    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

                     18F AND U.S. DIGITAL SERVICE OVERSIGHT

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

                                 JOINT HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                             INFORMATION TECHNOLOGY

                                    AND THE

                                SUBCOMMITTEE ON

                             GOVERNMENT OPERATIONS

                                     OF THE

                             COMMITTEE ON OVERSIGHT
                             AND GOVERNMENT REFORM
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 JUNE 10, 2016

                                   __________

                               Serial No. 114-115

                                   __________

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

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

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

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                  COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                         JASON CHAFFETZ, Utah, Chairman
    JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland,
    MICHAEL R. TURNER, Ohio                  Ranking Minority Member
    JOHN J. DUNCAN, Jr., Tennessee       CAROLYN B. MALONEY, New York
    JIM JORDAN, Ohio                     ELEANOR HOLMES NORTON, District of
    TIM WALBERG, Michigan                    Columbia
    JUSTIN AMASH, Michigan               WM. LACY CLAY, Missouri
    PAUL A. GOSAR, Arizona               STEPHEN F. LYNCH, Massachusetts
    SCOTT DesJARLAIS, Tennessee          JIM COOPER, Tennessee
    TREY GOWDY, South Carolina           GERALD E. CONNOLLY, Virginia
    BLAKE FARENTHOLD, Texas              MATT CARTWRIGHT, Pennsylvania
    CYNTHIA M. LUMMIS, Wyoming           TAMMY DUCKWORTH, Illinois
    THOMAS MASSIE, Kentucky              ROBIN L. KELLY, Illinois
    MARK MEADOWS, North Carolina         BRENDA L. LAWRENCE, Michigan
    RON DeSANTIS, Florida                TED LIEU, California
    MICK, MULVANEY, South Carolina       BONNIE WATSON COLEMAN, New Jersey
    KEN BUCK, Colorado                   STACEY E. PLASKETT, Virgin Islands
    MARK WALKER, North Carolina          MARK DeSAULNIER, California
    ROD BLUM, Iowa                       BRENDAN F. BOYLE, Pennsylvania
    JODY B. HICE, Georgia                PETER WELCH, Vermont
    STEVE RUSSELL, Oklahoma              MICHELLE LUJAN GRISHAM, New Mexico
    EARL L. ``BUDDY'' CARTER, Georgia
    GLENN GROTHMAN, Wisconsin
    WILL HURD, Texas
    GARY J. PALMER, Alabama

                       Jennifer Hemingway, Staff Director
                     David Rapallo, Minority Staff Director
              Troy D. Stock, Information Technology Staff Director
                          Sean Brebbia, Senior Counsel
                        Sharon Casey, Deputy Chief Clerk
                     Subcommittee on Information Technology

                           WILL HURD, Texas, Chairman
    BLAKE FARENTHOLD, Texas, Vice Chair  ROBIN L. KELLY, Illinois, Ranking
    MARK WALKER, North Carolina              Member
    ROD BLUM, Iowa                       GERALD E. CONNOLLY, Virginia
    PAUL A. GOSAR, Arizona               TAMMY DUCKWORTH, Illinois
                                         TED LIEU, California
                                     ------

                     Subcommittee on Government Operations

                     MARK MEADOWS, North Carolina, Chairman
    JIM JORDAN, Ohio                     GERALD E. CONNOLLY, Virginia,
    TIM WALBERG, Michigan, Vice Chair        Ranking Minority Member
    TREY GOWDY, South Carolina           CAROLYN B. MALONEY, New York
    THOMAS MASSIE, Kentucky              ELEANOR HOLMES NORTON, District of
    MICK MULVANEY, South Carolina            Columbia
    KEN BUCK, Colorado                   WM. LACY CLAY, Missouri
    EARL L. ``BUDDY'' CARTER, Georgia    STACEY E. PLASKETT, Virgin Islands
    GLENN GROTHMAN, Wisconsin            STEPHEN F. LYNCH, Massachusetts

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on June 10, 2016....................................     1

                                   WITNESSES

    Mr. Mikey Dickerson, Administrator, U.S. Digital Service
        Oral Statement...............................................     4
        Written Statement............................................     7
    Ms. Phaedra S. Chrousos, Commissioner, Technology Transformation
      Service, U.S. General Services Administration
        Oral Statement...............................................    10
        Written Statement............................................    12
    Mr. David Powner, Director, IT Management Issues, U.S. Government
      Accountability Office
        Oral Statement...............................................    15
        Written Statement............................................    17
    Mr. A.R. ``Trey'' Hodgkins, Senior Vice President, Public Sector,
      Information Technology Alliance for Public Sector, Information
      Technology Industry Council
        Oral Statement...............................................    57
        Written Statement............................................    60
    Mr. David Leduc, Senior Director of Public Policy, Software and
      Information Industry Association
        Oral Statement...............................................    66
        Written Statement............................................    68

                                    APPENDIX

    Ms. Chrousos-GSA Hearing Follow-up...............................    96
    Mr. Dickerson-USDS Response to Questions for the Record..........    98
    Mr. Shive-GSA Response to Questions for the Record...............   102

                     18F AND U.S. DIGITAL SERVICE OVERSIGHT

                                  ----------

                             Friday, June 10, 2016

                      House of Representatives,
    Subcommittee on Information Technology, joint with
             the Subcommittee on Government Operations,
                  Committee on Oversight and Government Reform,
                                                       Washington, D.C.
        The subcommittees met, pursuant to call, at 9:32 a.m., in
    Room 2154, Rayburn House Office Building, Hon. Will Hurd
    [chairman of the Subcommittee on Information Technology]
    presiding.
        Present: Representatives Hurd, Meadows, Farenthold,
    Walberg, Walker, Jordan, Blum, Buck, Carter, Grothman, Chaffetz
    (ex officio), Kelly, Connolly, and Maloney.
        Mr. Hurd. The Subcommittee on Information Technology and
    the Subcommittee on Government Operations will come to order.
        Without objection, the chair is authorized to declare a
    recess at any time.
        Good morning, y'all. The IT and Government Operations
    subcommittees have constantly highlighted a need for IT reform
    at large and the waste, fraud, and abuse that comes along with
    it. For real reform to happen, the Federal Government needs
    talented, experienced people to work on IT projects that are
    bigger than themselves.
        There is no question that there's a need to reform outdated
    laws, and the current procurement structure prevents the
    proverbial two guys or two gals in a garage from selling
    technology to the Federal Government when often their product
    may be cheaper and more innovative than another solution. It
    should be much easier for startups and small companies to sell
    to and work with the Federal Government.
        We need fresh ideas and an outside-the-box thinking to
    permeate all levels of government. 18F was launched just over 2
    years ago with 15 staff members. Today, 18F has 185 staff
    members and growing and has transformed into an entirely new
    division within the GSA, complete with its own commissioner and
    budget.
        How did that happen? What was its original mission? What is
    its current mission? Is it achieving its stated purpose to make
    the government's digital services, simple, effective, and
    easier for the American people? If not, what can we change to
    ensure it does? Because that is the goal I think all of us are
    here today to support.
        Additionally, I have concerns about the funding mechanism
    with which 18F is supported. As the GAO notes, 18F is to
    recover costs to the Acquisition Services Fund and is required
    to have a plan to achieve full costs recovery. Recent report
    suggests that it may be doing just the opposite.
        Today, I hope that we can gain a more transparent view of
    18F's mission and its full scope of their activities. The
    United States Digital Service was formed in the wake of a
    failure of the launch of healthcare.gov to procure the outside
    talent--tech talent that was needed to make the Web site
    operational. The stated mission is to improve and simplify the
    digital experience that people and businesses have with their
    government.
        I'm concerned with potential duplication and overlap. This
    committee is well aware of the costs associated with the
    duplicative and overlapping programs. And let me assure you, we
    don't need two more.
        This committee has held numerous hearings this Congress
    with agency CIOs as witnesses primarily focused on the state of
    IT and cybersecurity at agencies and the implementation of
    FITARA, and we will continue to do so and hold agency CIOs
    accountable. FITARA is important because it will give CIOs
    greater budget authority and empower them to make bold
    decisions. But with the power also comes accountability. We
    will hold CIOs accountable for their decisions.
        Under FITARA, nothing of any significance related to IT
    should be happening at agencies without the involvement and
    signoff of agency CIOs, period. I'm concerned by reports that
    USDS teams may parachute into an agency, fix whatever they
    perceive was the problem, and then leave without the full buy-
    in and involvement of the agency CIO. That should never happen.
    It is contrary to the entire purpose of FITARA.
        I hope to hear today concrete steps USDS is taking to
    ensure they involve agency CIOs from the beginning when working
    on a project at an agency. As usual, Mr. Powner and GAO have
    done great work in this area, and I would highly advise both
    18F and USDS to implement GAO's recommendations.
        As I've said before, taxpayers deserve a government that
    leverages technology to serve them rather than one that deploys
    unsecured, decades-old technology that places their sensitive
    and personal information at risk. They also deserve a Federal
    Government that is transparent. We can harness power of the
    cloud. We can upgrade our legacy systems. We can get smart
    people to come work for the Federal Government. We can do all
    this because, despite our problems, America is still a country
    of innovators. If 18F and USDS can help us achieve an efficient
    and transparent government worthy of its people and do so in a
    way that is clear, cost-effective, measurable, and appropriate
    for a government role, then I'm very open in supporting them.
    However, these conversations will help give us a clearer view
    and inform us on whether they need to be restructured,
    reformed, or restricted.
        And I thank the witnesses for being heard today and look
    forward to their testimonies and hearing specific ways we can
    bring cutting-edge technology and technology talent into the
    Federal Government.
        I now would like to recognize my friend, the gentlewoman
    from the great State of Illinois and the ranking member of the
    Subcommittee on Information Technology, for her opening.
        Ms. Kelly, you are recognized for 5 minutes.
        Ms. Kelly. Thank you, Chairman Hurd, for holding this
    important hearing, and thank you to our witnesses for taking
    the time to be here this morning.
        As we all know, the Federal Government relies on
    information technology in countless ways. Most importantly,
    Americans rely on IT to access services and connect with the
    government, from signing up for health care to applying for
    student loans to securing veterans' benefits. And when the
    government's IT services aren't working, the government is
    isn't working. We've learned this from our experience with
    healthcare.gov and other recent IT challenges.
        Although the Affordable Care Act is much more than a Web
    site, we saw what happened when we try to implement good policy
    without the underlying IT structure to support it. That's why
    the administration created the U.S. Digital Service and 18F.
        The stated goals of USDS and 18F are to improve and
    modernize government IT operations and help the government
    become better at procuring, developing, and sharing IT going
    forward. These are worthy goals. And the USDS and 18F have made
    great strides toward reaching them.
        For example, USDS has helped the Department of Homeland
    Security launch an online immigration review process. This is
    the project that DHS has been working on for nearly a decade at
    a cost of $1 billion. 18F is in the process of developing a new
    IT acquisition process that will make it easier for Federal
    agencies to contract with vendors that provide agile software
    development services.
        I look forward to hearing more about these and other
    success stories today. One of the greatest achievements of the
    Digital Service and 18F has been the ability to attract and
    recruit incredible talent from the tech industry into the
    Federal Government.
        At almost every hearing we hold, I ask agency heads to list
    some of their greatest challenges, and without fail, we hear
    about the challenges of recruiting and retaining a talented IT
    workforce. I have been impressed by 18F and USDS' ability to
    open the door to public service in one of our fastest growing
    industries. These employees are using the knowledge, skills,
    and experience they've gained in the private sector to help
    improve Federal IT.
        In addition to recruiting the best and the brightest in
    tech talent, we need to continue leveraging the resources and
    expertise, that of our partners in the private sector. They are
    eager to help bring Federal IT into the 21st century.
        I look forward to hearing from the witnesses and how the
    mission of these offices differs from what the private sector
    offers through government contracts. What value added do these
    programs bring? How are your roles changing? And what
    limitations do you face? But in order for the Digital Service
    and 18F to fully realize their potential, they need to be
    transparent about the good work they are doing. They should
    also continue to engage stakeholders and Congress so we can all
    understand the important role they play in modernizing Federal
    IT and help shape the role going forward.
        Thank you, again, to our witnesses for being here and to my
    colleagues for holding this important hearing.
        I yield back.
        Mr. Hurd. Thank you. And I'll hold the record open for 5
    legislative days for any members who would like to submit a
    written statement.
        I will now recognize our panel of witnesses.
        I'm pleased to welcome Mr. Mikey Dickerson, Administrator
    of the U.S. Digital Service.
        Thank you for being here, sir.
        Ms. Phaedra Chrousos, a Commissioner of the Technology
    Transformation Service at the Government Services
    Administration.
        Thanks for being here and thank you for the information you
    and your staff have provided us in advance of this hearing.
    Very important to understand what y'all are doing and help us
    with our oversight role and make sure we can support y'all on
    the activities. So that kind of back-and-forth is really
    important.
        Mr. A.R. ``Trey'' Hodgkins, senior vice president, Public
    Sector, at the Information Technology Alliance for the Public
    Sector.
        Thank you for being here.
        And Mr. David LeDuc, senior director of policy--public
    policy at the Software and Information Industry Association.
        Appreciate you being here.
        And, last but not least and number one in our hearts, Mr.
    David Powner, Director of IT Management Issues at the U.S.
    Government Accountability Office.
        Always a pleasure to have you here today, sir.
        Welcome to you all.
        And pursuant to committee rules, all witnesses will be
    sworn in before they testify.
        So please rise and raise your right hands.
        Do you solemnly swear or affirm that the testimony you are
    about to give will be the truth, the whole truth, and nothing
    but the truth?
        Let the record reflect the witnesses answered in the
    affirmative. In order to allow time for discussion, I would
    appreciate if y'all would limit your testimony to 5 minutes.
    Your entire written statement will be made part of the record.
        Now, I would like to recognize Mr. Dickerson for your
    opening statement. You are recognized for 5 minutes.

