59

* Federal Office Systems Exposition (FOSE) Information Technology
Roundtable, and

. The International 3rd Annual Government Financial Managers
Conference.

> Held several briefings on ClO Council activities with Senate staff; we would like
to hold similar sessions in the near future with House staff.

Education and Training Committee Achievements: (Eliza McClenaghan, chair of this
Committee, will provide further details.)

. Developed and distributed information resources management core
competencies to meet the Clinger-Cohen Act executive skills assessment
requirements. These competencies cover the Federal information resources
management environment, capital planning, change management, and
professional development.

» Benchmarking the best practices of successful organizations to determine the
status of information resources management core competency learning in the
Federal environment. Information will be gathered through a survey and
interviews with Federal CIO's.

* Drafted a white paper that addresses the resources needed to support the
implementation of the knowledge management aspects of the Clinger-Cohen
Act.
‘

Interoperability Committee Achievements: (Anne Reed, chair of this Committee, will
provide further details.) :

. Identified and established two broad areas of focus: technical architecture and
standards, and information management. Established several task forces to
address specific interoperability issues including architecture, standards, and
cross-cutting/information sharing initiatives.

» Reviewed and supported OMB's Memorandum 97-16, "Development,
Maintenance, and Implementation of Agency Information Technology
Architecture,” as a sound basis for establishing a meta-architecture for the
Federal Government.

> Developing Common Best Practices for Government Intranets. Completed the.
‘Common Best Practice, “How to Keep Computer Clocks Accurately Set,” to
ensure accurate time and date stamps for security purposes and electronic


123

© Provision for electronic entry of tra

advance to a single reporting site;

® Adoption of a policy to rely to the extent possible on
commercial data, rather than government-mandated data;

@ adoption of uniform reporting requirements for exports and
imports in the U.S.;

© Provision for integrated government-wide system for data

sharing among authorized agency users;

© Provision for timely access to statistics derived from

transaction-level data; and

Creation of a plain English information source for current,
clearly defined, international trade requirements.

Once developed, ITDS will:

© Provide more accurate and complete trade statistics and

data;

© Standardize data collection to allow for direct
comparison of U.S. imports and U.S. exports for balance of
trade purposes;


25

mechanisms, developing effective system architectures, and consolidating data
center operations.

(4) Governmentwide policy advice and recommendations: The Council has~
responded to OMB's solicitation for comments on proposed federal IRM policy
revisions (the Federal Acquisition Regulations, Freedom of Information Act, the
Privacy Act, the Paperwork Reduction Act), updates on critical issues such as Year
2000 progress, and guidance and feedback on agency reporting to meet OMB's
federal oversight requirements (such as preparing budget submissions for
information assets under OMB Circular A-11).

While these activities have proven useful, the Council does not yet have a strategic plan
to help guide its work and serve as a benchmark for measuring progress. As we saw in
the case of the CFO Council, achieving accomplishments that have strategic impact
requires well-defined goals and measures. The CFO Council adopted a vision, goals, and
strategies for financial management that has made it a much more productive body. The
CFO Council now regularly reviews activities and, if necessary, revises Council priorities.
In addition, the Council annually reports on its progress in implementing financial
management reforms.

Recognizing the need to focus its efforts, the CIO Council began to reassess and redefine
its strategic direction this past summer. This October, the Council members met at a day-
Jong planning conference to discuss and finalize their long-range strategy. They agreed to
focus their work on five strategic goals:

‘+ establish sound capital planning and investment processes at the agencies;

‘+ ensure the implementation of security practices that gain public confidence and
protect government services, privacy, and sensitive and national security information;

‘+ lead federal efforts to successfully implement the Year 2000 conversions;


154

the President. It is a job that needs full attention of top people that
represent the President. It is the President’s reputation that is on
the line, not theirs. They have to do something to help him.

So we are getting down to putting in the legislation on an Office
of Management. Now, would these be good types of projects for an
Office of Management to be available? And I am thinking of it in
a very nonpartisan way, with professionals out of the senior civil
service and others who know what they are doing in this area and
know the ins and outs of government like many of you do. I would
just be curious if you have any reaction to that. Let’s start over
here and just ge down the line here. We haven’t had a chance to
hear from Mr. Ehinger.

Mr. Ehinger, do you have any thoughts on this?

Mr. EHINGER. Well, I am not an expert on government organiza-
tions so I am not certain I can respond exactly to your proposal,
but it is interesting that when this project has come forward for
discussion throughout the government, we do tend to have issues
of management arise. Not one department, not one agency seems
to be able to respond very often beyond their own mission, so it be-
comes an issue.

One of the things we have done to alleviate that and has come
of some interest along the lines of your proposal is, we have dis-
cussed this at great length with the John F. Kennedy School of
Government at Harvard, where there tends to be a concentration
of the types of management experts over many years, having con-
ducted studies and so forth. That seems to be a repository of many
people from government too, from different administrations. We
have gotten a very good crosscutting sort of response and evalua-
tion to the proposals of this project as it relates to treating inter-
national trade as a function of government rather than as an indi-
vidual stovepipe organization.

So in that respect we have tried to get that sort of expert man-
agement opinion across a broad range of philosophies and so forth
from a management side, and it has been very helpful and very
useful. To the extent that such an entity that you are speaking of
may help to do that within the government, that would be useful.

Mr. Horn. Secretary Simpson.

Mr. Srmpson. I am sure Director Raines can speak for himself,
but I think it would be useful to have OMB take on greater respon-
sibility for crosscutting management issues. Over the years, as the
different substantive committees of the Congress have addressed
problems that arise within the scope of their jurisdictions, there
have been many acts of legislation passed that have expanded to
the point that they overlap with each other.

Food safety is an example. I think there are probably many areas
of government activity in which committees of Congress, acting in
good faith but with little awareness of what the others have done,
have expanded the functions of the agencies over which they have
oversight to overlap with the functions of other Government agen-
cies. This has gone on long enough that there is probably substan-
tial overlap in many areas now. Frankly, I doubt that any entity
other than OMB is in a position to do something about it.

Mr. Horn. Mr. Cronin.


149

the work, but OMB and Congress. Agencies have their traditional roles, data
definitions, and systems. Interestingly, OMB and Congress are also largely
organized along the same organization lines as well. Everyone has an ongoing
challenge to rise above and go beyond traditional organization structures to focus
on our core business and support functions, and how, given modern technology,
‘we should best evolve our business processes. An enterprise-level, cross-cutting
perspective needs to become a basic and overarching part of each of our jobs.

© Resources. The GITSB/IMC Innovation fund provides some assistance
to interagency initiatives, as do the people at OMB and GSA who, though limited
in number but often boundless in energy, work hard to support some interagency
processes. The CIO council is also evolving to be of assistance. But it seems
there are precious few people and organizations who take it as their job to support
reform of interagency processes, which actually covers a lot of what we do. Much
of what is getting done is done through volunteer committees and other groups, as
an add-on to people’s regular jobs. This approach is a positive and appropriate
one in many respects, but I continue to be concemed that as a government we're
seriously underinvesting in the people and organization and management
processes that would facilitate faster progress on the ITDS and many other
initiatives. I don’t believe, by the way, that more money and people are
necessarily required. Competing demands are great and we as a government are
already spending plenty on information technology and the related business
processes those expenditures are aimed at supporting. But I sense that we could
and should be doing more to find resources within current spending to innovate
and change the way we do business. This goes back to my first point, on
leadership.

© Cooperation. Finally, cooperation and teamwork are vital -- across
agencies, and with Congress and the private sector. Great ideas and visions, by
themselves, are generally not adequate to power the major changes required to
take full advantage of much of what modem information technology has to offer
us as @ government. Indeed, barriers are such that we will most likely not succeed
unless we all get very serious about making it happen soon. This will require
unusual degrees of cooperation across agencies, with Congress, and the private
sector. I am not sure that we, in ITDS, or that other government IT groups, have
fully taken advantage of the assistance and support that either congress or the
private sector could provide. Again, in a hopeful sign from the CIO Council, an
active outreach program is in place to a number of industry groups and there have
been a number of clear contributions already. The CIO Council has been
privileged to have one of the staff members supporting this subcommittee join us —
another step in the right direction of working together better and more closely.
And of course, we have this hearing today, marking what I see as welcome
Congressional interest in both the ITDS and the broader issues of how we work


COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California

J. DENNIS HASTERT, Illinois TOM LANTOS, Califor

CONSTANCE A. MORELLA, Maryland ROBERT E. WISE, Jn, West Virginia

CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York

STEVEN SCHIFF, New Mexico EDOLPHUS TOWNS, New York

CHRISTOPHER COX, California PAUL E. KANJORSKI, Pennsylvania

ILEANA ROS-LEHTINEN, Florida GARY A. CONDIT, California :

JOHN M. McHUGH, New York CAROLYN B. MALONEY, New York

STEPHEN HORN, California THOMAS M. BARRETT, Wisconsin

JOHN L. MICA, Florida ELEANOR HOLMES NORTON, Washington,

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana CHAKA FATTAH, Pennsylvania

MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland

JOE SCARBOROUGH, Florida DENNIS J. KUCINICH, Ohio

JOHN B, SHADEGG, Arizona ROD R. BLAGOJEVICH, Illinois

STEVEN C. LATOURETTE, Ohio DANNY K. DAVIS, Illinois

MARSHALL “MARK” SANFORD, South JOHN Fr TIERNEY, Massachusetts
Carolina JIM TURNE!

JOHN E. SUNUNU, New Hampshire THOMAS H. ‘ALLEN, Maine

PETE SESSIONS, Texas HAROLD E. FORD, Jr., Tennessee

MICHAEL PAPPAS, New Jersey —

VINCE SNOWBARGER, Kansas BERNARD SANDERS, Vermont

BOB BARR, Georgia (Independent)

ROB PORTMAN, Ohio
KEVIN BINGER, Staff Director
DaniEL R. Mout, Deputy Staff Director
WILLIAM MOSCHELLA, Deputy Counsel and Parliamentarian
JupitH McCor, Chief Clerk
Pui ScHILIRO, Minority Staff Director

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY
STEPHEN HORN, California, Chairman

PETE SESSIONS, Texas CAROLYN B. MALONEY, New York
THOMAS M. DAVIS, Virginia PAUL E. KANJORSKI, Pennsylvania
JOE SCARBOROUGH, Florida MAJOR R. OWENS, New York
MARSHALL “MARK” SANFORD, South ROD R. BLAGOJEVICH, Minois
Carolina DANNY K DAVIS, Minois

JOHN E. SUNUNU, New Hampshire
ROB PORTMAN, Ohio

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California
J. RUSSELL GEORGE, Staff Director and Chief Counsel
RoBERT ALLOWAY, Professional Staff Member
JOHN Hynes, Professional Staff Member
ANDREA MILLER, Clerk
‘MARK STEPHENSON, Minority Professional Staff Member

ay


119

STATEMENT OF JOHM P. SIMPSON
DEPUTY ASSISTANT SECRETARY OF THE TREASURY
REGULATORY, TARIVF, AND TRADE ENFORCEMENT

Bi THE
SUBCOMMITTEE OM MANAGEMENT, INFORMATION, AND TECHNOLOGY
OF THE
HOUSE COMMITTEE OM GOVERNMENT REFORM AND OVERSIGHT

OCTOBER 27, 1997

Mr. Chairman, on behalf of the Treasury Department and all of the
agencies of the federal government who are working together to
create an international trade data system I want to thank you and
the members of the Subcommittee for giving us the opportunity to
appear here today.

‘The Environment

Let me begin by describing to you the environment in which we are
working. The United states is the world's largest exporter and
importer. The U.S. economy depends heavily on world markets to
support a higher rate of growth. In 1995, exports increased by
more than 14 percent over the previous year, increased by another
6 percent in 1996 over 1995, and are up more than 11 percent
already this year over 1996. Export accounted and have accounted
for one-third] of overall U.S. economic growth over the period 1992
to 1996. About one of every ten U.S. jobs, and one of every five
manufacturing jobs, is supported by exports.

mR-2016


10.

11.

68

review boards should bring to light areas of concern, allowing those who are
initiating projects to rethink their approaches to maximize the probability of
success.

We have discussed some successful IT projects. | would like to flip the
coin. Why do we keep starting projects that fail?

The information resources management community is now coming to grips with
the sobering lessons learned from prior project failures. With application of the
provisions of the Clinger-Cohen Act to analyze information technology projects
as investments, to develop systems within a defined architecture, to assess
progress through formal performance measurement, and to educate the
information resources management community to apply best practices to
information technology management, we should see a reduction in the start of
projects that fail.

Continuing on the question of project failure, why do we find out so late
that projects are failing? Why can't we know when they are at the 4 million
of the 40 million dollar level instead of the 400 million or 4 billion dollar
loveis?

In many agencies, project concems have not been raised because there was no
mechanism to force a careful, independent analysis of project status relative to
initial budget, schedule, and performance criteria. Formal selection, control, and
evaluation processes, which include analysts from outside the project team, will
bring to light, at an earlier date, those projects that are in trouble, and will allow
for corrective actions.

Also, the Clinger-Cohen legislation has elevated the position of CIO within
agencies so that the CIO has more input to the planning and implementation
process. The CIO's mandate to develop and maintain an ongoing process to
ensure that information resources management operations and decisions are
integrated with organizational planning, budget, financial management, human
resources management, and program decisions provides the base to ensure that
projects are not developed in isolation and do respond to mission goals and
customer needs.

What can be done to make the CiO Council a more effective group? What
can Congress, OMB, and the ClOs themselves do?

See below.

What can Congress, OMB, the Agencies, and/or the ClOs do to be more
offective?


152

getting the attention of one person, the Vice President, the Presi-
dent, or the Director of OMB, than it is to attempt to get the simul-
taneous attention of all of the Cabinet officers who would need to
pay attention to this. So from my point of view it is just a question
of what is practical.

at we are missing now is exactly that action that you de-
scribed. President Eisenhower did something more significant than
he realized than when he said simply, “What’s taking you so long?”
That was the imprimatur that was needed, and that is what we
need now.

Mr. Horn. Well, I know on some occasions we have written to
the President and the Director of OMB urging attention in these
areas, and we would be glad to help. Because out of your testimony
I think our first question ought to be, how do we stimulate such
crosscutting projects? And then what I have already mentioned,
how do we get closure on them? Because we need somebody, just
for all of the reasons you have cited or implied, that nothing much
is going to happen unless there is a mother and father up there
that are giving it some of their personal attention.

The Vice President doesn’t have any authority unless the Presi-
dent gives it to him. The President can give it to him, as President
Eisenhower did give Vice President Nixon authority in the equal
employment opportunity area. President Carter gave Vice Presi-
dent Mondale probably more actual administrative responsibility
than any Vice President in this century.

But it takes the President signing on the dotted line so every-
body knows who is boss, or who is acting for him, either the Direc-
tor of OMB or the Vice President of the United States. But, it
means he has to sign a piece of paper somewhere saying: “Do it.”
As Churchill once said, “Just do it,” and that is what we are talk-
ing about here.

How do we get closure on these very good ideas and how do we
stimulate others like it? Let us take that one. What else is obvious
to you, now that you have dipped your feet into this battle, what
else can we do? This is an exciting idea, as far as I am concerned.
What is the next exciting idea we ought to be thinking about?

Mr. Proctor. I mentioned I suspect this panel is pretty busy,
and will be for a long time, with this one project. If you are inter-
ested in knowing the ITRB discussions, you can go to the NPR re-
port which had probably

Mr. Horn. Translate all of that bureaucratic gibberish you just
gave me.

Mr. Proctor. National Performance Review has made two publi-
cations; the first one, which actually was the most complete, which
was NPR, National Performance Review Information Technology
supplement. NPR was broken up into a bunch of different areas.
They had teams, including one that dealt with information tech-
nology.

They came out with a little book, which I would be happy to pro-
vide to the subcommittee a copy of that, summarized I guess best
thinking on maybe 60 to 80 different information technology initia-
tives. I think it is safe to say ITDS is probably as far along as
many of them, and in a lot of respects is more ahead. A lot of these


9

‘Committee would offer an opportunity for federal officials to collaborate on finding
practicable solutions to their common needs.

The Comumittee’s mission is to provide recommendations to the CIO Council on all
‘education and training matters as identified in the Clinger-Cohen Act. As a general
proposition, current work is focused on identifying competencies for information
resources management practitioners, and on identifying and promoting career
development opportunities. Certain current work is summarized in the following
paragraphs.

Activities to date
Identification of IRM core competencies

In February, 1997, the Education and Training Committee identified for the CIO Council
IRM core competencies which it recommended the Council adopt as the basis for the
IRM workforce planning called for in the Clinger-Cohen Act. The Council did so. (A
copy of the IRM core competencies is appended to this statement.)

‘The core competencies identified by the Committee cover the Federal IRM environment,
capital planning, change management, and professional development. Within each of
these broad areas, specific subjects, analytic models and business practices are identified.
‘The Committee's analysis of IRM core competencies benefited substantially from
discussions with, and review by, public and private sector organizations. These
discussions will continue, as the CIO community gains further experience with IRM and
the competencies required of successful practitioners. I personally believe the core
competencies we have so far recognized will be invaluable, as ClOs turn to the
identification of deficiencies at their respective agencies, and the really hard work of
designing, implementing and evaluating remedial programs responsive to particular
circumstances.

It is gratifying to note that the Defense Department's Information Resources
‘Management College, which offers a CIO certificate program, has incorporated these
core competencies in its curriculum. The General Services Administration's 1000 by
Department's new School of Applied Information Technology is also using the core
competencies as the basis for curriculum development.

The CIO Council has taken advantage of current information technology and posted the
IRM core competencies on several web sites:

http://www.cio.fed.gov
hitp://www.itpolicy.gas.gov
http://www.dtic.mil/c3i/cio/cioedtrg, htm!
hittp://www.ndu.edwirme


15

Having effective CIOs will make a real difference in building the institutional capacity and
structure needed to implement the management practices embodied in the broad set of
reforms set out in the PRA and Clinger-Cohen Act. The CIO must combine a number of
strengths, including leadership ability, technical skills, an understanding of business
operations, and good communications and negotiation skills. For this reason, finding an
effective CIO can be a difficult task. Agencies faced a similar difficulty in trying to find
qualified Chief Financial Officers to implement the CFO Act financial management
reforms. It took time and concerted effort by the Administration, the CFO Council, and
the Congress to get strong, capable leaders into the CFO positions.

Shortly after the Clinger-Cohen Act went into effect, OMB evaluated the status of CIO
appointments at the 27 agencies. OMB noted that at several agencies the CIO's duties,
qualifications, and placement met the requirements of the Clinger-Cohen Act. According
to OMB, these ClOs had experience, both operationally and technically, in leveraging the
use of information technology, capital planning, setting and monitoring performance
measures, and establishing service levels with technology users. These CIOs also had
exposure to a broad range of technologies, as well as knowledge of government budgeting
and procurement processes and information management laws, regulations, and policies.

In addition, OMB had concerns about a number of other agencies that had acting CIOs,
ClOs whose qualifications did not appear to meet the requirements of the Clinger-Cohen
Act, and/or ClOs who did not report directly to the head of the agency. OMB also raised
concerns about agencies where the CIO had other major management responsibilities or
where it was unclear whether the CIO's primary duty was the information resource
management function. OMB stated that it would reevaluate the situations at these
agencies at a later date, after agencies had time to put permanent ClOs in place or take
corrective actions to have their CIO appointment and organizational alignment meet the
necessary requirements,


128

-10-
Agencies currently collect duplicative data under statutory and
regulatory authorities that are also duplicative. Once agreement
is reached on a standard set of data that meets the needs of all
agencies it will be possible to identify legal authorities for data
collection that may be revoked, and also to identify legal
restrictions on sharing data among agencies that have a genuine
need for them. Issues of burden, enforcement, privacy, and security
may compete with each other and work against data sharing,
requiring balancing at the highest policy levels.

A compilation of legal authorities by agency has been prepared as
a starting point for this effort.

Establishment of A Benefit-Cost Baseline

In order to assure the cost-effectiveness of an ITS, there is need
for an accounting of the forms that agencies are currently using to
collect international trade data from the public, along with each
form's associated frequency of use and collection burden. In order
to develop a preliminary estimate of effect on public reporting
burden, the Project Office analyzed 25 forms identified in Phase I
of the data element study. These forms account for a current total
public collection burden of 7,482,306 hours per year. A preliminary
analysis of the redundant collection that can be eliminated
consolidating these forms into a single entry system identified a
savings of 1,973,329 hours per year of paperwork burden. In order


134

of Transportation Advisory Committee. One of the biggest concerns
is privacy. They think that there will be all sorts of data resident
on the transponder that anyone can read.

The point I make to them is, we have the data about your ship-
ment, about your truck, and about you as a driver in a secure data
base within Government. All we need to have on the transponder
is just an identification of what the truck is. In addition to that,
we have a substantial encryption technology built into this system
to help protect it.

So P think that even the most skeptical representatives of the
trucking industry are now satisfied that, whatever other concerns
they might have, privacy should not be one of them.

Mr. Horn. So in other words, as long as you relate that truck
and driver, you could have a code that simply accesses a secured
data base here, and it isn’t necessarily on the transponder?

Mr. Srmpson. That’s right. Yes, sir.

Mr. Horn. In terms of the remarks you had prepared, one thing
I noticed, it would be very hard to figure out the import figure in
relation to what you said in the first full paragraph under the envi-
ronment as to our export figure. Those are the things, of course,
up here that, when we are trying to get a handle on the balance
of trade, the deficits in trade, and all of that, you use the 1992
through 1996 import figure. But, I guess I would like to know,
what is the export figure?

We have here into the United States—well, actually, value of im-
ports has increased by 118 percent over the decade ending in 1996;
64 percent over the period 1992 through 1996. Then earlier, in the
preceding paragraph, there is another figure there. In other words,
1 would like to be comparing apples and apples, and I don’t know
how—do you get those data easily?

Mr. SIMPSON. We do have those data.

As you may know, Mr. Chairman, there is substantial concern
that U.S. import and export data are not comparable. In fact, our
export data are not comparable with the import data of our trading
partners. That is one of the things we expect to be corrected when
we finish our process of creating a standard data set that will be
used as both export and import documentation for our major trad-
ing partners. At that point, we will have the same information on
both ends of the transaction, and the comparability of the export
and import data should be much better.

Mr. Horn. Ten years ago, when the World Trade Center in Lon;
Beach was opening, one of the aspects of the services they wanted
to provide to people that had an international trade interest, as
well as any government agencies or State agencies that were en-
couraging exports and imports, was the tariff data on particular
commodities worldwide. As I remember, at that time there was an
individual in the private sector who had developed and kept an up-
to-date database on import-export tariffs country by country.

Now, will that be part of your system, and is that still in private
hands, or does the Government have a similar thing? I don’t know
why it should, if it is being done well in the private sector, but I
was just curious. When I saw these data, it reminded me of how
helpful that was for the shipper and the person trying to develop
a strategic niche, shall we say, in a particular country to which he


14

CFO/Admin/APBalutis/LKWesterback/11/25/97
Prepared by: LKWesterback/OBMV/OIPR
e:\itplans\cio\hornresp.wp

cc: OBMI Chron
OIPR Chron
OIPR Subject


32

on the information technology; the rest are basically part-time chief
information officers. A couple questions.

Has this gotten better over the last year? And, second, what
about the 100 smaller agencies? Is that 50 percent also?

Mr. Doparo. Basically, there has been some movement in the
CIO appointment process, but it has been roughly about the same
during the last year. OMB emphasized the fact that it was going
to do a reevaluation after the 1-year anniversary of the act, which
they are in the process of doing. So we have seen some change in
the last year but not much, particularly as it relates to CIO’s that
were also designated chief financial officers.

We recognize that it is difficult to get CIO’s in place fulltime in
the agencies. It took a while when the Chief Financial Officers Act
was passed back in 1990 to accomplish that. But we think that
really has to be focused on. Now, as it relates to the 100 other
agencies, we really do not have a good perspective on exactly where
those agencies are in the process. We have been focusing in on the
largest 24 agencies and departments, but I think it would be a fair
question to ask OMB to provide the subcommittee with this assess-
ment of those smaller agencies.

Mr. Davis of Virginia. OK. Chief information officers, it seems to
me, should report to the agency head. I think that is the only way
they are going to be effective. How many report directly to their
agency head; do you know?

Mr. Doparo. All but 5 of the 27 CIO’s right now report to the
agency head. But it is really a little bit more complicated than that,
because where you have CIO’s that are also CFO’s who are already
reporting to the agency head, they meet that test but do not meet
the other test of multiple responsibilities. And you have at least
four major departments and agencies where that is occurring at
this point in time.

In evaluating CIO organizations, one needs to look at not only
the reporting responsibilities or reporting to the agency head, but
also what’s their breadth of reporting responsibility, as well as
whether or not they have control over the IT functions in the orga-
nizations and enough authority to implement policies and stand-
ards.

We are in the process of developing an evaluation tool whereby
we can look at the effectiveness of CIO organizations and link not
only these management responsibilities, but are we getting a better
outcome in terms of return on investment for IT spending.

Mr. Davis of Virginia. How many of the 27 10's that you've
tracked have backgrounds or strong backgrounds in information
technology?

Mr. Doparo. Basically, I would like to provide the specific num-
ber for the record. Most of the people in the CIO positions have
strong backgrounds in management issues and public policy. Quite
a few have strong backgrounds in IT. Those are particularly the
ones that OMB has felt comfortable with the information. Also,
there is the issue of looking at the combination of the CIO quali-
fications along with the deputy CIO qualifications.

One of the things that we have seen in studying organizations
in the private sector, you can have a blend of talent as long as you
have the right combination of managerial and technical experience.


103

Implementation of the Clinger-Cohen Act, Questions, October 27 03/05/96 9:37 AM Page 2/8

Question 2.

Response 2.

Tt sounds like we have some work ahead of us. My staff thinks we should
ask the Congressional Research Service to collect the legislative constraints
to data sharing. We can certainly do that and see what can be done when
we see their results. Would you be willing to help my staff to make sure
we help, rather, than hurt.

The simple answer is yes, we welcome assistance on the terribly critical
issue of legislative constraints to data sharing. The restrictions can be
compared to the Loch Ness monster, which keeps getting reported but
verifiable sightings do not exist. It is not clear what these data sharing
restrictions specifically are or where they exist. What is known is that
every time data sharing among agencies is proposed, there is an immediate
reaction of “we can’t do that.” It has been a show stopper for integrating
functions and reducing duplication. What we need to do is drain the loch
and find the monster or more likely, show that there is no monster or that it
is not as menacing as the myth it has created. And again, yes, the research
that would tell us what is actually legislated that prevents data sharing
would be helpful.


39

to see better business cases and better rationale for these invest-
ments? An area of particular concern in this regard has been the
lack of good cost information, which is another issue that needs to
be looked at more carefully.

Mr. Davis of Virginia. Let’s talk about the CIO Council. It
sounds like they've accomplished more in their first year than, for
example, the CFO Council did in their first year.

Do you think that is a fair assessment?

Mr. Doparo. It is a little hard to make comparisons. I think the
CIO Council is off to a Bod start. They have a couple of advan-
tages that the CFO’s did not have. For example, the Deputy for
Management at OMB was in place, John Koskinen, at the time
that they were in place. They also had a good model with the CFO
Council to emulate. But there is no detracting from the fact that
the CIO Council is off to a good start. But the real issue is, can
it move forward and really start driving some of the reforms?

It is also important to recognize that the CIO Council really has
no authority. It doesn’t have a legislative underpinning like the
CFO Council, and it is really dependent upon OMB to enforce and
institute requirements. So it needs to give OMB good advice on
what needs to be done, what kind of measures need to be held
where the Government can be held accountable, and then provide

ogress reports on those goals. But it can be a very influential
ody.

Mr. Davis of Virginia. You had mentioned earlier an OMB data
request, their request to the agencies, and the committee staff in-
forms us of the OMB’s Memorandum 97-12. Do you think that the
97-12’s cover all the necessary issues, cover too much, or what is
missing?

Mr. Doparo. It, like the original inquiry, was at a high level and
there were some issues missing. Let me ask Dave to elaborate on
a couple of those.

Mr. McCuure. The 97—12’s, Mr. Davis, focus on the investment
control processes that are in place in the agencies, which is an im-
portant component for us to get information on. And it also dealt
with the backgrounds, qualifications, and the organization of the
Go's in the agencies, and those are a critical piece of Clinger-

ohen.

There are other elements in the implementation of the law that
97-12 doesn’t address, the performance measurement, for example,
and also the integration of the strategic planning process with the
issues of architecture and investment planning for IT. So it is fo-
cusing on two important provisions but not the complete provisions
of Clinger-Cohen.

Mr. Davis of Virginia. Just a couple other questions. As you
know, this subcommittee is responsible for the Results Act. I would
like to know if the CIO has participated in development of the Re-
sults Act strategic plans that we received this past September 30,
and can we expect that they will be participating in the perform-
ance plan and performance reporting requirements of the Results
Act?

Mr. Doparo. One of the things that we have done for various
Members of the Congress is to look at the draft strategic plans and
final strategic plans under the Results Act. And we did not really




64

Questions for the Record
Oversight Hearing on the Implementation of the Clinger-Cohen Act
Alan Balutis, Deputy CIO, Department of Commerce

‘There are other boards that relate to Clinger-Cohen and the CIO Council,
for example, the Information Services Technology Board. Are these boards
composed of the heads of IT? Why are they independent boards instead of
‘subcommittees of the CIO Council?

Executive Order 13011 of July 16, 1996, “Federal Information Technology,”
establishes the Chief information Officers (CIO) Council, the Government
Information Technology Services Board (GITSB), and the Information
Technology Resources Board (ITRB) as independent entities. They perform
complementary functions. The Order identifies CIO's and Deputy CIO's from
specified executive agencies plus two representatives from other agencies as
members of the ClO Council. The chairs of the GITSB and ITRB are also
members of the CIO Council. Two members of the ClO Council serve on the
GITSB. Attachment 1 provides the relevant text from the Executive Order
defining the purpose and functions as well as membership of each board.

Regarding the projects in the October 1997 article “Best IT Practices in the
Federal Government,” what role did the ClOs play in these projects?

Regarding the study itself, the CIO's played a key role in nominating projects for
consideration and in selecting the final twenty projects for inclusion in the
Publication, Most of the projects were initiated before the Clinger-Cohen Act was
passed. Thus, many — if not most — of the agencies did not have CIO's in place
at the time the projects were initiated. For this reason, the study methodology
did not specifically address C1O's and their roles. Some of the case studies do
nonetheless discuss the role of the ClO or ClO-equivalent. For instance, in the
Joint Automated Booking System of the U.S. Department of Justice, the Deputy
Assistant Attorney General for Information Resources Management chairs a
board that provides high level technical and programmatic guidance and that will
ensure the development and national implementation of the system.

Further, the interview process included posing what were referred to as the
“CIO's Questions” about each nominated project. Should the
department/agency be in this business? Should the department/agency be
doing it or can someone else do it better (cheaper)? Were the business
processes reengineered before technology was applied? Thus, the case studies
address key issues that are the responsibility of the CIO or ClO-equivalent.

The analytical chapter of the “Best IT Practices in the Federal Govemment”
provides commentary on the CIO Council and its effectiveness.


M48

* Leadership. There is great value to having important players letting their
vision be known, and that they expect cooperation and assistance in getting it
implemented. We have some of this now, but I am not sure that we are seeing it as
much, as often, or from as many sources, as would be helpful. For its part, the
CIO Council is also in the process of developing a role in this respect, going
beyond maximizing the interests of individual agencies, to taking what I call an
“enterprise” view of government IT management. This view cuts across
organization lines within the government and accepts as our goal acting in well-
coordinated, integrated, and cost-effective fashion as a common enterprise. This
could contribute to some of the agenda and direction-setting leadership that is
needed, although ultimately the driving force for major changes in government
business processes needs to come from the people and organizations who are
responsible for the programs that use the technology, not those who simply
provide it.

‘There is also an ongoing need for an overall plan that establishes,
‘communicates and coordinates our cross-cutting and highest priorities, and
explicitly linking this to agency operating plans. The NPR has made major
contributions in this respect, but more is needed. This could include an overall
strategic IT plan or top-level information architecture for the government, which,
as it tums out, is also an issue that the CIO Council is beginning to deal with.
Beyond this, timetables and accountability for interagency projects are very
important. I am not quite sure where those come from, or in the setting of
volunteer interagency initiatives, what the mechanisms are for setting and
achieving sufficiently aggressive timeframes to appropriately reflect the value of
benefits to be had in the future. The CIO Council is still in initial period of
development and evolution, but it is making some progress in establishing at least
several strategic priorities. Moreover, the work of CIO Council Interoperability
Committee is also supportive. At a recent planning session, the CIO Council
endorsed a specific role for this committee in identifying priority areas for cross-
cutting initiatives. Initiatives have also been undertaken, such as with ITDS, to
Support data standardization, and to take on some of the higher-visibility glitches
‘on the interoperability front, including such mundane, but show-stopping
problems, such as inability to exchange email attachments.

Still, greater enterprise-level perspective and commitment is needed. This
has been an issue in ITDS, going back to the incident I described at the first ITDS
meeting, and it continues today, even at the CIO Council. We are all a part of the
same government, and should be serving the public in a well-coordinated and cost-
effective way. This isn’t always the way we act and look at the world, however,
as we go about our daily work. In many ways, old organization structures are a
problem for all of the players, including not only departments and agencies that do


35

As I recall, Transportation had one of the greatest failures in IT
in this executive branch, and it is only matched by IRS in having
an equally great failure. Both of them blew $4 billion, I believe,
and got nothing for it. So we also need to write the Director of

I am delighted my colleague recognizes what I think a lot of us
are recognizing, that we need a management arm to advise the
President. And I will be putting in legislation shortly on Office of
Management. I will ask my colleague from Virginia to be first to
sign on board.

Speaking of that situation, one question arises in relation to the
CFO parallel; and that is, should there be a Chief Information Offi-
cer in the Executive Office of the President, whether it be in a pro-
posed Office of Management, whether it be in OMB, whatever?
What is the feeling of the GAO on that?

Mr. Doparo. I think in the early discussions of the Clinger-
Cohen Act, there actually was a proposal to create a national CIO
in OMB, and that proposal was dropped along the way.

Mr. Horn. Do we know why it was dropped?

Mr. Doparo. Well, I think the discussion revolved around focus-
ing more of the responsibilities at the ncies at that time, and
that it was important to get the agency CIO’s in place and operat-
ing effectively. There also was an urgent need to pass legislation.
But I think the emphasis at that time was to make sure that we
didn’t send mixed messages to the agencies, that they are primarily
responsible for fixing this problem.

