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





                  MAKING DHS MORE EFFICIENT: INDUSTRY 
              RECOMMENDATIONS TO IMPROVE HOMELAND SECURITY

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

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                             OVERSIGHT AND
                         MANAGEMENT EFFICIENCY

                                 of the

                     COMMITTEE ON HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 18, 2015

                               __________

                           Serial No. 114-33

                               __________

       Printed for the use of the Committee on Homeland Security
                                     


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      Available via the World Wide Web: http://www.gpo.gov/fdsys/
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                   Michael T. McCaul, Texas, Chairman
Lamar Smith, Texas                   Bennie G. Thompson, Mississippi
Peter T. King, New York              Loretta Sanchez, California
Mike Rogers, Alabama                 Sheila Jackson Lee, Texas
Candice S. Miller, Michigan, Vice    James R. Langevin, Rhode Island
    Chair                            Brian Higgins, New York
Jeff Duncan, South Carolina          Cedric L. Richmond, Louisiana
Tom Marino, Pennsylvania             William R. Keating, Massachusetts
Lou Barletta, Pennsylvania           Donald M. Payne, Jr., New Jersey
Scott Perry, Pennsylvania            Filemon Vela, Texas
Curt Clawson, Florida                Bonnie Watson Coleman, New Jersey
John Katko, New York                 Kathleen M. Rice, New York
Will Hurd, Texas                     Norma J. Torres, California
Earl L. ``Buddy'' Carter, Georgia
Mark Walker, North Carolina
Barry Loudermilk, Georgia
Martha McSally, Arizona
John Ratcliffe, Texas
Daniel M. Donovan, Jr., New York
                   Brendan P. Shields, Staff Director
                    Joan V. O'Hara,  General Counsel
                    Michael S. Twinchek, Chief Clerk
                I. Lanier Avant, Minority Staff Director
                                 ------                                

          SUBCOMMITTEE ON OVERSIGHT AND MANAGEMENT EFFICIENCY

                  Scott Perry, Pennsylvania, Chairman
Jeff Duncan, South Carolina          Bonnie Watson Coleman, New Jersey
Curt Clawson, Florida                Cedric L. Richmond, Louisiana
Earl L. ``Buddy'' Carter, Georgia    Norma J. Torres, California
Barry Loudermilk, Georgia            Bennie G. Thompson, Mississippi 
Michael T. McCaul, Texas (ex             (ex officio)
    officio)
               Ryan Consaul, Subcommittee Staff Director
                    Dennis Terry, Subcommittee Clerk
         Cedric C. Haynes, Minority Subcommittee Staff Director
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                             C O N T E N T S

                              ----------                              
                                                                   Page

                               Statements

The Honorable Scott Perry, a Representative in Congress From the 
  State of Pennsylvania, and Chairman, Subcommittee on Oversight 
  and Management Efficiency:
  Oral Statement.................................................     1
  Prepared Statement.............................................     3
The Honorable Bonnie Watson Coleman, a Representative in Congress 
  From the State of New Jersey, and Ranking Member, Subcommittee 
  on Oversight and Management Efficiency.........................     4
The Honorable Bennie G. Thompson, a Representative in Congress 
  From the State of Mississippi, and Ranking Member, Committee on 
  Homeland Security:
  Prepared Statement.............................................    11

                               Witnesses

Mr. Marc A. Pearl, President and Chief Executive Officer, 
  Homeland Security and Defense Business Council:
  Oral Statement.................................................    12
  Prepared Statement.............................................    14
Mr. Harry Totonis, Board Director, Business Executives for 
  National Security:
  Oral Statement.................................................    19
  Prepared Statement.............................................    20
Ms. Elaine C. Duke, Principal, Elaine Duke & Associates, LLC:
  Oral Statement.................................................    22
  Prepared Statement.............................................    24

                             For the Record

The Honorable Bonnie Watson Coleman, a Representative in Congress 
  From the State of New Jersey, and Ranking Member, Subcommittee 
  on Oversight and Management Efficiency:
  Statement of Daniel M. Gerstein, The RAND Corporation..........     4

                                Appendix

Question From Chairman Scott Perry for Marc A. Pearl.............    47
Questions From Ranking Member Bennie G. Thompson for Marc A. 
  Pearl..........................................................    47
Questions From Chairman Scott Perry for Harry Totonis............    50
Questions From Ranking Member Bennie G. Thompson for Harry 
  Totonis........................................................    51
Question From Chairman Scott Perry for Elaine C. Duke............    52
Questions From Ranking Member Bennie G. Thompson for Elaine C. 
  Duke...........................................................    52
 
MAKING DHS MORE EFFICIENT: INDUSTRY RECOMMENDATIONS TO IMPROVE HOMELAND 
                                SECURITY

                              ----------                              


                       Friday, September 18, 2015

             U.S. House of Representatives,
                     Subcommittee on Oversight and 
                             Management Efficiency,
                            Committee on Homeland Security,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:05 a.m., in 
Room 311, Cannon House Office Building, Hon. Scott Perry 
[Chairman of the subcommittee] presiding.
    Present: Representatives Perry, Clawson, Carter, 
Loudermilk, Watson Coleman, and Torres.
    Mr. Perry. The Committee on Homeland Security Subcommittee 
on Oversight and Management Efficiency will come to order. The 
purpose of this hearing is to continue our examination of ways 
to make the Department of Homeland Security more efficient.
    The Chair now recognizes himself for an opening statement. 
Today's hearing provides us with an important opportunity to 
examine how the Department of Homeland Security can improve its 
management using proven private-sector best practices. In the 
early years after the creation of DHS, the Department of 
Homeland Security, Department officials understandably were 
focused on preventing another major attack on the homeland. 
However, from the outset, DHS faced significant challenges, 
including consolidating 22 preexisting component agencies, 
reporting to a multitude of Congressional committees, and 
working diligently to strike the balance between National 
security and protecting privacy and civil liberties.
    Furthermore, a long-standing failure to adhere to strong 
management practices led to high-profile failures, such as 
wasting $1 billion on the failed Secure Border Initiative 
Network, the SBInet, and mothballed puffer machines that 
eventually were pulled from airports. Such mismanagement eroded 
public confidence in DHS and continues to hinder it today.
    DHS components, including Customs and Border Protection, 
CBP; Transportation Security Administration, TSA; Coast Guard; 
Federal Emergency Management Agency, FEMA; and others continue 
to revert to their practices used prior to joining DHS and 
often seek to fly under the radar of headquarters' oversight. 
More than 10 years after its creation, DHS continues to face 
conflicting cultures and processes. In addition, senior DHS 
officials often failed to hold components accountable and 
lacked the information necessary to make sound decisions.
    Secretary Johnson has refocused DHS efforts to improve 
management practices and increase interagency coordination. His 
Unity of Effort initiative creates new processes to ensure that 
everyone is driving towards common goals and objectives. For 
example, DHS's new Joint Requirements Council seeks to ensure 
that components leverage common technologies and platforms. 
Previous stovepipes led to components buying different 
technologies to meet very similar requirements. The examples 
include CBP and Coast Guard air and marine assets and component 
tactical radio systems. Because these efforts are so recent, we 
are unclear as to whether the new processes will transform how 
DHS manages its programs or simply adds other layers to an 
already massive bureaucracy.
    Private-sector companies respect the value of using sound 
management practices. Commercial firms must often deal with 
mergers, acquisitions, and restructuring. Having started and 
managed a small business in Pennsylvania, I understand the 
importance of sound planning combined with strong, capable 
leadership and accountability. For example, before undertaking 
a major project, commercial firms must have a sound business 
case to ensure the project is viable. A sound business case is 
critical to mitigating risk and ensures that managers have 
sufficient knowledge as the project moves forward. Because the 
private sector is focused on getting a return on its 
investment, commercial firms would be much more cautious about 
risking projects with cost overruns and schedule delays.
    In contrast, DHS all too often has ignored risks and moved 
forward with unachievable programs, leading to wasted taxpayer 
dollars and late, costly, and unimpressive results. DHS has 
much to learn from private-sector best practices. The private 
sector also routinely analyzes its overhead to streamline and 
maximize efficiencies.
    DHS, however, struggles to streamline its information 
technology programs, modernize its financial systems, and 
consolidate its real property inventory which result in a 
significant inability to cut waste. For example, two inspector 
general reports last month found that the DHS has done a poor 
job of tracking costs related to its warehouse inventory and 
conference spending. According to the IG, CBP could put $1 
million to better use if it improved warehouse management. This 
might not seem like a lot to Washington bureaucrats, but my 
constituents in Pennsylvania would much prefer that that money 
be spent toward securing the border.
    DHS must learn from the proven techniques and practices of 
successful commercial firms. Federal bureaucrats need to 
remember that the American people are their shareholders. Their 
tax dollars must be safeguarded, not wasted. As the Nation 
faces significant homeland security threats and our National 
debt continues to climb, we can afford no more mismanagement.
    [The statement of Mr. Perry follows:]
                   Statement of Chairman Scott Perry
                           September 18, 2015
    Today's hearing provides us with an important opportunity to 
examine how the Department of Homeland Security (DHS) can improve its 
management using proven, private-sector best practices. In the early 
years after the creation of DHS, Department officials understandably 
were focused on preventing another major attack on the homeland; 
however, from the outset, DHS faced significant challenges, including 
consolidating 22 pre-existing component agencies, reporting to a 
multitude of Congressional committees, and working diligently to strike 
the balance between National security and protecting privacy and civil 
liberties. Furthermore, a long-standing failure to adhere to strong 
management practices led to high-profile failures, such as wasting a 
billion dollars on the failed Secure Border Initiative Network (SBInet) 
and mothballed ``puffer machines'' that eventually were pulled from 
airports. Such mismanagement eroded public confidence in DHS and 
continues to hinder it today.
    DHS components, including Customs and Border Protection (CBP), 
Transportation Security Administration (TSA), Coast Guard, Federal 
Emergency Management Agency (FEMA) and others, continue to revert to 
their practices used prior to joining DHS and often seek to fly under 
the radar of headquarters oversight. More than 10 years after its 
creation, DHS continues to face conflicting cultures and processes. In 
addition, senior DHS officials often fail to hold components 
accountable and lack the information necessary to make sound decisions.
    Secretary Johnson has refocused DHS efforts to improve management 
practices and increase interagency coordination; his ``Unity of 
Effort'' initiative creates new processes to ensure that everyone's 
driving towards common goals and objectives. For example, DHS's new 
Joint Requirements Council seeks to ensure that components leverage 
common technologies and platforms. Previous stovepipes led to 
components buying different technologies to meet very similar 
requirements; examples include CBP and Coast Guard air and marine 
assets and component tactical radio systems. Because these efforts are 
so recent, we're unclear as to whether the new processes will transform 
how DHS manages its programs or simply add another layer to an already 
massive bureaucracy.
    Private-sector companies respect the value of using sound 
management practices. Commercial firms often must deal with mergers, 
acquisitions, and restructuring. Having started and managed a small 
business in Pennsylvania, I understand the importance of sound planning 
combined with strong, capable leadership and accountability. For 
example, before undertaking a major project, commercial firms must have 
a sound business case to ensure the project is viable. A sound business 
case is critical to mitigating risk and ensures that managers have 
sufficient knowledge as the project moves forward.
    Because the private sector is focused on getting a return on its 
investment, commercial firms would be much more cautious about risking 
projects with cost overruns and schedule delays. In contrast, DHS all 
too often has ignored risks and moved forward with unachievable 
programs leading to wasted taxpayer dollars and late, costly, and 
unimpressive results. DHS has much to learn from private-sector best 
practices.
    The private sector also routinely analyzes its overhead to 
streamline and maximize efficiencies. DHS, however, struggles to 
streamline its information technology programs, modernize its financial 
systems, and consolidate its real property inventory, which result in a 
significant inability to cut waste. For example, two inspector general 
reports from last month found that DHS has done a poor job of tracking 
costs related to its warehouse inventory and conference spending. 
According to the IG, CBP could put $1 million to better use if it 
improved warehouse management; this might not seem like much to 
Washington bureaucrats, but my constituents in Pennsylvania would much 
prefer that money spent towards securing the border.
    DHS must learn from the proven techniques and practices of 
successful commercial firms. Federal bureaucrats need to remember that 
the American people are their shareholders; their tax dollars must be 
safeguarded, not wasted. As the Nation faces significant homeland 
security threats and our National debt continues to climb, we can 
afford no more mismanagement. I look forward to the testimony and 
recommendations from our witnesses to improve the management of DHS.

    Mr. Perry. I look forward to the testimony and 
recommendations from our witnesses to improve the management of 
DHS. The Chair now recognizes the Ranking Minority Member of 
the subcommittee, the gentlelady from New Jersey, Ms. Watson 
Coleman, for her statement.
    Mrs. Watson Coleman. Thank you very much, Mr. Chairman. I 
would like to request unanimous consent to introduce a 
statement into the hearing record. The statement comes from 
Daniel Gerstein of the RAND Corporation. Following his service 
as an officer in the United States Army, Dr. Gerstein served as 
DHS deputy under secretary for science and technology from 
August 2001 to April 2014.
    Mr. Perry. So ordered.
    [The information follows:]
        Statement of Daniel M. Gerstein,\1\ The RAND Corporation
---------------------------------------------------------------------------
    \1\ The opinions and conclusions expressed in this testimony are 
the author's alone and should not be interpreted as representing those 
of RAND or any of the sponsors of its research. This product is part of 
the RAND Corporation testimony series. RAND testimonies record 
testimony presented by RAND associates to Federal, State, or local 
legislative committees; Government-appointed commissions and panels; 
and private review and oversight bodies. The RAND Corporation is a non-
profit research organization providing objective analysis and effective 
solutions that address the challenges facing the public and private 
sectors around the world. RAND's publications do not necessarily 
reflect the opinions of its research clients and sponsors.
---------------------------------------------------------------------------
Making DHS More Efficient: Industry Recommendations to Improve Homeland 
                              Security \2\
---------------------------------------------------------------------------
    \2\ This testimony is available for free download at http://
www.rand.org/pubs/testimonies/CT438.html.
---------------------------------------------------------------------------
                           September 18, 2015
                              introduction
    Chairman Perry, Ranking Member Coleman, and distinguished Members 
of the subcommittee, thank you for the opportunity to provide a written 
statement for your subcommittee hearing titled ``Making DHS More 
Efficient: Industry Recommendations to Improve Homeland Security.''\3\ 
This is an extraordinarily important topic and I applaud the 
subcommittee's willingness to examine this timely issue.
---------------------------------------------------------------------------
    \3\ The focus of my remarks today will be on improving the 
interface between the Department of Homeland Security (DHS) and 
industry. Therefore, I do not intend to address relationships between 
the Department and Federally-funded research and development centers 
(FFRDCs), such as the organization I represent, the RAND Corporation.
---------------------------------------------------------------------------
    The hearing comes at a critical juncture, as we are witnessing 
dramatic continued shifts in where research and development (R&D)--
important precursors for any successful acquisition--are being done. A 
higher percentage of the R&D is being both funded and conducted by 
industry rather than by the Federal Government (Figure 1). More R&D is 
being done outside of the United States (Figure 2). The net result is 
that less R&D as an overall percentage is being done within U.S. 
Government laboratories or with U.S. Government funding. This implies 
that the Government, to include DHS, must become more adept at building 
partnerships across the security and defense mission space that allow 
for the sharing of technology. It further implies that the Government 
will not be the driver to technological advancement in the way that it 
once was.
    At the same time, some evidence exists suggesting that many of the 
highly innovative companies are reticent to do business with the 
Government because of a Federal Acquisition Regulation (FAR) system 
that is opaque, is difficult to navigate, and places significant 
demands on industry partners. More on this will be addressed below. To 
ensure that the Government and DHS are able to meet the current demands 
for research, development, and acquisition (to include services), a 
vigorous and continuous dialogue must be developed in which DHS 
requirements are clearly articulated.
    Industry also plays an important role in this dialogue. For 
example, sharing the results of internal research and development 
(IRAD) must occur on a regular basis. This will require new models for 
exchanging information with the Government, while protecting sensitive 
proprietary information. It will also likely require either a revision 
to or a more enlightened view of the application of the FAR.
    My remarks this morning will focus on three critical areas: (1) 
Examining the tools that are available to the Department for working 
with industry, (2) discussing the importance of the Department being 
able to clearly articulate requirements, and (3) identifying innovative 
approaches for improving interactions with industry. 

