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S. Hrg. 110–409

HIGH-RISK INFORMATION TECHNOLOGY

PROJECTS: IS POOR MANAGEMENT

LEADING TO BILLIONS IN WASTE?

HEARING

BEFORE THE

FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT 

INFORMATION, FEDERAL SERVICES, AND 

INTERNATIONAL SECURITY SUBCOMMITTEE

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

SEPTEMBER 20, 2007

Available via http://www.access.gpo.gov/congress/senate

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

BARACK OBAMA, Illinois 

CLAIRE McCASKILL, Missouri 

JON TESTER, Montana 

SUSAN M. COLLINS, Maine 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

PETE V. DOMENICI, New Mexico 

JOHN WARNER, Virginia 

JOHN E. SUNUNU, New Hampshire

MICHAEL L. ALEXANDER, Staff Director 

BRANDON L. MILHORN, Minority Staff Director and Chief Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

FEDERAL FINANCIAL MANAGEMENT, GOVERNMENT INFORMATION, 

FEDERAL SERVICES, AND INTERNATIONAL SECURITY SUBCOMMITTEE 

THOMAS R. CARPER, Delaware, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

BARACK OBAMA, Illinois 

CLAIRE McCASKILL, Missouri 

JON TESTER, Montana 

TOM COBURN, Oklahoma 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

PETE V. DOMENICI, New Mexico 

JOHN E. SUNUNU, New Hampshire

JOHN KILVINGTON, Staff Director 

KATY FRENCH, Minority Staff Director 

LIZ SCRANTON, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Carper ................................................................................................. 1

Senator Coburn ................................................................................................. 4

Senator Akaka .................................................................................................. 5

WITNESSES 

THURSDAY, SEPTEMBER 20, 2007

Karen Evans, Administrator, Electronic Government and Information Technology, Office of Management and Budget ........................................................ 7

David A. Powner, Director, Information Technology Management Issues, U.S. 

Government Accountability Office ...................................................................... 8

Barry C. West, Chief Information Officer, U.S. Department of Commerce ........ 26

Daniel G. Mintz, Chief Information Officer, U.S. Department of Transportation ..................................................................................................................... 28

Michael D. Duffy, Deputy Assistant Secretary for Information Systems and 

Chief Information Officer, U.S. Department of the Treasury .......................... 29

Scott Charbo, Chief Information Officer, U.S. Department of Homeland Security ......................................................................................................................... 30

Paul A. Brinkley, Deputy Under Secretary for Business Transformation, U.S. 

Department of Defense ........................................................................................ 31

ALPHABETICAL LIST OF WITNESSES

Brinkley, Paul A.: 

Testimony .......................................................................................................... 31

Prepared statement .......................................................................................... 116

Charbo, Scott: 

Testimony .......................................................................................................... 30

Prepared statement .......................................................................................... 110

Duffy, Michael D.: 

Testimony .......................................................................................................... 29

Prepared statement .......................................................................................... 108

Evans, Karen: 

Testimony .......................................................................................................... 7

Prepared statement .......................................................................................... 43

Mintz, Daniel G.: 

Testimony .......................................................................................................... 28

Prepared statement .......................................................................................... 97

Powner, David A.: 

Testimony .......................................................................................................... 8

Prepared statement .......................................................................................... 47

West, Barry C.: 

Testimony .......................................................................................................... 26

Prepared statement .......................................................................................... 81

APPENDIX 

Chart entitled ‘‘Figure 3: Reported Performance Shortfalls of 126 Projects 

(as of June 2007)’’ ................................................................................................. 124

Chart entitled ‘‘Poorly Planned and Poorly Performing IT Projects (as of 

June 2007)’’ ........................................................................................................... 125

Chart submitted by Senator Coburn entitled ‘‘Percentage of Projects 

Rebaselined—By Agency’’ .................................................................................... 126

Chart submitted by Senator Coburn entitled ‘‘Total Projects Re-baselined’’ ...... 127

(1)

HIGH-RISK INFORMATION TECHNOLOGY 

PROJECTS: IS POOR MANAGEMENT 

LEADING TO BILLIONS IN WASTE? 

THURSDAY, SEPTEMBER 20, 2007

U.S. SENATE,

SUBCOMMITTEE ON FEDERAL FINANCIAL MANAGEMENT,

GOVERNMENT INFORMATION, FEDERAL SERVICES,

AND INTERNATIONAL SECURITY, 

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:31 p.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Thomas R. Carper, 

Chairman of the Subcommittee, presiding. 

Present: Senators Carper, Akaka, and Coburn. 

OPENING STATEMENT OF SENATOR CARPER 

Senator CARPER. The Subcommittee will come to order. I want to 

welcome all of our witnesses. Thank you for joining us today and 

for our next panel as well. 

We are here today, in large part because of the interest that our 

Chairman from our last session of Congress, Senator Coburn, had 

expressed and demonstrated in the issue of IT projects. We had a 

hearing in the last Congress, and this is really a follow-up to that, 

and I thank him for his leadership and for getting us to focus on 

this. And I am sure he will have a good deal more to say, but we 

are here in no small part because of the effort that he led the last 

2 years. 

In my role as governor, we used to work on IT projects, and we 

found them in some cases very difficult to manage. They often 

turned out to be expensive. We launched those projects because we 

were trying to find ways to provide better service to the people that 

we served, represented, and we were trying to save taxpayers some 

money, and we tried to do it by harnessing information technology 

for the delivery of better service at a lower cost. 

Usually we succeeded. There were a couple of times we did not, 

and we are not very proud of those failures. So I know what it is 

like to have tried this stuff and to have been successful and not to 

have been successful. And the idea of having someone looking over 

our shoulders—in this case, the Federal Government looking over 

our shoulders, not only OMB and GAO, but also us on this Subcommittee—is, I think, a good thing. We want to exercise our oversight in a constructive way, to always let our agencies know that 

2

we are trying to provide better service, trying to do it in a better 

way and save the taxpayers some money, to know that we want to 

make sure that they are on the ball, that they are getting the job 

done, and that they do not lose track of that. 

We appreciate our witnesses coming before us today, taking your 

time to participate in this hearing. This is the second hearing, as 

I said, of this Subcommittee on the issue of poorly planned and 

underperforming IT investments. This hearing will focus on how 

the Office of Management and Budget and Federal agencies will 

ensure the success of potentially $10, $10.5 billion of at-risk information technology projects. 

Investing in the Federal Government’s information technology infrastructure is crucial to the efficient operation of Federal programs and in many cases to our national security. Projects such as 

the Department of Homeland Security’s Secure Border Initiative 

technology program, or SBInet, as it is commonly referred to, is expected to provide our border agents real-time information on attempted border crossings by illegal immigrants or by terrorists or 

by thieves. Investments such as this are too important to our Nation to be allowed to fail due to a lack of planning or a lack of management oversight. 

But there are times when maybe we might want to cut our losses 

and end a failing project before we waste even more hard-earned 

taxpayer dollars. I know from experience it is hard to make those 

decisions, but sometimes it is a decision we must make. We owe 

it to taxpayers to pull the plug in some cases or go back to the 

drawing board when a project is continually over budget and is just 

not delivering what we had expected it to deliver. 

Last year alone, the Federal Government spent some $64 billion 

on 857 information technology investments. Spending this year will 

be just as high, I am told. The Federal Government is planning to 

invest approximately another $65 billion on some 840 IT projects. 

Managing IT investments can be a difficult process, as we know. 

Cost overruns and delays can be expected from time to time. Sometimes a project that sounded like a good idea at one point just 

might not pan out. This makes sound oversight important, and that 

is what we are here for. 

As our witnesses are aware, the Clinger-Cohen Act requires 

OMB to report to Congress on the net program performance benefits achieved as a result of agencies’ IT investments. OMB uses documents provided by Federal agencies to compile two lists that identify the most at-risk IT projects. Aptly named the ‘‘Management 

Watch List’’ on the one hand and the ‘‘High-Risk List’’ on the other 

hand, these lists highlight projects that have been poorly planned 

or are underperforming. 

However, as GAO is going to testify here today, the OMB may 

not be receiving the information required to properly exercise their 

oversight duty. As we found out at our last hearing, much of the 

documentation that agencies submit to OMB, such as the Exhibit 

300s, are not properly supported or contain unreliable cost estimates. Moreover, the high-risk list is potentially understated as 

agencies are only required to report their own projects based on 

OMB criteria. 

3

1The chart submitted by Senator Carper appears in the Appendix on page 124. 

2The chart submitted by Senator Carper appears in the Appendix on page 125. 

This year, according to GAO, 227 IT projects totaling an estimated $10.4 billion in expenditures for fiscal year 2008 have been 

identified as being poorly planned, poorly performing, or, in some 

cases, both. Most alarming are the 33 projects totaling $4.1 billion 

identified simultaneously as both poorly planned and poorly performing, and that is just not acceptable. 

As you can see, we have got a couple of charts over here. I am 

just going to put up one of the charts.1 Figure 3 shows the breakdown by the number of projects and billions of dollars between the 

high-risk list, the Management Watch List, and the projects that 

are listed because they are both poorly planned and underperforming. 

The next chart enables us to examine the high-risk list a little 

more closely, and it tells us why these projects run into trouble.2

How many do we have here? 

Senator COBURN. One hundred eighty six. 

Senator CARPER. We have 186. We have about 101 running into 

trouble because of cost and schedule variance within 10 percent. 

They are not staying within that 10 percent. We have another 33 

because we do not have qualified project managers. And then there 

are about 12 more that we can attribute to avoiding duplication. 

Now, OMB, to their credit, has made improvements in identifying and overseeing at-risk projects. Following last September’s 

hearing, OMB released the Management Watch List, requiring 

agencies to publish their Exhibit 300s on their website. And, further, OMB has improved agencies’ self-identification of high-risk 

projects, resulting in an increase in the number of projects on the 

high-risk list. However, we need to do more, and as GAO will testify today, questions still remain as to whether all high-risk 

projects are properly identified and tracked by senior management 

at both OMB and at the individual agencies themselves. Moreover, 

OMB has not revealed to Congress the specific reasons why 

projects are on the Management Watch List, leaving us unable to 

track progress, recognize trends, or to examine underlying causes 

or governmentwide issues. 

I look forward to working with our witnesses today, as well, 

along with my Ranking Member, Senator Coburn, and our other 

colleagues on this Subcommittee, in order to assure that proper 

oversight is in place. The American taxpayers demand that we be 

good stewards of their money, and I know everyone in this room 

wants to see that become a reality. We have a responsibility, really, 

to ensure that IT investments are managed properly, appropriately 

at every phase of development. Again, that is what we are here to 

do, to try to ensure it happens more often than not. 

Again, I would say to Senator Coburn thanks very much for providing the inspiration and the leadership on this issue in the last 

Congress, and I look forward to working with you on it this time 

as well. 

4

1The first chart submitted by Senator Coburn appears in the Appendix on page 126. 

1The second chart submitted by Senator Coburn appears in the Appendix on page 127. 

OPENING STATEMENT OF SENATOR COBURN 

Senator COBURN. Thank you, Senator Carper. And welcome. You 

are familiar faces, being in front of this Subcommittee. I think it 

is important that we stay informed on what is happening. I appreciate very much what OMB has done in terms of making information more transparent. 

I have a lot of concern. Please put up those two charts.1

I think you are moving in the right direction. I am very worried 

that we have a lot of dollars at risk because we are not moving fast 

enough and effectively enough. 

These two slides, the first thing that bothers me is we have over 

90 percent of the IT projects at the Department of Veterans Affairs 

being rebaselined. Now, that has got to be a metric that tells us 

we have got real problems with buying IT projects at the VA. What 

rebaselining is, for everybody here, is that we are going to reset, 

so we are going to hide the true cost and the failures of the programs in terms of buying. The average is 19 percent in the government, and you can see all those to the left, which is about 10 or 

11—Veterans Affairs, Department of Health and Human Services, 

Department of the Treasury, Department of Defense, Department 

of Labor, and USAID are all above 30 percent of their projects get 

rebaselined. Well, ‘‘rebaselined’’ is another way of saying we do not 

want everybody to know what the real cost was, or we do not want 

everybody to know that we inadequately prepared when we started 

out on this project. And so to me that is a very concerning figure. 

Anywhere in the private sector, if you had 90 percent of your 

projects needing to be rebaselined, we would fire the people who 

are responsible for the IT projects, and I would tell you probably 

if you had 30 percent in the private sector. I can understand because there are a lot of unknowns in terms of when we contract 

that. 

Then this other slide just shows the total number of projects 

rebaselined by Department, and you can see HHS and Department 

of Transportation and Department of the Treasury have a significant number, but the dollar amounts are not as great.2

So I am looking forward to our testimony today. I am worried 

that we are still—this is a large amount of money, $65 billion. It 

is bigger than the total GDP of 100 countries out there, and yet we 

seem to still be having some troubles managing it. 

The other thing that I have concern with is we have cost-plus 

contracting rather than contracting where here is what we want, 

you give us a bid, and you deliver, and then let’s hold you accountable for delivering. And I know that is an oversimplification. I 

know that does not apply in every instance, especially in defense 

and some of the other security issues. But in the private sector, 

there is not much in terms of cost-plus bidding for some of these 

IT contracts. There is a total bid, and then their feet are held to 

the fire to accomplish the goal at a fixed price. 

