Electronic Government: Federal Initiatives Are Evolving Rapidly But They
Face Significant Challenges (Testimony, 05/22/2000,
GAO/T-AIMD/GGD-00-179).

Pursuant to a congressional request, GAO discussed the evolving
electronic government (e-government) environment, focusing on: (1) the
statutory and policy framework; (2) key efforts to implement electronic
government programs; and (3) the major challenges confronting both
government and the private sector in making the transition to online
business and service environments.

GAO noted that: (1) while market and technology developments in private
industry are inevitably bumping the public sector more and more into the
electronic business domain, an evolving framework of laws and policies
are influencing the speed, pace, and direction of electronic government
initiatives; (2) in many cases, statutory requirements authorizing
agency programs may explicitly mandate action that involves electronic
and online processes; (3) these agency actions can vary widely, ranging
from efforts to improve internal business operations to mandates for
reforms outside the agency; (4) federal departments and agencies are
governed by general management statutes that affect electronic processes
in a variety of ways; (5) in addition to legal statutes, the executive
branch coordinated cross-agency projects and issued numerous policies in
the last few years encouraging the growth and adoption of electronic
government; (6) these efforts reflect themes supported by champions of
e-government including: (a) a need for the federal government to
tangibly demonstrate an ability to improve its service and access to the
citizen; and (b) a recognition that Web-based technologies can be
effective levers to override cultural and organizational barriers to
change; (7) particularly in the last 6 months, the administration has
devoted increasing attention to promoting e-government; (8) agencies are
tasked with providing easy public access to government information on
the World Wide Web, making forms available online, and making assistance
benefits available through private, secure online transactions; (9) an
immediate and complex leadership challenge confronting government
policymakers and managers is the need to adopt informed strategies to
guide agencies in how best to use the Internet to deliver services to
all citizens and business partners; (10) there is considerable disparity
in access to and use of the Internet among citizen groups and
businesses; (11) those with limited access include many small businesses
and citizens who live in remote areas and the inner city, businesses and
citizens with little or no computer knowledge, and the disabled; and
(12) an important policy consideration governments face is how to
provide services and access to these segments of the population and
ensure their participation in this new electronic environment.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-AIMD/GGD-00-179
     TITLE:  Electronic Government: Federal Initiatives Are Evolving
	     Rapidly But They Face Significant Challenges
      DATE:  05/22/2000
   SUBJECT:  Computer networks
	     Information technology
	     Interagency relations
	     Customer service
	     Electronic data interchange
	     Computer security
	     Information resources management
	     Public administration
	     Private sector practices
	     Intergovernmental relations
IDENTIFIER:  Internet
	     ILOVEYOU Computer Virus
	     World Wide Web
	     GSA Electronic Posting System
	     GSA Access Certificates for Electronic Services Program

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GAO/T-AIMD/GGD-00-179

   * For Release on Delivery
     Expected at
     1 p.m.

Monday,

May 22, 2000

GAO/T-AIMD/GGD-00-179

electronic government

Federal Initiatives Are Evolving Rapidly But They Face Significant
Challenges

        Statement of David L. McClure

Associate Director, Governmentwide and Defense Information Systems

Accounting and Information Management Division

Testimony

Before the Subcommittee on Government Management, Information and
Technology, Committee on Government Reform, House of Representatives

United States General Accounting Office

GAO

Mr. Chairman and Members of the Subcommittee:

I appreciate the opportunity to be here today to participate in the
Subcommittee's hearing on electronic government issues. There is perhaps no
topic that generates more lively discussion than the rapid changes that the
Internet is introducing to our personal lives, the economy, and institutions
throughout our society. The United States is the world's leading Internet
nation, with over 110 million users. By some estimates, worldwide Internet
traffic is doubling every 100 days.

