Information Technology: Status and Challenges of Employee	 
Exchange Program (15-DEC-06, GAO-07-216).			 
                                                                 
Recognizing the importance of human capital to information	 
technology (IT) and the need to improve the skills of federal IT 
workers, Congress created the Information Technology Exchange	 
Program (ITEP) as part of the E-Government Act of 2002. ITEP aims
to improve federal IT skills through exchanges of staff between  
the government and the private sector. The Office of Personnel	 
Management (OPM) was required to issue implementing regulations, 
which it did in September 2005, and to report semiannually to the
Congress. OPM's regulations require that each participating	 
agency develop an ITEP plan before proceeding with exchanges.	 
Agencies' opportunity to begin exchanges ends in December 2007.  
GAO is required to evaluate the program by December 2006. As	 
agreed, GAO's objectives were to determine (1) the status of the 
program and (2) challenges facing agencies. To address these	 
objectives, GAO analyzed key documents and interviewed OPM,	 
participating agencies, and others.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-216 					        
    ACCNO:   A64190						        
  TITLE:     Information Technology: Status and Challenges of Employee
Exchange Program						 
     DATE:   12/15/2006 
  SUBJECT:   Enterprise architecture				 
	     Exchange of persons programs			 
	     Federal employees					 
	     Information security				 
	     Information technology				 
	     IT human capital					 
	     Knowledge, skills and abilities			 
	     Private sector					 
	     Professional ethics				 
	     Program evaluation 				 
	     Strategic planning 				 
	     Federal regulations				 
	     Policies and procedures				 
	     Program implementation				 
	     Information Technology Exchange Program		 

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GAO-07-216

   

     * [1]Report to Congressional Committees

          * [2]December 2006

     * [3]INFORMATION TECHNOLOGY

          * [4]Status and Challenges of Employee Exchange Program

     * [5]Contents

          * [6]Results in Brief
          * [7]Background
          * [8]Seven Agencies Are Initiating Programs, but No Exchanges Have
            Taken Place

               * [9]Agencies Are Establishing ITEP Plans
               * [10]No ITEP Exchanges Have Occurred

          * [11]Agencies Face Implementation Challenges

               * [12]Desired Skills Are in Short Supply in Both the Federal
                 Government and the Private Sector
               * [13]Companies Are Concerned That Employee Exchanges Could
                 Hinder Future Business
               * [14]Federal Ethics Requirements Could Discourage
                 Private-Sector Employees from Participating
               * [15]Effectively Marketing the Program

          * [16]Conclusions
          * [17]Recommendations for Executive Action
          * [18]Agency Comments and Our Evaluation

     * [19]Objectives, Scope, and Methodology
     * [20]Comments from the Office of Personnel Management
     * [21]GAO Contact and Staff Acknowledgments

Report to Congressional Committees

December 2006

INFORMATION TECHNOLOGY

Status and Challenges of Employee Exchange Program

Contents

Table

Figure

December 15, 2006Letter

The Honorable Susan M. Collins Chairman The Honorable Joseph I. Lieberman
Ranking Minority Member Committee on Homeland Security and Governmental
Affairs United States Senate

The Honorable Tom Davis Chairman The Honorable Henry A. Waxman Ranking
Minority Member Committee on Government Reform House of Representatives

Recently, assessments of the federal information technology (IT)
workforce, as called for in the Clinger Cohen Act,^1 have resulted in the
identification of skills gaps in key areas such as project management.
Recognizing the importance of human capital to IT and the need to improve
the skills of the federal IT workforce, the Congress created the
Information Technology Exchange Program (ITEP) as part of the E-Government
Act of 2002 (E-Gov Act).^2 The program is envisioned as a vehicle to
promote the interchange of IT employees between federal executive agencies
and the private sector and to develop, supplement, and modernize IT skills
while improving overall competencies in the federal IT workforce.

The Office of Personnel Management (OPM) is required under the act to
issue implementing regulations for the program and to report semiannually
to the Congress on the operation of the program. OPM issued the required
implementing regulations in September 2005. OPM's regulations require that
each participating agency develop an ITEP plan, approved by the agency
head, before proceeding with exchanges. Agencies' opportunity to begin
exchanges ends in December 2007.