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



      tools available to the department for working with industry
    DHS relies heavily on a variety of external sources for its 
research, development, and acquisition. Industry is one of these key 
external sources of partnership and collaboration.
    FFRDCs, which include the Department of Energy Laboratories, and 
academic institutions, such as the DHS Centers of Excellence (CoEs), 
provide a majority of the basic and applied research that supports the 
Department's needs. These organizations also provide some of the 
development that occurs in the pre-acquisition stages. The efforts of 
the FFRDCs and CoEs are augmented through several internal DHS labs, 
interagency associates, and international partners. The Science and 
Technology Directorate (S&T) is responsible for conducting and 
monitoring basic and applied research for DHS. Additionally, the 
Domestic Nuclear Detection Office and the U.S. Coast Guard, through its 
R&D Center, also sponsor basic and applied R&D activities.
    However, a majority of the support for developmental activities and 
acquisition programs that occur in the Department is provided by 
industry partners. DHS spending in these areas is difficult to 
accurately measure as spending--particularly for development because it 
can include a wide variety of activities, from pre-acquisition to 
exercises and industry days--and occurs across the Department and not 
in any single organization. S&T is responsible for tracking the R&D 
portion of spending across DHS, while the Under Secretary for 
Management is responsible for managing large acquisition programs 
within the Department.
    In working to communicate with industry in the R&D stages of 
activity, DHS has a number of formal and informal mechanisms available. 
Formal mechanisms include traditional requests for proposals and 
requests for information that are governed by the FAR. S&T also manages 
the Broad Area Announcements and Small Business Innovative Research 
programs that serve as important avenues for providing windows into the 
Department for industry, as well as opportunities for the Department to 
gain visibility into industry capabilities in targeted areas of 
interest. The focus of both these programs is to attract small 
companies with innovative ideas to interact with the Department.
    During my tenure in S&T, we were also working to provide more 
opportunities for industry to demonstrate their capabilities in 
specific areas of interest. Operational experimentation demonstrations 
provided industry a forum for demonstrating capabilities in areas 
including command and control, big data, common operational pictures, 
first responder technologies, and use of drones. The Department has 
also instituted the use of prize authority to attempt to entice 
industry partners to compete on challenging R&D requirements. Industry 
days are another mechanism by which a two-way dialogue with industry 
can occur. These were done both in-person and by video teleconferencing 
to bring in industry partners.
    The Support Anti-Terrorism by Fostering Effective Technologies 
(SAFETY) Act continues to provide an outstanding channel of 
communication that benefits both our Nation's homeland security overall 
and the capabilities and technologies of the industry partners that 
gain approval for special indemnification of their technologies in the 
event of a designated terrorist attack.\4\
---------------------------------------------------------------------------
    \4\ See the SAFETY Act website, U.S. Department of Homeland 
Security, undated. Retrieved from https://www.safetyact.gov/pages/
homepages/Home.do.
---------------------------------------------------------------------------
    This short synopsis demonstrates that tools do exist for 
communicating with industry. However, impediments also exist that 
create a challenging environment for industry to successfully navigate. 
One source identifies that the large defense and security integrators 
are divesting of their ``information and technical service lines'' 
because of concerns about ``revenue growth or profit potential.''\5\ In 
another dire assessment of Silicon Valley's concerns with partnering 
with the Department of Defense (DoD), author Loren Thompson lists 
``five reasons why tech executives are likely to recoil in horror when 
they realize what it means to work with today's Pentagon: (1) The 
margins are lousy, (2) Intellectual property is at risk, (3) The 
regulatory burden is stifling, (4) Bureaucrats don't trust market 
forces, (5) The customer is a political system.''\6\ Couple this 
assessment with the data in Figure 1, which highlight that industry, 
not the Government, is driving R&D in several key areas based on market 
forces and opportunities for higher rates of return. While this 
assessment directly pertained to the DoD, these same forces exist for 
DHS; in fact, they are even more pronounced, given the far smaller 
footprint and available resources of DHS. The strong implication is 
that the Government, in this case DHS, must become a more savvy, well-
informed, and uncomplicated partner.
---------------------------------------------------------------------------
    \5\ Thompson, Loren, ``Exodus: Big Defense Companies Are Exiting 
Federal Services,'' Forbes, Washington, DC, August 4, 2015. Retrieved 
from http://www.forbes.com/sites/lorenthompson/2015/08/04/exodus-
bigdefense-companies-are-exiting-federal-services/.
    \6\ Thompson, Loren, ``Five Reasons Why Silicon Valley Won't 
Partner with the Pentagon,'' Forbes, Washington, DC, April 27, 2015. 
Retrieved from http://www.forbes.com/sites/lorenthompson/2015/04/27/
five-reasons-why-silicon-valley-wont-partner-with-the- pentagon/.
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            importance of clearly articulating requirements
    Identifying requirements and articulating them clearly to industry 
is perhaps the single most important aspect inherent in developing a 
more progressive dialogue between DHS and industry.
    Industry continues to inquire about what DHS requires in such areas 
as R&D, systems acquisition, and services support. Unfortunately, this 
has been a complex issue, as it has been problematic to develop 
actionable requirements that have enough specificity to guide 
industry's efforts yet are not so specific as to constrain potential 
innovation. The result can be seen clearly by examining several high-
profile acquisitions that were unsuccessful and for which the programs 
had to be canceled. The most recent of these was the Biowatch Gen 3 
environmental sampling system.
    The difficulty in developing clear requirements was summed up in a 
2012 Government Accountability Office (GAO) document, which identified 
that of 71 major acquisitions at DHS, 43 had been identified as failing 
and had allowed ``capabilities that the program was designed to provide 
[to] change over time because of poorly defined, unapproved, and 
shifting baseline performance requirements.''\7\ In fairness, this 
shortfall has been recognized and efforts are under way to develop a 
well-defined requirements generation process. This effort remains a 
work in progress.
---------------------------------------------------------------------------
    \7\ GAO, Homeland Security: DHS Requires More Disciplined 
Investment Management to Help Meet Mission Needs, Washington, DC, GAO-
12-833, September 18, 2012, pp. 10-11.
---------------------------------------------------------------------------
    Another GAO report highlighted one opportunity: ``The first, and 
perhaps best, opportunity to reduce acquisition risk is in the planning 
phase, when critical decisions are made that have significant 
implications for the overall success of an acquisition.''\8\
---------------------------------------------------------------------------
    \8\ GAO, Department of Homeland Security: Assessments of Selected 
Complex Acquisitions, Washington, DC, GAO-10-588SP, June 2010, p. 20.
---------------------------------------------------------------------------
    Bringing in industry early in the planning process can assist with 
technical specifications and technology readiness assessments, which 
are essential to successful acquisition programs.
    A major element of the Unity of Effort initiative announced by DHS 
Secretary Jeh Johnson upon his arrival in the Department concerned 
developing operational requirements that would improve the DHS 
acquisition system and result in greater effectiveness and efficiency 
across the Department and within individual components.
    The Unity of Effort initiative resulted in the standing up of a 
Senior Leader Group (SLG), a Deputy's Management Action Group, (DMAG) 
and a Joint Requirements Council (JRC). While the SLG and DMAG forums 
are not solely to assist in developing Department and component 
requirements, they are intended to have the requirements generation 
piece as a core function. This should provide a greater link between 
strategy and resourcing once these management activities are fully 
implemented. Most recently, the Secretary has signed a memorandum 
reinstating Integrated Process Teams (IPTs) for coordinating 
requirements across mission areas. Further, the teams should provide a 
systems approach to generating requirements, which has been lacking at 
points in the Department's history. The IPTs should result in the 
development of mission roadmaps that identify capabilities, time lines, 
technologies, and acquisitions that are of interest to DHS and the 
components. One source notes, ``These IPTs will be charged with 
coordinating and prioritizing research and development across the 
department in a number of areas, including aviation security, 
biological threats, counterterrorism, border security, cybersecurity 
and disaster resilience.''\9\ While these activities are appropriate 
and necessary to address DHS management shortfalls, a cautionary note 
is in order. Similar initiatives have been tried before but have not 
fully taken hold. Additionally, with slightly over a year left in the 
administration, institutionalizing these efforts will become even more 
challenging.
---------------------------------------------------------------------------
    \9\ Homeland Security Today staff, ``DHS Initiates New Measure to 
Unify Its R&D Activities,'' September 9, 2015. Retrieved from http://
www.hstoday.us/single-article/dhs-initiates-new-measure-to-unify-its-r-
dactivities/a0a9f01082879865da1ee7aa7957e23e.html.
---------------------------------------------------------------------------
    This body of activity under the Unity of Effort umbrella, if 
successful, should provide greater focus on generating requirements 
that result in a clear set of the capabilities that DHS is seeking. The 
outputs of these forums, if shared with industry, would provide the 
type of information that is critical to allowing industry to make 
informed decisions about where to spend its IRAD dollars and where the 
Department was planning for development capabilities and ultimately 
intending to make acquisition decisions. Therefore, once the IPTs have 
reached an appropriate maturity and documentation is available that 
highlights capability gaps and approaches for operational solutions, 
industry could--within the limits of operational security--be provided 
access to this information. This would allay one of the major 
complaints that industry has made regarding access to the R&D 
requirements that S&T is pursuing and the component operational 
requirements for potential acquisitions.
     innovative approaches for improving interactions with industry
    Improving interactions with industry is a necessity, not an option, 
for assuring homeland security today and into the future. The changes 
across the R&D global community will mandate that Government becomes 
more nimble in working with industry. As a greater percentage of the 
R&D is conducted by non-Governmental and international entities, a 
corresponding change in how the Government acquires essential 
capabilities will be required. The recent incorporation of prize 
authority competitions is one example of an innovative approach that 
has been employed elsewhere with positive results.
    Five additional potentially innovative approaches for enhancing 
DHS-industry collaboration are highlighted below.
Identifying Areas of Priority Effort
    An important starting point will be for DHS to put research, 
development, and even certain acquisitions into three discrete bins of 
activity. The first bin would include those technologies and systems 
for which the Department should rely on commercial-off-the-shelf 
capabilities. This bin includes technologies for which industry is the 
clear leader and the Government can benefit from the previous 
developmental activities of industry. Examples could include commercial 
software products that, with little or no modification, could meet 
established operational requirements. The second bin would include 
technologies for which industry is a leader, but the Government desires 
to stimulate the market to produce a specialized capability that, upon 
fielding, would be exclusively for the Government. An example would be 
a low-light, long-distance camera for law enforcement purposes. For 
such a system, the Government must become adept at monitoring the state 
of the market and, at the appropriate point, providing seed money for 
the specialized capability to be developed. The third bin includes 
those areas where the Government will need to stimulate the market 
because no commercial market is envisioned. An example is detection of 
home-made explosives for Government applications. In such areas, the 
Government should and must lead R&D efforts by stimulating and 
incentivizing industry through investments.
    In this binning construct, the nature of the technical workforce 
must evolve. DHS will need personnel who are less scientists than 
technologists. The distinction is that scientists would be conducting 
the R&D while technologists would be identifying sources of technology, 
assessing technology readiness levels to understand the maturity of the 
technologies, and binning the efforts to understand where DHS resources 
should be expended.
Systems Analysis
    DHS must employ a systems approach for generating requirements and 
fielding capabilities. The individual R&D and acquisitions are less 
important than understanding how they fit together in coherent systems 
designed to meet the operational requirements of the force. THE SLG-
DMAGJRC-IPT processes serve as important management forums in this 
regard. Therefore, efforts must continue through these forums to focus 
on identifying and supporting developmental capabilities that will 
enhance the operational efficiency and effectiveness of the Department 
and the homeland security enterprise. Such a systems analysis must 
account for solving operational problems. A useful framework is the 
DOTMLPF-P (Doctrine, Organizations, Training, Material, Leadership, 
Personnel, Facilities--Policy) approach similar to that employed by 
DoD. Such a framework provides recognition that not all shortfalls 
require an acquisition program.
Understanding DHS Requirements
    In the Homeland Security Act of 2002, S&T has the authority to 
develop a consolidated listing of all R&D that is on-going in the 
Department. This includes the R&D that S&T is doing in support of the 
homeland security enterprise (i.e., the Department; components; State, 
local, Tribal, and territorial governments; and first responders and 
law enforcement) and individual component efforts. Having such a 
consolidated view is essential to generating comprehensive 
requirements, as well as developing capabilities that are operationally 
effective and efficient. These consolidated capability requirements 
could be shared with industry, again subject to security and 
classification requirements.
Access to Industry Internal Research and Development
    A significant frustration during my time leading S&T was how to 
garner insights into the IRAD being done within industry. Here, 
industry can take the lead offering opportunities that allow DHS 
developers to see various technologies in simulated operational 
environments. While the operational demonstrations described previously 
were led and funded by the Government, industry could take the lead for 
modest demonstrations that would bring together industry partners 
focused on certain topic areas. Discussions between DHS and industry 
organizations such as the Homeland Security and Defense Business 
Council that Marc Pearl represents should take the lead in identifying 
processes for sharing corporate IRAD with DHS leaders, technologists, 
and the components. Undoubtedly, the nature of the IRAD will require 
certain agreements so as not to jeopardize corporate proprietary 
information.
Federal Acquisition Regulation (FAR) as an Impediment
    Developing a more collaborative approach to DHS-industry relations 
should entail a reexamination of the FAR. Today, the FAR is overly 
conservative and prohibits many interactions that could be very useful 
for both parties. Furthermore, many assert that the FAR hinders 
innovation and lengthens response times for fielding essential security 
capabilities. The Chief Technology Officer at Customs and Border 
Protection, Wolfe Tombe, described the FAR's negative effect, stating,

``Now we go out with a request for proposals and we'll say what we 
think we need, and I think a lot of times there are vendors who could 
come back if the FAR allowed it, and [recommend better, more cost-
effective solutions]. The FAR needs to be redone so it enables that 
kind of interaction. It's hard [for a vendor] to come back and say they 
have a better idea.''\10\
---------------------------------------------------------------------------
    \10\ Verton, Dan, ``Can the Federal Acquisition Process Support 
Innovation?'' Fed Scoop, August 27, 2014. Retrieved from http://
fedscoop.com/really-needs-done-acquisition-reform/.

    Tombe went on to say, ``It makes no sense to put out a contract for 
three months' worth of work to build a mobile app and take 18 months to 
get that award out the door.''\11\
---------------------------------------------------------------------------
    \11\ Verton, 2014.
---------------------------------------------------------------------------
    In short, the rigidity of the Industrial Age FAR is colliding with 
the requirements of an Information Age where speed and agility are of 
greater value. Further, with a more youthful acquisition workforce, 
accustomed in their private lives to real-time, ubiquitous 
communications, such stifling administration is both a frustration and 
a hindrance. As noted earlier, many companies, including in the 
information technology and big data fields, are deciding not to engage 
with the Government largely due to antiquated bureaucracy.
                              conclusions
    The range of challenges facing the Department and homeland security 
enterprise will continue to evolve and in many cases grow. Ensuring 
that preparedness and response capabilities will keep pace necessitates 
a vigorous and continuous dialogue with industry.
    It is clear from the actions over the past 2 years that the 
Department has recognized that a more robust engagement with industry 
is essential to successfully executing the homeland security mission. 
Such activity is cause for tempered optimism.
    The optimism is tempered in the sense that other DHS reform efforts 
that have also recognized the need for a more vigorous and continuous 
dialogue with industry have not been successful. Despite promising 
rhetoric, only modest progress has been made. A significant cause of 
these failures has been the rapid turnover of personnel in DHS and the 
failure to codify these changes through legislation.
    In my judgment, many of the tools are in place to support more-
fruitful DHS-industry dialogue. It is a matter of properly employing 
the available tools. Another important limiting factor for the 
Department has been the inability to articulate actionable capability 
gaps that could help industry better understand emerging requirements 
in order to allow for directing their IRAD toward these gaps. Finally, 
DHS should look to develop more-innovative approaches for improving 
interactions with industry. The use of prize authority is one such 
example. Another would be a more focused review of R&D efforts to 
determine areas for investment versus areas where DHS will monitor the 
technology and become an adopter of it.
    I appreciate the opportunity to discuss recommendations for 
improving the homeland security of our Nation.

    Mrs. Watson Coleman. Thank you, Mr. Chairman. Mr. Chairman, 
I appreciate this opportunity for the subcommittee to consider 
the importance to our homeland security enterprise of an active 
and broad partnership between DHS and the private sector.
    Secretary Johnson observed earlier this year: ``Government 
does not have all the answers or all the talent,'' emphasizing 
his belief that responding to homeland security threats must be 
a partnership between Government and the private sector.
    I also thank the Chairman for scheduling this hearing as 
the committee prepares to consider legislation to reauthorize 
many elements of DHS operations, including headquarters 
functions within the subcommittee's jurisdiction, among them 
the Department's Private Sector Office.
    Mr. Chairman, as this subcommittee saw during our last 
hearing this past April on the Department's oversight of major 
acquisition programs, one can scarcely overstate how much 
communication between the Department and contractors with 
respect to acquisition requirements can affect the cost and 
performance delivered by multimillion-dollar programs for our 
homeland security.
    By creating the Joint Requirements Council in June 2014, 
Secretary Johnson has taken steps to ensure that the Department 
speaks to industry coherently about each set of program 
requirements and to ensure that all requirements for 
acquisitions across the Department reflect a consistent set of 
priorities in terms of cost and capability. I appreciate your 
continued interest, Mr. Chairman, in the JRC. I look forward to 
working with you to review and enhance the JRC as the decision 
making center for the Department's senior leaders.
    I look forward to hearing testimony from Mr. Totonis and 
Mr. Pearl. I appreciate the efforts of business leaders to 
provide Homeland Security policymakers with the benefit of 
their management experience. I also look forward to hearing 
testimony from former Under Secretary Duke, whose career in the 
defense acquisition workforce, in the Office of the Secretary 
and DHS components and now as a consultant to private-sector 
organizations, enriches her perspective on how Government 
agencies and the private sector can communicate and collaborate 
in the most constructive way.
    I very much appreciate any thoughts witnesses might have 
about the circumstances under which DHS might appropriately 
implement recommendations from the private sector, whether in 
terms of DHS adopting best practices used by the private-sector 
firms to manage their businesses, or in terms of DHS promoting 
and maintaining contacts, as allowed, with firms working to 
provide goods and services employed by the Department's 
operations.
    In addition, I hope that the hearing will also provide an 
opportunity for Members and witnesses to tell us about specific 
instances of how private-sector recommendations have fared at 
the Department. Particularly because of this subcommittee's 
focus on management in the Department and the committee's 
upcoming consideration of the reauthorization legislation, this 
hearing affords members a chance to consider the importance of 
agencies like DHS casting their net widely as they collect 
recommendations from the private sector, making sure that DHS 
and its components recognize the critical contributions of 
small and other traditionally unrepresented businesses.
    As noted in the 2010 report of the Interagency Task Force 
on Federal Contracting Opportunities for Small Businesses, 
small businesses are leaders in innovation and drivers of the 
economy. Small businesses hold more patents than all the 
Nation's universities and largest corporations combined and 
create two-thirds of all private-sector jobs, employing half of 
all working Americans. Studies of innovation have pointed to 
several policy initiatives designed to foster contacts between 
small firms and DHS, but which would benefit from renewed 
emphasis and intention--such as the authority for private 
public cooperative research and development agreements or small 
businesses innovative research and business technology transfer 
programs coordinated by SBA, but also operating through the 
Department of Homeland Security Advanced Research Projects 
Agency, certain DHS authorities under the provisions of the 
Safety Act of 2002, et cetera.
    I look forward to our witnesses sharing their views on how 
these and other mechanisms might enhance opportunities for 
small and underrepresented businesses to contribute to homeland 
security and economic security. So, Mr. Chairman, even at a 
time of wide-ranging threats and constrained resources, 
cooperation between Government and the private sector remains a 
critical resource for new thinking, efficiency, and enhanced 
mission effectiveness.
    I also believe that Congress should ensure that DHS's 
reauthorization language makes sure that the Department 
receives industry recommendations offering the greatest breadth 
into its thinking and the greatest economic multipliers by 
highlighting collaborative opportunities for small businesses. 
With that, Mr. Chairman, I yield back the balance of my time.
    Mr. Perry. The Chair thanks the gentlelady.
    The Chair reminds other Members of the subcommittee that 
opening statements may be submitted for the record.
    [The statement of Ranking Member Thompson follows:]
             Statement of Ranking Member Bennie G. Thompson
                           September 18, 2015
    The Department of Homeland Security's mission is broad and all-
encompassing--from aviation security to border security, emergency 
preparedness, cybersecurity, critical infrastructure protection, and 
counterterrorism. As the Department moves forward, it must do so in an 
efficient manner that makes wise use of human capital, technology, and 
financial resources.
    Given the past acquisition failures at the Department, it is 
imperative that some best practices and new ideas be employed to ensure 
that taxpayer dollars are not wasted. I appreciate Secretary Johnson's 
push to improve the Department's acquisition and planning efforts 
through his Unity of Effort initiative.
    The private sector can also offer an example to DHS on how to 
manage some of its business practices. The private sector's ideas 
should be considered with an eye toward ensuring that homeland security 
capabilities are not diminished. Private-sector goals--earning a 
profit--and Government goals--providing services and protecting to the 
public--are vastly different, yet interdependent.
    In order to successful, effective channels of communication between 
Government and the private sector are required, including engagement 
with small and under-represented businesses. Small businesses are 
leaders in innovation and drivers of the economy. They hold more 
patents than all of the Nation's universities and largest corporations 
combined, and create two-thirds of all private-sector jobs, employing 
half of all working Americans.
    I would appreciate hearing from witnesses how DHS can better engage 
the innovation, efficiency, and competitiveness exemplified every day 
in small and minority businesses. Also, I would appreciate hearing from 
the witnesses how DHS can better engage its workforce. Surveyed 
employees feel that there is a lack of diversity throughout the 
components and they opine that promotion potential within the 
Department is few and far between. DHS cannot achieve Unity of Effort 
without buy-in from its employees. I want to hear what private sector 
best practices can be used at the Department to improve its workforce.