Electronic commerce and business strategies made possible by widespread
Internet access and interconnected systems are transforming how
organizations, both public and private, will operate in the next decade.
This trend is accelerating at a rapid pace, with investments in information
technology expected to account for 40 percent of all capital investment in
the United States by 2004. According to recent forecasts by the Gartner
Group, spending by federal, state, and local governments on e-government
will quadruple over the next 5 years, from $1.5 billion in 2000 to $6.2
billion in 2005.

Mr. Chairman, the rising connectivity and interdependence fostered through
information technology create both benefits and challenges. The potential
for benefits to the public sector is vast. Today, governments at all levels
are using the Internet and other electronic commerce means to improve
internal business operations and to provide on-line public access to
information and services. Opportunities for further improvements abound. New
global Web technology applications and opportunities undoubtedly will
continue to transform the way the federal government conducts business,
communicates, and interacts with citizens, industry, and other government
entities.

As we recently witnessed with the "ILOVEYOU" computer virus, the potential
for improvements in service and productivity offered by the Internet come
intertwined with a whole new set of management challenges. As such,
electronic business initiatives must still address the many costs, benefits,
and risks associated with any information technology decision-making. With
the speed and ease of massive interconnectivity offered by the Internet,
improvements in operational efficiencies, lower costs, and improved customer
service delivery truly can be dramatic. On the other hand, general business
risks such as fraud, theft, and destruction of assets, along with legal
issues such as liability and the loss of reputation, are exacerbated by the
openness of the Internet. Other matters related to adequate technical
infrastructure planning, stability in the numbers and skills of the
technology workforce required to build and maintain web-enabled products and
services, and adequate top management leadership and involvement further
complicate the underlying challenges.

Congressional interest in both the opportunities and challenges posed by
electronic government is evident from the numerous oversight hearings and
legislative proposals on topics ranging from Internet taxation, privacy,
computer security, consumer protection, open access, and competition. At
GAO, we have numerous reviews underway examining these and other electronic
government issues, such as use of the Internet to improve rule-making and
the implementation of electronic commerce programs at specific agencies. We
expect to be able to provide more comprehensive information and analyses on
many of these topics in the near future.

In my remarks today, I would like to address a few key aspects of the
evolving electronic government environment. Specifically, I'll focus on the
statutory and policy framework, describe key efforts to implement electronic
government programs, and outline the major challenges confronting both
government and the private sector in making the transition to on-line
business and service environments. Because the terms electronic commerce and
electronic government are often used interchangeably, let me begin by
briefly discussing how they overlap. As I will discuss shortly, the same
capacities that are transforming the business community offer equal
opportunities for government to excel.

Electronic Government Can Build Upon Electronic Commerce Experiences and
Approaches

The basic idea of e-commerce has actually been around for quite some time,
but the World Wide Web has brought a lot of changes and new opportunities in
the last few years. Until recently, e-commerce was mainly identified with
electronic data interchange, or EDI. EDI allows one business's computer
system to send routine information about transactions to another business's
system, following standardized formats. Its focus is on business or trading
partner data interactions, not serving consumers directly. The rise of the
World Wide Web over the last few years has dramatically broadened the scope
of electronic commerce. Electronic commerce is now seen as encompassing all
aspects of buying and selling electronically, including marketing,
end-to-end transactions with consumers, and on-line auctions. It is
transacted through a variety of technologies, including EDI, electronic
mail, electronic funds transfer, and web-based applications.

Electronic commerce often involves two kinds of relationships:
business-to-business and business-to-consumer. Generally
business-to-business relationships are ongoing and contractually
established, involving many transactions over a long period of time, such as
between a commercial business and its suppliers. Typically, the seller
extends credit to the buyer, and transactions are initiated with purchase
orders, which are used to monitor and control the entire buy-sell-pay
process.