The act required GAO to provide an evaluation of the program by December
17, 2006. As agreed with your offices, we determined (1) the status of the
ITEP program and (2) challenges facing agencies in implementing ITEP. To
conduct our work, we analyzed ITEP regulations and guidance, agencies'
ITEP plans, and OPM status reports. We also conducted interviews with ITEP
officials at the seven participating agencies--Department of Commerce,
Department of Defense (DOD), Department of Homeland Security (DHS),
Department of the Treasury, Federal Bureau of Investigation (FBI),
Department of Health and Human Services, and OPM--and with the Industry
Advisory Council (IAC), which includes about 500 companies as members. We
performed our work from July 2006 to November 2006 in accordance with
generally accepted government auditing standards. Details of our
objectives, scope, and methodology are included in appendix I.

Results in Brief

With only 1 year remaining to begin exchanges under the ITEP program, the
seven agencies that volunteered to participate are still initiating their
programs, and no exchanges have taken place. The participating agencies
all have drafted plans, but only three--DHS, DOD, and Commerce--have
finalized them. Only DHS has attempted to negotiate an exchange, but it
was unsuccessful in exchanging staff with a potential private-sector
partner. In its last two semiannual reports OPM has reported on the status
of agency plans, but has not reported that no exchanges have taken place
to date.

OPM, agencies, and others have identified key challenges that will
confront agencies as they finish their plans and implement ITEP programs:

oEmployees with desired skills are in short supply in both the federal
government and the private sector, particularly in enterprise
architecture, project management, and information security, according to
industry representatives.

oCompanies are concerned the employee exchanges could hinder future
business, since a company with an employee at an agency might be seen as
having an unfair advantage in bidding on agency procurements.

oFederal ethics requirements, especially financial disclosure
requirements, could discourage private-sector employees from
participating.

oFederal agencies' current marketing through a Web site has not been
productive, according to participating agencies; suggested improvements
include using the media and making personal contacts with companies.

OPM and the participating agencies are aware of the challenges and
acknowledge that they need to be addressed. However, in the short time
remaining before the authority to begin exchanges ends, it will be
essential to expeditiously address the challenges to enable a significant
number of successful exchanges. Given this, we are recommending that the
Director of OPM include in its upcoming semiannual reports to the Congress
the status of efforts to address challenges and whether these efforts are
leading to exchanges, and the number of exchanges that have occurred.

In written comments on a draft of this report, OPM said that it supports
the ITEP and will continue to promote it as a tool available to agencies
in the training and development of the Federal IT workforce. OPM agreed
with our recommendation that future semi-annual reports to Congress
include the number of exchanges that have occurred or a statement that no
exchanges have occurred. However, it disagreed with our recommendation
that it include in the semiannual reports the status of efforts to address
challenges facing agencies in implementing the program and whether these
efforts are leading to exchanges. OPM said that current reporting to
Congress fully meets its statutory obligation to report on the operations
of the ITEP. However, we continue to believe that it should include in the
semiannual reports to Congress the status of efforts to address challenges
facing agencies in implementing the program. Confronting these challenges
is key to determining whether the program will be successful and whether
it should continue beyond 2007. OPM also provided technical comments that
we have incorporated as appropriate.

Background

The E-Gov Act created ITEP to improve the skills of the federal workforce
in using information technology. The act authorizes federal executive
agencies that volunteer to participate to temporarily detail IT staff to
private-sector companies and to accept individuals from the private
sector.^3 Assignments can last up to a year and are extendable for another
year. Federal employees could be exposed to private industry best
management practices, while private-sector employees could gain a greater
understanding of federal information management practices and of how the
government does its work. The opportunity to begin exchanges is due to end
in December 2007.

OPM was required to issue implementing regulations for ITEP and to report
semiannually to the Congress on the number of individuals assigned to and
from each agency, including a brief description of each assignment and
other information as appropriate.

[22]Between 2003 and 2005, OPM developed implementing regulations for the
program, including soliciting public comments. OMB reviewed and approved
OPM's draft regulations as part of its normal regulatory process.