But as the issues have unfolded and as information technology
becomes more and more important and integral in carrying out the
Government’s activities, reexamining that issue has a lot of merit
at this time. I know, from the close involvement that we have had,
having a Comptroller in the Office of Federal Financial Manage-
ment over at OMB focused on CFO activities has made the dif-
ference in moving that legislation along. And I think it would be
quite appropriate to revisit the national CIO issue, looking toward
the future particularly.

Mr. Horn. Given the background you noted in your report, and
your exchange with Mr. Davis on the CIO’s as they are now exist-
ing in some of these agencies, I guess I wonder how they could de-
velop the acquired information technology architecture. What is
your feeling?

Mr. Doparo. That is a really problematic area. We have noted
a lot of problems with architectures both at IRS, FAA, and a num-
ber of other agencies, as well. I think that I'm going to ask Jack
Brock to talk about that as it relates to the Defense Department.
But this is an area where well—well, I'll make a couple points first.
One, that was one of the activities that the CIO Council and OMB
worked on to get out some recent guidance on how to develop good
architecture. So it is a positive development from a council and
OMB standpoint. The negative aspect of it is that it has taken a
long time to be able to do that, and it is going to be difficult for
the agencies to be able to guide these efforts. Second, I was pleased
to gee the CIO Council make this one of their top priorities.

ack.


67

satisfaction, improved data quality, and more timely response were frequent
citations in the case studies. For instance, the Department of Commerce's
Automated Surface Observing Systems, an effort of the National Weather
Service, provides better detection of phenomena, earlier detection of freezing
tain, improved nighttime observations, and greater data consistency. The
Department of Housing and Urban Development reports that the Tenant
Eligibility Verification System reduces fraud and abuse; improvements in the
focus and efficiency of the overall program free personnel to work on other
aspects of the program.

Itis significant to note that the team also observed that, within government, ROI
is a much more complex issue than within commercial entities. See the rationale
offered in the Analytical chapter of the booklet for a more complete discussion.
Additionally, please note that, under the auspices of the CIO Council, another
joint government and industry task force is addressing the issue of ROI.

Consider the earliest stages of these projects. Did they go through the
project selection, capital budgeting, risk assessment and similar
processes envisioned by Clinger-Cohen? Is that why they were
successful?

‘The case studies did not, in general, address formal processes for selection,
control, and evaluation of information technology investments. However, there is
strong evidence of careful selection procedures. All projects are aligned with the
agency's mission. Many cite specific causal factors that led to development of
new systems. For instance, the Department of Interior's Employee Express was
motivated by streamlining within the Personnel Office that reduced personnel
strength from 1500 to 750. The U.S. Department of Agriculture's Field
‘Automation and Information Management System responded to the “Jack-in-the-
Box" food disease outbreak and outbreaks of the ecoli virus in addition to an
increased number of food products and food diseases. Many of the case studies
address reengineering efforts that took place prior to project initiation or as part
of the system development. Frequent mention is made of addressing customer
needs and of taking advantage of existing technology. Taken together, these
elements indicate attention paid to key selection criteria as outlined in the
Clinger-Cohen Act and the Office of Management and Budget's “Raines Rules.”

Do you see the Clinger-Cohen changes increasing the flow of these kinds
of projects?

Yes. Formal selection, control, and evaluation processes to assess the viability
of information technology investments will sort the high value, low risk projects
from those that are less worthwhile or risky. True project tracking and oversight
will allow for course corrections in problem systems before the problems
escalate. In fact, the preparation of materials to present to formal investment


104

Implementation of the Clinger-Cohen Act, Questions, October 27 03/05/98 9:37 AM Page 3/8

Question 3.

Are there any other things Congress can do while I am still feeling
generous?

Response 3. Yes, there are several things Congress can do. We have five suggestions.

Mandate coordination among agencies to enter into agreements to
conduct cross-cutting projects that have clear and efficiencies that can be
documented.

Provide financial incentives for agencies to cooperate on cross-cutting
projects.

Be the catalyst for new personnel reward standards for cross-cutting
activities.

Earmark cross-cutting budgets for special Congressional attention.
Formalize the existence of the ITDS Project as one of the first cross-cut
projects to be authorized. It should be given a specific Congressional
mandate to simplify the government processes for international trade as
well as an annual review. Finally, it should be given a sunset date so it
doesn’t become just another government organization with an endless
life, so that the operational responsibilities for ITDS can be established.


126

-a8-
‘The Board has established an ITDS Project Office to carry out the
day-to-day work of developing the ITDS. The Project Office
currently has sixteen full-time employees, including one detailed
from the U.S. Treasury's Departmental Offices, seven detailed from
the U.S. Customs Service, and one detailed from the Food and Drug
Administration. Occasional assistance from staff of other agencies
is provided as needed.

Structure of the ITDB

Initially, it was envisioned that there would be three principal
tasks to construction of an ITDS: (1) creation of a standard set of
data to satisfy the needs of all users without redundancy,

(2) design of a single point of collection from which data would be
distributed to all agencies requiring them, (3) and design of a
single point for accessing all data collected by the systen,
regardless of where they are stored.

However, as the project developed, participants have taken
advantage of opportunities created by the project to address other
objectives. For example, a module for data on trade in services
will be included in the ITDS, certain processes for clearing trucks
and trains entering the U.S. will be re-engineered to take
advantage of technology being deployed by the Department of
‘Transportation, and data definitions will be developed with an eye


45

Transportation Michael Huerta Associate Deputy Secretary; Director, Office of
Intermodalism

vA* D. Mark Catlett Assistant Secretary for Management

SSA John Dyer Acting Principal Deputy Commissioner

*Denotes those individuals who have dual ClO/Chief Financial Officer responsibilities


87

Mr. Horn. Well, I think you have shown a very well organized
operation in which the chief information officers are all involved
and note under the capital planning and investment assessment.
you have got the qualities and an independent variable, CAIB.

As I recall, the greatest Secretary of State, Dean Acheson, after
he retired, was usually found in the Metropolitan Club with his
cronies, Scotty Preston and Walter Glickman. This was in the fif-
ties and sixties. And one day he huffed and puffed, and the mus-
tache was quivering as he was late for lunch, and he said: “Well,
I was just involved with a young man interviewing me, and you
know what he said? That I’m an independent variable.” So he
might have been from the State University of New York in Buffalo,
which is a very fine institution. But he was a great and sort of hu-
manist in his own writing and never quite confronted the science
world yet, so he might have also been a—I’m not sure.

Anyhow, we thank you for all you are doing on that. We will
have a few questions simply for the record we would like to send
you, and give us some answers.

My one question to you is, to whom do you report in the Depart-
ment of State?

Ms. McCLENAGHAN. I report to the Secretary of State on a day-
to-day basis, I report to the under Secretary of State for Manage-
ment——

Mr. Horn. OK. And do you feel you have sufficient authority
over all of its various systems?

Ms. McCLENAGHAN. Through the investment process, I do, sir.
By the establishment of our IRM Program Board, I have review
and oversight over all the information technology systems in the
Department.

Mr. Horn. Do you see a particular problem with international
systems that connect with you or our embassies when we get to the
year 2000 situation?

Ms. MCCLENAGHAN. At this time, we do not commit to other
international systems except through the telecommunication sys-
tem, sir, and we have kind of a diplomatic telecommunication serv-
ices program send out a cable to all of our embassies and ask them
to review with the telegraph postal systems what that impact
might be.

Mr. Horn. So you are looking at that aspect.

Ms. McCLENAGHAN. Yes, sir.

Mr. Horn. Because, I would think you have possibly major prob-
lems there if you have a purified system and they don’t.

We thank you very much for ‘that very full statement, and we
now move to Anne , the Chief Information Officer of the De-
partment of Agriculture.

Please proceed. You don’t have to read your statement. I prefer
that you look us in the eye and summarize it. The statement is
automatically in the record. Everybody has read it. So if you would,

Pl .

Ms. REED. Thank you, sir.

I would like to recognize my cochair, Dr. Neil Stillman, who has
worked with me through this last year as we first established the
interoperability committee. It was not one of the original commit-
tees that came out of our strategic planning session, though it took


8

you, all of your résumés and your testimony is put in the record
at this point and printed.

What we would like you to do—and, Mr. Dodaro, this is probably
your 500th appearance on Capitol Hill.

Do you ever keep track of them, Gene?

Mr. Doparo. I do.

Mr. Horn. Am I warm? And he knows the routine. And then we
would like you to look us in the eye and summarize them. And that
gives us more time for questions, since I did stay up last night and
read all of the testimony, and I think my colleagues have done the
same.

So go ahead, Mr. Dodaro.

STATEMENT OF GENE DODARO, ASSISTANT COMPTROLLER
GENERAL, ACCOUNTING AND INFORMATION MANAGEMENT
DIVISION, U.S. GENERAL ACCOUNTING OFFICE, ACCOM-
PANIED BY JACK L. BROCK, DIRECTOR, ACCOUNTING AND
INFORMATION MANAGEMENT DIVISION; DAVID McCLURE,
ASSISTANT DIRECTOR, ACCOUNTING AND INFORMATION
MANAGEMENT DIVISION; AND KEITH RHODES, TECHNICAL
DIRECTOR, OFFICE OF THE CHIEF SCIENTIST

Mr. Doparo. Mr. Chairman, Congressman Davis, we are pleased
to be here this morning to talk about the need for strong leadership
in reforming how the Federal Government manages information
technology.

As noted in both your opening statements, dramatic improve-
ments are necessary to reverse the trend of disappointing mod-
ernization efforts that have wasted billions of dollars and failed to
deliver promised benefits.

Basically, we see the legislative framework that has been estab-
lished under the Clinger-Cohen Act and the reforms under the Pa-
perwork Reduction Act as providing the opportunity for needed im-
provements. Both of these legislative actions address the root
causes of the Federal Government’s past problems and usher in
major management improvements that have worked successfully in
leading organizations that have used technology to improve their
performance.

With this legislative framework, the real challenge facing the
Federal Government right now is to implement it successfully. As
noted in your comments, we have seen some progress. But the Fed-
eral Government still has a long way to go to translate these legis-
lative reforms into day-to-day management reality, and achieving
greater progress in this regard is really greatly dependent on effec-
tive leadership.

The legislative framework in the Paperwork Reduction and
Clinger-Cohen Acts note the importance of this leadership. Both of
those acts made it clear that the agency head is responsible di-
rectly for setting goals, monitoring progress, and measuring per-
formance against those goals. Chief information officers were estab-
lished in order to assist the agency head and work with program
managers to find the best way to use information technology to
achieve performance goals.

As noted also in your testimony, the chief information officers
have a wide range of duties and responsibilities. They are to im-


OVERSIGHT OF THE IMPLEMENTATION OF
THE CLINGER-COHEN ACT

MONDAY, OCTOBER 27, 1997

House OF REPRESENTATIVES,
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY,
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT,
Washington, DC.

The subcommittee met, pursuant to notice, at 10 a.m., in room
2154, Rayburn House Office Building, Hon. Stephen Horn (chair-
man of the subcommittee) presiding.

_Present: Representative Horn and Representative Davis of Vir-

nia.
estat present: J. Russell George, staff director and chief counsel;
Robert Alloway and John Hynes, professional staff members; An-
drea Miller, clerk; Matthew Ebert, staff assistant; Mark Stephen-
son, minority professional staff member; and Ellen Rayner, minor-
ity chief clerk.

Mr. Horn. The Subcommittee on Government Management, In-
formation, and Technology will come to order, a quorum being
present.

In the private sector, information technology frequently improves
business products and services. Unfortunately, although the Fed-
eral Government spends over $27 billion each year on information
technology, success stories from this massive investment are few
and far between.

Today’s hearing is the first in an upcoming series of oversight
hearings on the Clinger-Cohen Act of 1996, which is also known as
the Information Technology Management Reform Act. The purpose
of the Clinger-Cohen Act is to ensure that the Federal investment
and information technology is made and used wisely. The law was
designed to increase competition, eliminate burdensome regula-
tions, and help the Government benefit from the efficient private-
sector techniques.

The Clinger-Cohen Act created the statutory position of chief in-
formation officer in major Federal Government agencies. It requires
the Office of Management and Budget, the agencies, and the chief
information officers to improve information technology practices. It
requires mission and program driven strategic planning for infor-
mation technology. It requires senior user management guidance to
ensure information technology activities are aligned with agency
plans and operations. It requires regular assessments of the infor-
mation technology skills inventory, skills requirements, and skills
development program. In short, the Clinger-Cohen Act requires the

@


150
together to take better advantage of all that well-managed information technology
can do for government and the public we serve.

This concludes my prepared remarks. I’d be pleased to respond to any
questions you may have.


42

Mr. BROCK. The three services have CIO’s. They are organized
somewhat differently, and I’m not really prepared to go into how
they are organized in each service. But there are some differences.

One of the problems that the Department of Defense has is, they
have a massive cultural hurdle to get over over there where each
of the three services wants to maintain absolute control over their
individual systems and processes. As a result, it has been exceed-
ingly difficult to integrate across common functions such as depot
maintenance or transportation, functions like that. As a result, it
has been critical that the CIO be placed in a position where that
individual does have the direct attention of the Secretary or the
Deputy Secretary so that action can be taken. It’s virtually impos-
sible for the CIO, acting by himself or herself, to have that sort of
influence.

Mr. Horn. Any other comments on this? I think we’re going to
write a letter. I will be the first to say we’re humble to write the
author of this act a letter. I think it might help to focus things over

ere.

Mr. Doparo. I think the timing would be right, Mr. Chairman.
They are looking at how to effectively implement the Clinger-Cohen
Act in a wide variety of issues. It would be helpful to do that at
this time.

Mr. Horn. Now you know that further down on page 6, one area
that we focused on during the year is CIO’s who have major re-
sponsibilities in addition to information management, and the
Clinger-Cohen Act clearly calls for CIO’s to have information re-
sources management as their primary duty.

Now as I read that, and I marked the marginal lists, I expected
a nice little appendix back here, 1, 2, 3, and 4, A, B, C, D, and E,
Which would tell you who the culprits are based on the summary

ere.

Now do you have that information?

Mr. Doparo. Here is a listing of what we have. The situation
right now is that we have been focusing a lot on evaluating the
year 2000 issues and major modernization efforts at key depart-
ments and bureaus, and we have not really done systematic eval-
uations across departments and agencies.

We know enough, based upon our institutional knowledge, that
we have got a problem here, but we haven’t yet gone in and evalu-
ated the results of each CIO organization. We have been waiting
a little bit until the first year unfolds and people get a chance to
get in place and get their efforts under way.

One thing I’ve learned over the years is, it’s really much more
beneficial to persuade people to make changes in their manage-
ment structure and organization if you can show that the problems
are not being solved and they are not really getting the proper out-
come. So we've had this concern.

I have enumerated the five already that have had the full re-
sponsibilities of the CFO and CIO. We can provide some other ex-
amples, but we don’t have a comprehensive list —

{The information referred to follows:]


161

Let’s see. Mr. Proctor, one of the things that interests me is,
there is now a small agency CIO Council, and how are they doing,
and is your agency represented in that?

Mr. Brocton. T hope so.

Mr. Horn. Do you perceive this as a small agency with tremen-
dous impact?

Mr. Proctor. Well, we have a small agency council, the IRM
Committee, which actually I founded about 10 years ago, and that
continues to this day. We've never succeeded in attracting CIO’s on
a wholesale basis to that, and we continue to kind of try to figure
out how to do something that is aimed for specifically at CIO’s.

I have actually proposed an agenda initiative for the next CIO
Council meeting in November under which nonparticipating CIO’s
and CIO Council would have access to the private part of the
website and selective access to circulations so they can be part of
the collaborative process and brought into that community even
those that don’t go to those meetings.

Mr. Horn. Do most of the regulatory agencies, such as FTC, your
major brothers and sisters from the 19th century up, or really we
Yew from the early part of this century up—do most of them have

's?

Mr. Proctor. We are actually compiling a list, and it appears
that most of the small agencies do have CIO's. There is the range
of assignments that track those at the large agencies that you were
reviewing this morning, but, for the most part, agencies have im-
plemented the position of CIO particularly combined with some
other responsibilities.

Mr. Horn. Now, the Interstate Commerce Commission is no
more, but the Surface Transportation Board is. Is that agency
thinking in terms of a data base that is comfortable for the clien-
tele they serve so they can get answers much more rapidly? Be-
cause that is really what you all are doing; you are enabling the
people that depend on Customs, Immigration, Coast Guard, and all
the other groups to find in one spot a way to advance and help
their business or their concern, which, if we weren’t doing this and
you weren't doing this, it wouldn’t be happening.
ee I think that you have got a very sympathetic clientele out

ere.

Mr. Proctor. We do. And I’m not familiar with what surface
transportation group is doing, but I do know that NPR has taken
the lead a lot in putting a number of websites up and _providin;
people crosscutting access. They are doing this in the phone bool
as well as the Blue Pages. The business advisor function gives pub-
lic, comprehensive access to crosscutting information about what
Federal agencies are doing.

Mr. Horn. Now, will these projects—when they are finished, will
they be asking for their own budget, or will they just simply be
what the agencies are doing through their own budgets? at is
the thinking on that anyway? Will this become a separate budget
item, or will everybody just share their part and it simply is co-
operation?

Mr. Simpson. In the case of the International Trade Data Sys-
tem, there will be certain budget costs that will have to be provided
for in the individual agency budgets, But that will be done as part


73

electronic commerce, law enforcement, environmental protection, national defense, and
health care may be represented on the Services Board to provide a program operations
perspective. Initial selection of members will be made by OMB in consultation with other
agencies as appropriate. The CIO Council may nominate two members. The Services
Board shall recommend new members to OMB for consideration. The Chair will be
elected by the Services Board

Sec. 5. Information Technology Resources Board.

(a) Purpose and Functions. An Information Technology Resources Board
(“Resources Board") is established to provide independent assessments to assist in
the development, acquisition, and management of selected major information systems
and to provide recommendations to agency heads and OMB as appropriate. The
Resources Board shall:

(1) review, at the request of an agency and OMB, specific information systems
proposed or under development and make recommendations to the agency and OMB
regarding the status of systems or next steps;

(2) publicize lessons learned and promising practices based on information
systems reviewed by the Board; and

(3) seek the views of experts from industry, academia, and State and local
governments on matters of concem to the Resources Board, as appropriate.

(b) Membership. The Resources Board shali be composed of individuals from
‘executive branch agencies based on their knowledge of information technology,
program, or acquisition management within Federal agencies. Selection of members
shall be made by OMB in consultation with other agencies as appropriate. The Chair
will be elected by the Resources Board. The Resources Board may call upon the
department or agency whose project is being reviewed, or any other department or
agency to provide knowledgeable representative(s) to the Board whose guidance and
‘expertise will assist in focusing on the primary issue(s) presented by a specific system.



82

CLINGER-COHEN CORE COMPETENCY RECOMMENDATIONS
Approved by the Chief Information Officers Council
February 19, 1997

Recommendation 1: It is recommended that the CIO Council endorse these core competencies
as the baseline for Clinger-Cohen Sec. 5125, pertaining to knowledge, skills and abilities.
Thereafter, the Council would recommend that all federal agencies employ this baseline to assess
learning needs and promulgate corrective remedies for CIOs, other senior management, IM
employees and professionals in functional areas using technology to support their mission.

Recommendation 2; It is recommended that the CIO Council endorse these core competencies
as a baseline tool to assist government agencies in complying with Clinger-Cohen Sec.
5125(CX3X(A): “assess the requirements established for agency personne! regarding knowledge
and skill in information resources management and the adequacy of such requirements for
facilitating the achievement of the performance goals established for information resources
management.”

Recommendation 3: It is recommended that the CIO Council endorse these core competencies
asa baseline for assessing governmentwide knowledge, skills and abilities needed in the IRM
field. To be in compliance with Clinger-Cohen Sec. 5125(CX3XA), all federal agencies would
bbe encouraged to employ these core competencies as a roadmap for human resource planning
and management of C1Os, other senior management, IM employees and professionals in
functional areas using technology to support their mission.

Training Web Sites of Interest

http://www itpolicy.gsa.gov

http://www dtic.mil/e3i/cio/cioedtrg. html
htp.//www.ndu.edu/irme

http://www. fedworld.gov/training (under development)


OVERSIGHT OF THE IMPLEMENTATION OF THE
CLINGER-COHEN ACT

HEARING

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY

OF THE

COMMITTEE ON
GOVERNMENT REFORM
AND OVERSIGHT
HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS
FIRST SESSION

OCTOBER 27, 1997

Serial No. 105-113

Printed for the use of the Committee on Government Reform and Oversight

Se

U.S. GOVERNMENT PRINTING OFFICE
48-384 WASHINGTON : 1998

For sale by the U.S. Government Printing Office
‘Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-057127-8



108

Implementation of the Clinger-Cohen Act, Questions, October 27 (03/05/98 9:37 AM Page 7/8

Question 7. We have talked about cross-cutting projects being rare. What can be done

Response 7.

to make them common place, to generate the hundreds of more cross-
cutting projects that we need?

Let the success of ITDS serve as an example of the value added to the
Government by conducting cross-cutting projects. Every project of this
type that dies creates a dampened environment for upcoming projects.

Itis original thinking at the working-level that inspires such projects, but
its the working-level people who can least afford the career risk of
proposing cross-cutting agency activity. Their risk should be limited to
performance, Having said that, such risk-taking staff do exist and may be
found right here at the ITDS Project Office. Incentives in the personne}
system would be a great asset to the success of cross-cutting projects.

If perspectives could be changed at the department-level as well as the
lower levels to one that is government-wide, cross-cutting projects would
be much easier. This structural change, as well as incentives in the
personnel system, would a great asset to the success of cross-cutting

projects.


131

-u-
Because the data query under the NATAP is made automatically, and
because the receipt of a “hit” from government automated risk
assessment systems cannot be overridden by any inspector,
opportunities for corruption within the border clearance process

are significantly reduced.

‘The NATAP began operation for evaluation purposes on April 1, 1997.
Prototype operations will run through the end of the year. During
this time, evaluation information will be gathered by the three
governments in close cooperation with each other. Evaluation
studies will be released by the individual governments as well as

a trilateral evaluation.

As part of the ITDS initiative, the Board of Directors will review
the results of the NATAP operation to identify successful
applications of these concepts for possible inclusion in ITDs.
Although the ITDS does not currently involve any multi-lateral
efforts at data standardization, the NATAP does provide an
opportunity to assess the benefits - to policy makers, trade
negotiators, analysts, and enforcement agencies - of having trade

data that are standardized with those of key trading partners.

Allow me again to thank you and your colleagues, Mr. Chairman, for
your interest in the International Trade Data System Project, and

for giving us an opportunity to appear here today. I shall be


159

Mr. Horn. It seems to me that on the Legacy system and the
point made by Mr. Proctor on duplication and human resource,
which a number of you have made and others have made. Let’s face
it, government is labor intensive, just like the universities are labor
intensive, and so if the people go with the Legacy system, there are
some savings there.

I remember when we computerized our library to be one of the
best in the country. We went from 35 acquisition librarians down
to 3. We didn’t fire anybody; we made them service librarians. The
result is, we have the best reputation for service in the West. And
you can retrain people to do other useful things, but they aren’t
doing things you can do by automation.

Mr. Procror. Mr. Chairman, if I might just add on that point,
one of the other real benefits that come out of this process that’s
already been demonstrated in some of the prototyping is that you
not only cut the cost of private sector and cut the cost of govern-
ment, you improve the quality of what government is doing in the
way of enforcement.

Tf you are actually collecting the data in a way that you can com-
pare what you are getting because it is a single filing, you elimi-
nate the possibility of the Government being gamed where one im-
porter will tell you that the source of origin was country X because
you're trying to get around an FDA prohibition on something and
they tell Customs something else because of tariff. You actually im-
prove the quality, as well, and there is an untold benefit to that
as well, which you need to add to the calculus here.

Mr. Horn. That might be part of what the CIO Council will be
doing. What kind of retraining courses can we possibly salvage peo-

le that have been involved and updating and merging areas, not
leclining areas?

Now, the estimate of about 2 million hours per year paperwork
burden on the private sector is sitting in some of the testimony.
Does that mean we also have about 2 million hours per year for
Federal agencies on, do I dare use the word, “keypunching” those
data at $50 an hour fully loaded? That is $100 million for just the
first 2 million hours, not counting reading these forms, storing
them, all the rest.

Are we really looking at hundreds of millions of dollars in agency
savings?

Mr. Simpson. Some of this data, Mr. Chairman, come in elec-
tronically, in a form that makes them immediately subject to ma-
nipulation electronically. But many of them don’t. Many agencies
continue to collect paper forms, and even those agencies that have
the capability to collect data or receive data electronically at this
point can’t compel it and, frankly, don’t always have a very wide
participation in this.

One of the reasons for that—and it is a reason I mentioned ear-
lier—is that the systems are set up so that data can be transmitted
over only value-added networks, to which only the large businesses
have access or, in the case of Customs, which dedicated Customs
brokers have access. We want to make this system open to Internet
transmissions so that we can increase the rate of electronic trans-
mission of data. We think that will drive down the cost of data
transcription, keypunching, substantially.




109

Implementation of the Clinger-Cohen Act, Questions, October 27 03/08/98 9:37 AM Page 8/8

Question 8.

Response 8.

Iwas generous at least with offers of Congressional help. I might as well
be equally generous with OMB. What can OMB do, not so much on this
project, but on this type of project to increase the supply and success?

Unfortunately, OMB suffers from the same organizational (vs. functional)
emphasis of much of government. As a result, endorsement and support
must come from upper management. Without it, no new project will
succeed.

OMB’s comparative advantage is in encouraging interagency cooperation.
Unfortunately, OMB examiners are usually rewarded for success with their
own accounts (i.e., organizations), seldom for addressing cross-cutting
issues. Thus, there is opportunity for improvement and a potential
catalyst for cross-cutting projects.


30

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


89

this is the first time that anyone has captured in one place all of
the reference to all of the organizations which are engaged in
standard setting. That will be web enabled, and we will make it
possible for people to go into our site and link to any of those
standard organizations so that we can have a useful tool for us to
use as we move toward common standards working in tandem with
industry as industry is moving into common standards.

So I think this is an important piece of work that you should look
forward to seeing in the near future.

Now we do like to focus on desk practices and some of our—in
each of our meetings, we do try to have a presentation from an or-
ganization that talks about something that they have done that has
worked well for them in the area of interoperability, data manage-
ment, and how that might be applied across government.

Mr. Chairman, I'll let my opening remarks conclude at this point,
and I will let you know also that part of my written testimony I
have provided some reflections on what kinds of progress we've
made in the Department of Agriculture, and in many cases I have
used quite effectively the work of the CIO Council to support what
it is that we are doing at the Department of Agriculture.

Thank you sir.

[The prepared statement of Ms. Reed follows:]


CAPITAL PLANNING COMPETENCIES

IT Performance Assessment: Models and methods
- GPRA and IT: Measuring the business value of IT
~ Monitoring and measuring new system development: When and how to “pull the plug” on
new systems
- Effective project/program management
- Measuring IT success: practical and impractical approaches
- Processes and tools for creating, administering and analyzing survey questionnaires
- Techniques for defining and selecting effective performance measures
- Examples of defining and criteria for performance evaluation
~ Managing IT reviews and oversight processes

Capital Planning and Investment Assessment
~ Best practices
- Best value cost-technical tradeoff analysis.
- Cost benefit, economic, and risk analysis
~ Risk management - models and methods
- Weighing benefits of alternative IT investments
~ Capital investment analysis - models and methods
~ Business case analysis
- Integrating performance with mission and budget process
- Investment review process
~ Cost as an independent variable (CAIV)
- Managing IT reviews and oversight process

CHANGE MANAGEMENT COMPETENCIES

- Techniques/models of organizational development and change
= Techniques/models of process management and control
- Business process redesign/reengineering models and methods
- Process quality improvement models and methods
-building techniques
" Personnel performance management techniques

MANAGERIAL/TECHNICAL COMPETENCIES

Professional Development and Training
~ Defining roles, skill sets, and responsibilities of Senior IRM Officials, CIO, IRM staff and
stakeholders

- Methods for building federal IT management and technical staff expertise
- Competency testing -- standards, certification, and performance assessment


12

and the Clinger-Cohen Act of 1996. These reforms encompass many important elements
identified in our best practices work, such as establishing more disciplined information
technology investment control processes, developing an overall information architecture,
and defining measures to show how information technology is contributing to improved
program performance.

Central to implementing these reforms is the need to establish effective leadership at
each agency. Under the law, agency heads are directly responsible for effective
information management, but CIOs play a critical leadership role in driving reforms to
help control systems development risks, better manage technology spending, and succeed
in achieving real, measurable improvements in agency performance. Furthermore, the
agency ClOs, working collectively as a Council, have a critical leadership role to play in
addressing governmentwide technology issues and advising the Office of Management and
Budget (OMB) on policies and standards needed to successfully implement legislative
reforms.

The challenge facing the federal government today is to provide the type of leadership
needed to implement information technology reforms as rapidly as possible. Although we
are beginning to see some progress, agencies still have a long way to go to translate
legislative mandates into day-to-day management reality. ‘The following sections offer our
observations on the status of efforts to promote effective CIO leadership and the
challenges and opportunities faced by the CIO Council. Our views are based not only on
our work in the technology area, but also on our experiences in evaluating the
implementation of other major management reforms, such as the Chief Financial Officers
(CFO) Act of 1990 and the Government Performance and Results Act (Results Act) of
1993,


4

‘Statement of Alan P. Balutis
Director, Office of Budget, Management and Information and
Deputy Chief Information Officer
U.S. Department of Commerce
and

Chair, ClO Council Outreach Committee
before
‘The Honorable Stephen Horn
Chairman of the House Subcommittee on
Government Management, Information and Technology
October 27, 1997

‘Thank you, Mr. Chairman, for the opportunity to discuss the activities of the Chief
Information Officers Council.

Executive Order 13011, “Federal information Technology,” establishes a Chief
Information Officers Council (CIO Council) as the principal interagency forum to
improve agency practices on such matters as the design, modemization, use, sharing,
‘and performance of agency information resources. The Order specifies that the Council
shall:

» develop recommendations for overall Federal information technology
management policy, procedures, and standards;

» ‘share experiences, ideas, and promising practices, including work process
redesign and the development of performance measures, to improve the
management of information resources;

>» identify opportunities, make recommendations for, and sponsor cooperation in
using information resources;

> assess and address the hiring, training, classification, and professional
development needs of the Federal Government with respect to information
resources management;

>» make recommendations and provide advice to appropriate executive agencies
and organizations, including advice to the Office of Management and Budget
(OMB) on the Governmentwide strategic plan required by the Paperwork
Reduction Act of 1995; and

» seek the views of the Chief Financial Officers Council, Government Information
Technology Services Board, Information Technology Resources Board, Federal
Procurement Council, industry, academia, and State and local governments on
matters of concern to the Council as appropriate.


96

Ms. REED. You should ask that question of the chief financial of-
ficer. Let me give you that for the record. It is more than we should

ve.

{The information referred to follows:]


15

Mr. Horn. We will move on to Chief Information Officer
McClenaghan from the Department of State.

Welcome.

Ms. MCCLENAGHAN. Good morning. Thank you, Mr. Chairman.

T am Eliza McClenaghan, chief information officer of the Depart-
ment of State. I’m here today in my role as chair of the CIO Coun-
cil Education and Training Committee. Other members of the com-
mittee include representatives from the CIO organizations of the
Departments of Agriculture, Education, Energy, Defense, Justice,
Labor, Treasury, the Environmental Protection Agency, the Na-
tional Science Foundation, the Nuclear Regulatory Commission, the
Office of Management and Budget, and the General Accounting Of-
ice,

As Alan mentioned to you earlier, the CIO Council was formally
established in August 1996, but shortly before it took effect we had
an interagency CIO working group, and Mr. Koskinen asked us to
establish an education and training committee. And immediately
upon the CIO Council's institutionalization, we embraced this com-
mittee in its organizational structure.

We were prompted to do. so for a number of reasons. One is, the
legislative history of the Clinger-Cohen Act puts an emphasis on
the development of the well-trained corps of professional Federal
Government information resource managers; second, explicitly lev-
els on the CIO the responsibilities related to work force planning
and the strategic planning and performance evaluation processes.

CIO’s must annually evaluate whether their agencies have estab-
lished the appropriate knowledge, skills, and abilities required to
achieve information resource management performance goals.
Thereafter, we must assess whether agencies, first of all, meet
those requirements and, if they don’t, develop strategies for hiring,
training, and professional development. And, finally, we must re-
port to the agency head on the progress on improving information
resource management capabilities.

Third, the CIO’s knew from our own experience in the public and
private sector that successful development and deployment of infor-
mation technology strategies in an area of rapid technology obsoles-
cence and tight budgets requires cognitive, highly skilled informa-
tion resource management practitioners at all organizational levels.

This committee would offer an opportunity for Federal officials to
collaborate on finding practical solutions to their common needs.
Our mission has been to provide recommendations to the CIO
Council on the whole education and training matters as identified
in the Clinger-Cohen Act. As a general proposition, current work
is focused on identifying problems for information resource man-
agement and practitioners in identifying, promoting, career devel-
opment opportunities.

Let me summarize quickly some of our work in three areas.

In February, the CIO Council did approve our identification of
Clinger-Cohen core competencies which we would use in our work
force planning efforts, and we’ve attached that for the record.
These planned competencies cover the Federal IRM requirement,
capital planning, change management, and professional develop-
ment. Within each of these broad areas specific subjects and busi-
ness practices are identified.


36

Mr. Brock. Thank you. One of the aspects of an architecture,
there are two parts of it, a logical and a technical. So it is a shared
ownership within an agency. logical architecture really defines
your business processes and that, of course, has to be defined by
the chief operating officer of the agency. And if the logical architec-
ture is not well-developed, and it is almost impossible to develop
a technical architecture that supports it, so a key problem we found
in many agencies is they don’t really have a good understanding
of how their business works and about how various business proc-
esses fit together.

The nice thing about knowing how your business processes fit to-
gether is it gives you an opportunit right away to reengineer or
to make other efforts to m: your business operations more effi-
cient. Then below that, or in conjunction with that, is the technical
architecture, which really defines the standards that need to be in
place. In other words, how are you going to communicate, share in-
formation and make the systems work to in fact support the logical
architecture to support the business processes?

I think what we found in DOD over the years is they have a good.
technical architecture. What we're finding, though, as we look at
individual systems that are coming in for approval, is that many

them are not scrubbed to see if the architecture, the technical
architecture is in fact in compliance with the overall agency archi-
tecture, if it is supporting the business processes or not. So, in part,
they have a good paper process but it is not followed very well in
practice. And the result of that is you have systems that don’t com-
municate well, you have duplicative systems, you have a lot of
overlap, and ultimately, I think you’re wasting a lot of money.