The business-to-consumer relationship is a newer one that largely builds on
the emerging power of the World Wide Web. It involves moving information,
products, and services on-line for consumption and purchase by consumers.
Indeed, the Web is forcing businesses and governments alike to rethink their
methods of communicating and interacting with the public, and, in some
cases, rethink how they deliver their core mission services and products.
Already we have seen a wave of new electronic businesses spring up on the
Internet to capitalize on the Web's advantages of (1) attracting broad new
customer communities, (2) setting up and maintaining a Web "storefront," and
(3) highly targeted marketing with tailored offers that the consumer can
accept and finalize on the spot.

The recent advances in web-based commerce mean that comparable advances in
e-government are just as possible. Generally speaking, electronic government
refers to government's use of technology, particularly web-based Internet
applications, to enhance the access to and delivery of government
information and service to citizens, business partners, employees, other
agencies, and government entities. It has the potential to help build better
relationships between government and the public by making interaction with
citizens smoother, easier, and more efficient. Indeed, government agencies
report using electronic commerce to improve core business operations and
deliver information and services faster, cheaper, and to wider groups of
customers. For example, the Department of Defense (DOD), the National
Aeronautics and Space Administration (NASA), the General Services
Administration (GSA) and other agencies have been implementing on-line
procurement operations for several years. The Internal Revenue Service
(IRS), the Department of Education, and the Social Security Administration
have been actively using electronic commerce techniques to improve service
delivery to taxpayers, students, and senior citizens. As such, e-government
includes many of the same characteristics of electronic commerce used in the
private sector, with the exception of having a more defined customer base
and less focus on revenue generation as a primary business driver.

A Diverse Statutory and Policy Framework Underlies Expectations for
Electronic Government

   * The Clinger-Cohen Act of 1996 requires GSA to provide governmentwide
     on-line access to information about products and services available
     under the multiple award schedules program.
   * The Fiscal Year 1999 DOD Authorization Act required DOD to establish a
     single, Defense-wide electronic mall system for ordering supplies and
     materials.
   * The Electronic Benefit Transfer Interoperability and Portability Act of
     2000 requires the Department of Agriculture (USDA) to establish a
     national standard of interoperability and portability for electronic
     food stamp benefit transactions.

Additionally, federal departments and agencies are governed by general
management statutes that affect electronic processes, again, in a variety of
ways. For example:

   * In response to the Clinger-Cohen Act, federal agencies are developing
     internal investment control and performance management processes
     designed to improve their acquisition, use, and management of
     information technology. This has spurred attention to new information
     systems-many web-based-such as the Information Technology Information
     Processing System (I-TIPS) supported by the federal Chief Information
     Officers (CIO) Council and currently used by several federal agencies
     including the Departments of Housing and Urban Development, the
     Treasury, Labor, Energy, and Agriculture.
   * The Privacy Act requires agencies to protect the confidentiality of
     records containing personal information and forms the basic
     requirements that are now being applied to protecting personal
     information that is captured by agency web sites.
   * The Government Paperwork Elimination Act of 1998 sets a deadline of
     October 2003 for agencies to develop capabilities to permit, where
     practicable, electronic maintenance, submission, or disclosure of
     information, including the use of electronic signatures.

In addition to legal statutes, the executive branch coordinated cross-agency
projects and issued numerous policies in the last few years encouraging the
growth and adoption of electronic government. For example, in 1993, the
National Performance Review (NPR), initially developed proposals to
implement electronic government. In 1997, NPR outlined further steps to
encourage and increase citizen and business Internet access to the most
commonly requested government services. These and other similar efforts
reflect two overarching themes supported by champions of e-government: (1) a
need for the federal government to tangibly demonstrate an ability to
improve its "service and access to the citizen" and (2) a recognition that
web-based technologies can be effective levers to override cultural and
organizational barriers to change. That is, web-based applications can
provide a friendly citizen interface over confusing and suboptimized
government agency structures, responsibilities, and processes.