The final ITEP regulations were not issued until August 2005, and became
effective in September 2005, almost 3 years into the program. OPM reported
to the Congress that the delay in the issuance of the regulations was due
to the complexity of the issues involved, including various ethics and
standard of conduct issues that could complicate exchanges, especially
from private industry to the federal government. In addition to OMB, OPM
worked with the Department of Justice and the Office of Government Ethics
to finalize the regulations.

In the ITEP regulations, OPM established a requirement that each
participating agency develop an ITEP plan. These plans are to be approved
by the head of each agency before beginning exchanges. Agencies,
companies, and individual participants are also required to sign a written
agreement before any exchanges can begin. Each participating agency has
primary responsibility for planning and directing its own ITEP program but
must adhere to the act and OPM regulations in implementing exchanges.

In December 2005, 3 months after the ITEP regulations went into effect,
OPM issued additional guidance to assist agencies in implementing their
programs and in drafting plans. The guidance included an overview of the
program, templates for ITEP plans and written agreements, and answers to
frequently asked questions and is available to agencies through the
OPM.gov Web site.

To help promote the program, OPM partnered with the Federal Chief
Information Officers Council and with the Industry Advisory Council^4 and
conducted outreach with several other IT professional organizations to
reach private-sector companies. OPM assists the agencies in marketing
their ITEP programs through its USAJOBS Web site. To facilitate the
exchange of information, OPM has been conducting weekly teleconferences
with participating agencies and the IAC. Additionally, the CIO of OPM
co-chairs the CIO Council's Information Technology Workforce Committee,
which helps to promote the program and shares status updates during
monthly meetings.

The E-Gov Act specifically addresses ethics and reimbursement issues. The
law states that private-sector employees assigned to a federal agency
under ITEP are deemed to be employees of the federal agency in terms of
Title 5, U.S.C., Chapter 73 (Suitability, Security, and Conduct) as well
as various other laws. For example, federal employees detailed to the
private sector would remain subject to all federal ethics rules and would
continue to be paid by their agencies. Private-sector employees detailed
to a federal agency would become subject to federal ethics rules, such as
those involving conflict of interest and financial disclosure, and would
continue to be paid by their companies. The act permits the federal
government to reimburse some expenses, such as travel and per diem and
leaves open the possibility that agencies might reimburse the company for
some of its employees' salaries, but it specifically prohibits companies
from charging the government for an employee's salary or benefits as a
direct or indirect cost under a federal contract.

Seven Agencies Are Initiating Programs, but No Exchanges Have Taken Place

[23]With only 1 year to go before the opportunity to begin exchanges ends,
the seven agencies participating are still initiating their programs, and
no exchanges have taken place. All seven agencies have drafted plans, but
only three--DHS, DOD, and Commerce--have finalized them. Only one agency,
DHS's Federal Law Enforcement Training Center,negotiate an exchange, but
it was not able to reach an agreement with a potential private-sector
partner. ^5 has attempted to

Agencies Are Establishing ITEP Plans

When the CIO Council called for agencies to volunteer for ITEP, [24]nine
agencies volunteered to participate; seven agencies--the Department of
Commerce, DOD, DHS, Department of the Treasury, Federal Bureau of
Investigation, Health and Human Services, and OPM--committed to
implementing programs. Participating agencies began developing their ITEP
plans after OPM issued regulations in August 2005. Agency officials told
us that the OPM guidance was useful [25]a [26]nd that they worked closely
with their agencies' human resources and general counsel staffs to develop
their plans.  

[27]Of those seven, DHS, DOD, and Commerce have approved plans as required
by OPM regulations, and the other four agencies have draft plans that are
awaiting agency head approval. DHS's plan was approved in March 2006;
[28]DOD's plan was approved in August 2006; and Commerce's plan was
approved in October 2006 (see fig. 1). Officials from the agencies with
draft plans estimated that additional time required for review and
approval of these draft plans could range from a few days to an indefinite
amount of time.

Figure 1: OPM and Participating Agencies' ITEP Actions

[29]OPM requires that plans address how the program will be carried out
(e.g., processes and procedures); how many exchanges the agency plans to
have; how employees are selected; which officials may approve exchanges;
and employee rights to return to the agency. Agencies are given the
flexibility to tailor their ITEP plans to meet their individual needs and
the workforce skills they want to reinforce.