Mr. Doparo. One of the parallel issues, Mr. Chairman, in addi-
tion to developing the architectures, is the CIO’s having the au-
thority to enforce them once they are developed. We are about
ready to release a report at IRS, for example, where we give them
credit for developing, making good strides in developing an archi-
tecture. They are still not complete. They know it and, they think
they are working on it, but the CIO really doesn’t have the author-
ity to enforce the architecture once it is developed. And that issue
is at the root of our recommendations to FAA, as well.

Mr. Horn. Let’s take FAA, ‘Transportation, as an example. As I
recall, Gene, a couple of years ago, I think it might have been the
NPR, they discovered there were 33 or 35 layers between the con-
troller in the Los Angeles tower and the Secretary of Transpor-
tation, if you had to go through all those layers.

Now, I gather here you’ve got a CIO that, in essence, doesn’t
really have control over the systems that are in that agency. And
he or she can have all the great ideas they want, but they are
being held very responsible for something where they do not have
the authority. How would you explain that, and what should we do
about it?

Mr. Doparo. We have issued several reports on FAA recently.
One report we looked at their software acquisition capability and
we reviewed some of their major projects. Keith led that work, and
Til let him elaborate on it.

But what we found, using the criteria established by the Soft-
ware Engineering Institute, is that those processes had a lot of


48

STATEMENTS OF ALAN P. BALUTIS, DEPUTY CHIEF INFORMA-
TION OFFICER, DEPARTMENT OF COMMERCE; LIZA
McCLENAGHAN, CHIEF INFORMATION OFFICER, DEPART-
MENT OF STATE; AND ANNE REED, CHIEF INFORMATION OF-
FICER, DEPARTMENT OF AGRICULTURE

Mr. BaLuTis. Thank you, Mr. Chairman, for the opportunity to
appear here before you this morning and discuss the activities of
the Chief Information Officers Council.

The Council was established by Executive Order 13011 on Fed-
eral information technology which created it as the principal inter-
agency forum to improve agency practices and also laid out its role
in the design, modernization, use, sharing, and performance of
agency information resources.

‘We held our very first strategic planning retreat just a little over
a year or so ago on October 28, 1996. We did so at the IRM College,
which is part of the National Defense University in Fort McNair.
The purpose of the retreat was not just to share ideas but to, in
fact, produce focused, specific, action-oriented strategic plans.

We had the benefit of the experience of the CFO Council as it
had been institutionalized, and we learned from that experience
that it was important to move out quickly, to be able to provide
some interim, perhaps albeit modest but nonetheless helpful steps
to respond to the question: “What difference did this legislation
make and what is the CIO Council doing?”

From the 10 working groups that made up that offsite planning
retreat, we produced a total of 51 recommendations, and at the
very next meeting of the council we went through a rating and
ranking procedure to rate all of them on ease or difficulty of imple-
mentation and high or low payoff.

We then moved out to begin to take action on those where we
had identified some payoff, where there was some ease of imple-
mentation. This is the proverbial low hanging fruit for which all of
us are eternally searching, and I think we have made substantial
progress in implementing that action plan and in organizing our
operations.

We have, as has been noted, structured the Council, set our ad-
ministrative Procedures, and created a committee structure. We
have endorsed major changes to the Federal acquisition regulations
that enhance the overall goal of the Clinger-Cohen Act by stream-
lining the acquisition process.

We have worked very closely with OMB to produce first a draft
capital programing guide which we took back after being reviewed
by all members of the Council and then took back to our own agen-
cies to ensure it was reviewed by senior IRM officials, budget offi-
cers, and interested and involved program managers. We issued
that guide in July, 1997 as a basic reference manual on capital as-
sets and provided guidance in the areas of planning, budgeting, fi-
nancial management, financial control, and acquisition manage-
ment.

We have established not only a working relationship at the
Council level with the CFO Council, but Joe Thompson from the
General Services Administration, who chairs our capital planning
and investment committee, has had a series of meetings with his


117

We look for a driver who just appears to be out of the ordinary or
appears to be nervous; we look for something about the truck that
suggests that it might be dangerous from a highway safety point
of view; we look for new weld marks on the trailer that suggest
that perhaps someone has installed a false compartment. That is
what we want the inspector to do. Instead, under today’s environ-
ment, he has his face down over a keyboard and we are not able
to use him the way we would like.

So one of the benefits we get out of an International Trade Data
System and the North American trade prototype is not only that
we get economies in terms of the reporting burden we impose on
the international trade community, but we are able to utilize that
information much more effectively for enforcement of all of those
laws at the border.

The prototype that I am describing takes advantage of some
technologies that are being deployed by the Department of Trans-
portation under its CVIS program; that is, commercial vehicle in-
telligence systems network. The Department of Transportation cre-
ated this program to help State highway authorities enforce their
safety and revenue laws. Basically, today, when the State highway
department opens up the weigh scales on any highway in the coun-
try, within a few minutes a line forms.

Using transponder technology that is now becoming feasible, it is
possible for the States to install a reader on the highway and to

jetect each truck that passes by, which will have a transponder on
board, and to know immediately whether that truck has a history
of running overweight, running with bad tires, running with bad
brakes, or not paying its road taxes.

We can use that same technology at the border to identify trucks
that are arriving from Mexico and Canada, and because we have
all of the information about that truck, about the driver of the
truck, and about the cargo inside the truck, in advance, when the
truck arrives and we detect its presence because of the transponder
on board, the electronic record that corresponds to that truck can
immediately be presented on the screen in front of the inspector.
We think this is a significant improvement over the system we
have in place today.

We have taken this process, this whole process, one step farther.
If it makes sense for U.S. Government agencies to terminate the
duplicative data collection systems they have in place and to put
all of their data needs into a single data set, it also makes sense
for the United States to do that with its major trading partners.

What happens today is that, on one end of the bridge, the Mexi-
can Customs Administration collects a set of data from the driver;
a 100 yards later, the U.S. Customs Service collects almost exactly
those same data. And there is no reason for it.

When we have looked at this and looked at the data being col-
lected by our trading partners, it has become apparent to us that
there is a tremendous amount of overlap. There are some dif-
ferences any way the data elements are defined, but, by and large,
we think it is possible to negotiate with our trading partners a sin-
gle data set that will serve not only as export documentation but
as import documentation. And on the basis of that theory, we are
now negotiating with the G-7 countries to create a standard set of


53

I would just say as an aside, sir, that I would respectfully dis-
agree with Mr. Dodaro’s statement that we are dependent on OMB
for our success. I think, in fact, we are dependent on ourselves as
CIO’s and deputy CIO’s who have been created by this act of Con-
gress to change the way we do business, not only in our own agen-
cies, but also collectively through the work of the Council.

And if I may be allowed one personal aside, sir, last night, in-
stead of reading testimony, I searched through my library, al-
though I say in vain, for one of your works as a political scientist
in the University of California system, because I did read your
work on legislative processes and systems while I served as a mere
lowly assistant professor in political science at the State University
of New York at Buffalo.

So I’m very pleased to be here this morning not only to testify
before—although he’s now left us—the Congressman who rep-
resents the Commonwealth of Virginia, but also before someone
who has made a successful transition from the life of studying gov-
ernment and politics to a life of practicing government and politics.

So thank you for the opportunity to appear before you this morn-
ing, Mr. Horn.

[NoTE.—The publication entitled, “Best IT Practices in the Fed-
eral Government,” may be found in subcommittee files.]

[The prepared statement of Mr. Balutis follows:]


138

Mr. Horn. Well, thank you, Mr. Cronin. We appreciate that in-
sight.

r. Proctor is the Chief Information Officer for the Federal
Trade Commission, and his testimony describes him as former
champion, In‘ernational Trade Data System initiative. Are we
going to create a special either civil service or senior civil service
former champion? I take it you are a continuing champion.

Mr. Proctor. I am also a continuing champion. We also have
two champions now, I guess one who is official and one who started
with the project. But a lot of things like this project actually have
been kind of a little bit seat-of-the-pants, ad hoc, and skunk work,
which is actually one of the reasons why I think we have made the
progress we have. So that was a fitting beginning of my prepared
statement, and I too will be brief.

I am the former GITS champion and ongoing champion. I also
was reminded to mention that although I am CIO of the Federal
Trade Commission, my role here has absolutely nothing to do with
the FTC and I don’t speak for them.

I was also here this morning, as you may know, as a CIO observ-
ing your hearings, and I was most interested. I think you covered
a lot of interesting, pertinent, and important issues, and I was
struck, I guess, by the wisdom in some ways of pairing your inves-
tigation this afternoon of this particular initiative with the subjects
that you were looking at this morning. Because ITDS does, as a
matter of fact, represent a lot of independents bureaucratically in
the day-to-day of this, and although FTC doesn’t have very much
to do with international trade, it is still a very important example
of what we can and should be doing, and in many respects are not
doing as much as we should, as you noted this morning.

l have at least 10 years, as my prepared remarks note, of experi-
ence in early permutations of the Federal IRM Government infor-
mation technologies working group, 2,000, et cetera, and I can tell
you from my perspective as an individual agency CIO, as GITS
champion here, and as a taxpayer, the CIO Council really reflects
not only the latest but the best effort that has been made to date.
I give Congress a lot of credit and the people who are working with
it now a lot of credit for putting something in place that is not yet
there, as the testimony this morning suggested, but certainly it is
making contributions. In fact, it is making contributions right on
this project, which is kind of the interesting connection.

As I approach the work of the CIO Council and ITDS, it seems
to me one of the kind of hallmark principles of this endeavor is
that we, all of us, need to rise above our individual, very much
agency-oriented roles, and take a truly enterprise perspective.
What is it taxpayers are looking for from us as a government to
provide here? What is it we as a supposedly integrated, unified, co-
ordinated Government are trying to do? And to really start with
that vision at the very beginning.

And that of course in a lot of respects is what is embedded in
Clinger-Cohen: Hey, don’t tell me about your systems, don’t tell me
about the data elements and stuff, as GAO talked about this morn-
ing; let us talk about this logical view of what we are trying to do
here, and that means business processes. Frankly, although it is
interesting that Customs collects this and Treasury or INS collects


49

counterpart on the CFO Council to discuss the capital planning
methodologies and development of performance measures.

The Council has formed five standing committees. I chair one of
those, the committee on outreach. Two of my colleagues are here,
and we'll hear from them momentarily on their responsibilities.

Let me cover briefly the work of the two others who aren’t
present: Kathy Adams, the CIO, Social Security Administration,
who chairs the year 2000 committee, a matter that I know this
committee has more than passing knowledge of. Kathy, in addition
to the great work she has done at the Social Security Administra-
tion, has conducted monthly meetings as a forum to share informa-
tion on cross-cutting issues relating to the year 2000.

We have established nine subgroups. One of those focuses on
State issues, and I’m very happy to say that later this week a num-
ber of us and members of our staff will be going up to Pittsburgh
to participate in a session with our State and local government
counterparts on the year 2000 problem.

We have developed a best practices document, published two
pamphlets, and worked with the Office of Federal Procurement Pol-
icy to ensure that there is standard language which has been pub-
lished and incorporated in the Federal acquisition regulation on
contracts solicitation and year 2000 compliance. We developed a
data base of information, which has since been transferred from
the committee to the General Services Administration, on commer-
cial, off-the-shelf products, so that we are not relying solely on the
claims of vendors or sales people who say they have produced year
2000 complaint products, but have an inventory of subproducts
that have been certified by this subcommittee’s work.

Mr. Horn. Let me ask you this on that point, because that is a
very important point.

Our understanding a year ago was that GSA would look at the
software that was up for acquisition by Federal purchasers to make
sure that it was year 2000 compliant. Then I learned they haven’t
really been doing that. Am I wrong? Or are they doing it?

Mr. BALuTIs. It’s been done by this committee of the council. We
have produced that data base, and we have transferred that data
base to the General Services Administration. They will operate it,
they will maintain it, and it will be available through them.

So it was done by the council. GSA participated in that, but the
committee, chaired by Kathy Adams, had that effort.

Mr. Horn. Who is considered to be responsible for assuring that
it is year 2000 compliant? Is it GSA? Is it the agency purchasing
the software, or even hardware, or what?

Mr. BaLuTis. My understanding, sir—and I'll double check this
matter and make it part of my response for the record—is that that
certification was done by the staff, largely working for Ms. Adams
and the Social Security Administration, aided by other interagency
personnel. They have made the certification, and that is part of the
data base now that will be maintained, I understand, by the Gen-
eral Services Administration staff, so that when it’s checked by IT
professionals or procurement staff at the individual agencies, they
will rely first on that data base since theyre——

Mr. Horn. Well, that is good news, I guess. But I get perturbed,
shall I say, when the Agency for International Development told us


78

Statement of Eliza McClenaghan
Chair, CIO Council Committee on Education and Training
before the
‘Subcommittee on Government Management, Information and Technology
of the Committee on Government Reform and Oversight
U.S, House of Representatives

‘October 27, 1997

Thank you, Mr. Chairman. I am Eliza MoClenaghan, Chief Information Officer of the
Department of State, I am also the Chair of the CIO Council Committee on Education
and Training. The other members of the Committee include representatives from the
CIO organizations at the Departments of Agriculture, Education, Energy, Defense,
Justice, Labor and Treasury, the Environmental Protection Agency, the National Science
Foundation, the Nuclear Regulatory Agency, the Office of Management and Budget, and

members. Nonetheless, I believe they will agree with the general thrust of my remarks.
Background

‘The ClO Council was formally established in August 1996, shortly after the Clinger-
Coben Act took effect. An inter-agency CIO working group that had been meeting to
prepare for implementation of the legislation had set up an Education and Training
Committee, and the Council placed the group within its ambit. It was prompted to do #0
for several reasons.

First, the legislative history of the Clinger-Cohen Act cites the need for action to provide
for the development of a well-trained corps of professional federal government
information resources managers.

‘Second, the Act explicitly levies responsibilities on Chief Information Officers relating to
work force management. As part of the strategic planning and performance evaluation
process, CIOs must annually assess whether agencies have established appropriate
knowledge and skill requirements to facilitate achievement of information resources
management performance goals. They must thereafter assess whether agency personnel
meet those requirements. If they don’t, CIOs must develop strategies and specific plans
for hiring, training, and professional development. Finally, ClOs must report to the
head of agency on progress in improving information resources management capability.

‘Third, the CIOs knew from their own prior experience in government and industry that
the successful development and deployment of information technology strategies, in an
era of rapid technological obsolescence and tight budgets, required a cadre of highly

skilled information resources management practitioners at all organizational levels. The


88

us no small amount of time to realize that there wasn’t need for
a committee to focus on issues of interoperability as we kept bump-
ing into opportunities in that area.

over the last year, actually 8 months, that we have been in
operation, we did develop a charter. I think the charter, my testi-
mony laid out pretty succinctly what the scope of the responsibility
is, but suffice it to say that we have focused on architectural issues
and on issues with respect to standards, how we might work across
the Government to be more efficient and more effective and how in-
formation is managed.

The architecture task force, one of our first efforts, did support
the development of the OMB guide to architecture. Of course, this
is an area where we continue to work. We understand very keenly
the importance of it. We also are keenly aware of the complexity
of an architecture—speaking for myself—the Department of i-
culture, we have diversity of the interest and responsibilities.
That’s something we work very hard in understanding, how the ar-
chitecture can best support those diverse interests. en you take
that governmentwide, there is another order of magnitude, but I’ve
been very pleased with the dedication of the individuals who have
worked on that.

In the standards task force we are looking at maybe some sim-
pler measures but things that do make a difference. One, we re-
cently identified a common best practice on how to keep computer
clocks accurately set. It may sound like a fairly small matter, but
in fact it has a tremendous impact for security, for one.

I think if you followed the activities of some of the departments,
where they Tave tried to deal with security breaches, one of the
most important aspects of discovery is the understanding of timing
of events. Additionally, in the area of electronic commerce it be-
comes important that the date be consistent. So while it might
seem a small matter, it is one that we think will have real benefit
to people.

More recently in our strategic planning session, there was a very
strong interest among the CIOs in our tackling the issue of e-mail
interoperability. I think there is perhaps no single other day-to-day
issue that causes more frustration for more people than the ability
to possibly transmit attachments through e-mail, because there are
so many different systems that don’t connect very easily.

So we have committed in the next year to putting together a very
serious task force to, one, understand more precisely what versions
of systems are interoperable, what technical work around some of
our colleagues may have found to achieve interoperability than oth-
ers that are less known and where that does not work, making it
very, very clear to industry our need for this capacity across the
Government. So I would expect a year from now to be able to use
some degree of progress hopefully in that ect.

I would like also to tell you specifically about the work that we
have done in interacting with industry. The Industry Advisory
Council has established a companion working group to ours. The
chair of that group does participate in our meetings, and they have
undertaken some independent work efforts on our behalf.

The most recent of those is the development of a draft informa-
tion systems interoperability reference guide. To our knowledge,


43

‘The first list indicates ClOs that have information management as their primary
responsibility. The second list indicates ClOs that have responsibilities in addition to
information management. ‘This information is current as of October 27, 1997, although we
understand that some changes are forthcoming.’

A. CIOs with Information Resources Management as Primary Responsibility (12
total)

Agency Name

Agriculture Anne Reed cio

Energy Woody Hall Deputy Assistant Secretary for Information
Management and CIO

HUD Steve Yohai ClO and Director, Office of Information
Technology

Interior Don Lasher CIO and Director, Office of Information
Resources Management

State Eliza McClenaghan CIO

Treasury James Flyzik Deputy Assistant Secretary (Information Systems)
and CIO

FEMA G. Clay Hollister Executive Associate Director, Information
Technology Services Directorate

GSA Joe Thompson clo

NASA Lee Holcomb clo

1As of November 19, 1997, changes were made or announced at 4 of the 27 CIO agencies.
Specifically, the individuals listed for State, Housing and Urban Development, and
Defense are no longer in the CIO positions, and the CIO at the General Services
Administration announced that he will leave his position at the end of 1997.

1


129

-aul-
to develop a full estimate of reduction in public reporting burden
that could result from an ITDS, the Project Office, in cooperation
with the Office of Managemetn and Budget, will gather and analyze
data on file in OMB's Docket Library about the forms currently

approved for collection of international trade data.

‘The North American Trade Automation Prototype (MATAP)

The first prototype developed to test ITDS concepts is the North
Americon Trade Automation Prototype, or NATAP. ‘The NATAP is an
international project developed trilaterally by Canada, Mexico, and

the United States. The key features of NATAP are:

- use of an international electronic me:

ge standard
(UN/EDIFACT) ,

- use of standard commercial data,

use of standardized data for processing both imports and
exports,

use of this standard data to meet the needs of multiple

federal and local agencies,

- use of the Internet for sending data, and


113

Unformunately, there are all too few cross-cutting projects actually being
developed. We need to help this and similar projects start-up and succeed. Let us use
this particular project as an exemplar; an oppormunity for lessons learned. What needs
to be done? In particular, what can Congress do?

This afternoon we will hear from:

John P. Simpson, Deputy Assistant Secretary of Treasury for Regulatory, Tariff, and
Trade Enforcement

Michael D. Cronin, Assistant Commissioner of Inspection, Immigration and
Naturalization Service

Robert W. Ehinger, Director, ITDS Project Office, Deparment of Treasury
‘Alan Proctor, Chief Information Officer, Federal Trade Commission


122

-4-
In September of 1995, in connection with a report of the National
Re-invention Project, Vice President Gore directed federal agencies
to work together to create an integrated International Trade Data
System (ITDS). ITDS will be a coordinated, government-wide system
for the collection, use, and dissemination of information related
to commerce across our national borders. The International Trade
Data System (ITDS) will include information about cargoes, the
conveyances in which they are transported, and where applicable,
the personnel involved in the transportation of goods (to support
enforcement of immigration laws). The system will also be designed
to accommodate the eventual inclusion of data on certain aspects of
non-goods trad

specifically, trade in servic

Goals and Objectives

The goal of the ITDS is to implement a government-wide integrated
system that meets the data needs of all users, reduces the
reporting burden on the public through elimination of duplicative
collection, and enables data providers and users to transmit and
obtain all data electronically. The following steps will be taken
to achieve this goal:

© Standardization of data element names, definitions, and

formats;


127

-9-
toward the possibility of future harmonization of U.S. trade data

with data collected by our major trading partners.

The ITDS will not take over the data analysis functions of
agencies; it will simply serve as a conduit for getting data to
those agencies and enabling users to obtain data and data analyses

through a single point of acce: The system will be developed

using open systems architectures, to encourage innovation by
private sector systems developers and to assure competition in the
development of systems for interfacing with the ITDS.

Standardisation of Product Codes

Several agencies have developed unique coding and nomenclature
systems for products subject to their regulatory authority. In
April 1997 a working group was formed to undertake an evaluation of
product codes in use at several agencies in order to develop a
single standard for inclusion in the data set. Agencies involved
are the Food and Drug Administration, the Department of
Agriculture, the Bureau of the Census, the Fish and Wildlife
Service, the Consumer Product Safety Commission, the National
Marine Fisheries Service, the Customs Service, the Bureau of
Alcohol, Tobacco, and Firearms, and the Environmental Protection
Agency.

Identification of Legal Changes weeded to Implement the ITDS


151

Mr. Horn. Well, we appreciate you coming back into the pit and
the firing and all of this, because you have raised some very good
questions which I will pass on here to Secretary Simpson.

How do we plan to get closure on this, and by what authority do
you see that happening? Individual Cabinet officers signing off?
OMB being the one that signs off in some way? What is the think-
ing about this?

Mr. Simpson. Mr. Chairman, we are engaged in what I am going
to call the toe-in-the-water stage of this process. The Vice President
gave us a mandate to design the system, not to develop it and im-
plement it. However, on the basis of the work that we have been
able to get done in the first year, I think there is a consensus, at
least among the agencies represented on the Board of Directors,
that we should move forward to develop a system and to deploy it.

I do believe that that sort of a step, which requires every agency
to prepare legislation, to convert from the old system to the new
system, to terminate the old reporting requirements and to accom-
modate data sharing in the new system, that requires them over
time to adjust their Legacy systems to a new format—I think that
sort of transition will only come about if it receives a fairly high
level of political mandate, either from the Vice President or from
the Congress. And at the risk of appearing to be hesitant, certainly
in comparison to Alan, I guess I am perhaps more prudent. I do
think we need sort of a mandate before we can go ahead with any
assurance that people are going to fall in line behind us.

Mr. Horn. I have wondered, and I really don’t know the answer:
to what degree is the Cabinet used within the administration as a
sounding board for projects like this? I go back to President Eisen-
hower’s administration. That was a very systematic process, and
when they came in to him with the Interstate Highway Act pro-
posal and the National Parks proposal, he looked at them and he
said, “What’s taking you so long?”

Then it would go into a Cabinet system where every department
had an assistant to the Secretary for Cabinet coordination, where
working papers would go out, and it would then be brought up at
the Cabinet. The principal person involved with that, an Under
Secretary or whoever, would give the briefing. There would be the
minutes signed and initialled by the President that said this is a
decision, and every 6 months there would be a progress report.

It was an orderly way to do crosscutting business or simply to
inform one’s colleagues, since they all go out on the road and they
are all expected to help defend the administration, whichever one
is in power. And, I was just curious, have any of these things ever
escalated up? The Vice President has been immensely active and
very helpfal, but does anything go up the pipe so they can have it
on an agenda, or do they even meet? I have never heard of a Cabi-
net meeting. It doesn’t mean they don’t do it,” I just haven’t heard
of it.

What happens in Treasury, for example?

Mr. Simpson. On the occasions that I have been able to talk to
Secretary Rubin, as I might have predicted, he has been very sup-

ortive, but he cannot watch over every little sparrow all the time.
think that in order to get this project done with the cooperation
of all of the departments involved, it is more practical to focus on


155

Mr. CRONIN. I think certainly that this is reflected at my level,
Mr. Chairman. As agencies deal with the requirements of the Gov-
ernment Performance and Results Act, we are reaching a point
where we see a need to focus on management issues and to fit the
budget process to that as opposed to the reverse, which has been
the consistent fashion in which we have performed over the years.
I think those management issues will be surfaced as something on
which OMB can focus and you will see that coming out in an over-
arching fashion as the agencies have to relate, as we certainly do
in the border management community.

Mr. Horn. Mr. Proctor.

Mr. Proctor. I think it is a tough issue, and which is probably
why you asked about it, but in terms of a model I think it would
work either way. There is a lot to be said for, I think, hitching im-
portant things like information technology management to budget
processes. If you look at Clinger-Cohen, if you look at GPRA, a lot
of that stuff revolves around budget. Budget, although it has a lot
of short-term aspects to it, is also a driver for a lot of the rest of
what we do. So whatever you do, obviously taking advantage of
that focal point for bureaucratic life is very important.

Having said that, I am also impressed with the comments that
you, GAO, and others have made over the course of the hearing
this morning, about the value of people who are dealing with infor-
mation technology to be focusing on information technology. That
is implicit in the role of a CIO within an agency, and it seems to
me that is a useful model for thinking about bringing management
ascension to some of the issues you have dealt with here.

Mr. Horn. Let me pursue a few questions now just for the
record. I have been impressed by your testimony that this project
obviously is a clear winner. It seems some of this happens, and ob-
viously Mr. Davis and I, who have a particular interest, and I am
sure Mrs. Maloney, will be glad to help move this off dead center
around here.

Because you are absolutely right; when you look at the land-
scape, the President submits this as a unified budget, immediately
it’s 13 portions. Because, historically, that is the way we dealt with
the budgets before the Budget Accounting Act of 1921. So the
President changed; the Congress didn’t change. And we have got 13
subcommittees, all of which are headed by Congress. I am not sure
that is appropriate. But you will just note that the budget director
is looking at it that way regardless of the organization of the execu-
tive branch.

We need some crosscutting efforts up here. The Government Re-
form and Oversight Committee is essentially the agency in the
Government; we have that jurisdiction. But sometimes there is
some duplication, but sometimes it gives us the overview that a lot
of substantive authorization and appropriations subcommittees
simply don’t have. So we would be interested in helping causes like
this.

I was a strong backer of NPR. And it seems to have fizzled out
a little. There is a lot that I thought they put in that made a lot
of sense and you ought to be doing much more than what has oc-
curred to implement some of those ideas.


CONTENTS

Hearing held on October 27, 1997
Statement of:

Balutis, Alan P., Deputy Chief Information Officer, Department of Com-

merce; Liza McClenaghan, Chief Information Officer, Department of

State; and Anne Chief Information Officer, Department of Agri-
culture ....
Dodaro, Gene, Assistant Comptroller General, Accounting and Informa-
tion Management Division, U.S. General Accounting Office, accom-
panied by Jack L. Brock, Director, Accounting and Information Man-
agement Division; David McClure, Assistant Director, Accounting and
Information Management Division; and Keith Rhodes, Technical Direc-
tor, Office of the Chief Scientist 8
Simpson, John P., Deputy Assistant Secretary of Treasury for Regulatory,
Tariff, and Trade Enforcement, accompanied by Robert W. Ehinger,
Director, ITDS Project, Department of the Treasury; Michael D, Cronin,
Assistant Commissioner of Inspection, Immigration and Naturalization
Service; and Alan Proctor, Chief Information Officer, Federal Trade
Commission .. 114
Letters, statements, eic., r 5
Balutis, Alan B., Deputy Chief Information Officer, Department of Com-
merce:
Followup questions and responses . 64
Information concerning COTS Products database . 51
Prepared statement of 54
Cronin, Michael D., Assistant Commissioner of Inspection, Immigration
and Naturalization Service, prepared statement of ... 136
Dodaro, Gene, Assistant Comptroller General, Accounting and informa-
tion Management Division, U.S. General Accounting Office:
Information concerning backgrounds in information technology .........___ 33
List of ClOs, with information resources management as primary
11
Horn, Hon. Stephen, a Representative in Congress from the State of
California, prepared statements of. 4,112
McClenaghan, Liza, Chief Information Officer, Department of State, pre-
pared statement of 8
Proctor, Alan, Chief I
pared statement of 142
Reed, Anne, Chief Inform: ,
Followup questions and responses .. 99
Information concerning accounting systems 97
Prepared statement of ... 90
Simpson, John P., Deputy Assistant Secretary of Treasury for Regulatory,
Tariff, and Trade Enforcement:
Information concerning costbenefits analysis 158
Prepared statement of 119

ay


145

Fortunately, as I said, we've moved far from that point. We have
developed an interagency “board of directors” for the project — several of whom
you have heard from today. ‘The Board is composed of representatives of the
biggest players from the enforcement, operations, statistical and policy agencies,
and it now functions as a team to provide top-level guidance for the project. A
project office has been formed. There is clear support for the vision and goals of
the project, and work is underway to develop a Clinger-Cohen style information
architecture to guide further work, including business process reengineering and
future systems design and development work. A massive data standardization
(and simplification) effort has also been completed, in which, I might add, the CIO
Council and a number of individual C1O’s lent some needed help, to reduce from
more than 1900 to 74 the number of data elements collected and used by agencies
across the government in connection with trade transactions. Moreover, many of
the principles and approaches involved in ITDS have already been tested in
connection with the North American Trade Automation Prototype, a cooperative
pilot involving governments of the US, Canada and Mexico. Work is also
underway to similarly test and advance these concepts in cooperation with our
major European G7 trading partners.

The challenge and difficulty of this exercise in better government
unfortunately continue to rival the expected benefits. Consider in this context
what we're dealing with. We are trying to jointly, cooperatively change
interlinked trade transaction processes that have been put in place over many
decades and are now engaged in by as many as 104 different federal agencies,
each with its own legislative mandates and budgets, where data elements, data
collection and data sharing is a true mish mash of overlapping, duplicative and
frequently unnecessary reporting requirements, information collections, and
related processes. These processes are attached to organizations that were created
Jong before the technology that produces the vision and enables the delivery of a
government which, though complex in its many roles, can still act with a single,
service-oriented face to the public we serve. Everywhere you look there is
bureaucratic uncertainty and risk that comes with possible change. Mix
understandable issues of traditional roles and turf, with a huge mass of legislation,
that has built up over the years authorizing and directing the work of individual
agencies, and guess what we have? Slow change, and much lost opportunity.

Yes, there has been some progress to date, and the ITDS project is a good
example of a better way of doing business under the Clinger-Cohen Act.
Unfortunately, this is also one of those efforts where the goal is incredibly easy to
state and uniformly appealing to many, but where actually implementing the
change will be a most challenging and difficult task. The bad news is that actually
putting the new technology and systems in place will be the easy part. The good
news is that the obstacles and alternatives are actually pretty easy to define now,


106

Implementation of the Clinger-Cohen Act, Questions, October 27 (08/05/98 9:37 AM Page 5/8

Question 5. tlow do we change the incentive system for agencies, either to increase the

Response 5.

rewards or decrease the barriers, so they are less reluctant to support these
cross-cutting projects?

It is important to both increase rewards and decrease the barriers. One
such mechanism would be for the Administration to put a section in the
budget for cross-cutting projects. Then, Congress could pass budget
resolutions that recognize these cross-cutting projects. This budget section
would include the identification of efficiencies and the affected agencies as
well as include the individual agency budget requirements. With this
mechanism, all cross-cutting projects would be highlighted for
consideration by Congress.

The Government Information Technology Services (GITS) Board is working
with OMB on a pilot project to encourage reinvestment of re-engineering
savings into the given agency’s projects. This same vision should be
expanded to encourage cross-cutting projects. Congress should act as the
catalyst. Such an initiative would be a natural second step to the Clinger-
Cohen Act and give agencies proper incentive without the threat of an
immediate budget reduction.


66

from this small sample, the relatively small size of the projects included in this set
of case studies lends credence to the idea that modular development and
implementation, with modules of small size, scope, and complexity, is an
effective approach.

What are the common characteristics of these successful projects. How
closely related to agency strategic plans were these projects? Did they
develop out of Results Act (GPRA) strategies? Were any derived from
Clinger-Cohen strategic planning?

Again, most of the projects were initiated before the Clinger-Cohen Act was
passed. The strategic program planning and performance measurement that are
required by the Goverment Performance and Results Act (GPRA) are just now
maturing. Thus, most projects have not benefited from the recent legislation.
However, there are exceptions. The Treasury Department undertook a formal,
structured strategic planning process to develop an overall Treasury
Communications System (TCS) Strategic Plan. This plan addressed Treasury's
communications needs and changing bureau requirements, and supported early
National Performance Review reinvention initiatives. The TCS Strategic Plan
raised investment considerations, as well as modular pilot test implementation
methodologies, preceding the Office of Management and Budget's “Raines
Rules” and providing early conformance with GPRA.

Whether formal strategic planning was undertaken or not, the case studies show
that all successful projects were closely aligned with core mission needs.
Additionally, many of the case studies specifically cite customer support as a key
focus. All case studies identified performance improvements, in dollar savings
and/or enhanced service delivery and customer satisfaction. Many cited the
ability to take advantage of current technology as a critical success factor.

Many of these successful projects had real dollar savings. Did they also
yield improvements in real performance measures like better program
achievement, better citizen services, fraud detection, etceteras?

In conducting the study, one of the key definitions used in defining "success" was
that each of the projects had to have a positive retum on investment (RO!). The
study team did not impose a definition of ROI; rather the team asked the
departments and agencies to explain their internal criteria for assessing RO!
from the projects. ROI can be attained either by savings or by improved
performance, or - typically -- by a combination of both. In arriving at the
recommendation of the 32 projects for consideration for publication, the relative
strength of the basis for ROI was a major consideration.

All of the twenty projects that are presented as case studies noted improvements
in teal performance measures, in addition to dollar savings. Increased customer


52

Mr. BaLutTis. To continue, the Capital Planning and IT Invest-
ment Committee, again, chaired by Joe Thompson, the CIO of the
General Services Administration, has sponsored seven capital plan-
ning pilots as part of the 1999 budget cycle that the executive
branch is now engaged in. They held an interagency forum in Feb-
ruary to review the progress of those pilots, issued their initial
findings, which we dubbed “First Practices,” in March, and then a
final product focused on best practices in August, and they are now
working on a survey in conjunction with the Industry Advisory
Committee and Government Computer News on experiences with
IT capital planning and measuring. There has been a sample of
over 1,500 respondents identified from Federal, State, local, and
private sector IT professionals.

In terms of the Outreach Committee which I chair, and have
done so since this past spring, we held a private sector forum in
February to begin to interact with industry and other interested
parties on the work of the Council. We had a very useful session
that also resulted in the establishment of an ongoing dialog with
several industry associations.

From that dialog emerged a product of the Council with the In-
dustry Advisory Committee that focused on assembling a number
of IT practices drawn, not from the so-called runaway system, sys-
tems that are over budget and behind schedule, but from actual
success stories. I’m pleased to have brought a number of copies of
that to share with the committee and the audience.

You said in your opening statement, sir, that success stories are,
in fact, few and far between. We would argue that they are present
out there and that we need best practices pulled from successful,
healthy systems as well as those that are drawn from the autopsies
of systems that have gone awry. We are distributing this publica-
tion widely to the public, to other Government agencies, and to
State and local governments.