    Mr. Perry. We are pleased to have a distinguished panel of 
witnesses before us today on this important topic. Let me 
remind the witnesses that their entire written statement will 
appear in the record. The Chair will introduce each of you 
first and then recognize you for your testimony.
    Mr. Marc Pearl is president and chief executive officer of 
the Homeland Security and Defense Business Council. The council 
is a non-partisan, non-profit industry organization that is 
made up of large, mid-tier, and small companies that provide 
homeland security and homeland defense technology and service 
solutions to DHS and other clients. Mr. Pearl has led the 
council since 2008. Welcome.
    Mr. Harry Totonis is a board director with the Business 
Executives for National Security or BENS. BENS is a non-
partisan, non-profit organization that supports the U.S. 
Government by applying best business practice solutions to 
National security problems. Mr. Totonis has had an extensive 
private-sector career and has authored numerous articles on 
business strategy, change management, and drivers of business 
effectiveness.
    The Honorable Elaine Duke is the former under secretary for 
management at the Department of Homeland Security, a position 
she held from 2008 until 2010. Prior to her employment as under 
secretary, Ms. Duke served in a number of positions in the 
Department, including deputy under secretary for management, 
chief procurement officer, and deputy assistant administrator 
for acquisitions at the Transportation Security Administration.
    Thank you all very much for being here today. The Chair now 
recognizes Mr. Pearl for your testimony. If you could, push the 
button, make sure the mic is close to your mouth there. Thank 
you, sir.

   STATEMENT OF MARC A. PEARL, PRESIDENT AND CHIEF EXECUTIVE 
    OFFICER, HOMELAND SECURITY AND DEFENSE BUSINESS COUNCIL

    Mr. Pearl. Chairman Perry, Ranking Member Watson Coleman, 
and distinguished Members of committee, good to see you again, 
former Chairman, Mr. Duncan, Ms. Torres, thank you for giving 
the Homeland Security and Defense Business Council the 
opportunity to testify and to provide our collective 
perspective on creating greater efficiencies at DHS.
    As the Chairman said, we represent the leading large, mid-
tier, and small businesses that provide homeland security 
technology, products, and services solutions. From the 
industry's point of view, more consistent Department-wide 
processes and procedures are needed to improve internal 
operation and for it to become a more efficiently-run 
organization. In order to help procure mission critical 
products and services in a timely and efficient manner, DHS 
also needs consistent, on-going, and quality measures that 
encourage industry-Government engagement and communications.
    The council works closely with DHS officials and its 
subject-matter experts to discuss ideas focused on the 
implementation and innovation processes that could serve to 
bridge the gap between Secretary Johnson's excellent policy 
aspirations embedded in his Unity of Effort and actual program 
operation. How we bridge that gap is something that we are 
looking at.
    While much progress has been made, as you said in your 
statements, there is still a lot of work to do. I ask, as you 
said, that my written testimony be entered into the record, but 
please allow me to outline a few key internal and external 
challenges that the council believes could help the Department 
move closer to a unified vision and greater efficiency.
    First, not enough has been done to consolidate and provide 
common mission services across the DHS enterprise. There isn't 
one centralized system, for example, that provides an 
individual's complete immigration history. CBP, ICE, and USCIS 
experience enormous challenges around the collection, 
coordination, and use of immigration data. In contrast, the 
Office of Biometric Identity Management is an excellent example 
of how DHS can create a mission-oriented service for the entire 
enterprise.
    OBIM processes 320,000 biometric identification 
transactions every day, providing services and information to 
Federal, State, and local government. We encourage DHS to 
continue to look for other opportunities to consolidate systems 
that could serve enterprise-wide mission areas which, in turn, 
will create cost savings and reduce duplicative efforts.
    Second, the entry-on-duty clearance process at DHS has been 
historically problematic, duplicative, expensive, time-
consuming, and frustrating both for the people at DHS and 
industry. Components refuse to recognize that a background 
investigation performed by one component can be recognized by 
another component. This lack of security reciprocity creates 
unnecessary and critical delays as to when a contractor can 
begin work, thereby moving schedules, significantly delaying 
the start of a project, and wasting taxpayer dollars.
    Third, a critical element of any successful organization, 
private or public, is a highly-motivated workforce that 
embodies the core capabilities necessary to accomplish mission. 
DHS must continue to invest in its workforce by examining 
incentives for greater accountability and creating robust 
training programs that help employees master the skills that 
they need to succeed. We believe it should identify critical 
skill sets needed across the Department and find areas where 
cross-component training can be utilized.
    Fourth, the Secretary's Unity of Effort approach aims to 
improve coordination between headquarters and its components 
and directorates. But challenges still exist within the 
components themselves where they need a better set of processes 
that encourage consistent and on-going connections between the 
component's program department and its contracting offices.
    With respect to the externalities of these issues, early 
and on-going engagement with industry is a critical element 
outlined in detail in my written testimony. Over the last few 
years, many parts of the Department have taken enormous steps 
to improve, expand, and deepen industry/Government 
communication. These must continue. But significant 
improvements can still be made in how the Department engages 
with industry. For example, TSA's strategic capability 
investment plan was an extremely helpful document issued last 
year and could serve as a model for other components that want 
to communicate a division's vision and plan for potential 
investments going forward.
    In closing, I cannot outline the efficiencies of DHS 
without addressing the role and responsibility of Congress, Mr. 
Chairman, in that equation. The duplication in Congressional 
jurisdiction over DHS across numerous committees and 
subcommittees continues to create, in and of itself, its own 
inefficiencies. While DHS still has a lot of work to do to 
improve its internal processes and procedures, an unpredictable 
budget cycle has its own impact on efficiency.
    We understand hard decisions surrounding the budget must be 
made in today's fiscal environment. But we encourage Congress 
to recognize the impact delayed funding has on the very 
efficiencies that you are trying to encourage and address here 
today.
    Thank you for giving the council the opportunity to present 
some observations on this vital topic. We look forward to 
continuing our close working relationship with each of you and 
your staff, as well as continuing to work with the Department 
on common issues of mutual concern.
    I am prepared to answer any questions that you might have. 
Thank you.
    [The prepared statement of Mr. Pearl follows:]
                  Prepared Statement of Marc A. Pearl
                           September 18, 2015
    Chairman Perry, Ranking Member Watson Coleman, and distinguished 
Members of the Oversight Subcommittee, I am Marc Pearl, and serve as 
the president and CEO of the Homeland Security & Defense Business 
Council (Council), a non-partisan, non-profit industry organization, 
comprised of the leading large, mid-tier, and small companies who 
provide the homeland security and homeland defense technology, product, 
and service solutions to the Department of Homeland Security (DHS) and 
other Government and commercial markets. Our members make up a huge 
portion of the Homeland Security Industrial Base, and I thank you on 
their behalf for giving us the opportunity to appear before you today 
to provide our organization's collective perspectives on the issue of 
creating greater efficiencies at DHS.
    The private sector has provided our Government and commercial 
market with homeland security and homeland defense specialized 
services, technological innovation, and strategic thinking for 
decades--long before the tragic events of September 11, 2001. However, 
in the wake of what occurred just 14 years ago last Friday, it became 
poignantly obvious to the administration and Congress that we needed to 
establish better processes and an effective organization to anticipate, 
prevent, respond to, and/or mitigate any terrorist act or nature's 
potential for destruction. Since the formal creation of DHS in 2003, 
industry has worked to support the Department in tackling the many 
diverse threats facing our homeland.
    Shortly after the formation of DHS, the Council was established for 
the purpose of building strong relationships between Government and 
industry so that we could work together on the many process issues and 
acquisition reform questions through open dialogues between the senior 
executives in industry and their counterparts at the Department. 
Additionally, we have sought to establish forums to engage in ``safe'' 
conversations and roundtables between subject matter experts in both 
the public and private sectors to address the challenges and obstacles 
that get in the way of efficiencies and mission success. Our programs 
and initiatives foster those relationships and facilitate an exchange 
of information that inform both sectors on how policy and process might 
be better implemented and communicated, as well as help address mission 
challenges, and improve the management and organization of DHS. Our 
mission is to bring both sides together in informal conversation to 
gain a greater understanding of one another's perspectives and 
processes to identify ways to improve the way we do business together.
    It is generally recognized that DHS needs more consistent 
Department-wide processes and procedures to improve internal operations 
and become a more efficiently-run organization. DHS also needs measures 
that support industry-Government dialogues that help ensure the 
Government can effectively procure mission-critical product and service 
solutions.
    For that reason, the Council is encouraged by Secretary Johnson's 
2014 Strengthening Departmental Unity of Effort that reestablished the 
Joint Requirement Council (JRC), established a set of regional Joint 
Task Forces, and created the Secretary's Leadership Council and 
Deputy's Management Action Group. These, along with other initiatives, 
aim (and I quote the Deputy Under Secretary of Management) ``to better 
integrate the Department's people, organizational structures, and 
operational capability'' that will in turn, create more efficiencies 
and enable mission success. Supporting the unity efforts, Secretary 
Johnson announced earlier this month, a new measure to unify the 
Department's research and development, creating Integrated Product 
Teams (IPTs) that will be charged with coordinating and prioritizing 
research and development across the Department in a number of areas, 
such as aviation security, biological threats, counterterrorism, border 
security, cybersecurity and disaster resilience.
    The Council and its members are invested in the Department's 
success and its ability to create a more efficient and unified 
organization. Our overall mission is to work with you in the Congress 
and the Department's leaders to encourage on-going discussions and work 
towards the implementation of programs and processes that will bridge 
the gap between policy aspirations and program operations. We must all 
work together to ensure that the Secretary's Unity of Effort becomes 
more than the logo of his tenure, only to be replaced by the logo of 
the next Secretary. We want it to become a foundational legacy of real 
change, real consistencies, real reform, and real efficiencies.
    While the aspirational policies of the Secretary's Unity of Effort 
are critical steps in the right direction, we believe internal and 
external challenges still exist that significantly impact the goal of 
achieving a more efficient and unified Department. Much progress has 
been made, but there is still a lot of work to do.
    The Council's testimony today will focus on a few key challenges 
that we believe, if continued to be addressed, will help the Department 
move closer to a unified vision. Allow me to provide a few observations 
on some of these critical internal and external areas that impact the 
efficiencies at DHS.
       the need to reduce duplication of common mission services
    While progress has been made, there is still a significant need to 
reduce duplication among the components' common mission services and 
align financial management systems, for example. DHS' multiple 
financial management systems make it difficult to look across 
individual budgets to see the larger picture on where dollars are being 
spent and produces an inability to capture where cost savings could be 
made.
    Additionally, little has been done to consolidate and provide 
common mission services across the enterprise, though the JRC, we are 
told, is looking into this area. CBP, ICE, and USCIS, for example, 
experience challenges around the collection, coordination, and use of 
immigration data. There isn't one centralized system that provides an 
individual's complete immigration history. An operator at one component 
must query multiple systems, and, as a result, we have a process that 
is time-consuming, costly, and frustrating to the on-ground official, 
from both an IT architecture and business process point of view.
    In contrast, DHS's Office of Biometric Identify Management (OBIM) 
exemplifies that the Department can, in fact, create a mission-oriented 
service for the entire enterprise. OBIM processes approximately 320,000 
biometric identification transactions per day, providing services and 
information to Federal, State, and local governments. They provide the 
technology for collecting and storing biometric data, analyze, update 
the watch list, and ensure the integrity of the data for and with 
numerous agencies, including CBP, DOJ, DOS, FEMA, ICE, TSA, USCG, and 
USCIS.
    We suggest that DHS look more vigorously at other opportunities for 
consolidating systems that could service enterprise-wide mission areas, 
which could create cost savings and reduce duplicative efforts.
                      lack of security reciprocity
    The entry-on-duty clearance process at DHS has been problematic, 
duplicative, expensive, time-consuming, and frustrating. DHS components 
do not recognize a background investigation performed by another 
component. This has created a barrier to entry for many contractors and 
is particularly unnerving for those who do business with other National 
security, critical infrastructure, law enforcement and financial 
services agencies, where they don't have to jump through as many 
multiple internal agency security clearance hoops as at DHS. When DHS 
is hiring a contractor to work on a project, this process causes 
unnecessary and critical delays as to when a contractor can begin work, 
thereby moving schedules, significantly delaying the start of a 
project, and wasting taxpayer money.
    It is our understanding that almost 75% of the vetting requirements 
are already shared across components regardless of the program; so 
establishing a common vetting security clearance program is an area 
where the Department and the private sector could find the mutual 
benefits of streamlining.
                the need to invest in the dhs workforce
    While we all recognize the importance of and on-going focus on all 
things related to cyber and IT, the underlying critical component of 
any technology and/or product is a well-trained and highly-motivated 
workforce that embodies the core capabilities necessary to accomplish 
the mission. Quality training is always a good investment whether in 
the public or the private sector; for it will inevitably lead to a more 
successful outcome.
    The DHS workforce is responsible for executing multiple missions 
including cyber analysis, responding to disasters, and safeguarding our 
ports of entry. With the variety of mission responsibility and skills 
needed to perform, the Department must continue to invest in its 
workforce by examining incentives for greater accountability and 
creating robust training programs.
    After working with and getting to know numerous Government 
employees over my 3+ decades in DC, I would proffer that many--
particularly those who have and continue to work at DHS over the past 
dozen years--tend to join the civil service for altruistic reasons and 
are motivated to serve the public and protect our Nation. At the very 
least, leadership can continue to remind their colleagues how important 
and critical their mission services are to our Nation, and, as a 
result, they will feel more job satisfaction and pride in their work. 
The communicating of appreciation is something that is regularly done 
at the most successful corporations, even amidst the frustration of 
one's daily tasks.
    DHS should also look at finding innovative incentives that support 
career progression. One suggestion--something that is also done in the 
private sector--would be to create special teams. Industry puts their 
best and brightest on important projects--cross-department--and 
Government could do the same. DHS could consider a pilot program with a 
major acquisition filling a special team based on merit. Being part of 
the special team becomes a reward and an incentive to want to be a part 
of the agency's top projects.
    Other incentives include career progression and proper workforce 
training. Employees want to feel like they have an opportunity for 
growth within their current job and the continued ability to refine 
their skill-set and grow as a professional. And as part of this, DHS 
should continue to adopt more robust and multi-disciplinary workforce-
training programs to help employees master the skills they need. On the 
program management and acquisition side, this must include training on 
how to work with industry.
    A quality employee understands all aspects of the business and is 
encouraged, at various points in his/her career, to acquire a better 
understanding and knowledge of such things as the budget process, 
mission needs and planning, as well as how those things are addressed 
in other divisions.
    Though it took many years even after the passage of Goldwater-
Nichols, DoD found the CO-COMMS approach--requiring flag officers to 
take on cross and joint commands--to be a tremendous incentive for 
morale and successful leadership. Perhaps DHS should be encouraged to 
look at joint environment requirements for those moving up the ladder. 
This would not only be a huge culture change, but also could break down 
cultural silos and help to operationalize the Secretary's Unity of 
Effort.
    We were encouraged by and wish to point out that DHS FY2014-2018 
Strategic Plan outlined a goal to find support systems for training, 
exercising, and evaluating capabilities that cross components to ensure 
the readiness of front-line operators and first responders. They also 
describe their goal to strengthen the cyber ecosystem which includes 
implementing human capital strategies that will help develop a skilled 
cybersecurity professional. To achieve this, they plan to develop a 
Department-wide human capital strategy, including enhanced Federal 
training programs. The Council supports these efforts and believes DHS 
should continue to find critical skill-sets needed across the 
Department and find areas where cross-component training can be 
utilized.
   the need for better connections between the program & contracting 
                                offices
    The Secretary's Unity of Effort approach aims to improve 
coordination between HQ and its components and directorates, but 
challenges still exist within components. There needs to be a better 
set of processes that encourage consistent and on-going connections 
between the component program and contracting offices. Our members have 
observed that the contracting offices have assumed the dominant role in 
some cases, but both must be in sync and engaged together to ensure 
that the right procurement strategy is in place so that the Government 
can ensure they are receiving the best proposals from their industry 
partners. A consistent, unified decision-making process across the 
Department is reliant on strong connections within the components and 
across components.
    Some of the components, we have been told by many of our members, 
have taken the proper steps towards communication and coordination of 
effort. For example, USCIS has worked hard to coordinate its CIO's 
vision throughout the programs and contracting shops, thereby leading 
to consistent messaging to industry from both of the offices, and 
creating more levels of certainty for the contractors.
    Additionally, ICE's Homeland Security Investigations division has 
demonstrated excellent integration and collaboration between the 
contracting officers and the mission owners, thereby leading to 
successful mission requirements in a timely manner and within budget.
                   improving engagement with industry
    Beyond the challenges within DHS, the Council believes improvements 
can still be made in how the Department engages with industry. 
Effective engagement with industry has been and continues to be a 
priority area of interest for the Council and our members. In 2014, at 
the urging of the Under Secretary of Management, we developed a 
``Framework for Government-Industry Engagement Through the Planning and 
Execution of the Acquisition Process.'' Through this effort, our member 
companies have worked closely with the DHS directorates and components 
to identify critical points of communication, information sharing, 
engagement, and/or dialogue, as well as the challenges and barriers to 
communication, that can and should occur throughout the different 
stages of the acquisition life cycle and process.
    It is critical that Government and industry work together to 
establish and maintain open and transparent two-way forums for 
communication in advance of and throughout the acquisition process. 
Early, frequent, and constructive communication between the Government 
and industry is the foundation to the planning and execution of a 
successful acquisition. Acquisitions begin at the point when agency 
needs are established. Early engagement with industry is a critical 
aspect of strategic planning, describing agency needs, developing an 
overall acquisition strategy, and identifying the terms, conditions, 
and practices appropriate for what is being acquired. It improves 
market research, which results in a greater understanding of the 
possible products, services, and technologies that exist to support the 
Government's needs, as well as the costs, benefits, and limitations of 
different procurement approaches. It allows the Government to define 
their requirements clearly within the market environment, and develop 
realistic expectations regarding risk, cost, schedule, and performance 
management. When requirements are well-defined, industry can write 
quality proposals and deliver solutions that address gaps in a timely 
and cost effective manner.
    For industry, the substance, frequency, and timing of communication 
with Government is vital to determining how to allocate limited 
resources and make informed, risk-based investment decisions. Because 
the costs associated with getting to know a prospective Government 
client, understanding their requirements, developing a technical 
solution, selecting a team, and preparing a proposal are so high, 
industry makes decisions on which opportunities to pursue long before a 
solicitation is released. Bid decisions are often made based upon the 
nature, detail, and specificity of information that is available in 
advance of the opportunity. The more time and information that is 
provided, the more that industry is likely to invest in and think 
through different ways to meet the Government's needs.
    When communication is absent, vague, infrequent, or untimely, it 
increases the risk that industry will choose not to participate in a 
solicitation or that it will not understand the Government's 
requirements. Communication problems that occur early in the process 
(e.g. not having well-defined requirements) increase the likelihood of 
contract delays, cost over-runs, duplication of effort, and outcomes 
that fail to meet the Government's expectations and mission needs.
    Industry relies on information from the Government on their future 
needs so that they have time to align their financial and personnel 
resources towards meeting those needs. This allows early R&D and 
ensures that needed solutions can be provided in a timely manner. The 
more specific the Department's directorates and components can be, the 
more industry will engage, which will produce better solutions and 
overall mission success.
    It is important to point out that throughout the last few years the 
Department has taken many steps to improve industry engagement and 
better, more transparent and open communication. Plans similar to TSA's 
Transportation Security Strategic Capability Investment Plan are 
helpful and we hope to see more documents published from other 
components that communicate the agency's vision and plans for potential 
investments.
    In addition to the small group discussions we have held with DHS 
arising out of the Framework, industry has enjoyed the opportunity to 
participate in a variety of forums such as mock debriefing exercises 
with industry and Government representatives. And all of the industry 
groups are currently working in coordination with DHS' Office of the 
Chief Procurement Officer to plan a Reverse Industry Day later this 
fall, which is part of its Acquisition Innovations in Motion (AIiM) 
series of industry engagement and acquisition initiatives. This will be 
the first DHS-wide event held from the viewpoint of the contractors 
informing Government program and contracting officials about the 
process industry goes through to respond to a Government solicitation. 
The Council looks forward to the event and believes that creating a 
better understanding between the two parties will help create greater 
efficiencies in the acquisition process.
    Mr. Chairman, and Members of this subcommittee, in closing I cannot 
attempt to briefly outline the need to address the efficiencies of DHS 
without addressing the Role and Responsibility of Congress in that 
equation.
    I'm quite sure you are aware that the duplication in Congressional 
jurisdiction over DHS across numerous committees and subcommittees 
creates its own inefficiencies. I point this out, not because this 
Oversight Subcommittee will be able to change that equation, but simply 
to provide an additional observation to outside factors impacting 
agency efficiencies.
    Additionally, while DHS still has much work to do to improve its 
processes and procedures that will and must lead to a more efficient 
organization, an unpredictable budget cycle has significantly impacted 
its ability to achieve efficiencies in many areas. A stable, 
predictable budget environment is critical to any government or any 
company's ability to achieve its mission, and this is particularly true 
to an agency as vital, large, and complex as the Department of Homeland 
Security. Its mission areas require long-term planning, as well as 
substantial and timely investments in specialized technologies, 
products, and services. And industry cannot, likewise, strategize, 
invest, research and develop solutions when the needed programs spit-
and-start or experience delays simply because long-range planning is 
impossible to do.
    The execution of DHS operations results from a continuous cycle of 
planning, programming, and budgeting activities. When you do not know 
your budget, you cannot plan for the future, start new programs, or 
hire and train staff. Budget uncertainties make strategic planning, 
long-term investment planning, and acquisition planning extremely 
difficult. Industry relies on these activities to determine how to 
invest its resources and R&D dollars so that it can develop the 
specialized capabilities that DHS needs. Delays in the acquisition 
process create inefficient business practices, waste taxpayer money, 
and prevent DHS from effectively procuring and delivering critical 
supplies and services to employees in the field.
    We understand hard decisions surrounding the budget must be made in 
today's fiscal environment. Regardless of the amount of funding the 
Department receives, it needs a stabilized budget planning cycle, and 
the Council encourages Congress to recognize that delayed funding harms 
the very efficiencies you are trying to encourage.
    Thank you for providing the Homeland Security & Defense Business 
Council with the opportunity to present some observations on this vital 
topic. We look forward to continuing our close working relationship as 
a trusted advisor to you and your staff, as well working with the 
Department and its officials on the common areas of mutual concern.