[30]In addition, agencies have identified key skills they would like to
strengthen through ITEP exchanges. The skills most frequently identified
by agency officials were enterprise architecture, project management, and
information security. Table 1 shows the status of agencies' plans and the
specific skills agencies have identified.

Table 1: Agency ITEP Plan Status and Skills as of November 2006

Agency      Plan approved Plan drafted Skills identified                   
Commerce          *                    [31]Enterprise architecture,        
                                          project management, information     
                                          security                            
DHS (FLETC)       *                    [32]Enterprise architecture,        
                                          information security                
DOD               *                    [33]To be determined at the         
                                          component level                     
FBI                            *       Enterprise architecture, project    
                                          management, systems engineering,    
                                          continuity of operations planning   
HHS                            *       [34]To be determined                
OPM                            *       Enterprise architecture,            
                                          information security, IT policy,    
                                          capital planning and investment     
                                          control                             
Treasury                       *       [35]Enterprise architecture,        
                                          project management, cyber security, 
                                          counterfeiting protection           

Source: GAO analysis of agency ITEP plans and interviews.

No ITEP Exchanges Have Occurred

[36]As of November 2006, no exchanges have occurred. Officials from the
participating agencies stated that they have had few inquiries and little
interest from private-sector companies regarding the ITEP program. DHS,
the first agency to have an approved plan, has attempted to implement an
exchange with a private-sector partner; however, the company did not go
ahead with the exchange because, as prohibited by the act, it could not
charge the government for its employee's salary as an indirect cost on its
government contracts. D [37]OD recently finalized its ITEP plan in August
2006and is proceeding with program implementation, but has not begun
negotiating agreements.

OPM has reported to the Congress on the status of its development of the
regulations and activities to promote the program. In its last two
semiannual reports, in April and October 2006, OPM has reported on the
status of agency plans but has not reported that no exchanges have taken
place.

Agencies Face Implementation Challenges

OPM, agencies, and others have identified key challenges that will
confront agencies as they finish their plans and implement ITEP programs,
including limited availability of private-sector employees with the skills
agencies want, concern that sending employees to agencies may hinder
companies' ability to bid on future contracts, possible reluctance of
private-sector employees to be subject to federal ethics rules, and more
effectively marketing the program. These challenges will make it difficult
to find willing and qualified participants and negotiate agreements with
companies. OPM and participating agencies' officials are aware of the
challenges and acknowledge that they need to be addressed, but these
challenges have not been reported to the Congress in the semiannual
reports.

Desired Skills Are in Short Supply in Both the Federal Government and the
Private Sector

Federal agencies face a challenge in finding employees from the private
sector with the skills they are most interested in pursuing. Although
agencies have identified their target skills--enterprise architecture,
project management, and information security--these skills are also in
short supply in the private sector. According to the IAC, which represents
about 500 companies, companies would be reluctant to give up the services
of staff members with these valuable skills. The IAC believes the federal
government is more likely to attract staff from private-sector companies
if the agencies focus on other skill areas where the government is a
leader, such as electronic learning.

Companies Are Concerned That Employee Exchanges Could Hinder Future
Business

[38]Both the IAC, representing its member companies, and agencies told us
of their reluctance to undertake exchanges because of a risk that an
exchange could interfere with future federal contracting opportunities.
Although the act specifically prohibits private-sector employees from
having access to any nonpublic information of commercial value to their
company, theymight still obtain or appear to obtain information that would
give them an unfair competitive advantage, and their companies might then
be disqualified from bidding on future contracts. According to the IAC,
this is a major issue with the program, because it is not easy to
determine what information is appropriate for private-sector employees.
FBI program officials also told us that this issue was a particular
concern to them. The Human Resource Manager for DHS's Office of the CIO
told us that DHS components were not interested in accepting an employee
from a DHS contractor, because they did not want to risk damaging their
relationship with the company.

Federal Ethics Requirements Could Discourage Private-Sector Employees from
Participating

Another challenge identified by federal agencies and IAC is that
private-sector employees considering an assignment to a government agency
could be discouraged by the numerous federal ethics rules they would need
to comply with to participate in the program. The regulations specified by
the act, such as those governing claims against the government, political
contributions, post-employment activities, disclosure of confidential
information, and, especially, financial disclosure could make a detail to
a federal agency unattractive. For example, although this has not yet
occurred, agencies and IAC agreed that the need to file a financial
disclosure statement could discourage some potential private company
participants.