We also did publish earlier a 6-month progress report that re-
ported on our offsite and the status of the various action items that
I noted earlier. We have developed a monthly seminar series for
CIO’s to meet with their private sector counterparts. We have
worked with groups like the Chamber of Commerce and Highway
One to put these kinds of sessions in place, and we hope to be hear-
ing in February from Senator Roth on the Government Perform-
ance and Results Act and its implications for IT professionals.

And we are completing a survey on business process reengineer-
ing efforts; we hope to have that completed soon. That’s one of the
so-called pesky questions that we are supposed to answer as CIO’s.
We hope to have that survey completed in November and present
the results at a seminar in January.

We've held several briefings on E10 Council activities with Sen-
ate staff. I’m glad, now that I’ve had the chance to talk with and
meet Mr. Alloway, that we can hold similar sessions in the near
future with your staff as well, sir.

So I think we are very pleased with these accomplishments to
date. We realize that much remains to be done, and we have every
intention to pursue the purposes of the Council with energy and
constructive, results-oriented activity.


101

to this and are working on the front end of this issue in actively promoting collaborative and
cooperative standards and approaches that will, in effect, police themselves by virtue of the
interoperability achieved.

7. How can we avoid the problem that occurred for example with GOSIP, the "official"
government standard for networking that was simply by-passed by the "Internet
Standard?”

‘The GOSIP standard provided the mechanism for the Federal Government to begin working
toward an open systems concept. While GOSIP did not become the industry standard, the
concept of open systems for the Federal Government was an admirable goal. The lessons
teamed from the GOSIP standard setting initiative provides the Federal Government with the
knowledge base for setting future Federal Government standards and guidelines. Since GOSIP
‘was overtaken by industry standards, the Federal Government has become more reliant on
defacto industry standards and has increased its participation on industry setting standards
organizations. The Interoperability Committee encourages its members to participate on such
standards setting organizations.

8. Why do we keep re-inventing the wheel? Surely the intelligence community in all its
various incarnations like DIA, NSA, and the CIA itself have solved the IT security
problem. Can't we just use a weak version of their standards, why do we have to do it all
over again?

The ClO council now has a security committee. Security for unclassified
information and systems should be commensurate with the risk and the magnitode

of the harm, according to the Computer Security Act of 1985. While no one has

"solved" the ever-changing computer security challenge, some intelligence

solutions can be cost-effective for other kinds of information. The goal of this committee is to
ensure implementation of security practices within the Federal Government that gain public
confidence and protect government services, privacy, and sensitive and national security
information. During the coming year, they will be working closely with NSA and NIST.

9. Lunderstand your subcommittee is surveying to identify other opportunities for
cross-cutting projects. I would like to have a copy of your report, is that possible?

‘The results from this survey are currently being compiled. We will provide you with a copy
when the report is completed. The purpose of this effort is to identify cross-cutting projects. It
is expected that this initiative will (1) identify ways to minimize the data that we collect from the
public and (2) identify data sharing relationships that provide opportunities for increased
efficiency in the data exchange process.


26

© assist agencies in obtaining access to human resources with the requisite skills and
competencies to develop, maintain, manage, and utilize information technology
Programs, projects, and systems; and

* define, communicate, and establish the major elements of a federal information
architecture, in support of government missions, that is open and interoperable.

We believe that the CIO Council has selected the right set of issues to pursue. Several of
these coincide those issues we have raised in our 1997 High Risk Series and
recommendations we have formulated in conjunction with specific audit work. In
addition, they parallel several concerns that the Congress—and this Subcommittee in
particular-have raised about federal IT management. For example, the regular hearings
and concerted effort by the Subcommittee on the Year 2000 computing crises have
highlighted the urgency of the problem and helped to increase the attention and actions
of federal executives. GAO has raised concems about the pace at which federal agencies
are moving to effectively address the Year 2000 problem.TM In consonance with industry
best practices, we have also developed and disseminated an assessment guide to help
agencies plan, manage, and evaluate their Year 2000 programs and are using this as a
basis for selected agency audits.*

In addition, we have strongly recommended that agencies adopt a capital planning and
investment-oriented approach to information technology decision-making.” It has been a
key foundation for recommending improvements to the management of IRS' Tax Systems

ear 2000 m. g Tim: Running Out for Federa
the New Millennium (GAO/T-AIMD-97-129, July 10, 1997).
**Year 2000 Computing Crisis: An Assessment Guide (GAO/AIMD-10.1.14, September



22

Similarly, in the last few years, we have reported and testified on management and
technical weaknesses associated with IRS' Tax Systems Modernization.* Among other
things, we have noted how important it is for IRS to have a single IRS entity with
responsibility for and control over all information systems efforts. Since we first reported
on these problems, IRS has taken a number of positive steps to address its problems and
consolidate its management control over systems development. However, as we noted in
recent briefings to the acting IRS Commissioner and congressional committee staffs,
neither the CIO nor any other organizational entity has sufficient authority needed to
implement IRS' Systems Life Cycle-its processes and products for managing information
technology investments-or enforce architectural compliance agencywide. We will soon
be making formal recommendations to IRS to address this issue.

Finally, as we reported to you earlier this year,” the problems encountered by the Health
Care Financing Administration (HCFA) in its development of the Medicare Transaction
System (MTS) provide another example of the need for strong management over the
development and implementation of information systems. In recent testimony on
Medicare automated systems,” we reemphasized the importance of establishing CIOs and
involving them and other senior executives in information management decisions. While
HCFA has recently established a CIO and an information technology Investment Review

“Medic mated System ion
High Against laud and Abuse (GAO/TAIMD-O7-176, Sept 29, 187)
12


105

Implementation of the Clinger-Cohen Act, Questions, October 27 (03/08/98 9:37 AM Page 4/8

Question 4, What about funding, how do projects like this get funded, does it work

Response 4.

well, and what should we do instead?

The funding process is horrible and does not work well. There is no
systematic method for ensuring that projects like ITDS get funded. We
know from experience. Before our first Congressional Appropriation in
FY97, we tried to get the trade-related agencies to contribute to the Project.
Even at a request for only $300k, major departments turned us down. Only
two government organizations supported the Project at that time.

Funding for cross-cutting projects is very difficult. Only when projects fall
under tight scrutiny of Congress or are endorsed by the White House do
agencies act outside their own organizational interests and in terms of the
government as a whole. A mechanism should be put in place to provide
incentives for cross-cutting projects.

For a specific recommendation on what we should do instead, please refer
to our Response 3 regarding uses of your generosity where we respectively

request a special place in the budget for cross-cutting projects.


162

of a crosscutting review by OMB, so that even though the money
is put into separate departments, the umbrella framework is there.

There will also, probably in the end, need to be a single, stand-
alone data collection organization that maintains the raw trans-
action data collected by the Government. That’s just for the sake
of the integrity of those data. So that, for example, if there is a con-
gressional need to know exactly what was reported, if there is a
criminal investigation, whatever, we need to have some entity that
is responsible for the entire data record as it was transmitted.
Those are the raw data. And that organization may need to be
stand-alone, may need to be a separate entity and funded as a sep-
arate entity.

Mr. Horn. Are there incentives we should be giving agencies so
they do what you have already been doing? What kind of incentives
would wake them up in some areas?

Mr. Simpson. That’s one of the most intriguing questions you
could ask, Mr. Chairman, because I guess it invites an opinion
about human nature that might be different in my case than in
someone else’s.

One of the things I’ve noticed in 32 years in government is that
the innovators seldom rise to the top. People are just uncomfortable
with them. They are uncomfortable all year round.

Mr. Horn. They are always nagging.

Mr. Simpson. They are always nagging. They have always got
another idea about how it can be done better. And, frankly, most
people who come to work expecting a pleasant day and not wanting
to be upset before lunchtime find the innovators to be really med-
dlesome.

And so one of the things I think that we need to find a way to
do is to give the innovators the audience that they need at the pol-
icy level and at the political level. Not all of their ideas will be
good, but the knee-jerk reaction to just suppress them because they
are a nuisance I think is holding government back and keeping
good ideas at arm’s length.

Frankly, I don’t know how, other than by just repeatedly calling
policy leaders up before this committee to report on what they are
doing. I don’t know how you can keep this negotiation of innovation
in front of them all the time and keep their attention focused on
it.

Mr. Horn. We are having a very interesting hearing, I believe,
this coming Friday on the Excellence in Government projects,
which are both Federal, State and local. And, I think we try to let
the performer to show whatever through this meeting. We hope
that it will be broadly covered, because one of my favorites has
been the benchmarking project in the State of Oregon, as well as
what goes on in New Zealand and Australia.

And, of course, in a results-oriented government, the Perform-
ance and Results Act, we are now getting that in our own govern-
ment. And it seems to me that it would help all of you that have
executive responsibilities to be able to get people to talk about:
“how do we know where we are going? How do we know we are
on the right road? And, How do we know when we are there?” That
would make a lot of sense for the average citizen to say: “My gosh,
there is a change here.”


34

Mr. Davis of Virginia. That is not a very efficient way of doing
things, is it?

Mr. RHODES. No, sir.

Mr. Doparo. Basically, Mr. Congressman, what is happening
now, and we have seen this happen with putting CFO’s in place,
as you put CIOs in place, you need to change the culture and the
power structure within the agencies to make them effective. And
a lot of people are reluctant to give up that authority and to be able
to make those proper changes.

Mr. Davis of Virginia. But where the CIO’s don’t have line au-
thority over IT, are they acting in an oversight role similar to the
1G’s oversight of the CFO’s? Do the CIOs oversee the head of IT?
Is that actually how it works?

Mr. Doparo. Some of them are attempting to do that. And we
need to go in and look at whether or not that is an effective way
to go about it. Different organizational structures will work if we
get the right result. We are skeptical that we’re going to get the
right result unless the CIO’s have proper authorities.

Mr. Davis of Virginia. It seems to me these are pretty basic, easy
questions. And you keep referring to the difficulties of getting this
kind of information out of OMB. Should I simply send OMB a let-
ter and should the chairman send them a letter requesting this
data? Would that be helpful?

Mr. Doparo. I think that would be a good idea. OMB, under the
Clinger-Cohen Act, was given greatly expanded responsibilities for
information technology. And in the early stages of the appointment
process, we really sort of deferred to them to monitor implementa-
tion and to give the agencies time. We are stepping up our efforts
in the next year to look at the results that have been achieved at
the agencies, but it would be very appropriate to ask OMB for that
type of information.

Mr. Davis of Virginia. I think one of the difficulties at OMB is,
the OB, they kind of left the M out of it. And in fairness, we have
been working toward a balanced budget and I know a lot of re-
sources have gone into that, and maybe too many resources, look-
ing at some of the line items they’ve come back on. But they've got
to get back into management or we're going to have to give it to
somebody else, I think. We’ve had some disappointments over there
in the year 2000 and in terms of everything else elevating the ap-
propriate priority for these issues.

Mr. Doparo. I think to their credit and at our urging, they
learned some lessons from the problems in the early appointment
process of the CFOs back in 1990. OMB did focus on this right
after the act was passed, but there needs to be follow through and
that’s where we have not seen enough aggressive action to follow
through.

Mr. Davis of Virginia. Thank you very much. I see my time is
up, Mr. Chairman.

Mr. Horn. I thank the gentleman. We'll have another round, but
I wanted to carry on where you left off. And I note to staff, we need
to write a letter to Secretary Slater, Secretary of Transportation,
on this span-of-control situation with the chief information officer
of the Department of Transportation.


115

much in the ballpark, within the limits outlined by the United Na-
tions Council on Trade and Development. In other words, the costs
of simply documenting trade amounts to about 4 to 6 percent.

Now, when you realize that the average rate of duty that we col-
lect in the United States is only about 3 percent, it is a little shock-
ing that the cost of documenting a transaction is actually higher
than the cost of the duties imposed. But it is a tax nonetheless. So
about 2 years a in September 1995, Vice President Gore issued
a mandate to all Federal agencies to work together to create a sin-
gle International Trade Data System.

The International Trade Data System has essentially three com-
ponents. The first component which we were successful in putting
together in June of this year is a standard set of data that will sat-
isfy the legal needs of all Federal Government agencies. That was
not easy to do, but we think we are at the point now where we
have a standard data set. We started with over 1,200 different data
elements that were being collected by U.S. Government agencies.
We found that over 270 of them were redundant, and, in the end,
we have it down now to, I think, about 127 data elements that will
satisfy the needs of Federal agencies.

Only a few of those are what we call mandatory data elements
and are to be collected with each importation or exportation. The
others are conditional, which means that they are only required in
special cases; for example, when the product being imported is a
pharmaceutical product, or they are data elements that we think
the automated system can generate, itself, automatically.

For example, for years we required importers to report the date
and time of filing. Well, in an automated system, the computer will
generate that information itself. So we have gone from over 1,200

jata elements that we were collecting down to a very small number
that are actually mandatory. .

The second part of an International Trade Data System is to cre-
ate a single point through which importers and exporters can re-
port electronically to replace the system that we have in place now
where they send paper forms to every agency that has an interest
in the transaction.

Under most of the electronic reporting systems in place now, the
only parties who have access to electronic reporting are those who
have access to what are called value-added networks, the very ex-
pensive, dedicated lines, T-1 lines and so on. We wanted to make
this system accessible to small business, so we have begun re-
searching ways that we can make the reporting system open to
those who can file over the Internet.

One of the first tasks that was undertaken was to develop a ro-
bust encryption system that will allow small businessmen to use
their Internet connection to transmit data that they feel are con-
fidential. Once those data are in the system, and what we call the
front end of the ITDS, the ITDS system will distribute the data to
those agencies that need it, and if several different agencies need
the same data item, they will get it from that single collection.
They won’t need to collect it repetitively or redundantly.

For a certain period of time, the format in which data will be col-
lected by this front end will be somewhat incompatible with the
format used by these Legacy systems in agencies around the Gov-


136

Mr. Chairman and Members of the Subcommittee, thank you for
providing this opportunity to describe the participation of the Immigration
and Naturalization Service (INS) in the development of the International
Trade Data System (ITDS) and to offer our perspective on the relationship
between ITDS and various facets of immigration operations and policy. My
statement will be brief, as the gathering and analysis of trade data clearly is
not a core mission of INS.

INS is, however, required to monitor the movement into and out of the
United States of non-U.S. citizens who trade in goods and services. INS is the
agency which authorizes the lawful employment in the U.S. of non-U.S.
citizens under numerous provisions of the Immigration and Nationality Act.
It enforces the provisions of that Act in relation to aliens who violate our laws
by accepting unauthorized employment. These responsibilities necessitate the
provision of data by INS to those departments and agencies with direct
responsibility for reporting and analyzing trade data. INS experience in the
use of technology for examination and tracking of applicants for admission to
the United States has also been used in development of those components of
trade automation systems that relate to the entry into the United States of
drivers and other operators of commercial transports. The result is a fully
automated and fully integrated system for cargo tracking and entry. This
system does not require separate immigration processing of various classes of
cargo handlers who are required to cross international boundaries in the
course of their work. The ITDS will enhance INS ability to consistently and
accurately verify the immigration status of cargo drivers and their crew each
time they enter and exit the country.

INS comes to the ITDS project from a framework of highly productive
cooperation and coordination among the agencies principally responsible for
managing the movement of persons and goods into and out of the United
States. These agencies--INS, the U.S. Customs Service, the Animal and Plant
Health Inspection Service of the Department of Agriculture, and the Bureau
of Consular Affairs of the Department of State—jointly have developed and
operate a sophisticated information technology and database management
platform, the Interagency Border Inspection System or IBIS, to support
operation of our ports-of-entry. Similarly, these agencies have collaborated


58

Performance Review and the Government Information Technology Services
Board. The report, “Access America: Reengineering Through Information
Technology,” provides a set of new reinvention recommendations to the
President.

Worked with the Industry Advisory Council (IAC) to organize a task force of
industry and government volunteers in order to assemble a volume of
approximately 150 “success stories.” Reviewed and selected 20, which were
developed into full-blown case studies of successful information technology
initiatives. These case studies are detailed in “Best IT Practices in the Federal
Government,” which was issued in October 1997.

We are now distributing “Best IT Practices in the Federal Government" to the
Congress, the General Accounting Office, news media, universities, state and
local governments, all Federal agencies/departments, public/private sector
counterparts, etc.

The Council has worked closely with the Interagency Management Council and
OMB to develop policy guidelines that will enable agencies to procure their own
telecommunications services competitively. In February 1997, the Interagency
Management Council presented, and the CIO Council accepted, policy guidance
‘on acquiring cost effective local telecommunications services Govemmentwide.

Developing a monthly seminar series for CIO's around a number of common
; ics that have emerged from a series of meetings held with CIO's,
* Deputy ClO's, and their staff.

‘Surveying the CIO community on business process reengineering efforts.
Planned completion is late November 1997.

Established an Intemet web site with documentation about activities of the ClO
Council and other documents of interest to the information resources
management community.

Made speeches and presentations on the Council's accomplishments and
activities to a number of professional organizations/seminars/conferences, for
instance:

IAC 7th Annual Leadership Conference,

Interagency Resources Management Conference (IRMCO) ‘97,
Information Resources Management College,

Armed Forces Communications and Electronics Association (AFCEA)
Intemational Management Conference 1997,

5


n2

ut

Eo ne vncreo conan =
See Congress of the Cited States =
cad Boose of Representatives ——
== ‘COMMITTEE ON GOVERNMENT REFORM ANO OVERSIGHT ——
== 2187 Raveur Howse Orr Bune =
= ‘Wanrmerrn 0 20815-0149 =.
al ase —
“The First Year of the Clinger-Cohen Act”
October 27, 1997
OPENING STATEMENT
REPRESENTATIVE STEPHEN HORN (R-CA)
‘Chairman, Subcommitice on Government Management,
Information, and Technology
afternoon session]

‘We now resume our hearing on the Clinger-Cohen Act of 1996. The Clinger-
Cohen Act requires the development of an effective and efficient, mission-oriented,
user-oriented, results-oriented information technology practice in each and every
Federal agency. One way to meet this challenge is to develop cross-cutting projects
that eliminate duplication.

In the private sector, cross-cutting projects are difficult to achieve. In the public
sector, where the Federal Government spends over 25 billion dollars every year on
information technology, cross-cutting projects are just about impossible. We need
these cross-cutting projects to help eliminate waste, fraud, and duplication.

This morning we investigated the Chief Information Officers Council. This
afernoon we will investigate one particalar cross-cutting information technology
project ~ the International Trade Data System. The purpose of focusing on this project
is not only to help it succeed, but also to help spawn hundreds of similar projects.

subcommitiee are constantly encouraging such cross-cutting projects through the
‘Results Act as weil as through general efforts at improving effectiveness and efficiency.


76

The committee’s analysis of IRM core competency has benefited
substantially from discussions and review by the public and private
sector organizations, and we will continue with these meetings as
a CIO Council in the community to gain further experience with
IRM and the competencies required for successful implementation.

I personally believe the core competencies we have so far recog-
nized will be invaluable as CIO’s turn to the identification of defi-
ciencies in their respective agencies and their really hard work in
designing, implementing, and evaluating remedial programs re-
sponsive to particular systems. It was particularly gratifying to
note that the Department of Defense Information Resource Man-
agement College has incorporated these core competencies into its
curriculum and created a CIO certificate program. Also, the Gen-
eral Services Administration has incorporated the core com-
petencies into a 2000 program, and it’s trailed off quickly.

At the Department of State, we are using them in our new
School of Applied Information Technology for basis of curriculum
development, and we are publishing these ncompetencies” widely,
and they are on our web site, ClO.fed.gov, and other web sites. We
will see some competition in the area of providing learning experi-
ences at all levels.

In addition, we decided we needed to do a benchmarking of
where the spending is occurring in these core competency areas
across the Government, so we've identified and have attached for
your review a draft benchmarking study that would go through
each agency and the sub-Cabinet agencies to look at where the
spending is occurring right now, so we can mark it over a period
of time as your committee reviews the implementation of the
Clinger-Cohen Act.

We are using the General Services Administration, the Indus-
tries Advisory Council, the American Society for Training and De-
velopment, and the Bureau of Labor Statistics in this exercise. The
latter two organizations are sharing experiences from recently con-
ducted research on similar nature and training in general to be
used by executive and corporate America.

Without wishing to prejudge the outcome of this study, I would
anticipate that we would find ¢ considerable variation in the state of
argument—core competency learning. For example, there has been
considerable attention in recent years to acquisition education
training generally. In consequence, I would expect that it would be
easier to identify best practices and benchmark learning processes
in this area than in the area of IT capital planning and invest-
ments where agencies are still trying to determine how to intro-
duce benefit-cost analysis and risk management concepts.

And, finally, we have developed a white paper to look at the re-
sources required by CIO’s to bring to bear work force planning and
human resource development to their agencies. In the first in-
stance, the CIO’s must identify the current IRM knowledge, skills,
and abilities resident in their agencies, and they must determine
what knowledge, skills, and abilities are required at least 5 years
in the future—no small chore given the rapid obsolescence of infor-
mation technology. Therefore, there would be a shortfall across the
board and CIO's would need to devise the strategy to address the
sho! le


28

has shown the importance of pursuing improvement efforts within the context of an
information architecture in order to maximize the potential of information technology to
support reengineered business processes.

We are encouraged by the Council's intention to establish a strong strategic focus for its
work and further refine and prioritize the areas where it can best make a difference.

One of the noteworthy aspects of the Council's goal-setting process was the members’
desire to move away from earlier draft language that defined the goals in terms of
“promoting and "supporting." Instead, the Council is working to frame specific, outcome-
oriented goals. At the conclusion of the conference, the Council set up committees for
each of the goals and charged them to decide on specific objectives and performance
measures. The Council's aim is to complete this work quickly and publish its strategic
plan in January 1998.

‘There is great urgency to deal with these major information technology problems. It is
important that the Council demonstrate how ClOs are helping to make a difference by
showing progress this coming year. GAO and OMB have given the CIO Council a head
start by publishing guidance on information technology capital investments, information
security, and best practices in information technology management By leveraging off
this work, the Council should be able to build momentum quickly. Also, the CIO Council
should follow the example set by the CFO Council, which publishes a joint report with
OMB each year on its progress in meeting financial management goals. Having a visible

21, 1997; and Defense



94

Sponsor, with performance standards linked to Year 2000 compliance. This is in
addition to the requirement for a full time Year 2000 Project Team leader. | have
also worked with our Inspector General who is helping to provide assessment of
our Year 2000 compliance. By the time that we next report to OMB and your
committee on the status of our efforts, | am very confident that we will show
significant progress. We are keenly aware that there are only 795 days left until
January 1, 2000. 1 assure you that this will remain an area of top management
focus so that our infrastructure will continue to support the critical services we
provide to the public.

Investment in People

USDA is a dynamic organization, with ever-changing business objectives
and legislated requirements. in order that we realize the maximum benefit of
technology to our business community, USDA must make a concerted effort to
assess the skills of its technical staff, identify deficiencies, and take corrective
action to train and inform employees who provide technical support. There is
anecdotal evidence that USDA is feeling the impact of the national shortage of IT
specialists. Together with the recent downsizing initiatives that have constrained
hiring, there is an increasing recognition that we must address human resource
requirements to assure that critical functions are fully and appropriately staffed.

During the next year, we expect to study this issue more carefully and work
with the CIO Council Committee on Training and Education and the Office of
Personne! Management to devise appropriate personnel strategies. These
strategies will address recruitment, retention, retraining, technical competence,
certification, and private/public sector changes. USDA possesses a number of
talented and energetic technology specialists, and it is my challenge to leverage
this asset to the benefit of the larger community.

USDA is working hard to address the challenges we face. With the strong
support of Secretary Glickman and Deputy Secretary Rominger, USDA has made
some very good moves to change fundamentally the way we do business. We
recognize that as we move into the 21st century, our capacity to provide service
to the public is directly linked to our ability to make smart decisions. While much
has been accomplished, much remains to be done as we focus on our investments
in the planning, infrastructure, and people necessary to achieve our mission.


9

prove the investment process, bolster the institutional capacity of
agencies to deliver services, help in streamlining work processes,
and set up information architectures that are important to guide
modernization efforts.

Because of the importance of the chief information officers, OMB
evaluated their appointment shortly after the Clinger-Cohen Act
became effective back in August 1996. OMB noted in several agen-
cies that the CIO appointment process had worked well and that
the appointments had been consistent with the intent of the legis-
lation. However, in many other agencies OMB was concerned about
the CIO designee, the placement of the CIO in the organization,
and the existence of additional duties for the CIO beyond those fo-
cusing on information management.

OMB is currently in the process of reevaluating the CIO status
within agencies, We think it is very important that they complete
this assessment. These reforms simply will not work without effec-
tive, dedicated leadership.

One area that we are particularly concerned about is the exist-
ence of multiple responsibilities for the chief information officers.
The Clinger-Cohen Act was clear that the information resource
management issue should be the primary duty of the chief informa-
tion officers, and, as we have testified before this subcommittee
several times, the challenges facing the CIO’s in the Federal Gov-
ernment today are legion.

As this committee well knows, we are behind in preparing for the
year 2000 millennium conversion. It has been reported several
times that the schedule is slipping. Information security also re-
mains a pervasive and serious concern across the Government. We
designated it as a high-risk area.

Also, there is a need to put information architectures in place.
This has been a particular problem in terms of failed moderniza-
tions that we have testified before this committee, and recent!
have recommended that architectures be developed in better sh.
ion at IRS, FAA, and the Veterans Administration, and the Edu-
cation Department. This is a very important task.

‘ederal agencies also have the need to make sure that invest-
ment processes are developed more soundly. We have testified sev-
eral times about the lack of well-developed business cases and cost-
benefit analysis, most recently before this committee on the Medi-
care transaction system.

We also have high-risk areas that GAO has identified across the
Government. Most of these areas really are dependent upon having
information technology as part of the solution to fixing these prob-
lems. Then agencies have got the all-important task of linking the
performance results of information technology with the strategic
goals being set under the Results Act.

So while Federal agencies have a set of challenges facing CIO’s
that are monumental, we still have in over half of the agencies’
CIO’s have duties in addition to IRM responsibilities. As Congress-
man Davis pointed out, we are particularly troubled by the occur-
rence of vesting both CIO and CFO responsibilities in one individ-
ual in the agency. Challenges facing us in reforming both financial
management and information technology are very significant and


77

The committee is working on this white paper to assist the CIO’s,
and we're particularly cognizant of the need to demonstrate to chief
financial officers and other senior agency leadership in investment,
you know, in work force planning, quite apart from the legal man-
date will have important payoffs in the future. Among the benefits
that the committee anticipates is the possibility of the Federal Gov-
ernment will be better able, in the face of an enormous number of
vacant information technology jobs in the private sector, to retain
its current IRM work force and more successfully recruit new em-
ployees.

fe had a handle on the knowledge, skills, and abilities that our
employees need to be productive, and if we can provide the wide
educational training opportunities, we will increase job satisfaction,
and if we are perceived as forward looking with challenging jobs for
well-prepared people, we will be an attractive employer. And this
leads me back to the significance of the committee’s work in identi-
fying IRM core competencies. The core competencies are what we
must offer our current employees, and the core competence will
guide our recruitment efforts.

In conclusion, the CIO Council’s Education and Training Com-
mittee believes the task at hand is important. It realizes the job
cannot wait, and, as its chair, I assure you that we are working
diligently. The Congress took an important step in enacting the
Clinger-Cohen Act, and we are grateful for the interest you and the
members of your committee have shown in our work. We look for-
ward to continuing our close collaboration with you in achieving
the purposes of this legislation.

Mr. Chairman, that concludes my opening remarks, and I'll be
happy to answer any of your questions.

e prepared statement of Ms. McClenaghan follows:]


83

CLINGER-COHEN CORE COMPETENCY AREAS

This document is designed to serve as a baseline to in identifying, organizing, evaluating and
developing current and needed training materials for CIOs, senior managers with CIO
responsibilities and professionals in other functional areas using information technology to
support their mission. The mix and depth of coverage for these competencies in any course will
be dependent on the group to be receiving the training. Upon approval of the Competencies by
the CIO Council, the Clinger-Cohen General Core Competency listing will be used to identify
currently available seminars, courses and other training resources that are available to train
personnel.

Federal IRM Competencies

Policy and Organizational Knowledge
~ Knowledge of dept/agency missions, organization, function, policies, procedures
~ Knowledge of governing laws and regulations (¢.g., Clinger-Cohen, GPRA, PRA)
~ Knowledge of federal government decision-making and policy making process
(political and administrative)
~ Understanding of linkages and interrelationships among Agency Heads, COO, CIO and
CFO functions
~ Intergovernmental programs policies, and processes
~ Privacy and security

Information Resources Strategy and Planning
~ TT baseline assessment analysis.
- Interdepartmental, inter-agency IT functional analysis
- IT planning methodologies
- Contingency planning
~ Modeling and simulation tools and methods
- Monitoring and evaluation methods and techniques

IT Acquisition
~ Alternative functional approaches (necessity, government, IT) analysis
- Business process reengineering as a foundation for IT acquisition
- Alternative acquisition models (e.g., franchising, contracting out, GWAC IDIQ,
modular, performance -based contracting)
- Streamlined acquisition methodologies
~ Post-award IT contract management models and methods, including past performance
evaluation
- IT Acquisition best practices


On the first anniversary of the Clinger-Cohen Act we begin with two areas.
‘This morning we will investigate the Chief Information Officers Council. This Council
‘was created to facilitate the development of Chief Information Officers; to share lessons
learned; to provide a forum for common needs; and to influence the guidance provided
by Congress, the General Accounting Office, and the Office of Management and
Budget.

This afternoon we will investigate one particular cross-cutting information
technology project - the International Trade Data System. This project has repiaced
about 40 separate forms required by a range of Federal agencies for international trade
activities with an electronic data system. Our goal is not only to help this project
succeed but, more importantly, to help spawn hundreds of similar projects. It seems all
parties are promising cross-cutting projects. ‘The National Performance Review has
identified a number of such projects that could materially improve government.
Congress, the leadership in the House of Representatives, the Government Reform and
Oversight Committee, and this subcommittee are constantly encouraging such cross-
‘cutting projects through the Results Act and general efforts at de-duplication,
consolidation, and improvements to effectiveness and efficiency. Unfortunately, there
are all too few cross-cutting projects actually being developed. The subcommittee can
help this and similar projects get started and succeed.

Lets us turn now to the Chief Information Officers and their Council. We are
interested in learning about the Chief Information Officers themselves — their
backgrounds, roles, authorities, and responsibilities within their agencies. It is our
understanding that the Chief Information Officers have made considerable progress in
their first year but have » long way to go. We expect to be explicit about the strengths
‘and weaknesses of the Chief Information Officers, We welcome suggestions from all
witnesses today for improving the implementation of the Clinger-Coben Act and the
effectiveness of the Chief Information Officers.

We are also interested in the accomplishments of the Chief Information Officers
Council. It is worth recalling the Chief Financial Officers, their Council, and their first
couple of years. Some say the Chief Information Officers Council has already
accomplished more in its first year than the Chief Financial Officers Council did in its
first two years. I look forward to learning about your successes. I also look forward to
learning from the Chief Information Officers who will testify here today about what
additional steps are necessary to improve the Chief Information Officers Council.

This morning we will hear from two panels. On the first panel are
representatives of the General Accounting Office:


111

an opportunity for lessons learned. What needs to be done? In par-
ticular, what can Congress do?

This afternoon, we will hear from John B. Simpson, Deputy As-
sistant Secretary of the Treasury for Regulatory, Tariff, and Trade
Enforcement; Michael D. Cronin, Assistant Commissioner of In-
spection, Immigration and Naturalization Service; Robert W.
Ehinger, Director of the ITDS Project Office, Department of the
Treasury; Alan Proctor, Chief Information Officer, Federal Trade
Commission. The ITDS stands for the International Trade Data
System.

‘We will now begin with Mr. Simpson, the Deputy Assistant Sec-
retary of the Treasury for Regulatory, Tariff, and Trade Enforce-
ment.

Mr. Simpson.

(The prepared statement of Hon. Stephen Horn follows:]


81

successfully recruit new employees. If we have a handle on the knowledge, skills and
abilities that our employees need to be productive, and if we then provide the right
‘education and training opportunities, we will increase job satisfaction. If we are
perceived as forward-looking, with challenging jobs for well-prepared people, we will
be an attractive employer.

‘And this leads me back to the significance of the Committee's work in identifying IRM
‘core competencies. The core competencies are what we must offer our current
employees. And the core competencies must guide our recruitment initiatives.

Conclusion

The CIO Councit’s Education and Training Committee believes the task at hand is
important. It realizes the job can not wait, and, as its chair, I can assure you we are
working diligently. The Congress took an important step in enacting the Clinger-Cohen
Act, and we are grateful for the interest you and the members of your Committee have
shown in our work. We look forward to continuing our close collaboration with you in
achieving the purposes of the legislation.

Attachment: IRM Core Competencies


107

Implementation of the Clinger-Cohen Act, Questions, October 27 03/05/96 9:37 AM Page 6/8.

Question 6, This particular project is apparently housed at Treasury. Is housing
important, how does one decide where and how should it be done?

Response 6. You bet housing is important. As we said before, high-level attention is
required for this type of project to survive. Cross-cutting projects have no
natural home. Government projects of this nature need to be housed at as
high a level as possible in order to be freed of the parochial interest of
subordinate organizations. Empowerment can not be accomplished
without important high-level attention to ensure that cooperation and
participation continues and roadblocks are removed.

The housing selection for ITDS was drawn from the recommendations of
the National Performance Review (NPR). ITDS, as a trade function, has
great potential for encouraging trade and reducing costs for American
businesses. This link with international economic policy was key in
placing the project at Treasury. Secretary Rubin, Undersecretary Kelley
and Assistant Secretaries Johnson and Killefer have been supportive of the
ITDS effort.


92

To continue the development of our policies and processes and to ensure
proven methodologies are used throughout the Department for measuring risk,
calculating return and rating and ranking IT investments, we are consulting with
agencies’ staff and determining which methods for 1T management will work for
USDA. We expect to compiete this analysis in February of 1998. A major
deliverable for the project is a Capital Planning Guide and Case Study document.
The Guide will assist USDA executives in assessing potential (T investments and in
choosing the appropriate “mix” of IT investments to support USDA’s mission. The
Case Study will include a complete set of sample documentation that will take a
project through the selection phase of the capital planning process.