    Mr. Perry. Thank you, Mr. Pearl. I appreciate that.
    The Chair now recognizes Mr. Totonis for your testimony. 
Thank you, sir.

STATEMENT OF HARRY TOTONIS, BOARD DIRECTOR, BUSINESS EXECUTIVES 
                     FOR NATIONAL SECURITY

    Mr. Totonis. Thank you. Chairman Perry, Ranking Member 
Watson Coleman, Members of the committee, my name is Harry 
Totonis. I am honored to be here as a private citizen and a 
member of the Business Executives for National Security.
    I plan to address what actions the Department of Homeland 
Security can undertake to improve management efficiency and 
effectiveness. I will speak from my own knowledge and 
experience, having worked in several industries, including 
health care, financial services, and management consulting. My 
perspectives will reflect how the private sector approaches 
similar challenges. I would also like to recognize and 
congratulate the many accomplishments that the Department of 
Homeland Security has achieved since its inception 12 years 
ago.
    I also applaud Secretary Johnson's initiative to improve 
the Homeland Security Department's cohesiveness and 
effectiveness as outlined in his April 2014 memo, Strengthening 
the Department's Unity of Effort. While significant progress 
has been achieved, opportunities appear to exist for continued 
improvement.
    Here I am referencing the annual report issued on February 
23, 2015, titled Major Management and Performance Challenges 
Facing the Department of Homeland Security. One area 
highlighted for improvement was in management integration and 
effectiveness. As requested, my statement discusses actions 
that DHS can pursue to strengthen and better integrate its 
operations and management functions.
    As I noted earlier, my recommendations are based on my 
experience both as a senior managing partner at Booz Allen 
Hamilton and a senior executive and CEO for private-sector 
companies. As a consultant, I had the opportunity to help large 
corporations address similar challenges. As a corporate 
executive and CEO, I had the opportunity to implement what I 
had previously recommended. The challenge that DHS faces is a 
common one for private companies.
    Based on my experience, there are five key elements that 
need to be implemented to achieve effective management. One, 
you need to have the appropriate leadership with the right set 
of experience, values, and commitments. Based on what I read, 
it appears that DHS satisfies that requirement.
    No. 2, the organization's mission and objectives must be 
clearly defined. Moreover, there must be alignment across the 
organization that spans from the board of directors to 
executive management, across mid-level managers, and down to 
all employees. In my experience, I have always strived for 
every employee to know our company's mission and objectives and 
for them to know where we stood relative to achieving that. 
Getting this right not only creates better results, but 
significantly improves employee morale. Based on what I read, 
this may be a challenge for DHS.
    Third, the organization must have an optimal organizational 
structure that reflects the nature of these activities. I will 
come back with more thoughts on this in a moment.
    Four, the organization must deploy systems to measure its 
performance. Moreover, these systems must be real time in order 
for people to know where the organization stands. Again, based 
on what I read, there appears to be a challenge for DHS in this 
area.
    Finally, the organization's reward systems must be aligned 
with the mission and objectives. All of the above need to be in 
place in order for an integrated management function to work 
well. The benefits from getting this right are both significant 
and many. Efficiency and effectiveness improves significantly. 
Redundancy is reduced. Scarce resources are deployed in 
priority areas. Scale economies are achieved. Challenges are 
identified. Moreover, ensuring that this is put in place 
ensures the employee morale improves because individuals feel 
empowered and are prepared to help the organization achieve its 
objectives.
    I would also like to return and address the organizational 
structure. There are three types of organizational structures 
that are usually employed, decentralized, centralized, and an 
organization that has a strong shared-services function. I 
believe, given that DHS includes 22 diverse agencies, there 
must be an organizational structure that is more decentralized 
with a strong shared-services organization.
    By ``strong shared-services organization'', I include 
things like strategic planning mission definition and policy 
setting, management development, reward setting, reporting 
systems, process improvement, finance and accounting, 
purchasing of property management. I underscore that the 
shared-services function should help improve the overall 
Department's efficiency and not create degradation of service, 
frustration, and bureaucracy.
    Finally, given the diversity that exists within DHS, I need 
to note that attempting to centralize additional functions 
beyond what I described, based on my experience, it has the 
potential of increasing costs, degrading service, and adversely 
impacting morale.
    Thank you for the invitation to testify. I am prepared to 
answer any questions you might have.
    [The prepared statement of Mr. Totonis follows:]
                  Prepared Statement of Harry Totonis
                           September 18, 2015
    Chairman Perry, Ranking Member Coleman, Members of the committee, 
my name is Harry Totonis. I am honored to be here as a private citizen 
and a member of Business Executives for National Security (BENS). I 
plan to address what actions the Department of Homeland Security can 
undertake to improve management effectiveness and efficiency. I will 
speak from my own knowledge and experience having worked in several 
industries, including health care, financial services, technology, and 
management consulting. My perspectives will reflect how the private 
sector approaches similar challenges.
    I am also a member of Business Executives for National Security, a 
non-partisan organization of business executives concerned about 
National security. Although reflective of BENS' perspectives on what 
the private sector can contribute to better managing our National 
security organizations, the views I express are my own.
    I would also like to recognize and congratulate the many 
accomplishments that the Department of Homeland Security (DHS) has 
achieved since its inception 12 years ago across many areas including, 
overall integration, acquisition management, information technology 
management, financial management, and human capital management. I would 
also like to note that I applaud Secretary Johnson's initiative to 
improve Departmental cohesiveness and effectiveness as outlined in his 
April 2014 memo, ``Strengthening Departmental Unity of Effort.''
    While significant progress has been achieved, opportunities appear 
to exist for continued improvement. Here I am referencing the annual 
report issued on February 23, 2015 and titled Major Management and 
Performance Challenges Facing the Department of Homeland Security, OIG-
15-09. One area highlighted for improvement was in Operations and 
Management Integration.
    As requested, my statement discusses actions that DHS can pursue to 
strengthen and better integrate its operations management functions. As 
noted earlier my recommendations are based on my experiences both as a 
senior managing partner at Booz Allen & Hamilton and senior executive 
and CEO for private-sector companies. As a consultant I had the 
opportunity to help large corporations address similar challenges. As a 
corporate executive and CEO I had the opportunity to implement what I 
had previously recommended.
    The challenge that DHS faces is common among private-sector 
companies. Based on my experience there are five key elements that need 
to be implemented to achieve effective management:
    1. The appropriate leadership with the right set of experiences, 
        values, and commitment must be place. Based on what I read it 
        appears that DHS satisfies this requirement.
    2. The organization's mission and objectives must be clearly 
        defined. Moreover, there must be alignment across the 
        organization that spans from the board of directors and 
        executive management across mid-level managers and down to all 
        employees. In my experience, I have always strived for every 
        employee to know our company's mission and objectives and to 
        know where we stood relative to achieving them. Getting this 
        right allows not only better results but significantly improved 
        employee morale. I am not certain where DHS stands on in this 
        area, but what I have read suggest that employee morale is a 
        challenge. As a result I would presume that more work is 
        required here.
    3. The organization must have an optimal organization structure 
        given the nature of its activities. I will come back with more 
        comments on this topic in a moment.
    4. The organization must deploy systems to measure its performance. 
        Moreover, these systems must be as real-time as possible. Again 
        based on what I have read, this appears to be a challenge area 
        for DHS.
    5. Finally the organization's rewards system must be aligned with 
        the mission and objectives.
    All of the above need to be in place in order for an integrated 
management function to work well. The benefits from getting this right 
are both significant and many. Efficiency and effectiveness improves 
significantly. Redundancy is reduced. Scarce resources are deployed in 
priority areas. Scale economies are achieved. Challenges are quickly 
identified and addressed. Executive management spends less time 
debating, creating plans or responding to remedial actions as a result 
of audits. Instead they have more time to execute. Finally, I have 
found that the organization's employee morale significantly improves as 
a result of empowerment, involvement and better understanding on how 
they can contribute to achieving the organization's mission and 
objectives. With high employee morale along with the other above items 
an organization achieves on-going improvement capability that ``feeds 
upon itself''.
    As I outlined earlier, I would like to repeat myself and note that 
the most progress in organizational and management efficiency is 
achieved when all of the five above conditions are aligned with each 
other and implemented. For example, if the systems are not in place to 
measure performance (No. 4) it is hard to execute on the No. 2 and No. 
5 objectives.
    I would like to return to my list of 5 items and further clarify 
the need for an optimal organization structure. Broadly there are three 
type of organizational structures:
   A fully integrated organization;
   A fully decentralized organization;
   An organization with decentralized line activities supported 
        by a strong shared services function or organization.
    Given that DHS includes 22 diverse agencies--the U.S. Customs 
Service, Immigration and Naturalization Service, Transportation 
Security Administration, FEMA, U.S. Coast Guard, U.S. Secret Service, 
Energy Security and Assurance Program, and many others--a decentralized 
organization with a strong shared-services function is most likely the 
appropriate organization structure. That implies that each agency 
should operate fairly autonomously with DHS providing leadership, 
direction and create value through a Shared-Services Organization.
    If a company creates a common product with similar processes and 
customers, then a push to consolidate into one similar entity would be 
a productive approach. If, however, different companies are creating 
different products through different processes for different customers, 
a push to consolidate may be counterproductive. Instead, these 
companies should be able to retain their unique capabilities and 
identities, but share common services to drive productivity and 
effectiveness.
    A shared-services organizational approach for DHS would include 
only the activities that are common or shared among the different 
agencies and are important to effectiveness and efficiency of the 
overall organization. For an organization as diverse as DHS, they would 
typically include the following functions:
   Strategic Planning, Mission Definition, and Policy setting
   Management Development and Promotion
   Reward-setting and compensation
   Goals, Objectives, and Budgeting
   Reporting Systems
   Process Improvement and Innovation
   Finance and Accounting
   Purchasing
   Real Property Management, which would strengthen efficiency 
        and reduce costs through reduced administrative overhead.
    I underscore typically include because a Shared-Services function 
should include responsibilities that only improve overall effectives 
and efficiency of the entire entity while avoiding creating degradation 
of service, operating frustrations, and increased bureaucracy within 
the agencies. Given the diverse nature of DHS in suggesting the above 
functions I tended to focus on leadership, policy, direction-setting, 
and measurement functions as opposed to day-to-day operating functions. 
The two exceptions may be purchasing and process improvement and 
innovation.
    Successful shared-services organization include a process 
improvement team that works with all the agencies on important and 
focused areas. For example, General Electric and other corporations 
created six sigma teams that worked with all the GE businesses to 
achieve operations improvement. To ensure success this team needs to 
have teeth relative to implementing their findings, funding, and it 
cannot be optional for an agency to implementing their findings.
    Finally given the diversity that exists within DHS, I need to note 
that based on my experience, attempting to centralize additional 
functions, beyond what is described above, it only has the potential of 
increasing costs, degrading service, and adversely impacting morale.
    I recognize, as other members of BENS have previously testified 
before this committee, that the management improvement plate is bigger 
and the opportunities far broader to set the Department on the path to 
greater effectiveness and efficiency. Certainly 12 years' worth of data 
should be sufficient to give a basic sense of where the frictions and 
the dependencies lie.
    In appearing before you today my intent is to present a private-
sector perspective that will, hopefully, assist the committee in 
becoming a better board of directors for DHS. I am confident that with 
the help of this committee the Department can, in the face a certain 
resource restraints in the coming years, commit to operational changes 
in its overhead and infrastructure functions that can put it in the 
company of the best-managed organizations--public or private--in the 
Nation.
    Thank you for the invitation to testify. I am prepared to answer 
any questions you might have.

    Mr. Perry. Thank you, Mr. Totonis.
    Mr. Perry. The Chair now recognizes Ms. Duke for her 
testimony.

     STATEMENT OF ELAINE C. DUKE, PRINCIPAL, ELAINE DUKE & 
                        ASSOCIATES, LLC

    Ms. Duke. Good morning, Chairman Perry, Ranking Member 
Watson Coleman, and Members of the subcommittee. I am pleased 
to be here today.
    I am testifying both from my experience as a civil servant 
of 28 years, including the final 8 at the Transportation 
Security Administration and DHS, but also combining my 
experience in working with industry since I retired about 5 
years ago. I would like to highlight some areas that fall under 
the DHS current leadership's initiatives that, as they work 
towards them, I think will greatly improve the efficiency of 
DHS.
    I would like to recognize the challenges they have. It is a 
complex organization and they are in the process of trying to 
not only fix inherited legacy systems but also transition to 
the heightened security risk and the heightened state of 
terrorism for the United States and also operating at the same 
time.
    So, first, I would like to talk a little bit about the 
outward face of acquisition. There are specific things that can 
be done to help industry support DHS in meeting its mission 
more effectively. One is a socio-economic strategy that is 
planned. DHS does reach its goals. It has consistently gotten 
an A in its small business strategy. However, small businesses 
and DHS mission can benefit from a more planned strategy for 
engaging small businesses, so that the small businesses not 
only have work and DHS not only meets its goals, but in a very 
effective way for growing these small businesses and giving 
them work where they are maturing to large, successful 
businesses, not just managing a partnership of other large 
businesses.
    So a planned strategy and really strategically looking at 
how we can grow our economy and our small bridges structure. 
This also helps large businesses because if it is communicated 
early to them what is targeted for small businesses and what is 
not, it allows large businesses to more effectively plan what 
opportunities it may partner with DHS on.
    The second one I would like to talk about is market 
research. By DHS better letting industry know early about its 
operational requirements, the industry can target its 
investments, its independent research dollars to better 
position itself for supporting DHS in meeting its mission. This 
better investment will reduce technology risk. It will improve 
schedule. It drives down contract costs and shortens schedules. 
One thing we have to keep in mind is if businesses operate 
inefficiently, then the Federal Government through its taxpayer 
dollars ends up paying those costs as allowable costs under the 
contracting program. So we must have systems that allow 
businesses to be more effective so that it drives down their 
cost and drives down the Government's cost.
    Another way we can do this is through published acquisition 
schedules. We have to get better about communicating to 
industry what is going to happen when; when things are delayed 
so they can make more accurate hiring decisions, more accurate 
planning decisions; and, again, drive down their overhead costs 
so the Government doesn't end up having to absorb those costs 
in paying for contracts.
    Another area is good source selection. Very clearly stating 
the requirements, what is important to the Government in terms 
of best value, what does the Government want in terms of 
requirements, and then clearly evaluating and awarding 
contracts that are aligned with those proposals, this allows 
industry to best propose the optimum solution for that specific 
Government set and really helps both industry operate more 
effectively, but also for DHS to receive exactly what it wants 
and needs to deliver its mission. This is the best price and 
the most efficient performance of the contract requirements.
    To do this, DHS needs a strong workforce. We all know the 
challenges DHS has had with morale and recruiting, hiring 
retention. Some specific steps they could take to improve this 
is look at DHS civilian joint duty assignments, to both 
increase understanding but also increase morale and more the 
jointness of mission. Exercising their personnel flexibility 
and preparing the workforce for Presidential transition both 
from an administrative and operational succession planning 
standpoint, developing a workforce plan that will carry them 
not only now but through transition and into the future.
    I would like to also address the Joint Requirements Council 
and the Secretary's Unity of Effort. This is essential for 
going forward. Some of the building blocks of management are 
built. They need to be cross-integrated. The Unity of Effort 
will do this, implemented. Especially uniting the leadership 
through the two leadership bodies, the Senior Leadership 
Council and the Deputies' Management Action Group to drive that 
board of directors that Mr. Totonis mentioned.
    I look forward to talking with you and answering your 
questions. Thank you.
    [The prepared statement of Ms. Duke follows:]
                  Prepared Statement of Elaine C. Duke
                           September 18, 2015
    Chairman Perry, Ranking Member Watson Coleman, and Members of the 
subcommittee. Thank you for allowing me to testify today. Efficiency is 
a great goal, one that is never completely accomplished, yet one that 
can have great impact on mission delivery as incremental steps are 
made. As DHS matures in its business and mission, it is important that 
it continues to examine critical areas for continued efficiency.
    I served our country as a civil servant for 28 years, including the 
final 8 at Transportation Security Administration and Department of 
Homeland Security headquarters, retiring as the under secretary for 
management. As a civil servant, I understood the importance of 
continued efficiency to deliver the mission effectively and execute our 
fiduciary responsibility with taxpayer dollars. As a retired Federal 
employee, I continue supporting DHS in its efforts to be a more 
efficient Department. DHS is taking initiative to improve its 
efficiency, and I will highlight in my testimony the some of those 
areas that I believe most critical.
    Acquisition is a major area to address in DHS' effort to continue 
becoming more efficient. In acquisition, actions to increase efficiency 
in the Department of Homeland Security (DHS) often result in parallel 
efficiencies in industry. This allows industry to propose the best 
mission solutions at the best price. Some areas that DHS can continue 
to improve on include better communications overall, but specifically 
in the following areas:
    1. Socioeconomic Strategy.--DHS and its support industry could 
        benefit from a planned strategy to meet its small business 
        goals. A well-planned strategy will ensure that the right 
        contracts are set aside for small business participation, 
        helping small businesses obtain contracts that will benefit 
        them more in their growth, rather than just managing a 
        subcontractor team. Planning will also help businesses prepare 
        for upcoming new requirements and recompetitions. Early, clear 
        communication about the strategy will help small businesses 
        target their very scarce proposal resources toward 
        opportunities with the highest win probability. And those same 
        early, clear communications will help large businesses make 
        decisions and avoid investments in preparing for acquisitions 
        that will be set aside for small business.
    2. Market Research.--DHS can enhance improve acquisition efficiency 
        by conducting more market research earlier in the acquisition 
        process. When industry knows what requirements may be coming in 
        the future, and knows what the DHS mission priorities are, 
        industry can best allocate its investment dollars to build 
        capabilities to meet DHS needs. Better investment reduces both 
        technology and performance risk, and drives down contract cost 
        and shortens schedule.
    3. Published Acquisition Schedules.--DHS should more routinely 
        publish schedules with dates for acquisition programs and 
        contracts, and update those schedules regularly. Usually 
        synopsis notices and draft or final request for proposals are 
        posted in Federal Business Opportunities. When industry sees 
        those dates, it begins assembling and mobilizing proposal 
        teams. It also begins hiring key personnel. Often those dates 
        slip and aren't updated. That forces industry to make decisions 
        about holding teams, or dismissing them. That increases 
        overhead, which in turn increases the labor rate Government 
        pays for its services. Better communications will provide 
        critical information for industry to act efficiently in 
        supporting DHS.
    4. Good Source Selection.--Requests for proposals and quotations 
        must be clear and accurate in both the requirements and the 
        source selection plan. The solicitation document must clearly 
        State what the requirement is, especially in a fixed-price 
        contract. Without that, there is increased risk on the 
        contractor, and industry must reflect that risk in higher 
        prices. That is especially true on fixed-price contracts. 
        Additionally, the solicitation document must clearly state how 
        the proposal will be evaluated and rate according to the stated 
        criteria. When the proposal states that technical is much more 
        important than price, and that innovation is desired, industry 
        will design its proposal around that criteria. Yet often award 
        is to the lowest price offertory due to budget and other 
        concerns. If that is the case, the solicitation should align 
        with the strategy and accurately inform industry so it can 
        accurately structure its proposal. And that results in the best 
        price and efficient performance of the contract requirements.
    Effective and efficient mission delivery requires a good DHS 
workforce. A critical area for continued efficiency is workforce 
management. This includes recruitment, hiring, and retention. DHS would 
benefit from focused efforts improve the DHS workforce and therefore 
improve mission efficiency. Some initiatives to drive efficiency 
include:
    1. Make better use special personnel flexibilities for recruiting, 
        hiring, and retaining critical talent, including members of the 
        acquisition, intelligence, and cyber workforce.--DHS has the 
        authority to establish ``Excepted Service'' for certain 
        components, and this help them more efficiently compete for and 
        retain critical employees. This is especially true in competing 
        for talent with DOD and the intelligence community, as well as 
        private industry.
    2. Institute DHS Civilian Joint Duty assignments.--This will help 
        build a DHS senior workforce that will drive an integrated 
        mission and improve DHS efficiency. This concept was approved 
        by Secretary Johnson in June, and implementing it quickly would 
        be very beneficial to the workforce and result in joint mission 
        efficiencies.
    3. Prepare the workforce for Presidential Transition.--This will 
        position DHS to efficiently delivery mission as the country and 
        Department transition to a new administration. Key steps that 
        DHS can take now include succession planning and operational 
        exercises.
    4. Develop a Workplace Plan.--Elements of the plan should include:
        a. Specific action and milestone for dealing with the lingering 
            employee morale issue
        b. Workforce measures and analytics for key areas such as 
            morale, staffing levels, performance management
        c. DHS Workforce of the Future modeling
        d. Talent Management Strategy, including: Recruiting, staffing, 
            developing, performance management and retaining talent.
    Along with workforce management, DHS must also address its security 
clearance, suitability, and on-boarding processes for both its own and 
contractor employees. The long lead times, duplicity between the 
clearance and suitability processes, and lack of reciprocity between 
DHS components is very costly both in terms of time and cost of 
investigations. Additionally, it delays the time that employees can 
report to work, further degrading the efficiency of offices waiting for 
key staff and contractor support.
    Another area where DHS can continue to improve its efficiencies is 
through Secretary Johnson's Unity of Effort, especially the Joint 
Requirements Council. This is important for several reasons. First, the 
Senior Leadership Council (SLC) and Deputies Management Action Group 
(DMAG) are setting the tone for the Department. That tone is one that 
respects each operating component's individual mission areas, but also 
drives integration and joint focus on the DHS mission set. Second, the 
need to continue to make ``back office'' functions more efficient is an 
imperative. DHS cannot sustain an expensive support structure and 
effectively meet its current mission obligations. It must continue to 
reduce overhead in key area such as duplicative information technology 
systems, facilities and related support services, and acquisition, 
operation, and sustainment of key DHS mission assets and systems.
    Thank you for the opportunity to testify. I look forward to your 
questions.

