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56–153 PDF 2010

S. Hrg. 111–532 

ONE DHS, ONE MISSION: EFFORTS TO IMPROVE 

MANAGEMENT INTEGRATION AT THE DEPARTMENT OF HOMELAND SECURITY 

HEARING 

BEFORE THE

OVERSIGHT OF GOVERNMENT MANAGEMENT, 

THE FEDERAL WORKFORCE, AND THE 

DISTRICT OF COLUMBIA SUBCOMMITTEE 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

DECEMBER 15, 2009 

Available via http://www.gpoaccess.gov/congress/index.html 

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 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

ROLAND W. BURRIS, Illinois 

PAUL G. KIRK, JR., Massachusetts 

SUSAN M. COLLINS, Maine 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

GEORGE V. VOINOVICH, Ohio 

JOHN ENSIGN, Nevada 

LINDSEY GRAHAM, South Carolina 

ROBERT F. BENNETT, Utah 

MICHAEL L. ALEXANDER, Staff Director 

BRANDON L. MILHORN, Minority Staff Director and Chief Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL 

WORKFORCE, AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE 

DANIEL K. AKAKA, Hawaii, Chairman 

CARL LEVIN, Michigan 

MARY L. LANDRIEU, Louisiana 

ROLAND W. BURRIS, Illinois 

PAUL G. KIRK, JR., Massachusetts 

GEORGE V. VOINOVICH, Ohio 

LINDSEY GRAHAM, South Carolina 

ROBERT F. BENNETT, Utah 

LISA M. POWELL, Staff Director 

JOEL C. SPANGENBERG, Professional Staff Member 

JESSICA K. NAGASAKO, Professional Staff Member 

JENNIFER A. HEMINGWAY, Minority Staff Director 

THOMAS A. BISHOP, Minority Professional Staff Member 

BENJAMIN B. RHODESIDE, Chief Clerk 
(III) 

C O N T E N T S 

Opening statements: Page 

Senator Akaka .................................................................................................. 1 

Senator Voinovich ............................................................................................. 2 

Senator McCaskill ............................................................................................ 15 

WITNESSES 

TUESDAY, DECEMBER 15, 2009 

Hon. Elaine C. Duke, Under Secretary for Management, U.S. Department 

of Homeland Security .......................................................................................... 4 

Anne L. Richards, Assistant Inspector General for Audits, U.S. Department 

of Homeland Security .......................................................................................... 6 

Bernice Steinhardt, Director for Strategic Issues, U.S. Government Accountability Office ......................................................................................................... 8 

ALPHABETICAL LIST OF WITNESSES

Duke, Hon. Elaine C.: 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 23 

Richards, Anne L.: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 31 

Steinhardt, Bernice: 

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

Prepared statement .......................................................................................... 55 

APPENDIX 

Background .............................................................................................................. 70 

Responses to questions submitted for the Record: 

Ms. Duke ........................................................................................................... 77 

Ms. Richards ..................................................................................................... 87 

Ms. Steinhardt .................................................................................................. 93 

(1) 

ONE DHS, ONE MISSION: EFFORTS TO 

IMPROVE MANAGEMENT INTEGRATION 

AT THE DEPARTMENT OF HOMELAND 

SECURITY 

TUESDAY, DECEMBER 15, 2009 

U.S. SENATE,

SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT

MANAGEMENT, THE FEDERAL WORKFORCE,

AND THE DISTRICT OF COLUMBIA,

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS,

Washington, DC. 

The Subcommittee met, pursuant to notice, at 10 a.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Daniel K. Akaka, 

Chairman of the Subcommittee, presiding. 

Present: Senators Akaka, McCaskill, and Voinovich. 

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA. I call this hearing of the Subcommittee on Oversight of Government Management, the Federal Workforce, and the 

District of Columbia to order. 

Aloha and good morning to our witnesses and attendees. Today’s 

hearing is focused on the ongoing need to improve management integration in the Department of Homeland Security (DHS) and the 

Government Accountability Office (GAO) report on that issue released today. 

The Federal Government embarked on one of the most sweeping 

reorganizations in its history by establishing the Department of 

Homeland Security. While I believe that DHS has improved the coordination of security efforts between the 22 agencies and offices 

that now form the Department, it has not yet developed as an integrated and well-managed Department. This hinders its ability to 

achieve its mission. 

The GAO placed the transformation of DHS on its High-Risk List 

in 2003 when it was created. It was clear early on that such a large 

reorganization of government warranted close oversight. Unfortunately, the Management Directorate and component management 

chiefs remain unable to effectively support the Department’s dayto-day operations. The Inspector General’s most recent yearly assessment shows continuing problems in the functional management 

areas of acquisitions, information technology, grants, and financial 

management. 
2 

As highlighted by the GAO report released here today, one cause 

of these management problems is the lagging integration of departmental management. GAO has noted that the successful transformation of an organization, even one less complex than DHS, 

could take from 5 to 7 years. We are quickly approaching that 7- 

year mark, which will be this March. 

To be successful, the Department will need to set clear department-wide goals and create performance measures to analyze its 

progress. DHS, like other agencies, needs a comprehensive strategic plan for management integration. It is also important that 

DHS require clear accountability from its leaders. 

In 2007, the Department implemented dual accountability, which 

means that component management chiefs are required to report 

both to headquarters and component leadership. At a previous 

hearing, this Subcommittee examined dual accountability in the 

area of acquisition management. I am still concerned that this 

model does not create clear accountability for management and integration. I do, however, want to commend the leadership of the 

Under Secretary for Management (USM), Elaine Duke, who joins 

us today, for her work in making management a priority at the Department and for staying on until a successor is confirmed. 

As GAO found, the USM and her chiefs have taken steps to ensure better coordination, for example, making coordination a component of performance reviews. I believe that the USM, who is the 

Department’s chief management officer, is critical in implementing 

management integration across the Department. That is why I am 

working with Senator Voinovich on the Effective Homeland Security Management Act, which would elevate this position to the level 

of Deputy Secretary with a fixed term. This will help ensure that 

DHS places sustained eye-level attention on effective management. 

Able and integrated management will have an enormous and 

overarching impact on the future success of the Department. Additional progress in these areas will increase the effectiveness and 

confidence in DHS’s ability to achieve its mission. 

Again, I want to thank all of our witnesses for appearing today 

and I look forward to your testimony. 

Now, I would like to recognize Senator Voinovich for his statement. Senator Voinovich? 

OPENING STATEMENT OF SENATOR VOINOVICH 

Senator VOINOVICH. Thank you, Senator Akaka, for holding this 

hearing. I really want to publicly express my appreciation to you 

for the work that we are doing together to try and get DHS off the 

High-Risk List, understanding that it was a major reorganization 

that probably shouldn’t have been undertaken in the first place, 

but it happened. 

