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TOWARD A TELEWORK-FRIENDLY GOVERNMENT

WORKPLACE: AN UPDATE ON PUBLIC AND PRIVATE APPROACHES TO TELECOMMUTING

HEARING

BEFORE THE

SUBCOMMITTEE ON TECHNOLOGY AND

PROCUREMENT POLICY

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

SEPTEMBER 6, 2001

Serial No. 107–125

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

BOB BARR, Georgia

DAN MILLER, Florida

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

DAVE WELDON, Florida

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

C.L. ‘‘BUTCH’’ OTTER, Idaho

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

JANICE D. SCHAKOWSKY, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

——— ———

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

JAMES C. WILSON, Chief Counsel

ROBERT A. BRIGGS, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON TECHNOLOGY AND PROCUREMENT POLICY

THOMAS M. DAVIS, Virginia, Chairman

JO ANN DAVIS, Virginia

STEPHEN HORN, California

DOUG OSE, California

EDWARD L. SCHROCK, Virginia

JIM TURNER, Texas

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

MELISSA WOJCIAK, Staff Director

VICTORIA PROCTOR, Professional Staff Member

JAMES DECHENE, Clerk

MARK STEPHENSON, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on September 6, 2001 ....................................................................... 1

Statement of:

Robertson, Bob, Director, Education, Workforce, and Income Security

Issues, U.S. General Accounting Office; Teresa Jenkins, Director, Office

of Workforce Relations, Office of Personnel Management; David Bibb,

Deputy Associate Administrator, Office of Governmentwide Policy, U.S.

General Services Administration; Harris N. Miller, president, Information Technology Association of America; Mark Straton, vice president,

global marketing, Siemens Enterprise Networks; and Robert M.

Milkovich, managing director, CarrAmerica .............................................. 12

Letters, statements, etc., submitted for the record by:

Bibb, David, Deputy Associate Administrator, Office of Governmentwide

Policy, U.S. General Services Administration, prepared statement of ..... 38

Davis, Hon. Thomas M., a Representative in Congress from the State

of Virginia, prepared statement of .............................................................. 4

Jenkins, Teresa, Director, Office of Workforce Relations, Office of Personnel Management, prepared statement of .................................................... 29

Milkovich, Robert M., managing director, CarrAmerica, prepared statement of ........................................................................................................... 70

Miller, Harris N., president, Information Technology Association of America, prepared statement of ............................................................................ 49

Robertson, Bob, Director, Education, Workforce, and Income Security

Issues, U.S. General Accounting Office, prepared statement of ............... 15

Straton, Mark, vice president, global marketing, Siemens Enterprise Networks, prepared statement of ...................................................................... 61

Turner, Hon. Jim, a Representative in Congress from the State of Texas,

prepared statement of ................................................................................... 8

(1)

TOWARD A TELEWORK-FRIENDLY GOVERNMENT WORKPLACE: AN UPDATE ON PUBLIC

AND PRIVATE APPROACHES TO TELECOMMUTING

THURSDAY, SEPTEMBER 6, 2001

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON TECHNOLOGY AND PROCUREMENT

POLICY,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 9:35 a.m., in room

2154, Rayburn House Office Building, Hon. Thomas M. Davis

(chairman of the subcommittee) presiding.

Present: Representatives Davis of Virginia and Turner.

Also present: Representatives Morella, Capito, Moran and Norton.

Staff present: Melissa Wojciak, staff director; David Marin, communications director; Amy Heerink, chief counsel; George Rogers,

counsel; Victoria Proctor, professional staff member; James

DeChene, clerk; Mark Stephenson, minority professional staff

member; and Jean Gosa, minority assistant clerk.

Mr. DAVIS OF VIRGINIA. Good morning. Welcome to the subcommittee’s second oversight hearing on Federal telecommuting.

The telework initiative gives employees the flexibility to work outside the traditional workplace, generally at home or in telecenters.

Today, we’re going to evaluate the progress of the Federal Government agencies’ efforts to promote the initiative. We will also review

agencies’ compliance with section 359 of Public Law 106–346, the

fiscal year 2001 Department of Transportation appropriation bill.

I want to take a moment to thank Congresswoman Connie

Morella, Congresswoman Shelley Moore Capito, Congressman Jim

Moran, and Delegate Eleanor Holmes Norton for joining us this

morning. Congressman Frank Wolf wanted to be here today, but he

was called to the White House this morning.

As many of you know, Mr. Wolf has been a longtime supporter

of telework and is responsible for the inclusion of section 359 in

last year’s transportation appropriations bill. This year he introduced H.R. 1012, the Telework Tax Initiative Act, which would provide a tax credit to eligible telecommuters.

Advances in computer and telecommunications technology have

facilitated the rapid growth of telework in the private sector. While

companies enjoy increased productivity, job satisfaction and employee morale as a result of telework programs, the Federal GovVerDate 11-MAY-2000 09:15 Nov 07, 2002 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\82424.TXT HGOVREF1 PsN: HGOVREF1
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ernment’s success has been inconsistent. Over the past decade,

there have been executive plans to encourage Federal telecommuting, but a more formalized plan with comprehensive guidelines was

never introduced. Section 359 and the related conference report

language strived to change that.