Other executive branch policies seek to ensure private sector leadership and
avoid unnecessary governmental regulation. For example, in 1997 the
Administration outlined the following policy principles in a special report:

   * The private sector should lead.
   * Governments should avoid undue restrictions on electronic commerce.
   * Where governmental involvement is needed, its aim should be to support
     and enforce a predictable, minimalist, consistent, and simple legal
     environment for commerce.
   * Governments should recognize the unique qualities of the Internet.
   * Electronic commerce over the Internet should be facilitated on a global
     basis.

Particularly in the last 6 months, the administration has devoted increasing
attention to promoting electronic government. On December 17, 1999,
presidential memoranda directed agencies to undertake numerous actions to
provide "one-stop access" to government information and services and better,
more efficient services and accountability, and to promote the broader
social benefits of information technology. Among other things, agencies are
tasked with providing easy public access to government information on the
Web, making forms available on-line, and making assistance benefits
available through private, secure on-line transactions.

In addition to these actions taken by the administration, a number of
cross-agency groups have emerged to assist agencies in managing the
transition from paper to electronic services. For example, the Federal
Electronic Commerce Program Office, co-chaired by GSA and DOD, is chartered
to provide central leadership, coordination, and reporting on governmentwide
electronic commerce implementation. In addition, the Interagency Acquisition
Internet Council was established to promote ways of using the Internet to
streamline the federal acquisition process. Similarly, the Interagency
Electronic Grants Committee (IAECG) was established to promote the use of
electronic commerce throughout the federal grants community.

Both the President's Management Council (PMC) and the CIO Council have
announced initiatives to support the goal of promoting electronic
government. The PMC, for example, has formally set a cross-agency goal of
committing the necessary resources and priorities to ensure creation of a
one-stop on-line help center that will be available through a central web
access point, or portal. The PMC has committed to reprogram the necessary
resources, currently estimated to be several million dollars, to get this
effort started. Called WebGov, it will help guide citizens to various
federal government web sites with the information or services they need. The
PMC is currently evaluating how best to facilitate the efforts of Internet
Service Providers and other Internet companies to improve their customers'
access to government information.

The CIO Council recently established an e-government committee that is
formulating a strategic plan and undertaking various short-term initiatives.
Several of these efforts involve working in partnership with industry and
state governments. For example, CommerceNet (a nonprofit market and business
development organization) is working with the federal government to allow
citizens to find on-line government surplus items.

Government Use of the Internet Is Evolving

To provide a better picture of the scope and range of ongoing e-government
activities, I would like to elaborate on some ongoing individual efforts as
they relate to trends in using the Internet to conducting basic
transactional services, on-line procurement, and interactive communication
and information dissemination.

Transactions and Applications

The Electronic Tax Administration (ETA), is designed to reduce taxpayer
burden by making it easier and faster to file returns and communicate with
IRS. IRS expects to receive over 33 million electronically filed individual
tax returns in fiscal year 2000, or over 26 percent of all individual tax
returns. One key initiative for fiscal year 2000 is expanding the use of
identification numbers to facilitate secure filing by tax preparers. IRS
also plans to make more electronic payment options available and to accept
more forms and schedules through electronic filing.

Several state and local governments offer on-line, form-based transactions,
such as job applications, business and professional licensing, and
registering vehicles. For example, the state of Florida's web site offers
easy-to-navigate categories of information and services, including on-line
job applications, consumer complaint forms, and business and professional
license searches. The state of Virginia became the first state to allow
citizens to renew drivers' licenses via the Web. It allows citizens to log
onto the Department of Motor Vehicle's web site, check on whether personal
information is correct, and pay the renewal fee with a credit card.