                           WITNESS STATEMENTS

                      STATEMENT OF MIKEY DICKERSON

        Mr. Dickerson. Thank you, Mr. Chairman.
        Chairman Hurd, Ranking Member Kelly, Chairman Meadows,
    Ranking Member Connolly, and all members of the subcommittees,
    thank you for the opportunity to appear before you today.
        Millions of people interact with the United States
    Government every day, relying on digital products such as Web
    sites, online forms, and mobile apps to access and understand
    government services. Americans are accustomed to the high
    standards of service set by the private sector, but outdated
    technology and complicated user interfaces can sometimes make
    interactions with the government frustrating and inefficient.
        Americans deserve simple, effective digital services. We
    are in a new era of technology and innovation in the U.S.
    Government, and we are using the latest technology to deliver
    better services, engage Americans, and tackle tough challenges.
    President Obama launched the United States Digital Service less
    than 2 years ago as a means to improve our Nation's most
    important public-facing digital services. The U.S. Digital
    Service, or USDS, is a collaboration between our country's top
    technical talent and product design and software engineering
    and the government's brightest leaders and civil servants who
    work in partnership to apply private sector best practices to
    our digital services.
        In 2014, the small team of technologist initially planned
    to focus on three projects, but with additional funding and
    support of Congress starting in fiscal year 2015, the size and
    scope of the USDS has increased. Today, the USDS has small
    teams working on high-priority projects with a number of
    agencies across the government.
        The work of USDS is centered on four main goals. First and
    foremost is to transform critical services. The USDS is focused
    on improving our Nation's most important public-facing
    services. The team helps to manage technology projects working
    alongside civil servants and IT contractors.
        The second goal is to rethink how we build and buy digital
    services. The USDS is working to modernize procurement
    processes and practices for the digital era by developing
    training programs and tools that enable Federal contracting
    officers to apply industry best practices to digital
    procurements. By increasing the technical knowledge and
    expertise of contracting officers, the Federal Government can
    partner more effectively with the IT private sector who will
    continue to deliver the majority of the government's digital
    services just as they do today.
        Our third goal is to initiate the development of common
    platforms and standards. The USDS is working to identify pilot
    opportunities for common platforms that can improve services
    needed by multiple agencies.
        And our fourth goal is in support of the others, is to
    bring to bring top technical talent into public service. In
    support of these goals, the USDS plans to bring 200 digital
    service experts into the Federal Government by the end of 2017.
        The long-term goal is to build and sustain institutional
    capacity within agencies while simultaneously encouraging a
    tradition of public service in the tech professions.
        In the short amount of time that USDS has been operating,
    we have seen success in many projects, especially under the
    following circumstances: when the USDS team is small and
    focused on a high-priority project; when agency leadership is
    engaged and supportive; when the USDS team is tightly
    integrated with existing contractors and career staff; when the
    project has a hard decline; and when the project has crossed
    agency dependencies or many stakeholders across the government.
        While the USDS is still a very new program, we've already
    seen early results in improving services for the public. For
    example, vets.gov is a single unified digital experience to
    provide veterans access to the information they need about the
    VA's benefits, such as educational assistance, health care, and
    economic opportunities. We are also pleased with the college
    scorecard, a tool that helps students and their families make
    better decisions about where to go to college by publishing
    comprehensive, reliable data on students' employment outcomes
    and success in repaying their student loans.
        By applying the best practices in technology and design to
    the Federal Government, the USDS helps enable delivery of more
    reliable and effective digital services to the American public.
    Through the recruitment of top technology talent from one of
    the most competitive industries in the world, the USDS is
    inspiring a tradition of public service in the tech professions
    which will help the Federal Government continue to deliver
    crucial services.
        I thank the committee for holding this hearing and for your
    commitment to providing top notch digital services to the
    American people. I am pleased to answer your questions.
        [Prepared statement of Mr. Dickerson follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Hurd. Thank you, Mr. Dickerson.
        Now, Ms. Phaedra Chrousos, you are recognized for 5
    minutes.

                    STATEMENT OF PHAEDRA S. CHROUSOS

        Ms. Chrousos. Thank you.
        Good morning, Chairmen Hurd and Meadows, Ranking Members
    Kelly and Connolly, and members of the committee. Thank you for
    inviting me to speak with you today. I left the private sector
    2 years ago to join the Federal Government's efforts to improve
    the public's experience with the government. Having founded and
    successfully led to two Internet companies prior to joining
    public service, I am particularly excited to speak with you
    about 18F, an organization that is helping bring government
    closer to the technology practices and methodologies of the
    private sector.
        As you know, GSA's mission includes providing the best
    value and technology to the Federal Government and the American
    people. The work of 18F is a vital part of that mission.
        In March 2014, recognizing that too many of our
    government's digital services are not designed to meet the
    needs of the people who use them, are not delivered on time,
    and are often over budget, GSA launched 18F, a 15-person
    startup within its agencies. In the last 2 years, 18F has grown
    to 185 people, attracting cutting-edge technologists from both
    the industry and the public sector and has worked on more than
    150 projects with 63 Federal entities. The organization has
    also evolved its service offering to respond to the technology
    needs of its agency customers. This 2-year-old startup is
    making progress towards its mission of making the government's
    digital services simple, effective, and easier to use for the
    American people.
        I would like to highlight just one example of 18F's work.
    In June of 2014, 18F signed its very first interagency
    agreement with the Federal Election Commission that asked for
    help in making the 90 million records they housed more readily
    accessible to the public. It was the first time FEC had worked
    with an agile user-centered team like 18F, and our work has
    transformed the way they approach technology today. In the
    words of our partners at FEC: We got so much more than a Web
    site. We had a complete culture change about how to do user-
    centered design in agile. This product embodies the way 18F
    works: a focus on data, a close partnership with stakeholders
    and users, building in the open, and the opportunity for the
    transformation of practices and processes within our customer
    agencies.
        Early on, during engagement such as this one with the FEC,
    18F recognized that a team of in-house technologists and
    governments simply cannot on its own rebuild the Federal
    Government's vast information technology systems. We also
    needed to partner with the private sector.
        One of 18F's first joint efforts with GSA's Federal
    Acquisition Service was the creation of the Agile Blanket
    Purchase Agreement, a new contract vehicle designed to provide
    18F and their agency customers access to the innovative
    technical talent that exists in the private sector today. 18F's
    partnership with the private sector is integral to the success
    of its efforts and is crucial for scaling this organization's
    impact across the Federal Government.
        The promise of 18F's work aside, I recognize that this
    young organization has room to improve its operations
    significantly. 18F was launched as a startup in government 2
    years ago, and the organization is learning while it scales and
    matures. The insightful analysis and recommendations put
    forward by the Government Accountability Office will contribute
    to our learning and help 18F become a stronger organization. We
    value transparency and welcome continued oversight of all of
    our efforts from GAO, the GSA inspector general, and this
    committee.
        I would like to close by emphasizing that the scale and
    scope of the technology challenges facing Federal agencies is
    larger than 18F could ever address on its own. As the committee
    noted in a recent hearing, the need for the Federal Government
    to improve its technology is imperative to creating a
    government that's transparent, effective, responsive, and
    secure. Addressing the challenges we face in this area demands
    continued leadership and close partnership with the Office of
    Management and Budget, Federal agencies, and the private
    sector, which will continue to play a critical role in
    delivering technology solutions that agencies need.
        Thank you for the opportunity to speak with you today, and
    I look forward to answering your questions.
        [Prepared statement of Ms. Chrousos follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Hurd. Thank you.
        Mr. Powner, you are recognized now for 5 minutes for your
    opening remarks.