In addition, I would like to publicly state that I have a hold on 

Rafael Borras, who is supposed to take Ms. Duke’s job, and the reason I do, Senator Akaka, and I expressed it to the Secretary and 

also to the Administration, is that I do not believe that he is qualified to take this very important position that is now being held by 

Ms. Duke. What is your title, you are Acting—— 

Ms. DUKE. No, I am still the Under Secretary. 
3 

Senator VOINOVICH. She is doing it, and as far as I am concerned, she can keep doing it. [Laughter.] 

I regularly remind my colleagues that when we established the 

Department, we initiated the Federal Government’s largest restructuring since the Department of Defense (DOD), and we are all familiar with it—22 agencies, 170,000 people. We knew that it would 

take time, and as you mentioned, Senator Akaka, 5 to 7 years. And 

I feel the same way, we are in the 6th year and next year is the 

end of it. I am not going to be around after that. I would like to 

be able to, when I tip my hat, know that you are off the High-Risk 

List. 

Ms. Steinhardt, I thought that meeting that we had in my office 

was great, GAO and the Department and talking about what you 

have been doing to try and work together in terms of meeting the 

metrics so that when we have a hearing later on, GAO and the Department will at least agree on the metrics. They may not agree 

on the report, but they will at least agree on how they are going 

to be judged in terms of whether they are getting the job done. 

In addition to the challenges GAO and the Inspector General will 

tell us about today, the DHS Chief Financial Officer and Homeland 

Security Advisory Council’s Cultural Task Force have both articulated concerns about management. 

While all these entities acknowledge the progress, let us make 

sure we understand, there has been substantial progress. I don’t 

want anybody to think there hasn’t been, we still need to get the 

job done. Today, we have an agency with a $50 billion budget—the 

third-largest now in the Federal Government, 220,000 employees— 

so it is really important that the Department put the utmost priority on addressing GAO’s recommendations. 

I want to thank all of you for being here today. I think that in 

order, as I mentioned, for us to achieve what we would like to 

achieve, it has got to be the highest priority. 

Ms. Duke, I want to say you have done a really good job. We 

really appreciate it. 

Senator Akaka, sometimes when I give my statement, it is just 

redundant, so I am leaving out a whole lot of it because you have 

already handled it. But we are just glad to have you here, and by 

working together, I think that we can really get some of these 

things out of the way, and maybe by the end of the next year, I 

probably won’t be around for the GAO report, but make substantial 

progress on it. 

Thank you for being here. 

Senator AKAKA. Thank you very much, Senator. 

It is my pleasure again to welcome back to this panel, the Hon. 

Elaine Duke, who we thank for continuing her service as Under 

Secretary for Management at the Department of Homeland Security; Anne Richards, Assistant Inspector General for Audits at the 

Department of Homeland Security; and Bernice Steinhardt, Director of Strategic Issues at the Government Accountability Office. 

It is the custom, as you know, of this Subcommittee to swear in 

all witnesses. Will you please stand and raise your right hand. 

Do you solemnly swear that the testimony you are about to give 

the Subcommittee is the truth, the whole truth, and nothing but 

the truth, so help you, God? 
4 

1The prepared statement of Ms. Duke appears in the Appendix on page 23. 

Ms. DUKE. I do. 

Ms. RICHARDS. I do. 

Ms. STEINHARDT. I do. 

Senator AKAKA. Thank you. Let the record show that affirmative 

answers were given by our panelists. 

Although statements are limited to 5 minutes, I want all of our 

witnesses to know that their entire statement will be included in 

the record. 

Under Secretary Duke, again, welcome back and please proceed 

with your statement. 

TESTIMONY OF HON. ELAINE C. DUKE,1 UNDER SECRETARY 

FOR MANAGEMENT, U.S. DEPARTMENT OF HOMELAND SECURITY 

Ms. DUKE. Good morning, Chairman Akaka, and Ranking Member Voinovich. First of all, I would like to say that the redundancy 

of your opening statement is encouraging. The way this Subcommittee has attacked management and integration at DHS in a 

unified approach has really helped us push forward on our objectives and I really do appreciate the unified approach this Committee has taken to the Department. 

We have made significant improvements and accomplished a lot 

of initiatives in the first 6 years of the Department. What the Inspector General and especially the GAO in the High-Risk List is 

looking for now is an integrated sustained approach, a unified approach to looking at our integration. 

I just wanted to take a moment to talk about some of the accomplishments we have made in every area of management. We recently implemented the efficiency review under Secretary 

Napolitano to look at reducing our overhead and our spending. This 

is going to be especially important as we get into tighter and tighter budget years for the Federal Government and the Department 

as a whole. 

We are completing our first Quadrennial Homeland Security Review, QHSR, and that will be delivered to Congress on time, by the 

end of this calendar year. 

We have made significant improvements in our acquisition workforce, both in terms of numbers—we have been able to double the 

number of contracting officers. That is a net gain, even with the 

attrition. And we have really attacked the root cause of some of our 

acquisition problems by expanding from procurement to acquisition 

and building our program management and our test and evaluation 

systems engineers and cost estimating workforces. 

We have completed acquisition reviews of over 90 percent of our 

programs, and on all of our 79 major information technology acquisition programs. And we have developed and implemented an online reporting system called Next Generation Reporting System 

that provides valuable information to our senior leadership on cost 

schedule and performance for all our major acquisition programs, 

and that was done in May of this year. 
5 

We have our intern program, our acquisition career program, in 

which we are up to 100 now, and received funding to double that 

workforce this year. 

We have finished our Human Capital Strategic Plan. Some of the 

key elements of interest to this Subcommittee, improving our diversity numbers throughout the Department, but especially at senior 

leadership levels, and better balancing our workforce, our ratio between Federal employees and contractors. And we are actually 

meeting with your staff on Thursday to give you an update on that 

effort to better balance our workforce. 

We have a lot of initiatives going on in financial report and are 

continuingly decreasing our number of material weaknesses, down 

from 30 in 2005 to 12 this year, and we have to do more work in 

that area. 

We have done a lot of initiatives in information technology (IT), 

specifically with data center consolidation and cyber operations, 

really working on improving how we handle attacks to our IT systems. We have our enterprise architecture in place that guides our 

IT investments that is consistent with the Federal architecture. 

And we have over 96 percent of our IT systems certified properly 

under the Federal Information Security Management Act (FISMA) 

standards. 

We are on schedule and below budget for our DHS headquarters 

consolidation at St. Elizabeths, thanks in part to some Recovery 

Act funding and the cooperation of General Services Administration (GSA). 

And we are in the process, as I reported to you, Senator 

Voinovich, in my recent response to your letter, for upgrading and 

improving our DHS integrated strategy for high risk, addressing 

GAO’s criticisms of it, including making sure we have more detailed and measurable actions with milestones and sustained leadership attention towards accomplishing what we put in our plan. 

The GAO and Inspector General (IG) are correct in their assessment. We have made moderate progress and there is still a lot 

more to do. I think it is important to remember that DHS didn’t 

start with a clean slate or a whole cloth, if you will. It started in 

many management areas with really the tattered remains of legacy 

functions. In most simplistic terms, we have really spent some time 

digging ourselves out of a hole in the management area. So I think 

even making moderate progress in terms of outcomes is something 

that, while I am not content that we are finished, we are proud of 

how far we have come. 