Invest in Infrastructure

USDA has many successes implementing innovative technologies. Smart
cards have been used within the Department since before it was considered a
mature technology. We have been in the forefront of testing the use of Electronic
Benefits Transfer to deliver food stamps. Examples of award-winning USDA
programs that rely heavily on technology include: Food Safety and Inspection
Service's Field Automation and Information Management program, identified by
the ClO Council and the Industry Advisory Council in a report released this month
as a “Best Practice” in the Federal Government; Rural Development's Direct Loan
Origination and Servicing system, which received the Association For Federal
Information Resources Management Leadership Award earlier this month; and the
Department's Purchase Card Management System, which received Vice President
Gore’s Hammer Award. Other major initiatives include Forest Service's Project
615, the Office of the Chief Financial Officer's Foundation Financial Information
System, field service agencies’ LAN/WAN/VOICE project, and the Animal and Plant
Health Inspection Service’s Integrated Systems Acquisition Project.

One of the key responsibilities of the CIO defined in the Clinger-Cohen Act is
the development and maintenance of an integrated information technology
architecture for USDA that will assure that information can be shared more
effectively among our agencies and customers, Our USDA Information Systems
Technology Architecture has been developed around three distinct components ~
the business/data architecture, the technical standards, and the
telecommunications architecture.

‘Streamlining business processes is the principle we use for business
improvement efforts and determining the technology needed to support them. The
Business/Data Architecture team is examining business objectives and specific
work activities. This activity is designed to find opportunities for more efficient and
effective business practices used to deliver services to our clients and partners.

3


60

commerce activities. Future topics include E-mail compatibility and issues
associated with the transfer of attachments.

> Through the CIO Council, surveyed Government agencies to identify current and
Proposed information systems initiatives that have potential for increased
information sharing Governmentwide. The surveys were due October 24.

> Working closely with a companion group under the Industry Advisory Council,
which has developed a draft Information Systems interoperability Reference
Guide. The Guide provides information on activities undertaken by industry to
standardize operations in systems infrastructure in six selected application
domains. This group will also sponsor an Industry Symposium on
Interoperability this winter.

Activities for Fiscal Year 1998

October 23, 1997 Meeting sponsored by the Outreach Committee with
the Coalition for Goverment Procurement to discuss
‘the Council's work with the private sector and get the
advantage of their advice, insights, and concerns.

November 13, 1997 Co-sponsored forum with the Chamber of Commerce
— Pesky Question #2: Is There Someone Who Can
Do it Better? CIO's from Xerox, Dupont and
Lockheed-Martin will discuss outsourcing their IT
operations.

November 19, 1997 ‘Session sponsored by Highway One with Marc
Andreessen, Chief Information Officer and Senior
Vice President of Technology as well as co-founder of
Netscape Communications Corporation, and John
Connors, Chief information Officer, Microsoft
Corporation. This session will be held after the
regular CIO Council meeting.

February (TBD) Session sponsored by the Chamber of Commerce:
Senator Wiliam Roth on the Government
Performance and Results Act.

February 10-12, 1998 Virtual Government 1998 sponsored by AFCEA

Intemational; a CIO Roundtable will be part of
conference.


56

and assistance in the areas of planning, budgeting, financial management, and
control and acquisition management.

In January, 1997, the Benefits Systems Review Team released their report,
“Strategies for Efficiency: Improving the Coordination of Government Information
Resources.” The report evaluates commonality among information collection
systems and identifies opportunities for improving the operation of Federally
funded benefit programs through enhanced coordination and data sharing
among agencies.

The Capital Planning and investment Committee Chair met with his counterpart
on the CFO Council to discuss plans for developing a capital planning
methodology and development of performance measures.

Highlights of Committee Achievements. The CIO Council has formed five standing
committees, as described below. | will provide highlights of initial committee
achievements and plans. Committee chairs will further elaborate on activities of their

respective committees.
Standing Committees:
» Year 2000 Kathleen Adams (SSA)
» Outreach Alan P. Balutis (DOC)
» Interoperability Anne Reed (USDA)
. > Education and Training Eliza McClenaghan (State)
>» Capital Planning and Investment Joe M. Thompson (GSA)

Year 2000 Committee Achievements:

Conducted monthly meetings as a forum to share information among Federal
agencies and to address cross-cutting issues relating to the year 2000.

Established an Internet web site to share information and lessons learned.

Established nine subgroups to focus on specific areas of concer: Best
Practices, State Issues, Data Exchange, COTS Products, Industry Issues, GSA
Schedules, Telecommunications, Building Infrastructure, and Biomedical
Equipment.

Developed a best practices document that provides guidance on the five-phased
‘approach to solving the year 2000 problem.


18

* Agencies need to develop, maintain, and facilitate integrated systems architectures to
guide their systems development efforts. We have seen major modernization efforts
handicapped by incomplete architectures, such as at Federal Aviation Administration
(PAA) and the Internal Revenue Service (IRS), as well as the departments of Veterans
Affairs and Education.”

© Agencies need to establish sound information management investment review
processes that provide top executives with a systematic, data-driven means to select
and control how technology funds are spent. Our reviews of systems development
and modernization projects, such as the Medicare Transaction System and the four
high-risk efforts included in our 1997 High Risk Series, continue to show the crucial
importance of structured investment oversight.

* In our 1997 High Risk Series we identified 25 high-risk areas covering a wide array of
key federal activities, ranging from Medicare fraud to financial management at the
Department of Defense. Resolving the problems in these areas depends heavily on
improved information management

(GAGAIMD- 96106, Tune 7. oy

%ear-2000 Biforis (GAO/AMD £799, May 30, 1997); and Shenk Fania Ad

Techuival Weaknesses (CAO/AIMD.O7-TE, May 16, 1097). High Risk Series: Information

(GAO/HR-97.9, February 1997). The four modernization
projects on GAO's high risk list are: the FAA's Air Traffic Control modernization; the
Defense Department's Corporate Information Management initiative; the National Weather
Service modemization; and the IRS' Tax Systems Modernization.

8


47

nancing Administration, HCFA, within parens, in its development
of the Medicare Transaction System, MTS, provide another exam-
ple of the need for strong management over the development and
implementation of information system.

I think one of the problems with that whole operation is that
Health and Human Services, I don’t think have taken this seri-
ously, on either the CFO law or the CIO law.

Now this is a bigger budget, the Department of Defense. Throw
in Social Security, which is now independent of—but it just seems
to me that part of the problem is, Cabinet officers have not taken
some of the Congress’ acts in this area very seriously, and that
bothers me, to say the least. I think it will bother the average citi-
zen when you see the billions of dollars that they can’t collect.

We are going to have more hearings on our loan improvement
legislation, and you see paperwork they can’t seem to reduce. But
I think we have got a marvelous example, this afternoon, of what
can be done by CIO’s working together and agency people working
together to get some simplification in our import-export which have
many agencies involved, and I was glad to see they are cooperating
with each other.

Now let’s see here; any loose ends? Otherwise, I will free you
from your bonds.

Now you noted here on page 18, also, the CIO Council should fol-
low the example set by the CFO Council which publishes the joint
report each year on its progress, meaningful financial goals.

Now has GAO had a chance to review the various CFO reports?
Do you think they can be helpful in terms of OMB input, or is it
simply CFO Council submitting the report and OMB——

Mr. Doparo. It is pretty much a joint effort, and OMB partici-
pates in a dialog in setting the priorities. We think they have set
the right priorities there—we think there are good measures in the
reports. It’s truly a joint report.

Mr. Horn. OK. Got any more questions we need to ask? I think
we have covered it pretty well.

So we thank each one of you, and you brought a really great
team with you this morning. They have all been—and we thank
you all for coming.

Mr. Doparo. We appreciate the opportunity.

Mr. Horn. I appreciate it.

Mr. Doparo. Thank you, Mr. Chairman.

Mr. Horn. We now go to panel two this morning. If they will
come forward, we will swear you in.

[Witnesses sworn.]

Mr. Horn. The clerk will note all three witnesses affirmed.

Mr. Balutis is the Deputy Chief Information Officer, Department
of Commerce.

Welcome. As you know, the statements will go on the record, and
résumés—very impressive—and if you will just summarize it for
us, then we will get down to the questions.


51

The Federal Year 2000 COTS Products Database
How was the Database Developed?

The Year 2000 is rapidly approaching. It is very important that Federal agencies are aware of
when commercial off-the-shelf (COTS) products they use will accurately handle Year 2000 dates
as defined in the Federal Acquisition Regulation. Individual agencies are seeking assurance
from computer software vendors that their software is compliant or will be made compliant and
will handle dates after the Year 2000. Recognizing the need to build a system which provides
information on Year 2000 compliant products, the Federal Chief Information Officers (CIO)
Council Subcommittee on the Year 2000's COTS workgroup initiated an effort to develop an
internet-based database of Year 2000 compliant products. The database is known as the Federal
Year 2000 COTS Products Database. The system was jointly developed by representatives from
Social Security Administration and the General Services Administration. A pilot test of the
database is scheduled to commence during November 1997. The Database site will be made
available for Federal government use during December 1997.

Are COTS Products Certified?

The Federal Year 2000 COTS Products Database is being implemented to provide a centralized
repository of information to all Federal agencies which will speed the research and investigation
of products being done by each agency. This Database can be used by the entire information
technology community, and it is intended to assist Federal agencies in meeting the Year 2000
challenge. Year 2000 product compliance information contained in the Database is based on
vendor assertions about their products. Year 2000 test information is based on specific agency
experiences with various vendor products. This information is updated frequently, and efforts
will be made to assure accuracy. However, the information has not been verified by the sponsors
of this database, and this database does not constitute endorsement or Year 2000 certification by
the Federal government.

What is the address of the website?
Users will go to the y2k.policyworks.gov intemet web site. They will be given the capabi

provide information from either an agency or vendor perspective. Anyone with internet access
may search the database.



Benchmarking Study

Benchmarking involves identifying the best practices of successful organizations and
examining whether and to what extent your own organization falls short. Benchmarking
applies as appropriately to IRM education and training as it does to other critical IRM
activities under chief information officer purview.

Accordingly, the Education and Training Committee is now in the process of
determining the status of IRM core competency learning in the Federal govemment.
The study is being developed in consultation with the General Services Administration,
the Industry Advisory Council, the American Society for Training and Development, and
the Bureau of Labor Statistics; the latter two organizations are lending experience from
recently conducted research of a similar nature. Information will be gathered

surveys and interviews with the CIOs who are members of the CIO Council, ClOs at
other federal agencies, and CIOs designated by Executive Branch agencies for major
subcomponents and bureaus. The survey instrument is attached.

Without wishing to prejudge the outcome of this study, I would anticipate that we will
find considerable variation in the state of the art in core competency learning. For
‘example, there has been considerable attention in recent years to acquisition education
and training generally; in consequence, I would expect that it will be easier to identify
best practices and benchmark leaming processes in this area, than in the area of IT capital
planning and investment, where agencies are still trying to determine how to introduce
benefit-cost analyses and risk management concepts into their IRM education and
training programs.

Resource requirements

Finally, the Education and Training Committee is looking at the question of the resources
COs will have to bring to bear on workforce planning. In the first instance, ClOs must
identify the current IRM knowledge, skills and abilities resident in their agencies. Then
they must determine what knowledge, skills and abilities will be required at least five
years into the future—no small chore given the rapid obsolescence of information
technology. There will be a shortfall, probably across the board, and CIO's will have to
devise strategies to address the shortfall. The Committee is working on a White Paper to
assist CIOs. We are particularly cognizant of the need to demonstrate to Chief Financial
Officers and other senior agency leadership that an investment now in workforce
planning, quite apart from the legal mandate, will have important payoffs in the future.

Among the payoffs the Committee anticipates is the possibility that the Federal
government will be better able, in the face of an enormous number of vacant information
technology jobs in the private sector, to retain its current IRM workforce and more


142

Hello, and good aftemoon. Iam Alan Proctor, a member of the original
Government Information Technology Services Working Group (“GITS”), and for
a number of years the GITS “Champion” for the International Trade Data System
Initiative, otherwise known by many as “ITDS.” As you may know, GITS was
chartered in connection with the original National Performance Review to assist in
implementing NPR information technology (“IT”) initiatives and to serve as @
continuing source of innovation and sponsor of IT-driven change within the
federal government. Like many interagency projects, my participation has been as
a volunteer on a very part time basis. My real job is as Chief Information Officer
(“CIO”) at the Federal Trade Commission, although I must hasten to add that I am
appearing here solely in my capacity as a former Champion for the ITDS project.
The views I express are my own; they are not those of the Federal Trade
Commission, any FTC Commissioner, the ITDS Board of Directors, or the
National Performance Review.

First, a bit of background on me. Before coming to government and the
FTC almost 2} years ago, I eamed a BA in economics and joint law and business
degrees from Stanford University and also participated in the Business Schoo!’s
public sector management program. I spent my first six years at the FTC working
as an antitrust lawyer, and internal champion of using computers to support the
Commission’s consumer protection and competition missions. Fifteen years ago I
made a big switch to running the Commission's information and technology
management program ~ first commissioned, I might add, by Jim Miller, fresh from
his first tour at OMB, as Director of the Office of Information and Regulatory
Affairs. Since then, I’ve served as the Commission’s “Designated Senior Official”
for IRM, under the Paperwork Reduction Act, and now, as the position has been
renamed and evolved, as the FTC’s Chief Information Officer.

Throughout my career in government, I’ve been a proponent of using
technology to better and more effectively support our government mission. I have
also been an ardent supporter of more cooperation, collaboration, and sharing of
resources across agencies in doing so. I founded the Small Agency Council IRM
Committee more than ten years ago, as an organization of IRM professionals from
more than 40 smaller agencies of the federal government dedicated to working
smarter and cheaper by sharing resources across agencies. The driving force for
me in this respect has been the view that we government employees and agencies
can do more working together than alone. This is good for the taxpayers and good
for government. I have also represented the Small Agency Council in an
assortment of other interagency groups, including the former Federal IRM Policy
‘Council (“FIRMPoC”), the Interagency Management Council for the Federal
Telecommunications System (“IMC”), GITS, and now the Federal CIO Council,
and its Interoperability Subcommittee. Finally, over the years I have also
participated in a number of other special interagency projects; these include, for


185

could export from the United States, so it would be their imports,
and we could maybe solve some of the balance of trade problems.

What do you know on that particular niche of the database?

Mr. SIMPSON. That is a McGraw-Hill database. We are perfectly
happy to collect data and allow all of the users of the system to
manipulate it as they want, both government users and private
sector users. Our job is simply to economize in the collection of
data and to provide a single repository for it. We are not out to put
people out of business. If they can do it more efficiently than gov-
ernment can, more power to them. We are trying to improve the
efficiency of our own operation, not to destroy the efficacy of theirs.

Mr. Horn, Well, 10 years ago I had never heard of McGraw-Hill,
maybe they had it then, but this was an individual that was doing
it, and I am just curious, will that type of data be in this system
on actual tariffs for particular commodities?

Mr. Simpson. Yes; it will. We may not have all of the manipula-
tions of it that the private sector finds useful, but that is what pri-
vate sector data manipulators can do, they can fill that gap.

Mr. Horn. So government would have access to that, or do you
pay the fee that the private sector pays?

Mr. Stmpson. We usually pay the fee.

Mr. Horn. OK. Well, let’s proceed with the rest of the testimony,
then. We have Mr. Cronin, Michael Cronin, who is Assistant Com-
missioner of Inspection, Immigration and Naturalization Service.

Mr. Cronin, Thank you very much, Mr. Chairman, for providing
this opportunity to describe INS’s role in both the International
Trade Data System and the North American trade automation pro-
totype. My statement will be quite brief, as befits the limited na-
ture of INS’s role. However, I think the fact that that role has been
recognized and the fact that INS is participating both in the ITDS
Board of Directors, in the project office and in NATAP, dem-
onstrate both the complexity of the project and the comprehensive
approach that has been adopted to bring this project to fruition.

The border management agencies, Customs, INS, Agriculture,
and the Department of State, jointly have made great strides in the
application of technology to passenger processing. A first step in
INS’s participation in ITDS has been the application and integra-
tion of this technology with the trade automation prototype, with
an eye to controlling and tracking the movements of drivers and
cargo handlers throughout ports of entry, and certainly benefited
from the guidance of John Simpson and the hard work of the
project office in bringing this project to closure in terms of that
technology integration.

We certainly look forward to continuing this work, the matura-
tion of the trade data system, and to developing new means of mov-
ing relevant data from INS in terms of temporary workers and em-
ployment of foreigners in the United States to the trade data sys-
tem. Thank you.

[The prepared statement of Mr. Cronin follows:]


13

ENSURING THAT CIOs
FULFILL A CRITICAL LEADERSHIP ROLE

Senior executives in the successful organizations we studied were personally committed
to improving the management of technology. The PRA and the Clinger-Cohen Act make
federal agency heads directly responsible for establishing goals and measuring progress in
improving the use of information technology to enhance the productivity and efficiency of
their agency's operations. To help them with their major information management
responsibilities, the reform legislation directs the heads of the major agencies to appoint
CIOs‘ The legislation assigns a wide range of duties and responsibilities to C1Os,
foremost of which are:

«working with the agency head and senior program managers to implement effective
information management to achieve the agency's strategic goals;

«helping to establish a sound investment review process to select, evaluate, and control
spending for information technology;

* promoting improvements to the work processes used by the agency to carry out its
programs;

* increasing the value of the agency's information resources by implementing an

integrated agencywide technology architecture;’ and

“Under the Clinger-Cohen Act, CIO positions were established at the same 24 agencies
where the CFO Act (as amended) established Chief Financial Officer positions. In
addition, CIOs were created at the Army, Navy, and Air Force. Together, these 27
agencies account for nearly all fiscal year 1997 executive branch outlays of about $1.6
trillion.

*A systems architecture is a blueprint, having both a technical and a logical component, to
guide and constrain the development and evolution of a collection of related systems. At
the logical level, the architecture provides a high-level description of the organizational
mission being accomplished, the business functions being performed and the relationships
among the functions, the information needed to perform the functions, and the flow of
information among functions. At the technical level, the architecture provides the rules
and standards needed to ensure that the interrelated systems are built to be interoperable,

3


137

ina highly productive Border Process Reengineering project to eliminate
mission and operational overlap and to streamline, focus, and coordinate
agency activities.

INS has profited greatly from this approach to border management and
brings this experience to the development of the International Trade Data
System. We look forward to continuing to provide design input and
operational support to ITDS and to development of more timely and effective
methods for transfer of relevant INS data to our ITDS partners.

This concludes my testimony. I would be glad to respond to any
questions which you may have.


55

In fulfilling the responsibilities outlined in the Executive Order, the CIO Council has
undertaken a number of activities. During its first six months of operation (September
1996-February 1997), the ClO Council launched a number of important initiatives and
‘set a course for long range solutions to several difficult management challenges.

Launching the Council: the Strategic Planning Retreat. The ClO Council held its
first Strategic Planning Retreat on October 28, 1996, at the Information Resources
Management College of the National Defense University at Ft. McNair. The agenda
was ambitious and covered an array of ClO Council interests and concems. The
objectives of the retreat were to share ideas and produce focused, specific, action-
oriented strategic plans.

Retreat members were broken into ten working groups to focus on specific issues and
topics. The working group reports, with a total of 51 recommendations, were presented
at the November 20, 1996, CIO Council meeting. The Council members ranked all
recommendations by ease/difficulty of implementation and payoff (high or low).

Developing an Action Plan. The recommendations were then assigned to the CIO
Council Committees to review the rankings and develop action plans. The results were
presented at the December 18, 1996, CIO Council meeting and work to implement
them began under the guidance of the respective committees.

The CIO Council has made substantial progress in implementing the action plan and
organizing its operations. Examples of Council actions include the following:

. ‘The Council has set its structure and established administrative procedures such
as criteria for additional members; voting, quorum, and proxy vote procedures;
committees; endorsements; sponsors; communications; and resources. The
Council also abolished the Federal information Resources Management Policy
Committee (FIRMPOC), which was no longer needed.

» The Council endorsed three major changes to the Federal Acquisition Regulation
Part 15, Contracting by Negotiation, proposed by OMB's Office of Federal
Procurement Policy. The changes enhance the overall goals of the Clinger-
Cohen Act by streamiining acquisition processes.

> Adraft “Capital Programming Guide," sponsored by the Office of Management
and Budget and developed by inter-agency working groups representing 14
agencies, was reviewed by all CIO Council members as well as agency
information resource management officers, budget officers, and other interested
and involved parties. The guide, which was issued in July 1997, is a basic
reference manual for Federal managers on capital assets and provides guidance

2


2

development of an effective and an efficient, mission-oriented, user-
oriented, results-oriented information technology practice in each
and every Federal agency.

On the first anniversary of the Clinger-Cohen Act, we begin with
two areas. This morning we will investigate the Chief Information
Officer's Council. This council was created to facilitate the develop-
ment of chief information officers’ work and role, to share lessons
learned, to provide a forum for common needs, and to influence the
guidance provided by Congress, the General Accounting Office, and
the Office of Management and Budget.

This afternoon we will investigate one particular crosscutting in-
formation technology project, the International Trade Data System.
This Project has replaced about 40 separate forms required by a
range of Federal agencies, which are involved with international
trade activities, with an electronic data system. Our goal is not
only to help this project succeed but, more important, to help
spawn hundreds of similar projects.

It seems all parties are promising crosscutting projects. The Na-
tional Performance Review has identified a number of such projects
that could materially improve government. Congress, the leader-
ship in the House of Representatives, the Government Reform and
Oversight Committee, and this subcommittee are constantly en-
couraging such crosscutting projects through the Results Act. We
encourage the elimination of duplication, the improvements which
result from consolidation, and increased effectiveness and effi-
ciency. Unfortunately, there are all too few crosscutting projects ac-
tually being developed. The members of the subcommittee want to
be of help and want to encourage similar projects to get started and
succeed.

Let us turn now to the chief information officers and their coun-
cil. We are interested in learning about the chief information offi-
cers themselves; their backgrounds, roles, authorities, and respon-
sibilities within their agencies. It is our understanding that the
chief information officers have made considerable progress in their
first year, but still have a long way to go. We expect to be explicit
about the strengths and weaknesses of the chief information offi-
cers in particular agencies.

We welcome suggestions from all witnesses today for improving
the implementation of the Clinger-Cohen Act and the effectiveness
of the chief information officer. We are also interested in the ac-
complishments of the Chief Information Officers Council. It is
worth recalling the chief financial officers and their council and
their first couple of years.

Some say the Chief Information Officers Council has already ac-
complished more in its first year than the Chief Financial Officers
Council did in its first 2 years. We look forward to learning about
their successes. We hope that the chief information officers who
testify here today will educate us in the additional steps that are
necessary to improve the effectiveness of the Chief Information Of-
ficers Council.

This morning we will hear from two panels. On the first panel
are representatives of the General Accounting Office, Con; S'S
programmatic and financial auditing arm. Gene Dodaro, the Assist-
ant Comptroller General of the Accounting and Information Man-


163

I think that the excellent people I know in government have just
exactly the attitude you have, ail of you. And, the question is, how
do we promote more of that?

I have felt for a long time that if you are going to be a senior
civil servant, which is an honored position, and should be, and I
commend President Carter for getting that through. The Hoover
Commission, as I remember, in 1949, when I was just getting out
of high school, I remember reading that report, and we need more
like that.

But we ought to do what the military has done, which is to say,
look, if you want to be a general around here, or admiral, you have
got to have Joint Staff experience before you do that.

And I would like to see us move a lot more people around than
I think we do move around who could be generalists’ managers and
bring new life to agencies by the experience they have had, provid-
ing it is an innovative, enlightening experience, and government
would be rapidly improved.

I don’t know how many of you have had a chance to move
around. But, I think the military has done pretty well with help
from Congress. I believe it was the Goldwater-Nichols bill that
said, “Hey, we've got to have that experience, and do it, and made
all the difference in the world in terms of getting to know your col-
leagues in other areas and working closely in this kind of thing.”

When, in military operations, you get down and if it is going to
be a success, there has to be some joint Staff experience there,
some Joint line demands there, that you realize that your particu-
lar service isn’t the only thing that is winning, that we are all in
this together.

So I would hope that this type of project that you all have been
involved in would be a very sought-after model throughout the ex-
ecutive branch.

So we thank you all for coming. Unless you have some comments
you would like to make on anybody’s testimony that you heard or
on anything I have had to say, you are welcome to wind it up. If
not, thank you all. I appreciate it.

I do want to thank the following people: J. Russell George, staff
director and chief counsel; Robert Alloway, to my left, professional
staff member; John Hynes, professional staff member; Andrea Mil-
ler, clerk; Matthew Ebert, staff assistant; Serrica Brown, intern;
Mark Stephenson, minority professional staff member, and Ellen
Rayner, who is minority chief clerk. And to our court reporters,
Ryan Jackson and Julie Bryan, thank you, very much.

The hearing is adjourned.

[Whereupon, at 2:25 p.m., the subcommittee was adjourned.]

°


72

19. Social Security Administration;

20. Department of the Amy;

21. Department of the Navy;

22. Department of the Air Force;

23. National Aeronautics and Space Administration;
24. Agency for Intemational Development;

25. General Services Administration;

26. National Science Foundation;

27. Nuclear Regulatory Commission; and

28. Office of Personnel Management.

The Administrator of the Office of Information and Regulatory Affairs of OMB, the
Controller of the Office of Federal Financial Management of OMB, the Administrator of
the Office of Federal Procurement Policy of OMB, a Senior Representative of the Office
‘of Science and Technology Policy, the Chair of the Government Information
Technology Services Board, and the Chair of the Information Technology Resources
Board shall also be members. The CIO Council shall be chaired by the Deputy Director
for Management of OMB. The Vice Chair, elected by the ClO Council on a rotating
basis, shall be an agency ClO.

Sec. 4. Government Information Technology Services Board,

(a) Purpose and Functions. A Government information Technology Services
Board (“Services Board") is established to ensure continued implementation of the
information technology recommendations of the National Performance Review and to
identify and promote the development of innovative technologies, standards, and
practices among agencies and State and local governments and the private sector. It
shall seek the views of experts from industry, academia, and State and local
governments on matters of concem to the Services Board as appropriate. The Services
Board shall also make recommendations to the agencies, the CIO Council, OMB, and
others as appropriate, and assist in the following:

(1) creating opportunities for cross-agency cooperation and intergovernmental
approaches in using information resources to support common operational areas and to.
develop and provide shared governmentwide infrastructure services;

(2) developing shared governmentwide information infrastructure services to be
used for innovative, muttiagency information technology projects;

(3) creating and utilizing affinity groups for particular business or technology
areas, and

(4) developing with the National institute of Standards and Technology and with
established standards bodies, standards and guidelines pertaining to Federal
information systems, consistent with the limitations contained in the Computer Security
Act of 1987 (40 U.S.C. 759 note), as amended by the Information Technology Act.

(b) Membership. The Services Board shall be composed of individuals from
agencies based on their proven expertise or accomplishments in fields necessary to
achieve its goals. Major government mission areas such as electronic benefits,


2

Modernization, HCFA’s development of the Medicare Transaction System, and FAA's
efforts at air traffic control modemization. We worked with OMB in 1995 to issue
governmentwide guidance on information technology investment managementTM and we
have also issued detailed guidance on how agencies can effectively implement an
investment-oriented decision-making approach to their information technology spending
decisions as expected under the Clinger-Cohen Act.”

Information security is also an issue of paramount importance to the information
maintained and managed by the federal government. We have highlighted the reality of
the government's vulnerability and the urgent need to effectively identify and address
systemic information security weaknesses.” Moreover, in our September 1996 report on
information security, we specifically recommended that the Council adopt information
security as one of its top priorities

Also, building federal agencies' capability to manage information resources has been a
critical problem for years. Several of our recent reports, for instance, have focused on
serious weaknesses in an agency's capability to manage major technology initiatives, such
as in area of software acquisition or development.” Similarly, our best practices work

juide (Version 1.0), Office
of Information and Regulatory, ‘Affairs, "Office of] eee and Budget, November 1995.

Risks TGAG/ABD 3633, May 22, 1996);
Information Available on the Intemet (GAO/T-AIMD-96-108, June 5, 1996).



70

The Department of Commerce report, “America's New Deficit: The Shortage of
Information Technology Workers,” points to the projected shortfall of information
technology workers in the years to come. Effective responses to this challenge
are needed.


146

even if they call for some very tough decisions. What’s going to be hard, and
what is going to require effective teamwork between the legislative and executive
branches, is dealing with two principal issues: reconciling the existing legislative
framework that sustains government's current approach with the new vision; and
agreeing on how to organize the people and systems that will support the new
environment.

. . .

Lessons learned from ITDS to date.

ITDS has accomplished a lot to date, and there are several good lessons to
be leamed for use in the future in connection with this and other interagency
projects.

« Leadership and top-level support is crucial. This is a major point made
by a recent, keystone GAO study, Improving Mission Performance Through
Strategic Information Management and Technology, and we've gotten as far as
we have on this project with leadership from Vice President Gore, OMB, the NPR,
the project Board of Directors, and the ITDS Project office. Together, these
people and organizations have staked out, highlighted and helped us stay focused
on our highest priorities. They have also provided the support it takes to maintain
a major effort like this.

© Information management practices mandated by Clinger-Cohen are
important, Although the ITDS project predates it, Clinger-Cohen defines — and is
supplemented in this respect by OMB Memorandum 92-02, Funding Information
‘Systems Investments -- an approach and a number of best practices that have been
most valuable in advancing the ITDS project. These include the concept and
requirement of an information architecture and a host of related best-practices,
including reengineering business process before building new systems,
standardizing data elements and other system attributes wherever possible, and
having program staff lead the effort.

© The budget process is an important facilitator and enabler of change.
This project wouldn’t be where it is without effective use of a budget process that
has made provisions for special funding of innovation opportunities, has
highlighted total system costs (and therefore opportunities) through budget cross-
cuts, or for that matter, in presenting the Administration’s budget request to
Congress, has highlighted this cross-agency initiative as a major information
technology initiative. The overall process has also provided some structure and
support for agency participants to contribute resources on an ongoing basis.



63

Mr. BaLutis. That title resides now with Scott Gould, who was
just recently confirmed as chief financial officer and Assistant Sec-
retary for Administration. But he is sending an organizational pro-
posal forward to Secretary Daley which would set out a Deputy As-
sistant Secretary-level CIO, a career reserved position, that would
report to the Secretary on IT issues and matters.

Mr. Horn. So would that be your position, the deputy CIO?

Mr. Batutis. I believe the plans are to keep that position, sir.

Mr. Horn. To keep the deputy CIO position.

Mr. BaLuTis. The deputy CIO position, I think, would be re-
tained but in a different organizational structure than exists at
present.

Mr. Horn. So that your deputy position would have access to the
Secretary; is that it?

Mr. BALuTIS. Yes, sir, There would be a Deputy Assistant Sec-

retary-level CIO, and that person would have access to the Sec-
retary.
Mr. Horn. It just seems to me since I did this 20 years ago in
a university, I wonder what is all the fuss? Why can’t they do this?
And, why do they combine it with jobs that are also full-time jobs
if they want to get something done?

I marvel at the inefficiencies of the executive branch in some
areas and don’t understand why they don’t see the need for this.
Just throw it in the jungle, which means nobody is doing anything
very well, but, boy, they have sure got the titles.

I expect to see, very frankly, full-time positions. I look at the de-
partments, IRS under Treasury, where the CFO has been the As-
sistant Secretary. That is part of the problem. Nobody gives the at-
tention to an IRS where you need about 20 CIO’s practically to un-
tangle it, and you need about 20 CFO’s to untangle it, and here we
are. You know, years go by, debts mount up, and the confusion
mounts. So I am glad Commerce is doing something about it.

Since you won't be here this afternoon when that interesting
panel on import-exports occurs, Commerce has two of your major
bureaus that probably have a major input into this.

Mr. BALuTIS. Yes, we do—

Mr. Horn. You were involved in that.

Mr. BALUTIS. Yes, I’ve been aware of it, involved in it. I think
the lead representative from the Department is a senior colleague
from the Census Bureau. But he is the right one to be involved,
and I have kept informed through him of the work of this as well
as the presentations that have been made at the Council as well
as discussions with my colleague, Alan Proctor, who will be testify-
ing this afternoon.

Mr. Horn. Very good. Well, I thank you.

Now we will have some questions to submit for the record if you
don’t mind. Mr. Alloway will send them to you. Take one or two,
three sentences to answer, and we will appreciate it. And, without
objection, that will go in the record at this point in your testimony.

{The information referred to follows:]


20

Communications and Intelligence. By asking the CIO to also shoulder a heavy load of
programmatic responsibility, it is extremely difficult, if not impossible, for the CIO to
devote full attention to information resource management issues. Recognizing this
problem, the Department's Task Force on Defense Reform is examining the current
structure of the CIO position to ensure that the person can devote full attention to
reforming information management within the Department.'*

We are particularly troubled by agencies that have vested CIO and Chief Financial Officer
responsibilities in one person.” The challenges facing agencies in both financial and
information management are monumental. Each requires full-time leadership by separate
individuals with appropriate talent, skills, and experience in these two areas. In financial
management, for example, most agencies are still years away from their goal of having
reliable, useful, relevant, and timely financial information-an urgently needed step in
making our government fiscally responsible.

Because it may be difficult for the CIO of a large department to adequately oversee and
manage the specific information needs of the department's major subcomponents, we
have also supported the establishment of a CIO structure at the subcomponent and
bureau levels. Such a management structure is particularly important in situations
where the departmental subcomponents have large information technology budgets or are
engaged in major modernization efforts that require the substantial attention and
oversight of a CIO. In the Conference Report on the Clinger-Cohen Act, the conferees
recognized that agencies may wish to establish ClOs for major subcomponents and

“Defense IRM: me m men 2
at Risk (GAO/AIMD-98-5, Oct. 20, 1997).
"Commerce, Education, Health and Human Services, Justice, and the Veterans
Administration have combined CIOs/CFOs.

"Government Re exislati Siren
and Technology (GAO/T-AIMD-95-205, July 25, 1995).
10



37

weaknesses that were leading to chaotic development; and that
there were duplicate, multiple programming languages that were
wasting money, et cetera. So we found problems with software de-
velopment. We also looked at the architecture. It was missing
pieces, as well. We have reports coming out soon on computer secu-
rity at FAA and also their readiness for the year 2000 problem,
which, as you know, is lacking.

So when you look at it all across the board and you look at the
panorama of problems that exist over there, and we've rec-
ommended in the architecture report that the CIO be given these
responsibilities. FAA has not responded to that.

‘e are in the process of arranging a meeting with the new ad-
ministrator, Jane Garvey, to talk to her about these issues and see
if we can get some movement within the department to rectify the
CIO responsibility issue. That is an area where additional encour-
agement from the Congress to implement our recommendations
would be very helpful.

Keith, do you want to add anything to that?

Mr. RHODES. You're getting right to the heart of the problem,
and that is the span of control. If you look at the five projects that
we looked at in the software acquisition review, they were all mov-
ing according to their own rules. Yes, there is a very high level
guiding acquisition policy, but it is so open to interpretation that
each of the teams was able to implement it how they wished.