                       STATEMENT OF DAVID POWNER

        Mr. Powner. Chairman Hurd, Ranking Member Kelly, and
    members of the subcommittees, thank you for having us testify
    on our ongoing work looking at GSA's 18F and OMB's U.S. Digital
    Services. For each of these organizations, I will provide a
    brief overview, positive developments, and areas that we
    believe need improvements.
        Starting with 18F, it was established in March 2014. Its
    mission is to transform the way the Federal Government builds
    and buys digital services. Agencies come to 18F for their
    services and pay for these services since 18F is funded out of
    revolving fund within GSA. Therefore, it operates on revenue
    generated from its business instead of an appropriation. Their
    plan is to start having full cost recovery in 2019. 18F has
    over 170 staff and has worked with approximately 20 agencies on
    more than 30 projects. These projects include building secure
    Web sites, obtaining cloud services, and providing consulting
    and training on agile practices.
        18F has worked on some major IT projects like the U.S.
    immigration transformation and the VA benefits delivery system.
    They also have two initiatives where agencies will be able to
    quickly access agile and cloud services. Our customer
    satisfaction survey showed that most customers were pleased
    with their services.
        We think they could do a better job on defining outcome-
    oriented goals and performance measures. During the course of
    our review, they developed these goals and measures. Some of
    these are good, like saving $250 million and having a 90-
    percent customer satisfaction score, but others, like growing
    their staff to over 200, are not outcome-oriented. We also
    think there should be measures and targets for full cost
    recovery. 18F acknowledges that these goals and metrics need
    further development.
        Now turning to USDS, it was established in August 2014. Its
    mission is to transform the most important digital services for
    citizens. USDS typically goes to agencies, and they do not
    charge agencies for their services because they have an
    appropriation. For fiscal year 2016, they plan to spend about
    $14 million.
        USDS has about 100 staff within OMB. It has worked with
    approximately 11 agencies on about 15 projects. These projects
    include information security assessments, system stabilization,
    and software engineering.
        USDS has worked on seven major IT projects, including U.S.
    immigration transformation and SSA's disability case
    processing. A much higher percentage of their work is
    associated with large IT acquisitions when compared to 18F. Our
    customer satisfaction survey showed that all customers that
    responded were satisfied with their services.
        Similar to 18F, USDS could do a better job defining
    outcome-oriented goals and performance measures. During the
    course of our review, these goals and measures were developed.
    Some are good, like measurably improving five to eight of the
    government's most important citizen-facing services, but
    others, like increasing the quality and quantity of technical
    vendors, are not outcome-oriented.
        We also think USDS' continued focus on the highest priority
    Federal IT projects that are to be identified quarterly to the
    Appropriation Committees is important.
        Finally, as USDS establishes agency digital service teams,
    it is critical that these relationships with--is consistent
    with CIOs and what is currently in FITARA and all the oversight
    that your subcommittees have performed to strengthen CIO
    authorities. We have concerns about some of these agency teams
    doing an end-around the CIO organizations.
        In conclusion, it is important that these two organizations
    clearly demonstrate their value by improving performance
    measures. 18F needs to continue to work toward full cost
    recovery while USDS needs to ensure that agency digital service
    teams do not undermine the CIO authorities that are being
    bolstered with FITARA.
        This concludes my statement. I look forward to your
    questions.
        [Prepared statement of Mr. Powner follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Hurd. Thank you, Mr. Powner.
        Mr. Hodgkins, you are recognized for 5 minutes.

                  STATEMENT OF A.R. ``TREY'' HODGKINS

        Mr. Hodgkins. Good morning.
        Chairmen Hurd and Meadows, Ranking Members Kelly and
    Connolly, and members of the committee, thank you for the
    opportunity to share our perspectives regarding the U.S.
    Digital Service and the General Services Administration's 18F
    and their efforts to improve government's approach to
    information technology.
        My name is Trey Hodgkins, and I am the senior vice
    president for the Public Sector at the Information Technology
    Industry Council where I manage our public-sector-facing
    practice called the IT Alliance for Public Sector, known as
    ITAPS.
        The tech sector has for some time been leading the focus on
    evolving the way the government acquires and manages
    information technologies, moving them from practices,
    processes, and protocols too often rendered in an era that
    predates the Internet to the 21st century. Our members believe
    such a transformation is necessary to fully apply today's
    technologies to government missions.
        Early in the current administration, industry helped
    develop goals to kick-start such an evolution. USDS and 18F
    embodies some of those pursuits, including bringing about
    cultural and process change. These include using agile instead
    of waterfall development methodologies, designing system space
    on end user needs in the context of the agency mission, and
    leveraging a multigenerational workforce. In many ways, 18F and
    USDS are positioned to be key enablers in the efforts to
    achieve a digital government.
        ITAPS regularly advocates for institutional disruption in
    the way the government buys and manages IT, and we embrace 18F
    and USDS as disrupters in the Federal space. They also manifest
    what the tech sector has been saying for some time: breaking
    out of the old processes allows innovation to flourish.
    Contractors do not have that same flexibility in today's market
    with strict contract requirements, static funding cycles, and a
    rigid compliance structure. If contractors were to suggest
    innovative and perhaps time- and money-saving solutions, their
    bids would be deemed nonresponsive because they did not follow
    the requirements and essentially be disqualified. Both of these
    programs have demonstrated how innovation can be injected into
    government if you peel away the layers upon layers of rigid
    process now in place. Imagine what could be accomplished if we
    were to permit companies to think outside the box in the same
    fashion.
        We believe that these initiatives, like any new startup,
    faces pitfalls and obstacles. In the remainder of my comments,
    I will offer recommendations on areas to focus practices to
    adjust and outcomes to illuminate in order to sustain them into
    the next administration.
        People do not always embrace change, and disruption can
    also expose programs to risk. We believe the risk facing these
    programs can be grouped into three categories, which are
    people, management, and technology. And I provide greater
    detail on these in my written testimony. These programs should
    address these risks and mitigate for them.
        Based on our discussions with vendors and government
    personnel, there is a general lack of clarity and understanding
    about these programs. What are they doing? What are they not?
    And how can they be expected to operate? This opaqueness has
    created a degree of uncertainty, concern, and suspicion.
        To address and counter these perceptions and to ensure that
    these programs can be sustained into the future, attention
    should immediately be paid to creating a very transparent and
    open operating environment. Furthermore, applying comprehensive
    metrics will provide oversight to ensure the interests of the
    taxpayers and to demonstrate that these programs are not
    wasteful of time and resources.
        The committee also included the formation of the Technology
    Transformation Service, TTS, in today's discussion. As the
    operational arm of a list of OMB initiatives and policies, GSA
    needs to clearly explain how these new roles and
    responsibilities relate to their mission and to the broader
    industrial base and how and with whom they will engage.
        GSA should also clearly explain how the entity is to be
    funded, where their authorities and personnel come from, and
    whether these activities must be authorized by statute. Leaving
    these and other questions unaddressed will expose 18F and GSA
    itself to challenges from uninformed stakeholder communities.
    ITAPS believes that a number of adjustments should be made to
    the programs to best position them for a clear trajectory into
    the next administration. Each program should clarify their
    mission. 18F in particular has expanded the reach and scope of
    their activities and created a condition where 18F acts as both
    the buyer and the seller. This is a conflict of interest, and
    such authorities should not be added to their portfolio at this
    time.
        Both 18F and USDS should remain focused on the original
    delivery models. Both programs in the TTS should immediately
    embark on an effort to become transparent in their operations
    and to ensure that stakeholders have clarity of purpose for the
    programs and understand how they can engage. Further, we
    believe that until the recommended transparency can take hold
    and effective assessment and analysis can occur, GSA should
    postpone formalizing TTS.
        Finally, both programs must find ways to effectively and
    robustly partner and not compete with new and existing
    government vendors to deliver better solutions.
        The technology industry wants to incubate a transformation
    in the Federal IT market that brings about new ways to fund,
    develop, procure, deliver, manage, and sustain innovative
    technology solutions. We support 18F and USDS and believe that
    they can enable elements of such a transformation. We also want
    this transformation to improve the technological experience for
    everyone: constituents and citizens, taxpayers, government
    employees, and vendors. ITAPS remains committed to working with
    our government partners to achieve such success.
        With that, I conclude my remarks, and I'm happy to address
    your questions.
        [Prepared statement of Mr. Hodgkins follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Hurd. Thank you, sir.
        Mr. LeDuc, you are now recognized for 5 minutes.