On-line Procurement

   * The state of West Virginia has an electronic bid submission program and
     the state of Florida has Web site services relating to purchasing and
     leasing. The state of Texas also receives electronic bids and proposals
     and is establishing an electronic procurement marketplace, which is
     expected to be operating statewide by September 2001.
   * Since 1998, the GSA has been working with several other agencies to
     provide businesses, large and small, with convenient, single
     point-of-entry Internet access to synopses of government contracting
     opportunities, solicitations, awards, and other acquisition-related
     documentation. The Electronic Posting System (EPS) initiative-currently
     in a pilot stage-allows vendors to search for contracting opportunities
     over $25,000, receive automatic e-mail notification about agencies'
     requirements for specific supplies or services, receive automatic
     e-mail notification about changes and amendments to solicitations,
     download documents related to a specific procurement; and view
     summaries of contract awards.
   * In September 1995, GSA Advantage went on-line. It was the federal
     government's first electronic catalog on the Internet. Advantage allows
     agencies to search for products and services and place orders from
     GSA's federal supply schedule contractors. According to GSA, there are
     currently over 2,000 schedule vendors on Advantage and fiscal year 1999
     sales were $86 million. We are currently conducting a review of the
     Advantage program for this Subcommittee and expect to report on our
     assessment later this year.

Interactive Communication and Information Dissemination

   * Access America for Seniors is designed to be an entry portal for senior
     citizens to reach government services and information on such topics as
     benefits, taxes, health and nutrition, and consumer protection.
     Similarly, the Access America for Students web site acts as a gateway
     to information of interest to students, with links to some on-line
     transactional resources such as applications for federal financial aid,
     a calculator (to compute monthly loan repayments), a form to
     consolidate loan repayments, selective service applications, and links
     to the IRS e-filing service.
   * Several federal agencies are developing expert systems and intelligent
     technology to provide businesses compliance assistance and to reduce
     burden. For example, the Department of Labor has developed 18 "E-law
     Advisors," web-based expert systems that the public can query through
     menus and routine questions to better understand and comply with DOL
     regulations. Occupational Safety and Health Administration is working
     on the next generation of these systems that would combine interactive
     questionnaires and electronic forms with legal analysis.
   * More than 20 federal agencies are participating in the Federal Commons,
     an interagency effort to use electronic commerce to streamline grants
     administration. The federal government has over 800 grant programs
     managed by 33 agencies. Each program has a unique legislative base. As
     a result, there is a plethora of different forms, procedures, award
     decision-making processing systems, and payment systems. The Federal
     Commons web site is expected to become the single point of entry for
     federal grants programs and a central repository for grant-related
     information. At present, the site accepts data from grant applicants
     and recipients for the 20 participating agencies in any format and
     transmits the data to each agency in its desired format.

Challenges in Transitioning to Electronic Government

Effective Executive Leadership and Management

As government expands the volume and scope of its electronic business
transactions and the diversity of the users of electronic services, it will
become increasingly important for government leaders and managers to devote
time and attention to interagency and intergovernmental design,
implementation, and coordination of these programs. Information technology
(IT), particularly web-based applications, provide the opportunity to
reengineer government and to allow government services to be organized in
ways that fit the needs of citizens rather than the requirements of
bureaucracies.

In government's rush to electronic service delivery, it is important to
remember that fundamental principles and practices of good IT planning and
management apply equally as well to effective customer-centric web-based
applications. Some of these fundamentals include

   * developing a well-defined project purpose and scope and realistic,
     measurable expectations,
   * understanding and improving business processes before applying
     technology,
   * performing risk assessments and developing appropriate risk mitigation
     strategies,
   * using industry standard technology and solutions where appropriate,
   * adopting and abiding by data standards,
   * training thoroughly and supporting users, and
   * reviewing and evaluating performance metrics.

An immediate and complex leadership challenge confronting government
policymakers and managers is the need to adopt informed strategies to guide
agencies in how best to use the Internet to deliver services to all citizens
and business partners. Today there is considerable disparity in access to
and use of the Internet among citizen groups and businesses. Those with
limited access include many small businesses and citizens who live in remote
areas and the inner city, businesses and citizens with little or no computer
knowledge, and the disabled. An important policy consideration governments
face is how to provide services and access to these segments of the
population and ensure their participation in this new electronic
environment. Multiple access methods to government services and processes-in
person, by phone, via fax, using public kiosks-may be essential to
supplement Internet use.