And so I look forward to hearing from our witnesses. I thank you 

both for being here, thank you for the great work the GAO does, 

5

and I thank you for the responsiveness that OMB has had, and I 

look forward to continued responsiveness from you. 

Thank you, Mr. Chairman. 

Senator CARPER. Thank you, Senator. Senator Akaka, you are 

up. Thanks so much for being here. 

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA. Thank you, Mr. Chairman. I want to welcome 

our witnesses here to this hearing. 

Information technology is fundamental to the day-to-day functioning of our government, from managing benefits at the Department of Veterans Affairs to helping first responders at the Department of Homeland Security. According to the Administration’s fiscal year 2008 budget request—and this was mentioned by Senator 

Coburn—about $65 billion is spent on over 6,500 IT projects government-wide. This is more than the entire budget of the Department of Homeland Security. These massive investments must be 

carefully planned and managed to ensure the government runs effectively and that the taxpayers’ dollars are not squandered. 

Oversight of these projects is very difficult. There are few reliable measures now available to assess the performance and management of IT investments. While the Office of Management and 

Budget maintains a high-risk list and an at-risk list, additional 

performance data on IT projects is difficult to come by. Without 

this essential information, neither OMB nor Congress can adequately assess the value of these projects. Additional information 

is also needed to fully understand the risks associated with a 

project. Agencies should not be overly risk averse, but they can 

minimize risk through better management. 

Agencies often rely on contractors to provide IT goods and services, making oversight even more difficult. As my Subcommittee on 

Oversight of Government Management has heard from several witnesses, contract oversight is increasingly difficult with an overburdened Federal acquisition workforce. Agencies need to commit to 

planning for their own specific IT needs rather than relying on contractors to make the decisions for them. 

There needs to be greater emphasis on utilizing off-the-shelf 

products or products already in use by the government. Testimony 

by DHS’ Chief Financial Officer at a hearing in July underscored 

this point when DHS decided to consolidate several existing financial management systems rather than developing a new one from 

scratch. It is my hope that the Office of Management and Budget 

will take a more active leadership role in providing guidance and 

so assistance that agencies avoid unwarranted or duplicative IT 

projects. At the same time, OMB must not shy away from using 

their budgetary authority to make course corrections or halt failing 

projects when necessary. 

I want to emphasize the critical role played by individual agency 

Chief Information Officers (CIOs), who are critical to IT planning 

and management. The Federal Government must recruit CIOs who 

have experience and expertise in the IT field in addition to strong 

management skills. Unfortunately, according to a 2004 GAO report, retaining CIOs is a challenge. Past and current CIOs admitted that they should be in place for at least 3 to 5 years to be effecVerDate 0ct 09 2002 09:32 Jun 13, 2008 Jkt 038844 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 P:\DOCS\38844.TXT SAFFAIRS PsN: PAT
6

tive, though the average tenure was only 2 years. Agencies must 

confront the challenge of maintaining experienced CIOs despite 

fierce competition with the often more lucrative private sector. 

While cutting-edge IT will always be a risky investment, costly 

problems can be avoided through better management. 

Again, Mr. Chairman, I want to thank you for holding this hearing and for your and Senator Coburn’s continued attention and 

dedication to this important issue. Thank you very much. 

Senator CARPER. You bet, and thank you very much for your 

statement. Thanks a lot for being here and for working with us on 

this obligation. 

We have two panels. I am just going to introduce our first two 

witnesses, if I may, and we will introduce the others when we go 

to the second panel. I think we are going to have a vote that starts 

at about 2:55, and what we will do is probably—I would like to finish the testimony from our first panel, and we will run off and vote, 

come back, and then we will do questions, and then bring the second panel on. But I expect we will have a couple of other interruptions later this afternoon. 

Let me start, if I could, with Karen Evans. Ms. Evans is the Administrator of the Office of Electronic Government and Information 

Technology at the Office of Management and Budget. In this role, 

she oversees the implementation of information technology 

throughout the Federal Government, including advising the Director on the performance of IT investments. Prior to becoming administrator, Ms. Evans was the Chief Information Officer for the Department of Energy—is that right? 

Ms. EVANS. Yes, sir. 

Senator CARPER. As well as Vice Chair of the Federal Chief Information Officers Council. As Vice Chair, she coordinated the 

council’s efforts in developing Federal IT programs and in improving agency information resource practices. She has a bachelor’s degree in chemistry and a master’s in business administration from 

the University of Delaware—all right, from West Virginia, West 

Virginia University. And as a native of West Virginia, the only native-born West Virginian in the U.S. Senate, welcome, Ms. Evans. 

David Powner is Director of GAO’s Information Technology team. 

He is currently responsible for a large segment of GAO’s information technology work, including system development, IT investment 

management, health IT, and cyber critical infrastructure protection 

reviews. In the private sector, he has held several executive-level 

positions in the telecommunications industry. He graduated from 

the University of Denver with a degree in business administration, 

as well as Harvard University’s John F. Kennedy School of Government’s Senior Executive Fellows Program. 

I am going to ask you to keep your testimony close to 5 minutes. 

If you run a few minutes over, we will let that go. But, if you will, 

I am going to recognize Ms. Evans first, and when she is finished, 

Mr. Powner, we will ask you to follow right on. 

Ms. Evans, you are recognized, and the entire statements from 

both of you will be entered into the record, and we will ask you just 

to summarize. Thanks. 

7

1The prepared statement of Ms. Evans appears in the Appendix on page 43. 

TESTIMONY OF KAREN EVANS,1 ADMINISTRATOR, ELECTRONIC GOVERNMENT AND INFORMATION TECHNOLOGY, 

OFFICE OF MANAGEMENT AND BUDGET 

Ms. EVANS. Good afternoon, Mr. Chairman and Members of the 

Subcommittee. My remarks will focus on the Administration’s 

strategy and progress in tracking, analyzing, and evaluating the 

Federal Government’s information technology investments. 

Each quarter agencies receive a scorecard about their progress 

and status in achieving governmentwide goals under the President’s Management Agenda. OMB analyzes information provided 

on business cases when evaluating agencies’ activities pertaining to 

the Electronic Government component of the scorecard. We deliberately included a criterion for ‘‘acceptable business cases’’ to emphasize the necessity in management. It is just one of a number 

of the components agencies must satisfy to get to green (or yellow) 

for the scorecard, and the agencies’ scorecards are posted on a 

quarterly at results.gov. 

The information included about each business case ultimately 

helps OMB and the agencies ensure effectively planned IT investments and improved portfolio management. Business cases reflecting one or more planning weaknesses are placed on what we call 

the ‘‘Management Watch List’’ and are targeted for follow-up. 

I would also like to describe another indicator, the high-risk list, 

which is used to analyze and evaluate actual project execution and 

performance. The objective of our analysis is to manage the risk 

each quarter associated with the execution of the planned actions 

with the IT project to ensure and achieve the intended outcomes. 

Each quarter agencies evaluate and report to us on the performance of the high-risk projects. These projects are considered ‘‘highrisk,’’ requiring special attention from the highest levels of the 

agency management and oversight authorities due to size, complexity and/or nature of the risk of the project, but they are not 

necessarily at-risk. For example, a successfully performing project 

may still be classified high risk due to the exceptionally high costs 

and/or complexity of the project. 

Oversight authorities and agency management must have tangible data on the performance of the projects at least quarterly to 

better ensure improvement in execution and performance. Agency 

managers and oversight authorities should know within 90 days if 

a project is not performing well. It is, therefore, a collaborative effort to manage project risk and avoid problems or to catch them 

early should they occur before the taxpayers’ dollars are wasted. 

This approach is separate and unique from what we do on the 

Management Watch List since it presents the oversight authorities 

about information in a differing focus and timing and expected results. It is not designed to replace the pre-existing oversight and 

internal agency processes but, rather, to supplement and complement them. 

This concludes my initial remarks on our strategy and our 

progress to date in analyzing and tracking, and the results have 

been included in my written statement. I would be glad to take 

questions when it is appropriate. 

8

1The prepared statement of Mr. Powner appears in the Appendix on page 47. 

2The chart referred to appears in the Appendix on page 125. 

Senator CARPER. Thanks, Ms. Evans. We can reserve your 2 minutes, if you want. 

Ms. EVANS. No. That is OK. 

Senator CARPER. All right. Mr. Powner, welcome. Thank you for 

joining us and for your work. 

TESTIMONY OF DAVID A. POWNER,1 DIRECTOR, INFORMATION 

TECHNOLOGY MANAGEMENT ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. POWNER. Thank you. Chairman Carper, Dr. Coburn, Senator 

Akaka, we appreciate the opportunity to testify this afternoon on 

poorly planned and performing Federal IT projects. 

Last September, we testified before this Subcommittee that $10 

billion in Federal IT spending was at risk of being wasted, that this 

figure was understated, and that OMB and agencies could do more 

to oversee these technology investments. The good news is that 

OMB has stepped up its efforts and there is more accurate reporting of troubled projects due to your oversight. However, we still 

have tens of billions of dollars at risk, and additional efforts are 

needed to better manage these technology investments. 

This afternoon, I have three points to make: 

First, over 200 IT projects totaling more than $10 billion are still 

not appropriately planned for or managed. 

Second, OMB’s efforts have resulted in more accurate reporting 

and oversight of troubled projects. 

And, third, despite progress, the $10 billion figure is still understated, and additional oversight is needed from both OMB and 

agency CIOs. 

Expanding on each of these, first, as of July of this year, nearly 

140 projects totaling $8.6 billion were on the Management Watch 

List, and nearly 125 projects totaling $6 billion were being reported 

as high-risk projects with shortfalls. Common to both lists, as your 

chart shows here,2 are more than 30 projects totaling more than $4 

billion, meaning that these projects are both poorly planned and 

poorly performing. For example, DHS’ Secure Border Initiative 

project is on both lists. 

Second, OMB has initiated several efforts to improve the reporting and oversight of troubled projects. Specifically, the number of 

reported projects on the Management Watch List increased from 

last year, as did the number of high-risk projects with shortfalls. 

For example, last year when we testified before this Subcommittee, 

we reported that 70 high-risk projects totaling $2 billion had performance shortfalls at that time. We also identified several projects 

that clearly should have been included on the list and were not. 

Since then, the number of high-risk projects with performance 

shortfalls has nearly doubled, and the projects we identified are 

now included. This is due in part to OMB working with agencies 

to ensure more consistent application of the high-risk criteria. In 

addition, since last September, OMB publicly releases on a quarterly basis aggregate lists of Management Watch List and high-risk 

projects by agency. 

9

Despite these positive steps, agency Inspectors General continue 

to report issues with the accuracy and reliability of the Exhibit 

300s, which means the number of projects on the Management 

Watch List is still somewhat inaccurate and understated. We also 

remain skeptical whether all high-risk projects with shortfalls are 

being reported by agencies. For example, although DOD accounts 

for nearly half of the $65 billion in Federal IT expenditures, it only 

reports three projects that collectively total less than $1 million 

with having shortfalls. 

We would also like to see agency-specific and governmentwide 

root cause analysis performed on Management Watch List and 

high-risk projects. Having such information would help identify 

areas for agencies to focus on and to identify weaknesses that transcend individual agencies. Such information would help to identify 

agency-specific and governmentwide improvement areas that could 

be addressed by hiring, training, and independent review teams, to 

name a few. In addition to focusing on the root causes of these 

poorly planned and performing projects, agency, OMB, and congressional oversight should focus immediately on the 33 projects highlighted in my written statement that are on both lists, as well as 

those projects that are repeat offenders, meaning that they have 

been on either list for extended periods of time. For example, last 

September, there were 86 projects on the 2007 Management Watch 

List; 29 of these are on the 2008 list since it was released earlier 

this year with the President’s budget. In addition, my written 

statement highlights over 20 projects that have had performance 

shortfalls for the last four quarters. 

In summary, Mr. Chairman, OMB should be commended for 

shining a spotlight on these poorly planned and performing 

projects. Now more needs to be done to fix them. Specifically, OMB 

and agencies need to address the root causes of these management 

weaknesses and focus on those projects that have multiple issues 

or those that have a long history of planning and performance 

shortfalls. Until this is done, we continue to risk wasting billions 

of dollars on these projects and leaving gaps in mission-critical operations. 

This concludes my statement. Thank you, Mr. Chairman, for 

your continued oversight of the Federal IT budget. 

Senator CARPER. Mr. Powner, thanks very much. 

I am going to ask you to talk us through each of these charts. 

Just walk us through Figure 1, please, poorly planned and poorly 

performing IT projects, from June of this year. Just explain both 

of them, if you will. 

Mr. POWNER. Well, first of all, the Management Watch List, that 

is derived by a review of agencies’ Exhibit 300s, so these are poorly 

planned projects. 

Senator CARPER. Talk to us a little bit about the Exhibit 300s. 

Some people have never heard of Exhibit 300s. Just what is it? 

Mr. POWNER. Well, what the Exhibit 300s is, it is the business 

case for these IT investments. It is also an assurance that we have 

adequate planning from a project management point of view. There 

are several areas based on OMB’s guidance—and Ms. Evans can 

get into the details here—where we look for things like earned 

10

value techniques so we can track costs and schedule performance 

and those types of things, effective risk management programs. 

So based on the review of these business cases, there is roughly 136 projects totaling $8.6 billion that are poorly planned. That is 

where you get the combination of the first two boxes there, the 

Management Watch List. 