Section 359 directs Federal agencies to establish telework policies as a means to ease congestion and permit 25 percent of their

eligible work force to telecommute by April 23, 2001. An additional

25 percent must be permitted to telecommute each year over the

next 3 years. The conference report requires OPM to assess the effectiveness of the program and to report to Congress.

Our March 22nd hearing revealed that if telecommuting is used

strategically, it can be an effective recruitment and retention tool

in the Federal workplace. For example, an aggressive telecommuting policy may help the Federal Government address the shortage

of information technology workers. As the Federal IT work force

nears retirement eligibility, they may be enticed back to the Federal work force on flexible terms while taxpayers benefit from a

knowledgeable and experienced work force. In fact, a December

2000 survey conducted by the Merit Systems Protection Board

found a possible correlation between the availability of telecommuting and Federal employees’ intention to leave Federal service.

The March hearing also helped identify some of the key barriers

to Federal telecommuting, including the availability of computer

and telecommunications equipment, managerial attitudes, funding

and insufficient marketing and education about the concept. In

fact, some Federal employees still report confusion about their

agencies’ policies, and some don’t even know if teleworking is an

option for them. Furthermore, Federal managers in particular are

resistant to telework, because they are no longer in a position to

monitor employees directly. Thus, managers need to shift their

focus from process-oriented performance measurements to results.

But the Federal workplace culture will not change overnight. It’s

a long and gradual process. That’s why I’m pleased that OPM and

GSA have already made concerted efforts to promote telework and

address these persistent concerns. In addition to training sessions

for employees, managers and top-level officials, OPM partnered

with GSA to create a one-stop telework Web site to educate the

work force and provide a variety of resources about telework, including links to agency policies, sample telework agreements, telecenter information, OPM guidance and OPM’s study highlighting

agency success stories.

OPM’s recent Interim Report on Telework in the Federal Government indicates that the barriers I mentioned still inhibit

telework—they still inhibit telework. For the report, OPM surveyed

Federal agencies about their telework policies. The data showed

that the total percentages of teleworkers in the Federal work force

has doubled to 3.1 percent since 1998, but it still remains very low.

Agency narratives and followup discussions reveal that agencies

are inconsistent in tracking their teleworkers, especially those who

telecommute on a nonscheduled basis or less than 52 days per

year.

Based on this information, OPM concluded that Federal teleworkers are likely undercounted. It’s been a challenge for OPM to

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compile accurate statistics about Federal telecommuters because

there is no governmentwide standard for data collection. This is an

important concern that I think has to be addressed since the report

is intended to provide a baseline from which to assess the progress

of Federal telework.

Today the subcommittee will ascertain what oversight measures

OPM will use to ensure Federal agency compliance with section

359. We’ll determine whether OPM provides adequate guidance to

assist agencies in determining which positions are eligible for telecommuting. In addition, we’ll look forward to hearing about further

action OPM will take to clarify the initiative and provide employees

with guidance to ensure successful telework experiences. We’ll also

determine if GSA is using section 359 as a marketing opportunity

to expand its advertising efforts for and increase utilization of the

telecenters. Since OPM’s interim telecommuting report reveals that

there is no official system in place to efficiently and reliably count

teleworkers and compile related data, the subcommittee will review

the current tracking system and any suggestions for governmentwide standardization.

The subcommittee will hear testimony from Robert E. Robertson,

the Director of Education, Workforce and Income Security Issues,

GAO; Teresa Jenkins, the Director of Office of Workforce Relations,

OPM; David Bibb, Deputy Associate Administrator of Real Property within the Office of Governmentwide Policy, GSA; Harris Miller, president of the Information Technology Association of America; Mark Straton, the vice president of global marketing, Siemens

Enterprise Networks; and Robert Milkovich, the managing director

of CarrAmerica.

We anticipate having with us today members of the full committee who are not on the subcommittee, as well as Members who are

not part of the full committee, but have a strong interest in this.

I ask unanimous consent they be permitted to participate in today’s

hearing, and without objection, so ordered.

[The prepared statement of Hon. Thomas M. Davis follows:]

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Mr. DAVIS OF VIRGINIA. I would now yield to Congressman Turner for any opening statement.

Mr. TURNER. Thank you, Mr. Chairman. I commend you on having this second hearing on this important issue of telecommuting.

We all know that the Federal Government faces a human capital

crisis, and the Federal work force is indeed aging, and it requires

us to be innovative in ways to not only attract and retain Federal

workers, but to improve worker productivity, morale, and, as I said,

retention and recruitment.

We know that advances in technology in recent years have made

telecommuting a far more feasible and attractive choice for employees and employers alike. Today we’re told that about 19 million

people telecommute, and the number is increasing rapidly. Despite

the fact that telecommuting has been an option for Federal employees over the last decade, as we’ll hear today from the Office of Personnel Management, only about 45,000 employees, or 2.6 percent

of our Federal work force, telecommute once a week, and almost

half of those are in one agency. Even though there’s been a marked

increase in telecommuting, we’re still clearly behind the private

sector. As some of our witnesses today will testify, the private sector offers valuable insights to us in how to address the barriers

faced by organizations attempting to promote telework among their

employees.