If the CIO, who was supposed to be issuing this policy, is deeper
inside the organization, then span of control is obviously weakened
and there can’t be a uniform stabilization of the process for acquisi-
tion or development or anything else.

Mr. Horn. I noted a few months ago, and I might well have got-
ten the example from you gentlemen, back in 1989 a very able pro-
fessional career woman noticed the year 2000 problem in the Fed-
eral Highway Administration.

Now, that was under the Bush administration. That, apparently,
never went up the management communications hierarchy so the
Secretary could say, the next time he sat around the table with his
administrators, or the Deputy Secretary could say, does anybody
else have a problem like that? Namely, FAA has a problem like

t,

And, as I remember, she knew what she was doing and they just
sort of brushed it aside. And, thus, Social Security gets the A’s for
having the initiative to do something about it way back in 1989.
But Transportation could have been there if they had an effective
management communication system. And I must say, any poor Sec-
retary that is nominated to go over and try to run that agency, that
ought to be the first thing he or she looks at. How the heck do you
get to know what’s going on in this particular cabinet Department,
when nothing comes up the hierarchy so you can share it and look
across the view in the horizon and do something about it. I would
think that is like taking a job with a stick of dynamite in your
hand wondering if it’s lit, and you’re wondering if it will go off.

So we will try to educate Secretary Slater that he better watch
out. They are playing games again, or at least it is getting up
where he can’t play the game by which he is being held responsible
by the President and Congress.


157

Mr. SIMPSON. We're doing a cost-benefit analysis that we expect
to have by June 1998. But rather than leave you in suspense, let
me say that the estimates depend to a great extent on the assump-
tions that one makes about the cost of maintaining Legacy systems,
and those assumptions can be pretty high or pretty low, and we’re
trying to get a realistic handle on it.

Obviously, if one makes high assumptions about the cost of main-
taining Legacy. systems, then we look pretty good. If the assump-
tions are on the low side, then we still look good but not quite as
good as before. But rather than make a seat-of-the-pants guess, I’d
rather work that out and give it to you.

Mr. Horn. Fine. Without objection, it will be put at this point in
the record.

[The information referred to follows:]


57

Published two pamphiets entitled “The Year 2000 Issue” and “Year 2000
Products and Services.”

Worked with the Office of Federal Procurement Policy to develop standard
language for contract solicitations on year 2000 compliance, which has been
published in the Federa Acquisition Regulations.

Developed a database of information on the year 2000 compliance of
commercial-off-the-shelf products.

Capital Planning and IT Investment Committee Achievements:

‘Sponsored seven capital planning pilots for the FY 1999 budget cycle, including
the General Services Administration (GSA), Department of Housing and Urban
Development, Department of Agriculture, U.S. Coast Guard, Department of
State, Environmental Protection Agency, and Department of Energy.

Agencies are now implementing the full capital planning life cycle, including
selection, control and evaluation phases.

Held an interagency Forum in February to review the progress of these pilots
and to share “First Practices” in a publication that was issued in March 1997. A
final product of "Best Practices” was issued in August 1997.

Conducted a survey, in coordination with the Industry Advisory Council and
Government Computer News, on experiences with IT capital planning and
measuring retum on investment.

Outreach Committee Achievements:

Held a Private Sector Forum, on February 18, 1997, which brought together

approximately 50 people, representing industry, government agencies, and other
interested parties to discuss such matters as the design, modernization, use,
‘sharing, and performance of agency information resources.

During the Forum, five Committee Chairs gave brief summaries of their goals
and initiatives for working with industry and six industry executives spoke of their
interest and desire to work with the various committees. As a result of the
Forum, a dialogue with several industry associations was established.

Developed a White House policy statement on the relevance and importance of
information technology in the Twenty-First Century. This policy has been defined
in a new report presented to the President and Vice President by the National

4


23

Board, the agency has not yet implemented an investment process-including senior
Management roles and responsibilitiesthat governs the selection, control, and evaluation
of IT investments, Consequently, we have recommended that HCFA establish an
investment management approach that explicitly links the roles and responsibilities of the
CIO and Investment Review Board to relevant legislative mandates and requirments.

Such actions are essential to ensure that HCFA's-or any agency’s-information technology
initiatives are cost-effective and serve its mission.

ESTABLISHING A STRATEGIC DIRECTION
BOR THE ClO COUNCIL

Although the Clinger-Cohen Act did not call for the establishment of a federal CIO
Council, the Administration is to be commended for taking the initiative to establish one
through a July 1996 Executive Order." Our experience with the CFO Act shows the
importance of having a central advisory group to help promote the implementation of
financial management reform. The CFO Council, which has a statutory underpinning, has
played a lead role in creating goals for improving federal financial management practices,
providing sound advice to OMB on revisions to executive branch guidance and policy, and
building a professional community of governmentwide financial management expertise.

‘The CIO Council, chaired by OMB, can play a similarly useful role. As stated in its
charter, the Council's vision is to be a resource for helping promote the efficient and
effective use of agency information resources. The Council serves as the principle forum
for agency CIOs to

* develop recommendations for governmentwide information technology management

policies, procedures, and standards;

“Executive Order 13011 of July 16, 1996: "Federal Information Technology.”
13


144

process in which exporters and importers are required in connection with a single
trade transaction, to submit information that is duplicative, overlapping, and
costly, in parallel to many different agencies. One small example I’ve heard of
anecdotally is suggestive of the potential for improvement here. I'm told to
consider the operations of just one auto company supplier, with plants located in
both Canada and the United States, and focus just on the movement of parts
between these plants, from where the parts are manufactured in some plants to
where they are assembled in others. If the government would just do three things
~ define once, up-front, in a single place, what information is required to be
submitted in connection with the movement of material between plants in Canada
and the United States; let the company provide this information to the federal
government through a single, consolidated submission; and to do so electronically
the company could save tens of millions of dollars a year. Multiply this many
times for all of the companies involved in international trade and you start to get a
picture of the costs imposed by the current system, and the economic case for
moving ahead quickly.

What is neat about ITDS is that it’s also good for government. The fact is
that accurate, timely and cost-effective collection, maintenance and use of trade
data is essential to many of the enforcement, operational, statistical, and policy
functions of many government organizations. I haven't met anyone in the four
years I’ve been associated with this project that doubts that government could save
big through smart use of information technology in consolidating and streamlining
ss processes of data collection, storage and access, or
in developing and maintaining the many information systems that support these
various business processes. We save by standardizing and streamlining our
processes, eliminating duplication, and improving quality and timeliness of data.
This reduces operating costs and makes for better quality policy and enforcement.

‘The project has made considerable progress since our first gathering more
than four years ago. The vision then was pretty much as it is now ~ simple and
powerful ~ and guided by the clearly stated goal of the Vice President and many
others across the political spectrum, of making a government that works better and
costs less. But there we were, representatives from more than 40 agencies sitting
together talking about the initiative. Several speakers had laid out the vision and
benefits of working together on this really big thing. There was also some
discernable tension around some of the implications. And then a representative of
one relatively big player stood up, announced to the group what I’m sure many, if
not most, of the people in that room were thinking ... that he was actually already
plenty comfortable with his agency’s current legislative mandate and budget and
didn’t see they would gain anything from this new idea ... and then basically
walked out of the meeting.


90

Statement by
Anne F. Thomson Reed
Chief Information Officer, USDA
Before Congressman Stephen Horn, Chairman
Subcommittee
Government Management, Information, and Technology

October 27, 1997

Mr, Chairman, members of the Committee, | welcome the opportunity to
appear before the Committee to provide you an overview of USDA’s actions to
implement the requirements of the Clinger-Cohen Act of 1996. The principles
conveyed in the Clinger-Cohen Act figure prominently in our efforts to provide
better management for USDA’s technology resources and better support to our
varied programs through the prudent use of technology.

USDA is a complex institution whose programs touch the lives of every
American, every day. We manage a diverse portfolio of over 200 Federal
programs throughout the nation and the world, at @ cost of about $60 billion
annually; with over 110,000 employees. We estimate that we will spend about
1.5% of our budget in Information Technology (!T)-related activities in FY 1998.
Of this amount, we expect to spend approximately $280 million for acquisitions,
with the balance used for commercial support services including operations and
maintenance, personnel costs, and intra-governmentat payments including grants
to the States.

In 1996, the Secretary established an Office of the Chief Information
Officer for USDA and appointed me as Acting Chief Information Officer (CIO}.
‘That appointment is now official. We have established an Executive Investment
Technology Investment Review Board of Subcabinet officials, chaired by Deputy
Secretary Rominger. | serve as vice-chair.

As part of USDA’s plan to reorganize and streamline, the Secretary recently
assigned to me responsibility for IRM-related activities of our county-based
agencies (Rural Development, Farm Service Agency, and Natural Resources
Conservation Service). This action was taken to ensure a coordinated technology
approach as these agencies transition to a consolidated administrative services
organization at both the headquarters and field level.

Currently, USDA is operating under a moratorium on significant information
technology acquisitions. All requests for new acquisitions that exceed $25,000
are reviewed by my office. Exceptions ara granted only for emergencies and for
acquisitions that are directly related to ensuring Year 2000 compliance.

1


44

clo

clo

Air Force

Army

Commerce*

Defense

EPA

Education*
HHS"
Justice*
Labor

Navy

NSF

Richard Nygard

Arthur Money
Lt. Gen. William
Campbell

W. Scott Gould

Anthony Valletta

Al Pesachowitz

Donald Rappaport
John Callahan

Stephen Colgate

Patricia Lattimore

John Douglass

Linda Massaro

Acting Assistant Administrator for Management.
and Acting CIO

Assistant Secretary for Acquisition

Director of Information Systems for Command,
Control, Communications and Computers (DISC4)

Chief Financial Officer and Assistant Secretary
for Administration

Acting Assistant Secretary of Defense (Command,
Control, Communications and Intelligence)

Acting Assistant Administrator for Administration
and Resources and CIO

Chief Financial Officer and CIO
Assistant Secretary for Management and Budget
Assistant Attorney General for Administration

Acting Assistant Secretary for Administration and
Managemen¥/CIO

Assistant Secretary of the Navy (Research,
Development, and Acquisition)

Director of Information and Resource
Management


85

TT Topics (Knowledge of how the these disciplines can be applied to support the mission of the
organization/ and the decision making process)
Data Processing

- Computer Systems Architectures Client/server, collaborative processing

- Systems Analysis, Design and Testing

- Telecommunications and Networks

- Information Technology Application

~ Internet Structure and applications, WWW, Email etc

- Software Engineering, Software Development Lifecycle, Provess, and Testing,
- Security and Policy

- Information Systems Management

IT Trends

-Knowiedge of Intergovernmental, Federal, State, and Local Projects
-Knowledge of Developing Technologies


62

Mr. Horn. I appreciate what you have done, all of you, on this,
and I thank you Tor the compliment.

I noted when I went through your testimony, which was very
well organized and succinct. I just asked the staff to get me that
year 2000 issue and the year 2000 products and services. And,
frankly, I missed that point Mr. Dodaro made on the OMB thing,
so I am glad to hear your side of it, because I think that is exactly
what happened, is you have all taken hold. I would ask you, do you
feel you are sufficiently positioned within your agency so that you
have the authority and the controls to do what you have to do in
the role of a chief information officer?

Mr. Batutis. Yes, sir, I do. I have responsibility for some other
areas besides IT, but I think in fact they only support and reinforce
that IT responsibility. I am responsible for the Department's com-

liance with the Government Performance and Results Act, so I
ve been able to incorporate the contributions that technology can
make to the accomplishment of the business mission.

I do not serve as the CFO or the deputy CFO, but I do have
budget formulation responsibilities, and, as a result, I have control
through that process or a say in that process in IT investments and
ongoing systems efforts. And, as the person responsible for the
management planning work as well, we can focus on the re-
engineering and reinvention needs to accompany the implementa-
tion of technology initiatives to our programs.

So, yes, sir, I do feel I have the authorities that accompany my

ibilities as the deputy CIO at the Department of Commerce.
ir. HORN. When Congress passed these various acts, be it the
inspector general 20 years , the CFO, or the CIO, the feeling
certainly was that this should be a full-time job because it is mas-
sive and it is very important and billions of dollars are involved
with it.
. De you feel that the CIO, your agency, ought to be a full-time
job?

Mr. BALUTIS. I believe it is, sir. We are in a somewhat unusual
circumstance in the sense that we have had an acting CFO Assist-
ant Secretary for Administration since shortly after the tragic
death, almost 20 months ago now, I guess, of then Secretary Ron-
ald Brown while the CFO and Assistant Secretary for Administra-
tion was given the interim designation as CIO, when we were
called upon to set our structure in place. I, in fact, had that title
and responsibility previously, and I have carried it out, albeit with
the deputy title since then.

Secretary Daley is revisiting that structure based on the experi-
ences we've had to date, the requirements of the act, and his deter-
mination of what would fit best within the Department of Com-
merce. But I think it is a full-time responsibility for me, where I
used the other authorities, I have to carry out it task in a way
I think the legislation intends, with some role in systems invest-
ment, a link to strategic planning, and some capacity to not only
lecture about the importance of good planning and systems archi-
tecture but some mechanisms to enforce it, if need be, within bu-
reaus in the Department of Commerce.

Mr. Horn. Has there been a CIO—who is the chief information
officer of the Department of Commerce?


86

BIOGRAPHICAL SKETCH

ELIZA J, MCCLENAGHAN

Eliza McClenaghan joined the State Department in 1993 as a Special
Assistant to the Under Secretary for Management on management and
information resources management issues. She served as senior advisor to the
acting Chief Information Officer before being named Chief Information Officer
by the Secretary in 1996. Prior to joining the Department, Ms. McClenaghan
worked in the private sector and on the Hill. CIO Magazine, in it’s August 1997
CIO-100 issue, selected the Department of State as a top performer in internal

information systems innovation.


121

-3-
Although there are no reliable cost figures for the United States
alone, the United Nations Council on Trade and Development
estimates that worldwide the cost of documentation requirements for
international trade accounts for 4 to 6 percent of the cost of
goods traded. In other words, the cost of preparing documentation

is equivalent to a tax of 4 to 6 percent on the value of goods.

Today,

parate reporting and data eystems are maintained by
federal agencies involved in all aspects of the international trade
process, including regulation of goods, transportation, and
immigration. Exporters and importers deal with numerous paper and
electronic systems, and are confronted with duplicative,
incompatible, and non-uniform data reporting and record keeping

requirenents,

In addition, those who need access to international trade data,
including those who make trade policy for the U.S. Government, must
often research several potentially incompatible sources because the
systems do not use standard data or technology. The current state
of trade data reporting and processing acts as a barrier to
efficient and effective trade and transportation flows, adds to the
costs for business and government of conducting international

trade, and makes analysis of the data difficult or even impossible.

‘The Mandate for ITDs


124

@ Reduce of government and trade community processing
time and costs;

© Provide knowledge to improve informed compliance with trade
statutes;

© Eliminate duplication and unnecessary reporting;

© Enhance fraud detection capabilities,

© Improve financial controls;

© Provide more immediate access to trade data; and

© Establish a basis for re-engineering processes of
government agencies and the processes by which the
international trade operates.

IDS Is a True Inter-Agency Effort

As directed by the Vice President's Memorandum and charter, an
inter-agency Board of Directors comprising senior officials of
agencies with substantial interests in collection and use of
international trade data was formed to oversee development of the
ITDS. Agencies on the Board include Treasury, the Food and Drug


31

Mr. Horn. We thank you and your colleagues for that very fine
presentation.

I now will yield 10 minutes to the gentleman from Virginia, Mr.
Davis, to begin the questioning.

Mr. Davis of Virginia. ‘Thank you for that testimony.

As you know, the agency heads are legally responsible for devel-
oping IT goals and progress measures, and we expect that the
CIO’s will do the actual work and you can get their boss’s approval.
Have any agencies actually developed and measured IT goals and
progress?

Mr. Doparo. Most of the agencies have developed goals at what
I would call the working level for IT organizations. There are the
standard type of goals in terms of measuring timeliness in deliver-
ing products and services, software defects, for example, in essence
traditional industry standards.

The real challenge that agencies face in the future is establishing
performance measures that link to the business goals of the agency
and what kind of contribution information technology is really
making toward accomplishing the business goals.

For example, in the Medicare transaction system, one of the pri-
mary goals is to reduce fraud and abuse in the Medicare system,
and the new services and IT that need to be brought about durin;
the Medicare transaction system or any other modernization ef-
forts, we should be able to measure what goal or measure what
contribution IT has made to reducing fraud and abuse. For exam-
ple, we recommended the use of commercial off-shelf technology, et
cetera.

The same thing is true at IRS in terms of electronic filing and
moving more toward that goal.

One of the things we've done, and I will ask Dave McClure to
elaborate on, is we’ve developed a guide describing how leading or-
ganizations have used performance measures to really tie IT devel-
opment to achieving business outcomes in the agencies. That is
really the big issue.

Mr. Davis of Virginia. OK, Mr. McClure.

Mr. McC.ure. Let me add to that for a moment. Gene is refer-
ring to an executive guide which we've put out, and I think we've
made available to the subcommittee. It lays out an approach for
trying to measure the contribution of IT to the business. That is
not an easy task but one which most organizations that are good
at IT spend : a lot of energy on.

at we've recommended is approaching the performance of IT
from many dimensions; looking at the return on investment and
looking at how it is contributing to the overall mission improve-
ment. And there are specific things that you can measure to deter-
mine whether IT is adding value: timeliness, cost, quality, cus-
tomer satisfaction.

We certainly would like to see the Federal agencies and the CIO
organizations themselves devoting attention to those kinds of meas-
ures, showing how IT is improving the overall operations of the or-
ganization and how the products and services that IT is providing
the business side is indeed enhancing their performance.

Mr. Davis of Virginia. Let’s talk about the CIO effectiveness. You
say that less than half—I think it is 13 versus 14—were full time


156

Let me ask you, on the estimate of about 5 percent of total trade
dollars spent in paperwork overhead, is that a pretty accurate esti-
mate, do we think, on the 5 percent of total trade dollars, or is this
simply the cost of filling out the forms and all the rest? I heard
that figure bandied around.

Mr. SImpson. It is the cost of collecting, to the trade community,
of assembling the data that are required, of putting it on to the
forms, and maintaining records that are required to support those
data. That figure was initially developed by the U.N. Council on
Trade and Development. It was a survey that they did across a
number of nations.

We thought, being the United States and being more efficient
than most, that it was probably pretty high. It was too high for us,
but we asked well known American manufacturing company that
both exports and imports to go very deep into its financial records
and take some of the costs apart and see how much it costs them
to document trade. They came up with a very similar figure. It was
a little discouraging to us, but at least we know that we have a
real problem to deal with,

Mr. Horn. What would that amount to, if you convert 5 percent
of our total trade? I assume that is imports and exports. What
would that 5 percent boil down to?

Mr. Simpson. We have about three-quarters of a trillion dollars’
worth of imports and a slightly smaller figure in terms of exports.
Let’s call it $1.3 trillion times, take the low side of that estimate,
4 percent. That’s a lot.

Mr. Horn. So converting it, since you are from the Treasury, you
can add and subtract. Tell me what it is in terms of billions. I
mean, that is what we are talking about.

Mr. Simpson. I was afraid you were going to ask that.

Mr. Horn. I assume you brought your pocket calculator with you.

Mr. Simpson. I’m going to say it is in excess of $50 billion.

Mr. Proctor. It is $52 billion.

Mr. Horn. It is $50 billion out of the $1.3 trillion; right?

Mr. Simpson. Right.

Mr. Horn. So we sort of agree on that? Will that be now the
mantra around town, at least until tomorrow?

Mr. Simpson. That’s as good a figure we have. I’m sure better
figures can be developed, but that’s as good as we have right now.

By the way, let me mention that on the basis of this work that
this one American company did, we have gone to Penn State Uni-
versity, which has an ongoing survey of benchmarking exercise, to
look at the efficiency of different American companies. There are
about 40 different companies that are involved in this, and the
original U.S. company that we went to has taken the lead to broad-
en the survey to these others.

I think what we're going to find is, they are going to be thwart-
ing very unhappy chief executive officers when they find out how
much the hidden cost has been.

Mr. Horn. Yes; no question about that. So that is the savings in
the private sector. Now, what about the public sector savings, say,
with the Federal Government? If your system here and proposals
see the light of day, which I am sure they will, what are we talking
about saving the Federal Government?


7

Mr. Davis of Virginia. Thank you, Mr. Chairman.

I think as many of you know, I was the general counsel to an
IT company in Fairfax and have been in government contract law
and procurement law for 15 years prior to coming here. It is inter-
esting how it has evolved.

Clinger-Cohen was an effort to try to get the “one size fits all”
rules and regulations off the books and allow the government buy-
ers a little more discretion, a little more flexibility, in buying par-
ticularly these complex IT procurements that many times we didn’t
get what we wanted at the governmental level because we were

und within the trappings of what the procurement had asked for
in the RFP.

I am interested in this hearing and the other hearings to see how
what we intended to occur is actually occurring. Today, focusing on
the chief information officers and their council, I am interested i:
learning what is happening on that. I am concerned, and I think
if you will look at the testimony by Mr. Dodaro, I share his concern
that agencies have vested the chief information officer and chief fi-
nancial officer responsibilities in one person. That is a concern.

The challenges facing agencies in financial information manage-
ment are monumental, and one of the problems with OMB is that
they spend more time on budget than they do on the management
side, and I think in this particular case you need a dedicated per-
son concentrating on the information needs of these different agen-
cies. But it will be interesting to hear your reactions to this.

We passed, in two different Congresses, major procurement laws
with FAPR and then Clinger-Cohen. I don’t know if any major leg-
islation will come out of this Congress or not. But maybe we need
to monitor and see that what was intended by the previous two
Congresses is actually taking place. Clearly, buying in the market-
place is changing and evolving to more IDIQ’s, more buying off the
GSA’s schedules, more discretion and, I think, competition. But I
will be interested to hear your comments, and I appreciate
everybody’s willingness to be here today.

Thank you, Mr. Chairman.

Mr. Horn. I thank the gentleman.

We will now move to panel one chaired by Gene Dodaro, the As-
sistant Comptroller General, Accounting and Information Manage-
ment Division, General Accounting Office.

Gentlemen, you know the routine here. Stand up and raise your
right hands.

‘Witnesses sworn.]

Mr. Horn. The clerk will note that all four witnesses affirmed.

I would like you to identify the fourth witness. I mentioned Mr.
Brock and Mr. McClure. Mr. Rhodes, if you would just give us your
title for the record, I would appreciate it.

Mr. Ruopes. I’m the technical director of the Office of the Chief
Scientist in the General Accounting Office.

Mr. Horn. And the chief scientist is who?

Mr. RuopEs. The chief scientist is Dr. Rona Stillman.

Mr. Horn. The chief scientist has testified here a number of
times. We thank you for coming.

I might also say, the ground rules here for this panel and every
other panel are, after you take the oath, the minute we introduce


139

that, Agriculture gets some other elements, you need to look at it
as the importers and exporters of the world do and the taxpayers,
which is it is a unified process.

Clinger-Cohen, I am proud to say, actually has this model of the
information architecture and, as far as I know, the ITDS project is
the very first cross-agency effort within government to apply that
largely agency-oriented discipline to what we are trying to do. I
happen to think it has actually been a very good exercise, and al-
though we haven’t completed it, in fact we are just kind of getting
warmed up. It is going to surface and is surfacing the tough issues
that are designed to be raised by that tool. So I think it is an early
success for Clinger-Cohen in that respect; also, standardization
across agencies, which John Simpson mentioned earlier, and there
are a host of other examples in which I think it has made it easier
for CJO’s in the world and others to help with the process and sup-
port activities like ITDS.

I would also note before summarizing just a couple of key obser-
vations specifically on ITDS, that one of the things that has really
struck me here is this kind of enterprise view. When you think
about what the NPR process has done, and they have talked about
this vision of virtual government, we should really put aside the or-
ganizational division and look as individual agencies at our overall
function. That is something, as I have mentioned, that obviously is
pertinent here from the executive branch perspective. But in my
experience, it is actually also pertinent to the way OMB approaches
its processes.

Imagine that when you go over to talk to OMB you find a desk
officer responsible, and then you start seeing these line agencies.
Or imagine you come to Congress and you find, this committee to
the contrary notwithstanding, a whole lot of appropriation and au-
thorizing committees that are looking at the world, you know, as
the Treasury Department or as INS or whatever else. That is what
all of us need to rise above and deal with here.

Just a couple of key observations. One, I think you should have
seen on its intuitive the obvious, which is a pretty simple vision
here. Government should get it straight from the beginning what
it wants, tell people, let them submit it in a nice efficient way, and
be done. Yet, here we are still working on our vision for 4 years,
and I sense frequently spending far too much time shoring up the
commitment that we have to that vision.

I lay this little game with my kids at home, my four little boys,
kind. of show them pictures of things and say, what is wrong with
this picture? I show them a picture of the existing trade processes
within the Government and they get it really quickly. And yet 4
years later, I mean, there is all this yak, yak, yak about you know,
well, this and that sort of thing. This is not a hard concept to deal
with. The hard part is kind of doing it, and that fact actually is
not all that hard either.

As I see it, there are a couple of key things from a leadership
and management perspective we need to be focusing on here, and
frankly I think there is room for OMB and Congress to turn up the
support on this as well. Beyond what we have been able to do with
the National Trade Data System, we need to communicate our firm
commitment to this. It has been an interesting 4 years, but it is


147

© Innovative approaches have also helped. The project has also been
assisted along the way by a number of creative approaches that have been applied

to deal with the special challenges of this kind of effort. For example, any project
needs a leader, but in an interagency context, meeting the needs of major
participants to be involved presents a special challenge. To meet this need, the
ITDS initiative recommended and Vice President Gore chartered, an interagency
Board of Directors to oversee and guide the reinvention project on a truly
interagency basis. And there are a respectable list of additional examples. The
GITS/IMC innovation fund contributed some seed money to get the project
started. The CIO Council and member CIO's have helped to reinforce the data
standardization effort. OMB has used its authorities to identify total system costs,
reduce the burden of information collections, and intervene on those occasions
when the services of a referee have been helpful. People and organizations have
also been encouraged and empowered within the government to work for change a
bit outside normal their normal bureaucratic envelopes, taking some extra
initiative and risks to advance the process more quickly. The ITDS Board has on
its own initiative applied the spirit of some of Clinger-Cohen’s department
oriented procedures to its own interagency initiative, drafting, for example, an
information architecture for the government's trade data processes. And yes,
there is also the use of a project “champion,” to position someone outside of the
normal bureaucratic positions, but still well placed to keep asking those pesky
questions Clinger-Cohen expects CIO's to ask.

Finally, a more clearly and aggressively defined project plan is needed,
with clear accountably for results. It is also clear that the project has taken
considerable calendar time, far more, I suppose, than really necessary to do the
work that has been accomplished to date. This reflects the scope of the challenge,
but it also suggests to me that we have come to a point where more aggressive
milestones, dates, and deliverables need to be laid out and committed to, and that
the participants, including the Board, need to become accountable for them. As it
‘tums out, the ITDS Board recently came to the same conclusion and is in the
process now of incorporating this structure in its overall ITA and project plan.

Applying these lessons in the future

I draw from these lessons three sets of suggestions with respect to ITDS
and the dozens, if not hundreds, of similar efforts that can or should be underway.
They are really interlinked “conditions for change” that are required if we are to be
successful in using information technology to make a government that works
better and cuts costs for everyone.


153

are crosscutting and are very hard, but it is a long list of very, very
good ideas.

That report was updated recently by Access America, another re-
port from NPR called Access America, and that also repackages
some of the earlier suggestions and adds some additional ones.

Mr. Horn. I notice the CIO Council is doing a survey about some
of these projects, and apparently October 24 was the deadline; is
that correct? Does anybody know anything about that?

Mr. Proctor. Well, we had a retreat, which was mentioned this
morning, on October 14 and various pieces of new initiatives have
been assigned to the groups. Anne Reed who testified this morning,
the CIO of Agriculture Department, is chair of a group that I am
on as well, the Interoperability Committee. That group actually at-
tracted a firm with a suggestion that we serve as a place for people
i. come who have ideas for crosscutting initiatives. Interesting, I
think.

One of the challenges, if you are interested in having more of
these things come out, is to move from a model where you get a
bunch of knowledgeable people together once every 3 or 4 years
and kind of come up with a huge number of things and spit them
out and drop them on the world, and move to a continuous im-
provement process where tomorrow when you wake up and have a
good idea you have someplace you can kind of send that, have some
knowledgeable people look at it, farm it out to people who really
know about it, and come back with a recommendation and say to
the CIO Council, “This makes sense. Why don’t we spin off a group
dealing with it?”

It is that kind of challenge that I think the CIO Council is still
very much kind of getting its legs on. The Interoperability Commit-
tee, as strange as that title might be for this function, looks like
it may well embrace that kind of capability.

Mr. Horn. I was impressed when I heard that testimony and
looked _at the various subcommittees, how they have divided the
labor. It made a lot of sense.

One of the things that a number of us have been thinking about
is an Office of Management and an Office of Budget. It used to be
that the old BOB had a very powerful section in there that dealt
with management problems, Government corporations, etc. They
had real experts, and these people continued between administra-
tions. It had nothing to do with being a Democrat or being a Re-
publican. These were professionals.

Now, since President Kennedy, primarily President Johnson on,
we have had much more politicizing of OMB. Now the President
doesn’t have available all of the expertise that a Franklin Roosevelt
had, a Harry Truman had, a Dwight David Eisenhower had, and
even President Kennedy had. I thought when President Nixon put
the M in OMB, it might solve a lot of our problems.

My friends on the inside of the Government have been telling me
for 10 years or 15 years, “You are dead wrong, the budget drives
out management,” and I agree with them now. I changed my mind
about 3 years ago. They told me enough about this, and you look
at it, and with the $5.3 trillion national debt. With the huge budget
deficit we have had and we will still have in the years ahead if we
are not careful, the Director of OMB has the toughest job next to


46

Mr. Horn. Well, I note on page 9, agencies of CIO’s whose re-

sponsibilities are focused solely on information management. And
then you say the other 15 agencies—CIO’s with multiple respon-
sibilities—these 15 agencies account for about $19 billion of nearly
$27 billion in annual Federal planned obligation information tech-
nology.
Right now we need to nail that one. That has been my gripe
with—3 or 4—portfolio of the Assistant Secretary for Management,
the CFO function, and I don’t know what they have done with the
CIO. They have done the same thing.

Mr. Doparo. Actually, the CIO at Treasury reports to the CFO,
the Assistant Secretary for Administration. We can provide the list
of 15 agencies with dual reporting or responsibilities and the ones
with sole responsibilities.

Mr. Horn. Well, you note on page 10, we are particularly trou-
bled by agencies that have vested CIO and CFO responsibilities in
one person, and then, Commerce, Education, Health and Human
Services, Justice, and the Veterans Administration remind CIO—
that is just stupid.

Now you look at Medicare, the messes they have got over there.
Has Medicare got a CIO yet?

Mr. Doparo. They have just hired somebody from Los Alamos
about 2 weeks ago, but we’ve made recommendations there——

Mr. Horn. Wish them well. It is about 5 years too late, but let’s
see what he can sell.

Now, on the President’s Commission on Critical Infrastructure
Protection, you say it issued its final report October 20, and it
hasn’t been released. What is your understanding of when that will
be released?

Mr. Doparo. Well, I think there will be some classified version
of the report at least.

Let me ask Keith to explain that. He’s been in contact with peo-
ple on that commission, and we have been providing them our
views.

Mr. RHODES. The lower level reports on department agency level
have a great deal of detail, and most of the agencies are very con-
cerned about having that level of detail, particularly when it is
classified or at least so it will go through a process.

To be honest with you, I do not know when it will be released
in final, but there is a mountain of information there that they
have to get through.

Mr. Horn. So is it likely to be one report that is sort of general-
ized and then a whole series of appendices, or what?

Mr. RHODES. I would imagine it would probably be one report
that’s generalized and—on a need-to-know basis—would be able to
access the appendices.

Mr. Horn. Staffers, let’s follow up on that to see what we can
learn out of that report in addition to what the CIO function—I
suspect that is a major problem, a major concern.

Now here, of course, you note on my gripes about Medicare that
on page 12 there is development of the Medicare Transaction Sys-
tem. MTS Frovides another example that these are strong manage-
ment overdevelopment—finally, says GAO, as we reported to you
earlier this year, the problems encountered by the Health Care Fi-


Gene Dodaro, Assistant Comptroller General, Accounting and Information
Division
Jack L. Brock, Director, Accounting and Information Management Division
Dr. David McClure, Assistant Director, Accounting and Information
Division

On the second panel will be members of the Chief Information Officers Council.
Aten P. Bata, Dep Chief Information Offer, Deparment of Commerce

Liza McClenaghan, Chief Information Officer,
Anne Reed, Chief Information Officer, Depuen of apna


40

see a lot of good linkages between the IT and strategic goals of the
agencies.

Some of the CIO’s, particularly some that are also CFO's, obvi-
ously have some role to play in the development of the strategic
plans. But I think we need to see the CIO’s more involved in the
strategic Plans as they unfold. The agencies should be able to more
clearly address the role of information technology in achieving the
mission goals set by the agency. I think that is a fundamental ex-
pectation that Congress ought to look for going forward. CIO’s need
to be more engaged in that process.

Mr. Davis of Virginia. Thank you. Mr. Chairman, that’s all my
questions.

Mr. Horn. I thank the gentleman. Let me now get into a few
questions that relate to the testimony, and I’m just going to page
through this.

My first question comes on page 6. You brought this out in your
oral summary. But in the first full paragraph at the top, going
down about 6 lines, you say, “On the basis of preliminary observa-
tions, however, OMB officials stated that they still have some of
the same concerns that they had a year ago about CIO positions
that have not been filled, have not been properly positioned, or
have multiple responsibilities.”

Can you tell us, for the record, specifically what agencies you’re
talking about here?

Mr. Doparo. Basically, that is based upon a recent discussion we
had with OMB as of last week. The first set of agencies are those
where there are combined CFO’s and CIO’s. And that is at the
Commerce Department, Veterans Administration, HHS, and the
Justice Department, as well as the Education Department. So you
have those five agencies right there where there are some concerns.

Also, and Jack can elaborate on this if you wish, there is the
issue raised that the Defense Department CIO has multiple respon-
sibilities. Defense has a task force right now looking at the role of
the CIO and whether or not it needs to be clarified or separated
from the dual responsibility it has now with command and control.

Mr. Horn. Has the President submitted a replacement for Gen-
eral Paige yet?

Mr. Doparo. No. Jack can give you a quick update of what is
happening at Defense.