Now, the high-risk projects, as Ms. Evans clearly pointed out, 

just because it is high risk does not mean that there is an issue 

with it. What we focus on are high-risk projects with performance 

shortfalls, one of these performance shortfalls on the far right 

chart. 

So if you look at the high-risk projects with shortfalls, we rough- ly have $6 billion projects—that is about 125 projects totaling $6 

billion. So if you take the two lists and add them up, you get to 

about $14 billion. But since we have the overlap of $4 billion, collectively we have about $10 billion that is at risk today. 

Senator CARPER. All right. Go ahead and talk to us a little bit 

about the chart on the right. 

Mr. POWNER. The chart on the right, if you look at the 125 highrisk projects with performance shortfalls, some projects report multiple shortfalls. that is why it adds up to more than 125 on the far 

right. So, clearly, the No. 1 shortfall for these high-risk projects are 

costs and schedule not within a 10-percent threshold. That is very 

common across the Federal Government, and I think the chart that 

Dr. Coburn held up that talked about the rebaselining, at times 

there are good reasons to rebaseline, but what you do not want is 

excessive rebaselining that masks overruns within 10 percent. And 

I think that is a large concern that was appropriately pointed out. 

You can see there that the second highest reported shortfall is 

where we do not have a clear baseline. Then following that are 33 

projects that are self-reporting that they do not have a qualified 

project manager. 

Now, interestingly, if you added the totals of those 33 projects, you come close to $1 billion worth of investment for fiscal year 

2008. That is not a good thing. We are saying that we have $1 billion worth of investment that we do not have qualified PMs running those projects. 

And then, finally, the last category there is duplication. In that 

case, there are a lot of e-gov initiatives where agencies have some 

of their financial management e-gov projects that they are actually 

reporting that there is current overlap with that because they have 

existing payroll systems and the HR systems and those types of 

things. But, clearly, the No. 1 issue here is the cost and schedule 

variance. 

What we would like to see is not only a breakdown like this—

this is a good breakdown for the high risk. We would like to see 

a breakdown like this for the reasons why projects are on the Management Watch List. We have never seen that. So we do not have 

a comparable breakdown for the Management Watch List. 

So what my written statement highlights is we would like to see 

a comparable breakdown, and then we would also like to see even 

a further breakdown where you get at the root cause analysis. Why 

do we not hit the 10-percent threshold? Well, I can tell you that 

we estimate poorly; we define requirements poorly; we have poor 

11

risk management; we have issues with overseeing contractors. If 

we got into those root causes a bit more, then you can attack a lot 

of those root causes from a governmentwide and agency perspective. And to Ms. Evans’ credit, her CIO Council and a number of 

efforts actually touch on a number of these improvement efforts. 

But we would like to see more follow-up from a root cause analysis 

from these lists. 

Senator CARPER. Would you repeat what you were saying there 

about we do not have a comparable . . . ? 

Mr. POWNER. We know that there are 136 projects——

Senator CARPER. And then I am going to ask Ms. Evans to respond to that and say why do you suppose that is the case. Go 

ahead. 

Mr. POWNER. We know there are 136 projects totaling $8.6 billion 

on the Management Watch List. Now, we do not know why they 

are on the list. We know it is one of 10 categories. We understand 

how OMB scores, but we do not have the specifics where we would 

have a comparable analysis like we do for the high-risk projects 

with shortfalls. 

Senator CARPER. Do you think that would be helpful to have 

that? 

Mr. POWNER. Absolutely. I think if you want to attempt to attack 

the root cause of the issues here, it would be nice to have that 

breakdown and then go after the primary problems. 

Senator CARPER. OK. Ms. Evans, would you just make a comment or two on that, please? 

Ms. EVANS. When we review the business cases, there are 10 

areas, as Mr. Powner said, that the business case is composed of 

when we look at major investments. And so in those particular 

areas, it is things like project management which then translate 

over to the high-risk list. So you actually see activities related—

what they say they are going to do for project management, do they 

have a qualified project manager. So you actually see that going 

into the execution. 

We have not released the exact scoring of this for a couple reasons, too, because this is a planning document as the agency is justifying the investment, going forward and talking about how they 

are going to do certain things that support the priorities going forward through the agency. So it is a supporting budget document 

at that point. That is one of the issues. 

The other thing is that there is a lot of analysis. We may not be 

as transparent with the analysis as everyone would like for us to 

be, so I will acknowledge that up front. But there is a lot of analysis that goes onto this and that when we release it, along with the 

other activities that we use, like on the President’s Management 

Agenda, on the scorecard, we actually evaluate things like security 

and privacy. There are specific criteria associated with that. And 

so when we rank these, when we rate these, we are using other information that complements the business case, not just what is 

said in the business case alone. 

So if you take security and privacy, when a business case comes 

in, in September, the annual cyber security report also comes in, 

in October. So what we do is we look at that information together, 

and so if an IG says that an agency has a very poorly performing 

12

security program, when you start looking at what is happening 

within the security overall within an agency, we look at that in 

total, and we say, OK, this particular part of this business case, 

which we have been very public about that, the whole business is 

at risk because they have a poorly performing security program. So 

we put those investments on the Management Watch List based on 

using the two pieces of information together. 

Now, it is possible—so I am really getting into some nuances 

here—that they can have some type of compensating risk for that 

particular investment which may not necessarily put it on there. So 

we use several pieces of information, and so my concern is that if 

we released a comparable piece when we are in the planning phase, 

it may not necessarily show all the analysis that goes into what we 

do with the business case as we are making recommendations 

through the budget process. So this is a planning document. 

At the end, when we release it, when the President’s budget is 

released, we keep them on the Management Watch List for specific 

things. And I think what I am hearing from everybody—so I will 

go back and relook at that—is at that time when we release those, 

you would like to know specifically why they are remaining on the 

Management Watch List, and is it something systemic like a failing 

cyber security program, or is it something particular to that particular investment. And so I will take that back and look at that 

as a potential area for improvement for us. 

Senator CARPER. All right. Good. Thanks. 

I am going to ask you to hold your fire right here, and we have 

7 minutes to go on this vote, and I am going to run and vote. We 

are going to stand in recess until Senator Coburn comes back. We 

will resume the hearing once he gets back, and he will ask some 

of his questions. And I should be back in about 10 minutes, but for 

now, let’s just stand in recess. And as we used to say in the Navy, 

‘‘At ease.’’

[Recess.] 

Senator COBURN [presiding]. All right. We are going to try, for 

the sake of efficiency, to keep going, and Senator Carper should be 

back shortly. 

I want to spend a little time on the business case, the Exhibit 

300s. When something comes on the Management Watch List, most 

often it is because the Exhibit 300s, there is something wrong with 

them, right? 

Ms. EVANS. Yes, sir. 

Senator COBURN. How is it that we have already bought a product when there is something wrong with the business case analysis? 

Ms. EVANS. OK. When you do a business case analysis, it depends on where you are in the lifecycle of the investment as well. 

Senator COBURN. Well, let’s talk about just when it starts. 

Ms. EVANS. A brand-new one. 

Senator COBURN. A brand-new one. If we have a business case 

analysis that does not fit, that in OMB’s assessment is suspect, 

how in the world do we start down the road on a contract when 

we have a business case analysis that does not make sense in the 

first place? 

13

Ms. EVANS. So if this is a brand-new project and we look at the 

business case and the business case is not strong enough or there 

is a weakness in it based on—because at that point it would be 

planning and then your potential acquisition strategy. So those 

would be the areas that we would highlight the most on because 

it is a brand-new type of effort. 

So if it ended up on the Management Watch List, what happens 

is that is 2 years in advance, so the Management Watch List, what 

you are doing is that is a document that is supporting the upcoming budget. So right now, they have not done anything except for 

tell us what they are planning to do. And we are saying there is 

a problem with what you are planning to do, whether it is the acquisition strategy, you have not thought of all these things. 

So we work with them all the way up to where they actually 

have to execute out on that planning document. We say, ‘‘OK, you 

have to have a remediation plan, or we want you to go back and 

look at the acquisition strategy, or it is not really strong, or whatever the weakness is.’’ And so we work through the upcoming year 

knowing that they have got to fix and put some type of plan in or 

address it or fix their acquisition strategy going forward. 

Now, in the ideal world, what would happen is before the fiscal 

year starts, they would have addressed all those weaknesses so 

that when the money is appropriated and they start that new 

project, that all the things that we have identified from a planning 

perspective jointly have been resolved, so that they can then go forward with the proper precautions in place. 

If you step back and say, ‘‘OK, maybe they did not address some 

of the planning issues, like project management, they do not have 

a qualified project manager on there to manage it through;’’ then 

what will happen is we say, ‘‘OK, they have done these other activities, they have this person set up to go into training, they have a 

remediation plan as they start to execute.’’ So it moves to the highrisk list because that is when you are actually executing out on 

that particular effort that we thought needed to have some type of 

remediation. 

Senator COBURN. But here is the thing I do not understand. If, 

in fact, everything is not solved, why would we go on and allow a 

contract to be let? 

Ms. EVANS. Sometimes we do not. 

Senator COBURN. Well, I know, but sometimes you do. 

Ms. EVANS. Sometimes we have to——

Senator COBURN. No, you do not have to. You could say we are 

not prepared to spend the people of this country’s money wisely so, 

therefore, we are going to hold off on your allowing to let this contract—unless it is an earmark, we are going to hold off allowing 

you to spend this money until you have your act together. 

Ms. EVANS. Which I would say that OMB does use its authorities 

appropriately, especially in those types of cases, and then we also 

then, if the project has to go forward because there is a compelling 

business need, that we use the proper budget authorities, proper 

management authorities that we have, and we do not just release 

all the funds so that there is a floodgate of money and no accountability. 

Senator COBURN. No, and I am not accusing you of that. 

14

Ms. EVANS. Right. 

Senator COBURN. If something is on the high-risk list and then 

it goes to the Management Watch List, to me it says we did not 

do what we were trying to do on a high-risk list. In other words, 

the whole purpose for having the high-risk list is so that they do 

not move to the Management Watch List. And if they are moving 

from a high-risk list before we ever institute a contract to a Management Watch List, how did we fail in that time period where we 

recognized there was a problem until we were implemented? 

If there is a business case to be made to start a program and yet 

we are going to start it without all the tools and all the management there, why would we go on and start it? Even though we are 

going to lose some time, why would we not get it right before we 

start it? Because we are wanting to spend the money in the budget 

that is allowed? 

Ms. EVANS. No. I would say, sir, to the agencies’ credit in that 

particular case, the underlying business requirement is there because they put it together, whether it is a brand-new program coming out or there is a business need. So they clearly have identified 

a business need, and it is a major investment because it is coming 

in on a business case. I would say a lot of times to the agencies’ 

credit, especially when we are highlighting certain areas that we 

have major concerns with, which we know the oversight committees would also have concerns with, they do slow down several of 

these activities until there are proper gates in place. They do go 

back and relook at that and slow it down and say, ‘‘OK, we cannot—we are not going to spend this money right now because we 

cannot answer some of these questions, we do not have the right 

contracting vehicle in place, OK, you want us to put certain provisions into the contract, we need to go back and look at it.’’

And so the agencies in partnership with us, with, ‘‘we are OMB’’ 

type of approach here, but they do go back, to their credit, and go 

back and re-evaluate those, and there have been several projects 

where they have either stopped them because there was not adequate controls in place and then restarted them, or they have 

stopped the contract and redid the contract to address those concerns. 

Senator COBURN. How much is Congress to blame for bad 

projects moving forward? Have you looked at that? In other words, 

where we have directed you to do something that you are not ready 

to do because some Member of Congress says you have to do it? 

Ms. EVANS. I cannot say that I have specifically done that particular analysis. 

Senator COBURN. Has GAO looked at that? 

Mr. POWNER. No, we have not. But one thing to point out, the 

high-risk list, Dr. Coburn, if you look—we have 840 projects, right? 

And so ‘‘high risk’’ means it is an important—it is high dollar, it 

is an important project. If we do not deliver it, there is going to 

be some——

Senator COBURN. There is going to be a cost. 

Mr. POWNER. There is going to be an issue, right? 

Senator COBURN. Right. 

Mr. POWNER. So of the 840 projects, we have about 440 that are 

deemed high risk, which means they are important projects. So we 

15

have 400 projects that agencies are saying are not that important. 

That does not make sense, does it? 

Senator COBURN. No. 

Mr. POWNER. I would expect 90 percent of our 840 projects or 

more to be on the high-risk list. 

Ms. EVANS. Well, OK. 

Mr. POWNER. To your point about what are you instructed to do 

and that, I think, it would be worthwhile to look at those 400 

projects. Why aren’t they high risk? 

Senator COBURN. Well, I think you will probably get a letter from 

my staff requesting that of the GAO after this hearing. 

Ms. EVANS. There is a nuance here, so I need to clarify something. I feel this compelling need to clarify this. I appreciate this 

opportunity. 

When we use the 840 number, that is a major investment. So 

when you are preparing this audit to ask them to look at this, that 

does not necessarily directly equate to 840 projects. So there could 

be a lot more projects under that investment, depending on how 

they group things. I am going to give you an example. Our policy 

says for one business case, one investment, we want one Exhibit 

300 that deals with infrastructure, office automation, desktop computing. Now, when you actually look at that and what is encompassed in that, we also have a policy out there that is now telling 

agencies you need to do a standard desktop configuration, you need 

to move your agency to implement Internet Protocol Version 6. 