As the chairman mentioned, Federal law requires agencies to develop a plan that allows 25 percent of the eligible Federal work

force to telecommute. As of April 23, 2001, an additional 25 percent

must be permitted to telecommute each year over the next 3 years.

Today we will explore the Federal Government’s progress in developing telework-friendly policies and determine what the Congress and the agencies need to do to make telecommuting a viable

option for Federal employees.

I welcome all of our witnesses today, and, again, I thank the

chairman for his continued interest in this important subject.

Mr. DAVIS OF VIRGINIA. Thank you very much.

[The prepared statement of Hon. Jim Turner follows:]

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Mr. DAVIS OF VIRGINIA. Mrs. Capito.

Mrs. CAPITO. Yes. Thank you. Good morning. I’d like to begin by

thanking Chairman Davis for inviting me to offer an opening statement this morning. I enjoyed participating in the last hearing on

telecommuting, and I’m happy that you’ve invited me back. Although I’m not a member of the subcommittee, I greatly appreciate

the opportunity to share with you my views on the importance of

telecommuting in today’s world.

As you may know, the district which I represent plays home to

the one and only telecenter in the State of West Virginia. The telecenter is located in the town of Ranson in Jefferson County, about

an hour outside of Washington, DC, in an area known as the eastern Panhandle of West Virginia. Over the past several years,

there’s been a dramatic increase in the population in the eastern

Panhandle of West Virginia. In fact, many Federal employees are

relocating to West Virginia in search of a peaceful, family friendly

environment. In the past, these individuals would face a difficult,

congested daily commute through Hagerstown, MD, on 270 and ultimately onto 495. Today, however, thanks to advanced commuter

technology, many of these individuals are capable of telecommuting

from work stations only miles from their homes in Jefferson County at the telecenter.

Unfortunately, most Federal employees in West Virginia can’t

take advantage of this exciting opportunity. While interest in telecommuting is high among those Federal employees, gaining agency

approval is an arduous, frustrating and bureaucratic process.

Despite the fact that telecommuting and other forms of working

at a distance have been thoroughly proven and are already commonplace in the private sector, there remain those who are steadfastly opposed to this practice. Why? As the proverb tells us, all

things seem difficult before they seem easy. Certain people are just

slow to change their way of thinking.

In my opinion, it is time for all of us to embrace the practice of

telecommuting. Clearly GSA needs to improve their effort to market the concept of telecommuting to agency management. Emphasis

should be placed on the need to comply with the recent changes in

the law requiring 25 percent telecommuting participation among

Federal employees. Additionally, efforts to streamline the telecommuting approval process should be promoted, and the length of

time from inquiry to implementation of telework should be decreased.

Employee interest in telecommuting should be met with enthusiasm, not skepticism, and whenever possible management should

encourage employee participation in telework. It is time to stop resisting the changing structure of our work environment and start

using the high-speed computing technology to its fullest potential.

On a positive note, since this committee’s telecommuting hearing

last March, the telecenter in my district has made great progress

in promoting and marketing its services to local citizens. Under the

capable management of Neil Jagedny, who’s in attendance this

morning, I’m certain that the Jefferson County telecenter will continue to make great strides. In fact, last June, GSA provided

$130,000 in additional funding to assist the Jefferson County telecenter as it moves to become a self-sustaining entity.

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But funding alone is not enough. We need more Federal agencies

to actively promote and encourage employee participation in telecommuting programs. The Jefferson County telecenter can no

longer afford to have dozens and dozens—and I think it’s almost

as many as 70—interested workers stuck in a confusing, lengthy

and frustrating application and approval process. Those Federal

employees who live in the eastern panhandle and have a legitimate

reason to telecommute should be authorized quickly by their respective employers. It just makes sense. Almost every name on the

waiting list represents a wasted opportunity.

Ladies and gentlemen, after years of discussion, now it’s time for

action, and I’m hopeful that we can demonstrate leadership necessary to realize the vast potential of telecommuting. And I look

forward to listening to the testimony of today’s witnesses. Thank

you very much.

Mr. DAVIS OF VIRGINIA. Thank you very much.

Mrs. Morella.

Mrs. MORELLA. Thank you. Thank you, Mr. Chairman. I want to

thank you for holding this followup hearing on teleworking in the

Federal workplace. With 25 Federal agencies located in Montgomery County, MD, my district, this decision is of utmost importance

to me and my constituents.

I also want to thank you for the courtesy of allowing me as a

member of the full Government Reform Committee, but not of this

subcommittee, to appear here today because of the interest that I

have in this issue. I want to thank you also for your leadership on

this issue, and I want to thank someone who is not here today

again—that is Mr. Wolf—for all of his efforts to ensure the Federal

Government’s support of telework programs and incentives. I look

forward to the day that the entire Federal work force will telework

to the maximum extent possible.

Now, while there is no magic bullet that will solve all of our Nation’s problems, teleworking becomes—it comes pretty close. As has

been noted, for every 1 percent of the Washington metropolitan region work force that telecommutes, there is a 3 percent reduction

in traffic delays.

