**HEARING BY THE HOUSE GOVERNMENT REFORM COMMITEE SUBCOMMITTEE ON
TECHNOLOGY, INFORMATION POLICY, INTERGOVERNMENTAL RELATIONS AND THE
CENSUS**

**FEDERAL E-GOVERNMENT INITIATIVES: ARE WE HEADED IN THE RIGHT
DIRECTION?**

March 13, 2003

**[INTRODUCTION]{.underline}**

The March 13, 2003 hearing on Federal E-Government Initiatives: Are We
Headed in the Right Direction? by the newly reorganized Subcommittee on
Technology, Information Policy, Intergovernmental Relations and the
Census was conducted by Chairman Adam Putnam.

Ranking member Lacy Clay and Vice Chairman Candice Miller also attended.

Witnesses who provided testimony were:

[Mark A. Forman,]{.underline} Associate Director, Information Technology
and Electronic Government, OMB

[Joel C. Willemssen]{.underline}, Managing Director, Information
Technology, GAO

[Patricia McGinnis]{.underline}, President and CEO, The Council for
Excellence in Government

[Leonard M Pomata]{.underline}, President, webMethods Government

In his Opening Statement, Chairman Putnam said areas the Subcommittee
will examine during the 108^th^ Congress include:

-   The President's recently submitted cyber security proposal and the
    security of our infrastructure for financial markets, public
    utilities and other critical systems.

-   IT management and e-government including agency and department
    website development, cross agency coordination, acquisition
    strategy, and performance results.

**The significance of human capital considerations was a common theme in
witness statements**.

[Mark Forman]{.underline} emphasized the critical importance of Federal
employees in his statement and during questions/answers:

-   Seven hundred seventy one (771) projects are on the OMB "At Risk
    List" for failing to address people and process transformation
    needed to ensure success, or do not adequately address IT security.

-   In 5 or 6 years we will not have enough people in Government (to
    plan/manage programs/systems).

[Patricia McGinnis]{.underline} suggested that Government managers will
need a new version of the "3Rs" to succeed and thrive in the
E-Government era. They need to be Re-tooled, Re-educated and constantly
Re-freshing themselves and their teams in areas such as project
management, information analysis and problem solving and customer
relationship management. Also, our hiring, training and retention
strategies for Government workers will need the 4^th^ and 5^th^
"Rs"...Rethinking and Reform as we move forward.

[Leonard Pomato]{.underline} discussed the importance of teams. He
stated project teams need to be fully trained in development approaches
and imbed measurement points in the process to determine progress.
Management teams need to be responsible and accountable for review of
team progress through similar measurement methodologies.

The remainder of this report contains brief extracts from witness
statements and key questions/answers.

**[WITNESS STATEMENTS]{.underline}**

**[Mark Forman, OMB]{.underline}**

Mr. Forman said we are headed in the right direction with the
E-Government Initiatives.

E-Government is one of the key elements in the President's management
agenda. The expanding E-Government initiative is bringing more services
to the American citizen over the Internet and is using IT to improve
management throughout the Executive Branch.

When using the Internet, it should not take a citizen more than three
"clicks" of a mouse to access the Government information needed.
Achieving this vision requires agencies to integrate and to simplify
their operations.

The Administration's E-Government efforts address the six chronic
problems that limit results from Federal IT spending:

-   Agencies have automated existing outdated processes, instead of
    fixing underlying management problems or simplifying agency
    procedures to take advantage of new E-business and E-Government
    capabilities.

-   Agencies have made unnecessarily duplicative IT investments.

-   Inadequate program management\--many major IT projects have not met
    cost, schedule and performance goals.

-   Few agencies have had plans demonstrating and documenting the
    linkage between IT capabilities and the business needs of the
    agency.

-   Agencies have built individual capabilities that are not
    interoperable with one another. Few IT investments significantly
    improve mission performance.

-   Poor IT security---major gaps have existed in agency and
    Government-wide information and IT-related security.

The E-Government initiatives consolidate dozens of redundant agency
centered efforts. The 24 projects were selected on the basis of the
value they would bring to citizens, while generating cost savings or
improving effectiveness of Government..

The initiatives reflect the Administration's E-Government strategy,
which focuses on four citizen-centered groups:

-   Individuals: Building easy to find one-stop shops for
    citizens---creating single points of easy access to high-quality
    Government services. Citizens should be able to find what they need
    quickly and easily and access information in minutes or seconds,
    instead of hours or days.

-   Businesses: The Federal Government must use the Internet to reduce
    the burden it places on businesses. The Administration cannot
    continue to make businesses report the same data to multiple
    agencies because the Government fails to minimize redundant data
    collection and use commercial electronic transaction protocols.