There are other things that they are doing, like changing out their 

telephone systems, updating—those are all projects. 

So there could be potentially five to six projects associated with 

one investment, so I am actually making the argument that there 

could be more than what is being reported here, but I want to 

make sure that everybody realizes it is not a one-for-one match 

here. 

Senator COBURN. I think that is a fair statement, and we will do 

that as we look at it. But it kind of goes back as to why if we start 

a project and it is on the high-risk list, why does it stay on the 

high-risk list? Why don’t they ever get off? 

Ms. EVANS. Because sometimes they should stay on there because of the complexity of the project, or because of the oversight 

and the mission-critical nature of the project. It can be a very highly performing project, but everybody wants to make sure that it 

gets to the intended results. And so there are other projects that 

are down there that are—for example, let’s take the 25 E–Government initiatives. Those are very important to the Office of Management and Budget. Those may not necessarily have the same level 

of importance to every different part of the organization within the 

agencies. So we use our authorities to put that on the high-risk list 

to make sure that there is not duplication. 

A project could be performing very well, but because Congress 

has a particular interest in a project because it is mission critical, 

because it is doing things with homeland security, it should be on 

the high-risk list so that everyone knows what it is doing, how well 

it is performing, getting that information on a quarterly basis so 

that you know how it is performing. 

16

Senator COBURN. So let’s go back to the Management Watch List. 

Those are poorly planned? 

Ms. EVANS. Yes. 

Senator COBURN. So let’s just use the Management Watch List. 

Why do they stay on the Management Watch List then? If they are 

poorly planned, where is the arrow that goes in and says poorly 

planned, fix it or quit it? Make it properly planned and fix it rather 

than keep it on the Management Watch List because it continues 

to be poorly planned. 

In other words, that is not an acceptable behavior anywhere in 

the private sector that you are going to allow somebody to continue 

to have a nightmare program and not go in and fix it. And we are 

not going to continue over a 5-year period to continue to say this 

is a poorly planned project. Somebody has to remedy a treatment 

or a solution for that problem. 

I am not upset with you all. I think you guys have done a great 

movement. I want to move us all the way. I think we are wasting 

$6 to $8 billion a year on IT right now, at a minimum in this country because we do not do bid—we do cost-plus contracting. And we 

could get a lot of it done for a whole lot less if we held contractors’ 

feet to the fire and if we knew exactly what we wanted. Our problem is that we do not know what we want, so we still offer a contract anyhow, and the system works to where it is cost-plus. And 

since we are changing what we want as we go, the VA has rebased 

over 90 percent of their projects, IT projects, which means they do 

not know what they want when they started it. They do not know 

the final result they want. 

As we move people onto the high-risk list, we move them onto 

the Management Watch List, there has to be—if they stay on the 

high-risk list, I understand that. It is something important for the 

Pentagon or Homeland Security or something that is strategic. But 

the Management Watch List is not. It is ‘‘poorly planned.’’ That is 

what the definition of it is. 

Ms. EVANS. Right. 

Senator COBURN. And so why do they stay there? 

Ms. EVANS. So when you look at that, I would ask for us to drop 

down a specific level, which when you look at all the different investments that have been initially on the Management Watch 

List—it is a planning document, but we have done the analysis 

across the board, from the inception when we started the Management Watch List. Now we changed it from 2004 to 2005, and we 

called it a ‘‘Management Watch List’’ because there were activities, 

things you needed to look at and work with it. 

If you look at it from the time that we started that to now, and 

out of the thousands of investments that we had, there are 73 that 

have consistently been there for one reason or another, depending 

on where they are in the lifecycle. So when you look at that number, 73—I am not saying that is good, bad, or indifferent. We know 

exactly what it is. So then what you do is you drop down and you 

say, ‘‘OK, is it a systemic problem within the agency or is it that 

particular investment because they do not know what they want to 

do on that particular project.’’ And in the case of one agency, I 

know it is the two because it is duplication. And we are arguing 

with the agency saying that it is duplication in what you are doing 

17

and so we do not agree with this, and so we have been scaling back 

and making them move those so that they are consolidating the 

system. 

So we have had that ongoing issue to consolidate down and have 

a good plan so that they can continue on with the services that 

they are doing, but consolidating it and meeting all the other requirements. We have continued to put that on the Management 

Watch List from that perspective, and then each year we work 

through that incremental performance with them. 

Now, I will tell you that when you look through the 73 investments that are consistently on the Management Watch List, our 

numbers, even though we have not released these, match up with 

yours. We have identified the same type of issues that you have. 

There is a systemic problem at VA. There are issues at VA about 

how IT programs are being managed, how they are doing certain 

things. And the CIO there, Bob Howard, is really aggressively moving out to address those overall weaknesses that you are now seeing through all these other indicators. 

And so we are working very closely with him because there are 

underlying issues that are causing people to question why they are 

rebaselining, why these things are happening, and it does go back 

to specific things like what problem are you trying to solve and 

how will you know that you have done it and how does this investment or this particular IT project, how is this helping you get 

there? 

Senator COBURN. I will finish up, if we can come back in a 

minute. Is there a clearance procedure at OMB for IT programs 

throughout the government? In other words, can they initiate one 

without you all saying OK? 

Ms. EVANS. That is kind of——

Senator COBURN. Well, now, that is just a yes or no answer. Can 

they initiate an IT program without OMB’s approval? 

Ms. EVANS. I would say that the answer, the straight yes or no 

answer would be ‘‘yes.’’ I would hope that agencies, through the 

process of what we have in place, that they give us the information 

ahead of time. But we are talking about major investments, and 

when you talk about an IT project, the Exhibit 53, which is a higher-level document that summarizes information, we do not get 

down into the specificity of some specific projects because we allow 

them that flexibility. 

Senator COBURN. Are you still allowing the VA some of that flexibility? And are you still allowing the Department of Health and 

Human Services that flexibility? 

Ms. EVANS. No, that is a different issue on that particular one. 

So what we have in place is earned value management. There is 

a policy in place. So earned value management deals with this particular issue. That is the actual execution. So when an agency 

starts a project, there are certain guidelines in place. You are either using new money, you are starting something new, or it is 

steady state. If you are using new money, you have to put this in 

place. 

And so we work very closely with these agencies, and VA in particular is on my other list—I have another list here—from the 

earned value management, who has it in place, who has policies in 

18

place, who has these things in place. That is what that issue is because in order to really do it, you have to get an integrated baseline. Once you do that, the simplest way to understand it is—I plan 

these actions for this year and this is how much I think it is going 

to cost. Then I start executing out every quarter, and if I have done 

a good job planning, it is going to fall within 10 percent. If I have 

done a bad job planning, it is going to be really out there, or it may 

take an action like rebaselining. 

Senator COBURN. But if you had a fixed-price contract and you 

knew what you wanted and you competitively bid it, you would not 

have the price variance. 

Ms. EVANS. You would not have a price variance, but you would 

still have a performance variance. 

Senator COBURN. Well, you may, but at least you are controlling 

the other end of it. We are not controlling the other end of it. 

Twenty percent is the average. 

Ms. EVANS. Well, and we agree with you because we—that is the 

other thing that we asked the agencies right when they were starting, if they were in a new phase of the contract, or whenever a contract is coming up for renewal. All the E–Government initiatives, 

the way that we are moving those out are performance-based contracts. You pay on the level of performance. If you do not perform, 

then you do not pay. Or there are incentives for pay or there are 

disincentives for performance. 

Senator COBURN. I need to yield back, and I will yield to the 

Chairman. 

Senator CARPER [presiding]. All right. Senator Akaka, you are 

recognized. Thanks for being here. 

Senator AKAKA. Thank you very much, Mr. Chairman. 

Ms. Evans, I understand from your biography that you have a lot 

of experience in government. First, let me thank you for that service. As you may know, I am a strong advocate of choosing government service as a career, and I am glad you have chosen that path. 

I hope that your service will help us find a better way to deal with 

the problems that we have now. So when you hear reports like $65 

billion is being spent for 6,500 IT projects, it is difficult to understand how much investment is put in, and immediately the question becomes: How do we keep this in check? Is it working right? 

And this is our problem, and we are trying to find answers to do 

that. 

From your long service, I am sure that you understand better 

than most how government agencies often resist change, especially 

in processes that have been in place for years. This is often reflected in the unique technology solutions adopted at many agencies, and what I am referring to is that many agencies do create 

their kinds of systems. 

In the area of information technology, should agencies be doing 

more to adopt private sector best practices so that they can use 

more off-the-shelf technology? 

Ms. EVANS. So the simple answer is yes, and when we go forward 

on that—but I do think that there are a lot of things that we do 

within the Federal Government that the private sector does not 

have to do, especially statutory types of requirements and data asVerDate 0ct 09 2002 09:32 Jun 13, 2008 Jkt 038844 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 P:\DOCS\38844.TXT SAFFAIRS PsN: PAT
19

surance and information security types of requirements that Federal CIOs need to do and are statutorily required to do. 

So I think a lot of times when you start looking at best practices, 

there are actually some really good best practices within the Federal Government, and we need to make sure—that is what the CIO 

Council does, to make sure that they are shared across the government so that all of us can learn from one another. 

Senator AKAKA. Mr. Powner, in 2004, GAO released a report on 

agency CIOs that found that there is high turnover, as I mentioned 

in my opening statement, with an average tenure of about 2 years. 

Can you give me your thoughts on what, if anything, the Federal 

Government can do to compete with the lucrative private sector for 

the best talent and then keep that talent in the government? 

Mr. POWNER. There are several things that you can do. First of 

all, it is very difficult to compete because the salaries are comparable in the Federal Government, first of all. And you are right 

that turnover is very high. On average, it is 2 years. If you look 

at political appointees, it is less than 2 years; career CIOs, slightly 

higher. 

One of the things you can do—and there are some agencies that 

have done a very good job looking at critical position pay authority, 

where you can actually pay up to the salary of the Vice President 

through critical position pay. IRS is a good example. IRS sought a 

number of those critical position pay authorities, and a lot of those 

are within their IT organization. They were able to attract some 

very talented folks. In IRS we always hear a mixed bag about 

whether they are doing well or not, but they have had some successes in recent years, and that is due to the critical position pay. 

So that is one area that you can look at. 

The other thing that is very important when you have this continuity that is always at issue is the Deputy CIO position. Some 

agencies have been very effective, especially when you have political appointees, having a career deputy, that kind of keeps some 

continuity over time there. So that is also something that is very 

key. 

Senator AKAKA. Ms. Evans, can you give me your thoughts on 

that same question? 

Ms. EVANS. OK, so I am probably the exception to the rule since 

I am now a political appointee, and I am going on my fifth budget 

season. So I am past the 18-month piece here in both tenure. 

So it is hard for me as a career public civil servant to say that 

there is competition out in the private industry. To me, these jobs 

are very rewarding, and so there are reasons why you are attracted 

to public service. And these jobs, especially the CIO jobs, are very 

exciting because you are right on the cutting edge and you see everything, and so you have the opportunity to really make a difference. You see how things are, and you see how things can be. 

And so I think it is important for us to attract the right folks in 

here. 

Now, on a more granular level, what happens is we are required 

through the Clinger-Cohen Act to actually do a workforce assessment. We do one every 2 years. So the CIO Council actively takes 

this on. We have identified where our skill gaps are. We have identified what our personnel gaps are, how many people we have on 

20

board in those positions, and we are actively doing things to ensure 

that we can retain them through activities like pay. We are doing 

other activities along the lines to ensure that they are properly 

trained. We have put out guidance dealing with project management. That is a particular skill gap that we have identified that we 

have to have and recruit and retrain. 

The CIO Council has actively gone out and has programs in the 

high schools as well as the colleges to attract IT professionals into 

our area. We work very closely with several programs that the 

agencies have in cyber security, which is another area so that we 

can then do direct hires and bring them into our workforce. 

I do think that there are a lot of things that we need to talk 

about as far as leadership and continuity of that leadership, and 

there is a lot to be said about how there is the political CIO as well 

as the career deputy. But I will tell you, if you look at the agencies 

going across the board, the leadership that is in the agencies now 

look at the CIO as a critical function and now whether it is political or career. They look at it as what are the skill sets that we 

need, what are we going to accomplish, and who is the right person 

for that job. And I actively work with each and every department 

to ensure that we get the right person into those positions as they 

leave. 

I am very passionate about my service, and I feel that we have 

a wonderful opportunity here in the Federal Government to make 

a difference. So I think that it is attractive enough and that there 

are other things that attract us into this. And so I think everybody 

does want to do a good job when it is all said and done at the end. 

Senator AKAKA. I understand that part of the problem that we 

are facing today in trying to resolve these problems is that GAO 

is having some difficulty in tracking problem projects. And the reason that I see as stated here is that OMB does not list why specific 

projects are on the Management Watch List. 

Is that correct? And if so, what can we do to correct or improve 

that? 

Ms. EVANS. So that is correct. We do not list the specific reasons 

when we release the list that is out there for the Management 

Watch List. We have really looked at that—we were discussing it 

a little bit during the break—because we look at the Management 

Watch List as a planning document, and what is really more important is how agencies are actually executing, which is all the information associated with the high-risk list because that is boots on 

the ground, what are they doing, how are they performing, and you 

can get that information on a quarterly basis. 

The Management Watch List in our view is a planning document 

that an agency is doing 2 years in advance, and so what we really 

want them to be focused on is execution and getting the things 

done. 