And during the last hearing, we heard from several Federal

agencies, including the Office of Personnel Management and General Services Administration. And from the panelists’ presentations, a few questions were raised that I hope will be addressed

during this hearing. First, how is the government encouraging

telework for all qualified Federal employees? Second, how are the

government agencies addressing obstacles that block teleworking

implementation, such as security issues? In addition, what has

been done to address these concerns? Finally, what can we do to

facilitate a solution for telework programs within the Federal Government, and more specifically in Montgomery County, MD?

Today we are acting as architects of a new mobile work environment, and with the cooperation of the Office of Personnel Management and the General Services Administration, the Federal Government will once again be an example to the States and to the private sector.

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So, again, I thank you, Mr. Chairman, for the opportunity to attend this hearing this morning. I certainly look forward to hearing

from our witnesses.

Mr. DAVIS OF VIRGINIA. Well, thank you very much, Mrs.

Morella.

We’re going to now call our panel of witnesses to testify. Robert

E. Robertson, the Director of Education, Workforce and Income Security Issues, GAO; Teresa Jenkins, the Director of Office of Workforce Relations, OPM; David L. Bibb, the Deputy Associate Administrator of Real Property within the Office of Governmentwide Policy at the GSA; Harris Miller, the president of the Information

Technology Association of America; Mark Straton, the vice president of global marketing for Siemens Enterprise Networks; and

Robert Milkovich, the managing director of CarrAmerica.

As you know, it’s the policy of this committee that all witnesses

be sworn before they testify, so if you’d rise with me and raise your

right hands.

[Witnesses sworn.]

Mr. DAVIS OF VIRGINIA. Thank you very much.

We’ve had the testimony ahead of time. To afford sufficient time

for witnesses, we’d like you to limit your comments to 5 minutes.

There’s a light down here in front. When it turns orange, you have

1 minute left. When it’s red, your 5 minutes are up, and you want

to move to summary. Your total written statement is going to be

made part of the permanent record.

I’ll begin with Mr. Robertson, and we’ll move right down the line.

Welcome, and thank you for being here.

STATEMENTS OF BOB ROBERTSON, DIRECTOR, EDUCATION,

WORKFORCE, AND INCOME SECURITY ISSUES, U.S. GENERAL

ACCOUNTING OFFICE; TERESA JENKINS, DIRECTOR, OFFICE

OF WORKFORCE RELATIONS, OFFICE OF PERSONNEL MANAGEMENT; DAVID BIBB, DEPUTY ASSOCIATE ADMINISTRATOR, OFFICE OF GOVERNMENTWIDE POLICY, U.S. GENERAL SERVICES ADMINISTRATION; HARRIS N. MILLER,

PRESIDENT, INFORMATION TECHNOLOGY ASSOCIATION OF

AMERICA; MARK STRATON, VICE PRESIDENT, GLOBAL MARKETING, SIEMENS ENTERPRISE NETWORKS; AND ROBERT M.

MILKOVICH, MANAGING DIRECTOR, CARRAMERICA

Mr. ROBERTSON. Thank you for inviting us to be part of these

hearings. Good topic. Good issues. As you’re aware, the work that

we’ll be discussing today had its origins with a request that we received from Mr. Armey last spring. He was essentially interested

in identifying potential regulatory tax and liability barriers that

concern private sector employers who are considering establishing

telecommuting programs. And in July, we briefed Mr. Armey and

several other Congressmen on the results of that work, and what

we’ll be doing this morning basically is summarizing that work and

talking about its application to the public sector.

But before I go on to the summary, I’m going to have to admit

that I’m going to have to use my glasses. Despite having increased

the size of the type, I still can’t see it. It’s tough losing your eyesight.

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In a nutshell, here’s our bottom line. Perhaps the biggest challenge to establishing and expanding telecommuting programs in

both the public and private sectors involve management’s concerns

regarding the effect of telecommuting on the operation of their particular organization. These concerns are not necessarily new. They

relate to assessing whether an employer has the types of positions

and employees that are suitable for telecommuting, protecting proprietary and sensitive data, and establishing cost-effective telecommuting programs. In short, I don’t think I can overemphasize

the fact that the extent to which telecommuting programs are established or expanded rest in large part on a manager’s belief, after

having looked at all of these concerns, that his or her organization’s operations are going to fundamentally benefit by establishing

a telecommuting program.

Now, apart from these management concerns, certain Federal

and State laws and regulations, including those that are governing

taxes, workplace safety, work force recordkeeping and liability for

home workplace injuries, can also act as potential barriers to telecommuting for both the public and private sectors. Of all the barriers that are related to the laws and regulations, what we’d like

to do today is focus your attention on the one that we believe is

a key emerging challenge. That involves the applicability of State

tax laws to interstate telecommuting arrangements. Here the basic

question for the private sector involves possible increased State tax

liabilities for the employer and employee when an employee telecommutes from a State other than the one in which the employer

is located. Similarly, from a public sector viewpoint, interstate telecommuting arrangements could open up the possibility of some

States double-taxing the income of Federal telecommuters.

