well, thinking about it is different than 
holding somebody accountable.
    And I want to drive this point home.
    Ms. Cobert. Yes.
    Senator Coburn. If we have CIOs, they ought to have the 
power as well as be held accountable for the implementation of 
this, and what I am seeing is a different level of 
accountability across different agencies. And you all can fix 
that if you choose to so that we know where to go and who is 
responsible and who will be held accountable.
    I think some of my back numbers were $88 billion in IT 
purchases, and about $44 billion of it got us nothing a couple 
of years ago. I am sure we are somewhat better than that, but 
that is pitiful. That is pitiful in terms of the money that we 
are spending.
    Let me ask a question about strategic sourcing because the 
position of the GAO is that you all are not even coming close 
to touching what is potential there. Tell me what your thoughts 
are on that.
    GAO says we could save $12 billion a year, potentially. I 
am not sure we can get that high, but the point is we are at 
$300 million.
    How do we get to $8 billion, and how do we listen to what 
GAO is saying, and how do we learn from the private sector, 
which you have a lot of experience in?
    Ms. Cobert. So I would echo GAO's perspective that there is 
absolutely more we can do in the realm of strategic sourcing, 
both consolidating purchases and being smarter about what we 
buy.
    In my private sector experience, when we looked at places 
where I have done this and we got changes, part of it was 
leveraging buying power, but another part was just buying 
smarter--making sure people were buying what they needed, not 
more. You did not need the high-powered PC if you were just 
basically doing word processing and e-mail on your desktop.
    So how do you get requirements right?
    One of the ways we are working through this--and I will let 
Dan add some of the specifics--is we are trying to bring on 
more categories. We have done some early experiments, but we 
need to bring in more categories of things that we buy in a 
common way across the government. So we are adding things 
around janitorial supplies, a second round of office supplies, 
a second round of delivery.
    So we are bringing more categories in, and we are trying to 
get more consolidated efforts against those. We have set up 
goals for this year, and that is one of the Cross-Agency 
Priority Goals that we are committed to delivering against, 
working with GSA and our other partners in this effort.
    Senator Coburn. Dan.
    Mr. Tangherlini. I appreciate the opportunity to comment on 
that because Beth has been, in the time that she has been there 
already, a very powerful leader and supporter of telling 
agencies that they really need to join this effort.
    We have five active strategic sourcing solutions right now. 
We have six that are currently underway to be developed. We 
just released and announced one--the Maintenance Repair and 
Operations Strategic Source Initiative.
    I think the point is the one you are making. When we have 
sat down with the President's Management Advisory Board, which 
is a group of Chief Executive Officers (CEOs), there is no one 
there who says it is a good game plan to atomize your spend. 
There is no one there who says you should buy things three, 
four, or five different times or ways through multiple 
contracts and duplication.
    And I think the trick is we really have to demonstrate in 
this early part of the initiative the value that we bring to 
agencies so as to make it obvious to them and clear to them why 
it is critical for them to participate.
    Senator Coburn. Gene.
    Mr. Dodaro. I would just add a couple points as they 
deliberate how to approach this.
    One is we have suggested that they target high-spend 
categories like services, for example, and also set better 
goals and metrics, as you mentioned.
    But there are about 4 or 5 agencies that account for about 
80 percent of all the spending, and I think focusing in on 
those large purchasing agencies, like DOD and Veterans Affairs 
(VA) and others, would yield results.
    Holding them accountable and targeting the high-spend 
areas, can be ways to try to get a better payoff.
    Senator Coburn. OK. Let me just followup, if you do not 
mind, Tom, for a second.
    Dan, would you comment on the progress you all have made in 
your CIO role and the benefits and what the results are?
    Mr. Tangherlini. No, I would be happy to.
    About 18 months ago, shortly after I came over to GSA and 
we had completed the first round of our top to bottom review, 
we identified one of the critical issues that was facing our 
organization, in terms of managerial accountability and 
transparency, was the fact that we had people in these chief 
roles who did not actually have clear accountability and 
authority over the responsibility for which they bore the 
title.
    So my Chief Financial Officer did not have all the finance 
people working for them. There were other chief financial 
officers, essentially, within the organization.
    The head of human resources was not in charge and 
responsible and accountable for all the human resources 
professionals across the organization.
    And the CIO, essentially, sat as the chairperson of a 
committee comprised of people who also bore the CIO title 
throughout the organization.
    As a result, within GSA, we did not have an enterprise 
architecture for our information technology, and we were buying 
things once in one bureau and again in another. Even cases when 
we were buying the same thing, they were not integrated.
    So we blew the whistle. We called a stop to that. We made 
the CIO, and we have gone through an effort to organize all the 
people within the administrative functions, particularly the IT 
function, under that single accountable individual.
    And we are beginning to see fruit borne from those efforts 
in the form of being able to integrate our systems, finding 
places where systems that we are developing for one part of the 
agency are extensible to other parts of the agency.
    And, since what we do is really in service of all other 
agencies, we are even seeing opportunities where we can take 
the lessons we have learned and the progress we have made and 
share it with other agencies.
    Senator Coburn. OK. Thank you.
    Chairman Carper. One of the things we do in our State--I do 
not know if they do this in Oklahoma or other States, but one 
of the things we do in our State is every year our 
congressional delegation--Senator Coons now, Congressman John 
Carney and I--co-hosts a veterans' summit, and we invite all 
the veterans organizations in our State to come and meet with 
us at our big VA hospital and health care facility in Northern 
Delaware.
    One of the things that we talked with them about is how the 
VA, 15 years ago, sort of developed the idea and implemented 
the idea of electronic health care records, and now it is being 
widely replicated in health care delivery systems across the 
country.
    We also talked about an effort to provide a more seamless 
transition for following the health care of military members 
and service members as they transition to becoming veterans.
    I remember when I was a Naval Flight Officer (NFO) for a 
number of years, and we used to--when we head out or we 
deploy--my squad was home-based in California. We deployed to 
different places in the Western Pacific, Southeast Asia.
    And we would literally take with us--this is an orange 
folder, but--manila folders that were thicker than this that 
had our health care records, for each of us. We would check in 
at our new assignment, our new duty station, and if we needed 
to see a doc or get some health care, we would have our health 
care folder.
    I got out of the Navy, off of active duty and went to 
Delaware to go to graduate school and showed up to the VA 
hospital, the same one we had the veterans' summit at last 
week, all those many years ago and I had my manila folder with 
my health care records in it.
    We are trying to do a whole lot better than that. As you 
know, we have electronic health records in the VA for veterans, 
and we have a different system over in the Department of 
Defense. So we are not asking our departing or people getting 
off of active duty to carry their folders with them to the VA. 
But it is not a seamless system, as you know, and it needs to 
be.
    I do not know if, Beth, you can give us a little bit of an 
update on how that is going, but I think there is a great 
savings there and, frankly, a lot better customer service that 
could be acquired.
    Ms. Cobert. Getting that transition to work well, getting 
the IT tools to work well, getting the processes to work well, 
getting the information to flow consistently is an area that we 
have been working on at OMB, both with the Department of 
Defense and with the VA. You have to get them both working 
together.
    It is an area that is one of the focuses in the priority 
goals this year. In my discussion with Sloan Gibson, who is the 
newly confirmed Deputy Secretary at VA, he is very focused on 
these issues and getting those IT systems right.
    In fact, as we looked for somebody within an agency to help 
lead the Cross-Agency Priority Goals on smarter IT delivery, we 
asked him if he could step up in that role, one, because there 
is a lot of focus on these activities at VA--they have a new 
chief information officer who is leading the charge there--and 
two, we thought it would be a great place because it is such an 
important issue for us to highlight and start to use some of 
these new tools and approaches. So we are very engaged in 
working with them on trying to make progress on that issue.
    Chairman Carper. Good.
    Ms. Cobert. And we are working with him as a great partner 
having joined that team.
    Chairman Carper. Let me stay on the focus of veterans for 
just a moment.
    A lot of folks in this country, who maybe never thought 
they would apply for disability from either the Social Security 
Administration or from the VA, have done so in recent years in 
part because we have made more eligible folks in the military 
who may have been or probably were exposed to Agent Orange and 
there are a lot of maladies that actually can qualify for 
veterans disability as a result.
    We have a lot of people who were simply in a bad economy, 
the worst recession since the Great Depression, and have, 
frankly, been looking earnestly to find a way to supplement 
their income, and they have tried to see if maybe they are 
eligible for Social Security disability or for VA disability. 
And so we have seen a huge uptick.
    We have had enormous backlogs, as you know, at the VA 
because of both of those factors.
    And there is a strong effort underway to try to move from a 
paper system in the VA to an automated system in the VA, to add 
people. We learned from Secretary Shinseki's representatives at 
our summit that real progress is being made.
    And I just wanted to know if this is something that is on 
your radar screen.
    But, we talked about the three Es and the P--effectiveness, 
efficiency, economy and people. This actually touches base on a 
bunch of them.
    A lot of these people are veterans, and some of them are 
desperately in need of help, and I just want to make sure that 
this is something the Administration is on and following.
    Ms. Cobert. It is an area that the Administration is very 
committed to. In fact, it is one of the places where we are 
talking about trying to deploy some new talent around IT, 
leveraging the work, for example, from the President's 
Innovation Fellows, to focus on the issue of applications.
    Making sure you get the information right the first time 
will both help get decisions made faster and make sure we have 
the right information to make the right decisions and make the 
process better. And we are going to hold ourselves to 
standards, in terms of measurable standards for performance, 
against that.
    Chairman Carper. All right. Yes, sir, Gene.
    Mr. Dodaro. On this issue, we made some recommendations 
recently, first, to get VA to have electronic access to medical 
records that the Social Security Administration has because a 
lot of people file for different types of benefits, and they 
have acted on that recommendation. So that is an improvement.
    We have also recommended that they provide more access to 
the Guard and Reserve records, so they have quicker access to 
those records as well, and that they develop a strategic plan 
with better metrics to bring the backlog down. It has come 
down----
    Chairman Carper. Yes, it has.
    Mr. Dodaro [continuing]. From over 500,000 to over 300,000 
now. So it is moving in the right direction.
    And they are taking a lot of efforts, but they do not 
really know which effort is leading to which improvement 
because they are not measuring them as much as they could and 
need to going forward.
    On the exchange of the health care records, this is an area 
where they have gone to this recent strategy of moving away 
from having one system to having separate systems that are 
going to be interoperable. But we have not seen a really good 
explanation of how that is going to work and why that is better 
than having a single record, or picking one of the two systems 
and just having people use that one system.
    This is something we have tracked for years, and I can tell 
you in our opinion, it is really not on track after years of 
efforts. I am pleased about this focus on it, and they are 
bringing in some new people. But it is not as hard as it has 
been made to be if some people will make some tough decisions.
    Chairman Carper. Well, if much progress has been made on 
Healthcare.gov, on the troubling startup that we had there, if 
we can make that kind of progress, we ought to be able to fix 
this.
    So I just want you to know this is one we are very much 
interested in and watching.
    Let me yield to Dr. Coburn. Thanks.
    Senator Coburn. One of the things the President mentioned 
in his State of the Union was job training. And the GAO, some 
time ago, listed out 47 job training programs for the 
nondisabled, of which all but 3 duplicated at least another 
one.
    What is the plan? What is the progress--none of which, by 
the way, have a metric on whether they are successful.
    And we did a lot of work looking at all those Federal 
programs as they applied to Oklahoma, as well as State 
programs, and what we found--our assessment doesn't mean it is 
right everywhere, but our assessment is Oklahoma is far 
superior in the State-run programs than any of the Federal 
programs. We are great at employing people and job training. We 
are not great with Federal dollars giving people a life skill 
with which to rise in our economy.
    So what is the plan going forward? How do we assess that? 
What is coming forward?
    The House has passed the SKILLS Act, which consolidated a 
large number of those and put metrics on every one of them. 
What is coming from the Administration on that?
    Ms. Cobert. The Administration, through the budget and its 
actions, has a series of initiatives that we have called jobs-
driven training. The issue you raise is the one we want to 
focus on--how do we use training as a way to connect people to 
productive employment?
    We are working with the private sector. We are working with 
the relevant agencies to have a much more coherent approach 
that starts with the job needs and then works back.
    What are the skills that companies are looking for? We hear 
from companies that they need people with certain skills, and 
they cannot find them. That is what job programs need to help 
provide.
    So how do you start from that end and work back? There is 
an effort underway to do that, looking across programs, looking 
at those metrics, connecting with the private sector and making 
those connections happen.
    Senator Coburn. I would certainly recommend you go look at 
the Career Tech Program in Oklahoma.
    Ms. Cobert. Terrific.
    Senator Coburn. That is funded well, and that is their 
whole goal--is to try to develop training programs for what is 
needed in the economy rather than to create a job training 
program for people who do not have a job.
    So I would just recommend it. We are proud of the success 
of the Career Tech Program in Oklahoma. It is highly 
successful.
    Job Corps is an absolute failure in Oklahoma when you look 
at the metrics of who got a life skill.
    And so, to me, it just drives me nuts that we continue to 
spend money on programs that do not achieve anything without 
truly reforming. Part of that is Congress's fault. That is not 
just OMB.
    One other area--and I do not know if you all are addressing 
this, Beth, but the STEM programs. We have 209 STEM programs, 
over 100 of them at the Department of Defense. We do not have a 
metric on a one of them.
    We are spending billions. We know we want more science and 
technology, engineering and math.
    What should be our approach in Congress to help you with 
that?
    And, Gene, I want you to comment on that as well.
    Ms. Cobert. We have continued to make efforts to try and 
get better coordination and consolidation of Science, 
Technology, Engineering, and Mathematics (STEM) programs. We 
have done that in a couple ways. I can provide some of the 
overview, and I can get back to you with the details of how 
that is working.
    One of the things we have done is to try and get greater 
focus within agencies on what is the group they are trying to 
reach: Are you trying to reach people who are already in 
graduate education? Are you trying to reach them earlier in 
their career? How do you get agencies to play lead roles in 
each part of those programs?
    So, even if the programs still exist in different places, 
they are coming at it in a much more coordinated way.
    There were some initiatives last year. There is another set 
of initiatives proposed in the budget this year because this is 
a critical issue for the economy. It is a critical area where 
we can make a difference, and we have to make sure that we are 
using those scarce dollars to deliver the best we can.
    So I am happy to get back to you with more of the details, 
but there is an effort, and a focused effort, in the program 
this year to continue to make progress there.