It is also important to note that we do this while still delivering 

services. The chiefs are service providers to over 3,500 headquarters personnel, a function that was never envisioned in the 

start-up of DHS. So in addition to having the traditional roles of 

policy and oversight, the concerns of this Subcommittee, we also 

have the extreme burden of providing service to a huge constituency. 

I appreciate the way the colleagues at GAO and the IG have approached this with us. I also thank you, Mr. Chairman and Ranking Voinovich, for your continued support and I look forward to answering your questions this morning. 

Senator AKAKA. Thank you very much, Ms. Duke. 
6 

1The prepared statement of Ms. Richards appears in the Appendix on page 31. 

And now, Ms. Richards, will you please proceed with your statement. 

TESTIMONY OF ANNE L. RICHARDS,1 ASSISTANT INSPECTOR 

GENERAL FOR AUDITS, U.S. DEPARTMENT OF HOMELAND 

SECURITY 

Ms. RICHARDS. Good morning, Mr. Chairman and Members of the 

Subcommittee. I am Anne Richards, Assistant Inspector General 

for Audits at the Department of Homeland Security. I appreciate 

this opportunity to discuss the management challenges facing the 

Department. 

Since its creation in 2003, DHS has been working towards accomplishing the largest reorganization of the Federal Government 

in more than half a century. While DHS has made progress, it still 

has much to do to establish a cohesive, efficient, and effective organization. 

Our latest major management challenges report identified a 

broad range of issues. Today, I will highlight four key areas where 

significant challenges still exist: Acquisition management, information technology management, grants management, and financial 

management. These areas are the backbone of the Department and 

provide the structure and information to support the accomplishment of DHS’s missions. 

Since these challenge areas have tended to remain the same from 

year to year, we developed a scorecard approach to measure the 

Department’s progress in these areas. We based our scorecard ratings on a four-tiered scale: Limited, modest, moderate, or substantial progress. Our most recent assessment shows that the Department has made moderate progress in acquisition management and 

information technology management and modest progress in the 

grants management and financial management areas. 

We rated the overall score of the acquisition management area 

as achieving moderate progress this year because of the Department’s improvements in recruiting and retaining an acquisition 

workforce and progress in developing and strengthening acquisition 

management policies and procedures. Two subcomponents of this 

area, organizational alignment and leadership, and knowledge 

management and information systems, have shown only modest 

progress to date. 

Regarding organizational alignment and leadership, DHS has not 

yet effectively implemented or adhered to its investment review 

processes. Federal Emergency Management Agency (FEMA) program offices have not adequately integrated the acquisition function into their decision making activities. In the area of knowledge 

management and information systems, DHS has not fully deployed 

a department-wide contract management system that is interfaced 

with the financial system. 

The next challenge area I would like to discuss is information 

technology management. Based on our analysis of six IT management capability areas, DHS has made moderate progress in IT 

management overall, with IT strategic planning, enterprise architecture, capital planning and investment control, and IT security 
7 

receiving scores of moderate progress. However, two areas received 

scores of modest progress, IT budget oversight and IT portfolio 

management. We scored IT budget oversight as modest because of 

the difficulty still in gaining a department-wide view of IT spending due to component Chief Information Officers (CIOs) not having 

sufficient budget control and oversight within their components. 

In the category of grants management, DHS has made modest 

progress. For example, in the disaster grants area, we issued over 

40 reports this year on sub-grantees with more than $80 million in 

questioned costs. FEMA needs to make certain that States as 

grantees understand the rules and regulations that govern disaster 

grants and take steps to ensure that sub-grantees adhere to these 

rules and regulations. 

The last challenge I would like to discuss is financial management. As in previous years, we were unable to render an opinion 

on the Department’s financial statements. Material weaknesses 

were also so pervasive that we could not verify the sufficiency of 

internal controls over financial reporting. Some of the specific 

problems include: The Department lacks a sufficient number of accounting and financial management personnel with core technical 

competencies; DHS’s accounting and financial reporting policies, 

procedures, processes, and internal controls have not received investments in proportion to the Department’s rapid growth in other 

programs and operations; field and operational personnel do not always share responsibilities for, or are not held accountable for, 

matters that affect financial management; and the Department’s financial information technology system infrastructure is aging and 

has limited functionality. 

Having identified some of the specific problems in financial management, I also want to take the time to acknowledge the progress 

being achieved by the Department. For example, DHS issued its Financial Management Policy Manual to help ensure efficient and 

transparent operations. At the component levels, both the Coast 

Guard and FEMA are continuing to make control environment 

progress and to implement corrective actions. 

In summary, it must be acknowledged that some aspects of these 

challenges were inherited by the Department from its legacy agencies, and it should also be acknowledged that creating a unified organizational culture from many separate and proud legacy agencies 

is simply a daunting task. The Department’s senior officials are 

well aware of these challenges and have reiterated their commitment to resolve them. The Office of Inspector General is also committed to helping the Department improve their core business processes and procedures in order to improve the Department’s ability 

to carry out its missions. 

Mr. Chairman, this concludes my statement. I will be pleased to 

answer any questions you or the Members of the Subcommittee 

may have. 

Senator AKAKA. Thank you very much, Ms. Richards. 

And now we will receive the statement of Ms. Steinhardt. 
8 

1The prepared statement of Ms. Steinhardt appears in the Appendix on page 55. 

TESTIMONY OF BERNICE STEINHARDT,1 DIRECTOR FOR STRATEGIC ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Ms. STEINHARDT. Thank you very much, Senator Akaka and Senator Voinovich. Of course, we appreciate the opportunity once again 

to be here to share the results of our latest report with you. 

You have talked about the enormity of the undertaking in the 

creation of the Department of Homeland Security. I was recalling 

some remarks made by Janet Hale, the first Under Secretary for 

Management at DHS, who pointed out that the creation of the Department was at one time a large-scale divestiture, acquisition, 

merger, and start-up all at once. It has, in fact, been quite an 

amazing change. 

And, of course, at the heart of this transformation effort is the 

creation of a well-integrated management infrastructure, essentially the underpinning that allows the Department to fulfill its 

various missions. In 2005, we reported that the Department lacked 

a strategy for management integration, and at your request, we recently followed up to see what has occurred since that earlier report. 

Generally speaking, we found that the Department has moved 

ahead in integrating its management functions. The Management 

Directorate of the Office of the Under Secretary for Management, 

has developed common policies and systems within individual management functions like human capital and IT that have helped to 

vertically integrate its component agencies. And one example of 

this which Ms. Richards just pointed out is the Financial Management Policy Manual which serves as the single authoritative guide 

on financial management for DHS. The Department has also set up 

a system of Management Councils for each of the functional areas 

headed by the Department chief in that area, and these councils 

provide forums for coordinating between component management 

offices. 

But while there has been progress in vertical integration within 

each management function, there has been much less done with 

horizontal integration, bringing together multiple management 

functions across the Department. So here, for example, one might 

expect to see the integration of human capital activities with financial management in areas related to payroll. The Transformation 

and Systems Consolidation (TASC) initiative, is a step in this direction. It is an effort to consolidate the Department’s financial management, acquisition, and asset management systems. But there 

aren’t very many like this. 