    Mr. Perry. Thank you, Ms. Duke.
    I guess it is my turn to ask questions. So without the 
formality of it all, I am going to start with Mr. Pearl. There 
is a whole a lot to digest in your testimony quickly. There are 
some lists there, putting some concepts together and I realize 
how complicated it is. You said something that I found 
particularly interesting, Mr. Pearl, that Congress has a part 
to play in this, right? Of all the things that we can affect or 
not affect, it seems like that might be an obvious place for us 
to start.
    So with that, you said there are numerous committees of 
oversight, requirements, and so on and so forth. I don't think 
anybody here wants to be in the way, right? We are trying to 
make things better. Can you give us some specific examples? Do 
you have specific examples? I imagine you do. I am thinking you 
do. But can you think of some specific examples for us, things 
that we should be working on where we can actually affect this?
    Mr. Pearl. Well, this is an issue that has been discussed 
with Chairman King, with Chairman Thompson, with Chairman 
McCaul, from the time that this was a select committee to the 
time it became a permanent committee. Relinquishing territorial 
imperative on the part of your colleagues in any Congress is 
difficult.
    I think it is estimated that over, about 108 committees and 
subcommittees in the Senate and the House have, in essence, 
attached jurisdiction to some aspects of the homeland security 
enterprise agenda, quite rightfully so in certain areas where 
it may be in transportation or energy with regard to water 
supply or food safety when it is USDA. But sometimes that goes 
beyond. There are ways in which those discussions with 
leadership at least should take place in terms of how can we 
consolidate.
    Should every subcommittee of every non-jurisdictional 
committee have, you know, be able to hold a hearing and call, 
in essence, folks from the Hill, and I was on a number when 
Elaine Duke was the under secretary and deputy, we were on 
panels together and knew that she was testifying.
    Every one at every level of DHS is always asked to testify. 
That takes staff time to, in essence, prepare the testimony. 
There isn't that sense of coordination and efficiency within 
the Congress. What this committee overall can do to that is a 
discussion that is beyond, you know, my pay grade and maybe 
even of the subcommittee's responsibility. But this is an 
oversight committee. Part of that comes with recommendations 
and urging discussion.
    So I would just simply say that it would behoove the 
subcommittee to at least ask for the opportunity to have 
discussions that could help consolidate to greater efficiencies 
within a Department that, in and of itself, is pulled all over 
this place with this unity, with whatever the common culture 
that we are all trying to build is going to be preventing.
    So I raise it not that this subcommittee is going to be 
able to fix it, but raise it because I think it is worthwhile 
for a discourse within the leadership of the United States 
Congress.
    Mr. Perry. I agree with you. But you certainly can 
understand that since it affects these other jurisdictions, 
that they feel in the duty of oversight that there is a nexus 
there. However, I think it is probably important that we visit 
and revisit the issue to make sure that we are being prudent in 
what we do. It is not just for show. It is meaningful. It is 
not wasting time and resources. So I think it is a great point 
to make.
    Mr. Pearl. I would only say, Mr. Chairman, that, and Mr. 
Totonis from BENS and the Business Executives for National 
Security have looked at this from a National security 
standpoint, in terms of DOD, and how it has been able to have 
more consolidation and not every committee and subcommittee in 
the United States Congress can assert jurisdiction.
    Mr. Perry. Right. So it can be done. But there has got to 
be the will. I get that. I have questions for everybody but my 
time is running out. So I am going to stick with you, Mr. 
Pearl. We will see if there is second round.
    When you talked about the separate agency processes and 
that they each have their process. Of course, it is hard to 
impose your will, so to speak, as the larger organization over 
the smaller one. What is your recommendation, where is the cart 
and where is the horse? Who is first and maybe one example of 
that, like where do you start I guess is maybe the better way 
to put the question?
    Mr. Pearl. This is something that, in fact, Elaine Duke and 
I have talked about continually, in terms of is there, in 
essence, a common operating platform within research and 
development? Is there a common operating platform with regard 
to acquisition? If every single component can do its own 
acquisition process without any, without anybody kind-of 
overseeing it to coordinate it, if every single component can 
do its own research and development without anyone from Science 
and Technology Directorate to be able to kind of impose a sense 
of coordination coming from the Secretary, then people are 
going to do what they think is best.
    This is not a nefarious approach. It is just that they 
think their culture, their way of doing it is the best. I am 
not saying the Coast Guard has it right all the time or that 
Secret Service or FEMA or CBP or TSA has it right all the time. 
But what we are saying is that part of the problem is, as I 
pointed out, is there are some good things happening in various 
components. There is, there seems to be if not a reluctance, at 
least a challenge in trying to, in essence, take those models 
of best practices in acquisition, in research and development, 
in program planning, whatever it might be, and try to bridge 
that to other components so that everyone can begin the process 
of meeting what Secretary Johnson calls a Unity of Effort or 
what, in fact, Secretary Ridge called, you know, a DHS 2.0 or 
``One DHS'' of Secretary Napolitano.
    We want to see these, as I said in my statement, more than 
just become logos. We want to see the aspirations of a 
Secretary become truly operational enterprise-wide.
    Mr. Perry. It makes sense. It may be too big of a job for 
one individual over the course of the tenure to get there. With 
that in mind, it would be interesting from your perspective to 
get a prioritization, if it is acquisition should be first, if 
it is R&D, which one should be first? Then, you know, try and 
look at the process for getting that. But that might be time 
for another discussion or a continued discussion. I appreciate 
your time.
    Mr. Pearl. Thank you.
    Mr. Perry. At this time, I am going to turn to the Ranking 
Member, Ms. Watson Coleman.
    Mrs. Watson Coleman. Thank you, Mr. Chairman. Thank you 
very much for your testimony. It is really quite illuminating. 
You kind-of connected the things and themes that we have heard 
consistently.
    I want to ask you, I have got a million questions too but I 
am going to start--is everyone aware of the Secretary's Unity 
of Effort and what that means and what he intends? Can you tell 
me whether or not you think that Unity of Effort as it is 
conceived, addresses the deficiencies that and the expectations 
of a better outcome in the Department?
    Can you just tell me yes or no, do you think it is 
efficient? Do you think it is missing a mark anywhere? Because 
I would like to start from there.
    Mr. Pearl. Let me just say the following, in my testimony, 
I say that we are, as an organization, very supportive of the 
essence of the aspirations of the Unity of Effort and things as 
has been discussed, the Joint Requirements Council, the DMAG, 
the task forces, the Southern Border Campaign. Those are 
important things.
    But in the 18 months or less that we have left under this 
particular administration at the Department of Homeland 
Security, we want it to become a foundation, a legacy, so that 
it doesn't, we don't just go to the next logo of the next 
Secretary. So yes----
    Mrs. Watson Coleman. That is where I am trying to go.
    Mr. Pearl. It provides a foundation.
    Mrs. Watson Coleman. We believe that this provides the 
foundation, that it addresses the issues, and will help this 
Department to operate more effectively, and efficiently and----
    Mr. Pearl. It could.
    Mrs. Watson Coleman. Okay.
    Mr. Totonis. It is also a matter of execution. It sounds 
great. It is the right mission. The devil is in the details, 
you know, how do you take that and actually execute it?
    Mrs. Watson Coleman. What I don't know is under this Unity 
of Effort, are there like goals and time tables? Do we have any 
indication whether or not the Secretary feels that certain 
goals are being achieved within the time frames?
    Ms. Duke. I do know that they have identified specific 
groups for the Joint Requirements, the Secretary has chartered 
five groups. I do not know if they have specific time tables. I 
do know through the Senior Leadership Council and the Deputies' 
Management Action Group they are tracking those and they are 
meeting regularly. I think that is a huge step forward for the 
leadership of DHS to be acting unified.
    That is a change. But they have to do something and they 
have to do it quickly. I think in terms of priorities, it 
should be something in the infrastructure area, whether it is 
facilities or IT.
    Mrs. Watson Coleman. So is there something, taking on what 
the Chairman said, is there something that we should be doing, 
if we agree that this effort that is there, this vision that is 
there, represents the sort-of best pathway for the Department 
and its various components to move forward, is there something 
that we should be doing now, thinking and doing right now to 
ensure that we don't go off track into some different area when 
the next President comes, that there is some continuity and 
some building that takes place, just asking?
    Mr. Pearl. Absolutely. I think that the nature of the 
existence of an oversight committee and a management and 
oversight subcommittee can go to, for example, the chief 
procurement officer has a very important acquisition, 
innovation in motion product right now. I hope that it has been 
shared with members of your staff. That goal, that aspiration 
should be reported back to you as to how, in essence, it is 
moving forward.
    What the Joint Requirements Council, the re-energization, I 
mean, it was there before, Admiral Allen was the chairman of it 
at the time years ago. It is now back in place. We would very 
much like to see after a year or so what progress is being 
made.
    Industry is looking for that as well, Madam Watson Coleman. 
We want to know what progress is being made and if Congress 
through the Oversight Subcommittee can, in essence, get their 
feet to the fire, we would very much appreciate it.
    Mrs. Watson Coleman. I am going to want to know a few more 
things as we move forward. One of the things that I want to 
know right now is you said something about the vetting of 
contractors.
    If one element, one component vets a contractor, why isn't 
that vetting appropriate for the other components that would 
use the same contractor? My question is: Is that part of the 
Unity of Effort?
    Ms. Duke. It is part of the Unity of Effort. I know it has 
got the attention of DHS leadership. I strongly think that is 
one that can very much help. It has to do with clearance versus 
suitability. Each component has its own suitability process. 
They recognize the clearance. That is something that DHS can 
work within itself.
    Mrs. Watson Coleman. I yield back. Thank you.
    Mr. Perry. The Chair thanks the gentlelady. The Chair now 
recognizes the gentleman, Mr. Duncan, for questions.
    Mr. Duncan. I thank the Chairman. Thanks for continuing the 
work we started in the last Congress on this effort. It is 
important that the agency really start adopting the best 
management practices and best practices in general of the 
private sector. They work in the private sector because they 
work in the private sector.
    One year ago, the Department of Homeland Security embarked 
on Secretary Jeh Johnson's Unity of Effort which we have heard 
about today. Something that I support. I mean, I think it is 
the right, I supported it then, I support it now, I think the 
right, at least, mindset of trying to bring this massive new 
Government agency that is still in its infancy in a lot of 
ways, relatively speaking, into a One DHS which I think Janet 
Napolitano started but with the right mindset.
    But it just can't seem to grab a foothold and actually take 
off. The best-laid plans, and I think this is, I say it to 
Secretary Johnson, I think it is the right mindset for managing 
the agency that, look, we are One DHS, we are not 22 separate 
components, we have got to start acting as One DHS, we have got 
to start working together.
    It comes to similar contracts, similar approaches to 
outsourcing operations, and with the vendors. So I will say 
this, in April 2015, the Center for Strategic and International 
Studies' publication listed cultural resistance as one of three 
overarching challenges to the Unity of Effort initiative. This 
document stated there appears to be strong cultural resistance 
to approaching homeland security in a cohesive, unified fashion 
across the Department's components and office.
    I have been here 4\1/2\ years. We have heard that over and 
over and over. I was on the OME subcommittee before I chaired 
it in the last Congress. I am back on it again. This is a 
continual theme. You would think after 14 years since this 
agency has been stood up or 12 years, whatever it is, that we 
still wouldn't be having these challenges of the individual 
components still holding onto their identity.
    Because the Nation suffers, National security suffers when 
we don't have that. I will ask Mr. Totonis, how would you 
recommend the Department resolve the remaining cultural issues 
with the consolidation of the 22 preexisting component 
agencies? I mean how do we get to that One DHS mindset?
    Mr. Totonis. Well, to stay on that point, from a public--as 
a CEO of a company, if I faced the same set of issues, the way 
I would approach it, if my board and my shareholders said the 
Unity of Effort is the thing we need to execute, my 
responsibility would be to execute it. So that means I would 
communicate my goals and objectives throughout the organization 
so everybody in the organization understands that this is the 
issue.
    If we did not make progress, I would make the changes in my 
executive managers, as well as my mid-level managers, and bring 
in the people that understand that this is mission No. 1.
    Mr. Duncan. Let me just interject this, because we see a 
lot of corporate takeovers but we see a lot of mergers. I think 
this was both. This was a corporate takeover in the fact that 
the committee in Congress, Congress in general said we are 
going to bring all these agencies together into one big DHS 
because we felt like at that time it was the right thing for 
the Nation to have everyone talking to each other, to have them 
working on the same page for the same goal and that is the 
safety and security of the Nation. So that was a corporate 
takeover.
    But in a lot of ways it was also a merger because, by 
golly, we are all Americans and we are all part of the American 
Government that all have the same goal of securing the country. 
So it is really a blend of corporate takeover and merger. It 
happens every day in the world. Has DHS talked with the 
companies that have been very successful in mergers and 
takeovers to find out how do you bring these two, before the 
merger, separate identities together to start riding for the 
brand, the new brand?
    Mr. Totonis. One other challenge, is that, if I think about 
corporate mergers, in corporate mergers, you would never merge 
organizations that are very different. One of the questions 
that I have in my mind in bringing in the 22 different agencies 
is there is so much diversity that it is hard to merge those 
entities together.
    Mr. Duncan. I don't disagree with you there. I mean, 
American Airlines and US Air were both airlines, right?
    Mr. Totonis. Right.
    Mr. Duncan. It is just a matter of which cup you are going 
to use, and which fuel you are going to use and which vendor, I 
get some of that.
    Mr. Totonis. Exactly.
    Mr. Duncan. But the ultimate goal is the same for everybody 
that merged into this, right, is the safety and security of the 
company. You don't think so? Mr. Pearl, I will let you jump in. 
If you don't think the safety and security of our Nation is the 
same goal between 22 components, then we need to have a talk.
    Mr. Pearl. No. No. That is an overarching goal. But when 
you have the different cultures of what your responsibility 
are, you have groups that are law enforcement organizations, 
you have emergency management groups there, you have different 
motivations for getting to that goal. Not every merger, Time-
Warner and AOL, even they may be in, ``communication,'' is 
going to work out. The question becomes how do you get to a 
joint common operating platform with the right people? That is 
something that Elaine Duke and her predecessors and successors 
through the management tried to do and continues to work on.
    But there are so many exigencies, there are so many, in 
essence, pushes and challenges that sometimes you stay in your 
swim lane and you do what you have to do and it is very 
difficult in the beltway of Washington to get there. We see it, 
however, we see it going on on ground in Nogales, in Otay Mesa, 
in the Pacific Northwest, in Miami, in the Keys, we see this 
kind of coordination of all of the agencies and components 
working together? That doesn't always translate to the policy 
people.
    Mr. Duncan. I agree with what you are saying. Mr. Chairman, 
I would end with this, I know I am over my time. But when you 
see those mergers like AOL and Time-Warner, whoever, what you 
also see is strong leadership that sets a vision for that 
merger and the ability of those less than senior management 
officials and senior management to actually fire people that 
aren't willing to ride for the brand, that are creating some of 
that friction.
    That is the problem with Government is it is not easy 
enough to let people go that don't have the right mindset, that 
are not doing the job. It is not just DHS, this is across the 
State Department, all the other Government agencies. We don't 
have the ability to fire people that need to be fired, right? 
So, Mr. Chairman, I yield back. I thank you for the leniency.
    Mr. Perry. The Chair thanks the gentleman from South 
Carolina. The Chair now recognizes the gentlelady from 
California, Ms. Torres.
    Mrs. Torres. Thank you, Mr. Chairman. Good morning to the 
three witnesses. Thank you for being here.
    I want to go back to the statements of employee morale 
because I specifically think that it is extremely important to 
ensure that the people that are in charge of our security, you 
know, are working under conditions that, No. 1, they are 
receiving the proper training they need for their specific job 
function. No. 2, their task is not simply to come here and 
report to committee after committee after committee.
    What has been the response, you know, from our committees 
of jurisdiction, what has been the outcome of number of hours 
that you have had to come here, prepare, and present report 
after report? Have you seen anything come out of, from us, I 
mean, what is our, what would be our grade level I would say, 
how would you grade?
    I know that I am putting you in a very difficult position. 
But oversight is very important. But when you have to report 
to, you know, 20-some committees, it takes a toll on employees. 
It takes a toll on you and your work.
    Ms. Duke. I would say that it was challenging. It is very 
time-consuming. It is much easier to prepare for a hearing when 
you are not going through the clearance process. I would say 
two things that the Oversight Committee could do to help DHS in 
its path that I believe is going in the right direction.
    One is recognize the positive. I do think that some of the, 
as they are called, bureaucrats, which to me is a positive 
thing, they are serving their country as civil servants, have 
been beaten down in a lot of ways. When good does happen, 
whether it is jointness, whether it is service, for the 
committee and the DHS leadership to recognize that.