So this was my concern initially—but 100 percent transparency 

is giving us consistency here—that we get very focused on the list 

and not really focused on the results. And so that is why we put 

a lot of effort on the high-risk list. But I hear the concern, and so 

I will go back and see what we can do about when we release the 

President’s budget and the list and the information about having 

more transparency into that process. 

21

Senator AKAKA. And our concern, too, is that the Clinger-Cohen 

Act requires you to establish the process, analyze, track, and evaluate the risk, and also analyze the results of the major capital investments that are made, and my question was to see that is carried out. 

Actually, we have heard from GAO that they are having difficulty along this line, and I hope we can find a way of improving 

that. Thank you very much, Mr. Chairman. 

Senator CARPER. Thank you, Senator Akaka. 

Let me go back to this chart over here for just a moment, if we 

could, and, again, we are looking at the number and type of highrisk with shortfalls, and the third column over says 33 of them fall 

into the category of a lack of a qualified project manager. I think 

Mr. Powner said that the number—if you quantify the dollar value 

of the projects, is about $1 billion. And we are talking a little bit 

in here about how to attract and retain qualified folks to work in 

these jobs when you are trying to compete with the private sector 

where they can make a lot more money. 

I just want to ask about the issue of a qualified project manager, 

any idea why, Ms. Evans? Is it because we are unable to attract 

and retain folks, because there is a turnover, the churn in the managers that are managing these kinds of projects? What is the deal? 

Ms. EVANS. There are a couple of issues associated with that 

which we have looked at, and so we have the specific information 

by agency going across about how many project managers they actually have on board and how they are training them and closing 

the gaps. 

Initially, what we have is we have more projects than we do 

qualified project managers right now. So that is the initial gap that 

we have identified, and that is what you are seeing right there. 

That is the validation of that. And so what we are doing is CIOs 

then are either compensating for and closing that gap in other 

ways—they put a person in there and then train the person as they 

are going along with the project. And so that is why they will show 

up that way. If it is a project that is a high-level project that needs 

the highest-level project manager, yet they only have one who is 

certified at a secondary level, they will put that person in there, 

but then they will concurrently train them as they go forward. 

So it is a gap, and it is a combination of several things: Recruit, 

retrain, the churn as people leave, and then the volume of the 

projects. So we are constantly focused on trying to close that gap. 

Senator CARPER. Is it being closed? Is it steady? Is it going up? 

Is it going down in terms of—that number last year, was it 30 or 

25? Or was it higher? 

Ms. EVANS. To be really honest, right now the methodology that 

we are using does not give me accurate enough data to be able to 

answer that question going forward. We are really looking through 

those numbers so that I can consistently answer, have I systemically addressed what that issue is. I know what the numbers are 

by a quarterly basis of what is happening, but when I start looking 

at those in conjunction with OPM through the scorecard, some of 

it I think I need to strengthen the process jointly with OPM so that 

I have more validity in the numbers. 

22

Senator CARPER. Think about that question and respond in writing and see if you cannot give a little more insight. 

Another question or two, if I can, and I think Senator Coburn 

has maybe another one or two. We will see if Senator Akaka has 

another one, and then we will go to our second panel. My goal is 

to try to wrap it up here around 4:30. I need to leave by then. So 

we are going to try to—pardon? No, it is not my train. It is a meeting with our leader. And I do not want to get on his bad list. 

Senator COBURN. It’s fun. 

Senator CARPER. How would you know? [Laughter.] 

All right. For OMB, one question. When overseeing multiple 

projects by dozens of agencies, it is important to recognize trends 

and create solutions before a problem becomes widespread. I think 

we all agree with that. I noticed that some agencies were able to 

decrease the number of projects on the Management Watch List 

fairly drastically. Others sort of continue to have difficulty effectively managing their investments. 

What is OMB doing to highlight trends and examine the root 

cause of governmentwide problems in planning and implementing 

IT projects? 

Ms. EVANS. So we do the analysis and look at the business cases 

across the board so that we can identify whether agencies are having a hard time really saying what the outcome is, so performancebased and a good way of measuring that. 

We look across the board to see if there are problems with the 

acquisition strategies and how those things—I think that has been 

highlighted. You are aware of those issues just like we are aware 

of those issues. 

So if we identify things that are specific to the workforce, like we 

were previously talking about, we will go back through the CIO 

Council and work those problems jointly with the CIO Council and 

go through and get suggestions, recommendations about how to 

deal with that. Is there a policy that needs to be done in a particular area, or is it really execution? And is it realignment of resources, those types of things? 

So we try to see if there is broad-based types of issues going 

across, and if they are, we jointly work that with the CIO Council. 

If it is agency-specific—and in a lot of cases, it is—I work very 

closely with the budget side of the house as well as the agency 

itself, and so there are several agencies that I meet with on a 

monthly basis so that we can make sure that we are addressing 

what those overall issues are, whether they are management 

issues, it could be leadership, it could be something at the higher 

level that they do not necessarily get all the visibility that they 

need to in some of the projects. 

We do dive down vertically, and we do look across horizontally 

at those problems, and we try to highlight those when we do the 

chapter in the budget so that everyone knows what type of analysis 

we have done as we are required by Clinger-Cohen. And then the 

types of actions that we intend to take, whether it is OMB-specific 

or CIO Council types of actions. 

Senator CARPER. Thanks very much. Dr. Coburn. 

Senator COBURN. Great. Thank you. 

23

I guess one of the things I would like for you to answer back, 

after you have had a chance to think about it, is you have a tough 

job. I mean, this is a lot of stuff, a lot of important stuff. I would 

like for you to answer back: How do we help you? How does this 

Subcommittee help you? In other words, if there are areas where 

there needs to be oversight in specific areas, we ought to be doing 

that. We ought to be looking at it. Every now and then heat brings 

forth light, and it would be nice if we could know where we can 

actually help. Rather than just have a hearing to talk with you 

about it and ask GAO to look at it, are there specific agencies that 

ought to be before us that have failed to respond and failed to go 

up? 

I would just note, we have one in five projects that get 

rebaselined in this country. One in five. I would just tell you there 

is not anywhere else out in the private sector where they would tolerate that. We have one in six without a project manager—without 

an appropriate project manager. And so we continue to go forward 

with a project even though we are required by law to have a project 

manager there that is qualified, but we go forward and do it. And 

there may be some thought as to maybe we should not do the 

project until we have the qualified project manager there because 

even though we may be more timely in our response, the cost and 

the effort and the end product may not be near as well as had we 

waited a year until we got a qualified project manager. So I would 

just like for you to think about that. 

Mr. Powner, I would like for you to just talk with me, and if you 

do not know the answer, it is fine. What percentage of our IT contracts are cost-plus versus fixed-price? 

Mr. POWNER. I do not have the specific numbers on that, Dr. 

Coburn. I would tell you that there are very few fixed-price contracts. 

Senator COBURN. Is there a systemic reason why there is not 

fixed-price contracts? 

Mr. POWNER. The reason is primarily because there is uncertainty with what is to be delivered and that type of thing. So the 

more we can define up front through solid requirements that are 

validated, that all helps. 

Senator COBURN. In other words, better planning, knowing what 

you want. 

Mr. POWNER. Correct. 

Senator COBURN. And what your end result is to be? 

Mr. POWNER. Correct. 

Senator COBURN. So the fact that we do not have that indicates 

that really our planning may be worse than what we think it is. 

Mr. POWNER. I think the planning is pretty poor. If you look at 

the Management Watch List, we are saying that 40 percent of our 

projects are poorly planned, and we contend that is understated. 

OK? Because the Exhibit 300s are still—there are still games that 

are played with the Exhibit 300s. 

Senator COBURN. Are the games played because so many of the 

Exhibit 300s forms are actually filled out by the contractors themselves? 

Mr. POWNER. Well, I think it is just the nature of your business 

case. I mean, it is not just in the government, but in the private 

24

sector, too, you do everything you can to stretch your business case 

to make sure you get the funding. But the contractors are writing 

a lot of those Exhibit 300s. That is how the process is played out, 

correct. 

Senator COBURN. All right. I will submit additional questions for 

the record. 

Senator CARPER. As will I. 

Senator COBURN. Thank you both. 

Senator CARPER. OK. Senator Akaka, another question? 

Senator AKAKA. Yes, Mr. Chairman, I have some questions here, 

but let me ask one of them in the second round. 

Senator CARPER. Please, go ahead. 

Senator AKAKA. Ms. Evans, I am concerned that having both 

what they call an at-risk list and a high-risk list unnecessarily divides up the projects that are or may become problematic. These 

IT programs should be measured across several dimensions. For example, some projects may be inherently risky due to size but are 

executed well, while others may have been planned well but have 

poor outcomes. I am sure you have seen cases of both. 

Why wouldn’t OMB combine all of these projects and assess them 

across the same dimensions much like OMB does with the Performance Assessment Rating Tool? 

Ms. EVANS. So we view that the IT investments complement the 

Program Assessment Rating Tool (PART), and we do evaluate the 

IT investments in alignment with those, so there is a performance 

piece. The business case, though, has to clearly talk about how it 

aligns with program outcomes. And we do ask them about the 

PART and the process. We used to track it until all programs had 

gone through the assessment, and now agencies have to clearly 

show that alignment, whether they are meeting the efficiency 

measures in the improvement plan or they are actually dealing 

with the measures on performance. 

So we do that linkage. 

There is a difference—and we can go back and look at this, but 

there is a difference in time, and I think the way that the PART 

is structured is when they first look at it, that is how we have the 

Management Watch List. That is the business case, that is the Exhibit 300s, because of the cost that you are asking for in the budget 

process. It is a budget document. 

There is an improvement plan on the PART as the agency goes 

forward, and then they measure against the improvement plan. 

That is the same as our high-risk list. In our high-risk list, each 

one of those has a plan underneath it, and then we manage that 

on a quarterly basis looking to see how well they are executing 

against that plan. 

Now, it may not be as smooth, so we can take a look at it, but 

we have these two dimensions in time of how we are looking at it, 

and that is why we have separated it. But we do continuously analyze it, and then we also then align it. So I hope that has helped 

in the answer going forward, but we can take a look and see if we 

can better articulate how we do the analysis with these two documents to show that we are doing it on a continuum basis. 

Senator AKAKA. Mr. Chairman, because I have another hearing 

to attend, let me conclude with this one question. 

25

Ms. Evans, OMB has put considerable effort into producing these 

risk lists, though, as we have said, we would appreciate it if more 

detailed information were available publicly. OMB has considerable 

power to influence how agencies spend the dollars that they have 

been budgeted. 

If OMB concludes that an individual IT program is having problems or is failing, could it and should it use budgetary means to 

try to correct or end it? 

Ms. EVANS. Yes. 

Senator AKAKA. Thank you. Thank you, Mr. Chairman. 

Senator CARPER. Was that the answer you were looking for? 

Senator AKAKA. Yes. 

Senator CARPER. All right. We will wrap up this panel with that 

response. I just want to thank you both for being back here and 

for the time you spent preparing for the testimony today and for 

your focus on these issues. 

Dr. Coburn a year or two ago put his finger on an important 

issue, and I certainly agree that it is important. He asked a real 

good question here today—several of them, but one of them was 

how can we be of further help? And I just think it is helpful when 

you put a spotlight on an issue that needs to be—an itch that 

needs to be scratched, and this is one that needs to be scratched. 

And to the extent that we can be constructive—and that is what 

we want to be—we look to you for some guidance on that front. 

In the meantime, stay vigilant, remain vigilant, and we will look 

forward to having the opportunity to continue this conversation 

further down the line. Thank you very much. 

With that, we would like to invite our second panel to come forward, please. Barry West, we are going to start off with you. I am 

going to just make a very short introduction here. Full introductions will be in the record, but this is just the highlights. 

Mr. West joins us as Chief Information Officer at the Department of Commerce. Mr. West was formerly the Chief Information 

Officer and Director of the IT Services Division for the Department 

of Homeland Security and FEMA, as well as the CIO at the National Weather Service. He serves in a number of key associations 

and councils advising on information technology issues. 

Daniel Mintz, currently serves as the Chief Information Officer 

for the Department of Transportation. His previous experience was 

with Sun Microsystems where, for 10 years, he worked on implementing large government and commercial programs. Before that 

he served as a member of the State of Maryland Advisory Panel 

on Electronic Commerce, providing advice on enabling online commerce in his State, my neighboring State to the west. 

Next we have Michael Duffy, who just last week was appointed 

as the Deputy Assistant Secretary for Information Systems and 

Chief Information Officer at the Department of the Treasury. Good 

for you. He joins Treasury after serving at the Department of Justice where he served as the Deputy Chief Information Officer. 

Next, Scott Charbo. Mr. Charbo is the Department of Homeland 

Security’s Chief Information Officer. He has previous experience as 

CIO for the Department of Agriculture and as President of a company called mPower3, Incorporated. Welcome. 

26

1The prepared statement of Mr. West appears in the Appendix on page 81. 

And, last, Paul Brinkley, who is the Deputy Under Secretary of 

Defense for Business Transformation at the Department of Defense. Mr. Brinkley leads the business modernization for the Department of Defense, and prior to assuming his current role, he 

served as Senior Vice President of Customer Advocacy and Chief 

Information Officer for JDS Uniphase Corporation. 

We welcome you all. Your entire testimony will be made part of 

the record, and we will recognize you in the order that you have 

been introduced. If we have time for questions at the end, we will 

do that. If not, we will submit questions and ask you to respond 

for the record. I need to leave here about 4:25. 