The Under Secretary chairs a Management Council made up of 

the DHS management chiefs and a representative from each of the 

component agencies, and this council has the potential to help 

bring a greater horizontal perspective to the Department’s management, but it hasn’t really played this role. 

When we first reported on this subject back in 2005, we pointed 

out that the Department would benefit from a comprehensive strategy for management integration. Subsequent to our report, as I am 

sure you are aware, the 9/11 Commission Act also required DHS 

to develop such a strategy. But that hasn’t happened yet, and given 
9 

the effort needed to make further progress on management integration, we believe it would still be valuable for the Department to develop such a strategy. 

The Department indicated a number of different planning documents that they believe collectively make up the strategy, but our 

review found that a number of critical elements of an integration 

strategy, which we outlined in 2005, are still missing. None of the 

planning documents conveys a sense of the critical links, both within and across management functions, as well as the priorities, 

trade-offs, and efficiencies to be achieved. And there are no goals 

and time lines for monitoring the progress of the initiatives to ensure that critical links occur when they are needed. 

As the Department develops its strategy and clearly articulates 

what it hopes to achieve in management integration, it will also 

need to develop performance measures that will help it track its 

progress against the strategy. 

Finally, I want to turn to the issue of accountability for management integration in the Department. I know one of your concerns 

over the years has been with the dual accountability structure in 

which, among other things, the management chiefs within the component agencies are accountable both to the heads of their agencies 

as well as to the Department management chiefs. So, for example, 

the Chief Financial Officer (CFO) at FEMA reports directly to the 

Administrator of FEMA but has a so-called dotted line reporting relationship to the Department’s CFO. 

In operational terms, the Department chiefs are supposed to provide input into the performance plans and the performance evaluations of the agency chiefs, but this has not happened consistently 

across the management functional areas. Some of the Department 

chiefs have been providing written expectations for the component 

chiefs. Some haven’t. Some have been providing input into end-ofyear performance appraisals and others have not. The Under Secretary assured us that changing this situation would be one of her 

priorities, and this will become particularly important once the Department has a management integration strategy that will involve 

decisions and trade-offs that the components will have to support 

and carry out. 

So with that, Mr. Chairman, I will conclude my remarks and 

look forward to your questions. Thank you. 

Senator AKAKA. Thank you very much, Ms. Steinhardt. 

Ms. Duke, as GAO reports, the Department has yet to issue a 

comprehensive strategy for management integration, as mentioned 

here. In response to the GAO report, you stated that you are leading the process for developing this strategy. Which DHS officials 

are supporting you in this effort and when will this plan be finalized? 

Ms. DUKE. The DHS principal that is principally supporting right 

now is the Deputy Secretary, Jane Holl Lute. We just had a meeting with GAO at the Office of Management and Budget (OMB), and 

Jeff Zients, the management side, and Xavier de Souza Briggs, our 

lead budget person, were both there. And so the Deputy Secretary 

committed that we are going back in mid-February with GAO for 

an update on our integrated strategy. 
10 

I think there are two pieces. One is the overall strategy, which, 

as you know, has the DHS issues, one of which is management integration, and then it also has the other high-risk items like flood 

map insurance, human capital strategy, and real property. So our 

plan for having the integrated strategy on the entire High-Risk 

List, we will have the outline by the meeting with Office of Management and Budget in mid-February. 

In terms of the management integration strategy, we have identified six items in management that are going to drive the horizontal integration that Ms. Steinhardt just talked about, and that 

piece of the plan, I have committed to Senator Voinovich and this 

Subcommittee to have by the end of this month in terms of identifying the six areas and the plan supporting it. That will be an 

iterative process. We are going to continue to have to develop good 

metrics, but we will have those identified by the end of this calendar year. 

Senator AKAKA. Ms. Steinhardt and Ms. Duke, as you know, 

GAO estimated that comprehensive reorganization takes between 5 

to 7 years to implement. It has been nearly 7 years now since DHS 

was created and it is only now undertaking a comprehensive management integration plan, as you were pointing out. Given the 

amount of progress DHS has made to date, how long do you each 

expect it will take to complete the transformation? Ms. Steinhardt. 

Ms. STEINHARDT. Well, it depends on the Department’s plans, I 

think, to address some of the challenges that we have pointed out 

that have put them on the High-Risk List. Obviously, management 

integration, being able to successfully integrate both vertically and 

horizontally, is a key element of that and we look forward to seeing 

Ms. Duke’s plan and how far that takes us. 

And then, of course, the other dimensions of the Department’s 

transformation challenges and how they plan to respond to that, 

we will see in February when they have their plan, and we have 

committed to working with them and supporting them in addressing some of those challenges. 

But I would just say that estimate of 5 to 7 years is based on 

organizations that have historically gone through a major transformation. I don’t know that any of them have been quite on the 

scale of DHS, though. And so they have taken a number—they 

have had a number of missteps, but they have had just an enormous challenge. So far, we are encouraged by the progress they 

have made, but there is still quite a lot ahead. 

Senator AKAKA. Further comments, Ms. Duke? 

Ms. DUKE. I would just say, in addition to Ms. Steinhardt’s comments, what GAO is looking for us is not only to have the plan, 

but to come off the High-Risk List to show sustained progress 

against the plan. So if we have an acceptable plan within the next 

couple of months, they are going to be looking at our progress over 

a period of time before they would be considering taking us off the 

High-Risk List. 

The other thing I would like to say is a lot of our progress is 

going to be contingent on the budget in the coming years. It is 

going to be challenging as we go to a flat, in real terms, declining 

budget of how much we are going to be willing to fund some of 

these efforts. A lot of them take money up front for savings and 
11 

efficiencies in the future, and whether these efforts are funded in 

the management budget, whether they are funded in the component budgets and we have to find a way to tax and gather that 

money, or whether they are not funded and DHS is told to find the 

money is really going to directly affect the speed of implementation. 

Senator AKAKA. Ms. Duke, I have some concerns about accountability with dotted line or dual reporting authority. In what management functions is DHS using dual reporting authority? And 

what steps have been taken to hold component management chiefs 

accountable for following departmental standards? 

Ms. DUKE. All the chiefs use dotted line functional authority, so 

all six of them. Additionally, we are appointing component acquisition executives in each of the components to have an accountability 

there. About half the components have someone there. 

The main areas we have are inputting to performance appraisals, 

which, as Ms. Steinhardt said last year, principally due to transition and all the turnover, we only did in a couple of the chiefs’ lines 

but are doing it this year. And it is really just the Secretary and 

the Deputy Secretary along with my commitment. 

One of the challenges is we don’t have one-for-one correspondence. For instance, there is not an equivalent Under Secretary for 

Management in each of the components. So it isn’t holding individual components. It really rises to the level the component had. 

I have seen with Secretary Napolitano and Deputy Secretary Lute 

a real commitment to good management built in, and I have a lot 

of confidence we are going to continue forward. 