    Senator Coburn. Is there a role for Congress in terms of 
helping you accomplish what you want to accomplish, or should 
we just stay out and let you all run this?
    Ms. Cobert. So I need to come back. I know there are always 
ways to try and figure out what we can do administratively. 
There are places, I am sure, where some ability to work with 
Congress will help us.
    Senator Coburn. Here is what Oklahomans ask me: Why in the 
world do you have 209 different programs?
    Can anybody give a logical answer to the American public 
about why we have 209 of those?
    [No response.]
    I take from the silence that nobody can.
    So I would love to hear your thoughts on what we can do to 
help that and streamline it.
    Ms. Cobert. I would be happy to get back to you with the 
specifics we are proposing in this area.
    Mr. Dodaro. A couple points I would make. When we looked at 
the 209 programs, we found that \2/3\ of them had never been 
evaluated. So you really do not know whether those programs are 
working.
    Typically, what happens, and the reason you have the 
proliferation of programs, is that people are not satisfied 
with the existing programs; so they create a new one to assist 
a targeted group, as you know. And that, repeats itself over 
the years.
    So regarding the role of the Congress in this particular 
case it is unlikely that the 200 programs will be able to be 
dealt with administratively. There will likely be a need for 
some statutory changes. I do not know that for sure, but just 
based on my experience I would say that is probably the case.
    There definitely would be a need for better coordination 
because it crosses multiple appropriations committees.
    And the Congress ought to ensure whatever programs are 
consolidated are required to have metrics and there is regular 
reporting on this because it is not going to be a one-time fix. 
There will be continued new developments in science and 
technology, engineering and math that are going to require 
changes to those programs.
    Even if you reduced the number of programs to 50 rather 
than 200, you could have the same problem again 10 years from 
now, not knowing which of those 50 are working effectively or 
not.
    So I think there are definitely ways that Congress can help 
in this area.
    Senator Coburn. OK. One final question, and it goes back to 
the Taxpayers Right-to-Know Act that passed overwhelmingly in 
the House. It is something that we need to do.
    I know there is resistance on the agencies because most 
agencies do not know all their programs and it will require 
them some work, but it is a one-time investment to finally get 
there.
    Gene, I would like your thoughts on--we know why the GPRA 
is not working--because the broad definition that OMB gave on 
programs. They put a whole bunch of them together and called 
that a program, and a lot of them that they did not call a 
program do not get reported. So, consequently, we do not have 
any accuracy in terms of the program.
    Gene, your thoughts on that?
    Mr. Dodaro. I think that if you are going to pass the 
legislation, there needs to be a provision in there that there 
is one definition of a program that is going to be used 
consistently across the government. If that is not in there, 
you are going to end up----
    Senator Coburn. It is in there.
    Mr. Dodaro. Yes. And so, that would be my only 
recommendation.
    I have looked briefly at the requirements. I do not think 
they are unreasonable things to ask anybody running an agency 
and a program, to provide. There will be implementation 
challenges, as you mentioned, but they should be able to figure 
out a way to be able to provide the required information.
    Senator Coburn. Gene, do you not think that the American 
people deserve to be able to go online and see what all the 
programs are and where their money gets spent?
    Mr. Dodaro. Of course, they should.
    Senator Coburn. Yes.
    Beth, I know in our conversations with you and Sylvia that 
there were what was called stakeholder concerns, and that 
really is the implementation. What are your thoughts now on the 
Taxpayers Right-to-Know Act?
    Ms. Cobert. I think the issues we want to wrestle with as 
we go through this, to get to the goals you are describing in 
terms of that transparency, which we are committed to, is the 
path to get there, the effort that it takes to do this and to 
do it right, to produce data quality. As we know, the 
underlying systems that create this information were not 
designed to generate that, and so there is an effort involved 
in moving from that to consistency in data standards.
    We are working through data standards in a whole number of 
areas. We worked through it in the grants reform work we did 
last year.
    So what I think we would like to do is figure out how we 
can get from here to there, understand the work that is 
entailed, putting sufficient pressure on the system while we 
are doing it so that we can get to the goal we both share about 
having that transparency, ultimately. But it requires work and 
effort to get from here to there.
    Senator Coburn. But you would agree the American people 
ought to be able to see that.
    Ms. Cobert. We want to be able to provide transparency 
about spending, about results. We want to focus on those things 
as you do.
    Senator Coburn. OK, one last thought. The last time I 
looked the only agency that knew all their programs was the 
Department of Education. They actually publish it every year. 
This is a nothing for the Department of Education because they 
have already done it.
    The question I would ask is, why does only one agency in 
the Federal Government actually know all the programs that they 
are running?
    Ms. Cobert. That is a good question.
    I think agencies have come to this from different places 
over time, in terms of how their systems were set up, the way 
they operate.
    They do think about ``program'' differently. That word has 
been used differently for many years. And their operational 
systems from which these data are driven were set up for 
different purposes.
    So that is the challenge--translating from the systems we 
have to where we would like to go, and that is the effort we 
would need to undertake.
    Senator Coburn. Actually, I see that as the excuse to not 
do it rather than the problem. And I do not mean to be curt 
with that. What I am saying is we will never get there if we 
always have a reason why we cannot perform versus OMB saying 
here is what the definition of a program is; here is the 3-year 
span; you will be there in 3 years.
    If we have that kind of leadership, this will happen, and 
we will not have to have a Taxpayers Right-to-Know Act.
    But we are going to get it. We are going to get the 
Taxpayers Right-to-Know Act on a level and a vote that is far 
beyond anything you have seen because, first of all, it makes 
common sense and, second, it is the right thing to do and, 
third, it will make our government better because we will 
actually know what we are doing.
    And I know that is your goal. I know that is Sylvia's goal. 
I know that is the President's goal.
    So my hope is that you will help us do that and do it in a 
way that you can swallow it. But we are never going to get 
control of things until we know what we are managing and we can 
measure what we are managing.
    Thank you, Mr. Chairman.
    Chairman Carper. You bet.
    I think, Gene, in your testimony, you talked a little bit 
about weapons acquisition, weapons procurement.
    In our old jobs, in leading the Federal Financial 
Management Subcommittee, Dr. Coburn and I focused a bit on that 
very issue--weapons systems and cost overruns in major weapons 
systems.
    I think the cost overrun maybe a decade ago was several 
hundred billion dollars, and more recently, it is over $400 
billion.
    One of the weapons systems modernizations that we focused 
on was that of large cargo aircraft that the Air Force uses. At 
the time, we were actually leasing Russian aircraft to meet our 
needs for oversized cargo. Huge amounts of cargo were taken 
into Iraq and, later, Afghanistan.
    And the Air Force had come up with the idea of modernizing 
C-5s, which were built in the 60s and 70s--huge planes, not the 
most dependable aircraft in the world. I will not go into the 
details, but just a good example is changing out the engines. 
They had to do engine changes every 1,000 flight hours as 
compared to every 10,000.
    But the Air Force said, if we are going to invest, instead 
of buying a whole lot more C-17s, which are great planes, but 
are not as big and do not carry as much and go as far, why 
don't we modernize the C-5?
    So we started off doing that, and today there are two 
squadrons of aircraft at Dover Air Force Base, which is really 
the home of airlift on the East Coast of our country, and they 
are very good at what they do.
    We have a bunch of squadrons of C-17s that do a terrific 
job. They are working in and out of Afghanistan and all over 
the world as well.
    And now we have, I think almost 18 C-5Ms which are living 
up to expectations.
    And in the contract that the Department of Defense has, the 
Air Force has, with Lockheed, who built the C-5 originally and 
is doing the modernization work down in Marietta, Georgia--
there is a requirement that the mission-capable rate of the 
aircraft, once modernized, be at least 75 percent. That means 
if you had 100 of them, at any given point in time, 75 of them 
go out and do the job. That was the minimum stipulation.
    I am told that the sort of early read on aircraft 
availability or operational capability is about 80 percent. So 
they appear to be actually above that metric.
    A year or two ago, one of the C-5Ms actually broke 40 world 
records, flying cargo from Dover Air Force Base to the other 
side of the world. It can fly fully loaded, with a full bag of 
fuel, all the way across the North Pole and land in 
Afghanistan, and it can go all the way to Turkey without 
stopping for gas on the way. It is pretty amazing work.
    Having said that, you pointed out we waste a lot of money 
in the Department of Defense. Some of it is weapons systems. 
Some of it is spare parts. It is all kinds of things.
    At our veterans' summit, I mentioned to those who were 
gathered that we are on track right now, over the next 25 
years, to actually be spending more money in DOD for 
compensation and benefits than we are going to have--that it 
will crowd out the whole budget. It will take the whole budget 
and not leave us anything for the warfighters and not leave us 
anything for weapons systems and weapons systems modernization. 
So that is a huge problem that we have.
    I think we also have the opportunity--our controller there 
is leaving. Robert Hale is leaving. I think he is a good 
person. I think he and his folks have worked hard to try to get 
them heading in a better direction, but there is still a huge 
amount that is going to be up to his successor to do in this 
arena.
    So this is sort of a broad question, but you raised the 
issue of weapons systems procurement and acquisitions and doing 
it the smart way.
    The issue of strategic sourcing, I think, applies as much 
to DOD maybe as much as anybody else--they spend about 20 
percent of our budget.
    In terms of improper payments, DOD basically says, we do 
not have any.
    Well, this is baloney. They probably have as many as any 
other agency, maybe more than most.
    In adversity, lies opportunity. There is a lot of adversity 
here.
    The war is winding down. We are out of Iraq. We are winding 
down in Afghanistan. There is a greater opportunity now just to 
focus on these issues and fight these battles on our home turf.
    And so that is a broad question, but let's talk a little 
bit about the Department of Defense. The Marines are making a 
little bit of progress, I am told, in moving toward being 
auditable.
    Let's just talk about the Department of Defense and how 
they are doing. What can we do to make sure they do a lot 
better?
    Do you want to lead us, Gene? You raised this. Do you want 
to say anything else?
    And then I want to kick it back to Dan and to Beth.
    Mr. Dodaro. Sure. We have seen in the weapons systems area 
they are actually bringing down the number of weapons systems 
in the portfolio. So that is a good sign.
    And there are some early indications that they are getting 
better at the cost estimating for some of the initial 
purchases.
    But they are not really managing yet the total life cycle 
costs of the development, and so there is still a lot of cost 
growth over time.
    And we have focused on a couple of things there. One is 
make sure that the technology they are using is matured before 
they go to production. There is still too much concurrency, 
where we are going to production before we have ironed out all 
the technical details. So that is No. 1, I would say.
    They do finally have best practices in their policies, but 
they need to follow them, and so congressional oversight is 
really important in that area.
    Financial management. They have a plan, but I think that it 
is going to be difficult for them to stay on track. There is 
concerted effort that needs to be made.
    They need to look at the workforce and whether they have 
all the right skills to be able to implement reforms properly 
and to deliver their audited financial statements--on time over 
that period of time.
    The supply chain management area is another area where they 
are making some progress, but they do not have enough metrics 
yet to really track progress in that area. We have suggested 
additional metrics.
    About 8 of the 30 areas on our high-risk list are DOD 
business practices. So we are focused on that. We will have a 
full update in all those areas next year.
    My overall statement is they are making some progress. It 
is incremental, but they really need to make more progress in 
order to realize the billions of dollars they could save there 
that are necessary to meet urgent warfighter needs.
    Chairman Carper. About a year ago, Jane Holl Lute sat right 
where you are sitting now, Gene. Jane Holl Lute, at the time, 
was Deputy Secretary of the Department of Homeland Security--a 
terrific servant to the people of this country.
    And she told us how she would actually come over and meet 
with you on a regular basis. I do not know if it was every 
month, but basically she would go through GAO's high-risk list 
as it pertained to DHS and say, what do we have to do to get 
off the high-risk list? Whether it is being auditable, getting 
an unqualified audit, what do we need to do?
    I think you all had a pretty good collaboration, and they 
made great progress through her tenure and that of Janet 
Napolitano.
    Does a similar kind of conversation occur with the folks at 
DOD and GAO?
    Mr. Dodaro. Not at that level. In fact, we have been, as I 
mentioned earlier, having these meetings with OMB and the 
agencies on the high-risk list. We are waiting for the new 
deputy to be appointed at DOD to be able to have that 
discussion.
    I have had discussions in the past with deputies at DOD, 
the deputy secretary level, but they have been far less 
frequent than they were with Jane and, ultimately, not quite as 
productive.
    I am hoping they change that. Beth and I have talked about 
this. But there really needs to be a different paradigm there.
    We are working at the different component levels, and this 
goes to our recommendation earlier about having a chief 
management official at the Department of Defense to really 
focus on these activities.
    Ultimately, the Congress and the Department did not go with 
our recommendation to have a full-time dedicated chief 
management official at the Department. They double-hatted the 
deputy.
    Now the deputy position is vacant, and the deputy chief 
management official officer is vacant, too. That person 
retired.
    And so now with Bob Hale leaving, who I agree with you, has 
done a very good job over there, they are going to have three 
big vacancies to fill which are pivotal to making sure these 
management reforms operate effectively in the future.
    So I am concerned, but I do plan to followup once those 
people get appointed.
    Chairman Carper. All right, Senator Ayotte, welcome.
    I want to ask Beth, if she will, just to finish up 
responding to this question, and Dan as well, and it is on 
weapons systems procurement and ways to save money in the 
Department of Defense.
    Do you serve on the Armed Services Committee?
    Senator Ayotte. I do.
    Chairman Carper. Oh, good. Well, this is probably one that 
is on your radar screen as well.
    If we could, let me go just for another minute or two.
    Beth, just very briefly.
    Ms. Cobert. Sure. Let me just echo what Gene said about our 
commitment together to have these conversations with DOD. It 
has been held up a little bit by the number of management 
transitions there, but in my conversations with the individuals 
who are acting in those roles they very much welcome those 
conversations.
    They are committed to do things like making improvement on 
audits. Improving their auditability is one of their Agency 
Priority Goals for this year.
    One of the individuals, who led the work at the Coast Guard 
at Homeland Security to help bring them to the state where they 
could get a clean audit, has now moved over to DOD. So I think 
that brings the experience of somebody who took something that 
was complicated and had the experience of making it happen to 
the DOD team. That is an important element.
    They have made progress at the Marine Corps, and we are 
working with them on a range of different topics.
    One of our Cross-Agency Priority Goals is strategic 
sourcing. We are working with DOD. In fact, Frank Kendall from 
DOD is the co-lead on that goal, both so we can leverage within 
DOD, as well as, between DOD and the civilian side.
    So there is a number of places where we are working with 
them to address a number of the issues you raise.
    Chairman Carper. Great.
    Dan, I do want to come back.
    I want to recognize Senator Ayotte, who is good to join us 
and very faithful in her attendance. We are grateful for that.
    And I want to come back on the strategic sourcing with 
respect to DOD if we could. Thank you.
    Senator Ayotte, welcome.