Mr. West, you are recognized. Thank you again for coming. 

TESTIMONY OF BARRY C. WEST,1 CHIEF INFORMATION 

OFFICER, U.S. DEPARTMENT OF COMMERCE 

Mr. WEST. Chairman Carper, Ranking Member Coburn, Senator 

Akaka, I appreciate the opportunity to address you on the Department of Commerce’s inclusion on the Office of Management and 

Budget’s High-Risk List and Management Watch Lists. 

Commerce has 12 information technology investments on the 

OMB High-Risk List. Of these, eight represent Commerce’s participation in OMB’s E–Government Initiatives or Lines of Business 

with a migration component or where Commerce is a shared service provider. 

The OMB High-Risk List. These investments were designated by 

OMB as high risk and include E–Travel, E–Rulemaking, E–Authentication, and the Financial Management Line of Business. The 

other four were nominated by Commerce because they meet two of 

OMB’s four high-risk criteria. The four investments nominated by 

Commerce include three components of the upcoming 2010 Decennial Census. They are the Field Data Collection Automation, 

FDCA; the Decennial Response Integration System, also known as 

DRIS; and the Master Address File and Topologically Integrated 

Geographic Encoding and Referencing system, also known as MAF/

TIGER. The fourth is the Ground System of the National Polar-orbiting Operational Environmental Satellite System, also known as 

NPOESS. All meet OMB’s evaluation criteria, that is, they have a 

baseline with clear goals, are within 10 percent of cost and schedule targets, have a qualified project manager, and avoid duplication 

with OMB’s E–Government efforts. 

OMB Management Watch List. Of Commerce’s 65 major IT investments submitted to OMB in the fiscal year 2008 budget, OMB 

placed 49 on its Management Watch List. All have been remediated 

and are no longer on the Management Watch List. Of the 49, 29 

were taken off the list by December 2006, leaving 20 on the list. 

All but one were removed by March 2007; the last was removed in 

June 2007. To ensure that Commerce’s senior management understood the importance of the Management Watch List and actively 

supported corrective actions, I briefed the Executive Management 

Team, which is Commerce’s most senior executives, providing a status update routinely. During my weekly update to the Deputy Secretary, the most critical IT issues, including the Management 

27

Watch List updates were given, status briefed, and overall progress 

was tracked. Corrective actions included completing additional documentation necessary to demonstrate adequate planning and investment control, largely in the areas of security and privacy. Office of the CIO staff worked diligently with the operating units to 

research and develop additional explanatory material and to ensure 

that responses were consistent across the business cases. 

Commerce attributes its success to the strength of its information technology capital planning and investment control process—

this is also known as CPIC—and to its commitment to improve IT 

security. 

Capital Planning and Investment Control. Commerce’s CPIC 

process is built on a foundation of strategic and operational IT 

planning that is integrated with processes for the selection, control, 

and evaluation of IT investments. 

The process begins with a request from my office to the operating 

units to develop a strategic IT plan within the context of maturing 

their capital planning and investment control processes. Strategic 

IT plans provide a framework for discussion and an opportunity for 

operating units to focus on the strategic use of IT resources to improve program delivery. 

The Commerce IT Review Board advises the Secretary and the 

Deputy Secretary on critical IT matters, ensuring that proposed investments contribute to the Secretary’s strategic vision and mission 

requirements and provide the highest return on the investment or 

acceptable project risk. 

As part of its charter, the Commerce IT Review Board makes recommendations for continuation or termination of projects under development at key milestones or when they fail to meet performance, cost, or schedule criteria. 

Project Management. Commerce recognizes the importance of effective project management to the success of IT investments. We 

have established a central source for project management expertise, advice, and guidance which focuses on four strategic initiatives. They are the establishment of standards and guidelines; providing project management services and support; providing Department of Commerce program and project managers with technical 

assistance; and mentoring, training, and guiding project teams. 

In conclusion, since information technology expenditures constitute such a large portion of the Commerce annual budget, which 

is about 20 percent, or $1.7 billion, it is imperative that special 

management attention be given to the Department’s proposed and 

continuing IT investments. This is done through the capital planning and investment control process, which continues to be 

strengthened to provide broader and deeper analysis of proposed 

new IT investments, projects under development, and projects that 

have completed deployment, as well as the overall performance of 

the portfolio. Where the cost, schedule, or performance goals of IT 

investments are not yet being fully achieved, the processes in place 

have detected the problems and directed corrective action. 

Again, I thank you for the opportunity to appear before you, and 

I look forward to answering any questions that you may have. 

Senator CARPER. Mr. West, thank you for that so much. I am 

going to now recognize Mr. Mintz for his comments. Thank you. 

28

1The prepared statement of Mr. Mintz appears in the Appendix on page 97. 

TESTIMONY OF DANIEL G. MINTZ,1 CHIEF INFORMATION 

OFFICER, U.S. DEPARTMENT OF TRANSPORTATION 

Mr. MINTZ. Chairman Carper, Ranking Member Coburn, other 

Members of the Subcommittee, thank you for the opportunity to appear before you today to discuss issues relating to the Department 

of Transportation’s information technology programs. My name is 

Dan Mintz; I have been the Chief Information Officer for the Department of Transportation since May 1, 2006. In that capacity, my 

responsibilities include serving as the Vice Chair of the Department’s Investment Review Board, which oversees all major IT investments for the Department. 

I came to the government from Sun Microsystems. During my 

years at Sun, I managed IT programs similar in magnitude to 

those being discussed here today and understand the need for senior management review and oversight, ensuring that all risks are 

properly mitigated. Many of the lessons learned during my time at 

Sun have helped me to more fully appreciate the issues facing departmental IT program managers and what we, as a Department, 

need to accomplish. 

My written testimony provides specifics about three IT investments that are included on the OMB Management Watch List and 

the OMB High-Risk List, and one of our projects designated by 

GAO as high risk. I would like to briefly mention here my five initiatives based on the lessons learned from those projects that we 

strongly believe will both improve ongoing program management 

and the way we are more effectively meeting mission needs overall. 

First, we are in the process of establishing a Department-wide 

program management organization. This organization will establish systematic processes and requirements to enable a more consistent approach to program management throughout the Department. 

Second, we will continue to ensure that those programs identified 

as high risk and high priority are reviewed by senior managers as 

well as the Investment Review Board when cost and schedule 

variances exceed the threshold of 10 percent. 

Third, I am implementing a plan to effectively address both technical and functional performance. We will be creating performance 

milestones developed with more precise indicators tracking program success. 

Fourth, we are addressing the issue of Earned Value Management, mentioned earlier in the first panel. This early-warning 

mechanism will further assist program managers in addressing 

risks. 

And, finally, this year we developed an improved ranking of investments across the Department to better determine the ‘‘health 

of our investments’’ which we plan to update on a quarterly basis. 

In conclusion, significant progress has been made and is continuing to be made to fully leverage information technology to meet 

the Department’s mission. Significant challenges remain, including 

the need to continue to improve our program management skills, 

manage project risks and monitor program performance so that 

management can quickly and effectively mitigate issues before a 

29

1The prepared statement of Mr. Duffy appears in the Appendix on page 108. 

project becomes a troubled investment. Our experience is that 

when we develop transparent processes, collaborate with senior 

business owners and budget officials, and follow a consistent and 

robust project approach, we are able to keep most of the IT investments off the Management Watch List or have them quickly removed. When we do not accomplish one or more of those goals, the 

results are far less positive. 

Because of the importance of many of the transportation programs to the Nation’s economic well-being, we receive attention 

from many sources of oversight. Over the years we have learned to 

maximize the value of their input, however challenging their opinion may be. Again, I thank you for the opportunity to appear before 

the Subcommittee today, and I look forward to answering any questions that you may have. 

Senator CARPER. Mr. Mintz, thanks. We thank you for your testimony. Mr. Duffy, you are recognized. 

TESTIMONY OF MICHAEL D. DUFFY,1 DEPUTY ASSISTANT SECRETARY FOR INFORMATION SYSTEMS AND CHIEF INFORMATION OFFICER, U.S. DEPARTMENT OF THE TREASURY 

Mr. DUFFY. Mr. Chairman, Dr. Coburn, I appreciate the opportunity to appear before you to discuss the management of information technology investments. Like the other Federal agencies represented here today, the Department of the Treasury is diligently 

working to improve the management of its IT, especially those investments considered to be high risk. The Department has experienced its share of IT challenges. In response, Secretary Henry 

Paulson made IT management one of his top priorities when he 

took over the Department this past year. As a new member of the 

Secretary’s management team, I am fully committed to improving 

our ability to effectively manage our IT investments to ensure business value from those investments. 

Treasury has an IT portfolio that totals roughly $3 billion—about 

25 percent of the Department’s budget. Of the total, $2.4 billion 

funds 63 major investments; the remaining $560 million supports 

222 ‘‘non-major’’ investments. 

The Department and its bureaus rely significantly on information technology to carry out its extensive and varied mission. Our 

largest investments are, of course, at the Internal Revenue Service, 

who uses IT to administer the tax programs. The Department, 

however, also uses IT to support other critical purposes, such as 

analyzing financial intelligence information to combat terrorism. 

Given the importance of Treasury’s IT investments, the Government Accountability Office reviewed and issued a report on Treasury’s IT management. The July 2007 GAO report found that Treasury has established many of the capabilities needed to select, control, and evaluate its IT investments. However, GAO also found 

several very significant weaknesses. 

Due to these findings, GAO identified the need for Treasury to 

implement an executive-level review board to oversee IT investments throughout the entire lifecycle of the projects. GAO also recommended that Treasury implement a more comprehensive process 

30

1The prepared statement of Mr. Charbo appears in the Appendix on page 110. 

by which to manage all IT investments, irrespective of size, scope, 

or dollar value. 

The Department concurred with the GAO recommendations and 

began to immediately address the issues raised. I strongly support 

these steps, and I believe this is a clear indication of the commitment of the Department’s leadership to rapidly and comprehensively improve Treasury’s management of IT. 

As the new CIO, I have taken particular interest in GAO’s findings and recommendations. I believe regular engagement of our Department and bureau executives and the continuous attention to 

the progress of IT investments are integral to our Department’s 

successful planning, implementation, and use of IT. 

In the coming months, the Department intends to take several 

key steps. Foremost, we will revitalize an Executive Investment 

Review Board. We will do that in the first quarter of this upcoming 

fiscal year. Doing so will bring greater executive involvement and 

accountability into Treasury’s management of IT and will further 

ensure IT portfolio decisions are driven by our business requirements and strategies. We also intend to better leverage existing 

management tools and processes that can be used to improve investment management capabilities. 

Notwithstanding the planned changes, I note that the Department has already taken some steps. To ensure that all IT investments receive comprehensive oversight, the Department began implementing process changes this past summer to ensure that all of 

our ‘‘non-major’’ investments go through a formal select and control 

process. 

In summary, the Department has made strides in the past year 

to improve the management and performance of its IT resources. 

Work does remain to be done. However, these efforts and the actions we have planned to engage executive stakeholders will result 

in effective IT management at the Department of the Treasury, 

and in so doing, Treasury IT programs will provide value-added 

services to the bureaus and offices performing the Treasury missions. 

Thank you again for the opportunity to participate on this panel. 

I would be happy to answer any questions. 

Senator CARPER. Thank you, Mr. Duffy. Mr. Charbo, you are recognized. 

TESTIMONY OF SCOTT CHARBO,1 CHIEF INFORMATION 

OFFICER, U.S. DEPARTMENT OF HOMELAND SECURITY 

Mr. CHARBO. Thank you, Chairman Carper, Dr. Coburn. I appreciate the opportunity to address you on the Department of Homeland Security’s inclusion on the Office of Management and Budget’s 

High-Risk and Management Watch Lists. 

DHS currently has 20 systems on the OMB Management Watch 

List from the 105 major investments submitted to OMB in the fiscal year 2008 budget. We are actively managing 9 out of the 20 for 

removal from the list. These range from issues relating to cost/

schedule, privacy statements, and security. The remaining investVerDate 0ct 09 2002 09:32 Jun 13, 2008 Jkt 038844 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 P:\DOCS\38844.TXT SAFFAIRS PsN: PAT
31

1The prepared statement of Mr. Brinkley appears in the Appendix on page 116. 

ments on the list have been remediated, and we have submitted 

documents to OMB for removal. 

DHS is managing 33 information technology investments on the 

OMB High-Risk List. Of these, 19 represent DHS’ participation in 

OMB’s E–Government Initiative or Lines of Business with a migration component or where we are the managing partner of the initiative and operate as a shared service provider. The remainder, we 

have confirmation that issues are addressed, or we have submitted 

to OMB information addressing the high-risk list and are waiting 

future removal. 

We have made progress to improve capital planning, acquisition 

planning, procurement oversight, alignment with enterprise architecture, and stronger policies for IT security. Collectively, this improved investment review process methodology has brought planning, budget, program management, IT, and acquisition planning 

into a stronger alignment. 

In March, Secretary Chertoff issued Management Directive 007, 

which operates greater oversight to the Department’s CIO for IT 

issues relating to budget, acquisition, architecture, and performance ratings of component CIOs. We have seen a response and expect to see more improvements in IT performance as the Department matures. 