    Mrs. Torres. Can I interrupt you for 1 minute? With that 
statement, I want you to address the OPM's 2014 Federal 
Employee Viewpoint Survey that ranked--37 of our agencies had 
the lowest morale ranking.
    Ms. Duke. Right. I think it is three-fold. One is the DHS 
mission isn't loved by everyone. It has the public interface 
that my fellow witnesses talked about. The work is difficult. 
There are a lot of American citizens that don't value the work.
    I think, second, it is a 24/7 operation that is very 
tiring. But most people, most of the civil servants that work 
in DHS are passionate about serving their country. That is what 
we have to build on. I think communication is key from the 
Secretary on down and recognizing the positive. As we just 
heard, dealing with the negative, dealing with people that 
don't perform is very important.
    But I think that recognizing, to try to offset some of the 
negative of the mission of DHS would be hugely positive in 
going forward. I think this committee, and I think working in a 
bipartisan manner, as this committee does often, really helps. 
I think that hearings, it is very difficult to actually move 
forward. They are necessary but they don't really solve the 
problems.
    I think that this leadership is very willing to talk to the 
committees. I found when I was a civil servant that when I 
could meet with the staff or Members and really talk through 
issues, that really was useful in moving things forward. So I 
think the transparency of this leadership could really help the 
committee in partnering with the Department and moving some key 
things forward.
    Mrs. Torres. What steps can DHS HQ and its components 
undertake to ensure that its IT personnel is properly trained 
and is ready to support the Department's new IT broker model?
    Ms. Duke. I think that, No. 1, taking advantage of some of 
the hiring flexibilities. It needs to have an existing 
workforce that knows DHS. It needs to bring in some of the 
cutting edge for both cyber and IT operations.
    Mrs. Torres. Because we have two models, right, the old 
legacy and the new, that we have to incorporate people that 
have only been trained under this model?
    Ms. Duke. Right. Right. I think that the blended workforce, 
the old and the new, brings the best of both. Understanding the 
specific nuances of operating an IT system in a Federal sector 
with bringing in the new best practices for cyber protection 
for agile-type deployment of IT upgrades, those type of things 
can partner together.
    Mrs. Torres. Thank you, Mr. Chairman. I yield back.
    Mr. Perry. The Chair thanks the gentlelady. The Chair now 
recognizes his good friend from Florida, Mr. Clawson.
    Mr. Clawson. Thank you. Thank you for coming today.
    So I have been coming for about a year. Let me give you a 
bit of a summary of what I hear because bits and pieces of what 
you all say we hear on the committees and subcommittees. There 
is a morale issue, too many meetings and reviews like this, the 
mission is not totally understood, financial data is generally 
unavailable, unaudited, no audited financial data, no 
operational data that I know of, but we need more money and 
more capital. What planet am I living on? I am accustomed to a 
minimum amount of data, not qualitative opinions.
    I don't doubt what you all are saying at all. But I am now 
at a year with no operational metrics, none. I am told that I 
need to vote for more money and that is the way to keep the 
country safe. Does that seem fair? Does that seem fair? Is that 
fair to the taxpayer? We won't give you any data. You make us 
come in here too much. If you don't give us the money, the 
country is not safe.
    The Secretary, Mr. Johnson, I have asked for the same 
thing, just a little bit of data. So it feels that the 
complaints about morale, lack of money, too many reviews, with 
no data for us at all from the Department feels like a 
diversion and unfair.
    I don't mean to be partisan at all. I would love to know 
what they are doing. What is the return on investment for the 
taxpayer who is putting the money in the bucket? We want to 
talk about morale, let's talk about morale for the taxpayer. 
How are we doing with the money? It may be great. But how do I 
know if all I get is opinions?
    You used to work there. Mr. Pearl, you are very 
experienced. I have been here a year now. I would love to see 
some operational data. You said it is too decentralized. Well, 
give me what you got. I don't want to make this a lecture. I 
feel like I am wasting my time too. You feel like you're 
wasting your time. I get to come to these meetings and get no 
data.
    I am in some alternative universe of billions of dollars 
being spent and no data to protect the people giving us money. 
Then we are going to talk about morale, not having enough. I 
say morale is based on performance. That is a big input. If we 
have no performance data, how do I know? How do I know? So what 
do we do? You give me advice. What do we do at this level to 
get some level of operational data so we know how people are 
doing?
    I like the whole idea of unified vision, unified purpose, a 
bit of unified data so I can tell how the progress is going, 
versus metrics, would be helpful. I just get so tired of coming 
down here and never getting any hard data, not even audited 
financial statements.
    I'm sorry I went on so long. You all are no longer with the 
agency. How do we get just a little bit of operational data so 
we know how things really are as opposed to opinions and 
qualitative stuff? Mr. Pearl? Ms. Duke? I'm sorry I am 
emotional about it but it just feels, we are just getting the 
same rut over and over.
    Mr. Pearl. Mr. Clawson, let me just try to take a stab at 
this in a small way. No. 1, there was nothing in my written 
testimony, other than just we need to look at the question of 
tamping down the budget and what that brings to strategy, with 
whatever the dollars are. We did not ask for any more money. I 
am not in a position I don't----
    Mr. Clawson. I am not implying that you did.
    Mr. Pearl. No. No. I understand.
    Mr. Clawson. You understand, I get asked for money, and I 
get no data back when I ask how we are doing. That is a weird 
world.
    Mr. Pearl. I get the same response from my children. You 
know, what are you going to use it for? I don't mean to say 
that facetiously.
    I think the question is when we look at the work of this 
subcommittee and the topic of this particular hearing, what we 
are trying to address are issues separate and apart from where 
the dollars are or how much dollars there are going to be. The 
efforts on what the Secretary is trying to do and his 
predecessors are trying to do is within these various cultures 
that are different and diffuse and all over the place, how can 
we begin the process of bringing a horizontal to these--some 
people call them silos, some others call them cylinders of 
excellence, to these components that exist? If we can begin to 
do that within the budget framework that exists, I think you 
will get there.
    A year ago December, you know, in talking with Elaine 
Duke's successor, Under Secretary Rafael Borras, there was a 
clean audit that came through for the first time since the 
Department--that did come through, and I urge you to look at 
those, that as part of a first step. It is not--doesn't answer 
every one of your questions.
    In short, what this oversight subcommittee can do, what 
industry organizations like ours are trying to do is work with 
the Department to identify the things that are working; ask 
for, as Ms. Duke said, the positives that are working and 
various components, and let us try to, in essence, replicate 
that across the entire enterprise. If we can begin to do that, 
then you will get the answers----
    Mr. Clawson. But how do we know what is working if we have 
no data?
    Mr. Pearl. Well, I----
    Ms. Duke. I think, Mr. Clawson, that I would separate 
employee morale and budget. I do think you need data, I 
absolutely think that, and I think it is important both for DHS 
and the oversight committees to operate on data.
    Hopefully the left-hand side of Unity of Effort can 
identify that, by identifying what mission sets they have, by 
identifying the capability gaps and actually being able to come 
through the appropriations process and show what they are 
performing and what they need in terms of delivering the gaps 
in that mission set. So that is imperative.
    I don't think that is relevant on the morale issue, because 
most civil servants don't--they come to it for the value of the 
mission. I think that, especially at the junior grade, it is 
not a budget issue; it is an issue of feeling that the work 
they do is important and valued, and then the communication 
comes down. So I think they are both important issues.
    Mr. Clawson. I agree morale is important, of course, I do. 
But I think in any organization, a scoreboard to see how you 
are doing might have some sort of impact on morale either up or 
down.
    Mr. Totonis. Mr. Clawson, I think your request of getting 
the data is an important one. I am not part of the Government. 
I am much in the public sector. What I don't understand is why 
don't you have the data? The data exists. The only--my 
perspective is, as a CEO, if my board said, get me the data, 
they would have the data in the next 24 hours.
    Mr. Clawson. I spent 12 years as an international CEO. I am 
appalled by how little data I get as a board member. I can't 
criticize or compliment management if I don't know anything, 
and I don't know anything.
    Ms. Duke, I don't dispute that there is a morale problem, 
but if I don't know anything, how is my opinion valid?
    Mr. Totonis. So why is DHS not giving you the data?
    Mr. Clawson. Sorry. I yield back. Sorry.
    Mr. Totonis. So why is DHS not giving you the data?
    Mr. Perry. I think it is a great discussion, but in the 
interest of time and other Members, maybe there could be a 
conversation between Mr. Clawson and yourself personally and 
your staff to the gentleman from Florida, because if the data 
is available, it sure seems like we should have that. There is 
a genuine frustration without having it to determine where we 
are. So I think it is a point well made and worthy of follow-
up.
    That having been said, the Chair thanks the gentleman, and 
recognizes the gentleman from Georgia, Mr. Loudermilk.
    Mr. Loudermilk. Thank you, Mr. Chairman. I want to pick up 
on the morale issue. I have seen, in most organizations that I 
have been in, I was in the military, I worked in an environment 
that was a very mission-critical environment. In intelligence, 
you were in a position where you didn't get a lot of public 
accolades, because of a lot of what you did never happened. I 
expect the same thing in the Department of Homeland Security. 
Much of what we avoid never gets out to the public.
    But as was mentioned, morale, from what I have seen, is 
based on commitment to the mission, having the tools to 
complete the mission, and self-gratification that you are doing 
something for the Nation.
    I have also seen that in most efficiently-run 
organizations, there is high morale, and it is the ``boots on 
the ground'' that have the best ideas and solutions to make the 
organization more efficient because of their commitment to the 
mission.
    So I am greatly concerned that the concern that you guys 
are having and that I am having of how low the morale is in the 
Department of Homeland Security. In fact, there was a study, 
2014 Partnership for Public Service Best Places to Work 
rankings, and DHS was last. Especially with a critical mission 
of National security, I would expect it to be not dead last, 
but near the top. Because, again, the motivation factor and the 
morale is a lot driven by the mission that you have.
    I have also experienced that when there is low morale, it 
is a management issue. A lot of times, it is politics that are 
overriding the mission. A lot of times it is management seeking 
promotion of themselves, not promoting the mission to the 
people. I have been to the border, and I have seen the 
frustration of Border Patrol of accomplishing their mission of 
stopping people from coming across the border just to have them 
released back into society. They are risking their life to do a 
mission, but they can't accomplish the mission because of 
politics.
    Can any of you give us an idea? Am I on track? Is the 
morale as bad as we are anticipating? What is the problem so we 
can, hopefully, together come up with a solution?
    Mr. Pearl. If I can, and I am sure there will be multiple 
opinions, just briefly. What goes on within the beltway of 
Washington by the people who are involved in policy and program 
is sometimes disconnected from the boots on the ground.
    So for that reason, about 5 or 6 years ago, we began to 
take our senior executives out to those folks that are working 
the land borders and sea borders and airports across the entire 
plain. What we found is, is morale is extremely high. The 
people that are doing the work, no matter what rubber band or 
gun is sent from Washington, they are going to make it work, 
and they are extremely tied to the mission. That is at least 
part of what we saw, the people that are doing the work that we 
have asked them to do.
    There is no question that this is not really a morale 
issue, certainly, that I talked about today. It was really 
about how do we train people to feel that they are getting the 
skill sets that they need in order to do their job. That is 
what--if there is any ``complaint'' that we have heard from 
people who are doing acquisition work, who are doing program 
work across the board is that they want to get trained; they 
want to raise their level of skill set because they entered 
this field in the first place for altruistic reasons, and that 
remains. They really do want to serve the country in no way 
different than the person who puts on a uniform.
    So from that standpoint, our perception is that I think it 
is a little bit further to the right, you know, to the center 
of a better-run agency when the people on the ground feel that 
way and you have things like what Secretary Johnson has put 
forward and his leadership has put forward, which is a 
structure by which they can work within that. Mr. Totonis 
talked about, now the question is, how do you implement that?
    I talked about, how do you bridge the gap between 
aspirations and actual operation? That is what industry is 
working with Government about. We are working very closely with 
them. We just launched what we call a 2020 vision project that 
is going to look at what the state of Homeland Security is, not 
just now but in the year 2020. We have to look ahead to see 
what that Department is going to look like. We are all in it 
together, the Congress, the Department, and industry.
    Mr. Loudermilk. Ms. Duke, could you respond to that 
question as well?
    Ms. Duke. Yes. My personal experience is part of the morale 
is feeling disenfranchised. They do have pride in their work, 
but my experience is it is more politicized in DHS. More 
issues--and I did work in DOD also. More issues that you 
wouldn't think would be political, are political.
    So the role of the--especially, the senior executives, the 
supervisors, it is hard to connect in terms of them feeling 
part of the mission, because a lot of the mission set and a lot 
of the decisions are made politically and not by--as much by 
the senior civil servants as was my experience in DOD.
    Mr. Loudermilk. Okay. I would like to continue this on, Mr. 
Chairman, but in respect of the time, I see that my time has 
expired, so I yield back.
    Mr. Perry. The Chair thanks the gentleman. With your 
indulgence, I think we will try for a second round, if you are 
interested in sticking around, and of course if the witnesses 
are, at least up until the time of votes if that occurs.
    I would like to start another line of questioning with Ms. 
Duke. You mentioned in your statement something I found a 
little bit intriguing. I don't mean to be naive about the 
situation, but Presidential transition, can you give us 
specifics of what you were thinking and what we can expect and 
what the potential pitfalls are and what the trepidation, 
apparently, is in regard to this?
    Ms. Duke. Well, the person in DHS charged with leading the 
Presidential transition is the under secretary for management. 
So I did it for President Obama. DHS has about 200 political 
appointees, which you lose.
    Also, during transition, if the future is like the past, 
there is a heightened sense of terrorist potential insecurity. 
So DHS employees have a daily role. They have to sit at their 
desk and do their role. But during transition are they ready 
for the heightened state of security and the possibility of an 
act of terrorism while they are missing 200 of their most 
senior leaders.
    We will probably start losing the political appointees in 
August, September of next year, so you have really a 6-month 
period there. So is everybody ready and prepared from an 
operational standpoint to perform and to carry the Department 
administratively through that time?
    Mr. Perry. So employees in anticipation, your senior 
management starts departing; they don't wait until the last 
minute----
    Ms. Duke. Correct.
    Mr. Perry [continuing]. Which is understandable completely. 
Those who are left in the agency that have been doing the nuts 
and bolts work, the not at-will employees, so to speak, they 
are nonpolitical employees, are left holding the bag.
    What is you--do you have a recommended solution set, or is 
it just the reality of, you know, do we just accept it and try 
to make the best of it?
    Ms. Duke. My recommended solution is that Under Secretary 
Deyo prepares as the leader of transition, but has a career 
team in, because he will be submitting his resignation, and 
whether the new President accepts it or not, but just in case 
he does, that you have a career team.
    Putting them together and exercising them right now, making 
sure they know each other, making sure they know their roles, 
you know, some of the basics, reach each other on an 
operational status.
    Mr. Perry. So that is your proposed solution set. Is that 
occurring?
    Ms. Duke. I believe it is. Also having succession planning 
in place. But, yes, I believe they are starting now.
    Mr. Perry. I mean, is that something that we should ask, 
particularly, as an oversight body, or do we make the 
presumption? You know, again, we don't want to unnecessarily 
drag people in for a hearing, but quite honestly, from my 
perspective, sending a letter, I won't say we--we do get a 
response. We get responses that are often, I hate to say it, 
untimely. Even more to the point, they are political, and they 
don't really answer the question, which is why we are compelled 
to drag people in, because we feel like that if we are face-to-
face, we can finally you know, pin somebody down, and say, come 
on, quit playing words to hide the ball here, give me the 
answer.
    So is this an innocuous enough question, I guess, to 
believe that if we make the request, we will get an honest 
answer and in a timely fashion?
    Ms. Duke. My interaction with Under Secretary Deyo is that 
you would, and that he could tell you who he is naming as his 
career lead, and that they would be willing to talk to you. I 
believe it is worth a try.
    Mr. Perry. All right. Thank you for that.
    Let me see. I just got so focused on the answer to that, 
that I didn't think about all my other notes here.
    Let me tell you what, in the interest of time, I am going 
to turn to the gentlelady, if you are interested and prepared.
    Mrs. Watson Coleman. Thank you very much.
    Mr. Perry. Yes, Ma'am.
    Mrs. Watson Coleman. First of all, every department in 
Federal Government experiences a transition. But for some 
reason, it has a harsher impact in this Department, because 
this Department has not really jelled yet with all of its 
various components. Is that accurate? Plus its mission.
    Ms. Duke. Right. I think partly because its mission is 
diverse and most of the operational instance have been natural 
disasters, not acts of terrorism, which has a little bit 
different operational response. I think some of the--the 
geographic dispersion of especially the senior leaders, they 
don't have that daily contact that you have in the Pentagon 
where you kind of run into each other.
    Being all over the--not having an operational center that 