Mr. Brock. The CIO at the Department of Defense is also the
Assistant Secretary for C3I. So, in addition to the role of CIO,
which basically entails oversight of $10 billion worth of business
systems, that individual, currently Tony Valetta, who is the Acting
Secretary, also has responsibility for the intelligence systems over
at DOD, for the command and control systems. He has major pro-
grammatic responsibilities in addition to the CIO. And right now
those responsibilities include trying to get a handle on the year
2000, and in some places we believe they are running late; trying
to get control over computer security, which is a massive problem
in the agency; trying to establish an investment process for IT ex-
penditures, which is not off the ground yet. So a massive set of re-
sponsibilities, over $10 billion in expenditures, plus another mas-
sive set of responsibilities on the other aspects of his assignments.


120

The U.S. economy is also heavily dependent on imports. The
competitiveness of U.S. manufacturers and the quality of life for
U.S. consumers depend on having access to materials and goods from
around the world. Indicative of this, the value of imports into
the United states hi

increased by 118 percent over the decade
ending in 1996 and by 64 percent over just the period 1992 through
1996.

Because international trade is so important to the U.S. economy,
the cost of government procedural requirements affecting
international trade, and specifically information reporting
requirements imposed on import and export transactions, is a
burden on the performance of the economy as a whole.

This burden is not imposed as a matter of conscious policy.
Rather, as laws have been enacted to implement trade agreements;
prevent unfair trade practices; protect the environment, consumers,
animal and plant health, and endangered species; ensure highway,
rail, and air safety; better regulate immigration; impose economic

sanctions on hostile regi and prevent export of sensitive

technologies to inappropriate destinations, new requirements for
reporting have been superimposed one on top of another, despite
efforts to limit the cumulative burden.


19

* Agencies need to integrate strategic information planning with the overall strategic
plan that they must prepare under the Results Act. Our review of recent attempts by
agencies to develop sound strategic plans showed very weak linkages between the
strategic goals and the information technology needed to support those goals.’

‘= Agencies must build their staff's skills and capabilities to react to the rapid
developments in information technology, develop needed systems, and oversee the
work of systems contractors, Weaknesses in agencies’ technology skills base,
especially in the area of software acquisition and development, have been a recurring
theme in our reviews of federal information technology projects."*

Despite the urgent need to deal with these major challenges, we still see many instances
of CIOs who have responsibilities beyond information management. At present, only 12
agencies have CIOs whose responsibilities are focused solely on information management.
The other 15 agencies have CIOs with multiple responsibilities. Together, these 15
agencies account for about $19 billion of the nearly $27 billion dollars in annual federal
planned obligations for information technology. While some of these CIO's additional
responsibilities are minor, in many cases they include major duties such as financial
operations, human resources, procurement, and grants management. At the Defense
Department, for example, the CIO is also the Assistant Secretary for Command, Control,



4

«strengthening the agency's knowledge, skills, and capabilities to effectively manage
information resources, deal with emerging technology issues, and develop needed
systems.

While there are various approaches on how best to use the CIO position to accomplish
these duties, the legislative requirements, OMB guidance,’ and our best practices
experience with leading organizations, define common tenets for the CIO position. An
agency should place its CIO at a senior management level, working as a partner with
other senior officials in decision-making on information management issues. Specifically,
agencies should:

* appoint a CIO with expertise and practical experience in technology management,

‘* position the CIO as a senior partner reporting directly to the agency head;

‘ensure that the CIO's primary responsibilities are for information management;

‘have the CIO serve as a bridge between top management, line management, and
information management support professionals, working with them to ensure the
effective acquisition and management of the information resources needed to support
agency programs and missions;

‘+ task the CIO with developing strategies and specific plans for the hiring, training, and
professional development of staff in order to build the agency's capability to develop
and manage its information resources; and

‘© support the CIO position with an effective CIO organization and management
framework for implementing agencywide information technology initiatives.

portable, and maintainable. These include specifications of critical aspects of component
‘systems’ ware, software, communication, data, security, and performance
characteristics.

‘Memorandum for the President's Management Council, "What Makes a Good CIO?" June
28, 1996.



3

agement Division will be the principal witness. He is accompanied
by Jack L. Brock, the Director of the Accounting and Information

lanagement Division, and Dr. David McClure, the Assistant Direc-
tor of the Accounting and Information Management Division.

On the second panel there will be members of the Chief Informa-
tion Officers Council. Alan P. Balutis, deputy chief information offi-
cer, Department of Congress; Liza McClenaghan, chief information
officer, Department of State; and Anne Reed, chief information offi-
cer, Department of Agriculture.

I will now yield to my colleague from Virginia, Mr. Tom Davis,
who has a particular interest in this and represents sort of “Silicon
Valley East.”

{The prepared statement of Hon. Stephen Horn follows:]


182
-1a-
happy to answer any questions you may have and to provide any

written material you may want.

‘Thank you.

-30-


110

Mr. Horn. Thank you for coming. We are particularly appre-
ciative to get this insight into how the chiefs and various task
forces and subcommittees are working. I think the example which
was set shows very well what ultimately should happen when each
of these agencies gets turned around. The fact that you are sharing
experiences, which is very important, not just for the psychiatric
care of your fellow CIO’s, but I think the CFO and CIO and inspec-
tor general, the monthly meeting is worthwhile for just that rea-
son.

But you have given us a very good reflection of where you are
headed as a group and why Congress made the right decision by
saying: “Hey, we need the chief information officer at the very to]
of these agencies if we are going to get something done in this mod-
ern world where, when you buy a system, it is already out of date
by 5 years.” And that is the way it is moving, and we need to move
with it and have the logical analysis of what it is we want to do
and then do it, because you can’t manage the modern world with-
out responsive systems to help you in that regard. You can imag-
ine, but it won’t be as wise, shall we say, as it ought to be.

So thank you very much for coming. We appreciate your testi-
mony. With that, we are in recess until 1 drelock.

[Whereupon, at 12:03 p.m., the subcommittee was recessed, to re-
convene at 1 p.m., the same day.)

Mr. Horn. The subcommittee on Government Management, In-
formation, and Technology will come to order.

Let me just make a few remarks that relate to this session that.
didn’t relate to this morning’s session.

We now resume our hearing on the Clinger-Cohen Act of 1996.
That act required the development of an effective and efficient,
mission-oriented, user-oriented, results-oriented information tech-
nology practice in each and every Federal agency. One way to meet
this challenge is to develop crosscutting projects and eliminate du-
plication. In the private sector, crosscutting projects are difficult to
achieve. In the public sector, where the Federal Government
spends over $25 billion every year on information technology, cross-
cutting projects are sometimes impossible. We need these cross-
cutting projects to help eliminate waste, fraud, and duplication,

This morning, we investigated the Chief Information Officers
Council. This afternoon, we will investigate one particular cross-
cutting information technology project, the international trade data
system. The purpose of focusing on this project is not only to help
it succeed but also to help spawn hundreds of similar projects.

Recently, it has become fashionable to propose crosscutting
projects. The National Performance Review has identified a num-
ber of such projects that could materially improve government.
Congress, the leadership in the House of Representatives, the Gov-
ernment Reform and Oversight Committee, and this subcommittee
are constantly encouraging such crosscutting projects through the
Results Act as well as through general efforts at improving effec-
tiveness and efficiency.

Unfortunately, there are all too few crosscutting projects actually
being develope . We need to help this and similar projects startup
and be successful. Let us use this particular project as an example,


12.

69

See below.

What can Congress, OMB, the Agencies, COs, and the IT staffs do to make
IT more successful?

This section responds to questions 10, 11, and 12.

Offered be!ow are suggestions to improve the information resources
management environment in the Federal Government. The suggestions are
intended to supplement, and not duplicate, existing legislation and guidance from
the Office of Management and Budget (OMB), General Accounting Office, and
the General Services Administration. The CIO Council, CIO's, Congress, OMB,
agencies, and IT staffs will have differing roles vis-a-vis each suggestion.

Continued positive support for the CIO Council, especially from Congress and
OMB, is important. The focus should be on the overall contribution of the ClO
Council toward improving the application of information technology.

Reinforcing the importance of the role of the CIO will lead to stronger CIO's who

have the ability to improve the effectiveness of information technology. Ensuring
a close relationship between the CIO, Chief Operating Officer, and key program

officials will also lead to improvement.

The ability to enforce effective project management through the budget process
is critical. ClO's need to have influence over information technology budgets.

Incentives, rewarding or punitive, for agencies to develop and institute effective
capital investment review processes will be important and motivating.

The planning, budgeting, selection, control, and evaluation phases of capital
programming must be seen as part of a single process, a continuum to achieve
results. f, for instance, planning is performed independent of evaluation, itis
less likely that project problems will be caught at an early stage.

Education regarding the intent and execution of the Clinger-Cohen Act,
Government Performance and Results Act, and Paperwork Reduction Act is
necessary. Within most agencies, a core group of administrators understands
the provisions and intent of the legislation. The message has not spread
uniformly to program managers in the field, many of whom have only a cursory
awareness of the legislation and see the new management techniques as simply
another variant in a long line of reform efforts. Buy-in is critical.

Capitalizing on process improvement models, such as the Software Engineering
Institute's capability maturity models for software development and acquisition
risk management, should be helpful.


24

+ share experiences, ideas, and promising practices for improving information
technology management;

‘* promote cooperation in using information resources;

+ address the federal government's hiring and professional development needs for
information management; and

+ make recommendations and provide advice to OMB and the agencies on the
governmentwide strategic plan required under PRA.

‘The CIO Council is currently going through a formative period. Since its first meeting in
September 1996, the Council has engaged in a wide variety of activities. It meets on a
monthly basis, bringing together CIOs, deputy ClOs, and representatives from major
departments and agencies, as well as representatives from other organizations such as the
Small Agency Council, the CFO Council, and the Governmentwide Information
Technology Services Board.

‘The Council's activities during its first year have largely revolved around four major areas:

(1) Council organization: The Council decided how to organize and created
operational procedures.

(2) Committee specialization: The Council created five committees to focus on
selected topics of concern emerging from initial sessions-Year 2000, capital
planning and investment, interoperability, information resource management
training and education, and outreach/strategic planning. Each committee has
pursued agendas that include regular working group sessions to exchange ideas
and identify promising management practices.

(8) Topical forums: The Council has provided a regular forum for presentations and
discussions of specific topics of shared concern, such as improving Internet
security, enhancing the usefulness of budgetary reporting on federal information
technology, understanding the use of governmentwide acquisition contracting


143

example, an initiative with NARA aimed at defining goals for electronic records
management, work with GSA to develop agency requirements for government
telecommunications systems, and assistance to OMB, on a task force designed to
spread the use of email within the government.

My experience offers three points of some relevance here today. I have
half a career of experience working cooperatively with other government
employees and organizations to use information technology more effectively. The
ITDS project you are hearing about today is an excellent example of the
challenges and opportunities in doing so. And the CIO Council, minted just about
a year ago under the Clinger-Cohen Act, offers what strikes me as a set of
outstanding new ways of overcoming old barriers to change in government's use
of information technology.

As GITS Champion for the ITDS project over a number of years, I saw it as
my job to see through and sustain the vision of the overall project, acting as a
knowledgeable and friendly sponsor, and as a link to OMB and other interagency
groups and organizations that may be involved. Coming from an agency that is
not part of the project, I have been well-positioned to serve as a reasonably
objective and neutral broker or facilitator among the more than 60 departments
and agencies with many of the big stakes in the project that earlier witnesses have
already reviewed with you.

My purpose today is to comment on lessons leaned from cur experience
with the ITDS project to date, and to offer my thoughts on ways to encourage
further success of ITDS and additional interagency reinvention projects in the
future.

. . .

ITDS is a big and important example of how modem information
technology can be used to enable major changes in the way the federal
government does its business, cutting costs and improving service along the way.
Itis a cooperative initiative originally proposed by the National Performance
Review which now spans more than 70 federal agencies. It seeks to redefine the
way in which the federal government uses information technology to collect, store,
access and use import and export trade data, and most probably to reorganize
related business processes along the way.

The initiative offers potentially big benefits for both the private sector and
government. For our country’s importers and exporters, it offers the promise of
dramatically cutting the regulatory costs and delay involved in international trade
transactions. In this respect, it is an opportunity to move beyond the current


10

each requires dedicated full-time leadership along to handle this
situation.

In addition to establishing CIO’s at the Department level, it is
also important for major bureaus that have multi-billion-dollar in-
vestment portfolios to have CIO’s as well. While the legislation
does not require this, the conference report encourages it, and we
have seen agencies move to set CIO’s in place in individual major
bureaus. And we have recommended that where CIO's are in place
in these major bureaus, they be given the same set of duties and
responsibilities and have organizational responsibilities similar to
those established in the Clinger-Cohen Act.

Recently, we issued reports on the IRS, the FAA, and HCFA for
the Medicare transaction system. We said that CIO’s be given ex-
panded responsibilities to carry out their duties more effectively.

Now, while it is important to have CIO’s working effectively
within each major agency and bureau, it is also helpful to have the
CIO’s operating collectively as a council. We were very pleased to
see OMB create the CIO Council even though it is not mandated
by the legislation.

As noted in your opening comments, we have seen other councils,
such as the Chief Financial Officers Council, provide a useful
framework by giving advice to OMB on what type of policies and
standards are needed, and working on common issues across the
Government. So we think that this is a very good development.

In its first year, the CIO Council spent a lot of time and activity
getting organized, establishing subcommittees to work on impor-
tant topics, and operating as a forum for sharing views on a num-
ber of temporary issues. However, the CIO Council has yet to es-
tablish a strategic plan with a set of measurable goals and objec-
tives that can be used to measure progress in implementing re-
forms Governmentwide.

The CFO Council eventually established that, and they have
been reporting annually on their progress to the Congress. We
think that that would be a good model for the CIO Council to emu-
late. The CIO Council knows that it needs to set strategic goals.
Recently, this month, it met and selected five areas to focus on:
The year 2000 conversion, computer security, capital planning and
investment, establishing sound architectures, and also working to
build the human resource capacity within the organizations in indi-
vidual IT organizations. We think these are the right five issues for
them to focus on. The task now is to really set out some measur-
able goals and objectives and to assess progress in that area.

In closing, Mr. Chairman, we are very pleased to see this hear-
ing. As you know, congressional involvement is a major factor in
ensuring successful implementation of major management reforms.
I think it is a good place to start with the CIO’s themselves and
the CIO Council because of the importance of leadership respon-
sibilities. We would encourage and be pleased to work with the
committee as it looks at other aspects of Clinger-Cohen implemen-
tation in the coming months.

Thank you. We would be pleased to answer any questions.

[The prepared statement of Mr. Dodaro follows:]


141

experience, and ITDS, and from the perspective of the CIO Council,
you are talking about a very small handful of people who are actu-
ally working on this stuff. You are talking a few people kind of on
a voluntary basis like this: How are you spending time on that
when you have your ITA to do? Well, that is important. I am a tax-
payer too. But you know, it does seem that if we are serious about
this, that we should be able to cough up from existing business
processes more resources to kind of make this change process work
a little faster.

I would commend, I guess, the ITDS team for being fairly cre-
ative in coming up with some resources. The GITS board IMC inno-
vations fund has been helpful. I think it is a great example of kind
of helping change move along. A number of agencies, including
Customs Service, have kicked in a bunch of money to kind of help
fund the project, and then there have been a lot of volunteers that
have helped make the process as well.

Finally, in terms of the cooperation and teamwork which I see
as important here, we really are talking teamwork and it needs to
include executive branch agencies; Congress, obviously; and OMB.
I think this International Trade Data System Board of Directors
has been a most interesting tool for implementing this kind of
crosscutting management process. It is important to have the con-
fidence of individual agencies as alive and well. I think it is a good
model and it will be interesting to see kind of how that moves.

From there, I am finished with my basic statement, and thank
you for the opportunity to be supportive of this project and to your
committee.

[The prepared statement of Mr. Proctor follows:]


29

yardstick will provide a strong incentive for both the Council and the agencies to make
progress in meeting their information management goals and demonstrate positive impact
on the agencies' bottom line performance.

Because it is essentially an advisory body, the CIO Council must rely on OMB's support to
see that its recommendations are implemented through federal information management
policies, procedures, and standards, In the coming months, the Congress should expect
to see the CIO Council becoming very active in providing input to OMB on the goals it
has chosen. OMB, in turn, should be expected to take the Council's recommendations
and formulate appropriate information management polices and guidance to the agencies.
‘There should be clear evidence that the CIO Council, OMB, and the individual CIOs are
driving the implementation of information technology reforms at the agencies.

Ultimately, the successful implementation of information management reforms depends
heavily upon the skills and performance of the entire CIO organization within
departments and agencies-not just the CIO as a single individual. We have emphasized
this point in our recent guidance on information technology performance measurement.
With this in mind, we are working to produce an evaluation guide that offers a useful
framework for assessing the effectiveness of CIO organizations. As with our other
guidance, we intend to ground this approach in common management characteristics and
techniques prevalent in leading private and public sector organizations. Using this
methodology that focuses on both management processes and information technology
spending results, we can provide the Congress and the agencies with in-depth evaluations
of CIO organizational effectiveness.

cutive rf non
‘Technology Investments, Exposure Draft (GAO/AIMD-9
19

163, Sept. 1997).


98

Ms. REED. One of our major initiatives right now is the establish-
ment of an accounting system. That project is being managed by
the deputy CFO, and currently we are still the acting CFO.

Mr. Horn. How many computer systems do you have operating
in the Department, and are they integrated or aren’t they?

Ms. REED. I wouldn’t even want to hazard a guess at how many
different computer systems.

Mr. HORN. Well, is it over 500, or is it 100? What are we talking
about?

Ms. REED. In terms of scale, I think I would say—each agency
took its own approach, and then within each agency, there are
probably several different variations in how they have approached
their particular business problems. So we are not talking in the
scale of 500, but with now about 30 agencies, some of these are
smaller and have combined systems. Some of those are larger and
have multiple systems, so it is a fair number of systems.

When I get one of those forms, sir, when they require me to iden-
tify what—everything that you have, you know, where you identify
what you have, I look for the column that says “all of the above.”

Mr. Horn. I can believe that. When we went into depth with the
Department of Defense on accounting, they had 49 separate ac-
counting systems. Of course the first Secretary should have taken
care of that, but Mr. Forrestal didn’t do it, and every service is sit-
ting there saying, “We can’t operate,” which is nonsense, and I am
sure all of your agencies say, “We are unique.”

Ms. REED. Well, I am sure you are aware that the Department
of Agriculture has a very, very long history of a highly decentral-
ized operation, and no question but what we are doing now with
the strengthening of the CFO and the CIO, and it is a changing,
longstanding cultural process.

Mr. Horn. Well, we thank you all. There will be questions that
staff will submit to you. If you could just type out an answer, we
will put it, without objection, at this point in the record. But there
are some technical questions here that we will just file on all three
of you for the record.

[The information referred to follows:]


140

time to basically say we are going to do it and make that clear, and
if people aren’t interested in doing that, they should go find some-
thing else to work on. It just seems kind of basic. We ought to be
focused on doing this.

Second, there are two key issues at this point that need to be put
behind us, raised and put behind us. How are we going to organize
this thing? What are we going to do to enable it in terms of clean-
ing up the regulatory and statutory environment that is the legacy,
if you will, of decades of efforts that created organizations to deal
with specific problems?

I think there have been proposals to do lots of studies of these
things, but in a lot of respects, I think, you know, the answer is
pretty easy. Frankly, from kind of a practical management perspec-
tive, I am not sure this is a case in which we need more time. I
think we really just need to sit down, get the right people together,
and make a decision of how we are going to do it.

As far as organization, I think there is a lot to be said for—I
think the board of directors is clearly moving toward this for ITDS,
toward haying a single agent that basically collects, holds, makes
available for the line agencies that use the information and do it.
That is a highly contentious issue that we see from month to
month, year to year. Until that issue is addressed, we ain’t going
nowhere in terms of actually debating the merits of this thing to
actually doing it.

Second, in terms of the laws and regulations. I heard just re-
cently, we don’t know what Congress is going to do. Imagine if they
don’t buy off on this vision. Well, hundreds of millions of dollars
are being wasted by the private sector. I am not sure why they
wouldn’t, but maybe we should wait until Congress clarifies.

In fact, there are lots of laws that prohibit one agency that col-
lects information from sharing it with another. Well, those are
problems and those, I think, as far as I am concerned, are not
going to get easier to solve later. There are a variety of ways of ap-
proaching this, but I am sure those who are expert in legislative
affairs should be able to figure this thing out. Lay out a clear vi-
sion of what we want to do, and leave it to the lawyers and legisla-
tive types of the world to implement that.

Finally, we need a clear project. It has been 4 years and we still
don’t have a lot of deadlines for a lot of things that need to be done,
and from a management perspective, again, I think we need to get
serious about this, lay out the challenges and get on with it.

The third of my quick observations here has to do with resources.
I continue to be amazed. You mentioned this morning that the lat-
est estimate is $27 billion that government spends on ITDS, and
that presumably is on hardware, software, and the other stuff that
looks in object class land like ITDS. That, of course, doesn’t count
the much larger number of those up in the personnel resources who
actually attach to those systems, and who knows, but I will bet
that is multiple to $27 billion. If you have duplicate systems, you
probably have duplicate people doing duplicate efforts that are
wasting even more money.

What strikes me, I guess, as amazingly anomalous is that we
have plenty of money to spend on that count, but when it comes
to actually supporting interagency efforts, and I say this due to my


91

During the past year, in accordance with Government Performance and
Results Act guidelines, USDA established a strategic plan for Information
Technology. The central themes of this plan are: invest in planning, invest in
infrastructure, and invest in people. It is in the context of this strategic direction
that | would like to share with you our plans for the future.

tnvast in Planning

USDA recognizes that its investment in information technology must involve
Department-wide solutions to be effective and affordable. While USDA's disparate
missions suggest the need for agency autonomy, there are many areas where
there is more in common than not and resources must be leveraged by working
together,

Recently, the Executive Investment Board reviewed our proposed IT
investments, and endorsed those investments for FY 1998 and FY 1999. At our
next meeting, members will review progress on our service center agencies’
proposed common computing environment project.

Agencies and mission areas have similar boards which review and manage
their own portfolios of investments. This structure assures review at the
appropriate levels, and allows the Board to concentrate on those investments
which are critical to achieving the Department's highest objectives.

Under the auspices of the federal CIO Council, USDA piloted our Capital
Planning Investment Control {CPIC) process during the past year, thereby providing
experience and insight to the broader Federal community. We have made great
progress in educating our agencies in capital planning practices, establishing
criteria for IT investments, and reviewing technology budgets according to Federal
oversight guidance. We know much is left to do. We are currently evaluating our
work and will continue to build upon these efforts.

Although we do not have a fully developed CPIC process, this year my staff
provided new IT investment guidance to our agencies, in particuiar in the selection
process. Before we provided the portfolio of IT investments to the Executive
Investment Board, it was analyzed in terms of risk, potential for return, and the
performance indicators for the systems.


i

Mr. Chairman and Members of the Subcommittee:

Iam pleased to be here today to discuss the importance of having strong Chief
Information Officers (CIOs) at major federal agencies! and ensuring an effective CIO
Council to help bring about much-needed reforms in the government's management of
information technology. During the last decade much attention has been focused on
serious problems with federal information technology projects. ‘The picture that unfolded
year after year was bleak: multi-million dollar, and in some cases, billion dollar system
development efforts routinely came in over cost, behind schedule, and lacking in
promised capabilities. In addition to wasting resources, these disappointing efforts
seriously weakened agencies’ abilities to meet mission goals and improve operational
efficiency?

To help reverse this trend, GAO embarked on a concerted effort to learn how leading
private and public sector organizations controlled system development projects and
successfully applied technology to improve their performance. Our resulting study
identified a specific set of strategic practices that these organizations use to improve
performance through information management. Based upon our work and that of others,
the Congress, in conjunction with the Administration, crafted two recent landmark
reforms in federal information management: the Paperwork Reduction Act (PRA) of 1995

‘In this testimony, we use the term "agencies" to refer to both cabinet-level departments

and major agencies.

*For background on these problems see 1995 High Risk Series, An Overview (GAO/HR-95-
1, Febrany 1208) J0eT Hish Risk Series. An Overview (GAOTR 9. 1, epmuary 1997);

Information and Testo GAO" -AIMDIGGD OF 126, May 19, 1994); and Gaverament
rengthen Federal Managemer
Technology (GAOT: ADO uly 25, 1696).

Management and Teehtolosy (GAOAIMDOEI15, May 109),
1


dependent on how the reader defines "accounting system."

USDA reported in its Jamumry 1998 USDA Financial Management Status
Report and 5-Year Plan that "the Department operates 70 financial
management systems that include 142 applications.” Although not real
Signiiany ove ofthe 70 sytem belongs othe Federal Reserve Bank
1A. Some people interpret

defines a core
financial system as a system that "controls and supports the key
fanctions of an agency's management, including general ledger
and reporting. The core finsncial
system receives data from all other financial and mixed systems and from
supports processing for those

systems that need it" In addition to USDA's 5 core financial systems in
operat, 2 the being paid in nd wil plac some of the ober
and applications currently in operation.


102

03/05/98 9:37 AM
RESPONSE TO

Questions for International Trade Data System (ITDS) Project
Implementation of the Clinger-Cohen Act
October 27, 1997 at 1:00 in 2154 RHOB

Addressed to Whole Panel
Twould like to ask for your suggestions. Not address my questions to one of you in
particular, but all of you should feel free to answer.

NOTE: All questions answered by Robert W. Ehinger, Project Director of International Trade
Data System (ITDS) Project.

Question 1. What suggestions do you have for all cross-cutting projects?

Response 1. Management of government resources should move from one focused on
the organization to one focused on function. Congress and the
Administration should start to look at what the government does as a set of
functions and move from an orientation toward organizations. Our
customers (i.e., the public) only cares about the functioning of government
(i.e., trade works, trade does not work). They care very little about how we
are organized.

The revised orientation is the equivalent of the government looking at itself
as a responsive body attempting to ensure satisfaction for its customers, not
its internal organizations. After looking at a set of functions, government
should determine what limited and proper role it should play and compare
that with the current environment. If this simple analysis were performed,
so many glaringly obvious cross-cutting projects would be revealed that
there would be too many to handle. Additionally, the evidence that this
view is not being accorded any attention will be abundant.


118

data that U.S. exporters can use when they export to any of the
G~7 countries.

Now, let me very quickly contrast that with the situation that ob-
tains today. An exporter in the Netherlands who is exporting to the
United States is able to send his products to a market of 280 mil-
lion people, and there is only one data set that he has to use. On
the other hand, a U.S. exporter in California sending goods to Eu-
rope has to deal with the data requirements of all of the different
European countries.

It is simply not true that the European Union, because it is a
customs union, has a uniform set of data, and that is something
that they are realizing themselves. Not only are the data elements
different but the electronic protocols that they use to transmit data
are also different from one country to another.

So beginning with the G-7 summit in the summer of 1996, and
then going through the Denver summit last year, where we got a
mandate to finish our work before the next summit in 1998, we
have been working with the G-7 countries to agree on a standard
set of data and on a common electronic protocol for transmitting
those data. I think what that will mean for U.S. exporters is sub-
stantially reduced costs, substantially reduced burden of data pro-
duction and recordkeeping, and will make it much easier for bs.
exporters to be competitive in foreign markets.

t me turn now from a description of the International Trade
Data System to talk briefly about the process for putting it to-
gether. It is an interagency system; it is being develo, inter-
agency; it is genuinely a crosscutting effort. And although today I
can say I am immensely pleased with the progress we are makin;
and with the working relationship that exists among all of the dif-
ferent agencies, I can tell you that it didn’t start out that way. The
process of getting agencies that did not have the habit of working
together toward a common objective, moving along parallel lines or
convergent lines, was tougher than I had expected it to be.

When we started this process, I thou ht that the challenges
would be technological: finding a way to collect data over the Inter-
net and over value-added networks, getting it distributed to the
agencies that need it, getting them to perform risk assessment au-
dits, and getting them to report results back to the border. In fact,
that has turned out to be the easiest part of the project. The harder
part by far has been the human part, getting people to work to-
gether.

The thing that has made that successful at every critical stage
has been intervention from the political levels of government, start-
ing with the Vice President’s initial mandate to Federal agencies
to do this, going through the very helpful intervention from Chair-
man Livingston of the Appropriations Committee when it appeared
that opponents of this project were going to be able to stop funding
for it, and continuing to this day.

We are very grateful for the interests that your subcommittee is
taking in this project. Frankly, without the interests at the political
level of government, projects like this lose momentum and eventu-
ally die.

Thank you, Mr. Chairman.

{The prepared statement of Mr. Simpson follows:]


65

Very early in our effort the team began to observe an improvement
in the sharing of information, techniques, and approaches (both
technical and business oriented) throughout the Federal
Government. This improvement was not merely the result of some
kind of indoctrination or sharing of published materials, but
appeared to be in the form of consensus and agreement on
approach arrived at after deliberation and debate. Such agreement
was most evident when discussing high-level strategy and
divergent viewpoints became clear as discussion moved in the
direction of specific tactics ~ which may be the result of specific
individual department and agency considerations.

As the project continued, our IAC [Industry Advisory Council] team
realized that the CIO Council itself was the source of the improved
information sharing. The Council provided an essential, high-level
opportunity for professionals to “network” among peers and then
extend those contacts to their subordinates. This process of
encouraging and facilitating contacts at second, third, and lower
levels of leadership appears to have created new contacts that did
not exist before. Of course, there were still those who preferred to
highlight individual department or agency uniqueness rather
acknowledge commonality of business needs. But for those who
choose to avail themselves of its offerings, the CIO Council is a
testament to the power in sharing information to leverage others’
‘experience in defining and solving common business problems.

It seems the successes are small projects and the failures are large
projects. Is this just a perception or is this a real pattern?

The study that led to the publication of the "Best IT Practices in the Federal
Government” did not focus on failures. The purpose of the study was to highlight
successful projects and practices. Consequently, one could not generalize from
this study that small projects are successful and large projects fail. What can be
noted is that in the course of the study effort, more than 150 different, successful
IT projects were nominated. The nominated instances, like those finally
selected, included a broad range of programs —- from very small to extremely
large. Also included were several projects that were early “failures” that later
became successes once more realistic and attainable timelines for performance
were adopted by program management teams. The study team reviewed all
these nominated instances and recommended 32 that best met a rigorous
definition of "success." From these, twenty representative examples were drawn
and are presented as case studies. These case studies highlight projects that
range in expenditures from $100 thousand to $132 million. Although no billion
dollar projects are included, several of the presented cases are sub-projects of
agency "mega-programs.” Though it is dangerous to draw broad conclusions


7m

Attachment 1: Excerpts from Executive Order 13011

Sec. 3. Chief information Officers Council. (a) Purpose and Functions. A Chief
Information Officers Council (“CIO Council’) is established as the principal interagency
forum to improve agency practices on such matters as the design, modernization, use,
sharing, and performance of agency information resources. The Council shall:

(1) develop recommendations for overall Federal information technology
management policy, procedures, and standards;

(2) share experiences, ideas, and promising practices, including work process
redesign and the development of performance measures, to improve the management
of information resources;

(3) identify opportunities, make recommendations for, and sponsor cooperation
in using information resource:
(4) assess and address the hiring, training, classification, and professional
development needs of the Federal Government with respect to information resources:

management;

(5) make recommendations and provide advice to appropriate executive
agencies and organizations, including advice to OMB on the Governmentwide strategic
plan required by the Paperwork Reduction Act of 1995; and

(6) seek the views of the Chief Financial Officers Council, Government
Information Technology Services Board, Information Technology Resources Board,
Federal Procurement Council, industry, academia, and State and local governments on
matters of concem to the Council as appropriate.

(b) Membership. The CIO Council shall be composed of the CIOs and Deputy
CIOs of the following executive agencies plus two representatives from other agencies:

1. Department of State;

2. Department of the Treasury;

3. Department of Defense;

4. Department of Justice;

5. Department of the Interior;

6. Department of Agriculture;

7. Department of Commerce;

8. Department of Labor;

9. Department of Health and Human Services;
40. Department of Housing and Urban Development;
11, Department of Transportation;

12. Department of Energy;

13. Department of Education;

14. Department of Veterans Affairs;

15. Environmental Protection Agency;

16. Federal Emergency Management Agency;
17. Central Intelligence Agency;

18. Small Business Administration;


16

OMB called for updated information on the status of governmentwide ClO appointments
in its April 1997 data request on individual agency efforts to implement provisions of the
Clinger-Cohen Act.’ OMB has not yet issued a status report based on this information
and subsequent follow-up. In a recent discussion, OMB officials stated that they will
provide feedback on individual CIO appointments as part of the fiscal year 1999 budget
review process. On the basis of preliminary observations, however, OMB officials stated
that they still have some of the same concerns that they had a year ago about CIO
positions that have not been filled, have not been properly positioned, or have multiple
responsibilities.

It is very important for OMB to follow through on its efforts to assess CIO appointments
and resolve outstanding issues. Information technology reforms simply will not work
without effective CIO leadership in place. We will continue to monitor this situation to
provide our suggestions on actions that need to be taken.

One area that we will focus on during the coming year is CIOs who have major
responsibilities in addition to information management. The Clinger-Cohen Act clearly
calls for CIOs to have information resources management as their primary duty. We have
stressed the importance of this principle in testimonies and, most recently in our
February 1997 High Risk report, where we emphasized that the CIO's duties should focus
sharply on strategic information management issues and not include other major
responsibilities.’ In additioh to the escalating demands of rapidly evolving technologies,
ClOs are faced with many serious information management issues, any one of which

‘OMB Memorandum-97-12, "Evaluation of Agency Implementation of Capital Planning and
Investment Control Processes,” April 25, 1997.

Jan. 31, 1997)and
(GAO/HR-97-9, February 1997).


160

Mr. Horn. I am sure it will. It seems to be the experience.

Legal restrictions against data sharing. I would like a list from
you of, where could Congress be helpful in going around and say-
ing, look, we have got to loosen up this law. Certainly for govern-
ment involvement, there shouldn’t be those, but I know when I
have talked to various commissioners and tried to get them to co-
operate on things, they look at me and very huffily say, “Well, we
have privacy laws.” I say, “Hey, I’m not talking about invasion of
privacy; I’m talking about the bottom line.”

Let’s say we get into debt collection, which the Treasury has
done a very fine job on this for us, by the way, since you are a rep-
resentative of the Treasury. And, you know, it is just utter non-
sense. They had no organization for collecting debts, and they had
no intention of doing anything about it. So we need to change those
laws so that Governmental agencies can talk to each other.

So, let us know what they are, and IJ will be glad to systemati-
cally work my way around the appropriations committees or the
authorization committees, as the case may be.

Now, let’s see. I think, Mr. Cronin, I was interested in the his-
tory of the project at INS in terms of its acceptance. I am assuming
that in the beginning INS was reluctant to slowly change. Give me
some highlights. Why the initial reluctance? Why the change?