              OPENING STATEMENT OF SENATOR AYOTTE

    Senator Ayotte. Thank you, Mr. Chairman.
    I want to thank all of you for being here.
    I guess I am not sure who is best to answer this question, 
but one of the issues that has come up repeatedly with regard 
to the Armed Forces has really been the audit issue, and the 
Air Force has been the most challenging force with regard to 
getting up to audit compliance.
    There was a recent hearing we had in the Senate Readiness 
Subcommittee, and in that, again, I am concerned that the Air 
Force is not going to get up to speed.
    Can you give me a sense of that issue from your 
perspective--the importance of it, first, and second, where you 
see DOD in terms of their progress on this issue?
    It is my sense that, for example, the Marine Corps has made 
progress, and the Army, but where are we with the Air Force and 
also some of the agencies that do not fall neatly within one of 
the forces, so I just wanted to get your thoughts on that.
    Mr. Dodaro. I would be happy to address that issue.
    First of all, in terms of the significance, one of the main 
reasons we cannot give an opinion on the governmentwide 
consolidated financial statements is the serious financial 
management problems at the Department of Defense. They 
basically have been unauditable, and they account for about a 
third of all the reported assets for the entire Federal 
Government and about 16 percent of expenditures last year. So 
this is a very significant issue.
    It is also significant because it limits their ability to 
manage efficiently----
    Senator Ayotte. Right.
    Mr. Dodaro [continuing]. And effectively within the 
Department.
    They have started with a new plan now. This requirement for 
them to do this has been on the books since 1996.
    Senator Ayotte. No kidding. Since I got elected in 2010, I 
have literally, probably, in every hearing where it is relevant 
raised this issue and pressed them on it.
    So I think this has been a requirement on the books for too 
long, and we have to get there.
    Mr. Dodaro. Right. Yes, right now, 23 of the 24 largest 
departments and agencies can get an unmodified opinion. So the 
DOD is the one big example where it has not yet occurred.
    They are finally focused on trying to audit their budget 
figures for a year and also the existence and completeness of 
their assets so they know how many they have and where they 
are, et cetera, which are two fundamental things that they need 
to do.
    So they are making some progress, but I think there are 
some real questions whether they are going to achieve their 
goals to get the statement of budgetary resources by 2014 and 
auditability by 2017.
    We are monitoring it very carefully, and we would be happy 
to provide more details to you about that.
    I have been following this the whole time, since the 90s. 
For the first time, I think they are really seriously trying to 
make the improvements, but I think they are overwhelmed with 
all the requirements that they have and changes that they have 
to put in place in order to properly account for money.
    We did a look at the Army and whether they were ready for 
their payroll audit and found that their payroll systems and 
their personnel systems did not reconcile. So they were not 
really ready to even pass a payroll audit.
    I think there are questions not just at the Air Force but 
all the main services.
    Senator Ayotte. Well, also, I certainly would love to hear 
your advice going forward, serving on both committees, on how 
we could help. Obviously, keep raising the issue in the 
committee but how we could really help get them over the finish 
line and make sure that we hold them accountable for this 
because this is just a fundamental issue in terms of 
identifying where taxpayer resources are going and are they 
being used effectively.
    Mr. Dodaro. I agree with you. We would be happy to help in 
any way we can in this area.
    Senator Ayotte. Thanks. Appreciate it.
    Ms. Cobert. And this is a place where at OMB and the Office 
of Federal Financial Management work closely with DOD.
    I think Gene is right in terms of the renewed commitment 
and a new plan to move forward and where we work closely with 
GAO--I think everybody agrees it is an important issue. We just 
have to get there faster.
    Senator Ayotte. Yes. It has just been too much foot-
dragging for too long, and so we all just have to be working 
together to make it happen. They have to make it happen and 
understand how important we believe it is.
    So I really appreciate your updating me on that.
    And I wanted to ask Administrator Tangherlini about a 
recent GAO report about the Environmental Protection Agency 
(EPA's) use of purchase card holders--but I am assuming this is 
not an issue unique to the EPA although the report was focused 
on the EPA, where the Inspector General analyzed the purchases 
that are being used with these cards and found that over 52 
percent of the purchases were prohibited, improper, or 
erroneous, meaning that there were purchases made that were not 
authorized under the law or otherwise EPA policy.
    So I wanted to get a sense. How is GSA modifying or 
eliminating or addressing this issue on the card purchase 
program overall in light of the weakness, I believe, that 
really came to light in the EPA Inspector General report?
    But I assume that if this issue exists within the EPA, it 
perhaps may exist within other agencies.
    Mr. Tangherlini. No, I think it is a really important 
question and a very difficult issue.
    What we are trying to do is really get agencies better 
data, and so we actually just completed in the past year the 
ability to actually take the data from the three different 
credit card providers and put it in a data warehouse. And we 
are working with agencies to actually do some fraud analysis 
against the information we collect, against that credit card 
data.
    But that is reasonably new, and so we have to do a better 
job of letting agencies know that that information is 
available, and we have to work more closely with agencies to 
give them the tools necessary to go and look over that 
information.
    I will tell you, though, the great thing about the use of 
the credit card is that it actually does give us the kind of 
information that the IG can then go back and audit and identify 
that kind of problem.
    What we need to do is just have more transparency so that's 
happening on a continuous basis, so people know that they are 
being observed, that they are being watched, that people are 
going to be held accountable for meeting these policies.
    Senator Ayotte. Right. It strikes me as, too, I could see 
this sort of verification piece of having the record of the 
transaction that the cards provide.
    So I think the idea is, obviously, the up-front piece of 
prevention in terms of the right policies in place, of being 
able to catch it as it is ongoing----
    Mr. Tangherlini. Right.
    Senator Ayotte [continuing]. Before the money is improperly 
spent or wasted.
    And the other piece that I hope comes from this is the 
accountability piece in the sense that if these cards are 
misused or used improperly that there is accountability within 
the agencies so employees understand, yes, you will be held 
accountable and there will be significant consequences, 
depending on the nature of the actions that you have committed.
    Ms. Cobert. What I have seen in my private sector 
experience when folks put in place the equivalent, a corporate 
P-card program, is that the ability to get the data that Dan 
described really is transformational, and your ability to use 
these programs and, frankly, use them for both purposes, use 
them to understand where there is fraud, take action against it 
and prevent it, but also to understand where people are not 
using them enough because it is a much more efficient way to do 
purchasing.
    So, when you get that data about records and what is used 
and you can analyze it, you can both decrease things that are 
happening improperly and also find places where people are 
using more cumbersome or costly purchasing vehicles when they 
should be using a card.
    So you can use it on both sides.
    Senator Ayotte. I know my time is up. But, on this issue, 
how far off do you think--I mean, what is the timeframe as we 
are now gathering the data to be able to analyze this?
    Where do you think it will be in terms of a timeframe for 
some of the practices you saw in the private sector that we can 
implement--because I can see the ability to look at patterns 
where you could save money overall by looking at the data and 
also prevent the fraud piece.
    So what can we expect in terms of a timeframe of really 
being able to realistically use this data on a day-to-day 
basis?
    Mr. Tangherlini. Well, I actually think it is actionable 
right now, and in fact, we are doing it at GSA.
    And one of the things when I do a quarterly round of 
meetings with our agency partners, and I go visit with the 
Deputy Secretaries and the Secretaries of the agencies, and we 
talk about ways that we can work together and collaborate to 
save money.
    One of the items we point out is that agencies could 
actually, as Beth mentioned, save substantial amounts of money 
by pushing their micro purchases, their small purchases, onto 
the purchase cards, getting rebates that we qualify for under 
those purchases, dramatically reducing the transaction costs of 
invoicing and accounts payable, but also dramatically 
increasing the amount of information we have about what people 
are spending money on and where they are spending it.
    One of our strategic source initiatives, the office supply 
initiative, actually provides the strategically sourced office 
supply discounts that we qualify for under the contract 
automatically when you use the credit card. So, even if you go 
up to the counter and pay the wrong price, it automatically 
discounts back to the strategically sourced price.
    Senator Ayotte. Thank you. I know my time is up.
    And it sounds like this is being implemented at GSA, but 
what we need to do is get this, obviously, across the 
government in terms of this being a regular practice.
    So thank you for your answers. Appreciate it.
    Chairman Carper. Senator Ayotte, I just want to say thank 
you for being so faithful in your attendance.
    This is really an important hearing. This is a great 
hearing. I am just happy that you could join us, especially 
when you came in.
    You and Senator McCaskill both serve on the Armed Services 
Committee, as does Senator McCain, a very senior member. As we 
try to do our oversight and meet our oversight responsibilities 
here, that dovetails perfectly with the roles that you all play 
on Armed Services.
    Senator Ayotte. Well, I appreciate it, Chairman.
    I do think this is an important hearing just so that we 
can, obviously, more effectively use the taxpayer dollars and 
make sure they are going to the right places. So I really 
appreciate your holding it, and I thank the witnesses.
    Chairman Carper. I do not know if you were here when I 
mentioned a series of hearings that Dr. Coburn and I held when 
we were leading the Subcommittee on Federal Financial 
Management, but we brought in some of the senior people from 
DOD, controller folks, and weapons systems people. The No. 2 
person on weapons systems acquisitions we brought in to 
testify.
    This was in the Bush Administration.
    We said, explain to us the kind of turnover you got from 
your predecessor.
    He said, my predecessor left 18 months before I got there.
    And we asked, talk to us about your direct reports. How 
many direct reports do you have?
    And he said, well, I have six direct reports. Only two of 
them were filled when I came into my position.
    Fast-forward about 3 years later, a new Administration, and 
we brought in as a witness the new Administration's person in 
that same position, the No. 2 in weapons systems acquisitions.
    We said, tell us about your turnover.
    He said, well, it is about an 18 months' gap.
    And it was like all over again.
    No wonder we have huge weapons systems cost overruns when 
we have these gaping holes in folks in these Senate-confirmed 
positions. As good as people are in the Acting position, it is 
not the same as having Senate-confirmed.
    And we are going to have a vacancy here as the controller 
leaves. We have a vacancy in controller. Danny Werfel's 
position, I think is still to be filled at OMB as controller.
    And the Administration needs to give more time and 
attention to this, and frankly, we do as well. It is a shared 
responsibility.
    All right, Dan, I said I want to come back to you on 
strategic sourcing. You had some conversation right here with 
Senator Ayotte, but if you want to add anything else on 
strategic sourcing with respect to DOD, please do.
    We started a series of six votes. We have about 5 to 10 
minutes to go, and I have two other questions. So, speak.
    Mr. Tangherlini. Sure. No, I will be very quick actually.
    DOD is, on the acquisitions side, simply our largest 
partner. One of the things we are doing is working very closely 
with DOD to find ways that we can develop cooperative 
agreements in which we can also leverage the scale of DOD's 
buying to help drive down the cost of non-DOD buying.
    Chairman Carper. Oh, OK.
    Mr. Tangherlini. So we have cooperative agreements. We are 
working with the Defense Logistics Agency to look at ways that 
we can collaborate on developing the next generation of systems 
that allow for simplifying buying for the goods we provide in 
common.
    We have agreements with the Air Force to use our new 
services contract, our new strategically sourced services 
contract, the One Acquisition Solution for Integrated Services 
(OASIS) contract vehicle, so that they can eliminate or reduce 
duplication of services contracts and drive down costs. We are 
excited about it because it helps us leverage the scale of 
their buying to drive down costs for non-DOD entities as well.
    So we think that there is a vast opportunity for, frankly, 
us to work very closely with DOD, to help them meet some of 
their savings goals and, by doing that, actually help every 
other agency meet theirs as well.
    Chairman Carper. All right. Thank you.
    This is not a question, but I just want to put something on 
the table, if I can, Beth.
    Senator Warner from Virginia, Senator Portman from Ohio, 
who serves on this Committee, along with our original co-
sponsors, have something they call the DATA Act. Congressman 
Issa and others, and Elijah Cummings are co-sponsors over in 
the House.
    And Senator Warner has from time to time asked me, well, 
how are we doing on the DATA Act?
    We are not going to get into the details of it today, but I 
am going to ask if we can have just a conversation that 
includes the four principals--Senator Warner, Senator Portman, 
Dr. Coburn, myself, maybe you, and a couple of other folks from 
OMB.
    I know you all have had some reservations. We have been 
negotiating through those. I think we are making progress.
    I want to get Mark Warner off my back. [Laughter.]
    I say that in a loving way.
    But this is an important initiative; you know that. I think 
you are trying to make it better and make sure we do not do 
foolish things in passing the legislation. So I just want to 
put that on your radar screen.
    I have two quick questions, and then I am going to run and 
join my colleagues. I think it is six votes in a row.
    The first, on real property.
    I talked about scoring earlier by CBO, how sometimes it is 
frustrating because they do not score things when you actually 
know they are going to save money.
    The current scoring rules require full up-front funding for 
property projects. Therefore, agencies are often compelled to 
enter into, as you know, costly long-term leasing arrangements. 
Today, GAO released a report that attempts to address this 
issue while putting forth a variety of alternative funding 
approaches for major capital projects.
    I would just ask Mr. Dodaro, how are the scoring rules 
preventing Federal agencies from executing many of the 
strategies necessary to meet their real property needs, and are 
there specific budgetary changes that would assist Federal 
agencies in better managing and reinvesting in their real 
property portfolios?
    The scoring rules actually incentivize agencies to enter 
into long-term leases instead of building or buying maybe 
themselves when that makes more sense. We have the incentives 
misaligned.
    Please.
    Mr. Dodaro. Yes, definitely. The scoring rules right now 
provide that if an agency wants to purchase, it has to score 
the whole cost of the purchase up front. It would be the 
equivalent of having to pay for your house immediately as 
opposed to mortgaging it over a period of time. So because of 
that, agencies over rely on leasing.
    Now we looked recently at the leasing issue, and we looked 
at the high-value leases, and there are 200 of them. These 
leases represent only about 3 percent of GSAs total number of 
leases, but they account for a third of the total cost that GSA 
pays for those leases. In some cases, the agencies have been in 
leased space in the same buildings for decades; in some cases, 
40 or 50 years. So it really makes sense for the Federal 
Government to figure out a way to do this.
    Now, in the report that we released today, we have put 
forth several options for people to consider and really to 
start a dialogue on this so we can move to a different paradigm 
in this area, so it would be more helpful.
    One would be to modify the current Federal building fund. 
Right now, there are obligation limits put on the building 
fund, which keep GSA from using the full amount of money that 
is in there.
    Another is to try to time the receipts more to the 
expenditures. Right now, the receipts come in as they are 
received, but funds for the expenditures are appropriated 
later. So there is a mismatch between those areas.
    We have also suggested some other alternatives that could 
be set up where GSA could borrow from the Federal Financing 
Bank and create a little different model and then be able to 
pay the bank back over time. Alternatively, specific carve-outs 
could be put in place to be able to do this.
    But all these options that we put forward really provide a 
different financing vehicle so that the Federal Government can 
purchase and own the property when it makes sense for them to 
do so. In some cases leases make sense, but in many cases they 
do not.
    And so these models in this report today can start an 
important dialogue, and I appreciate the input that we have 
received from both Dan and his people at GSA and Beth at OMB 
into this. We have had a lot of good input.
    And so we are hopeful that the report will provoke a 
dialogue which is much needed.
    Chairman Carper. Dan, we have about 7 minutes, 6 minutes 
left on the votes, so I am going to take just a minute, if you 
will.
    What I want to do is maybe gather us together, maybe by 
phone, to followup on this conversation, and maybe with Dr. 
Coburn and a couple others and our staffs, with perhaps the 
three of you, rather than pull everybody together.
    But just give me a minute. Just take your best shot.
    Mr. Tangherlini. Very quickly, I would say that the scoring 
rules are not the problem. They are more the symptom, frankly.
    The bigger problem is having a meaningful strategy that 
recognizes that we are going to have a long-term investment in 
real estate.
    In many ways, the GSA Federal Buildings Fund is actually 
set up in a very businesslike way, where we collect rent from 
agencies that is set at a market level.
    Chairman Carper. Right.
    Mr. Tangherlini. That market level is determined through 
analysis and audits, investigations and inspections.
    And then what we are supposed to do is make investments 
based on continuing need in the buildings.
    What has happened over time is since we have not had full 
access to those rent funds people have pushed more into the 
lease areas. As Gene pointed out, our average tenancy in a 
Federal building lease is in the decades. It is actually 27 
years and growing.
    And so what happens is we are paying for that building over 
and over on the lease side. By our estimates, it is about twice 
as expensive--I think that is confirmed by GAO--to lease than 
it is to buy or build.
    And so what we have to do is ask ourselves, are there some 
of the mechanisms in the GAO report or other ones that we could 
come up with which would allow us to do this in a more 
efficient and effective way going forward.
    Chairman Carper. All right. Beth, I am going to ask you to 
hold your fire. I would love to stay here for another 15 
minutes and dwell on this.
    I am going to ask a question of you, Ms. Cobert, for the 
record and then just ask you to respond on the record, but I 
want to at least get it on the record.
    The management agenda, as I think you have mentioned, 
emphasizes the importance of recruiting and developing top 
agency talent.
    Ms. Cobert, the question I will be asking for the record 
is, what are the Administration's specific plans in this area? 
We have talked about that to some extent today.
    How will you monitor and measure the progress in this area 
over the next few years?
    Again, this is a shared responsibility; we realize that.
    I will close with this thought. In the Navy, when we used 
to try to do something really hard, we would say it is like 
turning an aircraft carrier, but if you stick with it, you can 
change the course of an aircraft carrier.
    In naval aviation, we used to say--if it was really hard, 
we would liken it to trying to change an aircraft engine while 
the aircraft was in flight.
    And this is like turning the course of an aircraft 
carrier--hard, long, takes a lot of effort, but we can do it.
    I think I am encouraged today that we can see the course of 
the carrier is changing.
    This is an all-hands-on-deck effort, though. OMB cannot do 
it by themselves--GSA, GAO, as good as you are and your team 
are.
    And this is the dream team. This is a great team. We are 
just so proud of you. We were talking up here, Democratic and 
Republican staff, about what a great leadership team we have 
here.
    We think the leadership team here is pretty good, too, and 
we have the opportunity to leverage and to get the kind of 
result so that when the people that we are asking to pay a 
little bit more money in taxes, in order to help bring down the 
deficit and put us on a more fiscally sustainable position, 
when they say, I do not mind paying some more in taxes, I just 
do not want you to waste my money, we can say, well, there is a 
whole lot that we are doing.
    And the plan is not just on paper, not just a plan, but 
actually, we are implementing and getting it done.
    So my thanks to all of you for being with us today and for 
the good work that you are doing.
    We want to followup and continue to followup very closely 
with you, and I think to collaborate with the defense 
committee, Armed Services Committee, that some of our 
colleagues are very much involved in as well, and we will get 
some synergies out of that.
    All right. The hearing record will remain open for 15 days. 
I think that is until March 27, at 5 p.m., for the submission 
of statements and questions for the record. I will have a few, 
and I am sure my colleagues will as well.
    Thank you for a wonderful hearing. Keep up the good work. 
Thank you.
    [Whereupon, at 10:46 a.m., the Committee was adjourned.]
    
                            A P P E N D I X

                              ----------                              

[GRAPHIC] [TIFF OMITTED] 

                          MANAGEMENT MATTERS:



       CREATING A 21ST CENTURY GOVERNMENT--PART II, OUTSIDE VIEWS

                              ----------                              


                         MONDAY, MARCH 31, 2014

                                       U.S. Senate,
                             Committee on Homeland Security
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 3:02 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Thomas R. 
Carper, Chairman of the Committee, presiding.
    Present: Senators Carper and Coburn.
    Chairman Carper. The hearing will come to order. How are 
you all doing? Nice to see you all. Thanks for joining us 
today. Dr. Coburn needs to be on the floor in a few minutes and 
I have asked if he would like to go first. He has accepted. So 
he is going to go first and then I will give a short statement 
and then we will hear from you. Welcome, everybody. Thanks for 
joining us.

              OPENING STATEMENT OF SENATOR COBURN

    Senator Coburn. Thank you, Mr. Chairman, for being so 
gracious. I am going to the floor, in typical fashion, to 
address the issue with Sustainable Growth Rate (SGR), it is a 
problem that we keep treating symptoms of but never address the 
real problems, much about what our discussion is today.
    The government cannot manage what it cannot measure. We all 
know that. Any discussion of the Administration's management 
initiative should start with the fact that we do not even have 
the full accounting of everything that we are doing. Only one 
agency actually knows all its programs. That is the Department 
of Education (ED). The rest do not.
    That is why I, along with 9 of the 16 Members on this 
Committee, more than one-third, 37 at last count, of the U.S. 
Senate have introduced the Taxpayer's Right-To-Know Act. I have 
already had a conversation with Mr. Stier about some additions 
to that and some great ideas that we had before the hearing 
opened.
    The first step in measuring the results of a government 
program is creating an inventory of all Federal programs. I am 
reminded--Robert Shea was here and helped us with the bill that 
Senator Carper and I, Senator McCain, and then-Senator Obama 
introduced creating the transparency that we now have, and we 
have seen the inadequacies of that. Although it is better than 
what we had before, we are not where we need to be.
    So I thank you for that. The Taxpayer's Right-To-Know Act 
will create a concrete way to address the $200 billion that the 
Government Accountability Office (GAO) has identified in 
duplication. It is a basic statute for every Federal program so 
we can know at a glance what we are doing. And then the 
question comes back to Congress why, what is the strategy, what 
are the tactics, what is the plan in terms of the government's 
response and actions?
    Most of our witnesses here today have been on the front 
lines. Tom, I know you have, and I know Max has, I know Robert 
has. Dr. Metzenbaum, we welcome you as well. The Sunlight 
Foundation has been really out there in terms of making it 
apparent for what is not happening and being a voice to make 
sure that the American taxpayer actually gets to see where the 
money is spent and how it is spent and why it is spent.
    So I really appreciate you all being here. I appreciate the 
Chairman, even though it is a Monday, it is hard to make a 3 
o'clock pm meeting coming 1,400 miles, but glad to be here with 
you and I hope to return after I finish on the floor. Thank you 
very much.
    Chairman Carper. Thanks, Dr. Coburn.