they meet in regularly. Even natural disasters are handled from 
different operation centers. FEMA has its own, because we don't 
have the vision of the St. E's Op Center that we had. So I 
think that that makes them not prepared. There aren't as many 
exercises in DHS that you might have in some other operational 
agencies. I think that is really important.
    Mrs. Watson Coleman. So the complex, is it St. Elizabeth, 
that would be the proposal to bring all these series of 
entities together, right? It is really important that we kind-
of stay focused on that.
    Mr. Loudermilk, he spoke something that I had just been 
thinking. It is sometimes hard to defend how efficient the 
Department has been in certain areas, not the natural disaster 
areas, but in the prevention of other areas like terrorist 
attacks, of that nature. It is kind-of hard to say, well, we 
stopped 75 da, da, da, da, da, you know. We need to keep that 
in mind.
    So when I am listening to you all, because you all didn't 
come here just to talk about morale, obviously. You talked 
about, you know, operational efficiencies, effectiveness. That 
is what, I think, you were doing. I look at this huge entity, 
and at the top of this, you know, is this. At the top of this, 
there is this, and so there is connectivity there. Then you 
have these entities, these elements or components they call 
them--but there is very little of this at that level.
    So are you proposing--am I making sense? Are you proposing 
that we don't need this sort-of horizontal interaction as much 
here as we do up there? If we have it up there, we are have 
unity of effort, unity of mission, unity of value, unity of 
service, unity of expectation, and the resources to implement 
that this will kind-of happen?
    Ms. Duke. From my perspective, I was suggesting that you 
have to drive change through leadership. So leadership has to 
drive the change. I think at the lowest level, it is imperative 
that we have that. I think some of the facilities 
consolidations that are happening in certain geographic areas 
will hopefully help that. Because then you start with the 
overhead and then can get to the mission. But I think it has to 
be both sides.
    Mrs. Watson Coleman. So you know, we talk a lot about 
morale issues and how important they are. Then you mentioned 
something about the morale issues, sort of in the higher level, 
more highly-paid employees of the Department. I am thinking of 
the people on the border. I am thinking of people at the 
airport. Like, no one likes them. So by the time I get through 
security, I am like, oh, God do I have to take another thing 
off, you know.
    So for me, it is really important that the Department not 
only deals with the morale issues at the sort-of leadership 
level, which they are paid well enough to be self-motivated and 
have high morale, but also we need to figure out a way to 
reward, acknowledge, and appreciate those that really have 
boots on the ground.
    Mr. Pearl. I would just say, I will repeat, in terms of the 
visits that we have been trying to take to get out of 
Washington to see what is going on, we have been surprised, 
impressed----
    Mrs. Watson Coleman. Yes.
    Mr. Pearl [continuing]. By the foot soldiers on ground and 
what they are doing. To see the OFO, the blues and the greens, 
at the Border Patrol working closely together in Nogales, in 
Detroit, in the Southwest. We see those. They are forced to 
work together. They are sharing the same footprint. They are 
not like in Washington, 70--I think it is 70 officers spread 
over 50 locations with regard to the Department inside the 
Beltway, inside of Washington. They are getting along.
    We have met with task forces; we have met with fusion 
centers. We are seeing it with State and local, with Federal. 
When we go to Seattle next month, we are having a joint meeting 
with all of the DHS folks in the Pacific Northwest to find out 
where the level of coordination and cooperation is going, to 
find out a little bit more about where the morale issues are.
    But it really is, from my standpoint, about the morale. You 
are in a job at TSA, you are going to be yelled at by the 
passenger. The question is: Are you receiving support from the 
people that are your supervisors?
    Mrs. Watson Coleman. Right. Exactly.
    Mr. Pearl. That is what training does; that is what the 
private sector, as Mr. Totonis talked about, that is what we 
want to see more of. Within the acquisition space, the Homeland 
Security Acquisition Institute has done incredible work to try 
to get the program managers and the contracting officers on the 
same page with respect to the training. We need that across 
enterprise-wide to all the components.
    Mrs. Watson Coleman. So I think that--yeah. I think that 
this notion of appreciating down to this level, and then 
appreciating down to the boots-on-the-ground level, and to stop 
saying that this Department has the worst morale, that this is 
the worst place in the world to work, you know, but to start 
talking about the important work that it does and how we are so 
grateful to be safe in this country because of this Department, 
will help us sort-of transition out of the negative into the 
positive.
    Thank you, Mr. Chairman.
    Mr. Perry. The Chair thanks the gentlelady. The Chair now 
recognizes the gentleman from Georgia, Mr. Loudermilk.
    Mr. Loudermilk. Thank you, Mr. Chairman.
    I have another line of question, but I still want to pick 
up where we left off. Ms. Duke, I think you were getting into 
the area, I am sensing that there is maybe a bit of 
disagreement from Mr. Pearl and your perspective. Because I saw 
a different perspective when I went to the border.
    Now I don't know if--you talked to some of the folks who 
are, ``boots on the ground.'' But real quickly, when you went, 
did you go with supervisors with you, or did you go pull these 
folks aside and talk to them one-on-one without upper level 
management directing you and--because when I went to the border 
recently, I pulled these folks aside. Yeah, there is good 
cooperation. They believe in the mission, but they are 
frustrated with the politics that prohibits them from 
completing their mission.
    I mean, you can see it if you go to almost any airport with 
the TSA, customer services are reflected by the morale within 
that organization, and I can tell you, especially at this 
airport, the customer service that I see out of there is pretty 
pitiful and the morale seems to be in the tank.
    So I think there is a disconnect here somehow, because, 
yeah, when we would go to the border, and you have got upper 
level or mid-level management that is directing you, you get a 
different story from the folks than if you pull them off one-
on-one and talk to them. That is my concern, for some reason 
there is a report coming out saying that DHS is the worst place 
to work. That is what I am trying to get at. I am not saying 
that you are not being forthright with us, because I think you 
are. I think we are seeing a different picture.
    Mr. Pearl. I am trying to paint a picture maybe in response 
that it is not as bad as it appears.
    Mr. Loudermilk. Okay.
    Mr. Pearl. But I will tell you, and I don't want to bleed 
into the money, okay, but when we went to Los Angeles 
International Airport, when we talked to the folks from TSA 
both without their supervisors and with their FSDs, with the 
field office supervisor, No. 1, there was one common theme.
    First of all, you have a number of part-time employees who 
are TSA inspectors. When money comes in to the TSA at an 
airport, it is spent on the whistles and the bells, the X-ray 
machines, and all of the baggage stuff that they have to look 
at. They showed us how these multiple employees at TSA have to 
fill their shift bids for the next quarter on legal sheets of 
paper like you and I did when we were in college, that they 
have to fill it out on a piece of paper, then it is kind-of 
coordinated, and then they get to pick their time, their 
terminal, et cetera.
    They are using computers that were IBM computers, not 
Lenovo Thinkpads that are not necessarily network-connected. 
Because when the money does come in, the money that they are 
going to use, they know they have to put it towards safety and 
security, not internal operations. That is just one little 
example. They are very aware of that here in Washington. They 
are very aware of that exigency. But where do you place your 
dollars that you get?
    So will morale be bad when you are sitting around for an 
hour-and-a-half waiting to bid on your shift, when United 
Airlines flight attendant in the air has a mobile app that can 
get her his bid for the next 3 months on every flight that they 
want to take while they are in the air? Does that kind-of--is 
there a disconnect there? That is one example, sir. That is one 
little example of the kinds of morale, efficiencies, 
coordination system-wide that is not necessarily being 
addressed.
    Mr. Loudermilk. Ms. Duke, could you respond?
    Ms. Duke. One thing I think that DHS can do to address some 
this internally on a more tactical level, is as compared to 
DOD, it hired technicians in its rapid growth and didn't focus 
a lot on, as much, as my experience in DOD, on leadership and 
supervision, leadership from the higher level, how do we keep 
employees motivated; how do we deal with some of these skills? 
But supervision, how do you deal with performance in the 
Federal space effectively, because you can, it is just maybe 
harder?
    So I think DHS is trying to, in its workforce management 
now, make sure that supervisors both supervise and lead. I 
think that is something that can be done internally, and I 
think that they are looking at now that would be helpful.
    Mr. Loudermilk. Mr. Totonis, would you like to weigh in?
    Mr. Totonis. No. You know, as a private citizen, you know, 
when I go through TSA, I experience such things as you, sir. 
The challenges identified is how do we, on the leadership side, 
communicate and make everyone within that organization feel 
proud that they are keeping this Nation safe and not doing 
scanning or screening, right? So what is the bigger purpose for 
the mission, and that has to come from the top.
    Mr. Loudermilk. Okay. Again, Mr. Pearl, I wasn't trying to 
discredit your testimony at all. I was just trying to get what 
perceived to be a different outcome, and I appreciate it. Mr. 
Chairman, I would yield back.
    Mr. Perry. The Chair thanks the gentleman. The Chair 
recognizes the gentlelady from California, Mrs. Torres.
    Mrs. Torres. Thank you, Mr. Chairman.
    Continuing on in this conversation, we are facing yet 
another Government shutdown.
    When it comes to the security of our Nation, specifically 
at airports, I know from being a first responder, that certain 
positions are exempt. As a former 9-1-1 dispatcher, my position 
was never exempted. How do folks--how do they think that first 
responders, for one, would be able to respond to an emergency 
if there wasn't someone there answering the phone? I don't get 
it.
    But let's talk about those nonexempt positions, the person 
that is in charge of having to write all of those legal 
documents and forms, whose work is piled up or who has to come 
in to work thinking about how are they going to make their 
mortgage? How do we address that morale from the perspective 
that that is an issue that we are creating here, and it is 
outside of any management skill or unskilled performance level 
that we can, you know, point a finger to except ourselves?
    Ms. Duke. I do agree with you, and, you know, you can take 
a Civil Service career path, and a lot of people that take the 
career path are like, because they like the mission; they like 
the security as opposed, to say, maybe a contractor support. So 
I do think it affects our ability to draw the best people into 
Federal Government, because as a young person is considering 
their career, that would go into the ``con'' column of public 
service.
    Mrs. Torres. Bank of America doesn't take an IOU, we know 
that. So you know, having to face that month after month, you 
know, with what we are creating here as Members of Congress, 
the problems that we are creating for these folks----
    Ms. Duke. I think also it does. It adds to the stress. It 
adds to the feeling of not being valued, because if you think 
you cannot do your job for weeks--it also, for those that are 
nonexempt, it hurts so far, and I think it is the right thing, 
we have ended up paying--backpaying the people. But they still 
have the stress, because they don't know if that is true.
    But also then you have the haves and have-nots, the ones 
that got paid for staying at home, and the ones that had to go 
to work despite anything, and that is a real challenge in terms 
of morale, too, balancing that.
    Mrs. Torres. Balancing that.
    I would like to ask another question regarding the small 
business community and our level of outreach.
    What can you suggest? Where are the areas where we can 
improve to ensure that our departments are doing, you know, a 
better job at reaching out to small business? What I am hearing 
from, you know, the very, very small businesses that I 
represent in my district, is that they have to go through all 
of these certification processes only to find out that once the 
RFP has been issued, they didn't get it because maybe they 
spent a quarter of a million dollars certifying, you know, 
their components to meet certain qualifications. But the person 
who received, or the contractor that received that contract did 
not have to go through that. Oftentimes, they are someone that 
is not even in country.
    Ms. Duke. I would say, one is training. I know that DHS 
will go out throughout the country and help small businesses 
understand the system. I think that is really important, to 
understand the qualification process. They partner with Small 
Business Administration, and I think that is really important.
    I think the second thing is communicating. Unfortunately, 
you can't even hear the communications unless you know the 
system. So I think that workshops, the seminars with the 
departments and Small Business Administration throughout the 
country, not just in the District of Columbia, are imperative 
to solve that problem, ma'am.
    Mr. Pearl. But let me give another perspective, if I may. 
The private sector has a role in that as well. There is no 
question that the Department--when I talked to the folks at the 
management directorate, we hit our ``small business goals,'' 
but that doesn't necessarily go to the issue of capabilities. 
You picked a small business that may have been the squeaky 
wheel, but that doesn't necessarily go to the capability of the 
problem you are trying to solve, particularly at the Department 
of Homeland Security.
    There are mentoring programs by many of the large 
businesses who bring in and identify small businesses, and they 
will work with them to get through the necessary clearance 
processes.
    Mrs. Torres. Who knows about these mentoring programs?
    Mr. Pearl. The small businesses who--if you want to align 
yourself and you see that you have a capability set that aligns 
with an IBM or a Lockheed Martin, or a Booz Allen Hamilton, you 
know, the question is, you can identify them. It takes just--it 
is a little Google research, who is in that field?
    So the private sector has a role. The incentive that in 
essence that the Government can give to the private sector is 
is that when they do bring in these small businesses, and you 
get three or four small businesses to be part of a teaming 
process, versus giving one small business one contract, you 
can, in essence, leverage that to the betterment of more small 
businesses. Because when your contract is involved in south 
California or northern Maine, you can, in essence, find the 
small businesses that are already there and not have to move 
people.
    So how this Congress, how the Government can incentivize 
the big businesses, to in essence utilize small business 
capabilities is something that I would like to see, we would 
all like to see Congress and the Government to explore more. It 
is a bigger question than just DHS. But in point of fact, small 
businesses could benefit by the private sector, the large 
business involvement with them.
    Mrs. Torres. Thank you. Mr. Chairman, I yield back.
    Mr. Perry. The Chair thanks the gentlelady. I finally found 
my notes. Mr. Pearl, what you mentioned was examining 
incentives, which I think you just kind of fleshed out there a 
little bit. So it didn't answer all the questions, but just a 
couple of things.
    First of all, thank you very much, my colleagues, for 
taking the time and interest in, and for you for taking your 
time to come in and testify. We certainly very much do 
appreciate it.
    We would hope that you would continue the conversation. As 
many, you know, of course, we have got a lot of big issues on 
the plate, and oftentimes in Congress your hair is on fire, it 
seems like 24 hours a day, metaphorically, at least. So we 
would like you to continue to provide the feedback in the form 
of maybe--from my standpoint anyhow, you know, this is the 
challenge. This is our proposed solution set, and then a 
follow-up meeting.
    Because we would like to try to actualize on some of this 
stuff as opposed to just continue to have the circular 
conversation about it. I really mean that, even if the context 
that it is difficult.
    You know, I think that, too oftentimes, and maybe 
particularly in this case, that the agency is mischaracterized; 
that employees/bureaucrats is pejorative. It is not meant to 
be. We understand and recognize and acknowledge that these 
employees from the bottom to the top, have taken a mission of 
civil service of protecting their country and being on a 
mission, and that is really important.
    So this isn't meant at all to disparage. We are trying to 
make things better, quite honestly. I think the questions 
regarding morale reflect that.
    I will tell you from my perspective, having run my own 
organization and served in the military for over 30 years, 
anywhere from the rank of private to colonel, that leadership 
starts at the top, and it makes an incredible difference. Quite 
honestly, in kind of working and agreeing with the Ranking 
Member, you know, their morale is self--they are self-
motivated. They get paid well. They have the trappings of the 
position, and the expectations appropriately so, on our part, 
are high, and they should be.
    You know, we are the stewards of the taxpayer's money, and 
this committee, in particular, it is our job to provide that 
oversight and ask those tough questions and be demanding, and 
so we will be. It is not meant to be personal, but it is 
appropriate for our mission.
    So I guess with that--you know, just one other comment on 
the shutdown prospect. I understand the point that is being 
made, but I will tell you, having worked in the private sector 
and talking to people every single day, dealing with my wife, 
who works in a very large business in human resources and 
watching the challenges every single day of people, businesses 
change, contracts change, employees, no matter who you are or 
where you are, there is always a specter of a lost paycheck, a 
lost job, having to move, what have you. The Government is not 
sacrosanct in that.
    Maybe--I hate to say this, and I think some people may find 
this not palatable, but if your job application, let's say, you 
take this job and accept it willingly knowing that this is no 
different than the rest of the real world. Things happen, 
things change. It is imperfect. We are trying to do the best we 
can. You might not get a paycheck. You might be required to 
move. You might have the same thing that everybody else on the 
planet has to deal with.
    Thank you very much for your service. We invite you to 
participate, and we want you to come. I mean, really. So maybe 
that is enough of that.
    Let me get on with the perfunctory portion of this. The 
Chair thanks the witnesses for their valuable testimony and 
Members for their questions. The Members of the subcommittee 
may have some additional questions for the witnesses, and we 
will ask you to respond to those in writing.
    Pursuant to committee Rule 7(e), the hearing record will be 
open for 10 days.
    Without objection, the subcommittee stands adjourned.
    [Whereupon, at 11:40 a.m., the subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              