Overall, the application of State tax laws to telecommuting arrangements, as well as the application of other laws and regulations that were enacted before our transition to a more technological and information-based economy, is evolving, and the ultimate impact of these laws and relations remains somewhat unclear

at this time.

Let me just conclude with some observations on the implications

of these barriers for the future of telecommuting. To begin with, we

need to acknowledge that telecommuting offers a new set of opportunities that could benefit employers, employees, and society as a

whole. These have been mentioned earlier in the hearings.

However, whether these opportunities are realized will depend

on resolving fundamental questions about how telecommuting effects an employer’s ability to manage employees and other resources. As we noted earlier, some of those questions deal with the

suitability of telecommuting as a work arrangement, as well as

questions about data security and overall costs. Knowing the extent

to which these questions apply to Federal agencies would provide

important information for making decisions about telecommuting

by Federal workers. This was referred to earlier by Representative

Morella, trying to get a handle on just how extensively these obstacles apply to the Federal agencies.

Realizing the full potential of telecommuting also requires that

we look beyond internal management questions and concerns to the

laws that govern an organization’s operating environment. Some of

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these laws were put in place before we could imagine a world in

which employees lived in one State, but, through technology,

worked in another distant State. As a result, these laws may unintentionally discourage telecommuting. Further examining how current laws and regulations could potentially impact telecommuters

and their employers would provide the opportunity to mitigate

their possible effects.

In conclusion, pursuing the question of how to promote telecommuting is really a question of how to adapt current management practices as well as laws and regulations to changing work

arrangements that are and will be part of the information age in

which we now live.

Mr. Chairman, that concludes my statement, and I’ll be happy to

answer questions at a later time.

Mr. DAVIS OF VIRGINIA. OK. Thank you very much.

[The prepared statement of Mr. Robertson follows:]

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Mr. DAVIS OF VIRGINIA. Ms. Jenkins.

Ms. JENKINS. Mr. Chairman, and members of the subcommittee,

I appreciate your invitation to come here today to discuss the

progress OPM has made since March in promoting telework within

the Federal Government. We take our role very seriously and are

intensely focused on fulfilling our responsibilities under Public Law

106–346. On March 22nd, then acting OPM Director Steve Cohen

discussed plans for assessing the status of telework in the Federal

Government and the barriers agencies confront as they move to increased telework participation. Today, I will describe our activities

since the March hearing, as well as upcoming initiatives.

Agencies were surveyed in April, and the results were included

in the Interim Report on the Status of Telework in the Federal

Government. The survey identified 76 agencies that have telework

policies covering the majority of their employees. Only 18 agencies

reported having no telework policies. The April survey indicates

that the percentage of Federal employees who telecommute at least

1 day per week has nearly doubled since 1998, but the percentage

is still small, 2.6 percent today, compared to 1.4 percent in 1998.

The data reported in April reflect an undercount of actual telecommuting practices within agencies. Some agencies were not yet

tracking regularly scheduled or ad hoc teleworkers. Other agencies

had no formal telework policies in place at the time of our survey.

Still others had only draft policies or were modifying existing policies to comply with the public law.

We have contacted agencies that reported having no or only draft

policies in place in April, and considerable progress is being made

toward formalizing and fully implementing telework policies. In addition, since April, OPM has engaged in a number of activities to

assist agencies in increasing their telework participation. We

shared best practices and aggressively marketed telework. We provided agencies with our study, a compendium of successful

telework stories that illustrate how Federal agencies have overcome common telework barriers.

In late June, OPM and GSA launched a joint Web site to make

it simple for agencies to acquire all the information they need

about teleworking in the Federal Government. We advised agencies

to consider all positions as appropriate for telework. This positive

analytical approach focuses managers’ attention on job characteristics for determining whether a position is suitable for telework.

When the agencies report to us later this year, we will have more

reliable data to help refine calculations of actual telework utilization. And although Federal agency progress has been significant,

much work remains to be done. Management reluctance, employee

fears are two major barriers to telework implementation. Our next

steps include a telework leadership seminar for top-level agency officials in October, an Internet-based training module by November

to break down major telework barriers, a satellite educational

broadcast to Federal facilities in November, a conference in January aimed at agency supervisors and managers, and a telework

guide for managers and supervisors to be published in the fall.

Also in the fall, the Interagency Telework Issues Group, which

was formed in September 2000, will provide OPM and GSA with

recommendations in the areas of data security, computer equipVerDate 11-MAY-2000 09:15 Nov 07, 2002 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 C:\DOCS\82424.TXT HGOVREF1 PsN: HGOVREF1
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ment, legal and procurement issues, human resource management

issues, health and safety, training and taxes. We are also assisting

agencies with assessing the impact of telework on productivity, recruitment, work force stability, and these demonstrated benefits

should help to change the perspectives of managers unconvinced

that telework can assist them with their human capital challenges.

Mr. Chairman, I believe that telework is good for business, for

employees and the environment, and thank you again for inviting

me, Mr. Chairman. I will be happy to respond to any questions.

Mr. DAVIS OF VIRGINIA. Thank you very much. I appreciate you

being here.

[The prepared statement of Ms. Jenkins follows:]

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Mr. DAVIS OF VIRGINIA. Mr. Bibb, thanks for being with us.