              OPENING STATEMENT OF CHAIRMAN CARPER

    Chairman Carper. Well, good afternoon. It is good to see 
you all. As you know, this is like Part 2. I think today is 
sort of like the beginning of the baseball season. I think of 
this as the second game of a day/night double-header. The sun 
is shining, the sky is blue. It almost feels like baseball. So 
it is not a bad analogy to use. But we are happy you are here.
    One of the things, when I talk to folks about deficit 
reduction, I always talk about three things we have to do. One 
is we need to work on our entitlement programs to save the 
programs, to make sure they are going to be around for our kids 
and grandchildren, to see how we can save money in those 
programs, and to do so without savaging old people or poor 
people. That is No. 1.
    Two, we need tax reform that I believe generates some 
revenues. The third thing we need to do, just look at 
everything we do and ask, how do we get a better result for 
less money? When I talk to folks about No. 2, that is tax 
reform that raises some revenues, people say to me, I do not 
mind paying some extra money in taxes. I just do not want you 
to waste my money. And actually, a lot of people feel that way, 
Democrats, Republicans, folks who are Independents and all.
    So part of what we are doing today is figuring out not just 
how we can stop wasting money--any large organization wastes 
money--but also how can we do those things that are our 
responsibility more effectively and more efficiently. We are 
very happy to have your help in doing that.
    This hearing follows up on a hearing we held in our 
Committee about 2 weeks ago to discuss the Administration's 
management agenda for the remainder of President Obama's second 
term, and at that hearing, Beth Cobert sat where you are 
sitting, Max. She is our Deputy Director for Management at the 
Office of Management and Budget (OMB).
    I am just thinking, Dr. Metzenbaum, is that a position that 
you once held?
    Ms. Metzenbaum. I was the Associate Director for 
Performance and Personnel Management reporting to that Deputy.
    Chairman Carper. I see. Thank you. Who did you report to at 
that time?
    Ms. Metzenbaum. Jeff Zients.
    Chairman Carper. There you go. Whatever happened to him? I 
am just kidding. Jeff has been a busy boy.
    At that hearing, Beth Cobert from OMB and Dan Tangherlini 
from General Services Administration (GSA) discussed the four 
pillars of the Administration's approach to good management. 
And they include effectiveness, efficiency in government, how 
to drive economic growth, how to recruit and train a talented 
and dedicated workforce. Those were their pillars, if you will. 
Gene Dodaro sat right where you are sitting, Mr. Lee, and he 
said--a fellow who was the Comptroller General at GAO, he also 
testified. I have seen him testify, gosh, dozens of times. He 
has never used a note, and I understand, in deference to him, 
you will not use notes today and just kind of ad lib it. 
Audibles, is that what we call it? Football audibles.
    But Gene testified and suggested a few ways in which the 
Administration and Congress can work together to help achieve 
the goals of the management agenda and to save taxpayers some 
money in the long run. Our hearing was a discussion of the 
challenges facing our government agencies, along with what the 
President wants to fix, and how we here in Congress can be 
partners in promoting smarter, more efficient, more effective 
government. And those are familiar themes for those of us in 
the Congress, but especially in this Committee.
    Something I often like to say is, that everything I do, I 
know I can do better. I think that is true of all of us. I 
think it is true of every Federal program, and part of our 
challenge is to figure out how to do things, some things 
better. Sadly, the challenges that we are facing are not new. 
For decades, both Democrats and Republican Administrations have 
struggled to correct the inefficiencies and make government 
work better for the American people. In some cases, we have 
succeeded. In a number of cases we have, but there is still 
plenty of work to do.
    Government, though, fortunately, does not have to do it 
alone and struggle to improve efficiency. There are private 
groups who have made it their mission to advise and to help 
government agencies on how they can improve efficiency and 
spend taxpayer money more wisely.
    Today we continue the conversation that we began earlier 
this month. This time, though, we are receiving input from 
folks who represent a few of these outside groups. Our 
witnesses want to see agencies and programs run well and 
achieve their missions efficiently, and they understand the 
value of an effective government. They have personal 
experience, in a number of cases, in government; have gathered 
opinions from others; have done studies; have looked deeply at 
how government works or does not work; and they can inform us 
as to what they have found and how we might base our actions 
accordingly.
    I believe the non-profit and private sector groups like the 
ones that are represented here today can prove to be valuable 
partners in advising our government on good management 
practices. I look forward to your thoughts on the 
Administration's management agenda and what they think, what 
you think are the best ways to tackle those four pillars that I 
mentioned earlier--effectiveness, efficiency, economic growth, 
people, and culture.
    Effective government management has long been a priority 
for this Committee and I hope this hearing shines a spotlight 
on what management initiatives are being done well, which ones 
could be done better, and how we in Congress can help the 
Administration achieve this important goal for our country.
    I like to quote a bunch of people and I do almost every 
hearing. I think today I want to quote President Truman. 
Actually, I am not going to quote him. I am going to paraphrase 
him. But he once said something to the effect: the only thing 
that is new under the sun are the things we never learned or 
forgot. Think about that.
    We have to learn from the lessons of past government 
workers and Administrations so that we do not repeat their 
mistakes. We look forward to hearing from our witnesses on what 
you believe can be done to set our government management on a 
more responsible course. With that done, I am going to just 
briefly introduce our witnesses.
    Our first witness, Max Stier--do you pronounce your name 
Stier?
    Mr. Stier. The answer is yes, Stier.
    Chairman Carper. OK. There you go. Mr. Stier is President 
and Chief Executive Officer (CEO) of the Partnership for Public 
Service. The Partnership, as I understand it, seeks to 
revitalize the Federal Government by promoting ways to recruit 
and develop a new generation of public servants and to 
transform the way government works. Just a small undertaking.
    Mr. Stier. Small.
    Chairman Carper. There you go. Prior to joining the 
Partnership, Mr. Stier served as General Counsel at the 
Department of Housing and Urban Development (HUD) and Special 
Counsel at the Justice Department (DOJ). I think you might have 
even been a Congressional staffer for a guy from Iowa with whom 
I used to serve on the House Banking Committee. That would be 
Jim Leach, an old friend.
    Our second witness is Shelley Metzenbaum. Ms. Metzenbaum, 
are you any relationship to Howard Metzenbaum? Is he your 
great-grandfather?
    Ms. Metzenbaum. Dr. Metzenbaum is my father.
    Chairman Carper. Is he your dad?
    Ms. Metzenbaum. My dad.
    Chairman Carper. I was just kidding. I never served with 
him, but know him well. I went to Ohio State, so I know him 
well. You all are from Columbus, are you not?
    Ms. Metzenbaum. Cleveland.
    Chairman Carper. Excuse me, Cleveland. Ms. Metzenbaum is 
President of The Volcker Alliance. The Volcker Alliance seeks 
to address the challenge of implementing public policy, to 
rebuild public trust in government, and to bring about 
sustained government improvement.
    Prior to joining The Volcker Alliance in 2013, as we 
discussed earlier, Ms. Metzenbaum was the Associate Director 
for Performance and Personnel Management at the Office of 
Management and Budget, reporting to Jeff Zients. In that role, 
she was responsible for implementing President Obama's approach 
to improving the performance of Federal programs.
    Our next witness is Robert Shea, as in Shea Stadium. Is 
that right? OK. Mr. Shea is a Principal at Grant Thorton, a 
leading international accounting and advisory firm. As leader 
of the--this is a quote--cost, budget, and performance 
management team--right? Is that the name? Mr. Shea works with 
Federal agencies to help them meet financial management 
requirements, improve organizational performance, manage cost, 
and effectively implement information technology (IT) 
investments.
    Before joining Grant Thorton, Mr. Shea was the Associate 
Director for Administration and Government Performance at the 
Office of Management and Budget during the George W. Bush 
Administration. What years was that?
    Mr. Shea. 2002 to 2008.
    Chairman Carper. OK. And who did you report to then?
    Mr. Shea. Clay Johnson.
    Chairman Carper. Sure. Mr. Shea also served on the staff of 
the Governmental Affairs Committee under Senator Fred Thompson. 
From what years to what years?
    Mr. Shea. Now, come on. 1999 to 2002.
    Chairman Carper. All right, good.
    Mr. Shea. And I see a bunch of friends behind you.
    Chairman Carper. On which side?
    Mr. Shea. Both sides.
    Chairman Carper. Both sides. That is good.
    Our final witness is Tom Lee--I like to call him Tommy 
Lee--Director of Sunlight Labs at the Sunlight Foundation. What 
a cool name for a foundation. The Sunlight Foundation seeks to 
dramatically expand access to government information in order 
to create accountability of public officials. It also seeks to 
make public information available online. Matters, as we heard, 
Dr. Coburn is very much interested in and he has let me be his 
partner from time to time as well.
    Sunlight Labs is an open source community supported by the 
Sunlight Foundation that is dedicated to using technology and 
convert government data to user friendly applications. Prior to 
leading Sunlight Labs, Mr. Lee led the Sunlight Foundation's--
is it called Subsidy Scope, Subsidy Scope Project?
    Mr. Lee. Yes, that is right.
    Chairman Carper. Which, I understand, explored the level of 
Federal involvement in various sectors of the economy.
    We thank all of you for being here today. Our colleagues 
are coming in from around the country, as we speak, and we 
start voting at 5:30. So we will be finished up before that 
happens, but I expect a few of our colleagues will be coming in 
and joining us for parts of this hearing. So I am going to be 
able to hear everything you say. I am the lucky one. And Dr. 
Coburn is going to come back when he finishes on the floor. 
Again, welcome.
    Mr. Stier you are welcome to proceed. We are happy you are 
here. You have 7 minutes for your statement. If you go much 
beyond that, I will have to rein you in. But if you can stick 
within that, that would be great. Thank you very much. Please 
proceed.

   TESTIMONY OF MAX STIER,\1\ PRESIDENT AND CHIEF EXECUTIVE 
            OFFICER, PARTNERSHIP FOR PUBLIC SERVICE

    Mr. Stier. Thank you, Mr. Chairman. It is a pleasure being 
here and I think it is very important for you to be holding 
this second hearing. This is a time of great need in the 
government, and Congress and this Committee have a critical 
role to play. I think we are all applauding the work that Beth 
Cobert is doing at OMB and want to help her succeed. She needs 
the help.
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    \1\ The prepared statement of Mr. Stier appears in the Appendix on 
page 157.
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    I was trying to find out if I could come up with nine of 
these for the baseball analogy, but I only have eight. It is 
not the David Letterman top 10 list, so I have eight. I have 
eight fields.
    Chairman Carper. It is like a rain-shortened game.
    Mr. Stier. Exactly. A rain-shortened game, there we go. I 
have eight fields and some specific ideas in each of them that 
I would love for this Committee to be focused on. I am going to 
begin with an issue that I know is near and dear to your heart, 
which is reducing the number of vacancies at the senior levels 
of government. You have described it, quite aptly, as Swiss 
cheese----
    Chairman Carper. Swiss cheese.
    Mr. Stier. It is a real problem. You cannot run the 
government effectively if the top people are not there, 
particularly in the management positions. I have four quick 
ideas on this.
    First we need to focus more on how governments start 
through Presidential transitions. Every Administration gets 
behind the eight ball. They do not get their people in quickly 
enough. Clay Johnson talks about this in a very compelling way. 
Every new Administration should have their top 100 people in by 
May 1 and the top 400 by the August recess of their first year. 
It is possible, but it requires a different expectation and 
different level of cooperation between an incoming 
Administration and Congress. That should be the goal and we 
should be focusing on that right now to make it happen.
    Second, we need to build off the success of S. 679, which 
reduced the number of Senate-confirmed positions. There are 
still more positions that currently require Senate confirmation 
that can be reduced. Frankly, we should be changing at least 
the management positions from Senate-confirmed political spots 
to career positions or term appointments with a performance 
contract. There is no need for these positions to be held by 
political appointees. Turnover and vacancies in these positions 
create great disruption, and does not enable the long-term 
management work that needs to be done inside agencies.
    Third, we need to ensure that----
    Chairman Carper. You are two for two.
    Mr. Stier. All right. We need to ensure the appointees are 
well-prepared. Today it is misery. Attention is focused 
entirely on the selection and not on the preparation of 
nominees. In particular, the ever-lengthening time between 
nomination and confirmation is not being used effectively. New 
nominees believe they cannot do anything because the Senate 
would be offended, when, in fact, that is the time when they 
should actually be preparing to do their jobs well. This 
Committee and the Senate, in general, could be signaling to 
nominees that they actually should be getting ready to do the 
job well. That would have a huge impact in making sure they 
start effectively, which does not happen today.
    Fourth, we need to see some improvements in the 
Presidential transition process. Senator Kaufman championed 
legislation that made real improvements in this area. The 
Committee should hold a hearing here to look at those 
improvements and see what more can be done, because there are 
some additional things that need to be done which Senator 
Kaufman supports.
    Chairman Carper. Senator Ted Kaufman?
    Mr. Stier. Correct.
    Chairman Carper. One of the best 2-year Senators we have 
ever had.
    Mr. Stier. Yes, amazing guy.
    Chairman Carper. We just had a lovely luncheon at the 
University of Delaware.
    Mr. Stier. All right. So I am going to run through----
    Chairman Carper. No. We will stop your time right here.
    Mr. Stier. OK. First, we have to focus on execution and 
engage the private sector. Obviously we see this again and 
again, for example with healthcare.gov. Too much focus is on 
the ideas and not in getting this stuff done and that is not 
working well. Congress has a big role to play in this too. The 
number of hours spent in oversight hearings has been going down 
for years.
    It is not just legislation passing, it is oversight. We are 
not seeing Congress focusing on programs before there is a 
problem, and we need to see more of that. For example, the 
number of hours spent in hearing was 5,397 in the 104th 
Congress and only 3,758 in the 111th. We need more oversight 
hearings.
    Second, we need to engage the private sector more 
effectively. One concrete idea we have is to create a public/
private sector talent exchange that would be akin to the 
Intergovernmental Personnel Act (IPA) program that exists right 
now for non-profits and State and local government. That would 
be a really great way of getting government people into the 
private sector to learn about best practices and vice versa.
    Finally, you might even consider detailing Hill staff to 
Federal agencies, because, frankly, there is not enough 
information among the Hill staff about what is actually 
happening inside agencies, and that would be a big deal.
    Third, we have to treat government as a single integrated 
enterprise. We recently released a report on this and it is 
something that Senator Coburn and I were just talking about. I 
think his legislation is really important. What it is missing, 
however, is an integrated strategic plan for what government is 
trying to achieve.
    We need to know what is happening with Federal programs, 
but we also need to see how those programs are tied to a core 
set of objectives across government, and that needs to be a 
Presidential priority and something that everybody understands. 
It is a common sense notion that Dave Walker proposed many 
years ago, that you cannot do anything without that plan. We 
also need to see the President driving that through the 
President's Management Council (PMC).
    Fourth, we need to celebrate what is working in government. 
No organization I have ever seen gets better if all you do is 
find things that are wrong with it. That is what we have today. 
We have Inspectors General (IGs), we have Congressional 
oversight and the media always finding things that are wrong.
    The way an organization gets better is not only to find 
things that are wrong, but also to find out what is right, 
celebrate that and make that something to be replicated. This 
Committee, could be pushing in that direction.
    We do something called the Service to America Medals, the 
Sammies, which identifies great, incredibly impactful stories. 
One winner was responsible for treating amputees from the 
military that are able to return to the battlefield, another 
was the gentleman who eradicated polio in India. The stories go 
on and on and on. Last year, one winner was the Deputy 
Assistant Secretary for Energy at the Air Force, who saved a 
billion dollars in fuel costs on an annual basis. There are 
wonderful stories out there that no one sees, and therefore, no 
one can replicate.
    We need to bring those things to light. It is a bright spot 
analysis that, again, any business person will tell you is a 
way to drive positive change. It does not happen in government, 
but we need more of that. I hope you will come to the Sammies 
celebration. We have the Sammies finalist announcement 
breakfast on May 6 and then the gala on September 22.
    Fifth, we need to hold agency leaders accountable for 
managing their people well, and that is not happening right 
now. In our Best Place to Work in the Federal Government 
rankings we see employee morale really plummeting. What is 
interesting to me, though, is despite morale plummeting 
overall, a quarter of in government agencies are seeing 
increases in morale, such as the National Aeronautics and Space 
Administration (NASA), and it is all about leadership. That is 
what the data tells us. We need to make sure we are investing 
in those leaders and holding them accountable.
    This Committee can be asking questions about employee 
morale to the top agency leadership. Additionally, one very 
concrete thing that the Committee could do would be to pass a 
law requiring agencies to include employee morale in the 
performance plans for both the political and career leadership. 
That is what Ray LaHood did at the Department of Transportation 
(DOT). He built employee morale measures into the performance 
evaluation system for senior executives and saw the biggest 
change at the Department of Transportation subsequently of any 
major agency over 2 years. It really is quite impressive.
    We also need this data faster. It is critically important, 
but it is currently taking 5 or 6 months to be released, and we 
need to get it out much quicker.
    Sixth, we need to develop the senior career leaders in 
government as well as the political leaders. We are not seeing 
career service leaders treated as an enterprise asset. To that, 
one of the things we think should happen is legislation to 
reform the senior executive service (SES). An element of that 
reform would be to require that candidates, in order to join 
the SES, should have worked in multiple sectors, multiple 
levels of government, or multiple agencies.
    Today the SES is a very insular group, and it needs an 
influx of the kind of skills and talents necessary if our 
government is to truly operate as an enterprise. We also need 
to make sure that development and training investments are 
taking place for this critical group.
    Seventh, we need a score card for political leaders. Robert 
talks about that in his testimony and he is absolutely right. 
The only elements that I think I would highlight further from 
what he has to say is that we need this to be a Presidential 
priority. President Bush got that right. We need specific 
metrics, especially the people metrics, to be included like 
quality of hire and employee engagement.
    Lastly, we need a reform of the whole civil service system. 
It is 60 to 100 years old, depending on what piece of it that 
you actually touch, and it is desperately broken. We are 
putting out a report this Wednesday that presents a new 
framework for modernizing the civil service. At minimum, we 
need to have this conversation.
    The last time there was any real reform at all, there were 
12 days of hearings. That is what we need to see here and now. 
Major parts of the civil service are truly, desperately broken. 
The Federal compensation system right now, pays all Federal 
employees at the same set level. It makes no sense. Government 
pays a physicist the same as a physical therapist. That is not 
how any other organization works.
    The system worked terrifically well when it was first 
built, but nothing in our society has stayed the same in the 
last 60 to 100 years and government cannot either. We need to 
revisit it. Federal employees need it to be revisited. The 
people in government are wonderful, but they are not being 
supported by the system that is supposed to help them.
    Thank you very much. I apologize for going over, but it is 
a pleasure being here to testify.
    Chairman Carper. I am glad we went over. Thanks. You have 
given us a lot to think about, and hopefully to do. Thank you.
    Mr. Stier. Thank you.
    Chairman Carper. Dr. Metzenbaum, welcome again. Thank you. 
Please proceed.