-   Intergovernmental: The Federal Government must make it easier for
    states and localities to meet reporting requirements, while
    promoting performance, especially for grants. Many of the
    intergovernmental initiatives are designed to improve homeland
    security as identified in the President's Budget and in the National
    Strategy for Homeland Security released in July. One initiative is a
    secure portal that will improve the disaster management process by
    simplifying and unifying the interaction between Federal, state and
    local public safety personnel.

-   Internal Efficiency and Effectiveness: The Federal Government must
    modernize internal processes to reduce costs for Federal agency
    administration. Industry best practices in supply-chain management,
    financial management, and knowledge management improve agency
    efficiency and effectiveness, eliminates delays in processing, and
    improves employee satisfaction and retention.

Significant progress has been made on the E-Government projects in the
last year, including the launch of numerous Government portals,
initiative websites and consolidations.

We are continuing to focus on improving Government responsiveness and
reducing the Government's burden. Some of the initiatives that will have
deployments over the next few months are:

-   Geospatial One Stop Portal will launch in the Spring of 2003,
    pulling together all existing and planned Federal geospatial assets
    into one-stop shopping for all customers.

-   Disasterhelp.gov. At the end of April 2003, the initiative will
    launch a robust set of tools for Federal, state local, and tribal
    first responders to work together before, during and after a
    disaster.

-   Business Compliance One-Stop. One-stop Internet access to help small
    businesses find the laws and regulations they must comply with to
    start and/or manage a business.

Over the past year, the Administration made significant progress in
addressing the six chronic problems that were identified in the FY 2003
budget as limiting IT effectiveness:

-   [Automation of existing outdated processes, instead of fixing
    underlying management problems or simplifying agency procedures to
    take advantage of new E-Business and E-Government
    capabilities]{.underline}. OMB's guidance for the FY 2004 IT budget
    process required that agencies take a comprehensive reform approach
    in identifying people, processes and technology required to deliver
    significantly better results. As a result, 771 projects,
    representing approximately \$21 billion, are on the "At Risk List"
    for failing to address people and process transformation needed to
    ensure success or do not adequately address IT security. OMB will
    allow investments on the list to move forward only after agencies
    present successful business cases.

-   [Duplicative IT Investments]{.underline}. OMB policy calls for
    agencies to make maximum use of shared IT solutions and to stop
    redundant IT purchases. A key example is payroll operations will be
    standardized and consolidated from approximately 22 separate
    providers to a few Federal payroll providers by September 2004.

-   [Few IT Investments Have Significantly Improved Mission
    Performance.]{.underline} IT investment results have been limited by
    significant redundancy in Federal business operations. OMB issued
    guidance requiring that agency IT investments synchronize with the
    Federal Enterprise Architecture (FEA) which is a tool that enables
    the Government to identify opportunities that leverage technology
    and alleviate redundancy. Functions that are performed by multiple
    agencies are now clearly delineated, and the opportunities for
    cross-agency collaboration to improve performance re readily
    apparent. OMB is accomplishing this through the Business Reference
    Model (BRM) which is the foundational layer of the FEA. OMB used the
    BRM to assist agencies in identifying opportunities for
    collaborative investments, joint infrastructure projects, and
    greater use of enterprise licensing across the Government

-   [Few Agencies Have Plans Demonstrating The Linkage between IT
    Capabilities and Business Needs.]{.underline} The most important
    element of enterprise architecture is the identification of how IT
    can be leveraged best to improve agency performance of core
    missions. Many agency Enterprise Architectures lack focus on
    business results. As a result, many agencies, bureaus and operating
    divisions cannot share information or systems; this shortfall
    increases operating costs as well as burden on citizens and
    businesses. Although some improvements have been made in recent
    years, agencies still often base IT investments on business cases
    that fail to link IT investments to performance improvement. For the
    2004 business cases, OMB added specific questions to ensure that
    agencies began to tie IT investments to the performance goals and
    measures of the programs they support.

-   [Many Major IT Projects Do Not Meet Cost, Schedule and Performance
    Goals.]{.underline} A comparison of agency investment requests for
    2003, versus what is reported as actual costs, provides specific
    demonstration that too many IT projects have cost and schedule
    overruns. OMB directed agencies to have a program management plan
    and a qualified project manager for projects to be approved for
    spending in 2004 and thereafter.

-   [Major Gaps Exist In Agency And Government-wide Computer-Related
    Security.]{.underline} Under the first year of the Government
    Information Security Reform Act reporting in 2001, the
    Administration was able to establish a baseline of agencies' IT
    security performance. While some agencies have demonstrated clear
    progress over the last year, significant challenges remain for other
    agencies. To ensure that IT security weaknesses re appropriately
    addressed, OMB requires agencies to develop, implement and maintain
    plans of action and milestones for every program and system where an
    IT security weakness was found. These plans are tied directly to the
    budget request for a system.