                        STATEMENT OF DAVID LEDUC

        Mr. LeDuc. Thank you, Chairman Chaffetz, Chairman Hurd,
    Chairman Meadows, and Ranking Member Kelly. On behalf of the
    Software & Information Industry Association, thank you for the
    opportunity to testify today on oversight of the U.S. Digital
    Service and 18F.
        SIIA is the principal trade association for the software
    and digital content industries. SIIA commends the Obama
    administration for its work to update and enhance the Federal
    Government IT framework, which has strived to evolve Federal IT
    to become more modular, agile, and cloud-focused, and we
    support much of the core missions of both the USDS and 18F to
    help agencies buy and share efficient and easy-to-use digital
    services.
        But we have reservations with respect to several aspects of
    the 18F program.
        First, 18F's focus on ``build custom'' departs from the
    longstanding reliance on a ``buy, not build'' IT procurement
    policy. The ``buy, not build'' or commercial off-the-shelf,
    COTS, first approach is a longstanding critical proponent of
    Federal IT policy. This approach is underscored in the revised
    Circular A-130 and shared-services policies put forward by this
    administration.
        Choosing vendor-supported solutions recognizes that
    agencies often lack and are challenged to maintain consistent
    and necessary IT management staff. They also benefit from
    economies of scale, among other advantages. When choosing
    vendor-supported off-the-shelf solutions, vendors are in the
    best position, working with their agency customers, to provide
    relevant updates, assurances of security and performance.
    However, 18F is focusing on a ``build custom'' approach to
    develop new solutions that are likely to require sustained,
    meaningful, and experienced support plans, which are not
    necessarily available as part of the solutions provided by 18F.
    The importance of ongoing support for agency solutions cannot
    be overstated, and agencies cannot afford for this to be
    overlooked.
        Competition from 18F can only be expected to grow stronger
    over time for private IT vendors, particularly affecting small
    businesses.
        Second, 18F has the ability to operate outside of the
    traditional procurement process with the dual role of design
    agency procurements and to compete for the opportunity to
    provide the solutions without sufficient transparency and
    oversight. 18F combines policymaking functions, operations, and
    promotion of their own products and services sales. This is an
    area where there are many questions about the operation of 18F
    and not many answers.
        It appears that 18F could be deployed to design acquisition
    plans and RFPs and then have an opportunity to respond to that
    RFP, essentially as a sole-source consultancy. This end result
    is not likely to achieve the best value for agencies, and it
    can ignore innovative ideas from the government--outside the
    government.
        Private sector IT solution providers doing business with
    Federal agencies must demonstrate their compliance with
    critical security requirements such as business security
    certifications or the often onerous Federal approval process.
    18F should face no less rigorous standards and scrutiny and not
    be prioritized over offerings because of its address at 18th
    and F Street.
        Additionally, a particular concern to this committee
    mentioned by Mr. Powner earlier, the risk is that 18F could
    negate the steps taken to establish appropriate agency CIO
    oversight established in FITARA.
        Third, 18F must be required to cover its costs in offering
    agency IT services, but transparency is currently lacking in
    this area as well. 18F should be required to provide a detailed
    assessment of services provided as well as revenues and
    expenses to demonstrate whether they are covering costs. And if
    they are not, they should be required to provide a plan for
    cost recovery in the near future.
        Without a sufficient transparency mechanism in this area,
    it is difficult to make an apples-to-apples comparison between
    18F services and the private sector services.
        Fourth, the unanswered questions and lack of transparency
    are particularly concerning given the expansion and recent GSA
    reorganization of 18F. 18F launched in March 2014, as we know,
    as a 15-person team of innovators and has grown today to a
    total of 183 personnel across four nationwide offices. We are
    concerned the administration is moving very quickly to embed
    and make permanent the 18F program without seeking input from
    Congress or working with other agencies and without addressing
    the issues we have identified.
        As an internal government IT consulting service, 18F should
    undergo the traditional oversight and scrutiny by both Congress
    and the administration to ensure that it will stay within a
    well-defined designated lane.
        In closing, following our three recommendations, we offer
    to help guide 18F towards the well-intended goals of the
    organization: first, greater transparency on costs and process;
    second, adherence to the current ``buy first'' approach of
    commercial off-the-shelf products, consistent with Federal
    Government IT policy; and, third, a requirement to function by
    the same rules as other IT vendors, needing to provide for the
    same level of scrutiny and comparisons on cost.
        Thank you, again, for the opportunity to testify today, and
    I look forward to answering any of your questions.
        [Prepared statement of Mr. LeDuc follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Hurd. Thank you, Mr. LeDuc.
        I would like to now recognize Mr. Connolly for his opening
    remarks.
        Mr. Connolly. Thank you, Mr. Chairman.
        And I'm sorry I'm late. Mr. Meadows and I were in a postal
    reform working group meeting for the committee.
        This hearing is exactly the type of oversight, it seems to
    me, that we can agree on on a bipartisan basis. Today's hearing
    gives us the opportunity to hear from the administration about
    two programs that are playing an important role in the
    administration's efforts to modernize and improve IT, Federal
    IT.
        The Federal Government spent, of course, $80 billion in IT
    in 2015. Mr. Powner, you testified before the full committee
    just 2 weeks ago that agencies are spending up to 70, 75
    percent of that money on legacy IT systems. GAO's high-risk
    list includes management of IT acquisitions and operations.
    Agencies need to modernize their systems and their way of
    thinking about IT investments. The creation of the U.S. Digital
    Service and 18F in 2014 brought some critical focus to those
    issues.
        In 2014, Congress passed, of course, the FITARA
    legislation, the Federal Information Technology Acquisition
    Reform Act, better known Issa-Connolly. One of the most
    important changes of that bill was to provide agency CIOs with
    the authority to make spending decisions related to IT in a
    more streamlined and efficient manner. The law also requires
    CIOs to certify progress on ongoing IT investments. Congress
    gave CIOs that authority and responsibility for a reason. It's
    imperative that 18F and Digital Services coordinate with CIOs
    to ensure that the agencies have a sense of accountability for
    their investment decisions and also ensure agencies adopt and
    institutionalize best practices and share them.
        There are many success stories over the last 2 years that
    we look forward to, Ms. Chrousos and Mr. Dickerson highlighted
    in their testimony. It was refreshing to see that the GAO found
    positive customer satisfaction with both 18F and Digital
    Service.
        I'm proud to cosponsor the Information Technology
    Modernization Act, which would create a revolving fund for
    updating outdated IT systems under the bill. 18F would use its
    expertise to ensure that agencies have used best practices such
    as agile development.
        As Mr. Powner testifies today, there are some areas where
    both 18F and the U.S. Digital Service can improve and should
    improve their communications, transparency, coordination, and
    outreach. I know those are concerns in the private sector,
    which looks at 18F maybe with a mixed and jaundiced eye.
        GAO found in its review of these programs that the U.S.
    Digital Service and agencies could do a better job of
    incorporating the agency CIO into the work of Digital Service
    terms. We are interested in hearing from the witnesses today
    how 18F and the Digital Service can improve communication with
    stakeholders and work with the private sector to ensure that
    the work of those programs is transparent and that the Federal
    IT portfolio is as effective and as efficient as possible.
        I appreciate the commitment the employees of 18F and
    Digital Service have made to this government. They are bringing
    the lessons they have learned from the companies and
    organizations they come from to improve Federal IT management
    procurement. Just as technology has led to private sector job
    growth, it can also inspire Federal Government recruitment of
    the best and the brightest.
        Thank you, Mr. Chairman, for holding the hearing.
        Mr. Hurd. I'd like to now start our questioning portion of
    this event. And we're going to start with the gentleman from
    Texas, Mr. Farenthold.
        You are recognized for 5 minutes.
        Mr. Farenthold. Thank you, Chairman Hurd.
        As a former computer consultant and Web designer, I guess,
    on a very small scale, I did some of what 18F and USDS did. So
    it's an issue that I'm passionate about.
        I do want to start off with the ``buy, not build.'' Again,
    even from my days in the '90s, it was always cheaper to buy,
    not build.
        Mr. LeDuc criticized 18F for not--for building not buying.
    And I wanted to give Ms. Chrousos 30 seconds if she wanted to
    respond to that.
        Ms. Chrousos. Thank you for the opportunity to respond to
    that.
        One thing that was clearly highlighted in the testimony of
    my fellow witnesses is that we haven't done a very good job of
    communicating what 18F does. Over the last 2 years, we have
    been very responsive to our customer agencies, and we
    absolutely take a buy-first approach. We have one service line
    that builds out prototypes and lite Web services, but that's
    done not in competition with the private sector but as a way to
    showcase modern methodologies and practices to agencies.
        Mr. Farenthold. Now, you indicated you came out of the
    private sector and into government. I want to ask another
    broad, general question here. There's a very different mindset,
    especially in the startup world in California or even working
    in a big company like Google, you know, where you have these
    big campuses with bicycles everywhere and free meals. How does
    the government compete for IT talent against that?
        Ms. Chrousos. In one word, it's patriotism. So all of the
    people that come and join us are very mission-oriented, and
    they are leaving behind cushier environments, let's say, to
    come and work on projects that impact the American people.
        Mr. Farenthold. And you look at the technology and startup
    world, and there's a mentality of risk taking, and there's a
    huge push--the buzz word is ``disruption.'' You change,
    fundamentally, the way things are done.
        Now, obviously, the government is not in a position to take
    risks. And I think you can do technology without risks. Banks
    indicated that. I can do my banking on my phone now and feel
    relatively safe about it.
        But how do you bring into the government a culture of
    disruption if that's how we really are going to fundamentally
    transform how things are done? And I'll let you answer that,
    Ms. Chrousos, and then I'd also like to hear from Mr. LeDuc on
    that.
        Ms. Chrousos. Thank you. I think that's the delicate
    balance that we're always trying to balance.
        How do you bring innovation but still make sure that it
    complies with all of the government policy is something that I
    personally think about every day as the Commissioner of
    Technology Service and as I try and mature my organization.
        I think 18F faces this. The Digital Service team and
    agencies face this. The innovation labs and agencies face this.
        Mr. Farenthold. And so do you think that's the reason it
    takes so long to get something done in government IT? Is that
    the primary reason?
        Ms. Chrousos. The balance?
        Mr. Farenthold. Yeah. Trying to--yeah, basically that.
        Ms. Chrousos. Yeah. I believe it's a delicate balance. Even
    in the private sector, large companies in the private sector
    haven't figured that out either.
        Mr. Farenthold. Okay.
        Mr. LeDuc did you want to--I'm sorry to rush you. I only
    have 5 minutes.
        Mr. LeDuc. No. I mean, I think that makes a lot of sense.
    We are supportive of the goals of 18F, you know, and their
    approach to, as they say, hack the bureaucracy. You know,
    that's necessary in many areas, and we want to see more
    innovation, and we want to see more small startups brought in.
        Mr. Farenthold. Okay. Great.
        And then, so, Mr. Dickerson, Ms. Chrousos, can you each
    tell me what you consider to be your group's biggest success