Mr. BIBB. Good morning, Mr. Chairman, and members of the

committee and subcommittee. I’m David Bibb from the General

Services Administration, and today I’ll discuss GSA’s telework efforts within our own agency and our support of telework governmentwide.

Telework, sometimes referred to as telecommuting, can be defined as performing agency work outside of the primary office facility. This includes working at home, in a telecenter or in the field

directly supporting customer agencies.

Public Law 106–346, which we’ve heard about this morning, was

enacted last fall. It requires each Federal agency to establish a policy under which eligible employees of the agency may participate

in telework to the maximum extent possible without diminished

employee performance. GSA has established that required policy.

Our agency has a little over 14,300 associates in our work force.

Approximately 12,000 of our associates are eligible to telework,

based on the broadest interpretation of eligibility.

Under GSA’s policy, 100 percent of these 12,000 eligible persons

may participate in telework, subject only to concurrence by their

supervisors that this won’t diminish their performance. Approximately 2,500 or 21 percent of GSA’s eligible associates telework on

a regular or ad hoc basis. Approximately 800 telework on a regularly scheduled basis 1 day per week. An additional 200 telework

on a regularly scheduled basis 1 day per pay period, and we estimate another 1,500 telework on an ad hoc basis.

We are finalizing an electronic questionnaire to solicit additional

feedback from GSA associates about teleworking, including more

information about potential barriers to increasing the telework participation level beyond the 21 percent that we now have, such as

agency culture and managers’ apprehension.

In addition to telework, GSA also supports other programs that

help to reduce transportation congestion, energy consumption and

associated vehicle emissions. Approximately 59 percent of all GSA

associates participate in the alternative work schedule program.

This gets those employees off the highways 1 or 2 days per 2-week

pay period. Also 29 percent of our GSA associates participate in the

transit subsidy program.

In addition to efforts within the agency, GSA supports Public

Law 106–346 on a governmentwide basis by its public building

service operation of telecenters and by its office of governmentwide

policy support of OPM’s promotion of telework governmentwide.

GSA’s Public Buildings Service has provided 15 telecenters in the

metro Washington area. It offer a combined total of 326 fully

equipped workstations.

The telecenters—at this point, Mr. Chairman, I’d like—some of

the member numbers I will give you are slightly different from my

printed testimony, because we were working with the center directors and completed updating them last night. The telecenters currently serve 462 Federal teleworkers, representing 19 executive

branch agencies, and although utilization over the years has followed a slightly downward trend, center directors are now reporting a positive uptick in usage. The current overall utilization rate

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is 55 percent; 45 percent of those are Federal workers. The other

10 percent are private sector employees.

The centers as a group do lose money, and they’re currently

being subsidized by GSA’s Public Buildings Service Federal Buildings Fund. However, it is possible as OPM works to carry out the

telework provisions of Public Law 106–346 that overall increasing

numbers of teleworkers in the Federal Government will result in

greater utilization of the telecenters. In fact, our updated figures

show that the number of Federal telecenter users is up 11 percent

since the law passed last fall. Center directors also report an upsurge in inquiries by Federal employees about potentially working

in the centers. Since the March 2001 telework hearing, our marketing efforts of the telecenters have concentrated on improved signage, open houses, telework training seminars, brochures and local

newspaper ads.

Another role for GSA is in the policy arena. For example, GSA’s

Office of Governmentwide Policy worked with OPM associates to

develop the one-stop Federal telework Web site that’s already been

mentioned today.

In response also to a request from Congress, we recently awarded

a contract to identify technology barriers and solutions for Federal

home-based telework. The study we hope will be done in early

2002.

Again, Mr. Chairman, I appreciate having the opportunity to appear here today, and I’m prepared to answer any questions the

Members may have.

Mr. DAVIS OF VIRGINIA. Thank you very much.

[The prepared statement of Mr. Bibb follows:]

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Mr. DAVIS OF VIRGINIA. Mr. Miller, thanks for being here.

Mr. MILLER. Well, thank you, Mr. Chairman. I’m Harris Miller,

president of the Information Technology Association of America,

representing 500 of the largest IT companies across the United

States, and I’m very pleased to let you know, Mr. Chairman, that

my son Derrick, who attended high school with your son, helped to

draft this testimony.

The simple message I have—— Mr. DAVIS OF VIRGINIA. If this is anything like his graduation

speech, it’s going to be spectacular. Thank you very much.

Mr. MILLER. Very kind of you, Mr. Chairman.

The simple message is that 21st century work is no longer a

place, and those managers and those organizations who continue to

think that work means that you have to be in a certain place at

a certain time simply do not understand the realities of the 21st

century.

Congressman Turner mentioned the figure of 2.6 percent of Federal employees are telecommuting as opposed to about 10 percent

in the private sector, but I would contend it even understates how

fast the private sector is moving, because if you eliminate from the

private sector jobs which cannot be telecommuting, such as manufacturing and certain retail jobs, in fact it’s much higher in the private sector. It’s probably close to 20 percent now. So the Federal

Government seems to be falling even farther behind.