 TESTIMONY OF SHELLEY H. METZENBAUM, PH.D.,\1\ PRESIDENT, THE 
                        VOLCKER ALLIANCE

    Ms. Metzenbaum. Thank you, Mr. Chairman. I greatly 
appreciate the opportunity to testify today.
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    \1\ The prepared statement of Ms. Metzenbaum appears in the 
Appendix on page 164.
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    Government management matters and it needs more attention, 
and that is why last year, building on a long and distinguished 
career in the public and private sector, former Federal Reserve 
Board (FRB) Chairman Paul Volcker decided it was time to launch 
the Volcker Alliance. The Alliance, where I am now proud to be 
the President, aims to rekindle intellectual, political, 
practical, and academic interest in implementation issues in 
the nuts and bolts of government, and these days the electrons 
too.
    I appreciate the opportunity to be here today to talk about 
the priorities for improving Federal management. Because 
performance measurement and management is the core way that the 
best businesses, and increasingly the best government 
organizations, achieve better outcomes and a higher return on 
investment. I will devote much of my testimony to lessons 
learned from the implementation of the Government Performance 
and Results Act (GPRA) of 1993 and its modernization by 
Congress and the Administration in 2010. As requested, I will 
also share my thoughts on other management issues.
    Federal performance improvement efforts have made 
noteworthy progress over the years. The 1993 law got agencies 
to set goals, measure performance, and report annually. 
Progress was made doing these things, but there was a critical 
missing element. Too few agencies were actually using the 
performance data to find ways to improve. Nor were enough 
agencies using their goals to communicate priorities, refine 
those priorities with the public and Congress, and enlist 
assistance and expertise.
    Lessons learned over the last two decades in the United 
States and elsewhere at every level of government made it clear 
what change was needed. Agencies needed to spend more time 
using goals and data to inform and drive improvement not just 
completing mandated reports. Improvement in what? In outcomes, 
in productivity, in people's experience with government, and 
accountability. Otherwise, goals, measurement, and reporting 
are wasteful. If goals and measurement are not useful, they are 
wasteful.
    Research identified a few key practices that make goals and 
measurement transformative by encouraging discovery, 
innovation, and best practice diffusion. The Obama 
Administration policies and the law Congress passed in 2010 
required these key additional practices. Agency heads set a few 
specific, ambitious, and outcome-focused priority goals that 
their organizations must try to accomplish within 2 years 
without new funding, without new budget or without new 
legislation.
    Three new leadership responsibilities were established. The 
Deputy Secretary, or equivalent, needs to function as the chief 
operating officer (COO). The chief operating officer, needs to 
designate a goal leader accountable for achieving progress on 
each priority goal. The Deputy Secretary is expected to run 
data-driven reviews no less than every quarter.
    The performance improvement officer (PIO) supports the 
chief operating officer helping to drive performance 
improvement across the agency and with other agencies. The PIO 
also works with the Performance Improvement Council to 
strengthen the Federal Government's capacity in analytics and 
understanding of how to use the data to improve, to reduce 
problems, but also to find what is working and spread success.
    Priority goals need to be measured in more frequent and 
timely ways to make the information actionable. And then key 
information about priority goals must be updated at least 
quarterly on a central website, Performance.gov. The site 
includes the key information about what agencies are trying to 
accomplish, their goals, why they are trying to accomplish 
those goals, how they plan to accomplish each goal, the 
strategy, the logic and evidence of why each strategy is the 
right one, the progress made every quarter, and plans for next 
steps, especially if the progress is not as good as expected.
    Finally, I think we have learned it is important to get 
accountability expectations right. The emphasis needs to be on 
significant improvement in all areas, not achieving 100 percent 
of the targets. And it needs to be on understanding and 
tackling impediments to progress.
    Some targets should be exceeded, but others will be missed, 
and an agency that meets all of its stretch goals should be as 
much cause for concern as one that does not meet them all 
because targets that are too timid just do not stimulate 
innovation, the kind of innovation needed to deliver more bang 
for the buck.
    Research by the Government Accountability Office and others 
found that when the additional practices are used they are 
remarkably useful. Trends for the Administration priority goals 
reinforce that finding. Adult smoking is down, exports are up, 
and the lowest performing schools are beginning to turn around.
    Greater attention to electronic transactions is improving 
customer experience and cutting costs. Visa processing times 
are down, as are patent backlogs. All of this information is 
posted on Performance.gov. That is not to suggest, however, 
that everything is rosy. There is still plenty of room for 
improvement on mission-focused performance goals and plenty of 
missed opportunities in mission support areas.
    One area needing attention is the Federal recruitment and 
hiring process. It is seriously limping and Federal internship 
programs are just plain broken. Congress can help here by 
making it easier for one agency to recruit on behalf of others. 
Greater agility is needed in procurement and it is time for 
renewed attention to past performance in contract award 
decisions.
    Federal grants need to be more agile and performance 
focused, and agencies that work with State and local 
governments to accomplish their objectives need to play a 
stronger role doing knowledge management and knowledge 
diffusion. The Administration's push on benchmarking for the 
mission support functions is fantastic, and benchmarking should 
be expanded, not just to the mission support functions, but 
across common program types such as for benefits processing.
    The Volcker Alliance, I should say, stands ready to work 
with Congress and the Federal Government to find ways to manage 
smarter and with greater accountability. We are also ready, in 
some situations, to lead the charge, to catalyze new thinking, 
and to convene partnerships to leverage change.
    I appreciate the opportunity to be here today and am happy 
to answer questions. Thank you.
    Chairman Carper. Thank you so much for that testimony, for 
joining us. Mr. Shea, please proceed.

TESTIMONY OF ROBERT JOHNSTON SHEA,\1\ PRINCIPAL, GLOBAL PUBLIC 
                   SECTOR, GRANT THORTON, LLP

    Mr. Shea. Thank you, Mr. Chairman. I would be remiss not to 
point out that I am here, in part, in my capacity as Chairman 
of the Board and a Fellow of the National Academy of Public 
Administration.
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    \1\ The prepared statement of Mr. Shea appears in the Appendix on 
page 177.
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    Chairman Carper. Oh, really?
    Mr. Shea. Max and Shelley are also Fellows and represent 
the deep bench of Administration expertise that you can draw on 
for all of your oversight challenges.
    Chairman Carper. Thank you.
    Mr. Shea. I am grateful for the opportunity to speak to you 
today. I applaud your interest in finding areas in which the 
Committee's focused oversight efforts would have the greatest 
impact on the government's performance and efficiency. My 
experience in working to improve the government's operations 
comes, in part, from my time as a staff member on this great 
Committee in the late 1990s.
    With considerable help from GAO and IGs, the Committee 
documented what many agreed were the greatest management 
challenges. Report after report showed the extent of the 
challenges. Agencies took months to produce audited financial 
statements and could not report the extent of their improper 
payments.
    Recruiting and retaining the right workforce was difficult 
for agencies. Information technology projects were often over-
budget and off-schedule. The acquisition system did not support 
the timely and objective procurement of goods and services. 
Performance was not as clearly and transparently reported as it 
should be.
    To accelerate progress in these areas, the President's 
Management Council at the time developed a score card, which 
Max talked about, with indicators that measured the degree to 
which agency efforts resolved these challenges. Agencies were 
rated red, yellow, or green based on their progress. For each 
of the major areas of the score card, specific accomplishments 
were measured.
    What was new at the time was the fact that agency progress 
was updated and reported publicly every quarter. These updates 
followed a rigorous review by OMB staff of evidence provided by 
agencies. I cannot emphasize enough just how critical 
transparency was to how seriously agency leadership took these 
management improvement initiatives. Knowing their scores were 
going to be reported publicly made the very top leadership at 
agencies work very hard to improve in each of these areas.
    Government agencies made real progress during this period, 
though I do not think it would be fair to suggest agency 
challenges related to finance, human capital, information 
technology, acquisition, and performance have been resolved 
entirely. I do not have to tell this Committee that.
    But because those measures are not being reported publicly 
today, it is difficult to show objectively how agencies are 
performing in these areas of common concern. The management 
improvement initiatives described in the President's Fiscal 
Year (FY) budget offer a renewed opportunity to address many of 
the government's persistent management challenges.
    They fall neatly into the framework described in the 
President's budget, and many of the initiatives promise genuine 
transformation of agency and program operations with real gains 
in terms of performance and efficiency. But without clear 
metrics to gauge progress, it will be difficult to determine 
whether or not actual improvement is being achieved.
    The good news is that this Committee's oversight efforts 
can move agencies to address common challenges so long as some 
key ingredients are in place. First and foremost are clear 
goals. In whatever area you choose, it is imperative you have a 
common understanding of how progress will be measured.
    Then, I am afraid, the Committee's Members and staff will 
have to provide consistent, regular attention to ensure 
progress is sustained. My written testimony provides a few good 
examples that offer a roadmap, but the bottom line is, with 
bipartisan consensus on a couple of these priorities, some big 
problems could be tackled by the Committee's efforts.
    I am grateful for the opportunity to offer some suggestions 
on where you might direct that focus. GAO's inventory of 
government overlap and duplication and the accompanying 
recommendations are a good place to start. If there is a subset 
of those 104 un-implemented recommendations on which you and 
the Administration agree, I would expect the Committee's 
efforts to produce real tangible benefit.
    GAO's biennial high risk list provides an excellent 
oversight target as well. At GAO's suggestion, the National 
Academy of Public Administration is convening agency officials 
and OMB to share ways agencies have tackled high risk areas in 
the past and gotten off the list. With focus on their common 
approaches, agencies can take to these thorny issues.
    With focused oversight, some agencies or programs on that 
list might get the nudge they need to address issues raised by 
GAO and get off the list.
    The Administration's evidence agenda is an area in which 
the Committee's focus could also pay big dividends. Experience 
shows that when evaluated using rigorous methodologies, 
programs are often found not to be as effective as originally 
thought at solving whatever problem they are designed to 
address. But over the past decade, the Executive Branch has 
renewed its effort to study programs and build a body of 
evidence of what programs or program approaches work best.
    The Administration has launched a number of pilot programs 
and demonstrations to help determine which strategies lead to 
better results from taxpayer investments, allowing Federal, 
State, and local governments to identify the most promising 
strategies that warrant expansion.
    We know far too little about which programs work best 
today. If we can move just a fraction of the government's 
investments into more proven approaches, the results could be 
dramatic. While we know little about how government programs 
perform, we know even less about what they cost. Under current 
policy, agencies are supposed to report annually what it costs 
to achieve their goals.
    A number of other laws and rules dictate the extent to 
which agencies measure and report the cost of their operations. 
Too few agencies take these efforts seriously when a study of 
the cost of programs would invariably uncover waste that can be 
eliminated. In a time of increased budget austerity, I can 
think of no better way to find savings than a considered look 
at the cost of government agencies and their programs.
    A lot of information needed to form the basis of a program 
cost adjustment is included in the Taxpayers Right-To-Know Act, 
which I know is under consideration by the Committee. More 
important than the reporting of information required by the law 
would be the use of it to find ways to eliminate waste and 
reduce costs in program administration.
    Wherever the Committee focuses its considerable oversight, 
success will depend on how clear the goals are and whether you 
are willing to invest the repeated, persistent attention that 
similar endeavors have required in the past. When the Committee 
has set goals in collaboration with the Administration, 
measurable progress was made. It is a recipe for success that 
can produce results. Thank you, Mr. Chairman.
    Chairman Carper. Thank you, sir. Mr. Lee.