DHS has also worked to centralize information technology processes and avoid unnecessary duplication by requiring adherence to 

the architecture for IT investments over $2.5 million, which was 

also appropriation requirements. To date, we have reviewed over 

$1.8 billion in acquisitions prior to committal of funds. 

I cannot emphasize enough the importance of good policy and a 

strong relationship of the CIO, the CFO, and the CPO in achieving 

any goals for improved management of IT and, more importantly, 

program performance. DHS has benefited by such a relationship 

under the direction of the Under Secretary for Management. 

This concludes my comments, and I welcome questions. Thank 

you. 

Senator CARPER. Thank you, sir. Mr. Brinkley, last word. 

TESTIMONY OF PAUL A. BRINKLEY,1 DEPUTY UNDER SECRETARY FOR BUSINESS TRANSFORMATION, U.S. DEPARTMENT OF DEFENSE 

Mr. BRINKLEY. Thanks. Chairman Carper, Senator Coburn, it is 

my honor to have the opportunity to appear before you to discuss 

Defense Business Transformation and its associated information 

technology investments. 

Defense Business Transformation is not an easy task. The size 

and complexity of the Department of Defense, combined with its 

unique mission, present challenges that are not faced by other organizations undergoing transformational change. Despite these 

challenges, I believe the progress the Department has made at all 

levels under the leadership of Deputy Secretary of Defense Gordon 

England over the past 3 years has been remarkable. 

Fundamentally, business transformation requires a number of 

things: Leadership, commitment, and a strong investment manageVerDate 0ct 09 2002 09:32 Jun 13, 2008 Jkt 038844 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 P:\DOCS\38844.TXT SAFFAIRS PsN: PAT
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ment and governance structure, a sound enterprise-level strategy 

for transforming business processes and the culture that our people 

work within, and a solid relationship with independent organizations that can be unbiased arbiters of success or failure. Most importantly, and a key missing factor in many governmental transformation efforts, including prior efforts at DOD, is an awareness 

that IT projects struggle or fail because of a failure of management 

to confront necessary changes to processes, policies, and statutes. 

IT projects are too often sold as quick fixes to core management 

problems that are difficult for leaders to confront and resolve. 

Over the last 3 years, DOD has built a foundation to ensure 

these business issues are addressed before IT investments are 

made. Today, the Department’s top operational leaders are the 

champions of our organizational transformation. The Defense Business Systems Management Committee, established by statute, is 

chaired by Deputy Secretary England and associated investment 

review boards that provide strong investment management and 

overall transformation governance and ensure investments are 

aligned to business strategies. 

The Business Transformation Agency, established by the Deputy 

Secretary of Defense in 2005, provides an accountable organization 

for all of our DOD-wide business and system improvement efforts. 

It is staffed with a combination of best and brightest career civil 

servants and highly qualified experts and others, using hiring authorities given to the DOD by Congress. 

The Enterprise Transition Plan, produced biannually by the 

Business Transformation Agency, approved by the DBSMC, provides a strategic plan and emphasizes business process and system 

improvements and cultural change, and it clearly articulates 6-

month milestones for measuring progress. 

Finally, we have developed a very productive relationship with 

OMB and the GAO based on those clear metrics, proactive engagement, and responsive cooperation. 

We have successfully developed and continue to evolve the Business Enterprise Architecture and its associated federation strategy. 

For an organization the size of DOD, these are critical factors. We 

are driving the Department-wide adoption of continuous process 

improvement principles, and we are implementing Lean Six Signal 

methodologies. This addresses business issues that IT issues often 

suffer from. 

We are improving acquisition and fielding processes for information systems through developing what we call the Business Capability Lifecycle. This is a new acquisition process for business systems that will resolve longstanding challenges that have impacted 

delivery of business capabilities in a timely, well-informed manner. 

Under the rules of the BCL process, initial operating capability 

of an IT program must be reached within 12 to 18 months of the 

contract award, or else business cases will not be approved. This 

better aligns IT projects with technology industry innovation rates 

that are moving much faster today than our ability to field capabilities within government. 

Two major systems programs critical to the DOD that have directly benefited from this approach are the Defense Travel System 

and the Defense Integrated Management Human Resource System, 

33

called DIMHRS. By confronting and addressing policy and process 

issues long ignored, the Defense Travel System has addressed key 

issues that have been highlighted by GAO and the Congress repeatedly. And it is finally realizing its full potential as a source of 

lowest fare, financially efficient travel management for the Department. Using a similar approach, the DIMHRS program has been 

restructured and is on a path to resolve longstanding military personnel pay issues for the Army and Air Force beginning in 2008. 

There are many similar success stories emerging for the DOD. 

Our efforts at business transformation in the DOD will take years 

to complete. Our goal is to sustain this positive momentum beyond 

administrations and continue our ability to provide our customer, 

the American warfighter, with business practices that best enable 

their challenging mission and to provide Congress with agile financial transparency and the accountability the American people rightfully expect from their government. 

Thank you. I look forward to your questions. 

Senator CARPER. Thank you, Mr. Brinkley. In fact, I thank all of 

you. 

Who is here from Treasury? Mr. Duffy. And how long have you 

been there? 

Mr. DUFFY. Nine days, sir. [Laughter.] 

Senator CARPER. Perfect. We had at least one hearing in the last 

Congress on the issue of the tax gap, and Mark Everson, who was 

until fairly recently the Commissioner of the IRS, has now gone 

over to run the Red Cross, but he has been before us a couple of 

times in the last 2 years. We talked about, among other things, the 

tax gap. 

I do not know if you have had enough time in 9 days to figure 

out if there are any IT projects that you all are working on that 

would help us know the gap between the taxes that are owed, that 

ought to be collected, and those which are being collected. We are 

led to believe that the tax gap is—how much is it, Senator Coburn? 

Senator COBURN. Three hundred billion dollars. 

Senator CARPER. And anything we can do to narrow that so that 

people do not like to pay taxes, but it is sort of rubs salt into those 

wounds when they feel like they are paying their fair share and 

other people are getting away scot free. So what have you got going 

on in that area? And is there anything in particular that we not 

just in this Subcommittee but we in this Senate can help to make 

sure that we go after those scoundrels and make sure that you 

have the tools you need to get them? 

Mr. DUFFY. Unfortunately, Mr. Chairman, I have not had the opportunity to get the briefings in-depth on that, and I would like to 

get back to you in writing. 

Senator CARPER. Would you do that? That would be much appreciated. 

The second question I have really deals with—as you said, Senator Coburn, and Senator Akaka—the issue of how do we attract 

and retain good talent to work in this field for the Federal Government when they can make, by most observations, a fair amount 

more money in the private sector? I think it was Ms. Evans who 

indicated that, well, she likes the job, she has been there 5 or 6 

years, at least, and she likes it because she gets to work on cuttingVerDate 0ct 09 2002 09:32 Jun 13, 2008 Jkt 038844 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 P:\DOCS\38844.TXT SAFFAIRS PsN: PAT
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edge projects. She gets a sense of civic pride in knowing that she 

is doing something good and meaningful for our country. And I can 

appreciate that. In fact, I think we can both appreciate that. 

What are you all seeing that is working in your own departments, in your own agencies, that enables you to attract and retain 

good people? How can we learn from those experiences? What is 

working? Please, Mr. West? 

Mr. WEST. Yes, my experience in the 231⁄2 years I have had in 

government is that most of your individuals want to look for challenges. It is not so much about the pay, but they want to be challenged on exciting projects, and they want to be rewarded and recognized at the end of the day. So I think we need as a government 

to recognize our people more and to continue to challenge them as 

best we can on exciting projects, but at the same time holding them 

accountable. 

Senator CARPER. All right. Good answer. Thank you. 

Others, please. Mr. Mintz, you were at Sun Microsystems for, 

what, 10 years? 

Mr. MINTZ. Almost 11 years. 

Senator CARPER. OK. 

Mr. MINTZ. And then all around the Washington area, different 

private companies. High school was the last time I was in government. 

One of the things that government brings that many of the jobs 

in private industry do not is a sense of mission. And I think one 

of the issues is how do we convey to people, particularly young people, that advantage. One of the things we are doing, we are working—GSA has a program called IT Shadow Day where we invite 

high school kids in, and I know it has become a very active program, where we introduce them and take them around, and they 

get some experience with government employees as to how exciting 

it is. I think people underestimate the fact that a lot of the younger 

people are looking also for meaning in terms of their job, and that 

is something I think we have to emphasize. 

The other thing, our Deputy Secretary has been emphasizing 

things like telework and flexibility in terms of job performance. I 

think increasing that kind of flexibility helps also because, again, 

a lot of the younger people today are looking for flexibility in terms 

of how they come to work or are able to work out of their house. 

Senator CARPER. One of the ways we identify good talent in our 

business in the Senate is through interns. We have undergraduate 

and graduate student interns who come in not just in our Washington office, but we have three offices in Delaware. We will have 

interns there throughout the course of the year. We look for the interns that are especially energetic, enthusiastic, bright, committed, 

and when they have graduated, we keep track of them. And having 

developed that relationship, we know what their work ethic is and 

what their capabilities are. They know how we work and how we 

operate. And when we have an entry-level position, we go after 

them. We have kept track of them. I do not know if you all do any 

of that, but if you do not, you may want to consider it. 

Other ideas, Mr. Duffy? 

Mr. DUFFY. Actually, along those lines, Mr. Chairman, there is 

a program that I believe is run out of the National Science FoundaVerDate 0ct 09 2002 09:32 Jun 13, 2008 Jkt 038844 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 P:\DOCS\38844.TXT SAFFAIRS PsN: PAT
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tion. It is called the CyberCorps Program. When I was at the Department of Justice, we used that program to bring in a number 

of young, talented people who are interested in the IT realm with 

obviously a bent toward IT security. That is one that I think has 

been very effective. 

I believe that Mr. Powner during the first panel mentioned the 

IRS’ critical pay authority and the ability that they have had to 

bring in some very talented people from the private sector to help 

IRS begin the process of their modernization and their evolution. 

And then, of course, I would have to echo the comments of my colleagues here, some of the things that they have talked about in 

terms of the challenges. 

Senator CARPER. Good. In fact, going back, as congressman, governor, and senator, I have had four chiefs of staff over the last 25 

years; two of them started off as interns. 

Mr. Charbo. 

Mr. CHARBO. Yes, sir. As you know, DHS is a tough place to not 

only attract people but to retain them. So we have looked at some 

creative ways to attract and retain. First of all, the partnerships, 

I can again emphasize that more. In this case, our chief human 

capital officer has really taken on that role for us to try to attract 

better ITs. One example, we have run some Washington Post ads 

where we have attracted hundreds of applicants, where we actually 

can draw that certification, and then hire directly from those certifications and move that across the Department from component 

to component, focusing on IT security. 

We are focusing on giving a better environment for those employees once they get here. We are dispersed particularly from the 

headquarters viewpoint. It is tough to retain people in some of the 

situations that we put some of the employees into. So we are pretty 

focused on trying to develop that. And then certain benefits in 

terms of payments of loans, etc., and in terms of attracting students. We use interns as well. My office directly uses interns. 

So it is really a matter of getting out of the box of the typical 

government hiring processes and certification and looking for better 

ways to do it. 

Senator CARPER. Good. I know there is a program in the Senate 

where our employees can continue to improve their educational 

skills, and they get financial help in doing that. In passing the 

Higher Education Act, which I think the President has just signed 

into law, there may be a provision there as well which plays to our 

advantage in the Federal Government in attracting and retaining 

talent, offering as an incentive to people some help in improving 

their academic credentials. 

Mr. Brinkley, do you have anything you wanted to add? 

Mr. BRINKLEY. The only thought, sir, is the personal experience 

we have had with this in the DOD and MAPS. I am sure my colleague from Sun Microsystems can comment on this. We are not 

going to retain a skilled technical workforce, we are not going to 

be able to hire a young engineer and get him to stay for 30 years 

in the government. The trick is to create an environment, as they 

have in the technology sector, where you can come in and in a year 

to 2 years do something significant so that when you move on your 

career moves on. And that is the way the technology sector conVerDate 0ct 09 2002 09:32 Jun 13, 2008 Jkt 038844 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 P:\DOCS\38844.TXT SAFFAIRS PsN: PAT
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tinues to evolve. It leads the world in terms of innovation, and I 

think there is still a disconnect between expectations of what the 

Federal workforce must become—the people who are in it have 

been in it for many years, and they are proud of that service, and 

they should be proud of that service. But the technology world now 

is one in which you have a constant rotation of people in and out 

of companies, and they move on to another company. And the trick 

is to create an environment where a young person or anyone can 

come in and make an impact in as quick amount a time as possible. 

So increasing and accelerating the ability to deliver value in a 

job, they will sacrifice the funding for the opportunity to serve, but 

they will not sacrifice the funding if it is going to take them 5 years 

to actually make something happen. The best and brightest do not 

want to work in an environment where it is going to take 5 years 

to feel the capability. They want to work in an environment like 

they can get in the private sector where they can do it in 6 months 

or 12 months. So to us, that is a major focus, how do we shrink 

and tighten the ability for somebody to make a difference, and in 

doing that create capabilities that the Department needs and also 

make it a desirable place to work. 

Senator CARPER. Good. Those are all, I think, very constructive 

statements, and we appreciate them. I have some questions I am 

going to submit for the record, and Dr. Coburn has graciously offered to chair the hearing until its conclusion. You all should be out 

of here by suppertime. 

Senator COBURN. I am sure we will be out of here before suppertime. 