    story? You know, just 10, 15 seconds there.
        Mr. Dickerson. Sure. It's very difficult to pick just one,
    but one success story that we're proud is of vets.gov, which is
    a unified experience where veterans can get access to services
    that they need.
        Mr. Farenthold. What about 18F? What do y'all consider your
    biggest success?
        Ms. Chrousos. Our biggest success is the Agile Blanket
    Purchase Agreement, which is bringing in agile talent from the
    private sector into government.
        Mr. Farenthold. So, Mr. Dickerson, you talked about
    vets.gov. Your top 10 priorities include electronic health
    records for Veterans Health Information Systems and Technology
    Architecture--that's VistA--a Medical Appointment Scheduling
    System, and Veterans Benefit Management System.
        I have had countless hearings, and my number one source of
    complaints from my constituents is poor service from the VA,
    many of which are IT related. Even--you know, even to the point
    of suicide calls going to voicemail. Where are we going on
    that? Why can't we get that done faster? And what are y'all
    doing to fix it?
        Mr. Dickerson. Thank you. We are completely sympathetic and
    also feel just as acutely as you do the opportunities for
    improvement in all those services at the VA.
        I have a small focus team at the VA as we speak today
    working on a few targeted opportunities in the service space.
        Mr. Farenthold. Okay. That doesn't sound like it's big and
    bold enough to solve the problem. So I would urge you to--is
    18F doing anything with the VA at this point?
        Ms. Chrousos. We had worked in partnership with the VA
    Digital Service team about a year ago, and we worked on a small
    component of their bigger picture.
        Mr. Farenthold. All right. Well, I think we need to sit
    down with the VA and you guys to see if we can get y'all
    working together. Because, again, I think the poor performance
    of the VA is a national disgrace. It needs to be addressed.
        I have a lot more I could do, but there are a lot of people
    here, and I am out of time, so I'll yield back.
        Mr. Hurd. I would like to recognize the ranking member, Ms.
    Kelly, for 5 minutes of questioning.
        Ms. Kelly. Thank you, Mr. Chair.
        Two weeks ago, the full committee held a hearing on the
    Federal Government's use of outdated legacy IT systems. We
    learned that the Federal Government spent about 80 million on
    IT last year, most of which was spent on these old systems.
        Clearly, we need to find a better path forward, and that's
    where the Digital Service and 18F come in.
        Mr. LeDuc, in your written statement you said, and I quote:
    ``We support much of the core mission of the both USDS and
    18F.''
        What role do you think the Digital Service and 18F can play
    in the Obama administration's efforts to modernize Federal IT?
        Mr. LeDuc. Thank you for that question.
        As I mentioned, we're very supportive of the different
    thought process that 18F brings and their goal bringing in
    innovative IT companies, small IT businesses, and integrating
    that into agency solutions, working alongside of agencies to
    help them in designing their procurements and deciding what
    types of technology they need. We think 18F can be particularly
    helpful in that role, consulting two agencies to help them
    obtain the right technology.
        Ms. Kelly. Okay. Does SIIA believe that the Digital Service
    and 18F are having an overall positive impact on modernizing
    the IT acquisition process?
        Mr. LeDuc. Yes. I think we could say, you know, overall
    positive. But, as I mentioned in my testimony, we just want to
    make sure that, you know, it stays within--you know, a well-
    functioning lane to assist the agencies.
        Ms. Kelly. Thank you.
        Mr. Hodgkins, in your written statement, you said, and I
    quote: ``In some ways, 18F and USDS are positioned to be key
    enablers in these efforts to achieve a digital government.'' In
    what ways do you think the Digital Service and 18F can enable
    the Federal Government to move into the digital age?
        Mr. Hodgkins. Well, they are already serving as disrupters,
    as we just discussed, around the cultural change that is
    necessary. We actually had to change the thought process of the
    bureaucracies and how they look at technology, and then that
    translates into how they buy it. And they are a leading edge on
    many of the elements of those different equations that have to
    be changed before we can fully incorporate technologies.
        Ms. Kelly. Thank you.
        Does ITAPS believe that the Digital Service and 18F are
    having an overall positive effect on modernizing the IT
    acquisition? It is the same question.
        Mr. Hodgkins. I think in certain areas, yes. I think that,
    in some areas, as we discussed, it's hard to tell because of
    the opaqueness of some of the things they are doing. And then
    there's still a lot of stuff left on the table that we can all
    continue to focus on.
        Ms. Kelly. Thanks.
        Ms. Chrousos, 18F's mission has always been to promote
    efficiency and innovation in the way Federal Government
    approaches IT. Can you provide a few examples of how the agile
    development is leading to more innovation and cost savings in
    government? I know you did one, but we want more than one.
        Ms. Chrousos. We want more than one. That's wonderful.
        We worked on the veterans--sorry. We worked on the
    Department of Education's College Scorecard, which--which
    unleashed 25 years of data that had never been seen before by
    the public. Today, it's being used by people going into college
    to make informed decisions about both what college they go to
    from an academic perspective but also how much they spend on
    college from a budgetary perspective.
        That was an example--that was a very small lite build that
    took over--that took 3 months, and it showcased agile
    development, user-centered design, open data, the usage of APIs
    to the Department of Education, allowing them to get a better
    idea of what that looks like so that when they go out to
    vendors and the procurement community, they can actually talk
    about these things and weave that into their RFPs.
        Ms. Kelly. Okay. And what are some of the steps you are
    taking to advance agile development across the government?
        Ms. Chrousos. We showcase agile methodologies with lite
    prototypes and discovery sprints when we work with agencies
    hand in hand. That's when an agency hasn't done it before. So
    we absorb that first-mover risk of taking a leap into a new
    technology methodology.
        We also are developing procurement vehicles. One--the first
    one is the agile development BPA, which used code review by our
    engineers to evaluate agile vendors. These are now
    prequalified, precertified vendors that we can access to work
    on projects and agencies can also access to work on projects.
        Ms. Kelly. And two questions. What are some of your biggest
    successes, and can you identify some of the failed IT projects
    that 18F has helped to turn around?
        Ms. Chrousos. One of the--one of our biggest successes is a
    turnaround, in my opinion. We worked with HHS to rewrite an RFP
    for a child welfare platform. We believe that the platform was
    going towards a large kind of waterfall singular buy, and we
    were able to break that down, insert modern technology
    methodology like agile user-centered design, 2-week sprints,
    open data, open code into the RFP. We hope that this yields
    savings for HHS, and we hope this also yields savings for
    others that can take this RFP, which is out in the open, and
    can use it for themselves.
        Ms. Kelly. For Mr. Dickerson and Ms. Chrousos, what do your
    agencies bring to the Federal IT innovation that can't already
    be accomplished by the private sector?
        Mr. Dickerson. I think the most valuable role that the USDS
    brings into the government is the ability to coordinate and
    work across all of the organizational boundaries to solve what
    are often very complicated problems with a lot of stakeholders
    that involve a lot of the parts of the agency.
        Ms. Kelly. Thank you.
        Ms. Chrousos. And I believe that we act as an ecosystem
    where talented people from the private sector can come in and
    learn how to adapt their practices to government and then show
    government how to do that.
        Ms. Kelly. Thank you. And thanks for the extra time.
        I yield back.
        Mr. Hurd. Now I am honored to recognize the distinguished
    gentleman from Michigan, Mr. Walberg, for 5 minutes of
    questions.
        Mr. Walberg. Thank you, Mr. Chairman.
        And thanks to the panel.
        Ms. Chrousos, as you indicated in your testimony, in 2
    years, 18F has grown from 15 employees to 185, some significant
    growth. You also indicated part of 18F's mission is to help
    Federal agencies buy, build, and deploy technology the way the
    private sector does today, hopefully with efficiencies that the
    private sector does in many cases.
        Can you describe the scope of work anticipated by 18F and
    how that work overlaps or duplicates capabilities present in
    the private sector or are being performed by the agencies
    themselves?
        Ms. Chrousos. Thank you for the opportunity to answer that
    question.
        I think we need to do a better job of explaining our
    service offerings to both our stakeholders and the private
    sector. We do not intend and we do not--in my opinion, we do
    not compete with the private sector. We offer five service
    offerings to agencies today, and we will be constantly
    iterating on those to respond to the needs of our customer
    agencies.
        The first is to lightly prototype or build small builds to
    be able to showcase modern methodologies to agencies, which
    often yields in those agencies going out to the private sector
    to hire agencies--to higher developers that work like us. We
    offer acquisition assistance where we add an engineer or
    subject-matter, technical subject-matter expert to the table
    next to the contracting officer to help them rewrite request
    for proposals so that agencies can buy smarter. We offer some
    lite guides and workshops that help agencies understand how to
    practice modern technology methodologies in the government. We
    offer consultation services to CIOs who want to deploy to the
    cloud. These are the kinds of things that we offer, and I
    believe that our vantage point from bringing in private sector
    individuals into the government and explain to them how the
    government works and adapting those technologies out is where
    we play in this space.
        Mr. Walberg. Going from that, with the rapid growth that
    you've had, who are you hiring? Are you hiring programmers,
    program managers, acquisition staff? Who are the hires?
        Ms. Chrousos. Technical folks, engineers, design thinkers,
    usability experts, definitely product managers that can help
    product manage teams that are coming in through the Agile BPA.
    Those are the types of hires that we're hiring.
        Mr. Walberg. Where do they come from?
        Ms. Chrousos. They come from both private and public
    sector. So we looked across our organization. I actually sign
    off on every hire, and we have seen people come from Microsoft,
    come from Twitter, come from Booz Allen, come from some like
    foundations.
        Mr. Walberg. What's their average tenure?
        Ms. Chrousos. Their average tenure, well, we hire using
    Smarter IT authority, which is a 2-year fellowship with 2
    additional years--a 2-year term, sorry, with 2 additional
    years. The average tenure in the private sector in this field
    is around 13 months, to give you an idea of what this kind of
    workforce--how this workforce moves around. So we don't have--I
    don't have the average tenure right now on hand, but I suspect
    that it's around 2 to 4 years.
        Mr. Walberg. So significantly more than in the private
    sector?
        Ms. Chrousos. I'm sorry. I don't have exact numbers, but I
    can work with your staff to get you the numbers.
        Mr. Walberg. Okay.
        Mr. LeDuc, are there concerns in the software industry
    about how agency CIOs are being given information to make
    informed choices about who to turn to for help with IT
    concerns?
        Mr. LeDuc. Yeah. I mean, as we understand, I mentioned this
    in my testimony, obviously, the structure put in place by
    FITARA and the goal for the CIOs to be able to monitor and
    determine the technologies to be used, the process that 18F
    could take in going to some of their services provided to
    agencies can very well go beyond this process and not
    effectively provide CIOs the opportunity to necessarily choose
    the technologies that they want to use. So we think that could
    be a real challenge area.
        Mr. Walberg. What's your biggest concerns about how the two
    agencies, 18F and USDS, have evolved in the past couple of
    years?
        Mr. LeDuc. I think, as I mentioned, the biggest concern is
    about an evolution and a rapid growth of an entity like 18F
    that's not necessarily really visible in how they are behaving,
    you know, if they are making technology decisions quickly
    outside the traditional mechanisms. While that can be a really
    good thing, you know, as a goal of 18F to be modular and