Mr. Cronin. I really don’t think there was initial reluctance.
There was a matter of determining exactly—if there was reluc-
tance, it was related to de-evolution of INS’ authority to clear per-
sons into the country.

However, the work we’ve done with automation in terms of pas-
senger processing and in terms of processing commuters on the
land border dovetailed really well with the trade automation proto-
type. And I think Bob can perhaps comment more fully as project
director.

But integration really wasn’t that much of a challenge. The tech-
nology certainly appeared to be very compatible. It is a process by
which we enroll and vet truck drivers and cargo handlers. Subse-
quent to the initial enrollment, as they come through with their
trucks, they are automatically identified through the system.

Mr. Horn. You have already a preclearance system, don’t you, on
the California border?

Mr. CRONIN. Right, San Jose.

Mr. Horn. So when certain trucks come, you look into their sta-
tus and you track to see if they have ever carried drugs?

Mr. CRONIN. Precisely, we track for criminal history.

Mr. Horn. So you have got a pretty good database in the sense
of your own experience that would say this type of system works.
It is just a question then of getting it up to speed and having a
speedier reply in the limited time that your people, as well as Cus-
toms, have at the border before it is a few miles long.

Mr. CRONIN. That is exactly right. That system has been ex-
tremely successful in terms of processing commuters, and we are
seeing the same success.

Mr. Horn. Well, I won’t ask you which of the recalcitrant agen-
cies. We can talk privately on that.


99

Response to Information Requested
by
Congressman Stephen Horn
November 6, 1997

1, Please explain in layman's terminology why an IT Architecture is so important and
why we have not had one before?

Development and implementation of an IT architecture helps ensure strategic alignment of
technology to support business needs and goals. This becomes imperative when those
technologies are the primary means to achieving new ways to provide increased customer
services and radically improved, highly cost effective new business practices.

2. Developing an IT Architecture for the Federal Government is a large task. Do you
have preliminary schedule for intermediate deliverables?

We do not have a schedule at this time. The development of a Federal IT architecture is a
monumental task. It will take the efforts of many Federal Government organizations working
toward this common goal to make a Federal IT architecture a reality. As a first step, the
Interoperability Committee has participated in the development of OMB Memorandum 97-16,
“Development, Maintenance, and Implementation of Agency Information Technology
Architectures”, which was issued on June 18, 1997. As a second step, the Committee is now
forming a task group to advance proposals for an approach to a Federal IT architecture. One
proposal is to deal with the issue agency by agency and business line by business line or
possibly by interagency common business lines such as the International Trade Data System. At
the same time we must keep in mind that our IT environments include many systems and many
vendor platforms. Many of these were built and purchased over a long period of time, From a
budget perspective a single architecture per agency or agency business line is a good idea but the
process to achieve itis extremely large with major financial implications. We recognize the
importance of this issue and see the primary role of the Interoperability Committee as a catalytic
agent to identify approaches that are working and to synergize them into some form of broader
framework, yet to be identified.

3. Are there some Agencies that have already developed an IT architecture and, if so, how
will you be able to get them to agree on a common architecture?

Several agencies have made significant progress with the development of documented enterprise
architectures. Recently, four Cabinet agencies were referenced in OMB Memorandum 97-16,
“Development, Maintenance, and implementation of Agency Information Technology
Architectures”, dated June 18, 1997. The development of these architectures were based on a
business need and were being developed prior to the requirements of the Clinger-Cohen Act of
1996.


21

bureaus.” These subcomponent level CIOs should have responsibilities, authority, and
management structures that mirror those of the departmental CIO.

We have reported on instances where the subcomponent CIOs were not organizationally
positioned and empowered to discharge key CIO functions. For example, in our reviews
of FAA's air traffic control (ATC) modernization, which is expected to cost $34 billion
through the year 2003, we found that FAA's CIO was not responsible for developing and
enforcing an ATC systems architecture. Instead, FAA had diffused architectural
responsibility across a number of organizations. As a result, FAA did not have a complete
ATC architecture, which in tum has led to incompatible and unnecessarily expensive and
complex ATC systems.” Additionally, we found that while FAA's CIO was responsible for
ATC software acquisition process maturity and improvement, the CIO lacked the authority
to implement and enforce process change. Consequently, we reported that FAA's
processes were (1) ad hoc, and sometimes chaotic, and not repeatable across ATC
projects and (2) its improvement efforts have not produced more disciplined processes,
Among other actions, we recommended that FAA (1) establish an effective management
structure for developing, maintaining, and enforcing a complete systems architecture and
improving software acquisition process improvement and (2) that this management
structure be similar to the department-level CIO structure prescribed by the Clinger-
Cohen Act.

"H.R. Conf. Rep. No. 104-450 (1996).

u


50

over a year ago that while we are solving the problem, we are get-
ting a new computer system, and they went from A to F based on
the fact that here they are getting a new computer procurement,
and it didn’t conform and wasn’t year 2000 compliant.

I don’t see how somebody can goof that up when they know there
is a problem and not run the appropriate tests. I would think GSA,
doing this for the whole Federal Government, ought to at least call

e right people, and maybe they have now under Chief Infor-
mation Officer Adams’ control. They have obviously lived with this,
and that would be a good person. But, somebody has got to assume
responsibility and at least put the right phrase in the vendor con-
tract so we aren’t stuck with the bill when somebody lied to us.

Mr. BaLutis. We agree with that, sir, and I think the actions we
have taken both to include the right kind of language in the solici-
tation itself but, more importantly, to rely not solely on the claim
of the vendor, because the example you mentioned is—is disquiet-
ing, we hope unusual, but perhaps not. But we didn’t think it made
sense for each department or agency to go through this process
themselves. The Year 2000 Committee was in place, certainly sub-
stantial expertise there, and we took on that tasking with the idea
that, once we had that completed, it would be turned over to the
General Services Administration.

Mr. Horn. So has it been turned over now?

Mr. Bauutis. I believe it has, sir. Yes.

Mr. Horn. OK. We will ask the General Services Administration
how they are doing on this.

To whom in GSA has it been turned over?

Mr. Bautis. I will get that name for you, sir, and provide it.

Mr. Horn. Let Mr. Alloway know, and I would like a followup
on that just to see that they have a process here.

Mr. BaLutis. I will do so.

Mr. Horn. Thank you.

[The information referred to follows:]


95

Mr. Horn. When I read your testimony I was—I think that is a
real contribution.

To whom do you report to in the Department of Agriculture?

Ms. REED. I report to Secretary Glickman on a day-to-day basis.
I work with the Deputy Secretary-——

Mr. Horn. Very good, and I take it when you have wanted ac-
cess, you got it?

Ms. REED. Yes, sir.

Mr. Horn. And it seems to me Secretary Glickman is sort of
ahead of most other secretaries in his commitment to do some of—
you are probably very fortunate to be working with him.

Ms. REED. We've taken some pretty bold steps in the last year
certainly, sir.

Mr. Horn. What would you regard as your boldest step?

Ms. REED. I think establishing almost a year ago a moratorium
on information technology spending which required instantly, did
not wait for, a capital planning process for me to have an impact
on how funds were used on our information technology programs.
But right from last October when that was established, any acqui-
sition over $250,000 had to come to me for prior approval.

In telecommunications, for network equipment, I set a threshold
of zero, because I wanted to get a much stronger degree of control
over how we manage our telecommunications infrastructure. That’s
one—the moratorium in how we have managed that process
changed the paradigm significantly early on.

The second major step that the Secretary took last summer was
to make the decision to consolidate information technology manage-
ment operations of seven agencies across three mission areas, and
he at that time asked that I take the leadership role in a much
more direct responsibility for information technology in those agen-
cies, again, with the Department of Agriculture——

Mr. Horn. In terms of the Secretary's interest in management,
do you have an integrated system where, if he is trying to look at
various data that would give him an indication of progress, a par-
ticular agency or service he is making—does he have that available
to him? I mean, have you worked the integrated management sys-
tem in Agriculture?

Ms. REED. Would that we had sir —we have as many organiza-
tions due in large number of Legacy systems which were developed
around the particular interest of the particular agencies. We have
learned, in some cases the hard way, that it was—how important
it is that that information be shared and are now moving—as we
develop the architecture for the Department, that is one of the key
issues that we face, as I’m sure that right kind of information gets
to the right person at the right time seamlessly. We aren’t there
now; we have a ways to go.

Mr. Horn. Well, it is very interesting. You have historically one
of the greatest budget offices in the American Government where,
during the Second World War, it was ahead of everybody else. I
don’t know if this legend or legacy is still around the Department,
but I would be curious to know how many different accounting sys-
tems exist within the Department of iculture, or have you
knowledge of that? Would that really be the chief financial officer
that I should ask that question of?


33

And the implementation guidance for the Clinger-Cohen Act really
sets a tall order for all the range and responsibilities that CIOs
should have. Basically, one of the ways to look at that is on an in-
dividual basis, but also on a collective basis of whether there is the
right team in place in the agency to implement this. But you need
to have technical expertise to complement the management experi-
ence at various levels.

(The information referred to follows:]

Nearly all of the 12 CIOs who have information management as their primary re-
sponsibility have strong education and/or experience in this area, This includes
graduate degrees related to information technology and experience in systems devel-
opment, data processing, network management, telecommunications, and/or leader-

ip of information management operations. By contrast, the education and experi-
ence of most of the 15 ClOs who have responsibilities in addition to information
management are in areas such as accounting, finance, budgeting, trade, public pol-
icy, and general management.

Mr. Davis of Virginia. You really do. For a job like this, I just
don’t think you’re going to be successful without a pretty good
background in IT.

But continuing on that line, how many CIO’s have direct-line au-
thority over the IT staff?

Mr. Doparo. That is another area where we are just beginning
to take a look at. In most cases, though, what we have seen is the
CIO’s have responsibility for setting policies and standards, and it
is less clear whether or not they have the ability to influence the
operations at, say, a regional level or other functional areas within
the department.

As I mention in my statement, for example, one of the areas we
have made recommendations along that line has been at the FAA
and at the IRS. I will ask Keith Rhodes to explain a little bit about
what we have seen as to the problems at IRS and FAA, which are
two of our heavy spenders in modernization, of not having that
type of control that you speak of.

Mr. RHODES. To use FAA as a primary example here, Theron
Gray is the chief information officer at FAA. He is actually organi-
zationally in the IT o: ization, which is a subsection of the R&D
organization, which is headed by Dr. George Donohue.

e problem is that facilities, if we’re taking the year 2000 for
example—since we've testified before this committee multiple times
on the year 2000—year 2000 is a facilities problem. Year 2000 is
a research and development problem, an operational system prob-
lem, and a security problem, as well. Well, at FAA what Theron
Gray has control over is, basically, his subset of the development
staff. He has the IT staff as a subset of the research and develop-
ment side, not the operational system, not the facilities system, and
not the security people.

On IRS, for example, Art Gross has control over his IT staff, but
he doesn’t own the field staff and he doesn’t own the field systems.
So if he solves inside his diagram of the Y2K problem, he is only
solving a national system problem, he is not sol ving the remote fa-
cilities area, which in reality, he doesn’t own the ‘D people be-
cause the R&D is done in the field. Therefore, you can’t have uni-
form development, uniform testing, uniform change-out, and a uni-
form operational test. Because year 2000, like security, like other
things, is a ubiquitous problem, as you well know.


133

Mr. Horn. Well, we thank you.

Ordinarily I wait until all of the witnesses have finished on a
panel before asking questions, but I am very impre essed by what
has gone on in this project, and we will be glad to help in any way.

You mentioned opposition coming before the Committee on Ap-
propriations. What was the nature of the opposition? Was it within
Congress? Was it within the bureaucracy? Was it within some of
the clients, shall we say, that Customs have? Or what?

Mr. SIMPSON. Well, in the interests of being diplomatic, and so
as not to reopen old wounds, let me say, it initiated in the execu-
tive branch of Government from some of the agencies that were
simply unwilling to share data collection. These bureaus have been
very successful in creating ties with their appropriators, and we
frankly found ourselves on the outside looking in.

The Treasury Department, Mr. Chairman, I sometimes compare
to the president of a university who has a very popular and suc-
cessful football coach. Nominally, the Treasury Department and the
university professor are on top, they are the bosses, but everyone
knows who has the real power. And i in the Treasury Department,
I am afraid, very often our bureaus who have the ability to provide
travel and information and briefings for congressional staffers on
the appropriations subcommittees just have the inside track on us.

But le t me say that I think we are past that. We have support
from all of the bureaus and agencies who are working on this, and
I know, as of this morning, we now have the full support, and, in
fact, the enthusiastic support, of our appropriations subcommittees.

Mr. Horn. Well, I must say, with that analogy and having been
a university president for 18 years, I really feel sorry as heck for
Treasury right now, and I am glad you have overcome it. You don’t
have completely tenured faculty, but I know some days it seems
that way.

So the football coach—it depends on how tough the president is,
you can get rid of him also, but some don’t—they do run the uni-
versity ultimately, in some of our Midwestern and Southern States.

Let me ask you on the transponder, is that inserted by U.S. Cus-
toms in the truck, or how does that system work?

Mr. Srmpson. Right now, the transponder is provided by the Gov-
ernment for the prototype and the transponder readers are being
provided by the Department of Transportation. But over time, we
expect the transponders themselves will be put on the trucks either
by e manufacturer or by the party who purchases the truck.
en transponders are already less than $5 a unit, and we expect
that to go even lower.

Mr. Horn. Is this sort of like the Blobal positioning transponder?

Mr. Simpson. As I understand it, Mr. Chairman, the range of
these transponders is great enough, and in fact they can be read
by satellite.

Mr. Horn. Well, that is what I was wondering. Is there a way
that some forces we don’t want to know what we have on there,
that they can decipher the data base that is on there?

Mr. Simpson. No, for a number of reasons, but let me give you
why I think is the primary reason.

I sit on an advisory committee on which there is substantial rep-
resentation by the U.S. trucking industry. This is the Department


17

would be a formidable task to address, Taken together, these issues create a daunting
body of work for any full-time CIO, much less for one whose time and attention is divided
by other responsibilities. As you know, Mr. Chairman, we have reported extensively on a
number of these compelling challenges. These are just a few:

* Ensuring that federal operations will not be disrupted by the Year 2000 problem is one

of the foremost and most pressing issues facing agencies-one that we have designated
as a governmentwide high-risk area. Efforts by this Subcommittee have underscored
repeatedly that many agencies are seriously behind schedule in resolving this problem
during the next 2 years.’

Poor security management is putting billions of dollars worth of assets at risk of loss
and vast amounts of sensitive data at risk of unauthorized disclosure, making it
another of our governmentwide high-risk areas. Agencies need to make much better
progress in designing and implementing security programs and getting skilled staff in
place to manage them." This extreme vulnerability has been given added emphasis by
the recent Presidential commission report on the growing exposure of U.S. computer
networks to exploitation and terrorism."

(GAG/AIMD-96-110, Sent "24, 1996)

‘The President's Commission on Critical Infrastructure Protection issued its final report
to the President on Oct. 20, 1997. The report has not yet been released to the public.

7


61

March 1998 As an outgrowth of the “Best IT Practices in the
Federal Government,” the Council will sponsor
preparation of a document that identifies best
practices for measuring return on investment, both
quantitatively and qualitatively.

As you can tell from the array of accomplishments noted and planned, the CIO Council
has been extremely active and productive. Our recent strategic planning retreat, held
October 14, has identified further strategies and actions to support these directions.
We will share the report from this planning session with you as soon as it becomes
available.

We are pleased with our accomplishments to date and heartily thank all those who
have contributed to the success of our efforts. We recognize that much work remains
and have every intention to pursue the purposes of the Council with energy and
constructive, results-oriented activity.

4 would be happy to respond to any question the Committee may have about the work
of the Council.


180

-12-

~ use of encryption to secure the data.

concepts relate to key goals established by the ITDs.

In recognition of the fact that arrival of a truck at the border
requires clearance of not only the cargo but also the driver (for
immigration purposes) and the truck (for highway safety and other
purposes), the NATAP integrates the processing of goods,
transportation, and crew members into a comprehensive, totally
electronic process. To the extent possible, NATAP uses the data
normally used in international commercial trade transactions as the
basis for government processing instead of the data elements
conventionally required. Additional government-devised data are
added to these commercial data only when necessary to meet mandated

governnent information requirements.

The U.S. is using the NATAP to compare the feasibility of using
commercial data with use of data received by Federal agencies under
current procedures, as well as to test the capabilities of a
central data collection system for border clearance. Under NATAP,
commercial data are received and processed through U.S. border
agency risk assessment systems prior to the actual arrival of a
vehicle. When a vehicle arrives at a border entry point, Automated
Vehicle Identification (AVI) devices, developed by the Department
of Transportation for its Commercial vehicle Intelligent systems
Network, provide electronic notification of arrival of the vehicle.


114

Mr. Simpson. Thank you, Mr. Chairman.

Mr. Horn. I might say, since some of you weren't here this morn-
ing, we need to swear you in. When you are sworn in, your résumé
and your full statement is put in the record, and I would appreciate
it if you would just look us in the eye and summarize your state-
ment and not read it word for word. We can read, and what we
want to do is just hear the summary and get down to the question.

So why don’t we all stand and raise our right hands.

[Witnesses sworn.]

Mr. Horn. All four witnesses affirmed, the clerk will note. We
will begin with Mr. Simpson.

STATEMENTS OF JOHN P. SIMPSON, DEPUTY ASSISTANT SEC-
RETARY OF TREASURY FOR REGULATORY, TARIFF, AND
TRADE ENFORCEMENT; ROBERT W. EHINGER, DIRECTOR,
ITDS PROJECT, DEPARTMENT OF THE TREASURY; MICHAEL
D. CRONIN, ASSISTANT COMMISSIONER OF INSPECTION, IM-
MIGRATION AND NATURALIZATION SERVICE; AND ALAN
PROCTOR, CHIEF INFORMATION OFFICER, FEDERAL TRADE
COMMISSION

Mr. Simpson. Thank you, Mr. Chairman.

Let me begin by thanking you and the subcommittee for holding
this hearing. I will say that those who are involved in innovation
projects and government are accustomed to getting sort of ambiva-
lent reactions from the institutions in which they work. So it is
nice to have an opportunity to feel the warmth of sunshine now
and then.

Let me begin by giving you a brief summary of what the Inter-
national "Trade Data System is about. Over the years, as laws have
been enacted to protect health and safety of the American people,
to protect American agriculture from plant and animal diseases, to
protect the environment, to protect endangered species, to protect
American workers from unfair trade practices, to protect intellec-
tual property, and to prevent the export of sensitive technology to
inappropriate destinations.

Over the years, as these laws have been enacted, the agencies re-
sponsible for carrying them out have prescribed their own systems
and forums for reporting the data they needed from the inter-
national trade community to carry out these laws. So over a period
of time, somewhere upward of 50 or 60 agencies of the U.S. Gov-
ernment have become involved in collecting data from the inter-
national trade community. There are over 100 agencies that either
collect or use those data.

But 33 years ago, the United Nations Council on Trade and De-
velopment did a survey and reported on it in Columbus, OH, and
they concluded that, worldwide, the cost of documenting inter-
national trade amounts to about 4 to 6 percent of the value of

goods.

We didn’t think that could be possible in the United States, so
we asked one American company, Household Word, that is both an
exporter and importer, to go deep into the financial records of their
company to survey the costs that they incurred in the course of doc-
umenting exports and imports, and, to our surprise and dismay,
the report we got back from them was that their costs were pretty


116

ernment, and so for that period of time we will have between the
ITDS front end and those Legacy systems what we call intelligent
agents that will make some transmissions and conversions to the
formats that the agencies need. But over time, as agency Legacy
systems become obsolete and they are replaced, we have a system
in place through OMB that will assure that any replacement sys-
tems are compatible with the International Trade Data System.

At the back end of the process, there is a large body of parties
who use data for analytical purposes, for trade promotion and for
research. This includes the Library of Congress, the Ways and
Means Trade Subcommittee, the U.S. Trade Representative, and
economics faculties at every university in the country.

Currently, in order to get data on US. international trade, they
have to go to a number of different sources scattered around Wash-
ington, so one of the things we wanted to create within the inter-
national trade data system is a single point of access to all of those
data bases. So if you are a professor at the University of Illinois
and you want to know the impact of U.S. international trade on the
economy of Illinois, you can enter through the U.S. Trade Data
System, the International Trade Data System, and, using hypertext
links on the screen, you can get to the data no matter where they
are all over the country, but it appears to you, as a user, as if you
are using a single data system.

In the course of developing the International Trade Data System,
we realized that the most challenging environment in which we
would be collecting data is at our land border ports. Trucks arrive
at the border and we have virtually no prior notice that they are
coming. Unlike airline flights or ocean vessels which are able to
transmit their manifests hours and sometimes weeks in advance,
with the land border crossings, the trucks arrive and we don’t
know that they are there until they actually pull up in front of the
primary booth.

So we are testing, in a prototype called the North American
trade automation prototype, our capacity to collect data through a
single point of entry to get those data distributed to the Federal
agencies that need it, to allow them to do risk assessment on those
data if they have enforcement responsibilities at the border, and to
get the results of that risk assessment back to the customs inspec-
tor so that when the truck arrives, the finished review of that elec-
tronic data is available for his use.

Now, let me briefly contrast that with the system that is in place
today. The most advanced system we have in U.S. Customs is a
system in which there is a bar code sticker that is put on the top
document that is handed out the window by the truck driver. The
U.S. Customs inspector in the booth can run a wand over that bar
code and all of the information that is constant is in the computer:
The name of the company that is exporting, the name of the im-
porter, maybe a description of the merchandise; but all of the vari-
able information, such as quantity and value information that
changes from one shipment to another, has to be punched in by the
inspector during the few precious seconds that he has with the
truck there.

We don’t train customs inspectors to be keypunch operators; we
train them to use their intuition to spot anomalies about the truck.


a ‘one ruNORED RMI ConaRESS, Se

=o Congress of the United States =

a House of Representatives =

= (COMMITTEE ON GOVERNMENT REFORM ANO OVERSIGHT ——
aed 2157 Ravouwe House Orme Bunn ha
a Wasmosoron, DC 20518-0149 Es

“The First Year of the Clinger-Cohen Act”
‘October 27, 1997
OPENING STATEMENT
REPRESENTATIVE STEPHEN HORN (R-CA)
‘Chairman, Subcommittee on Government Management,
Information, and Technology
{morning session}

In the private sector, information technology frequently improves business
products and services. Unfortunately, although the Federal Government spends over
$27 billion each year on information technology, success stories from this massive
investment are few and far between.

Today's hearing is the first in an upcoming series of oversight hearings on the
Clinger-Cohen Act of 1996. The purpose of the Clinger-Cohen Act is to ensure that
the Federal investment in information technology is made and used wisely. The law
was designed to increase competition, eliminate, burdensome regulations, and help the
Government benefit from efficient private sector techniques.

‘The Clinger-Cohen Act created the stanitory position of Chief Information
Officer in major Federal Government agencies. It requires the Office of Management
and Budget, the agencies, and the Chief Information Officers to improve information
technology practices. It requires mission and program driven strategic planning for
information technology. It requires senior user management guidance to ensure
information technology activites align with agency plans and operations. It requires
regular assessments of information technology skills inventory, skills requirements, and
skills development programs. In short, the Clinger-Cohen Act requires the
development of an effective and efficient, mission-oriented, user-oriented, results-
oriented information technology practice in each and every Federal agency.



93

The Technical Standards Architecture sets the parameters for
interoperability and standardization of USDA information technology. To date,
USDA has identified standard configurations for desktop equipment, o
automation and client/server operating systems.

Through the Telecommunications Architecture, USDA will stabilize and
manage the current USDA agency networks. USDA will optimize acquisition of
New telecommunications resources through coordination of business processes
and telecommunications plans among all USDA agencies. We are identifying
redundant circuits and eliminating them. The most recent example of success in
this area is the coordination between Forest Service's 615 Project implementation
and our field service agencies’ LAN/WAN/Voice project. We are also expanding
this cooperation to other Federal agencies, such as the Department of Interior.

To help ensure successful architecture implementation, wa have developed
a USDA Information Systems Technology Architecture Implementation and
Management Pian. This plan outlines the actions required to define, integrate, and
institutionalize the three components of the architecture. Major planned actions
include validating the core business processes identified for each of the mission
areas, defining Departmental technical standards, and implementing a USDA
enterprise network. The architecture will be continually refreshed to ensure USDA
uses established and emerging technology to meet most effectively its strategic
business needs.

As the Chair of the government-wide ClO Council Interoperability
Committee, | have worked to promote data sharing and the development of
common standards. We have sought to support projects such as the International
Trade Data Systems and the development of common data for geospatial
information systems. During the next year, we plan to establish a task force to
address barriers to exchanging information across incompatible e-mail systems.

Even as we develop a department-wide architecture and deploy modern
information systems in support of our programs, we know that our most critical
infrastructure challenge is to assure that we can meet the challenge of the Year
2000 data conversion. We have recently named a Senior Executive Project Leader
for the Department and have increased the staffing of our Year 2000 Project Team
to bring focus to our efforts. We have worked closely with the CIO Council
Committee on Year 2000 to share lessons learned and help assure the success of
interagency interfaces.

Recognizing that most of the actual work to correct Year 2000 problems
must take place at the agency (bureau) level, the Secretary has required that each
USDA agency name a program level Senior Executive to serve as Executive

4


38

Mr. Doparo. That is exactly, Mr. Chairman, why we think the
legislation encourages the CIO’s to be a senior management part-
ner, to really be at the table surfacing those issues and making the
case for funding. Not only year 2000. Actually, we found that par-
ticular example in other agencies as we have gone now in looking
at what they are doing to handle the year 2000 issue. Computer
security is another issue because it doesn’t receive a lot of support
at the highest levels, and that one I think is particularly problem.
atic, too.

Mr. Horn. Well, my time is up. Mr. Davis can complete the
round. I know you've got a great concern about the capital budget.

Mr. Davis of Virginia. And you mentioned the capital budget and
investment planning for the Proiects. Is it the case today that
the CIO’s are involved in some Projects but that many projects
throughout decentralized bureaus’ offices are not covered?

Mr. Doparo. That has been a problem, and I am going to ask
Dave to elaborate on this. One of the key reforms in the Clinger-
Cohen Act was to establish an investment review process, requiring
agencies to have more discipline both at the department level as
well as the major bureaus and agencies. And we have issued some
guidance to help agencies establish that, to ensure that there is
some consistency throughout the process.

One example that we have recently raised to the Congress was
the whole development of the Medicare transaction system and the
fact that the department, in this case HHS, really didn’t get in-
volved until there were problems. The same thing was true of the
Treasury Department with IRS. Dave can give you a little snapshot
on how the reforms in the legislation are unfolding.

Mr. McCuure. Mr. Davis, I think most of the agencies and de-
partments are in the process of trying to design their IT invest-
ment processes. I think it would be an accurate statement to say
that most of them are not in place in terms of a comprehensive se-
lection control and evaluation process.

So I suspect that if we went into each agency and looked at that
part of their IT budget that was going through an investment con-
trol review, it would be based upon whatever rules they put in
place for this last budget cycle. That’s largely been based on dollar
size, infrastructure concerns, or crosscutting type of applications.

One of the things that I’m trying to empl size in my discussions
with these departments is that those kinds of rules for what is put
in the investment process and who decides where in the organiza-
tion IT can be spent, for what purposes, is probably one of the most.
fundamental ground rules for making an investment process work.
I think we have a mixed implementation so far.

Mr. Doparo. One of the best developments I have seen, though,
at least for some of the major modernization efforts, is that the
hemorrhaging has been curtailed in a number of cases. IRS was cut
back dramatically, with the Congress’ assistance. And the Medicare
transaction system is cutting back on spending. So I think that the
key issue of stopping huge, bad investments is beginning to get a
little bit better.

The question is, as we proceed with bringing a lot of these mod-
ernizations back on track—for example, Agriculture has had a mor-
atorium on IT for a while—the real question here is, are we going


158

Early results from the ITDS Cost/Benefit analysis estimate the
system cumulative net savings (defined as the difference between
discounted savings and ITDS costs) through 2005 at $6.8 billion.
This figure represents the lowest end of the net savings
estimate and only includes the trade community filing cost
savings.

There are a number of ITDS benefits that remain "intangible" in
our current analysis that we expect to quantify in the future.
The flip side of each US trade transaction is accompanied by the
burden imposed by the governments of our trading partners. As
the ITDS approach is accepted and adopted by our trading partners
a reduction of at least as much again can be expected in the cost
of government processing. Within our own government there are
strong indications of improved port operations and management,
enhanced enforcement, greater productivity, and cost reductions.
The ITDS will supply better quality trade data in a more timely
manner, sparking innovative new applications.

The addition of these government agency savings and other trade
community savings (in such areas as licenses, permits, and fees,
surety, legal support, and border delays) will increase the net
savings figure several times over.


125

-7-
Administration, the Department of Agriculture, the Department of
Transportation, the Immigration and Naturalization Service, the
U.S. International Trade Commiasion, the Bureau of the Census, the
U.S. Trade Representative, and the U.S. Customs Service. 8
officio members include a representative of the National
Performance Review team, the Office of Management and Budget, the
Government Information Technology Services Board , and the Federal
Trade Commission.

Responsibilities of the Board include oversight of project design,

review of current and future resource needs (including an

assessment of the cost-effectivenese of various design options),
and review of existing statutes and regulations respecting
collection of international trade data to assure that changes

needed to implement an ITDS are identified.

The Board members recognize their responsibility to represent not
only the interests of the agencies for which they work but also the
large number of other agencies not represented directly on the
Board, other branches of the government, and private sector
interests, all of which either supply or use international trade
data. Ex-Officio members on the Board represent the Government
Information Technology Services (GITS) Board and the Office of
Management and Budget (OMB).


100

These agencies have developed formal IT architectures that are at varying degrees of maturity,
As progress is made, the CIO Council will work with OMB to facilitate common architectures
where it is appropriate and cost effective. The work to support collaborative efforts in common
business lines (such as the International Trade Data System) is an example of this

4, What role does the CIO play in the development of an agency's IT architecture, does
the CIO's staff actually develop the architecture or oversee its completion by the IT staff?

The CIO plays a crucial role in the development of an IT architecture. The Clinger-Cohen Act
states that the CIO has responsibility for “developing, maintaining, and facilitating the
implementation of a sound and integrated information technology architecture for the executive
.” In addition to being a blueprint for business and IT, the IT architecture is a policy

th line executives in setting the corporate vision for the IT
architecture. It is the CIO's rote to facilitate the achievement of this corporate vision. While the
IT architecture has several technical layers, it is not exclusively an IT document. To gain
acceptance of the IT architecture, itis critical that the organization perceives it as belonging to
the enterprise. If it is perceived as a IT document, its full value cannot be achieved. The IT
architecture must also be incorporated into the Capital Planning and Investment Process.

5. In agencies where the CIO is not the head of IT, what happens if the CIO has an
architecture but the IT staff just ignores it, or has a different architecture, or says it will
have to wait until "next year" or some other delaying tactic?

AAs noted in question four, the Clinger-Cohen Act vests authority for the development and
implementation of an IT architecture in the CIO. With the support of agency heads, the IT
architecture can be enforced through the Capital Planning and Investment Process. Each
executive agency must also establish planning and budgeting processes to support the IT
infrastructure.

6. When your subcommittee develops an architecture standard, for instance the e-mail
attachments you are working on, and the CIO Council votes to accept the standard. In a
case like that would the standard be advisory, official, or would there be any enforcement?

It is anticipated that standards recommended by the Interoperability Committee will be presented
to the CIO Council for approval. Once approved, these standards/guidelines will be issued by
OMB or become a recommended best practice of the CIO Council, depending on the
recommendation of OMB and the CIO Council. The Interoperability Committee has already
created a best practice “Keep Computer and Network Clocks Accurate.” This best practice was
provided to members of the CIO Council and posted on the CIO Council web site. The issue of
mandatory standards and their enforcement is a continuing debate. Many voluntary standards
are being used effectively, especially when they provide common solutions and opportunities
(like the HTTP/ TCPIP of Internet). Enforcement can be an expensive, manpower intensive
activity that often doesn’t reap the intended results. Many C1Os with limited staffs are sensitive


41

As we said, or as Gene said, they are now looking at where the
placement of an office should be.

Mr. Horn. Well, they've got an expert sitting there, the Sec-
retary of Defense. He does know a lot about the Clinger-Cohen Act.
When you're on the Senate side, I’m sure you say the Cohen-
Clinger Act. On this side, we appreciate reality therapy and it is
the Clinger-Cohen Act.

Based on GAO’s experience over the years in similar situations,
we talk about the CFO’s, we talk about the inspector general, so
forth. What would your advice be to Secretary Cohen as to where
that CIO should be positioned in the hierarchy over there, given
the fact that it was sort of the three C’s that General Paige had
to be responsible for? I mean, what would you see, based on your
management analysis and experience?

Mr. Doparo. In terms of the CIO?

Mr. Horn. Yes, where should that be placed in relation to the
current position, which they might well chop up various ways, the
Assistant Secretary for communications, intelligence, so forth?

Mr. Doparo. Basically, one issue we’ve seen, Defense doesn’t
lend itself the ready, quick answers because of its size and its com-
plicated nature. But one of the biggest problems in both the CIO
area and CFO area is that the responsibility has been placed
among people where they are at the peer level with other func-
tional areas. And there really needs to be, either at the Deputy or
Secretary level, a way to integrate and provide the support for the
CFO and the CIO.

We have had these discussions when John Hamre was the con-
troller for example, as well, about his ability to influence the func-
tional areas. So there needs to be at a higher level, I think, a man-
agement team approach that also recognizes the very important
line responsibilities of the agencies. It needs to be done in a way
where it is clear you are not usurping the line managers’ respon-
sibilities to carry out important missions in defense, but we need
more of a management integrated approach at a higher level.

So it is a delicate balance there, and I think the primary advice
I have been giving to all the heads of the agencies is to make sure
we focus on the results. And if you’re not getting the results that
you want, and clearly we are not getting the results that we want
in Defense and many other major agencies, there is a need to make
some changes. And part of those changes is organizational place-
ment, but they are also putting in place better measures to track
how well things are being done and carried out through the depart-
ment. So it is really all about achieving your right results. And, so
far, agencies are not there.

Mr. Horn. I agree with your point of reference here with the
Deputy Secretary. It seems to me that when David Packard was
over there, Deputy Secretary, he was the first one that really knew
how to run an organization and the Secretary pretty much let him
do it. And it would seem to me that CFO has to be reporting di-
rectly to the Deputy Secretary and have a CIO across the whole
wasteland of the Pentagon and its three services, who also will
have CIO's.

. Have they already picked them, by the way, in the three serv-
ices?