The other things that have helped the functional integration 

model are strengthening of the chiefs’ delegations and their authorities through the functional integration management directives. 

For instance, now the Chief Information Officer reviews all purchases over $2.5 million to make sure they are consistent. 

But I do think one of our next steps, as Ms. Steinhardt said, was 

getting better visibility. For instance, even though the CIO has authority over the CIOs in the components, those CIOs really don’t 

have all the IT dollars in there. So it is getting those direct-line 

within our current model, I think, is our next steps in integration. 

Senator AKAKA. Ms. Steinhardt, I would like to hear from you on 

this issue, as well. GAO’s report released today discusses dual accountability and dotted line authority. However, the report does not 

address whether this framework is effective. In your view, is this 

approach sufficient to ensure accountability or would you recommend changes to this structure? 

Ms. STEINHARDT. Well, I think the key is having the right people 

at the table when decisions are made. That is a big piece of it. As 

Ms. Duke just mentioned, this isn’t the case necessarily across all 

of the management functions. I think, certainly from the work that 

we did, it is clear that in some cases, the management chiefs are 

using their authority to provide input into performance plans and 

to set performance expectations and to provide input on actual performance. But this is not consistent. So as a start, it would be helpful to make sure that, even as envisioned, that it is implemented 

consistently across the Department. 
12 

Senator AKAKA. Ms. Duke, in that light, let me ask, are the positions in DHS filled, or are there open positions so as a result you 

don’t have the people to deal with whatever the issue is? 

Ms. DUKE. Out of the six business line chiefs, four are filled. Two 

of those are career and two are political appointees. One is an acting. That is the Chief Procurement Officer. Rick Gunderson is acting. And the final one is the Chief Financial Officer, which, as you 

know, is Senate confirmed, and we do not have a nominee for the 

CFO position at this time. So one is vacant with Peggy Sherry acting. One is acting, and four are filled. 

Ms. STEINHARDT. Senator Akaka, if I may just return to an issue 

that Ms. Duke brought up about having a counterpart to the Under 

Secretary for Management at the component levels. You might 

think of this as having a chief management officer in each of the 

component agencies, somebody at that higher level who can oversee 

all of the management functions. Two of the components now have 

such positions, but it might be worthwhile, and certainly work we 

have done for you, Senator Akaka and Senator Voinovich, in the 

past on the Chief Management Officer (CMO) concept more broadly, I think, suggests that this might be useful and helpful within 

the Department as a whole at the component level. 

Senator AKAKA. Thank you. Let me call on Senator Voinovich for 

his questions. 

Senator VOINOVICH. Thank you. You indicated that you were concerned about having the budget to do the things that you need to 

do. Did you know I am Ranking Member on the Homeland Security 

Appropriations Subcommittee and am very interested in making 

sure that you have the money that you need to get the job done? 

One of the things that has been a little disturbing to me is that 

you have various responsibilities. I wonder sometimes, does anybody sit down and look at the big picture of how much we are 

spending on this and how much we are spending on that, and think 

about the fact that if we didn’t spend money on some items, what 

we could really do with those dollars to help in terms of management functions that you would like to put in place. This should result in DHS working harder and smarter, doing more with less and 

becoming more efficient. 

I imagine that you are already putting your budget together or 

have for the next time around. I would be very interested in helping with that so that you have the dollars that you need to get the 

job done. 

Second, Ms. Steinhardt, do you folks ever as part of your evaluation look at the vacancies and at the dollars that it would take in 

order to get the job done? In other words, when you are reviewing 

an agency, is one of the questions you ask whether they have the 

right people there to get the job done? And then what is the budget 

that they need? Do you ever do that kind of work in terms of your 

oversight and review? 

Ms. STEINHARDT. I would imagine that—I am just at a loss now 

for a specific example, but yes, we would take that kind of overview 

into account in looking at the management of an agency. 

But in this case, I would say that is why—I think this kind of 

underscores the need for management integration and thinking 

about a strategy for how to integrate across the Department, be-
13 

cause when you are putting together a budget, say, for major acquisitions, has the human capital component of that—I think probably 

here, this might be an example where that has occurred more laterally—but thinking about at the right time whether you have the 

people in place who are going to support these major acquisitions, 

whether you have the right workforce—— 

Senator VOINOVICH. Well, the point is that you have got to have 

the budget to do that. Now, Ms. Duke talked about acquisitions 

and bringing on a lot more people in acquisitions than DHS had 

before. That is an area, by the way, where we need more people 

throughout the Federal Government. Congratulations for what you 

are doing, Ms. Duke. But the issue now is, does DHS have the 

money to do it? 

If I came to GAO, and we sat down and looked at the budget of 

the Department, particularly that portion of it that we are talking 

about today, would you be able to recommend to me some of your 

observations as to where something could maybe be done a little 

differently and might help them out? 

Ms. STEINHARDT. We would certainly take a look at it, absolutely. 

Senator VOINOVICH. Because what happens is—I know about this 

because I was a governor—they come in and you tell them, this is 

what you have got to give me. So they go ahead and do the best 

they can, and then the question is, do you give them—I always say, 

if you don’t give them the money and the budget and the tools to 

get the job done, then you are basically telling them that you don’t 

think very much of the job that you are asking them to do. 

Ms. STEINHARDT. But what are the priorities, also. That is another thing that we would want to look at, how the Department 

has identified its priorities. If they are asking for money here and 

their budget allows them only this, then what is going to go? And 

it is looking at the big picture, not just in the components. 

Senator VOINOVICH. Well, part of the problem is that Congress 

comes in and sets your priorities and juggles the money around. 

Ms. STEINHARDT. Complicated. 

Senator VOINOVICH. I am really going to dig into it because, as 

I say, I have got one more shot. 

Ms. STEINHARDT. Well, we would absolutely want to support you 

there, Senator Voinovich. 

Senator VOINOVICH. Yes. In terms of this management integration, Ms. Duke, I wrote to you and you sent me back a letter and 

said that you were going to have a plan to get it done before the 

end of the year. I am a little confused about the six things that you 

are going to need to drive it down, and then you also mentioned, 

I think, that you are going to have metrics to measure performance. Tell me more about that. What is it that you are going to be 

able to give us in the next several months that is going to get us 

down the road on this integration? 

Ms. DUKE. Well, we are on the High-Risk List for several reasons, including management integration. So some of the other reasons we are on the High-Risk List are flood map modernization 

program, information sharing, many other very big, kind of DHSwide reasons, if you will. So what we are working with OMB on 

is addressing each one of the reasons we are on the High-Risk List. 

And I have overall coordination of that with the Deputy Secretary, 
14 

for making sure that we are addressing all the reasons we are on 

the High-Risk List, the four DHS ones plus the two Federal-wide 

ones. 

On the management integration one, that one squarely falls on 

my lap completely and that is where we have a strategy, but when 

GAO reviewed it, there were some concerns with the strategy, that 

it wasn’t specific enough. It didn’t have milestones so that they 

could measure our progress against. And it didn’t have outcome 

goals. And it didn’t have a sustained regular look at the progress. 