The President's Budget is clear about our plans to use capital planning
to improve performance, achieve outcomes from investments that match
agency strategic priorities and provide real benefits to the public. The
E-Government Act of 2002 codifies the E-Government Fund, which will
allow for the financing of cross-agency initiatives to improve service
to the citizen and reduce operating costs. The \$5 million appropriated
in FY 2002 was invested in tools to integrate agency investments. Our
intent for FY 2004 is to fund similar integrations and achieve
consolidation of redundant IT investments. As we are successful in using
the E-Government Fund to integrate redundant systems, we can free up
those same agency resources to be spent on more productive ways to
achieve the missions that appropriated dollars are intended to serve.
The goals of the E-Government Act are similar to those of the
President's Management

Agenda\--efficient Government operations and effective decision-making.
OMB will integrate the requirements and provisions of the Act into the
President's Management Agenda and the expanding E-Government
initiatives.

**[Joel Willemssen, GAO]{.underline}**

Mr. Willemmsen's testimony is contained in: Electronic Government,
Success of the office of Management and Budget's 25 Initiatives Depends
on Effective Management and Oversight (GAO-03-495T), March 13, 2003.

The GAO reviewed the mini business cases that were prepared for 23 of
the 25 E-Government initiatives to determine whether they were complete.
When the GAO conducted its review, there were 24 initiatives. The 25^th^
initiative, e-Authentication , which is a cross-cutting initiative, was
added later.

All the business cases reviewed included a discussion of the expected
benefits of the proposed initiative, and all but one included a
discussion of the initiatives'objectives and planned future conditions.
However, only 9 of the 23 business cases discussed how customer needs
were to be identified and addressed, and only 8 addressed collaboration
among agencies and other Government entities, even though OMB considered
these elements fundamental to its E-Government strategy.

Without a plan to assess users' needs, there is greater risk that the
project will focus too heavily on issues that customers do not consider
important or disrupt processes that are already working well and
accepted by uses. The result could be that the Internet sites and
services created might not be useful to those customers they are
intended to serve.

Also, collaboration across agencies and other organizations is a key
component of most of the initiatives, and therefore a discussion of
strategies for collaboration is essential to a complete E-Government
business case. As the Government attempts to integrate services across
organizations---particularly in cases where Federal agencies overlap in
providing similar services to --the issue of how agencies collaborate
can determine an initiative's success or failure.

Updated work plans and funding plans for the 24 original initiatives
were submitted to OMB in May 2002. Ten of the 24 did not identify a
final completion date, and accurate cost information was generally
lacking.

The GAO recommend that OMB ensure that managing partners for all the
initiatives:

-   Focus on customers by soliciting input from the public and
    conducting user needs assessments.

-   Work with partner agencies to develop and document effective
    collaboration strategies.

-   Provide OMB with adequate information to monitor cost, schedule and
    performance of the E-Government initiatives.

**[Patricia McGinnis, The Council for Excellence in
Government]{.underline}**

The Council for Excellence in Government chooses E-Government as a
priority because we believe that it offers tremendous potential to break
down bureaucratic barriers and to leap ahead to a level of service,
protection and connection that the American people want, need and
deserve in every aspect or their interaction and reliance on Government.

The President's Management Agenda has established E-Government as a
cornerstone for making citizen focused, cross-functional Government a
reality.

The progress made over the past year has been remarkable. The leaders at
OMB and agencies across Government deserve a lot of credit for stepping
up to this challenge.

The challenge now is to drive the implementation of E-Government as a
strategic management tool down into the agencies, where leaders and
agencies must embrace and demand these tools for their own
decision-making and day-to-day management regimen.

Government managers will need a new version of the "3Rs" to succeed and
thrive in the E-Government era. They need to be: Re-tooled, Re-educated
and constantly Re-freshing themselves and their teams in areas such as
project management, information analysis and problem solving and
customer relationship management. And our hiring, training and retention
strategies for Government workers will need the 4^th^ and 5^th^
"Rs"...Re-thinking and Reform as we move forward.

**[Leonard Pomato, webMethods Government]{.underline}**

The driving force in all IT initiatives is the customer. The customer
needs drive the process to determine what and when an IT project is
necessary and viable. For technology to be successful, well-defined
output to the customer, whether business or Government, is the most
important first step.

In business, customers measure performance of IT projects by return on
investment. Similarly, Government agencies need to measure the value of
an IT initiative in terms of measurable savings through reduced cost of
service delivery or enhanced delivery to the customer.