So my message to the Federal managers is—not to blaspheme— let thy employees go. To me, the issue really is, to a large extent,

attitude. There are certain legal and regulatory administrative barriers which have already been mentioned, but basically it’s psychological. One has to understand that workers can be and, in fact, are

frequently more effective and more productive.

For example, AT&T teleworkers work 5 more hours per week at

home than AT&T office workers. JD Edwards, one of the largest

global software companies, teleworkers are 20 to 25 percent more

productive than their office counterparts. AT&T estimates it saves

over $3,000 annually per teleworker. Telework can cut corporate

real estate costs by 25 percent or more, and, of course, teleworkers

save substantial time by not being engaged in a commute.

Also an interesting data point from AT&T’s survey, 77 percent of

employees working from home for AT&T reported much greater

satisfaction with their current career responsibilities than before

teleworking.

So we see the benefits are clear, more hours, more productivity,

cutting costs, saving time and psychologically for the employees frequently much higher satisfaction, much happier, much more productivity.

There’s, of course, also the challenge for the managers, and I

admit myself to be a bit of a lay convert. I’m one of those people

who also believe that you need to manage people, you need to see

them. But I’ve come around and realized now that many of my employees do now telework. They are very productive. They are very

much engaged, and I suggest the Federal managers need to open

their ears and eyes and minds to this opportunity.

Let me talk about some of the other benefits that haven’t been

discussed here very extensively. One of the big issues that this

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Congress and our Nation is wrestling with is getting more

broadband into the homes. In fact, Congress has a big debate potentially coming up here about that issue in the very near future.

One people—one factor people have not focused enough on is the

relationship between telecommuting and broadband. In fact, as it

turns out, if you look at people who have broadband in the homes,

that it’s now only about 7 or 8 percent, which is pretty disappointing considering what we expected in 1996 when we passed the

Telecommunications Reform Act. But it’s interesting that about 80

percent of those people are telecommuters. What that tells me is

that if people have a real reason to have broadband, they will get

it, because it affects their work.

Imagine a part of northern Virginia in Congressman Davis’ district or Congresswoman Morella’s district or Congresswoman

Capito’s district where it enabled you—a lot of Federal employees

who got together and negotiated broadband into their neighborhood

and reduced rates because they could be more effective telecommuters, set up kind of a buying co-op that would convince the

cable company or the satellite company or the telephone companies, the competitive local exchange carriers to offer broadband because they knew they had a built-in customer base because there

are so many Federal employees concentrated in Virginia, Maryland

and West Virginia and other places around Washington, DC. So

there are some great opportunities to drive more broadband.

Let me talk about a couple of other challenges, though. One Congresswoman Morella mentioned, the information security challenge.

This is not just a challenge for the Federal Government. It’s a challenge for the private sector. We need to make sure that if people

are working at home, they have information security. But another

challenge is to make sure the technology is current. You can’t have

one version of software in the office and another version on the

home computer. So the challenge is to make sure that all the technology is kept current, and that’s something people are learning to

live with.

The regulatory barriers were already mentioned by the witness

from GAO, so I won’t go into them in great detail, but certainly we

share his concern about the taxation issue, home deductions, and

we certainly hope that we won’t have a repeat of that effort by

OSHA a couple of years ago to think about trying to regulate teleworking. I think everyone realized that was a very silly idea and

hope it’s gone away.

One last issue I’d like to mention, Mr. Chairman, is contractors.

We’re talking today primarily about Federal employees, but keep in

mind, a huge percentage of the IT work is done for the Federal

Government by IT contractors. Contracting officers almost never

allow the contractors to allow their workers to telecommute because there is no specific leadership from the Congress or from

above, and that could also provide the same kind of benefits we’ve

been discussing. If an IT worker is working for one of the major

companies in the Washington area or anywhere around the country

that provides services to the government, if they are encouraged to

telework, that provides the same benefits, cutting down on commuting time, cutting down on pollution, increased productivity. But

if the contract officers have the mindset that the person who is the

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contractor has to be sitting in a particular office at a particular

time from 8 to 6 every day, then you’re not going to get over this

barrier. So, again, I believe it’s psychological. It may require legislation for Congress to direct the agencies to do this, but right now

I don’t see any regulatory barriers.

Thank you very much, Mr. Chairman.

Mr. DAVIS OF VIRGINIA. Thank you. Let me just add that we are

putting that in our bill, working with your groups and so on, and

that we’ll be introducing a little later this session.

[The prepared statement of Mr. Miller follows:]

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Mr. DAVIS OF VIRGINIA. Mr. Straton, before I get to you, Ms. Norton may have to go off to another hearing. I want to allow her to

make a few comments. She’s tried to take a leadership role in this

area.

Ms. NORTON. Thank you very much, Mr. Chairman. And I thank

you for inviting me here to this subcommittee hearing. I’m a member of the full committee, but not of this important subcommittee.

I am a member of the Transportation Committee, and I regard this

as a transportation issue and a major transportation issue.

I very much thank Chairman Davis with whom I have worked

so closely on regional and District of Columbia issues for focusing

as he is on telecommuting. I’m very concerned at what I can only

call negligible progress in the Federal sector here. I was very glad

to hear about what GSA is doing. Clearly we have a huge amount

of unevenness here.