It was kind of putting out fires. And it also didn’t have the horizontal integration that Ms. Steinhardt talked about. 

So what we have done is we have said, OK, we can’t do everything at once. We are picking out six key areas that are horizontally integrated that will be significant in moving the Department forward. For instance, one of them is St. Elizabeths. Having 

a DHS headquarters is important. So that is going to be one where 

we will have an actual measurable action plan with dates and outcomes. And so we are going to propose that these six things are 

near-term efforts that can be measured, that we are committed to, 

that will substantially drive the horizontal and the vertical integration that we need to do as a Department at this point in time. 

Senator VOINOVICH. OK. I will get back to that. Senator Akaka 

has two more questions and he has somewhere to go, so why don’t 

you ask your two and then I will finish up with mine. 

Senator AKAKA. Thank you so much, Senator Voinovich. 

In the most recent Partnership for Public Service Employee Satisfaction and Commitment Survey, DHS ranked 28th out of 30, 

which is a slight improvement from the last survey. Why do you 

think morale continues to be so low? 

Ms. DUKE. When you look at the data from the employee survey, 

it was very eclectic, if you will. There was wide variances in the 

different components over what was causing dissatisfaction of the 

employees. But there were a couple that were systemic and that 

was having to do with performance and specifically rewarding the 

good performers and dealing with the performers that aren’t meeting objectives. And so that is what we are principally looking at 

through our new Chief Human Capital Officer (CHCO), Jeff Neal, 

is how do we make sure our supervisors have the skills and actually have the responsibility for dealing with that. But that is the 

one area throughout the Department that was low for our employees. 

Senator AKAKA. Finally, Ms. Duke, this may be your final time 

appearing before this Subcommittee. Again, I want to thank you for 

agreeing to stay on at DHS through the transition. Since your arrival at DHS, what are your biggest accomplishments and what 

key challenges remain for you? 

Ms. DUKE. I think the biggest accomplishments are in building 

the acquisition program, building up the workforce, building up the 

accountability of the major acquisition programs, the over 100 in 

DHS, because that isn’t just a CPO, Chief Procurement Officer, 

issue. That is an IT issue, it is a finance issue. And that is probably the biggest area. 

I think in terms of challenges, that information technology, and 

the systems issue. If you read best practices when you have a 
15 

merger, you first consolidate and then you delegate. DHS was 

handed a position where we were kind of delegated and are seeking 

to consolidate, taking eight grand systems and making one, and we 

have got to get that IT systems issue right to really mature, and 

that is going to be hard because it is change and it is dollars initially to save money. That is one of the areas we have to spend 

money to save money. 

The other area, I think, is our budget. We are working on a huge 

effort to get standardization and visibility in our budget. After 6 

years, it is very difficult to look at our budget across components 

and have the clarity of data and the parity to make the tradeoffs 

on what is important. And so we are really focusing on getting our 

budget right so that leadership can make the tradeoff decisions and 

mission. 

Senator AKAKA. Thank you very much, Ms. Duke. 

Senator Voinovich, as you mentioned, I will be leaving, so I will 

be turning the gavel over to you. 

Senator VOINOVICH [presiding]. Back to the question. So I would 

like to know in writing just what exactly it is that you are going 

to be doing, and is it possible that you could get a hold of Ms. 

Steinhardt and talk to her a little bit about it? Because I am really 

interested in trying to make sure that there is a meeting of the 

minds about what it is that needs to be done. I promise you that 

if we get that and the need is dollars and cents, I would like to 

work with you and the Secretary to see if we can’t make sure that 

you have the resources that you need to get the job done. 

Ms. DUKE. OK. And I will give it to you in writing. But the 

deliverables will be the six major initiatives with action plans, with 

milestones for each of the major initiatives. The other deliverable 

will be the letters to each of the components consistent across the 

chiefs to set forth the performance standards in management for 

the fiscal year. Those are the two major deliverables. 

Senator VOINOVICH. OK. And what I would like to know is what 

are the resources necessary for you to produce those deliverables. 

Ms. STEINHARDT. And we would be very happy, of course, to work 

with Ms. Duke and her staff on that. 

Senator VOINOVICH. Great. Senator McCaskill. 

OPENING STATEMENT OF SENATOR MCCASKILL 

Senator MCCASKILL. Thank you. I did get a spreadsheet and I 

have been trying to figure out how many contractors there are in 

DHS. It was always one of those, ‘‘you have got to be kidding me,’’ 

moments. Previously, no one knew and there wasn’t a number 

available, which is always a bad sign. That means you are hiring 

so many contractors at once that nobody is bothering to keep track 

of how many contractors there were. 

I am pleased that we got a spreadsheet from you recently where 

clearly there has been an attempt to try to do the best job possible 

counting the number of contractors. The spreadsheet that we got 

from your office, Ms. Duke, indicates that there are 10,520 contractors in the Washington, DC area working for the Department of 

Homeland Security. Of that 961 work for you. Do you believe these 

are accurate figures? Can we rely on these figures? 
16 

Ms. DUKE. The figures are based on algorithms, taking the cost 

of the contract and using some very valid formulas. So they are as 

accurate as we can get under the current conditions. 

Senator MCCASKILL. OK. So this was a statistical analysis as opposed to asking the contractors to tell you how many people they 

have working for them? 

Ms. DUKE. Yes. 

Senator MCCASKILL. Why can’t we do the latter? 

Ms. DUKE. There actually is a long history, and that is something 

we are working with Office of Federal Procurement Policy (OFPP) 

on right now. There was an attempt about 6 years ago to start 

counting contractors and asking contractors and actually it was put 

out in the Federal Register as a public notice. The comment from 

industry was so strong that the Federal notice was withdrawn and 

the Federal Government did not go forward with that policy. 

Under this Administration, we are looking at that again across 

the Federal Government in terms of how should we be counting 

contractors, how should we be accountable, and what these levels 

of professional services are, and also relooking at the definition of 

inherently governmental and what contractors should be doing and 

what contractors should be doing. 

Senator MCCASKILL. Well, I know that the Secretary’s efficiency 

review, you are looking at inherent governmental functions, but let 

me go back and make sure I understand. There was an attempt 6 

years ago to ask the people that we have hired in the Federal Government to tell us how many people they have working for them 

and they said it is too hard for us to do that, so we said, never 

mind? 

Ms. DUKE. The promise was that we are asking for a service. We 

are asking them to provide a service, and that it was their privileged information in terms of how many people they have working 

on it. So we should ensure we are paying a fair and reasonable 

price for the service we are asking for and how many people they 

use in managing their workforce was really a matter that wasn’t— 

that didn’t count—— 

Senator MCCASKILL. Concern you? 