TESTIMONY OF TOM LEE,\1\ DIRECTOR, SUNLIGHT LABS, THE SUNLIGHT 
                           FOUNDATION

    Mr. Lee. Mr. Chairman, thank you for the opportunity to 
appear before you today to speak about Federal program 
management and transparency. As you mentioned, I am the 
Director of Sunlight Labs, the technical arm of the Sunlight 
Foundation. Sunlight is a non-profit that is dedicated to using 
the power of the Internet to catalyze greater government 
openness and transparency. We take inspiration from Justice 
Brandeis's famous adage that sunlight is the best of 
disinfectants.
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    \1\ The prepared statement of Mr. Lee appears in the Appendix on 
page 182.
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    Our work on technology and accountability has naturally led 
to a focus on data and its capacity for improving how 
government functions. We collect, improve, and redistribute a 
wide variety of types of government data, serving millions of 
citizens, journalists, watchdogs, and researchers. In recent 
years, spending data has become a particular focus for us, most 
notably through our analyses of USASpending.gov data quality.
    We believe that data about government spending operations 
are among the most essential forms of information that a 
government can publish. This information is prerequisite to any 
meaningful analytic effort to maximize efficiency or improve 
the value received for taxpayer dollars. But its utility 
extends beyond these important questions. Spending data is one 
of the clearest measures that citizens have of their 
government's priorities and effectiveness. It serves as an 
important antidote to appeals based solely on rhetoric.
    We believe that the current Administration deserves credit 
both for its commitment to open data and for its efforts to 
reduce duplication and waste. In particular, the effort that 
began with the Federal IT Dashboard to reduce unproductive IT 
spending is worthy of praise. Agency-led IT projects are 
particularly prone to failure and in need of stronger 
oversight. At their worst, such efforts represent complex, 
large appropriation engineering projects that are implemented 
by contractors and supervised by agency staff that do not have 
experience managing technical undertakings. The capabilities 
and incentives within this dynamic create a high potential for 
waste. The Administration's stated commitment to a stronger, 
centralized supervisory role in such projects is welcome.
    We are similarly pleased to see this Committee considering 
the Taxpayers Right-To-Know Act. This legislation promises to 
expand the information available to both the public and 
oversight bodies, and to do so in a way that minimizes the 
associated disclosure burden. We believe that the existing 
programmatic description process conducted in connection to the 
Catalog of Federal Domestic Assistance (CFDA), could be 
expanded to include the data newly mandated by this Act. The 
CFDA already includes some information about programs salary 
costs, statutory authorizations, and accomplishments. Making 
this reporting more granular, uniform, and complete promises to 
substantially increase the usefulness of the CFDA. And because 
this reporting system already exists, we are optimistic that 
the costs associated with the Taxpayer Right-To-Know Act will 
be minimal.
    However, we do wish to urge the Committee to consider 
revisions to the Act that would enhance its clarity and 
effectiveness. In particular, the difficulty of getting 
meaningful data from the jobs reporting requirements of the 
American Recovery and Reinvestment Act (ARRA) should serve to 
underscore the need for imposing specific, clear methodology 
upon those reporting such data. For example, the language in 
the bill calling for accounts of the number of full-time 
Federal employees rather than the number of full-time 
equivalents (FTE) is a potential source of imprecision that 
could result in data that is difficult or impossible to use 
effectively.
    Similarly, the bill's definition of services specifies 
criterion for inclusion based upon direct benefits to 
recipients. In the past, a similar provision in the Federal 
Funding, Accountability, and Transparency Act has, in 
Sunlight's opinion, been used inappropriately by agencies to 
claim that certain activities, like the National School Lunch 
Program, are completely exempt from spending disclosure 
requirements.
    Finally, although it is admittedly beyond the scope of the 
bill as currently written, we urge the Committee to consider 
addressing agencies' programmatic contract spending. The data 
quality problems of USASpending.gov, the system's failure to 
associate disclosed contract data with specific programs, and 
the opacity and complexity of the Federal procurement system 
can make it surprisingly difficult to determine how agencies 
are using private firms to pursue their missions. Consider, for 
example, the initial difficulty in identifying Conseillers en 
Gestion et Informatique (CGI) Federal as the vendor behind 
HealthCare.gov's troubled launch. Yet, anyone who spends time 
in Washington is sure to encounter contractors who perform the 
same work as agency personnel, but at much higher hourly rates. 
In some cases, these arrangements may be well-justified, but in 
others, they may be the product of agency attempts to ignore 
personnel hiring and compensation standards, to avoid 
transparency requirements, or simply to obfuscate the degree of 
investment the program represents. Collecting and publishing 
data about the major contracts associated with each program, 
their size and duration, and relevant employees' average 
compensation rates would enable oversight bodies to monitor and 
control program spending far more effectively.
    But although we believe these alterations could 
significantly strengthen the bill, we wish to emphasize our 
support for the kind of transparency efforts that the Taxpayer 
Right-To-Know Act represents. Recent attention to Federal 
spending data, notably including the DATA Act, promises to 
provide Americans with a more accurate accounting of their 
government's activities, priorities, and options. We believe 
that this will empower policy that is more efficient, 
equitable, and cost-effective.
    We welcome your attention to these matters and encourage 
you to continue to engage with transparency issues as they 
relate to the Committee's work. Thank you for the opportunity 
to speak today and I look forward to answering any questions 
you might have.
    Chairman Carper. Thank you, Mr. Lee.
    There is a time, not that long ago, when Dr. Coburn and I 
were not the Chair or Ranking Member of the full Committee, 
this full Committee, but we took turns leading a Subcommittee 
called Financial Management. It was a pretty active 
Subcommittee, if I do say so, and we were less interested in 
the Homeland Security piece of this Committee's jurisdiction 
and more interested in the Governmental Affairs side.
    We are still interested in both of them, but we still 
continue to have a strong interest in the Governmental Affairs 
side. When we were leading that smaller Subcommittee, I used to 
say, as we struggle to help make sure that we got better 
results for less money in this government, better results for 
the same amount of money, I would opine on the need to gain 
leverage in terms of what we were trying to do.
    We figured out that if we were able to be on the same page 
with OMB and the President's management objective, that would 
help. We figured out if we could somehow tie our wagons 
together with the Government Accountability Office, 
particularly with their high risk list that they put out at the 
beginning of every 2 years, the beginning of the Congress, that 
that might help.
    Dr. Coburn has been very much involved with the IGs to try 
to make sure we have Inspectors General in place. We figured 
that that could help. And the idea to work with a whole lot of 
good government groups, non-profits that really focus on how do 
we get better results for less money. And we have been trying 
to do this for a while. In some cases, with some success. You 
mentioned a few of those.
    And what I want to do is ask each of you to think about 
what the other three have said. Mr. Stier, you went through 
quickly--your eight innings--a pretty good laundry list there. 
But I am just going to ask you, think about what Mr. Lee has 
said, Mr. Shea, and Dr. Metzenbaum has said and pick one or two 
pieces that you think are just--as I listen to a radio station 
up in Philadelphia called WXPN, every week they pick a song 
that is a ``gotta hear'' song.
    But something that we really need to hear. And it could be 
something you said, but especially something one or both of 
them have said. Please, go first.
    Mr. Stier. I like this exercise. It is a good one. So I 
will just start with Shelley and the thing that she said that 
most strikes home that I think the Committee would be well-
advised to pay attention to is her point about the broken 
hiring process, in particular, around student internships.
    The Federal Government today has 7 percent of folks under 
the age of 30. In the general workforce, that number is 23 
percent. We do not have a government that is generationally 
diverse and we have a government that is fundamentally not 
taking the best talent coming out of universities. That is an 
area that I think is vital to the long-term future of our 
country and our government and that is a place where this 
Committee could do some real good.
    Shelley mentioned one particular idea that I will highlight 
and that is simply common sense, which is to allow agencies to 
use each other's work to find the best talent. So in the case, 
for example, of cyber professionals, if the Department of 
Homeland Security (DHS) goes through an incredibly difficult 
hiring process, and finds 10 amazing candidates and only needs 
five of them, no other agency can hire the remaining five off 
their list. They have to start from scratch. That makes no 
sense.
    Robert, the idea that I would focus on is his point again 
about the score card. We need that transparency. We need that 
public face to that transparency in order to drive action in 
government. Everyone is overwhelmed in the government. I 
believe that the reason why our Best Places to Work rankings 
have traction is because it is transparent, it is a front-page, 
Washington Post story, it is easy for people to understand.
    We need that kind of clarity around management issues and 
it needs to be something for which this Committee and the 
President holds the top agency leadership accountable. I think 
President Bush got that right and I think it is a powerful 
statement from Robert.
    And then to Tom's point, I concur entirely on the 
importance of data transparency. I think his ideas on the 
Taxpayers Right-To-Know Act are spot on. And again, there are 
some things we would add, too.
    Chairman Carper. All right. Thanks. Dr. Metzenbaum, please, 
same question.
    Ms. Metzenbaum. What a great question. Thank you so much, 
Mr. Chairman. Let me start with Max's suggestion in terms of 
the SES and making sure that the SES of the future have broader 
experience and that we make it easier to get people from 
outside government into government and place a higher priority 
on internal rotations to bring ideas into the workplace. We 
need to do more than give it serious consideration. We need to 
figure out how to make it happen.
    Let me also talk about Robert's suggestion that the 
Committee and the Administration work together to find a few 
priority areas for serious attention and serious followup, 
whether those areas are the high risk list, or the duplication 
problems, or other issues, pick ones that are priorities for 
Congress, ones you really want to give consistent attention to. 
That will make a huge difference.
    This Committee could start to look at progress on the 
priority goals that agencies have set, or the cross agency 
priority goals that the Administration has set, or some of the 
duplication issues that have been identified by GAO. You cannot 
do them all, but I would urge the Committee to pick a few 
priorities, and follow up regularly to learn about progress on 
them and how problems are being addressed.
    As Robert suggested, consistent followup makes all the 
difference in the world. Clear goals measured to see how you 
are doing and then consistent followup. If the Congress is 
attentive to that and works with the Administration on a few 
priority issues where there is agreement about their 
importance, it can be very powerful and--will be 
transformative.
    And then finally, on what Tom Lee was talking about in 
terms of sunlight, ``sunlight is the best disinfectant,'' as 
Justice Brandeis said, I also quoted Brandeis in my written 
testimony. His quote about the States being the laboratories of 
democracy----
    Chairman Carper. Is that his saying, too?
    Ms. Metzenbaum. That is also, yes.
    Chairman Carper. That is pretty good.
    Ms. Metzenbaum. It is a great one.
    Chairman Carper. I use those quite a bit. Did he ever say 
anything else, do you know? There has to be a third one out 
there. I am sure he said a lot.
    Ms. Metzenbaum. I know that he did. If you take Tom's 
comment about disinfectant and apply it to data transparency 
contributes to better data because people challenge data if it 
looks wrong. In addition, data transparency can help prevent 
corruption and fraud. Beyond simple transparency, data can be 
used to learn from States as laboratories of democracy. If 
there is no scientist studying what is going on in the 
laboratory, then how are you going to learn what works better?
    One of the challenges and one of the questions the 
Committee could ask is: is there a scientist? What is going on 
in the lab? Whether a Federal agency or perhaps Federal 
agencies that are supporting others in academia or elsewhere.
    Robert was talking in terms of evidence-based. How are you 
learning what works, and it is not just what works, but what 
works better? First we have to figure out what works and then 
we need to figure out how to do it better and at a lower cost. 
If Congress asks these questions, that promises positive 
returns.
    Chairman Carper. Before I turn to Mr. Shea, I want to quote 
a former Vice Chairman of the Federal Reserve who is now back 
teaching economics at Princeton. His name is Alan Blinder. And 
we had, a year or two ago, a hearing before the Finance 
Committee and we had four very smart people testifying on 
deficit reduction, what we needed to do.
    Dr. Blinder said in his testimony that health care costs 
were killing us. Unless we figured out how to get our arms 
around those, for the government and the private sector as 
well, it is going to do us in. And when we came time to ask 
questions, I said, Dr. Blinder, you say that health care costs 
are killing us, the 800-pound gorilla in the room. I agree. 
What should we do about it?
    He sat there and finally he said, I am not an expert in 
this field. I am not a health economist. What I would do is 
find out what works, do more of that. That is all he said. And 
then I said, you mean find out what does not work and do less 
of that? And he said, Yes. And there is huge wisdom in that.
    Ms. Metzenbaum. There are fantastic examples of reductions 
in costs, the sort of 80/20 rule in health care where in some 
plans 20 percent of the folks in the emergency room create 80 
percent of the costs, and you have had some turn-arounds in 
some locations. There is just such opportunity here.
    I think there is almost consensus among your witnesses here 
that there is huge potential. You have to look at the data. You 
have to use it to figure out how to do better.
    Chairman Carper. Thank you. Mr. Shea. Did any of your 
colleagues here at the witness table, any of them make any 
sense to you today or anything that you would like to endorse?
    Mr. Shea. Yes. This is not an area in which you will find a 
great deal of disagreement, so we better pick something we 
disagree with in the next round. I am going to cheat a little 
bit and pick up on a common theme in Shelley's and Max's 
testimonies, which is around civil service reform.
    Grant Thorton surveys all of the C-level Executives (CxO) 
communities on a regular basis, and invariably, they all raise 
as a, if not the major, challenge the workforce. None of them 
can recruit and retain the people they need to accomplish their 
mission. And unless we get comprehensive civil service reform, 
I do not think that challenge will be diminished in the near 
future.
    So I would have to say it is a major priority and there is 
wide consensus that it is the major management challenge.
    Chairman Carper. Senator Voinovich, former Governor 
Voinovich, as you know, he spent several years, he and Senator 
Akaka, working on this, focusing on this, and when he got ready 
to retire, he felt that they had made some progress. I do not 
know if that is a view that you all share, but if you feel like 
pointing to some things that they tried to accomplish and maybe 
were unable to attain that you would have us go back and work 
on some more, that would be helpful.
    Mr. Shea. We were, during the Bush Administration, able to 
accomplish reform of the SES, reform of DHS's personnel system, 
and the Department of Defense's (DOD). The latter two were 
repealed, which is a huge shame because simply getting those 
enacted was a huge challenge and implementation was not 
perfect, to say the least. But it was the beginning of the road 
to reform. So we are back at square one in both of those cases.
    But what Max's organization will talk about Wednesday is 
probably going to be a good opening salvo and a new start to 
that comprehensive reform.
    Chairman Carper. OK.
    Mr. Shea. But if I can talk about Tom's point, contract 
data and the lack of the quality in it as reported on 
USASpending.gov or elsewhere, at the Federal Procurement Data 
System (FPDS), name it, would provide much greater 
transparency. When we were implementing USASpending, we got 
assurances from the procurement community that all the data 
they were going to provide was completely pristine, and 
experience shows that not to have been the case.
    A little investment there will go a long way to improving 
the quality of that data and getting the results that 
transparency is intended to produce.
    Chairman Carper. Thank you. Mr. Lee.
    Mr. Lee. Well, I think I am similarly in agreement with the 
people on this panel. To highlight two things in particular, I 
think that Dr. Metzenbaum's and Mr. Stier's points about civil 
service reform are completely correct. From Sunlight's 
perspective, we mostly look at these issues as they relate to 
the government's use of technology. We have been very pleased, 
for instance, to have a number of former colleagues become 
Presidential Innovation Fellows.
    But it is absolutely true that that program and most of the 
other most innovative programs that bring people with technical 
skills into government have to be done, at the moment, through 
unusual hiring vehicles that step outside of the normal 
processes for bringing people in because it is simply too 
onerous to get high quality technical talent.
    This applies not only to the Presidential Innovation 
Fellowship program, but also the 18F initiative at GSA, and any 
number of other attempts to bring up-to-date technical skills 
into government. It is essentially impossible given the formal 
hiring processes.
    To speak a little bit, also, to Dr. Metzenbaum's point 
about the need for the usefulness reports, we agree completely, 
and that is one of the reasons why we feel that the data 
quality in USASpending.gov is such an urgent issue. I did not 
focus on it in my remarks today, but Sunlight has performed, 
for several years now, a data quality analysis comparing the 
totals in the Catalog of Federal Domestic Assistance--they are 
listed by yearly obligations per program--with the rolled up 
totals from the award and assistance side of USASpending.
    The numbers are off by as much as a trillion dollars every 
year, and this excludes all contracts. In short, the data in 
USASpending is unusably bad for any serious analysis. And this 
data is what is powering GAO reports. It is what powered, until 
its discontinuation, the Consolidated Federal Fund report, 
which Congress relied upon for making decisions about which 
parts of the government to sustain or not.
    So until an effort is made to correct the data there, of 
course it is true that the reports will not be useful and will 
be wasteful. We are optimistic, though, that potential exists 
for correcting that problem. In particular the DATA Act, we 
feel, represents a meaningful effort toward that end.
    To your point, Mr. Chairman, about trying to work in 
harmony with OMB and other portions of the Administration as 
much as possible, that is certainly wise, but we have been 
dismayed to see OMB's efforts, in particular, to alter the DATA 
Act and substantially weaken it. So I think that it will be 
necessary----
    Chairman Carper. How do you explain their views on the DATA 
Act? If somebody is watching this hearing on television and has 
no idea what the DATA Act is, just explain it in a couple 
sentences.
    Mr. Lee. Sure.
    Chairman Carper. Just for somebody who has never thought 
about the DATA Act could actually say, Oh, I get it.
    Mr. Lee. So the systems that power USASpending are exposed 
to the public through the Federal Funding, Accountability, and 
Transparency Act. But as I mentioned, that has led to serious 
data quality problems. The DATA Act tries to move 
responsibility for those systems to Treasury, in part, and to 
establish oversight bodies that will create a more uniform 
reporting process and be able to impose greater levels of 
quality.
    I believe that the current state of the Act is maybe up in 
the air a little bit, but Sunlight is optimistic that in its 
strongest form, creating an independent body and moving the 
oversight of the USASpending system to Treasury, which, of 
course, maintains other substantial financial oversight 
systems, could result in useful, analyzable public spending 
data.
    Chairman Carper. OK. Something we talked about, hiring 
folks, whether they happen to be Cabinet Secretaries or Deputy 
Secretaries, Under Secretaries, thanks to the efforts of 
Senator Alexander and Senator Schumer, we no longer require 
quite as many Presidential nominees or appointees to be 
confirmed. Did we make enough progress? No, I do not think so. 
Did we make some progress? Yes, we did. My hope is we will come 
back in a year or so and do more of that.
    I do not care whether George W. Bush was the President or 
Barack Obama is the President, in the last decade we have seen, 
in both Administrations, Executive Branch Swiss cheese. We make 
it too hard for folks who have been nominated to get a fair 
hearing and up or down vote, and it was that way when George W. 
Bush was President and it certainly has been that way in this 
Administration. I think it is even worse in this 
Administration.
    It has led to the change in the rules, which have not been 
well-received, but at the end of the day, some day Democrats, 
we are going to be in the Minority. We will have a Republican 
President, and we have to figure out how to work together to 
get things done, regardless of who is in the Majority and in 
the White House.
    I am not going to ask you for political advice, but every 
entity I have ever been a part of, whether it was in State 
government, in the Navy, here in the Federal Government--my 
wife is a career employee with DuPont, a big company, and I 
have watched her being involved with schools, colleges, and 
universities, and the key for almost all of them to succeed is 
leadership.
    It is almost always the key. If you have strong 
leadership--lead a company, a school, a college, university, or 
an agency, I will show you an agency or a school or an entity 
that is on its way to being more effective in everything that 
they do. We just make it too hard.
    We were having a hearing with our Subcommittee, Federal 
Financial Management Subcommittee. We are going through the GAO 
high risk list and one of the issues that we focused on was the 
cost of a weapon system with overrun for a major weapon system. 
I think the cost has gone from $200 billion per year to about 
$400 billion per year.
    So we held a hearing on it. We had the person in the Air 
Force, the No. 2 person for acquisition in the Air Force, and 
we said: Talk to us about how long you have been in your job, 
what kind of turnover you got from your predecessor. And this 
is in the Bush Administration, George W. Bush. He said, my 
position had been vacant for 18 months before I got there. 
There had been an acting person in place, but not a Senate-
confirmed person.
    And I said, Well, what kind of turnover do you get in 
personnel. He said, My predecessor was gone. And I said, Tell 
me about your direct reports. And he said, There are six direct 
reports, but only two are filled. That was in George W. Bush's 
Administration.
    Go about 3 or 4 years forward, a new Administration, and 
the person who was before us, before our Committee, same job, 
new Administration, what kind of turnover do you get? Well, my 
job had been vacant for 18 months and we had an acting person 
in place.
    I mean, no wonder we have this huge weapon system cost 
overrun. And we had Jane Holl Lute, who was Deputy Secretary of 
Homeland Security, very able person, she said to us when she 
and Janet Napolitano took over the leadership of that agency, 
she said she called Gene Dodaro who runs GAO, said, Gene, I am 
going to come and sit on your doorstep and meet with you and go 