Developing and Sustaining a "Citizen as Customer" Focus

Just as the Internet and web-based technologies force organizations to
rethink their business processes, they force organizations to reconsider
their customers-specifically how their customers need, perceive, and digest
information and services in a viewable, electronic format. For example,
private industry web sites are increasingly being tailored to allow for
individual preferences and needs to restrict information only to those
products and services desired. Interactive and e-mail messages are
transmitted to remind specific customers of products, services, and
information that they have expressed past interests in. "Interactive"
consumers meanwhile are starting to demand even more convenience and
operational excellence from the on-line companies they deal with on a
regular basis. Although there are privacy concerns related to these
practices, the same expectations can surface for electronic government
service delivery as well.

Government agencies and other organizations have identified a number of
areas in which there needs to be a governmentwide strategy, guidance, and
framework of policies and practices to ensure effective design, development,
and implementation of customer-focused electronic service delivery. For
example, some agency officials have pointed out that the public will expect
a more consistent level of service across agencies, including navigable web
sites with intelligent search capabilities, similar user interface
conventions, and interoperable authentication policies and methods.

Security and Privacy

A big piece of the solution to this problem will be in the development and
implementation of so-called Public Key Infrastructure or "PKI" technology. I
would like to address this in some detail because it is integral to ensuring
a successful future for e-government. A PKI is a system of computers,
software, and data that relies on certain sophisticated cryptographic
techniques to secure on-line messages or transactions. A key component is
the use of electronic "certificates" that vouch for a particular user's
identity. A properly implemented and maintained PKI can offer several
security services. Specifically, it can provide assurance that (1) the
parties to an electronic transaction are really the people they claim to be,
(2) the information has not been altered or shared with any unauthorized
entity, and (3) neither party will be able to wrongfully deny that they took
part in the transaction. Key federal security experts believe these
assurances would provide the comfort level necessary to spark widespread
implementation of electronic government services.

The federal government is aggressively promoting the deployment of PKI
technology. Currently federal agencies-including NASA, DOD, and the Patent
and Trademark Office-are experimenting with 24 pilot PKI programs. A Federal
Public Key Infrastructure Steering Committee has been established to
coordinate PKI pilot projects on a governmentwide basis and to take
initiatives to encourage the adoption of PKIs. For example, the Steering
Committee has sponsored the development of a prototype Federal Bridge
Certification Authority, which is a mechanism that will allow disparate
agency PKIs to recognize each other's electronic certificates. GSA built the
prototype on behalf of the steering committee, and it was demonstrated in
April 2000. The intent of the demonstration was to show that the bridge
authority can interoperate with other PKI domains with varying certificate
policies, including DOD's separate demonstration bridge certification
authority. However, the Federal Bridge Certification Authority is still a
prototype, and so far it has only been demonstrated in a test environment.
Questions have been raised as to whether the technology will be able to
handle large numbers of users and transactions in a real-world environment.

Furthermore, GSA has been working since 1996 on a program called Access
Certificates for Electronic Services (ACES), which is intended to help
jumpstart agency adoption of PKI technology to provide the public with
secure access to privacy-related government information and services. In
1999, GSA awarded ACES contracts to three vendors to provide a range of
support services to agencies wishing to adopt PKI technology. The first
vendor was authorized to issue ACES certificates in April 2000, so the
capability has only very recently become available. The significant feature
of ACES is that it can support the use of digital signature certificates
without individual agencies having to build their own PKIs. In this kind of
arrangement, certificates are provided to the public for free, and whenever
they are used to support a transaction, the agency involved must pay a fee
to the relevant ACES vendor.

Some agency officials believe it will be difficult to budget for ACES
certificates because the total cost, which depends on how heavily the
service is used, is not known. Agency officials also worry that if their
programs are successful and heavily used, their ACES costs may be high. In
addition, it would be advantageous for certificates to be interoperable and
certificate policies to be consistent across the government. Guaranteeing
the authentication of certificate holders, for example, can be problematic
if agencies and vendors all use different processes.