Ms. DUKE. The attitude of the industry was, it is none of your 

business. The attitude was, you are not buying people, you are buying a service, and so buying the number of people is irrelevant to 

the—— 

Senator MCCASKILL. But isn’t it true that we are, in fact, buying 

people? Isn’t that why we had turned to contractors, because we 

couldn’t hire enough people quickly enough because of the inherent 

problems at the Office of PersonnelManagement (OPM), that we 

turned to contractors to hire people? We didn’t hire—I mean, these 

are people sitting side by side—would we ever dream of having— 

aren’t most of these contractors sitting in your offices working 

alongside Federal employees? 

Ms. DUKE. Yes. Quite a few of them are. 

Senator MCCASKILL. What percentage, would you say? 

Ms. DUKE. We just did—I can submit that for the record, but we 

actually did do a data call on that, of how many contractors we 

have, what I will call the attributes of Federal service. They sit in 

government space. They have been there for a long period of time 
17 

using government computers, those type of things, and I can submit that to you, Senator McCaskill. 

Senator MCCASKILL. Well, the more I can understand how—I 

mean, having done government auditing for a long time and having 

done government budgeting for a long time, in order to compare efficiency and effectiveness, you look at the number of full-time employees that are providing various services and then you can compare them and determine whether or not you are getting the efficiencies you should get. I am trying to get my arms around this 

concept that we give a contractor a set amount of money, and then 

if they want to hire two people to do what it is taking us to have 

five people do, it is OK, or if they are hiring 10 people—I mean, 

I think that is something we need to know if we are contracting 

for essentially—and I don’t think anybody would argue, would 

they, that we hired a lot of people at the Department of Homeland 

Security that were doing inherently governmental functions. Is that 

an unfair statement? 

Ms. DUKE. I think that, at a minimum, they were doing core 

services, items that, really, Federal employees should have the inherent knowledge to do our core functions, and we have identified 

about 3,500 positions in our first go-around that we are in the process of making Federal because they fit that category. 

Senator MCCASKILL. Yes. It just worries me that as we—and I 

am not—and people may have misinterpreted my interest in this 

area as being against contractors or privatization. I am not. But 

what I am against is doing it in a way that we can never, ever, 

ever know whether we are getting a bang for our buck, and that 

is the way we have been contracting, particularly in DHS. I don’t 

think we were ever in a position to know if we were getting value 

as it relates to a government employee versus a contract employee. 

So I am glad that we have at least an attempt to begin counting 

noses and I would be disappointed if this Administration didn’t go 

further down this path of effectiveness. I have a lot of confidence 

in the Secretary. She gets this, and you guys have probably noticed 

that she is pretty strong about making things happen and changing 

things when she sees that they are not being done right. 

Let me talk a minute about TASC. After the failure of Emerge, 

we are now, according to the DHS IG, a project that is close to $1 

billion. If we have another meltdown like we had with Emerge, 

who should be sitting at that table to answer questions about it? 

Ms. DUKE. Well, I think that starting from the top, TASC is part 

of the future of DHS. So I think it is me, I think it is the Deputy 

Secretary, I think it is the Secretary. The CFO currently runs the 

Program Office and our CIO is heavily involved. I mean, we all understand the importance of TASC and the success in doing it right. 

Senator MCCASKILL. Would you consider the CFO the functional 

top of that organizational chart as it relates to TASC? Who is the 

functional—— 

Ms. DUKE. Yes. 

Senator MCCASKILL [continuing]. Responsible person, the CFO? 

Ms. DUKE. The CFO, yes. 

Senator MCCASKILL. Let me ask, Ms. Richards, in your testi- mony, you said that your professional service contracts over $1 million are going to go through a review before award or renewal, 
18 

which is terrific. How many of those contract awards under this review have been found, in the review that you mention, that they 

include inherent governmental functions and what has happened 

as a result of those reviews? 

Ms. RICHARDS. Ma’am, I am going to have to get back to you for 

the record with the exact numbers on the contracts that have gone 

through that review. I will say that we do have reports that came 

out this year that did find some contractors doing inherently governmental functions, in our opinion, in the SBINet area. We also 

are currently looking at contractors that are providing core support 

to the Transportation Security Administion (TSA) in their logistics 

area, and that report should be out shortly. But I will have to get 

back to you with the exact figures. 

Senator MCCASKILL. Yes. I see it with TSA—it is really interesting to me that—I go through a lot of airports, and I especially 

spend a lot of time in the Kansas City and St. Louis airports. In 

Kansas City, all the screeners are contract. Of course, they are 

TSA in St. Louis. I can’t figure out the rhyme or reason on that. 

I mean, why would you have contractors in some locations—I don’t 

know how many there are. Kansas City are the only ones I have 

noticed. 

And the reason I notice it is because they do things much differently. I have a bad knee, so I get wanded every time I go 

through, so I know the drill. I could actually—if you needed me, I 

could step in and be a TSA screener. And so I know about where 

the shoes go on the belt or they don’t or if they go in a bin. I know 

all that stuff. They are very different in Kansas City—not that they 

aren’t doing a good job, it is just different, so I notice it. Is there 

some reason why we are doing contractors in some places and government employees in others? 

Ms. DUKE. Senator McCaskill, under the original Act that stood 

up TSA, ATSA, it was required to have, I believe it was four or five 

airports that stayed contractor, and they were directed to convert 

all the others to Federal by the end of 2002, and the reason for that 

in the statute was to allow comparison to see, was the federalization really more effective, and TSA was directed within a period of 

time to do a comparison of the four that remained Federal—excuse 

me, remained contractor. 

Later, the statute was modified and airports are now allowed to 

opt out. And so if an airport believes it can perform more effectively with contractors, they can submit an application to TSA to 

go back to contractor. I believe there has only been a couple airports that have actually asked to convert. So that is why you see 

so very few. A couple of the other ones that stayed contractor was 

a small airport in Wyoming. There was one in each category of airport. 

Senator MCCASKILL. I am curious. Before we changed that statute, did we look at the value—I mean, if the reason was because 

we wanted to compare, right, did we compare? 

Ms. DUKE. There was a comparison done—— 

Senator MCCASKILL. And the result was? 

Ms. DUKE. I honestly don’t know the exact results, but that study 

does exist and it looked at both levels of security and cost. 
19 

Senator MCCASKILL. OK. I will follow up on that and get that, 

because that is interesting to me. It is just typical that we do a 

study to see which is better, and then without really clearly knowing what the study said, we decide everybody can opt out if they 

want. I mean, it is interesting that no one has. And I don’t want 

the word to get out that I am trying to move people out of their 

jobs screening in Kansas City. I am really going to slow down on 

my wanding if that gets out in the Kansas City airport, I am sure. 

[Laughter.] 

Ms. RICHARDS. And ma’am, if I could add, when we do our penetration testing and other testing on the effectiveness of TSA, we design our tests to specifically test for the differences between the 

contracted screeners and the TSA screeners, and our results have 

not shown an appreciable difference between the two. 

Senator MCCASKILL. I think they are both doing a fine job. I just 

think there is just a little—there is some quirkiness and differences 

in the way they do it. You can tell that there is a certain culture, 

maybe, which is fine. It is the difference between an apple and an 

orange. They are different. They are both good. 

Senator VOINOVICH. Senator, could you—— 

Senator MCCASKILL. Yes. 