Effectively Marketing the Program

Federal agencies face a challenge in determining how to effectively
promote ITEP to the private sector. IAC has actively marketed ITEP to its
member companies and other federal IT associations; however, marketing
efforts through OPM's USAJOBS Web site, have not been productive,
according to federal agencies. OPM has reported 23,000 hits on USAJOBS,
but participating agencies told us that contacts they received from the
Web site were almost all looking for permanent federal positions and were
unrelated to ITEP.

Several sources told us that a more proactive approach in reaching out to
private companies was needed to get companies to participate. For example,
IAC said that OPM and the participating agencies should promote the
program repeatedly through the media. The director of a similar employee
exchange program at the Department of Energy told us that personal contact
with companies was essential to recruiting companies into the program. To
attract companies, agencies will need to convince them of the value of
exchanges. However, only two of the seven participating agencies had
initiated direct contacts with private-sector companies.

Conclusions

Four years into ITEP, agencies are still initiating and planning their
programs and, accordingly, no exchanges have taken place. Agencies will
face several challenges in making exchanges, including shortages of
employees with key skills and concerns that exchanges could hinder
companies' ability to do future business with the government. OPM and the
participating agencies are aware of the challenges and acknowledge that
they need to be addressed. However, given the short time remaining for
beginning exchanges, it will be essential to expeditiously address the
challenges to enable a significant number of successful exchanges.
Reporting to the Congress on these challenges and the number of exchanges
that have occurred is key to determining the viability of the program and
whether it should continue beyond 2007.

Recommendations for Executive Action

We recommend that, as part of OPM's responsibilities under the E-Gov Act,
the Director of OPM include in its semiannual reports to the Congress (1)
the number of exchanges that have occurred, as required by law, and (2)
the status of efforts to address challenges facing agencies in
implementing ITEP exchanges and whether these efforts are leading to
exchanges.

Agency Comments and Our Evaluation

In written comments on a draft of this report, OPM's Director said that
OPM supports the ITEP and will continue to promote it as a tool available
to agencies in the training and development of the Federal IT workforce.
OPM agreed with our recommendation that future semiannual reports to
Congress include the number of exchanges that have occurred or a statement
that no exchanges have occurred. However, it disagreed with our
recommendation that it include in the semiannual reports the status of
efforts to address challenges facing agencies in implementing the program
and whether these efforts are leading to exchanges. Further, OPM said that
current reporting to Congress fully meets its statutory obligation to
report on the operations of the ITEP. However, we continue to believe that
it should include in the semiannual reports the status of efforts to
address challenges facing agencies in implementing the program.
Confronting these challenges is key to determining whether the program
will be successful and whether it should continue beyond 2007. OPM also
provided technical comments that we have incorporated as appropriate.
OPM's comments are reprinted in appendix II.

We are sending copies of this report to interested congressional
committees. We also will make copies available to others on request. In
addition, this report will be available at no charge on the GAO Web site
at http://www.gao.gov.

If you have any questions on matters discussed in this report, please
contact me at (202) 512-9286 or at [email protected] . Contact points
for our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. GAO staff who made major contributions to
this report are listed in appendix III.

David A. Powner 
Director, Information Technology Management Issues

Appendix I

Objectives, Scope, and Methodology

Our objectives were to determine the (1) status of the Information
Technology Exchange Program and (2) challenges facing the program.

To address our first objective, we reviewed the E-Government Act of 2002,
regulations, and guidance to understand program requirements. We analyzed
approved plans for the Departments of Homeland Security, Defense, and
Commerce and draft plans for the Departments of Treasury and Health and
Human Services. The Federal Bureau of Investigation and Office of
Personnel Management (OPM) did not provide us with copies of their draft
plans. We reviewed these plans to determine details about administering
the exchanges and assessed whether agencies followed OPM guidance in
developing them. We reviewed OPM's semiannual reports to the Congress to
assess progress reported on the status of federal agencies' exchanges with
the private sector. We interviewed program staff at the seven
participating federal agencies, including federal Chief Information
Officers (CIO) and human resource officials, OPM, and Office of Management
and Budget officials on program activities. We also met with members of
the Federal CIO Council Workforce Committee and the Industry Advisory
Council (IAC) to discuss their roles in promoting the program to federal
agencies and private-sector companies.