Senator CARPER. Thank you, sir. And thank you all for joining 

us today and for your service. 

Senator COBURN [presiding]. You are all Chief Information Officers. Do you sit down with OMB at this CIO Council? Do each of 

you? 

[Witnesses nod yes.] 

Senator COBURN. Is there a CIO for the Pentagon? 

Mr. BRINKLEY. Yes, there is. He does sit on that council. 

Senator COBURN. He does sit on that council. Is there anything 

you have gleaned from one another that has been beneficial? Are 

there things that you have learned from one another in that council 

that have been beneficial other than working through with OMB 

to get your stuff off the Management Watch List and the high-risk 

list? 

Mr. Charbo, you have been before us before. 

Mr. CHARBO. Yes, sir. There is always an agenda for the council. 

Typically, it is an item of the moment or trying to drive a lot of 

the larger initiatives. There is always that member time towards 

the end where it is issues—where I may be having a situation trying to resolve something. I may want to try to steal some employees from some of my brethren here as well. So, there is a lot of dialogue and discussion within the council. It also builds the relationships so that we can share war stories, best-case examples, best 

practices, worst-case examples, worst practices, and not go down 

some of those roads. 

37

Senator COBURN. OK. Let me get specific for a minute. If I look 

at the Department of the Treasury, you all rebaseline almost 50 

percent of your IT projects. Why? 

Mr. DUFFY. I do not have a good answer for you at this point in 

time. The reality is, as GAO identified that we have had——

Senator COBURN. These are your responses. 

Mr. DUFFY. I know. 

Senator COBURN. This is not GAO——

Mr. DUFFY. No. 

Senator COBURN. We sent a letter to each agency, you all sent 

us one back, and we put this data together based on every agency 

in the Federal Government. 

Mr. DUFFY. Absolutely. 

Senator COBURN. And we had it confirmed by OMB that she saw 

the same thing. 

Mr. DUFFY. And I do not refute the data. What I was going to 

say is that GAO identified, very correctly, that we have had issues 

in the past with the planning of the IT investments. The absence 

of good planning ultimately leads to needing to rebaseline. 

Senator COBURN. OK. I have a couple of questions. I am going 

to ask them, and if you cannot answer them, it is fine. 

Last tax season, the fraud detection software was not available, 

and yet you all dumped the old fraud detection software. So last 

tax season, we had no fraud detection software. Is there going to 

be fraud detection software this year? 

Mr. DUFFY. I will have to get back with you with a written answer on that one, sir. 

Senator COBURN. OK. Well, it is worrisome that you do not know 

that the answer is yes. That concerns me about it. 

Just for all of you, on your project managers or your managers 

who are in charge of IT under you, is there either an incentive or 

a penalty system when there is poor planning? You testified that 

you have cleared it all up in terms of the Management Watch List. 

The Management Watch List is about poorly planned projects. But 

we are into this, the third and fourth year on these Management 

Watch Lists. So are they moving the ball on you at OMB in terms 

of what they are requiring? Or is there not a learned cycle here 

where we understand what they want and are just not performing? 

And is there an incentive system for the people that work under 

you on these to get it right or a penalty if they do not get it right? 

Is there a cost consequence for having a failed IT project? Anybody 

want to answer? And the Pentagon is really different, and let me 

tell you why. That is why we have business transformation over 

there. They have 100 different computer systems that do not talk 

to one another, and they cannot even get to ground zero—I guess 

you are getting to ground zero now through the Controller’s Office, 

but there is a big difference in the Pentagon and almost every one 

of our other agencies in terms of communication capability. 

So anybody want to answer that? Thanks, Mr. Charbo. 

Mr. CHARBO. You were going to get to me eventually, so I figured 

I would take a shot. In terms of the program managers that directly report to me—which a majority of the program managers do 

not report to me in DHS. I would venture to say that is probably 

the case for most of the CIOs here and in government. 

38

There is a direct consequence. That is part of our performance 

rating. So you set those measures in the performance plans. If they 

do not meet those you have to hold them accountable. 

Senator COBURN. How are they held accountable? 

Mr. CHARBO. Directly through their bonus program, their evaluations, which could lead to dismissal. If it is an SES, they could be 

dismissed. If it is a GS level, it is a little bit different, but it could 

lead to dismissal if they continue to fail to meet expectations. 

Senator COBURN. So is that applied, for example, in your Department? 

Mr. CHARBO. For this piece, under those who report to me, it is. 

We have a track record. A lot of times, those people will see the 

writing, and they move on. 

In terms of what the Secretary has done from the management 

directive, this year is the first year that I will actually specifically 

write recommendations on the performance evaluation for each of 

the CIOs within the components. I will preface that to say that in 

some cases some of these programs do not report directly under the 

CIO, even in the components. We are working to change some of 

that. 

Senator COBURN. But are each of your agencies—as Chief Information Officers, are you copied, are you made aware on a routine 

basis, what is happening on these projects? 

Mr. CHARBO. At DHS now for—I talked about an improved investment review. What we have done, what the Under Secretary 

has done, for the ones that are on the front page, typically, or that 

are very high focus, we have put an integrated team together. So 

the CIO is there, the CPO is there, the CFO is there, and we are 

working—because I will agree that the schedules—typically the 

schedules get—are very optimistic in terms of setting some of the 

program deliverables, and most of the programs that we are seeing, 

I think that would attribute to a lot of the cost/schedule variances 

that we see. 

So at this point, what we do is with the program manager we 

set those expectations. If we are having to go back and reset the 

expectation with our leadership in terms of the true price, the true 

schedule now for some of these investments, we are doing that. We 

are carrying that bad news forward to the Congress, to OMB, to 

the leadership on a lot of these investments. 

So that is a change that is happening in DHS with a lot of the 

larger ones. That is the group that we focused with the program. 

Senator COBURN. How about the rest of you? 

Mr. DUFFY. In Treasury, and as well as at Justice, where I was 

previously, what Mr. Charbo described as the overall environment 

is very much the same. There has been within the last year more 

attention paid, particularly at the SES level, to put specific performance criteria into those plans and then hold the executives responsible. 

As for my own office—I am all of 9 days into this job, but I am 

going to get an opportunity to have some influence on the next 

round, I personally believe in putting those types of criteria into 

performance plans and holding people accountable. That is where 

we are at today. 

39

I think your comments, however, and your questions are very 

good ones, and they are opportunities for us to look at how do we 

incentivize people, both negatively as well as positively. 

Senator COBURN. Anything different? 

Mr. BRINKLEY. Dr. Coburn, I think the question of accountability 

is a question of who we are holding accountable. I think it is a very 

common knee-jerk tendency to drag a PM through a wire brush 

session when they miss a milestone or they do something. Yet it 

is almost never the responsibility of the PM. PMs get handed 

projects that are generated by functional leaders, and it is the functional leadership that we have put accountability in place for. So 

our efforts under Secretary England have been focused on monthly 

reviews of status where we do not bring the PM in to give status; 

we bring the person who is sponsoring the project in to give status. 

And that individual is the one who drives the budget, and he is the 

one who drives the requirements. And if the project is off the rails, 

it is usually because something has gone wrong in terms of requirements or change or statute or policy, and, again, as you are very 

familiar with the Defense Travel System. We have many examples 

where failure to confront the brokenness on the front end led to 

failure on the back end with the project manager trying to knit 

something together to deal with a broken process. 

Senator COBURN. And it was not the project manager that 

had——

Mr. BRINKLEY. Absolutely. So for us, accountability applied to the 

leadership that is generating the requirement, and this funding the 

program has made, I think, a lot of our progress possible over the 

past 21⁄2 years. 

Senator COBURN. You all do not know about DTS. Mr. Brinkley 

does and a lot of other people do. This is something we have been 

looking at for 21⁄2 years, and it is a great example of how not to 

do it—in other words, not clear goals, not knowing what you wanted to get, and having a cost-plus program that originally cost supposedly $30 million—and I think it has ended up at $670 million. 

And you extrapolate—and we are seeing that across agencies. We 

are seeing that in Commerce. The Census has no fixed-price contracts. They are all cost-plus. And the contracts that were issued 

were kind of—well, we are kind of guessing what we want. Why 

don’t you develop what we think we want? And so what we did was 

have very poor planning. And at the same time, we did not put any 

of the efforts on an online census, which is IRS, Treasury—what 

is it, 55 percent now filed online with secure data? Tremendous. 

And so the capability was out there, but we did not have the vision 

or the leadership or the management to get that done to save this 

money. We gave your Assistant Secretary information that the private sector, in terms of mailing and Internet, can do it for oneeighth of what the Census can do it. And I think you may have actually seen that. That was a company we asked to prepare it who 

competes with you all in lots of other areas. But it just goes to 

show you that if, in fact, we will plan and we really know what our 

goals are, we identify what our goal really is rather than saying 

we think this is what we want. We should not go forward until we 

know what we want. 

40

And so I appreciate you guys being in the positions that you are in. You make a big difference—$65 billion of which about $14 to 

$15 billion is really at risk, which in this day and age, if we can 

make it not at risk and we can convert cost-plus contracts to fixedprice contracts, you will have a little more leverage to do other 

things within your agencies rather than this. 

I do not mean to sound that I am not appreciative of what you 

all do. You all are managers. I know what you are doing, and the 

goal is there. We have to get consistent on it. 

Let me just ask you, Mr. West, right now GAO is real concerned 

about IT on the census. Can you give me a comfort level that is 

different than what GAO has? Since you are kind of over that, are 

you feeling good about that? 

Mr. WEST. I feel good about the leaders that we have in IT out 

there. Having been involved in the census—I was heavily involved 

in the 1990 census, spent 8 years at Census, so I actually have a 

really good feel for what goes into a decennial. A lot of those same 

folks have been around for four or five censuses. They are using 

the handhelds this year. As you know, they went with the Harris 

contract. I feel comfortable as they move forward. I have been 

heavily involved in a lot of their briefings. I do have a comfort level 

that they are going to make this work. It has been a challenge as 

you know, but I feel that they have the right people there—you 

have provided the attention to really make them accountable as we 

move forward. 

Senator COBURN. OK. Just one final thing. I want to ask about 

DOT and the telecommunications at FAA as well as the traffic control programs. Those are both big programs. There has been a lot 

said. 

Are you all being oversighted by other subcommittees, both in 

the House and in the Senate, in terms of the traffic control? Have 

you come and made a presentation to Congress on those IT programs? 

Mr. MINTZ. Well, the FAA has. Most of my personal interaction 

has been directly with GAO. When I first came here, I actually 

reached out to GAO, and before any of the investigations came on 

the table, and asked them to come over to figure out how best to 

work with them. And then I have worked with now the former administrator, Marion Blakey, and the FAA people set up a regular 

program with GAO to look at the air traffic control system and 

working on how to get it off the GAO High-Risk List, which is a 

little bit different issue than the OMB one. 

Senator COBURN. Right. Is there anything that any of you all 

would want us to do that would be helpful in you accomplishing 

what you are trying to do? I have had quite a few experiences on 

different things with the Defense Department’s modernization, and 

I feel real comfortable they are moving. It is slow, but it is moving. 

Are there other things that we can do or areas we need to look into 

that will make you more effective, give you a greater tool? Is there 

a tool that we need to provide that will allow you to manage more 

efficiently and get better results as you do your job? 

Mr. MINTZ. Well, there are two things that I guess I would encourage you to continue to do. First of all, the emphasis on transparency, one of the things that is certainly true in terms of my priVerDate 0ct 09 2002 09:32 Jun 13, 2008 Jkt 038844 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 P:\DOCS\38844.TXT SAFFAIRS PsN: PAT
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vate industry experience and is certainly true here in the government is that the more transparent we can make this and the more 

visible in public that we can make all the information, the better 

off we are, because a lot of the problems surface, whether we like 

it or not, when we make all the information public because intermediaries that are interested in the topics look at them closely and 

hold us accountable. 

The other thing, some of the conversation you had in the first 

panel, I think the encouragement with OMB is a good one and with 

GAO is a good one, that we need them to continue to be aggressive. 

I think, at least I know speaking just for Transportation, our challenge is to internalize the OMB directive and make it true within 

the Department. 

Senator COBURN. Make it a culture. 

Mr. MINTZ. There is a tendency, when I first came, to look at 

OMB as sort of the parent, that if OMB said it was wrong, then 

we would do something about it. But if they did not say it was 

wrong, we sort of went on. 

And the focus that I have tried to bring and I think is being 

adapted is we have to be OMB, that is, we have to integrate these 

lessons into the culture and change the internal behavior because 

it is the right thing to do. 

So the more I think people like yourself focus on making all this 

information transparent will force changes in that kind of——

Senator COBURN. Well, you all know January 1 of this year, 

every penny you spend other than for security is coming up. It is 

going to pop up. If it is not there, we are going to be having hearings on why it is not there. And by September of next year, all the 

subcontractors all throughout the Defense Department, all 

throughout every agency and all the sub-grantees, it is all going to 

be there. We are going to know who got it, how much they got, and 

what they did with it. So it is going to make us better. It is going 

to make us all better. 

I want to thank each of you for the job you do, the service to our 

country, for coming and testifying. You will probably get some 

questions from some of the Members of the Subcommittee. We 

would love to have you respond to those in 2 weeks. 

With that, thanking you for your service, the hearing is adjourned. 

[Whereupon, at 4:43 p.m., the Subcommittee was adjourned.] 

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Æ


38844.089