through your high risk list until we have addressed the things 
you say need to be fixed. She said, We want to get off your 
high risk list.
    And lo and behold, they did, especially with respect to--
not just auditable, but gaining an unqualified audit. That is 
something we earn every year. I think they are determined with 
the new leadership of Jeh Johnson and Alejandro Mayorkas. They 
are determined to learn again what lessons are there for other 
Deputy Secretaries or Secretaries, out of that experience with 
Homeland Security, trying to get off the high risk list and 
actually succeeding, particularly with respect to DOD, which 
basically has been on the high risk list forever, and 
especially for Federal lack of appropriate financial 
management.
    They deny that they have improper payments. They are not 
even auditable. I think the Marines are trying to get close, 
but it is just a very slow process. Give us some advice on how 
a huge agency when they asked Willy Sutton, they said, Why do 
you rob banks? He said, that is where the money is. Well, that 
is where the money is. So give us some advice on DOD in this 
regard, please.
    Mr. Stier. I think you said it already, which is that the 
vacancies are a killer. You are not going to see substantial 
change in any organization when you do not have long-term 
leadership that can be held accountable for the changes that 
need to take place. There are a lot of things that could be 
changed with respect to the appointments process, such as 
reducing the number of people that are going through the pipe.
    Our number one recommendation would be around the 
management positions. For example, at DHS you have an Under 
Secretary for Management, and I think Rafael Borras did a 
terrific job and is responsible for some amazing things. On the 
bright spot piece, it is so important to find things that work, 
but that is not happening.
     DHS has, to my knowledge, the only integrated management 
platform that includes data on all management issues across the 
department, and Rafael Borras put it together. It is fabulous. 
Every other agency that I know of in government looks at it and 
says that they would like the same thing. We need to see that 
brought up and repeated across government.
    At DOD, there are no leaders around long enough to be able 
to pay attention to these management issues over time, even 
though the challenges are bigger and more complex. DOD needs 
another Deputy who is a career employee focused on management 
issues or a term appointment Deputy with a performance 
contract.
    I think you are always going to be behind the eight ball if 
you do not have people in place for the necessary time to focus 
on the change efforts that require years to push through. They 
have to be at a senior level enough that they can maintain that 
continuous pressure over time.
    You should not need Senate confirmation for those 
positions. You have ample opportunity to control the 
organization through policy or the senior leadership, the 
Secretaries. To have an infrastructure that could, from 
Administration to Administration, keep senior leaders eye on 
the ball on the mission support issues would be a fundamentally 
valuable and important change.
    GAO is a great example. One of the key reasons why I think 
it is a phenomenally well-managed organization is the leader of 
that organization has a 15-year term. When you have that kind 
of timeframe, they own the organization. Right now, political 
appointees are primarily rewarded for crisis management and 
policy development, not for the long-term health of their 
organization. They are gone before anyone can hold them 
accountable.
    My primary point of advice then, is to see that not only at 
DOD, but across government, senior management positions are 
made up of career employees on performance contracts.
    The only resistance you ever hear on this is, will they be 
part of the senior team? Will they be at the table when 
critical decisions are made? There is a legitimate question to 
be asked along those lines. There are tradeoffs here, but the 
present system is clearly not working. I believe we should be 
open to approaching this another way.
    Chairman Carper. Well, actually, there has not been just a 
vapor, I think an effort to create chief management officer, if 
you will, within the Department of Defense.
    Mr. Stier. Right.
    Chairman Carper. A Deputy Secretary or Under Secretary.
    Mr. Shea. There is that position today.
    Chairman Carper. But I seem to recall, when we tried to do 
something legislatively, it was opposed by the Department of 
Defense. I think Gordon England said that he wanted to be--as a 
Deputy Secretary, he should be dual-hatted to be the Deputy 
Secretary and also to be, if you will, the Secretary--Deputy 
Secretary for Management.
    Mr. Stier. Yes, that is correct. He did oppose it. The 
problem there however, is that you do not want good management 
to be dependent on the person. Gordon England was someone who 
fundamentally cared about management issues. He was very good 
at that, but that is not always the norm. I think you need a 
system in place that deals with the variety of personalities 
that come into the agency.
    By and large, the people selected on the political side are 
not going to be focused on management. They are going to be 
pulled and drawn into the politics and the policy. Management 
is going to lose out. There may be a person in place, but they 
are not at a senior enough level to drive the management focus 
necessary to run the agency effectively.
    Chairman Carper. If you look at a couple of positions in 
the Federal Government, one is the Director of the Census and 
we have gone to a situation so that the Census Director is 
appointed for a period of 5 years, and I think the Commissioner 
of IRS is a similar kind of situation.
    Mr. Stier. We need more of that.
    Chairman Carper. All right. Find out what works, do more of 
that.
    Ms. Metzenbaum. I would argue, though, we should not do 
one-size-fits-all. We need to recognize that we want a 
combination of political and career leaders. So if you think 
about a Rafael Borras at DHS or David Kappos at the Patent and 
Trade organization, you have had some phenomenal managers who 
have come in through the political process and you want to 
allow that kind of leadership turnover to get fresh ideas and 
new skills informed by experience in other places.
    You want that kind of infusion of new ideas, new energy, 
that kind of leadership. At the same time, one of the 
challenges is getting the Senior Executive Service to step up 
to the plate and realize they are the Senior Executive Service 
and that they have authority. They are the senior career 
officials, and especially when there are vacancies, they should 
be leading. They can be leading, using clear goals, frequent 
measurement, and frequent data rich reviews.
    I will go back to where Robert was: kinds of leaders that 
need to come both from the political and the executive career 
leadership, ideally in partnership with Congress. He mentioned 
the security clearance process, which got Robert intense 
oversight on a regular basis, really driving change. There are 
huge opportunities for gains if this happens.
    You cannot do it in every area, but pick a few areas. There 
will be some give and take, but if Congress and the 
Administration, regardless of party, work together and 
political appointees and career executives use goals, use 
measurement, use data on a regular basis and are transparent 
about it, you can get some real improvement.
    Chairman Carper. All right. Mr. Shea.
    Mr. Shea. Yes, sir. The meeting that I discussed that the 
National Academy of Public Administration will host, will 
involve OMB, GAO, and agency leadership responsible for each of 
those high risk areas, and it will help agencies understand the 
factors GAO uses to judge what is on the list and what comes 
off the list.
    It is not hard. I mean, they are difficult issues, but the 
basic ingredients are there: Clear leadership focus, a plan 
that has been implemented to some degree and you can see 
evidence of the impact of the implementation of those actions.
    OMB and GAO have an unheralded, but multi-Administration 
process whereby they meet regularly and assess progress on 
these plans to remediate high risk areas. What GAO hopes will 
happen in the near future is a reinvigoration of that process. 
So you can nudge some areas that have not really made 
sufficient progress forward a little bit faster.
    Chairman Carper. I remember when Leon Panetta was nominated 
to be Secretary of Defense. He and I were colleagues together 
in the House and I have a huge admiration for him. And he came 
by to chat with me, actually, a week or so after he had been 
confirmed. And we talked about GAO, we talked about the high 
risk list, and he knew what I was talking about. But we focused 
on Federal financial management within DOD.
    I do not know that he had given it much thought. My guess 
is when the President interviewed him about doing this job, my 
guess is they did not talk at all about improper payments and 
how to get off that GAO high risk list. But he and I talked 
about it that day. And he went back to the Pentagon and said, 
We are going to get serious about this.
    And he has been succeeded by Chuck Hagel, another one of 
our colleagues here, again, whom I have huge respect for, and 
we had a similar kind of conversation. He has made it clear 
that these and all the other things that he is expected to do, 
fight wars and put down insurrections and support our allies, 
that the Department of Defense is going to become a better 
financial steward, better fiscal steward of their operation.
    And it looks like the Marines are actually leading the way. 
We have----
    Mr. Shea. As their proud auditor, we are side by side 
trying to get them there.
    Chairman Carper. That is great, that is good. It is an all-
hands-on-deck moment. In the Navy, we used to say, for things 
that are really hard to do, it is like turning an aircraft 
carrier. You have the people on the bridge that are trying to 
figure out which way to turn the carrier. And then you have the 
folks in the engine room. You have to have the whole team to be 
able to change the course of an aircraft carrier.
    For the Department of Defense, these areas, financial 
management, it is turning an aircraft carrier. If we all do it 
together, we could actually get it done. One of the things I 
think we are going to do--Dr. Coburn and I have talked a little 
bit about this and our staffs--and that is to have a hearing--
it would be a hearing where we have Army, Navy, Air Force, 
Marines, and maybe the Coast Guard. Why the Coast Guard? Well, 
they have actually done this.
    And what I am interested in doing is engendering a little 
bit of friendly inter-service rivalry. Say, Well, if the Coast 
Guard could do this, and the Marines are making real progress, 
how about the three of you? The Navy, how about the Army, how 
about the Air Force? So we are going to try that as well.
    When we have witnesses and we are doing oversight hearings, 
sometimes I will say to them at the end, What advice would you 
have for us in the Legislative Branch on this Committee, what 
should we be doing to support your initiatives, some of the 
kind of issues we are talking about here today? And oftentimes 
they say more oversight or they will say, put a spotlight not 
just on what is done poorly or ineffectively, but just as 
importantly, what is being done well.
    I have never held ``gotcha'' hearings. I do not like a 
``gotcha'' hearing. That is not the kind of way I think we 
should govern. Although every now and then, we want to get some 
people. But I think sometimes we overlook the fact that we need 
to put a spotlight on the behavior and positively enforce that. 
Mr. Lee, do you want to say anything on this front, please?
    Mr. Lee. Sure. Just briefly. To the extent that these 
issues do produce leadership vacuums, I think it is important 
to recognize that responsibility often then flows to vendors 
who are left to implement policy and planning. And I think that 
it would be useful to have additional attention paid to this 
particular problem through whatever means are available.
    Some that particularly occur to me are avoiding vendor 
lock-in, however possible. That is often something----
    Chairman Carper. What do you mean by vendor lock-in? Just 
take a minute and describe it.
    Mr. Lee. Sure. The use of a proprietary technology may make 
it more difficult to switch to a different vendor in the 
future. It may not be technology, in fact. It could be any 
number of aspects of how the project is undertaken. By not 
factoring in those costs during the initial planning process, 
it is easier to bring things under budget that could ultimately 
be much more expensive and lead to cycles of dependency with a 
sub-par contractor solution that need to be avoided.
    I would say that the use of open technologies is one way of 
addressing that problem, at least for IT spending. And 
secondarily, or perhaps more importantly, though, I would say 
that attention to the procurement system more broadly and the 
procurement officer workforce is important. I think it is well-
known that that workforce is aging and not being replaced at an 
adequate rate, in part because the complexity of the Federal 
Acquisition Regulation (FAR) makes it very difficult to bring 
new people in. It is exacerbated further by revolving door 
problems that are endemic to this kind of work, particularly at 
agencies that do a lot of procurement. We would welcome more 
attention to any of these issues.
    Chairman Carper. We have had people before our Committee 
talk about the aging of the Federal workforce, and I forget 
what the percentages are, but however high a percentage of 
Federal public service, civil service, that are within 5 years 
of retirement age.
    Mr. Shea. About 30 percent by 2016 will be eligible to 
retire.
    Chairman Carper. They will not all retire, but a lot of 
them will, and I like to say--this is Albert Einstein speaking 
through me--in adversity lies opportunity. And there is 
certainly adversity here, but there is actually great 
opportunity to bring in some of the new talent, the fresh 
talent that I think, Dr. Metzenbaum, you and others have been 
talking about here. Go ahead, please.
    Ms. Metzenbaum. I was just going to say, in the Employee 
Viewpoint Survey, actually 25 percent of Federal employees have 
actually indicated their intent to retire. Happily, Congress 
passed the phased retirement law, which creates a great 
opportunity, especially if you pair the phased retirement 
program with internship programs, because there is a 
requirement for mentoring.
    If agencies start to manage this much more intentionally, 
there is a huge opportunity right now to maintain institutional 
knowledge and institutional memory, but bring in new ways of 
thinking and new, fresh talents. So I am very hopeful that 
Congress will ask agencies about their use of phased retirement 
to make sure they are paying serious attention to this 
opportunity.
    Chairman Carper. All right. Thank you. Can we talk about 
strategic sourcing for a little bit? I do not know if that is 
something you all have focused on. I do not think it has been 
mentioned here. If it was, I missed it. We have covered a lot 
of ground. Gene Dodaro, Beth Cobert, and Dan Tangherlini were 
here, as I said earlier, just, gosh, within weeks. And we 
talked a fair amount about strategic sourcing.
    The example sometimes we use is, rather than every Federal 
agency go out and buying their toilet paper on their own, or 
their computers on their own, why do we not figure out what we 
can buy together. It is not just hardware or software, but 
other things as well. Talk to us about strategic sourcing. 
Where are you seeing it done well outside the government, or 
maybe inside the government, and what are some lessons we can 
take from outside of the Federal Government or, literally, from 
within our own ranks? What is being done smartly? Please.
    Mr. Shea. Well, I think clearly the General Services 
Administration is leading the way on strategic sourcing. They 
are the ones that have the greatest insight into the way the 
government overall is procuring goods and services. I would 
also suggest that the Administration's effort to move agency 
financial systems to shared service is a little strategic 
sourcing of a different color. I think it also shows enormous 
promise.
    Chairman Carper. Talk some more about that, please. Just 
drill down on that.
    Mr. Shea. So the Administration has suggested that before 
an agency procures a new financial system, it will have to 
consider migrating that to an existing agency which offers the 
same services to other agencies, so that there is not 
duplication of financial system procurements. And it promises 
to not only----
    Chairman Carper. Give us an example of that you might be 
aware of.
    Mr. Shea. So right now, the Department of Housing and Urban 
Development is in need of a new financial system. This includes 
the system for monitoring the finances of the agency, preparing 
it for audit, any number of financial activities. And before it 
will purchase a new system and implement a new large financial 
information technology system, it will need to strongly 
consider, and likely migrate, to another agency, say the 
Department of Treasury, which already provides financial system 
services to other agencies.
    They have implemented the system before, they have 
customers, they are responding to other agency customers, and 
that is a way to ensure a successful implementation at a lower 
cost. Your overlap in duplication work is instructive here. So 
you have documented the enormous overlap in duplication in 
government programs, not all necessarily bad, but it is 
something to pay attention to.
    Imagine all those entities procuring financial systems or 
services or procuring pencils or procuring the really excellent 
consulting services of Grant Thorton.
    Chairman Carper. I have heard about them.
    Mr. Shea. All of this overlap in duplication is multiplied 
exponentially when you are buying goods and services. So you 
cannot push hard enough on reducing the amount in this way.
    Ms. Metzenbaum. I want to speak to three opportunities 
related to strategic sourcing. First, it is great that the 
Administration has a priority goal on strategic sourcing and is 
committed to expanding it. I know the Department of Commerce in 
the first term made enormous progress in this area, just around 
computer purchases.
    Chairman Carper. Why do you think that happened?
    Ms. Metzenbaum. Leaders at Commerce first asked the 
question, ``How many of these similar things are we buying? '' 
They then looked at how many similar things they were buying 
and the different prices they were paying, even within one 
department. Commerce saw real opportunity for savings and, in 
fact, so did a vendor who, it is my understanding, came and 
offered a better price, even before Commerce could complete its 
analysis.
    And so, with commodity purchases, the things that every 
agency is buying, it makes sense to look at the pricing and to 
ask, ``What is our opportunity, both to compare prices, but 
also to get scale discounts from the vendors themselves? '' 
There is huge opportunity here and it is excellent to see the 
Administration pushing in that direction.
    I want to pick up on what Robert said about shared 
services, where one part of the Federal Government sells 
services to another. The Administration has a benchmarking 
priority goal where, it is going to compare costs and quality 
so that government agencies have a basis for choosing from whom 
to buy. If you can pick the best at providing, for example, 
payroll services and things like that.
    This is a huge opportunity, incredibly important. I know 
Dan Tangherlini is one of the goal leaders for this priority 
goal. I am very optimistic about seeing significant progress in 
this area.
    I do want to raise the third area. People are not 
commodities, so you do not want to strategic source 
commodities, but it would be great if Congress gave legislative 
authority for the Federal Government to recruit across 
agencies. Imagine how that would help in areas such as 
cybersecurity, as Max said.
    There are lots of various economists, et cetera, where, why 
should you expect every agency to get expertise in figuring out 
the best schools providing the experts in those areas, or the 
best way to recruit. Why not allow some specialization and then 
let one agency do all the recruitment, hiring.
    If an agency gets 50 great people and only needs ten, why 
not let the other agencies hire the other 40? I would urge 
Congressional action in this area. Even though this proposal 
does not score, it would actually be a great saver to agencies.
    Chairman Carper. Yes, sir.
    Mr. Stier. I think as everyone has said, Beth and Dan are 
doing a great job on this issue. There is a lot of opportunity 
there. You asked about the Department of Commerce. It comes 
back to your point about leadership. Becky Blank and Scott 
Quehl, then the Acting Deputy Secretary and the Assistant 
Secretary for Management, were terrific. They saved hundreds of 
millions of dollars by getting ahead on this issue. It was 
because they had leaders that understood the possibilities.
    That opportunity is there and I think you have some 
terrific people who will push on that. I will point out, that 
there is a common theme in this and in shared services which is 
treating the government as a single enterprise. We have done a 
report on that that I would like to submit for the record.\1\
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    \1\ The report referenced by Mr. Stier appears in the Appendix on 
page 185.
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    I think there is enormous opportunity, whether it is on the 
talent issues or on the purchasing of goods or on shared 
services. Imagining the government as an integrated enterprise 
offers fabulous opportunities for greater efficiency and 
effectiveness, not only in terms of mission support, but also 
on mission delivery activities. I think we have a lot of 
opportunities if we pursue that.
    I know you are interested in customer service issues. I 
think one important thing to marry to these efforts is a real 
focus on creating customer service within government. We think 
about the government providing important services to the 
public, which it does, but it also provides services to 
internal customers, both in mission support and mission 
delivery.
    There are some really interesting things that have been 
done at the Department of Health and Human Services (HHS) by 
Ned Holland, as well as Josh Gotbaum at the Pension Benefit 
Guaranty Corporation, to really measure and make transparent 
intergovernmental customer service. I hope this Committee can 
eventually look at ways to encourage government to view itself 
as responsible to the internal customer because I think that 
would truly transform the way government works.
    If you want government to act as an enterprise, you will 
run up against that sense of removal from the customer. So 
building that in at the front end would be very important.
    Chairman Carper. All right. Thanks. Mr. Lee.
    Mr. Lee. I would just add that from the shared services 
perspective, we think that there is tremendous opportunity 
there. There are, of course, sometimes tradeoffs to 
centralization and having a single solution for a wide variety 
of users, but there is the opportunity, as has been pointed 
out, for specialization and expertise to be developed.
    One example that comes to mind in our work is 
Regulations.gov, which is a system that is used voluntarily by 
agencies. Not all of them participate. My understanding is this 
is, in part, because of a funding dynamic whereby the cost of 
maintaining separate systems is lower than an individual 
agency's contribution would be, even though that contribution, 
if they participated, would lower the overall system costs and 
cost taxpayers less money.
    So there is a need for some sort of centralizing effort to 
look at these problems, and the incentives that are facing 
individual agencies and think through how we might be able to 
operate more efficiently.
    And I would just add that we are cheered. I have already 
mentioned the 18F initiative at GSA, but I think that is 
emblematic of the kind of approach to shared services we would 
like to see in the future.
    Chairman Carper. OK. I want to talk a little bit about 
workforce. We have been talking around it and sometimes 
directly to it, but let us come at it more directly, if we 
could. The folks on our staffs have heard me say this probably 
more than they want to remember, but I love to recount 
listening to the National Public Radio (NPR) on my way to the 
train station in Delaware. I go home most nights.
    On my way to catch the train, I usually listen to NPR, News 
at the Top of the Hour. It is around 7. And about a year ago 
they talked about an international study that was done asking 
the question of thousands of people, What do you like about 
your work? What is it that you like about your work? What 
brings you satisfaction?
    And some people liked getting paid. Some people liked 
benefits. Some people liked pensions, vacations, or sick time, 
health care. Some people liked the folks they worked with. Some 
people liked the environment in which they worked. But the 
thing that most people identified as the thing they liked about 
their work is they felt that what they were doing was important 
and they were making progress.
    Again, what they were doing was important and they felt 