Despite all the useful development work that has been conducted to date,
PKIs are not yet commonplace, either in the private sector or in government.
And a number of significant challenges must still be overcome before the
technology can be widely deployed and implemented. For example:

   * Most large-scale implementations have been limited to pilot
     environments or specific applications. Issues have been raised
     regarding how well PKI technology can scale to the level of hundreds of
     thousands or millions of users, as will be encountered in government
     applications. A network of trusted registration authorities may be
     needed to verify the identities of all users. In addition, another vast
     network of electronic directories will need to be in place so that
     every user's identity can be looked up and verified before any
     transaction takes place. As such, problems with verification failures
     or unacceptably slow response times are possible until further
     operational experience is gained with large-scale PKI implementation.
   * It can be expensive to establish a PKI. A significant up-front cost is
     involved with fielding and maintaining a PKI capability in a production
     environment. New systems must be set up to positively identify users,
     issue them electronic certificates, and manage the exchange and
     verification of certificates. In addition, existing software
     applications and legacy systems must be modified so they can interact
     with the PKI. These activities can involve significant costs. Funding
     for some key governmentwide PKI infrastructure has not yet been
     established but they will be needed to build and maintain an
     operational federal bridge certificate authority for fiscal years 2001
     and beyond.
   * Although many PKI products are currently on the market, they generally
     are not interoperable. Choosing among them means taking the risk of
     adopting a "dead end" technological approach that may soon need to be
     replaced. The Federal Bridge Certification Authority may help resolve
     some agency-to-agency interoperability issues, but it is not yet
     operational. Having additional standards to help facilitate
     interoperability can also help resolve this issue.
   * PKI implementations are not always user-friendly. Some early adopters
     of PKI have found it difficult for users to interact with PKI systems.
     Users need proper training to perform functions such as generating
     their private/public keys, protecting their private keys, backing up
     and using their certificates. As you know, in the world of computers, a
     system that is too difficult to use probably won't be used at all.
   * Compounding the security problem are concerns about sharing private
     information electronically. Individuals should be able to determine
     when, how, and to what extent personal information is collected and
     used. However, if not properly implemented and managed, the
     technologies that have been developed to manage massive volumes of
     personal information could also be abused. It is no longer technically
     difficult for the government to establish databases that collect
     extensive personal information about large numbers of individual
     citizens. This means that when technologies such as PKI are
     implemented, extra care must be taken to avoid improperly gathering or
     using personal information.

As you know, we are currently reviewing the development and implementation
of PKI technology throughout the federal government at your request and will
be providing a fuller report later this year.

Technology-Related Challenges

The key to success in e-government is to plan for and implement an adequate
technical infrastructure that will support a user's experience of easy and
reliable electronic access to government. Elements of this supporting
infrastructure include:

   * Adequate network capacity, or bandwidth. Government agencies will need
     to consider the amount of electronic traffic that will be generated by
     an electronic offering and provide adequate connectivity to support
     that load. Some web sites have been completely overwhelmed and disabled
     when far greater numbers of users visited the sites than their
     developers had anticipated.
   * Platform and software application reliability. The web servers and
     other computer platforms that support e-government services-including
     their operating systems and the software that connects them-must also
     be capable of supporting potentially heavy user demands and must run
     reliably. The system must reliably confirm that a transaction is
     complete and also must reliably abort a transaction completely and
     consistently in the event that some problem intervenes. The technology
     in use today does not always respond consistently and unambiguously.
     Users may fill out lengthy on-line forms and submit them without
     getting any clear response from the system at all, leaving them unsure
     whether their submission was received and accepted.
   * Interoperability. Even a smoothly operating electronic delivery service
     will fail to fulfill the promise of e-government if it is isolated from
     or unable to work with other related applications. Instead,
     e-government applications should be able to communicate and exchange
     relevant data with each other. To ensure interoperability, government
     officials need to recognize its importance and design it in from the
     start. The emergence of key technical standards for electronic business
     will help.
   * Technical roadmaps. Application developers will need to agree upon an
     overall systems roadmap to guide the development and evolution of
     e-government systems. Architecture development is a primary means of
     integrating systems and business processes across an organization in a
     cost-effective manner. Architectures align information system
     requirements with the business areas and processes that they support
     and promote systems that readily exchange and share information. They
     also can help avoid inconsistent design and development decisions and
     their associated increased costs and performance shortfalls. Our work
     at other agencies, such as the Customs Service and IRS, has illustrated
     the criticality of an agencywide architecture in helping reduce systems
     development risk and minimizing investment costs.
   * Alternative media, such as wireless devices. Finally, it is important
     to note that technology is continuing to evolve at a rapid pace, and
     today's web-based applications are not necessarily the final
     incarnation that e-government will take. As the public moves to more
     compact wireless devices, the government will need to move as well,
     perhaps supporting a variety of media through which to conduct
     transactions, from traditional paper-based methods on end of the
     spectrum to small wireless receivers on the other.

Human Capital: Demand for IT Skills

As governments at all levels increase their efforts to provide electronic
service delivery systems, they face the reality that IT human resources to
develop and manage web-based Internet applications are in short supply. The
demand for IT workers is large and growing. Employers will attempt to fill
1.6 million new IT jobs in 2000. The largest skill gaps are for enterprise
systems integration and web development positions. These positions have high
complexity and a scarcity of qualified applicants. The increasing need for
qualified IT professionals puts governments in direct competition with the
private sector for scarce resources. In addition, the increasing government
reliance on private sector service providers and outsourced application
development has created a growing demand in the federal workplace for more
traditional skills, such as contract management and project and program
management.

Agencies are also becoming acutely aware that electronic government
technology applications work only if people have the right training to
execute them properly. The challenge of new technology and the mandate on
improving customer service have led to an increased commitment to training.
Without fully developing staff capabilities, agencies stand to miss out on
the potential customer service benefits presented by technology. Employees
must have the training and tools they need to do their jobs. The process of
adopting a new system can be made much less difficult by offering
well-designed, user-oriented training sessions that demonstrate not only how
the system works, but how it fits into the larger work picture and "citizen
as customer" orientation. A significant challenge for all agencies is
providing internal incentives for customer service, reducing employee
complaints, and cutting the time employees spend on non-customer-related
activities.

Conclusions

Nevertheless, despite its promise, technology advancement is not a panacea
for government performance problems. I want to emphasize that we still face
some formidable challenges. While considerable technological progress has
been made, successful e-government must still deal with some of the same
basic challenges that have plagued information systems for
decades-inadequate attention to technical and business architecture,
adherence to standards, and security. We still have limited experience in
implementing the mechanisms for security and privacy-especially PKI-which is
just one among many factors affecting the large-scale use of e-commerce and
e-government. We also need systems that operate together seamlessly behind
the scenes, offering a single face to the public and allowing transactions
to occur in a way that is reliable, and easy to navigate.

Beyond technology, government executives and senior managers must recognize
and embrace the efficiencies offered by e-government proposals and develop
effective investment strategies and plans to make them reality. Moreover,
top leadership must effectively merge the power of electronic
interactions-among agencies, with businesses, and with the public-with
necessary and corresponding management and process improvements that will
better ensure positive outcomes. In addition, the Web provides new
challenges for several traditional information policy areas. The mechanisms
used to ensure freedom of information, copyright protections, records
management, and privacy may need to be reevaluated given increasing reliance
on the Web and its capacity to distribute and present information to both
known and unknown audiences. These, too, are familiar themes behind recent
information management reforms and should not be ignored.

Mr. Chairman, that concludes my statement. I would be happy to answer any
questions that you or other members of the Subcommittee may have.

(511976)

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