[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


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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:]
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    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:]
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    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.]

                                APPENDIX

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