    flexible--and we support that--rapid growth in this area
    without significant oversight and transparency could really
    lead to just a bunch of single-handed decisionmaking that could
    not provide agencies with the best solutions.
        Mr. Walberg. I yield back.
        Mr. Hurd. The gentleman yields back.
        Now, I would like to recognize my friend from the
    Commonwealth Virginia, Mr. Connolly, for 5 minutes of
    questions.
        Mr. Connolly. Thank you, Mr. Chairman.
        Mr. Powner, can you help us understand, because I think Mr.
    Walberg's line of questioning overlaps my anticipated line of
    questioning, which is, what is the value proposition here? Why
    do we have 18F and USDS? What is the value to the government,
    and how does it avoid competing directly with the private
    sector? Why not just issue our fee for these services like we
    normally do?
        Mr. Powner. Well, you could clearly do that. I think when I
    look at 18F and you look at where you could go procure really
    quick agile services and consulting in that, there's some value
    in that, no doubt. Having agencies innovate on a small-scale
    basis and expand it, that makes a lot of sense with 18F.
        Mr. Dickerson, we've always supported a SWAT team out of
    the White House that could parachute in, help save, help
    healthcare.gov. And we know there are a lot of problems with
    large acquisitions. There's a top 10 list that goes to the
    Appropriations Committee. You guys got an updated report
    yesterday. We need to fix those large projects. There's a lot
    of opportunity there. The legacy side of things, not just
    acquisitions, but swapping out these old legacy, where we have
    a lot of data conversion, application conversion, that's where
    USDS could really help the Federal Government.
        Our concern, these groups, if done right, make a lot of
    sense. We want to make sure they are transparent; they
    demonstrate value; and we have cost recovery taken care of with
    GSA; and then, with USDS, that it's consistent with what we're
    trying to do with the CIOs.
        Mr. Connolly. Under FITARA?
        Ms. Chrousos. Under FITARA, correct.
        Mr. Connolly. I'll come back to that. Mr. Hodgkin's, do you
    accept that explanation from the private sector point of view,
    that this is sort of a bit of a carve out. It's not a direct
    threat. Not intended that way. And it's to give us some more,
    you know, fast response time capability within the Federal
    Government with some kind of presumably limited scope?
        Mr. Hodgkins. I think that to some degree I agree with that
    answer, although I would share that many of our members
    continue to, again, because of the opaqueness of the
    operations, they're not entirely clear that this isn't directly
    competing with activities that they believe they can deliver.
    And as I referenced in my testimony, there's a great degree of
    frustration about the narrative of brining in new companies
    because we want innovation.
        Our members are frustrated because they feel that the
    government-unique acquisition process has tamped down their
    ability to deliver that innovation rapidly in agile ways. They
    do that for their commercial customers. They have those that
    are government-unique, or solely in the government space, have
    counterparts in the commercial marketplace who do that, and so
    to my point in my testimony about unshackling the Federal
    Government industrial base, those companies believe that they
    can also deliver capabilities to the government market in the
    ways that these entities are doing it.
        Mr. Connolly. So do you see it as direct competition, or at
    least down the road?
        Mr. Hodgkins. I think that we have to figure out how to
    break these molds that are out there. That we, you know--for
    some of them are decades old, and I think this is a great way
    to start doing that. But I think we also have to spend a lot of
    time and attention on taking the best practices they create and
    translating that, because as I've noted, a lot of what they've
    done has been to help frame frankly relatively smaller
    projects.
        There has not been necessarily the attention to the really
    big projects which we believe the kinds of 56-year-old systems
    this committee exposed are also going to end up being. They're
    going to take some time, and they're going to take some
    resources. And we have to figure out how to take the good work
    that these groups are doing in bringing in those capabilities
    and then translate that into that scale we need.
        Mr. Connolly. Ironically apparently we have mastered how to
    maintain such 56-year-old systems in the Federal Government. We
    just don't know how to replace them, so we're going to need
    help from the private sector, no question.
        Mr. Dickerson, Mr. Powner in his testimony said, or raised
    a concern, that the lack of clearly defined roles between CIO's
    that we're trying to strengthen, streamline the decisionmaking
    under FITARA legislation, and digital service teams, actually
    may be inconsistent with the intent of the law under FITARA.
    Could you respond?
        Mr. Dickerson. I appreciate the opportunity to clarify
    that. I believe that all of the USDS activity is completely in
    compliance with both the spirit and the letter of FITARA.
        Mr. Connolly. Well, you're going to have to do better than
    that. Yes. Yes, officer I believe I was completely in
    compliance with speeding laws, even though you have stopped me.
    GAO thinks otherwise or has at least suggested it could be a
    concern.
        I'm asking you, are you aware of that concern, and besides
    just defending USDS, what are you doing to ensure that you, in
    fact, are in compliance with the terms of what is now the law,
    FITARA.
        Mr. Dickerson. May I have a minute to respond?
        Mr. Connolly. Of course. With the consent of the chair.
        Mr. Dickerson. Yes, you're right. There are important
    oversight and control mechanisms imbedded in FITARA, such as a
    significant role for the CIO in making decisions that affect IT
    at the agency.
        The CIO is always part of the set of agency leadership that
    we talk to before we embark on, or go into, a project and
    decide how to execute it. We operate completely within the
    authority to operate, or ATO mechanism, and also the CIOs
    retain the control over the contract decisions, which is
    specified by FITARA.
        Mr. Connolly. My time is up, Mr. Chairman, but I hope we
    get to pursue that just a little bit more.
        Mr. Hurd. Mr. Powner, do you have any comments on that last
    question?
        Mr. Connolly. Thank you, Mr. Chairman.
        Mr. Powner. I do think, the reason we raised the concern is
    we talked to four CIOs where there were digital service teams
    established. DHS, we felt pretty good about that; DOD and VA,
    fairly good. State Department, the CIO told us initially that
    they were not involved with the selection nor the projects
    being chosen at that agency. We don't think that's appropriate.
    They ought to be working with each other in that situation.
        Now, since the State Department kind of backed off of their
    initial comments, but when you read our report, that's an
    issue, and the question is how many of those departments and
    agencies, we just want to make sure we're in sync. We actually
    think that if the digital service teams at the agencies
    coordinate with the CIOs, they're going to be welcomed more
    into those agencies to work on the big problems and everything.
        As an example, at DOD, Terry Halvorson--the travel system
    at the Department of Defense has been a mess for years. We
    haven't been able to deliver on it. So he said, yeah, I want
    the digital service team to try to tackle that. That's great.
    They agree on what they're working on, and they agree that
    that's a priority system that we've had a lot of problems, and
    that's where Mr. Dickerson can really help move the ball
    forward with those troubled projects. We just need to tighten
    it up a little more.
        Mr. Hurd. Thank you, sir. I'd like to now recognize the
    distinguished gentleman and scholar from North Carolina, my
    friend, Mr. Walker, for 5 minutes of questions.
        Mr. Walker. Thank you, Mr. Chairman. I appreciate that. I
    think I'm going to stay right here on this line of questioning.
    I had another area I wanted to go to. If I have time, I'll come
    back to that. I want to dig it just a little bit deeper. Mr.
    Powner, are the charters being established between USDS and
    Federal agencies accounting for the role agencies, the CIOs,
    are required to perform pursuant to FITARA?
        Mr. Powner. We think that those charters could be clearer
    in terms of the relationship with the CIOs.
        Mr. Walker. When you say they could be clearer, can you be
    just a touch more descriptive or specific for me.
        Mr. Powner. Yes. So if you say that we're going to
    establish a digital service team that reports to the agency
    head or the dep secretary and that will also work in
    conjunction with the CIO, and those teams will be established
    consistent with FITARA. That's what I'd like to see.
        Mr. Walker. Okay. What role would the CIO play in
    coordinating with the USDS and the OMB to establish the agency
    digital service teams?
        Mr. Powner. I think when you--clearly these CIOs, they
    should know what the priority acquisitions and the priority
    legacy conversions are. In working with those CIOs, the most
    important problems they have, they should be working with these
    digital service teams so the digital service teams can help
    them solve the most complex things.
        These guys are pretty smart that have come in. Okay? Mr.
    Dickerson knows how to fix problems clearly. We want to focus
    on the big problems that we have in this government because
    there's a lot of them in the IT world.
        Mr. Walker. Sure. Absolutely. Who is responsible for making
    sure these CIOs know? You said they should know. Who is
    responsible? Whose job is it to make sure that's communicated?
        Mr. Powner. Well I think the CIO's. Clearly Tony Scott
    plays a role in that as the Federal CIO. But when you look at
    what we're doing with FITARA, if the CIO is to capture all IT
    spending in a department and then be responsible for the
    execution of this spending, that would include what we're doing
    with the digital service teams.
        That's under the umbrella. That's what we're trying to fix
    with FITARA, that there's not a lot of rogue operations going
    on, and I'm not saying we know that's happening with other
    services that are being acquired at agencies. We want to get
    our arms around the IT spent, and we want to get the
    appropriate governance over there so we've got the right
    security and the right delivery.
        Mr. Walker. All right. So when a USDS team comes into an
    agency, who do they report to; CIO, Mr. Dickerson, Tony Scott,
    someone else? Who is it?
        Mr. Powner. I think there are multiple options that could
    work. I mean, you could actually have them, you want to elevate
    their position, have them report to the dep secretary, fine.
    But we got some CIOs that don't report to the dep secretary. So
    I don't think that would be appropriate. As long as they're
    both reporting at least equally, or there's multiple
    arrangements that could work. We just don't want to have, we
    don't want to undermine the authority of the CIOs.
        Mr. Walker. All right. I appreciate your frankness on that.
    Mr. Dickerson, you touched on this a little bit earlier, and I
    want to get back to it if I have time here. Do you think the
    charters adequately account for the laws established by FITARA?
        Mr. Dickerson. Our charters have evolved over time as we
    are learning how best to document and set up these teams. I
    completely embrace Mr. Powner's recommendation that we make it
    more clear and explicit going forward. Our later charters, as
    noted in the GAO report, are more explicit about that we
    interact with the CIOs on a day-to-day basis.
        Mr. Walker. Okay. GSA funds 18F through Acquisition
    Services Fund, which operates on the revenue generated from the
    GSA's business units and not appropriations from Congress.
    Either Ms. Chrousos or Ms. Powner, can you give me a list of
    these business units?
        Ms. Chrousos. At GSA, sir?
        Mr. Walker. Yes.
        Ms. Chrousos. Business units include the business units
    under the Federal Acquisition Service, like ITS and GSS. It
    also includes 18F.
        Mr. Walker. Okay. Annually can you tell me how much these
    units produce for the ASF?
        Ms. Chrousos. I can only tell you the numbers for 18F
    unfortunately, but I can work with your staff to get you that
    information.
        Mr. Walker. And maybe a couple weeks, can you have it, as
    long as there's nothing else happens in your life?
        Ms. Chrousos. Yes. I will work with your staff to make sure
    we get it to you in time.
        Mr. Walker. Fair enough. What are the statutory
    authorizations to collect such revenue outside of the
    appropriations process? That's something, we talk about the
    incredible expansion in the last 2 years, something obviously
    as the American people see more and more bureaucracy expanding,
    so from an accountability standpoint, somebody explain to me,