To address our second objective, we interviewed program staff at OPM and
the seven participating federal agencies and analyzed their responses to
identify future challenges they face in administering the program. We
contacted IAC officials--representing 500 member companies--to determine
challenges to participating in the program identified by companies. We
also conducted research on the Department of Energy's Acquisition Career
Development Program.

We conducted our work from July through November 2006 in the Washington,
D.C., area in accordance with generally accepted government auditing
standards.

Appendix II

Comments from the Office of Personnel Management

Appendix III

GAO Contact and Staff Acknowledgments

GAO Contact

David A. Powner, (202) 512-9286, [email protected]

Staff Acknowledgments

In addition to the contact named above, Neil Doherty, Nancy Glover,
Cynthia Scott, Teresa Smith, and Glenn Spiegel made key contributions to
this report.

(310818)

www.gao.gov/cgi-bin/getrpt?GAO-07-216 .

To view the full product, including the scope
and methodology, click on the link above.

For more information, contact David A. Powner at (202) 512-9286 or
[email protected].

Highlights of [44]GAO-07-216 , a report to congressional committees

December 2006

INFORMATION TECHNOLOGY

Status and Challenges of Employee Exchange Program

Recognizing the importance of human capital to information technology (IT)
and the need to improve the skills of federal IT workers, Congress created
the Information Technology Exchange Program (ITEP) as part of the

E-Government Act of 2002. ITEP aims to improve federal IT skills through
exchanges of staff between the government and the private sector. The
Office of Personnel Management (OPM) was required to issue implementing
regulations, which it did in September 2005, and to report semiannually to
the Congress. OPM's regulations require that each participating agency
develop an ITEP plan before proceeding with exchanges.

Agencies' opportunity to begin exchanges ends in December 2007.

GAO is required to evaluate the program by December 2006. As agreed, GAO's
objectives were to determine (1) the status of the program and (2)
challenges facing agencies. To address these objectives, GAO analyzed key
documents and interviewed OPM, participating agencies, and others.

[45]What GAO Recommends

GAO is recommending that the Director of OPM include in its upcoming
semiannual reports the number of exchanges that have occurred and the
status of efforts to address challenges facing agencies in implementing
ITEP. In comments on a draft of the report, OPM agreed to report on
exchanges but not on challenges.

With only 1 year remaining to begin exchanges under the ITEP program, the
seven agencies that volunteered to participate are still initiating their
programs, and no exchanges have taken place. All participating agencies
have drafted plans, but only three--Department of Homeland Security,
Department of Defense, and Department of Commerce--have finalized them.
Further, only Homeland Security has attempted to negotiate an exchange,
but it was unsuccessful. In its last two semiannual reports, OPM has
reported on the status of agency plans, but has not reported that no
exchanges have taken place to date.

OPM, agencies, and others have identified key challenges that will
confront agencies as they finish their plans and begin to implement ITEP
programs:

           o Employees with desired skills are in short supply in both the
           federal government and the private sector, particularly in
           enterprise architecture, project management, and information
           security, according to industry representatives.
           o Companies are concerned that employee exchanges could hinder
           future business, since a company with an employee at an agency
           might be seen as having an unfair advantage in bidding on agency
           procurements.
           o Federal ethics requirements, especially financial disclosure,
           could discourage private-sector employees from participating.
           o Federal agencies' current marketing through a Web site has not
           been productive, according to participating agencies; suggested
           improvements include using the media and making personal contacts
           with companies.

OPM and the participating agencies are aware of the challenges and
acknowledge that they need to be addressed. However, given the short time
remaining before authority to begin new exchanges ends (see figure), it
will be essential to expeditiously address the challenges to enable a
significant number of successful exchanges.

OPM and Participating Agencies' ITEP Actions

References

Visible links
 44. http://www.gao.gov/cgi-bin/getrpt?GAO-07-216
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