Senator VOINOVICH [continuing]. Give me a shot, and then I will 

get back—— 

Senator MCCASKILL. I thought you were done. 

Senator VOINOVICH. No, I am not. 

Senator MCCASKILL. I thought you were handing out the gavel. 

Senator VOINOVICH. No. [Laughter.] 

First of all, I understand what you go through, because I have 

a pacemaker. 

Senator MCCASKILL. They do the same thing. 

Senator VOINOVICH. Yes, I see the whole deal. I continually try 

to find out whether the Professional Aviation Security Specialists 

(PASS) program is working like we hoped it would work. 

First of all, I am pleased that you are getting back to looking at 

the inherently core governmental functions. I assume that you are 

looking at first of all, can we find these folks and bring them in, 

and then whether or not you have got the budget issue—is it an 

even-steven or maybe can you save money bringing them in rather 

than continuing to have them farmed out. 

I think you need to continue to do that, because the previous Administration really was into farming stuff out. The interesting 

thing is that when they had these, what is it, 76, it is a procedure—— 

Ms. DUKE. A–76. 

Senator VOINOVICH [continuing]. A–76—and Senator, you would 

be interested in this—when they have an A–76, they get the people 

who work for the government to compete with the private sector to 

see whether or not you should stay with your people—— 

Senator MCCASKILL. Right. 

Senator VOINOVICH [continuing]. And about 80 percent or 85 percent of the time, the people that are working for the Federal Government win those. But the thing that bothers me is why do you 

have to have the A–76 procedure before you give employees that 
20 

work for the Federal Government the opportunity to come back and 

let you know how they can become more efficient? 

In other words, one of the things I wanted to do when I came 

to Washington was based on my work as governor. I instituted 

Total Quality Management for 56,000 workers in the State of Ohio. 

It was one of the best things I ever did, as I look back on it. It just 

seems that we don’t have enough of that going on today in the Federal Government. 

In your particular case, since you merged all these people, different cultures and all the rest of it, I suspect that you couldn’t do 

that in the beginning, but I would suggest that you look at that situation to see if we couldn’t be getting more out of the people that 

we now have by empowering them to come back and say, what, 

Elaine? We could do this a whole lot better if you would just let 

us do it. 

The other thing, the issue of the competency of the people that 

you hire, and again, following up on Senator McCaskill, do you 

have people there that make sure that you are not being ripped off 

and that they are doing the job that they should be doing? And it 

is the same thing, and the question is that you award $4 billion 

in grants each year and the IG finds that FEMA does not consistently and comprehensively execute its oversight to make sure that 

what is happening in terms of those grants. What can you do to 

improve that program in terms of monitoring the grants that are 

going out there and that we are getting what we are supposed to 

be getting from them. 

Ms. DUKE. Several things. One is we are—on the idea of employee involvement, TSA had started an idea factory. That is opening up DHS-wide in January. We are working with the labor units, 

with DHS on some fine-tuning, but that is going to allow that employee engagement DHS-wide, and that is a big effort for us. And 

hopefully we will get those improvements from the grassroots efforts. 

In terms of service employees, one thing that would probably be 

of interest to you, Senator, and this Subcommittee, is the OFPP is 

working on revisions to the circular, but more specifically the definition of inherently governmental, and if you look at the current 

definition, it says, for instance, signing the budget or approving the 

budget is inherently governmental, but supporting the budget is 

commercial. So it argues, or could be interpreted, you need one 

budget person and all the rest could be contractors, or at some 

point does the ratio skew to that budget person, is really tantamount to an autopen. And so that is where I think the Administration, in introducing the concept of core functions, is how many real 

Federal budget people do you need so they are really making the 

decisions, not just approving contractors’ work, if you will, and 

really have that core knowledge. 

So that is being done at the Federal level. The OFPP Administrator, Dan Gordon, just got confirmed. He is actually from GAO 

and really understands the importance of this. 

On grants, you are absolutely right. That is probably one of our 

biggest workforce shortages in DHS. So what happens in the workforce shortage on the business side is we focus all our efforts on 

getting the grants awarded, and then the grants administration, 
21 

making sure the State and local governments and other recipients 

execute the grants properly. We received funding last year for the 

first time to have a DHS Grants Oversight Office in the Office of 

the CFO, and FEMA, who is our principal granting agency within 

the Department, is working on building up their staffing on the 

business side. But I agree with you on all your points. 

Senator VOINOVICH. Thank you. Senator McCaskill. 

Senator MCCASKILL. The only other question I had that I didn’t 

get a chance to ask, when I ran so far over my time before I got 

carried away, was about award fees. We had a Subcommittee on 

Federal Financial Management, we had a meeting on wasteful contractor bonuses and your Acquisition Management Scorecard 

showed that there hadn’t been a lot of change and not a lot of consistency. Would anyone want to give me good news about contractor bonuses that are wasteful and not deserved? 

Ms. DUKE. Yes, Senator. We have issued new policy on award 

fee. The problem with award fee is they are qualitative. They reward kind of just general satisfaction, and so under the Chief Procurement Officer, we issued guidance that is consistent with the 

Federal guidance that will severely limit the use. Additionally, we 

are giving training and incentives so that if we are going to pay 

fees for performances tied to a specific quantitative objective, which 

is the difference between incentive and award fee. So, yes, we do 

have the new policy and are enforcing it in DHS. 

Senator MCCASKILL. That is great. That is all I had. 

Senator VOINOVICH. I will just ask one more question, and that 

is on performance management and setting objectives. I understand that is not being done in all cases. Are you going to be able 

to get that done this year, the coming year? 

Ms. DUKE. We are working on our performance management system and improving it. I believe all employees are under a performance plan. But in terms of having a centralized approach to performance management in DHS, that is what we are working on in 

the coming year. 

Senator VOINOVICH. Because I understand that for fiscal year 

2009, only two of your six management chiefs complied with this 

directive. Why didn’t all of your chiefs provide these written objectives? 

Ms. DUKE. It was a matter of transition and turnover and the 

chiefs. It was just our mistake. There was no excuse. 

Senator VOINOVICH. And then it is the same thing about them 

giving you the feedback regarding their accomplishments. You 

know what it is. Sit down and say, here is what we want to do. 

Periodically meet with them and come back and—— 

Ms. DUKE. Right. 

Senator VOINOVICH [continuing]. So they know whether they are 

doing good or bad. 

Ms. DUKE. And we did it within management. What we failed to 

do was do it to the components. So we failed to issue the objectives, 

say, to the CIOs in the components, and that is what we refocused 

on. And I agree with you, Senator, that is important. 

Senator VOINOVICH. Thank you. This has been a great hearing. 

I am pleased with it. This is a nice team, and if you are all working 

together, we are going to continue to make some real progress. 
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Ms. Duke, again, thank you so much for the good work that you 

are doing. I hope this isn’t the last time that you come before us. 

Thank you. 

The Subcommittee hearing is adjourned. 

[Whereupon, at 11:13 a.m., the Subcommittee was adjourned.] 
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Æ