    Ms. Chrousos, Mr. Powner, the statutory authorization to
    collect this revenue.
        Ms. Chrousos. Well, GSA's mission is to provide the best
    value in real estate acquisitions and technology, and GSA uses
    this reimbursable fund to invest in programs that can support
    that mission and ultimately can support agencies in their
    mission.
        Mr. Walker. Okay. I've got 20-something seconds. Let me ask
    you this way. Do you think it's intentional to have this
    revenue placed outside of congressional jurisdiction, control
    and oversight? Is it intentional, or why is it?
        Ms. Chrousos. I don't believe it's intentional. I don't
    believe it's intentional.
        Mr. Walker. Then what do you think it is?
        Ms. Chrousos. I'm sorry. I'm not familiar with the origins
    of the fund. I'm just familiar with my own finances. I
    apologize. If you have an answer?
        Mr. Walker. With that, my time is expired, Mr. Chairman.
    Thank you.
        Mr. Hurd. The government's messed up. All right? The way we
    buy IT goods and services is messed up. We have difficulty
    getting smart people that have the technical skills to solve
    the problems of the future is difficult. And what I think
    should ultimately be happening is everybody that's sitting at
    this table right now, you all should be holding hands and
    working together, because you all ultimately have the same
    goal.
        Because the only way that we are going to get a digital
    infrastructure within the Federal Government that is, that the
    American people deserve, is if we break some things on the
    inside, all right, and that we utilize the talents of the
    private sector as well.
        But the mentality of, the startup mentality in the Federal
    Government where it comes to disruption it is important, but
    the Federal Government doesn't have the appetite for the level
    of risk that the startup community has or the venture world
    has, all right. And so that's the one thing that doesn't
    transfer between, you know, with that narrative. And we have a
    responsibility to all of our constituents, which is the
    American people, that we're using their money wisely and
    smartly. I think these programs conceptually are great
    programs.
        And my first question, and maybe we start with you, Mr.
    Dickerson, how do you decide what projects you work on?
        Mr. Dickerson. It's a very complex process. I will try to
    make it brief. I spend a tremendous amount of time, and my
    other members of the leadership team spend a tremendous amount
    of time gathering information from all over the government. The
    agency leadership, stakeholders everywhere----
        Mr. Hurd. Can I make a suggestion? That work is already
    being done. There's a GAO high-risk report. That high-risk
    report identifies some of the key projects that are a billion
    dollars or more that are having issues. All right?
        Under FITARA, we have established a number of areas. Data
    center consolidation, something as simple as that. We have seen
    four agencies realize $2 billion in savings. You know, a man
    and a team of your talents would go a long way.
        The CISO of the Social Security Administration needs a
    whole lot of help, all right, and this is an entity, they
    should be able to say, hey, when they get grilled here at this
    committee about not following some of the basic practices of
    good digital system hygiene, they should be able to reach out
    to you, or you all should be able to call them the next day.
        Is that concept, is that not--grade my paper. Does that
    make sense? Is that, you know, the flexibility and the way that
    you all could be used?
        Mr. Dickerson. As you say, the OMB and the office of the
    Federal CIO conduct broad portfolio oversight of all those
    programs across the entire government, and we absolutely rely
    on that information as much as we can.
        Mr. Hurd. There's nobody in the Federal Government that
    understands this better than Tony Scott, all right, and Tony
    Scott knows where the problems are and should be able to direct
    you all.
        But when I look at some of the lists of, you know,
    successes, as somebody said earlier, these aren't the tectonic
    changes that we likely need in order to see our government get
    into the current century, let alone the next century. All
    right? Ms. Chrousos, do you have an opinion.
        Ms. Chrousos. About our prioritization process?
        Mr. Hurd. Uh-huh.
        Ms. Chrousos. 18F is a demand-driven, fee-for-service
    organization. So our prioritization process uses a
    prioritization rubric that looks at both impact and viability,
    but we cannot parachute in, or we cannot kind of pull in
    customers. They have to come to us and want to work with us.
    When we look, when things come into our organization, we look
    at impact, which for us is number of people it impacts as well
    as potential cost savings, and then we look at viability. For
    example, is this something better done by the private sector?
    Is this something that we have the talent for? Is it something
    we should send to the Federal Acquisition Service or back to
    that agency's CIO? That's how we prioritize.
        Mr. Connolly. Mr. Chairman, would you yield for a second?
        Mr. Hurd. I would.
        Mr. Connolly. Just by way of followup to your point, but,
    Ms. Chrousos, okay, great, and Mr. Dickerson. But the chairman
    was asking, but we already have a list of very high priorities,
    from GAO's high-risk list, and some of the priorities we set
    out in FITARA. Do you also look at those priorities as you're
    looking at the projects you're going to get involved in?
        Ms. Chrousos. The projects that we get involved in are
    usually small reference products, like Mr. Hodgkins referred
    to, that showcase modern methodologies to agencies, and then
    they go and procure a larger team to actually tackle the big
    problems. So we don't look necessarily at that GAO high-
    priority list. We don't believe that's our function.
        Mr. Connolly. Thank you, Mr. Chairman.
        Mr. Hurd. Let's talk a little bit about IT procurement. IT
    procurement is something I've spent a lot of time talking
    about. And I've said on a number of occasions IT procurement is
    not a sexy topic.
        IT procurement, you're not going to hold a rally for IT
    procurement or a parade. However, you know, this agile delivery
    service, blanket purchase agreement concept is a concept that I
    think could change this, right? And if we fix this, Ms.
    Chrousos, I will hold a parade on IT procurement, and you will
    be the grand marshal.
        But can you please expand on this agile delivery service
    and its use of blanket purchase agreements with vendors?
        Ms. Chrousos. Yes. If you had told me as well that IT
    procurement was something I'd be passionate about 2 years ago,
    I would have told you you were crazy.
        Mr. Hurd. Ms. Chrousos could you move this closer----
        Ms. Chrousos. Oh sorry. But I personally believe it's the
    single most impactful way to impact what we're trying to do in
    the government and to move the government forward in
    technology.
        The Agile Blanket Purchase Agreement shows a lot of promise
    because for me it shows what happens in terms of breaking down
    some of the procurement barriers that Mr. LeDuc and Mr.
    Hodgkins spoke of, when you put an engineer next to a
    contracting officer and you let them speak and you let them get
    their minds together. We took engineers from 18F and
    contracting officers from the Federal Acquisition Services, and
    we put them together, and we gave them a problem. Can you find
    us a way to access really innovative, modern technical talent?
    And they said, yes, if we look at this and say, instead of
    asking for pages and pages of documentation and past history,
    but instead we ask businesses to submit live code in an open
    hub repository and then we have engineers look at that code and
    assess it, we'll be able to get to better talent.
        Mr. Hurd. So take us through how you choose the vendors.
    How many vendors are there, and how does 18F work with agencies
    to choose one of these vendors?
        Ms. Chrousos. The blanket purchase agreement is like a
    preselection of vendors, so we work with engineers and
    contracting officers to go through the documentation the way
    that you would with any procurement vehicle. That vehicle, you
    can then put task orders against that vehicle. Right now
    agents, we can access the Agile Blanket Purchase Agreement. We
    actually issued a task order this week to a small business, and
    agencies can use the Federal Acquisition Service to access this
    same blanket purchase agreement.
        Mr. Hurd. Mr. Powner, does this exist in other parts of the
    Federal government? Is this unique? Look, the VA would benefit
    from this ability. I'm sure the organizations that are part of
    Mr. Hodgkins' and Mr. LeDuc's association would love to be able
    to participate in these things. Your opinion on this?
        Mr. Powner. So clearly, I think, you know, this is tied to
    FITARA, to your grades on incremental development. Agile is one
    way of going really small. Right? These vehicles if done right
    and were inclusive of the people who should be doing this, I
    think could really work. I mean, talking about shock the
    system, we need more agile development. This could actually
    help a lot.
        I actually think, and I've said this at times on
    incremental development, I think Congress and OMB, if you want
    to fix this big bang waterfall approach, don't fund anything
    unless you deliver within the year, and have a waive-out
    process. You know what; that would change a lot. You're not
    going to get funding either through the OMB process or through
    the appropriation process. We talked to appropriation
    committees about this. If you want to really fix it, if you
    want to go small fix it, that's the way you would do it. This
    would help.
        Mr. Hurd. Ms. Chrousos, if all of the agencies that had a D
    or an F on the agile development, within our FITARA score card,
    came to you and said, hey, help us figure out how to do this,
    is that a project that you all would take on?
        Ms. Chrousos. I believe so. We have been asked by other
    agencies to help them build out their own Agile Blanket
    Purchase Agreements. We're not trying to hoard that
    information. Our documentation is actually out in the public on
    GitHub, so you can build your own agile BPA at your agency if
    you so desire, or you can come through our organization. And
    that's something we welcome.
        Mr. Hurd. I hope all the CIOs that got a D or an F on their
    FITARA score card in this area are hitting that Web site as we
    speak. I have gone over my time. I know Mr. Farenthold has
    additional questions. The gentleman from Texas is recognized
    for 5 minutes.
        Mr. Farenthold. Thank you, Mr. Chairman. I want to follow
    up on the blanket purchase agreement. Can you tell me just in
    broad general, what type of services are these? I mean, you've
    got 17 vendors. What type of services?
        Ms. Chrousos. Seventeen vendors is for one of the pools.
    We're authorizing two more pools. And software development,
    DevOps, our key design thinkers, those types of thinkers that
    can work on agile development, user-centered products.
        Mr. Farenthold. All right. So how does this help and not
    create another barrier? So I'm a software developer, I want to
    build a, I don't know, make it simple, an app for the phone to
    tap into some Federal agency. Is getting certified through
    that, how does that help me and how does that not create
    another barrier to entry?
        Ms. Chrousos. We're trying to create smarter bridges
    between the government and the private sector by putting
    engineers and contractors together. We just think this is a
    smarter bridge. We're also at the same time working with the
    Federal Acquisition Service to try and lower the barriers to
    entry. We have had a really interesting project with Schedule
    70 where we're looking at creating plain language roadmaps and
    lowering the time it takes at Schedule 70 significantly.
        Mr. Farenthold. All right. So Mr. Hodgkins, is this helping
    your members, or is this just another hurdle?
        Mr. Hodgkins. Thank you for the question. We're supportive
    of the agile development approach. One of the challenges that
    we think of this particular BPA is that it's only accepting
    applications of companies who are willing to code in open
    source. So all of the companies who have intellectual property
    in their products are not eligible to compete on this
    particular BPA, and so they're not offering their solutions in
    an agile fashion, and that's something we think that, you know,
    we can open that up.
        Mr. Farenthold. I'm a huge advocate for open source. I
    actually do think that's the way the government can address
    some security issues as well as make stuff available across
    government lines. You also talked, though, about unique
    government needs. What are the unique government needs that the
    private sector doesn't have? You need good user interface. You
    need good price. You need good security. What are the unique
    government needs?
        Mr. Hodgkins. The government has a lot of unique needs in