          Question From Chairman Scott Perry for Marc A. Pearl
    Question. In recent years, the American public has grown 
increasingly dissatisfied with our Government. A February 2015 Forbes 
article stated, `` . . . more people in the United States place their 
trust in business before the government . . . a 60 percent trust level 
in business as opposed to the government's 41 percent.'' This is not 
hard to believe considering the numerous failed programs, wasted 
monies, and misconduct among Federal employees. What recommendations do 
you have for DHS, specifically, to promote transparency, increase trust 
with the American public, and improve individual accountability?
    Answer. DHS, as an agency, is not well-understood by the general 
public. Some of the negative image and distrust that the public has 
towards DHS comes from a lack of understanding as to its history and 
mission. Many in the public see DHS as a newly-created agency, one that 
only came into existence as a result of 9/11. Some people have the 
mindset that if we did not have the agency before 9/11, then we 
probably do not really need it now. They see DHS as bureaucratic bloat 
and waste that we did not have prior to 9/11. Most people fail to 
realize that the majority of the individual agencies and areas of 
responsibilities that make up DHS (e.g. immigration, customs, border 
security, FEMA, Secret Service, Coast Guard) have long existed in our 
Government, just under different names or different organizations. 
While many people are familiar with the Coast Guard and Secret Service, 
they may not know that these agencies are part of DHS.
    To the extent that the public is familiar with a component of DHS, 
they likely have a limited and skewed understanding of what the agency 
actually does. Their knowledge comes from their limited exposure with 
the agency or to what they see and hear on television. They may see 
FEMA as the people who bring water during disasters or the Coast Guard 
as the people who patrol the waters and rescue people. They may have 
the impression that TSA are the people who search and delay you at the 
airport or that CBP agents are the people who hassle you when you come 
back from vacation.
    To help improve transparency and increase trust, it would be 
helpful for DHS to develop a marketing and awareness campaign that 
helps educate the public on all of its mission areas. DHS has many 
important missions that protect and strengthen National security, the 
public health, and the economy but they are invisible to the average 
citizen. There is always National media attention on the things that 
DHS does wrong vs. the things it does well. DHS and the administration 
need to find more ways to advertise successes, highlight the bad things 
that DHS has stopped, and explain the benefits it provides so that the 
public can gain a greater appreciation for the agency.
    As an example, the public hears that DHS is allowing illegal 
immigrants into the country, but it does not understand the economic 
gains associated with facilitating lawful trade and travel at our 
borders. It does not hear about the drugs, weapons, and contraband that 
are seized everyday by border agents. It does not hear about the 
illegal immigrants that are caught and returned to their country. It 
does not hear how agents at the border protect our economy from 
counterfeit goods or protect our agriculture from pests and diseases. 
DHS plays an important role in safeguarding our country, but few people 
know or understand its mission or achievements.
   Questions From Ranking Member Bennie G. Thompson for Marc A. Pearl
    Question 1. Mr. Pearl, you identified the Office of Biometric 
Identity, or OBIM as an example of an effective operation. There is 
discussion of moving OBIM to an operational component, specifically 
CBP. Do you see any risks in transferring OBIM?
    Answer. Our members do not support or reject any decision to move 
OBIM to an operational component of DHS. However, there are 
considerations of risk that should be carefully thought through in 
advance of moving the office.
    OBIM provides biometric capabilities, services, and data across the 
Federal enterprise as well as to some State, local, and international 
partners. Its Federal customers currently include or will soon include 
the State Department, Department of Justice, Department of Defense, the 
intelligence community, the Office of Personnel Management, and the 
many components of DHS (CBP, CIS, TSA, FEMA, USCG, ICE, NPPD, Secret 
Service, and Management). While CBP is currently the largest consumer 
of OBIM services, that is likely to change in the future as more people 
become reliant on biometrics for identity proofing, including industry. 
To fulfill its growing mission, OBIM will need to focus on developing 
new and improved services and business processes, technical 
capabilities, and models for rapid delivery of services to a wide range 
of customers.
    If OBIM is moved to CBP or any another operational component of 
DHS, it will become a consumer, manager, and broker of the data. 
Therefore, legislators need to ensure that the agency does not become 
narrow-minded in its thinking and decision making. By placing OBIM in 
an operational component of DHS, there is a risk that strategy, 
operational, technological, and financial decisions are made within the 
mindset of and to the benefit of a specific component vs. other users 
of the system.
    The office and its capabilities should be viewed as a National 
asset within a larger and evolving National construct on biometrics. 
Given its National and perhaps international significance, the agency 
must be able to think and act objectively beyond the interests and 
priorities of a single operational component. It will be critically 
important to ensure that the office maintains a level of autonomy and 
accountability separate from its ``owner.''
    The system that OBIM uses to store and analyze the data is the 
Automated Biometric Identification System (IDENT). This database is 
part of a larger ``system of systems''. Its effectiveness is reliant on 
both an upstream and downstream of data from many partners. Developing 
and maintaining engagement and relationships with all stakeholders is 
critical to the success of OBIM and the entire biometric ecosystem. No 
matter where OBIM gets moved to, legislators must ensure that the 
office has the authority and ability to think and make decisions in a 
broader National context. The implications to National security cannot 
be understated.
    Question 2. What factors prevent DHS from responding to private-
sector firms, regardless of their size in terms of packaging its 
acquisitions and procurements in a manner which will allow companies to 
fairly compete for contracts?
    Answer. To answer this question, it is important that the committee 
understands two different factors are in place. First, let me explain 
the factors that influence a private-sector firm's decision whether or 
not to bid on a Federal contract. Then you will have a better 
understanding of the factors at DHS that have the effect of either 
encouraging or discouraging companies from competing for Federal 
contracts.
    The decision by a private-sector firm (whether large, mid-tier, or 
small) to compete for a Federal contract involves a careful assessment 
of risk. Financial investments in pursuit of opportunities are 
significant. On average, companies spend approximately 1-2% of the 
total value of a contract in the proposal phase alone. This may not 
sound like much, but it could cost between $500,000-$1 million to 
pursue and bid on a $50 million opportunity. Because the costs of 
getting to know a prospective client, understanding the requirements, 
developing a technical approach, selecting a team, and preparing a 
proposal are so high for industry relative to the return on that 
investment, industry tries to make decisions on whether or not to bid 
as early in the acquisition life cycle as possible. That is why both 
the substance and timing of communication with industry is so 
important.
    Overhead, bid and proposal costs limit dollar expenditures, and 
companies do not want to submit a bid if they do not think they have a 
good chance of winning, and can successfully provide the capabilities 
and/or needed solutions. They would rather devote their resources to 
procurements for which they can be successful. Industry does its 
investment planning, particularly as it relates to investments in 
pursuit of new business, over multiple years. Therefore, procurement 
forecasts play a significant role in determining their priorities. 
Industry tracks the status of DHS procurements and devotes substantial 
time and energy to learning about DHS's needs and thinking through ways 
to meet them. Decisions on whether to compete are often based on the 
level of information that can be obtained in advance about an 
opportunity.
    As much advance and relevant information about future requirements 
is used to focus industry's attention. The earlier that industry has 
specific forecasting and procurement strategy information from 
Government, the more likely they are to devote their resources to the 
Government's needs and/or decide they should not waste their resources. 
For small businesses, these issues take on even greater importance. 
While a small business can partner with a bigger business to perform 
the work, they need working capital (e.g., the ability to make payroll) 
to pursue multiple contracts. A small company (whether or not it 
``fits'' into the Government definition) often cannot pursue multiple 
contracts at the same time because of the resources involved. They need 
to invest their funds in only a few opportunities and make decisions 
wisely. This concept of risk management is often overlooked or under-
appreciated by Government officials.
    Industry must have the ability to meet with the appropriate 
Government officials early in the process so that they can understand 
their requirements and assess the risk associated with bidding. Firms 
must be able to gain information that allows them to answer the 
following types of questions:
   Do we clearly understand what the Government is trying to 
        achieve and accomplish through the contract?
   Can we do the work and succeed in execution?
   Do we have a competitive advantage?
   What is the likelihood that we can win the contract?
   Can we make a profit? (Requirements must be specific enough 
        that industry can come up with a realistic cost estimate. This 
        increases confidence that industry can deliver profitability at 
        their bid price.)
   What are the business practices and history with 
        procurements of that Government customer?
   What are the opportunity costs?
   What is the anticipated length of the process (e.g., what is 
        the likelihood of a delay of award after proposals are 
        submitted?)
    Industry days and other engagement forums that share information 
with industry well in advance of Requests for Proposals (RFPs) generate 
interest in a greater number of companies, enabling them to make more 
informed and earlier decisions on whether to bid. When information is 
available early in the process, it gives companies an opportunity to 
consider technical approaches sooner, and build teams around those 
approaches rather than selecting teams at the last minute based on 
other factors.
    While DHS is working hard to establish earlier and more substantive 
communication with industry in advance of procurements, there are 
several factors that prevent or discourage it from having or providing 
the needed communication and engagement with industry:
   Acquisition schedule and the desired speed of procurements
     Communication with industry is often schedule-driven. The 
            end-date of a procurement does not change for the end-user 
            so the Government schedule is ruled by this date. This 
            often impacts what type of communication Government will 
            have with industry. There are sometimes concerns that 
            additional communication with industry will create delays 
            that the schedule does not afford.
   Fear of acquisition integrity and lack of understanding of 
        what the Federal Acquisition Regulation (FAR) allows leads to 
        no or poor communication.
     Despite several mythbusting efforts, there are still 
            acquisition staff, particularly those that are young and 
            less experienced, that do not understand what the FAR 
            allows. There is a lack of understanding as to the who, 
            what, when, where, why, and how of allowable communication 
            between Government and industry before the issuance of the 
            RFP.
     Procurement lawyers are also causing too much fear. There 
            is a lot of inconsistency in the advice that procurement 
            lawyers give to different components as to how to engage 
            with industry.
   Internal communication and coordination of information 
        across DHS
     There are so many decisions and actions going on at the 
            same time within the Government during an acquisition that 
            it is challenging for DHS to determine how to coordinate 
            information through the organization and push it out to 
            industry. The result is that information is sometimes 
            either not provided or is inconsistent.
    In addition to the need for early communication and greater 
engagement, there are two other factors that strongly influence whether 
a private-sector company will decide to compete for Federal work:
    1. DHS' ability to clearly define and stick to the requirements in 
        their procurements
     Requirements must be clear and specific enough so that 
            private-sector firms can come up with a realistic cost 
            estimate and make the cost-benefit determinations that are 
            central to determining whether they will pursue the work. 
            Any ambiguity or change in requirements increases risk. The 
            effect is that industry either decides not to bid or they 
            increase the price of their bid to offset the increased 
            risk.
    2. Impact of Delays in Awards and/or Cancellation of Solicitations
     Delays (or cancellations or withdrawals of planned 
            acquisitions) cost contractors significant amounts of 
            money, which means they may not have sufficient funds to 
            bid on future activities. Contractors start preparing to 
            bid months or sometimes years in advance of an upcoming RFP 
            by forming teams, identifying potential staff, ensuring 
            that especially key staff have the right certifications and 
            experience, and sometimes making research investments to 
            better position the team for the opportunity. When the 
            Government delays an RFP by months, contractors must 
            continue to spend money to keep the teaming, potential 
            solutions, and possible staff in place. Similarly, when the 
            Government delays issuing an award or task order after 
            proposals are submitted, contractors must figure out how to 
            keep staff ready and available to work once an award is 
            made. This means that contractors either pay the salaries 
            of existing, highly-skilled staff for extended periods of 
            time even when the employees do not have revenue generating 
            work to do or they incur termination expenses for the 
            existing staff and hiring expenses for replacement staff 
            when the award is made. In the end, the company expenses 
            that are incurred when an opportunity is delayed or 
            cancelled often drive up the company's G&A rate, with those 
            costs effectively being passed on to the Government.
     Procurements that are awarded too long after the proposal 
            is submitted present substantial risk because pricing for 
            the bids was based on a specified award time frame. The 
            vendor thus bears the burden of rising labor costs with 
            diminished margins in supporting the program.
     Extended delays of actual awards contribute to increased 
            financial risk because dollars dedicated in the pursuit of 
            the opportunity are expensed in 1 fiscal year and potential 
            earnings are extended to a later fiscal year. Companies 
            tend to become more reluctant to bid on these programs. 
            Spending money that does not have the potential to generate 
            revenue for more than 2 years is a difficult move for many 
            companies to make, especially small businesses.
    Thank you, again, for the opportunity to present the collective 
perspective of the members of the Homeland Security & Defense Business 
Council in answer to your follow-up questions to the recent hearing.
    The Council looks forward to continuing our long-standing 
relationship with the committee on the critical issues you are 
tackling.
         Questions From Chairman Scott Perry for Harry Totonis
    Question 1a. In your testimony, you stressed the importance of a 
``Shared-Services Organization'' and pointed out that a key function 
for an organization as diverse as DHS would include ``real property 
management.'' A recent Inspector General report regarding the 
Department's warehouse inventory stated: ``Because the warehouse 
inventories are inaccurate, DHS cannot manage warehouses or demonstrate 
compliance with requirements to limit the size of real property 
inventories and reduce costs.''
    While the Department did concur with the report's recommendations, 
what advice would you give to DHS to better manage its inventory?
    Answer. My knowledge of inventory management is limited to a CEO's 
perspective. Based on my experience, in order for DHS to better manage 
its inventory, I would examine DHS's entire sourcing approach/strategy. 
By optimizing the every step in the sourcing chain DHS will most likely 
be able to reduce costs across several areas and significantly improve 
inventory management. The good news is that significant progress has 
been made in sourcing and inventory management (including processes and 
technology) starting back in the '90's. Many experts exist in this area 
that could help DHS.
    Question 1b. Why is real property management so important to an 
organization's effectiveness and efficiency?
    Answer. I have found real property management is no longer just 
about square footage costs. It impacts an organization's effectiveness, 
efficiency, and employee morale. For example, the questions that I 
typically ask when I am evaluating real estate include:
   Is this property located near employee pools that can I 
        access to meet the organization's people needs?
   Is this facility at a location where employees will find it 
        attractive to live?
   Is the layout consistent with today's best practices? Open 
        layout; access to technology; spaces that facilitate employee 
        interaction, ideation, and problem solving?
   Do the facilities include technologies that allow employees 
        to interact, exchange knowledge, drive innovation and foster 
        collaboration?
    Question 2. In recent years, the American public has grown 
increasingly dissatisfied with our Government. A February 2015 Forbes 
article stated: `` . . . more people in the United States place their 
trust in business before the government . . . a 60 percent trust level 
in business as opposed to the government's 41 percent.'' This is not 
hard to believe considering the numerous failed programs, wasted 
monies, and misconduct among Federal employees. What recommendations do 
you have for DHS, specifically, to promote transparency, increase trust 
with the American public, and improve individual accountability?
    Answer. Unfortunately the Forbes article (February 2015) you quote 
appears to capture the sentiment of the American public these days. 
However, while one can point to failed programs, the contributions of 
Government over the years have been many, enormous and invaluable. I 
believe the perception of the American public today is been shaped by 
four attributes:
    1. The perception that Government never has enough funds and a need 
        exists to constantly increase taxes. Businesses improve 
        productivity, reduce costs, and live within their means. 
        Quality improves while prices come down. The perception of the 
        Government is exactly the opposite. When was the last time that 
        a Government agency significantly reduced operating costs?
    2. The poor handling of key ``touchpoints'' or very visible 
        activities. Examples that come quickly to mind include VA, TSA, 
        and the Secret Service:
        a. Reports that veterans are dying while they wait for months 
            to receive care
        b. TSA employees that overstep their authority
        c. The reported exploits of Secret Service Agents.
    3. Despite of the above, very few people (if any) lose their jobs.
    4. Many reports that Government agencies are engaged in highly-
        secretive activities collecting information on American 
        citizens, listening to conversations, etc.
    To make progress on transparency, trust, and accountability I would 
recommend that Government become leaner, improve execution, and be more 
aggressive on terminating employees that don't deliver.
   Questions From Ranking Member Bennie G. Thompson for Harry Totonis
    Question 1. As an executive in the private sector, what have been 
some of the key features of on-boarding programs that you have 
experience with, and what made those features important to the 
operation of the programs?
    Answer. By ``on-boarding programs'', my assumption is that the 
question is asking about employee on-boarding programs. In my 
experience, the following practices are key:
   Strong orientation programs for all new employees on company 
        culture and definition of success
   A training program to make sure employees are confident and 
        ready to begin their job with the first 3 to 6 months
   Mentor(s) for all incoming employees
   Access to resources to quickly address any issues that 
        surface
   Holding mentors and managers responsible for developing new 
        employees
   Formal reviews at 3 and 6 months and at the end of the first 
        year
   Statistical evaluation of new employee success as input to 
        shaping the on-boarding program.
    Question 2. What are some of the performance metrics and assessment 
criteria that your companies have used to measure the effectiveness of 
on-boarding programs?
    Answer. I have used the following performance metrics for 
evaluating the effectiveness of on-boarding programs:
   The attrition rate for new employees.--A strong on-boarding 
        program should translate into lower turnover.
   New employee productivity.--A strong on-boarding program 
        should translate into achieving rapid productivity.
   Overall employee morale.--An on-boarding process helps new 
        and existing employees. In my companies, I make the execution 
        of on-boarding program the responsibility not of the human 
        resources department but of existing employees. When existing 
        employees are responsible for the on-boarding program they tell 
        and retell the company ``story''. They are reminded the 
        criteria that makes the company a success and take 
        responsibility of new employees. I measure and look at existing 
        employee participation to on-boarding programs.
         Question From Chairman Scott Perry for Elaine C. Duke
    Question. In recent years, the American public has grown 
increasingly dissatisfied with our Government. A February 2015 Forbes 
article stated: `` . . . more people in the United States place their 
trust in business before the Government . . . a 60 percent trust level 
in business as opposed to the government's 41 percent.'' This is not 
hard to believe considering the numerous failed programs, wasted 
monies, and misconduct among Federal employees. What recommendations do 
you have for DHS, specifically, to promote transparency, increase trust 
with the American public, and improve individual accountability?
    Answer. DHS can promote transparency through clearly and timely 
communicating to the appropriate body (Congress, GAO, IG, American 
public) what actions they are taking to secure the homeland, and 
equally important why they are taking them. This communication can be 
done within the appropriate classification levels, including 
Unclassified for the American public. If the public generally 
understands the threat to the homeland, and how DHS's actions are 
developed and changed to address those threats, most of the American 
public will be more understanding. This is especially important when 
changes in those actions affect the public. Information, done well, 
will not inject fear into the public, but will help them understand and 
adapt to the changing terrorist threat.
    In terms of individual accountability, DHS must take actions 
related to the workforce. The necessary actions are revealed by the 
Employee Morale Survey, and related to accountability, include both 
rewarding exceptional performers and taking action against poor 
performers. This requires a good performance evaluation system with 
evaluation factors that are meaningful and directly tied to the most 
mission-driven aspects of the employee's work. It also requires 
supervisors that are knowledgeable in employee performance management, 
so they can take appropriate actions. Along with that, supervisors 
should be rated on their management of the workforce, not just 
technical aptitude. Finally, DHS should continue to expand how it 
appropriately include all employees in its plans, priorities, and 
missions. DHS employees will be more accountable if they understand and 
are engaged in mission. That must flow down to all levels of the 
organization, to ensure accountability of each employee.
  Questions From Ranking Member Bennie G. Thompson for Elaine C. Duke
    Question 1. As the committee proceeds with its reauthorization of 
language for the Department, inclusive of its acquisition practices, 
what suggestions could you offer to DHS to become more proactive and 
effective in its engagement with industry?
    Answer. DHS must do more to engage industry very early in the 
acquisition process, well before a contract is contemplated. DHS 
procures most of its services and products as commercial and 
nondevelopmental items. DHS must talk with industry early in its 
process, when it first is researching an unmet mission capability and 
determining how to best meet that capability. Industry is invaluable to 
helping DHS understand what is currently available, and how those 
products/services would have to be modified to meet DHS's mission 
needs. Additionally, these early discussions help industry plan and 
effectively spend its IRAD dollars. The earlier and better DHS can 
communicate its plans and potential needs, the better and more 
efficiently industry can plan to meet those needs.
    Question 2. Is the Department now better-positioned to implement 
reforms and achieve management integration given its current senior 
leadership and initiatives?
    Answer. Yes, for two reasons. First, Secretary Johnson's Unity of 
Effort memo reflects a maturation of the earlier management integration 
vision. It develops and integrates the original building blocks in a 
manner that should achieve the necessary reforms and integration if 
effectively executed. Second, the current senior leadership appears to 
have a good definition of roles and responsibilities. DHS headquarters 
(HQ) senior leadership is generally working on matters appropriate for 
HQ, and allowing component senior leadership the appropriate latitude 
to execute the individual missions. Additionally, the two DHS-wide 
leadership forums, Senior Leaders Council (SLC) and Deputies Management 
Action Group (DMAG), can provide the necessary focus on key issues as 
well as the top-down integration of the components.
    Question 3. DHS's track record of poor program execution decreases 
its buying power and in turn delays its ability to adhere to schedules 
for delivering program outcomes timely. What are the most critical 
steps the Department needs to take to improve its acquisition 
management practices?
    Answer. One critical step is proper staffing of both the 
contracting and program management offices--with the right number of 
people with the right skill sets. This number and type isn't one-size-
fits-all, it depends on what the component acquires. However, DHS 
leadership should take steps to ensure each major program and 
acquisition office is appropriately staffed. Related to this is 
ensuring that each employee performing an acquisition role (such as 
program manager, contracting officer's representative, etc.) have 
performance evaluation factors related to that acquisition function. 
This includes law enforcement and military personnel currently 
performing acquisition roles.
    Another critical step is to continue to strengthen and define the 
role of the DHS chief acquisition officer (CAO) and each component's 
chief acquisition executive (CAE). The CAE in each component is 
critical to that component's ability to successfully deliver 
acquisition programs. CAE's organizational placement, support of 
leadership, and authorities are not consistent within the various 
components. They should be given the necessary authority to match their 
delegated acquisition responsibility.
    A third critical step is moving forward with the Joint Requirements 
Council (JRC) reestablished by Secretary Johnson's Unity of Effort 
memo. The JRC has the ability to greatly improve DHS' buying power by 
rationalizing requirements, appropriately standardizing, and eliminated 
duplicative systems, products, and systems. DHS has the JRC's 
established and meeting, it is critical that they deliver results. This 
will not be easy, as it requires active and positive participation of 
all components. Though not easy, it is essential.

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