Fundamental to success of any project is a well thought-out plan that
requires rigorous milestones and incremental measurement of progress
toward those milestones.

Project teams need to be fully trained in development approaches and
imbed measurement points in the process to determine progress.
Management teams need to be responsible and accountable for review of
team progress through similar measurement methodologies. Among the
widely used industry practices, the Capability Maturity Model is one way
of measuring organizational capability to develop and deliver IT project
results.

To function as a team, individuals and units need to coordinate,
cooperate and communicate as a team, across departments and
organizations.

E-Government doesn't mean just putting a web-front end on the same old
back end; it also means re-evaluating, and if necessary, re-engineering
the back end so that it makes sense and delivers value.

**QUESTIONS/ANSWERS**

**Q.1** Ranking Member Clay. Of citizens (approx. 1/2) that don't access
the Internet, what is the cost of maintaining two systems?

A. P.McGinnis. The E-Government Act of 2002 contains provisions for
studies of the digital divide. Think should ask for a comprehensive
action plan to allow greater access to the Internet.

**Q.2 Ranking Member Clay**. The E-Government Act of 2002 creates new
Office of Electronic Government in OMB. How will the two OMB offices be
staffed?

A. M. Forman. Working with John Graham (Administrator of OIRA) on this.
There are a number of technology and policy issues. Will probably have
the Policy Branch, currently in OIRA, under Mark with a dotted line to
OIRA.

**Q.3 Chairman Putnam.** Has there been enough time to evaluate any gaps
in the E-Government Act?

A. P. McGinnis. Think main gap is lack of funding for E-Government
initiatives. Funding for cross activities is not readily available. Do
not believe changes in legislation needed.

A J. Willemssen. Think should allow more time for the Act before
considering changes.

**Q.4 Chairman Putnam.** Is there an analysis of who is using the sites?

A. M. Forman. The Government does not track Internet users because of
the prohibition on using cookies. Most of the big initiatives have focus
groups that could be a source of information.

**Q.5 Chairman Putnam.** Have you received business case report?

A. J. Willemssen. No.

A. M. Forman. Have told agencies they are to provide business case
information.

**Q.6 Chairman Putnam**. Which of the 24 initiatives are complete or
nearly complete?

A. M. Forman. First round of implementation reports was not good. The
second iteration gets into reengineering. Recreation One-Stop and IRS
Tax Filing have made improvements. E-Grants has made good progress.
E-Payroll is accelerating. Disaster Management is back on track.
Business Compliance One-Stop has some good features but does not have a
good management plan.

A. J. Willemssen. Think there are some success stories. Some are
providing more information. Any type of transactional project will take
more time.

**Q7. Ranking Member Clay**. Re Performance measures.

A. J. Willemssen. Think need to look at in terms of outcomes. One of
objectives is to receive information.

**Q8. Ranking member Clay**. Question of Travel Card use.

A J. Willemssen. Think will need to focus on controls.

A. M. Forman. We are following up on this.

**Q9. Chairman Putnam**. In implementing Clinger-Cohen, there was focus
on enterprise architecture. Would you focus on the blueprint approach
for the E-Government Act?

A M. Forman. Having discussions now to focus on each department's
chronic management issues.

**Q10. Chairman Putnam**. How do you get sufficient information to
monitor the 24 initiatives?

A. M. Forman. Looking for the E-Government initiatives to show progress
in meeting milestones.

**Q11. Chairman Putnam.** How well is the culture changing in agencies?

A. M. Forman. Think we turned the corner last summer. Have had some key
lessons learned. Agencies laid out some things for OMB to evaluate.

A. J. Willemssen. Each agency likes to have its own system. Think this
is improving.

**Q12. Chairman Putnam.** On scale of 1 to 10, where are we in
E-Government implementation?

A. L. Pomata. Think would rate them a 9. Given the magnitude of the
problem, think a 9 is warranted.

A. P. McGinnis. Think we are just beginning. Would give a 2 or 3.

A. J. Willemssen. Would rate very highly in terms of OMB's focus and
direction. Would

rate implementation incomplete at this time.

A.M. Forman. Re policy on status, would say a yellow (5). In terms of
progress, would give a green (9 or 10). The guidance is out there.

**Q13. Chairman Putnam**. What can the taxpayer expect in terms of
quantifiable savings?

A. M. Forman. Would apply commercial benchmarks on what performance can
be achieved at current level of implementation. Human capital is one of
the real limiters. In 5 or 6 years, we will not have enough people in
Government (to plan/manage programs/systems).

A. P. McGinnis. Think like potential savings. Potential savings are
extraordinary.

John Ray

GSA Office of Electronic Government and Technology

April 15, 2003

<John.ray@gsa.gov>

\(202\) 501-3473