they were making progress. The work that we do here for the 
American people is hugely important. And we do make some pretty 
good progress from time to time. But we can always do better.
    But in thinking about employee morale, intuitively I think, 
Well, if I were working for somebody, I would like to know they 
are going to be around as my leader for not just a couple of 
weeks or a couple of months, but we are not going to have a 
revolving door, I will get somebody new and we will have an 
acting instead of confirmed, another acting for a year or more.
    But it would be nice to have some continuity in leadership. 
We talked a little bit about that. Actually, if I were a rank-
and-file Federal employee, I would like not to be called a 
nameless, faceless bureaucrat on an ongoing basis, and maybe 
not made fun of, but to be derogatory, I think, in the way that 
we think of most Federal employees that are hard-working, 
dedicated people and we do not give them that kind of respect. 
Sometimes people just want to know that they are valued and we 
need to do a better job of that.
    I think it might have been you, Mr. Stier, but I think you 
may have noted in your testimony the partnership's recent 
rankings of best places to work in the Federal Government. Is 
that what you call it, best places to work in the Federal 
Government?
    Mr. Stier. Yes.
    Chairman Carper. Nearly a quarter of Federal organizations 
improved their scores despite challenges such as furloughs, pay 
freezes, and anti-government rhetoric, some of which I just 
alluded to. What do you think has been some of the key factors 
that have enabled these agencies to improve morale even in 
difficult times? That is a two-part question. What are some of 
the key factors that enable these agencies to improve morale 
even in difficult times?
    And second, I am going to ask you, and the other witnesses, 
once he has responded, if you all would react to what he has to 
say and correct him or add to what he said. Take it away, 
please, Mr. Stier.
    Mr. Stier. Thank you and I look forward to the amendments. 
The most important differential is that the agency leadership 
cared and demonstrated that by focusing on the issue of 
employee engagement. You see that in the agencies----
    Chairman Carper. Focusing on the issue?
    Mr. Stier. Employee engagement. I alluded to the fact that 
when Secretary LaHood got to the Department of Transportation, 
it was the bottom ranked agency. He thought that the agency 
could do better and he focused on trying to improve engagement 
by listening to his workforce. They did a lot of great things. 
There is a website they created called IdeaHub where they 
brought in ideas from employees and had the employees vote on 
those ideas.
    What really mattered was that Secretary LaHood said that 
engagement is important. He acted as if it was important. The 
most critical thing that he did was to require the performance 
plans of the agency's senior career and political people, to 
include an element in their performance evaluation focused on 
employee engagement.
    That is something that the committee could require and 
drive here from Congress to get real focus on this issue. What 
is attractive about engagement is that there are many different 
kinds of actions that could be undertaken to improve. What 
matters is that it is viewed as being important, and there is a 
way of demonstrating to leadership that this is something the 
Secretary cares about. This is how you will be evaluated. That 
is true both on the political and career side.
    It is learning from their colleagues. There are a number of 
agencies that have done amazing things. For example, Shelley 
mentioned Dave Kappos, the head of the Patent and Trademark 
Office (PTO). They went from 177 out of 240 in our rankings in 
2007, to this past year when they were No. 1 amongst 300 
subcomponents in government.
    Most importantly, they saw incredible improvement in their 
outcomes for the public at the same time. They had a drop of 20 
percent in the patent backlog and improvements in quality of 
the patent application reviews. Dave Kappos, who is now on the 
Partnership's Board would say that he unlocked the potential of 
the workforce.
    What did he do? He invited the labor unions in, and had 
real conversations about actually engaging them, even though 
there was a highly contentious relationship before his arrival. 
The head of the Patent Examiners Union cried when he left. He 
also focused on the SES, a point that Shelley made, as well. 
That is the career leadership that is going to be there amidst 
all the turnover. He built a cadre at PTO that was focused on 
the whole organization and invested in them.
    I think it would be terrific if this Committee brought in 
Dave Kappos and Charlie Bolden from NASA and heard from those 
agencies that did substantial impressive things, and then bring 
in DHS leadership and leaders from other agencies to have that 
conversation, because there is a lot to be learned across 
government that would be highly impactful.
    The Homeland Security Committee in the House has had 
hearings every year in the last 4 years around employee morale 
at DHS, and I believe that has had impact. The leadership has 
paid attention because you pay attention. If you pay attention 
for example, by requiring agencies to build employee engagement 
into their senior leadership evaluation process, that would 
have a huge impact.
    Chairman Carper. Good. Thank you. Others, please. You want 
to react or respond to anything that Max has said? Again, 
workforce morale.
    Ms. Metzenbaum. I think there is huge opportunity here. 
During the first term of the Administration, I know we put a 
lot of effort when I was in government to getting the employee 
viewpoint survey data to make it possible for the agencies to 
slice and dice, to gain insights that would help them improve. 
The survey is now not being run just once every 2 years, but 
every year.
    And as Max points out, getting the data back to the 
agencies sooner in a format that they can actually analyze by 
sub-unit, by organizational unit. So I think asking the Office 
of Personnel Management how they are going to try and help and 
support this, building this as a tool for the Federal 
Government and for the leadership makes a huge difference.
    It would be great for Congress to look at the data and ask 
questions, in a constructive way, possibly even benchmarking 
across similar kinds of organizations. So some organizations in 
the Federal Government for example are production operations, 
and it would use the data in a very different way than those 
that are policy shops, things like that.
    But there is huge opportunity here and if Congress looks 
especially where there are problems as Max is suggesting, where 
there is progress in benchmarked and similar types of 
organizations. And then, asking those who are not making the 
progress, ``What is your next step here? ''
    Chairman Carper. All right. Mr. Lee.
    Mr. Lee. I am not sure I can speak to the issues as 
comprehensively as my fellow witnesses, but I can offer the 
perspective of someone who has watched a lot of talented 
people, and particularly talented young people, turn away from 
government service because of the challenges that it 
represents. This is a particular problem in the technology 
industry, as you might imagine, where the workforce is still 
tilted toward a younger demographic composition.
    But as an advisor to teams from organizations like Code for 
America, which puts young people in municipal government for a 
year doing technological work. I have seen this first-hand. I 
would say that there are two factors that are worth emphasizing 
beyond the broader point that you have made, Mr. Chairman, 
about the need to feel you are making progress in a job and the 
difficulty of doing that when you move from an industry where 
it is not unusual to hold a job for just 1 or 2 years to an 
environment that can be a little bit slower moving.
    Two problems I would identify though: compensation is 
typically tilted heavily toward people who are further along in 
their careers and emphasizes credentials, to a substantial 
extent, particularly technological credentials.
    This is especially a glaring problem when it comes to open 
source technologies or other competitors where there just is 
not any credentialing body. You have to look at the person's 
body of work. You cannot go get a certificate from Oracle for 
tens of thousands of dollars.
    And then I would say, frankly, another issue is the 
difficulty of making changes when there is a problem with the 
personnel in an agency. Obviously, there are countervailing 
considerations to this, but that certainly has been my 
experience, that a lot of people are dissuaded by negative 
circumstances they encounter where that is an exacerbating 
factor.
    Chairman Carper. OK. Mr. Shea.
    Mr. Shea. Yes, sir. I do not have much to add either, but 
it has never stopped me before. The----
    Chairman Carper. Actually, sometime I find repetition is 
good. It actually is.
    Mr. Shea. Well, I think your point about language cannot be 
understated. I have been really disappointed about the 
conversation we have had around the Federal workforce over the 
last several years. We tried to change it in the Bush 
Administration with no success whatsoever. But the policies and 
conversation we have had around the workforce has been really 
damaging, and you can see that in the decline overall in the 
engagement scores.
    And what is important to recognize is that this high 
engagement, as Max shows, produces better results at little or 
no cost. You can get a lot more out of employees. They are 
willing to put up with a lot of crap for the importance of the 
missions they are serving, if leadership will focus just a 
little bit on keeping them engaged and motivated. So it is a 
low-cost investment to make and a higher performing government 
overall.
    Chairman Carper. I have known people who have said that in 
order for them to get something done that they really want to 
see accomplished, what they like to do is convince other people 
that it was their idea. And I find that when I am trying to get 
something done, what I like to do is to maybe not convince 
other people that it is their idea, but to certainly feel that 
they own a piece of that idea.
    Mr. Shea. That is a great idea, Senator.
    Chairman Carper. I think that is a little about what you 
are talking about here with employees. I have a question for 
all the witnesses, and then I think I am going to ask Senator 
Coburn's staff to come and take his seat and they can just ask 
whatever questions they want, because he is apparently hung up 
on the floor. If you all have any questions you want me to ask 
for him, I would be happy to do that, by the way. He is 
certainly free to offer questions for the record, and I know he 
will.
    But for all of our witnesses, if I could, Mr. Lee, urge 
that we make agency spending data more, I think the term you 
used, was granular, maybe more uniform and complete in order to 
achieve greater transparency. But if legislation goes too far 
or is too prescriptive, that effort may impose too much cost 
and divert too many resources and attention from achieving the 
mission release. That concern has been raised. How do you 
suggest that we get the right balance in this regard?
    Mr. Lee. It certainly is a concern and I think that you can 
take granular reporting. Sub-recipient reporting for Federal 
spending data is an example too far. It is not possible to 
track every cent the government spends throughout the entire 
economy. However, I will say that, we have an existing 
disclosure burden that has been in place for decades, but is 
not working at all. A necessary first step will be to get that 
particular house in order.
    As we conducted our data quality analyses at Sunlight, we 
were really pleased to see the thoroughness with which many 
agencies dealt with this spending system. They would, for 
instance at HHS, upload their data and then re-download it to 
check it. And, in fact, they found that the process of 
uploading it had somehow messed it up and it was no longer 
accurate and so they had to go and do it again.
    And this was for a system that was completely parallel to 
their internal system of checks for managing their accounts and 
the flow of funds. I think that the reason why this information 
has not been given the priority it deserves is because it is 
seen as completely parallel and incidental to how agencies and 
the Administration manage their own business. It is seen as 
something that is only used by the public and Congress, which 
we feel strongly are important users that should be getting 
accurate information.
    So that is one of the reasons why Sunlight was excited 
about moving responsibility for managing this data to Treasury, 
where a lot of the real but hidden systems reside, in the hopes 
that these two streams of reporting could be harmonized and 
ultimately the burden reduced. We are optimistic that 
technology and the reduction of duplicative systems can help 
ease the disclosure burden, even as we recognize that it is 
important that we make an investment in transparency and 
oversight.
    Chairman Carper. Again, this one is open to each of our 
witnesses. If you would like to comment, Mr. Shea?
    Mr. Shea. Yes. When we were first negotiating the Federal 
Funding, Accountability, and Transparency Act with the 
Committee, the knee-jerk reaction from the Executive Branch was 
that the requirements being discussed were too burdensome and 
un-implementable. Maybe we have proven that true.
    But, in fact, once the bill was enacted, it became clear 
that all of the data required by the law was already being 
collected in some form. And it looks as though, from the 
Taxpayers Right-To-Know Act, most of those data elements are 
being collected in some form by agencies and programs today.
    So I think you can assure yourself, with some additional 
language, that agencies, when they are confronted with this new 
requirement, that they first make sure that the data is not 
already being collected and reported somewhere before they 
establish a new mechanism for producing that data.
    Chairman Carper. OK. Thank you. Dr. Metzenbaum.
    Ms. Metzenbaum. I am wholly supportive of the idea of the 
taxpayers' right to know about what we are spending our money 
on, what the Federal Government spends its money on, and what 
it is accomplishing. I think the challenge is, before adding 
new data reporting requirements, really thinking about the 
questions you want to answer.
    I have some concerns about certain aspects of the proposed 
legislation. I have fears that it will exacerbate the silos and 
duplication issues because if you focus on the program as the 
primary unit for reporting rather than outcomes, then it 
encourages everybody to want to protect their program turf.
    So I can think of situations, for example, around clean 
water. What is the program? Is it the Clean Water program at 
the Environmental Protection Agency (EPA)? Is it the Clean 
Water program in Delaware, which is a program that is supported 
by Federal money. Is it the Surface Water program, the Drinking 
Water program, or is it the rule-writing, the inspection, the 
enforcement program?
    And what you really want is it to be about cleaner water. 
And if you tie all of this to outcomes, it is good to know 
which programs are managing and supporting each outcome 
objective. I would be very cautious about adding new reporting 
requirements before making sure that the data will be useful to 
people making decisions and that people running each program 
are not going to say, ``Wait a minute, I want to make sure I 
have my dollars for my permit program,'' when, in fact, you 
might want to shift it to the enforcement program.
    So really, not creating a system that reinforces turf and 
the silos, but rather focuses on the outcomes. I would urge, in 
sort of thinking about the next steps in terms of how to 
improve the proposed language, consulting Bob Kaplan and 
Michael Porter, two professors at the Harvard Business School. 
They are doing some really interesting work on patient-focused 
accounting and cost tracking, and they are finding it is 
reducing costs and improving cycle times.
    I think there may be some lessons for the Federal 
Government in what they are doing. So, before taking the next 
step and adding a whole new set of reporting requirements, I 
would be clear about what you are trying to accomplish with 
those reporting requirements.
    One other thing that I think is worth consideration in 
thinking about how the specifics of the law should work are the 
front-line workers, whether we are talking about case workers, 
inspectors, teachers, or policemen. If you look at what happens 
when these reporting requirements trickle down, they often turn 
a case worker into a data clerk. Instead, we should be figuring 
out how to return data to the data suppliers with value added 
through analysis that helps them make better decisions about 
what kind of treatment or action they ought to be taking with a 
person or a student they are trying to help or a facility that 
they are trying to get into compliance.
    What has worked better in other situations is returning the 
data back to frontline worker in a way that helps them answer 
that question, ``How should they allocate my time for the 
highest return.'' So as you consider adding data requirements, 
reporting requirements, please think about the users of the 
system and make sure the Federal Government is building systems 
that inform the decisions that will actually drive 
improvements.
    Chairman Carper. Good. That is very timely. Thank you. 
Thanks very much. So Max Stier.
    Mr. Stier. Thank you. I think these are all great points 
and I am really pleased that you are focused on the cost on the 
government side. There is an awful lot of time that is spent by 
the Federal workforce responding to compliance exercises. One 
would think that the information may be useful for management; 
it typically is not. Often that data becomes simply another 
report that gets thrown over the wall which no one is looking 
at.
    One thought I have would be to----
    Chairman Carper. Off the wall as opposed to over the wall.
    Mr. Stier. Over the wall, exactly. Can we remove some of 
the unneeded data collection requirements? There are some 300 
reports that agencies are doing that no one is reading. Can you 
remove some of those or create a regular process that will help 
the Federal workforce do what you really want them to do, 
rather than provide data that no one is actually interested in. 
Can they instead, spend the time on things that you do care 
about.
    Combine some effort to replace those compliance exercises 
with ones that you really care about. That would be enormously 
beneficial inside the workforce and for you and for the public.
    Chairman Carper. That is sort of a first cousin to what a 
fellow named Cass Sunstein tried to do with respect to 
regulations, to make sure we are going back and actually 
looking at the ones we have and trying to decide whether or not 
we still need them all in their former----
    Mr. Stier. Right. It is very important. His effort was 
still focused on the outside, not on the inside. No one has 
ever paid attention to the overhang that government itself is 
having to deal with, and it is enormous, unbelievable stuff 
that agencies have to do that adds no value or limited value at 
great cost.
    Chairman Carper. All right. Thanks. We opened our hearing 
today with your statements. Dr. Coburn and I gave an opening 
statement, but then we opened with your testimony. And 
sometimes when we have a diverse panel together and there is 
not a lot of consensus, one of the things I do at the end is I 
say, Where do you think you agreed.
    And as it turns out, there is a lot of agreement here, 
there is a lot of consensus here. But I want each of you to 
give just a short closing statement, maybe a minute or so, and 
just to go back and all that we talked about--we have covered a 
lot of territory here. But just something that you would really 
like to leave right here on this dias. For God's sake, if you 
do not remember anything else, have nothing else that you 
follow through on--and hopefully, we will follow through on a 
number of these points. I think we are already on some of them.
    But just give us one terrific take-away, what might be that 
one point?
    Mr. Lee. I suppose that coming from a transparency 
organization, I should take a moment just to emphasize, 
particularly since we have heard some considered and correct 
thoughts about the disclosure burden that the government faces, 
I need to emphasize the value of transparency measures.
    They need to be done smartly, of course, to make sure that 
they are useful. But ultimately, they cannot only find 
duplicative or wasteful activity, they can forestall bad 
behavior or useless behavior in the first place simply by 
making it known that people from within government and from 
outside of government are going to be paying attention.
    If there is a single thing to stress, I think it is that it 
is important that these systems be open to the light of day and 
that useful information that can help us produce a better 
government be given to the public.
    Chairman Carper. All right. Thanks. Mr. Shea.
    Mr. Shea. Thanks for the opportunity, Senator. It has been 
a great afternoon. I would simply implore you to pick three 
areas in which you can agree with the Administration, that 
deserves your focus, and relentlessly pursue improvement 
actions with the agency responsible for that. That is just a 
simple point.
    Chairman Carper. I like that one. Thank you. Dr. 
Metzenbaum.
    Ms. Metzenbaum. Thank you, Mr. Chairman. Once again, 
showing how bipartisan the discussion is on these issues, what 
Robert just said is very similar to what I was going to say. I 
thank this Committee for giving attention to management 
matters. They do not get enough attention and they need more.
    And I would urge you to pick a few areas, both in mission-
focused areas, but also mission support areas, just a few where 
you work with the Administration to find what is working. Shine 
a spotlight on it. Promote speedier adoption of it. And find 
what is not working.
    Do some root cause analysis to figure out what is going on 
and deal with the difficult problems, because Congress working 
with the Administration can take on some of the problems that 
neither can do as well on their own. I think you would see 
tremendous progress.
    Chairman Carper. Good. Thank you. Mr. Stier.
    Mr. Stier. If you give me a minute, I can cover three 
things. Thank you very much for doing this hearing, and also, 
again, I want to end where I started, which is, I think the 
Administration is doing important work and they need all the 
support that they can get. Working in tandem with you and the 
rest of the Committee, a lot can be done and, frankly, needs to 
be done.
    You need to focus on the transition process now before the 
Presidential campaign season begins. There are things that 
could be done that I think would improve all of these things 
going forward, because it all begins where it starts and it 
does not start very well because of some dysfunctions in the 
transition process.
    Second, we talked about concrete things that can be done to 
improve employee engagement. It is a real problem and one on 
which this Committee could have real impact.
    Finally, it is time for civil service reform. The current 
system does not meet the needs of today's world, and certainly 
not tomorrow's. Thank you.
    Chairman Carper. Well, this has been 2 hours well spent and 
we are grateful to you for spending them with us and for the 
preparation that you have gone through. Probably years of 
preparation, actually, in preparing you for this conversation.
    I might suspect that we will want to followup with you on a 
number of these points. So we thank you for that. I am one of 
those people, I really believe that Einstein had it right. In 
adversity lies opportunity. People say to me, How are you 
doing? I have a friend who says, Compared to what, when they 
ask him how he is doing. He says, Compared to what?
    But usually when people say to me, How are you doing, I 
tell them I am happy. And they say, How can you be happy? Do 
you not work in Washington? Are you a Senator? How can you be 
happy there with all that gridlock and back-biting and 
inability to get along and so on. But I really believe Einstein 
is right, in adversity lies opportunity.
    And there is plenty of adversity here, but there is also a 
lot of opportunity. I think there are people of goodwill on 
both sides of the aisle, in the Legislative Branch, the 
Executive Branch, and in the private sector that are willing to 
help us do better.
    Everything I do I know I can do better and the same is true 
of a lot of problems we are talking about here. So with that in 
mind, the hearing record is going to remain open for 15 days. 
So the 15-day window closes on April 15 at 5 p.m. for the 
submission of statements and questions for the record.
    I know a number of my colleagues will have some questions, 
and if you could respond to those promptly, we would be most 
grateful. Again, it is great to be with all you. Thank you for 
those of you who have served within this Federal Government of 
ours in a number of capacities and those who work very closely 
in trying to make our government more and more effective. We 
are grateful. With that, this hearing is adjourned. Thanks so 
much.
    [Whereupon, at 4:54 p.m., the hearing was adjourned.]
    
                            A P P E N D I X

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