    scale. It has a lot of unique needs in compliance, and it has a
    lot of unique needs regarding the way the company is expected
    to operate and shape its business model.
        Mr. Farenthold. Ms. Chrousos, do you want to talk about
    what unique government needs are as well are? Because I think
    they're not as unique as people want to make them to be, other
    than size.
        Ms. Chrousos. I don't think the government's needs are that
    unique, and I actually don't think agency's needs or
    subagency's needs are necessarily that unique as well. I think
    if you look across, and we have been trying to see patterns
    coming in of incoming requests.
        We see patterns of common technical components that are
    needed throughout government. It's an area that we should have
    smart people looking at and looking at how to leverage
    efficiencies.
        Mr. Farenthold. I mean, that's traditionally the GSA's
    role, is to take advantage of the size of government to make
    things cheaper. Having used the TSA Web site, I don't know.
        Is there a way to expand something like these blanket
    purchase agreements to say, all right, this is certified and
    secure so we don't have every CIO doing the same evaluations of
    very similar software or the same needs in software.
        Ms. Chrousos. I believe so. We're a young organization.
    We're 2 years old, and this was our first collaboration with
    the Federal Acquisition Service. One of the reasons we created
    the Technology Transformation Service is to bring some of these
    ideas and some of these people together at GSA to do exactly
    what you're talking about.
        Mr. Farenthold. I think that creates a level of expertise
    and bureaucratic kind of a CYA, oh, this is GSA certified. I
    don't have to be afraid to buy this and go through a lengthy
    purchase process. I did have one other. I think it was your
    group that was working with the census. We had a hearing on the
    census. Can you talk a little bit about what your role was and
    what value you feel you provided to the Census Bureau? That's
    another agency within this committee's direct jurisdiction.
        Ms. Chrousos. I'm so sorry to disappoint you. I actually
    don't know enough about that to speak to it today, but I'm
    happy to get you that information.
        Mr. Farenthold. All right. It was just on your list of
    things, and I would be interested to do that. That's basically
    all I've got for right now. So I yield back.
        Mr. Hurd. Gentleman yields back. Mr. Connolly, you're
    recognized.
        Mr. Connolly. Thank you. I want to follow up on just one
    aspect of, the question of the role of the CIO. Mr. Powner, you
    gave an example of the State Department CIO not being cognizant
    or fully aware of what USDS team was doing within the State
    Department. Is that correct?
        Mr. Powner. That's correct.
        Mr. Connolly. Mr. Dickerson, does that make sense from a
    good management point of view? I mean, in the private sector
    it's almost inconceivable to me that anyone could hire a
    private IT team and come in and do some work in the corporation
    without the CIO's knowledge and approval. I mean, that would be
    tantamount to saying you might as well move on because we don't
    have any confidence in you.
        How is it possible in the public sector that we're a team,
    your team in this case, would be operating in an agency without
    the knowledge or express approval of the CIO?
        Mr. Dickerson. So I believe, Mr. Powner, after making a
    comment about the State Department CIO also followed up by
    saying that they brought those comments back a little bit under
    discussion. I looked into this with my team a little bit, and
    to the best of my knowledge, the CIO at the State Department
    was a participant in several meetings in the earlier stages of
    our work at the State Department. Now that being said, there's
    absolutely a spectrum among the CIOs that we work with of the
    amount of time and the interest that they have in the digital
    service-type projects, given all their other statutory
    responsibilities.
        Mr. Connolly. Well would you agree, and Ms. Chrousos,
    please comment as well, generally speaking, it's a pretty good
    management practice to make sure that your team, or your team,
    is operating with the full knowledge and consent of the CIO?
        Mr. Dickerson. I certainly agree that it's an excellent
    management practice for the CIO and the rest of the agency
    leadership to all be aware of what we're doing.
        Ms. Chrousos. I agree with Mr. Dickerson.
        Mr. Connolly. Well, aware of and giving consent?
        Mr. Dickerson. And giving input and consent, yes.
        Mr. Connolly. Yeah okay. Ms. Chrousos?
        Ms. Chrousos. I agree.
        Mr. Connolly. Mr. Powner, any last comment on that, because
    I--remember in FITARA what we're trying to do without doing it
    by fiat, is we're trying to evolve to a system where there is a
    hierarchy and that the CIO is empowered to make decisions, and
    streamline, and monitor procurement, and pull the plug when it
    goes bad and look at things in more bite-sized manageable
    pieces and make sure the other things we're talking about,
    legacy systems, data center consolidation, going to the cloud,
    trying to tap into the domain expertise of the private sector,
    where we don't have it in the public sector, all those things
    are being encouraged.
        What we didn't do is say there should be one CIO, but that
    is clearly, what we're kind of hoping is that there will be one
    premier CIO, who is aware of what's going on and the various
    moving parts.
        Mr. Powner, final word on that issue.
        Mr. Powner. Well, I think we're heading in the right
    direction. Look, we know from many of your hearings, we have a
    few CIO organizations that are a bit dysfunctional. They really
    don't have the right authorities in the cultures that they grew
    up in, and there's some agencies where we really need to
    tighten that up and fix it, so I think there's a lot of wheels
    here going at the same time. But the long-term solution is
    fixing the CIO problem.
        Mr. Connolly. Yeah. And potentially these two programs can
    be tools for them actually to strengthen that, but we just
    don't want to have rogue operations that actually unwittingly
    detract from the broader goal we're trying to achieve in
    FITARA. I thank the chair.
        Mr. Hurd. I would like to recognize Ms. Kelly.
        Ms. Kelly. Just quickly, Mr. Dickerson and Ms. Chrousos,
    what makes your agencies different from each other in funding
    in the projects you do take on, or what are the differences?
        Ms. Chrousos. We're a fee-for-service, demand-driven
    digital consultancy. And as such, we have a separate, very
    separate intake and prioritization process. We offer support
    services. We do view the CIO as our most sophisticated
    customer. We try and meet their needs by offering support
    services from the ground up.
        Mr. Dickerson. USDS is not cost recoverable. We operate off
    of an appropriation from Congress, so we go directly to where
    we're needed as quickly as possible, which means that we are
    often useful and best applied in cases where there are
    unanticipated needs.
        Ms. Kelly. Okay. Thank you.
        Thank you, Mr. Chairman.
        Mr. Hurd. Ms. Chrousos, aren't you required to achieve full
    cost recovery now, and why is it going to take until 2019?
        Ms. Chrousos. Thank you for the opportunity to answer that
    question. As the TTS commissioner, this is something I think
    about and work with my team quite a bit. I work with the 18F
    management team as well as the CFO, and we look at key
    performance indicators on a weekly basis to try and iterate the
    operations of our business to get to full cost recovery.
        Mr. Hurd. So are you required to have full cost recovery
    right now?
        Ms. Chrousos. We're committed, we are required to have a
    plan for full cost recovery, and we're committed to achieving
    full cost recovery by 2019.
        Mr. Hurd. Will you plan on sharing publically 18F's
    accounting for cost recovery to include cost structures and
    project charges in instances where 18F came in below expected
    costs or above?
        Ms. Chrousos. I'm happy to work with the CFO's office, and
    as long as that's allowed by GSA, I'm very happy to share that
    with you.
        Mr. Hurd. Mr. Powner, is 18F supposed to achieve full cost
    recovery now?
        Mr. Powner. I believe that there's a requirement for a plan
    to get there. Obviously we want to do it as soon as possible. I
    do think that when you have a startup, there is some, you know,
    you need to build up to it because the payout is actually
    lagging what they're doing.
        Mr. Hurd. Is GAO receiving the information that you need in
    order to determine that they're on a path to full cost
    recovery?
        Mr. Powner. Yes, we have received that. I think by 2019,
    that's the plan. I mean, they got a worst case, best case, most
    likely case. There's some good numbers there, and that is the
    most likely case to recover by 2019. I think our report says
    the worst case is around 2022.
        Mr. Hurd. Good copy. Mr. Dickerson, the USDS is directed to
    provide quarterly reports to the Committees on Appropriations,
    in both the House and Senate, describing current USDS teams and
    projects that include the top ten priority programs. Has that
    been provided to the Appropriations Committees?
        Mr. Dickerson. Our most recent top ten project report was
    transmitted yesterday, I believe.
        Mr. Hurd. Copy. Now, is that the same document that we
    received, titled Report to Congress, Ten High Priority
    Programs?
        Mr. Dickerson. That's right.
        Mr. Hurd. Is that for OMB, or is this directly for USDS?
        Mr. Dickerson. The reporting direction from Congress
    changed between the last 2 years' appropriations, and so what
    you're seeing here is kind of the last production under the
    joint OMB, USDS oversight. So you see some projects that USDS
    is involved in and some that we are not.
        The new direction from Congress with the most recent
    appropriation is that USDS report on these projects going
    forward, and that is our plan.
        Mr. Hurd. Good copy. Do you know what the Joint Legacy
    Viewer is?
        Mr. Dickerson. In passing familiarity, yes.
        Mr. Hurd. Is that true interoperability?
        Mr. Dickerson. I think it's an excellent first step. It's
    certainly a better place to be that you're able to see records
    from two different systems together in the same place. My
    understanding is that that is found very valuable by the
    clinicians that are trying to serve those veterans. There is
    certainly farther to go. More interoperability would still be
    better.
        Mr. Hurd. And what is USDS' role in the interoperability
    between VA and DOD? I know you mentioned something earlier, but
    I'd love to hear a little bit more robust answer.
        Mr. Dickerson. It's a very big problem, and we have bitten
    off some pieces of it that we think we can have a really strong
    impact on. One of those is the transmission of the service
    treatment record between the DOD and the VA at the end of a
    veteran's Active Duty service.
        Mr. Hurd. Copy. My last question is to everybody, and
    please answer in like 20 seconds. What is your key takeaway
    from today?
        Mr. Powner, let's start with you. You're the most
    experienced witness at the table.
        Mr. Powner. Let's continue to fix the CIO problem.
        Mr. Hurd. Mr. Dickerson?
        Mr. Dickerson. I am very gratified to hear unanimity on the
    point that 18F and USDS have an important role to play in
    improving our overall government services. I certainly take
    away the point that there are many parts to this problem, and
    all of us have an important role to contribute to it, and I am
    happy to embrace the recommendations from GAO.
        Mr. Hurd. Ms. Chrousos?
        Ms. Chrousos. The key single takeaway is that we cannot do
    this alone. It's a very ambitious and important goal that we
    all share between us and that more information sharing is
    better.
        Mr. Hurd. Mr. Hodgkins?
        Mr. Hodgkins. Thank you, again, Mr. Chairman, for letting
    us be here.
        The takeaway for us is that we support these programs. It's
    good to hear they are on a good trajectory. We want to keep
    them that way so that these activities can be sustained into
    the next administration, but this is a big problem, and they
    are part of a solution, but they are not the whole solution.
        Mr. Hurd. Mr. LeDuc, you get the last word.
        Mr. LeDuc. We're delighted that these subcommittees are
    committed to their oversight role. We're very happy about this
    hearing today. We're delight that GAO has done a very thorough
    review in their work, and we believe that combined these two
    things together, can really help to focus 18F and USDS.
        Mr. Hurd. I'd like to thank our witnesses, especially Mr.
    Dickerson and Ms. Chrousos. You all are testifying for the
    first time before Congress. I appreciate all you all taking
    time to appear before us today. If there's no further business,
    without objection, the subcommittees stand adjourned.
        [Whereupon, at 11:04 a.m., the subcommittees were
    adjourned.]

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