Mr. Chairman, I do have a suggestion as to what we might do

to clear up a lot of our transportation problems on which you and

I work so closely. Just have more of the residents of the region understand that the way to countermand this transportation problem

is to do what so many of you are already understanding you must

do, and that is move to the District of Columbia. You will not need

telecommuting. You will not need transportation. You will live in

one of the variety of beautiful neighborhoods in our town, and this

problem will go away. Now, inevitably, some of you will have to go

to Fairfax. Others of you will make your way to Montgomery. The

only reason they are there in the first place—when I was here—

when I was growing up——

Mr. DAVIS OF VIRGINIA. Ms. Norton, let me just join you. I would

particularly give that to my Democrats, a welcome to move——

Ms. NORTON. I’ll take that, Mr. Chairman. I do want you and my

good friend Connie Morella, who chairs the District Subcommittee,

to know when I was a child growing up in the District of Columbia,

Fairfax and Montgomery were cow country, and as far as those

who live in the District of Columbia are concerned, they still are.

Montgomery and Fairfax is there only because there was not

enough room in the District of Columbia for the entire Federal

presence. The reason that Montgomery and Fairfax have become so

prosperous is because first of the Federal presence, which then

spawned everything else, including the whole IT sector.

Seriously, though, we have a terrible national crisis. I only hope

some parts of the United States have done better than we have in

this region, because we are the poster child for a transportation crisis, and we are sitting on our thumbs and doing nothing about it.

You would think, given the fact that this part of the country is way

ahead of other parts in IT, that telecommuting would be far advanced here, and, in fact, the opposite is the case. Traffic problems

are sapping the energy and the money out of this region. If, in fact,

somebody is looking where to locate, whereas normally locating

near the Nation’s Capital or locating particularly in Montgomery or

Fairfax would have been prime places given the work force and

given the other advantages, this part of the country is becoming

just the opposite place now to come, and I think places in the far

West where there are equally good work forces, where they have

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telecommuting further advanced and where traffic is not a problem

that it’s become here are likely to overtake us in competition.

If I may say so, Mr. Chairman, as a person who chaired a Federal agency, the Equal Employment Opportunity Commission, I believe that a—and concentrated on management and on reform of

the agency when I was there under President Carter, I believe that

the challenge really lies in management. Until management understands how to supervise and hold employees accountable who indeed are engaged in telecommuting, I don’t think that there is a

great incentive for them to change the culture that, in fact, has

been a part of the culture of our country and of the Federal Government forever. I don’t think that they will know how to do it on

their own.

I was pleased to hear the OPM testimony, because I believe

you’ve got to begin at the top on this one. You’ve got to make managers understand how to do it. We’re not born into this world

knowing how to supervise people who work from home. We know

how to hold you accountable if you are sitting right under our nose.

This really envisions an entirely different way to manage employees, and the Federal Government is way behind on understanding

that, because we have not given our own managers who are very

good at managing the tools to cross over from the old industrial society management to the new management that a technological society demands. And that is why I think the chairman’s leadership

here in focusing us so that we come up with true remedies—and

I want to say, Mr. Chairman, if it takes legislation, fine. I do believe the Federal Government is quite capable of doing it with

hearings like yours that involve the kind of oversight that give the

government the incentive to move far more rapidly on telecommuting.

Thank you, Mr. Chairman.

Mr. DAVIS OF VIRGINIA. Thank you very much, Ms. Norton.

Mr. Straton, thank you—— Mr. STRATON. I’d like to ask you——

Ms. NORTON. Mr. Chairman, I will be back. I’m going to another

hearing, but I will be back.

Mr. DAVIS OF VIRGINIA. Thanks.

Mr. STRATON. With your permission, Mr. Chairman, after I read

my statement, I’d like to take about an additional 60 seconds and

just show you some examples of what we’re doing.

Mr. DAVIS OF VIRGINIA. Good idea.

Mr. STRATON. Mr. Chairman, ranking member, and other members of the subcommittee, thank you for providing Siemens the opportunity to discuss this experience as a pioneer and leader in teleworking. Siemens is one of the oldest and largest electronic companies in the world, operating in 192 countries. In the United States

we employ over 85,000 people in 700 locations with presence in

each of the 50 States. At Siemens we both use and sell teleworking

technologies. Siemens views teleworking simply as a means to

allow for geographic dispersion of the work force using electronically supported communications and collaborations.

Siemens initially deployed teleworking because of significant cost

savings opportunities, but other benefits have accrued over the

years. As a result, teleworking became a mainstream part of our

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business model in 1996. Today 20 percent of our employees are fulltime teleworkers, and roughly 40 percent are what we would call

mobile workers.

Teleworking has enabled us to decrease our office space by 35 percent nationwide, resulting in annual cost savings of over $3 million in the 3,000-person enterprise networks division alone. Productivity increases of over 20 percent are typical, with no decline in

customer satisfaction. In addition, we have grown to appreciate the

benefits to our employees’ families and ultimately our communities.

Business benefits are measurable and recurring, from entire departments to individual employees. Teleworking allows us to retain

high-performing employees who contribute beyond their peers and

enables us to help dual-income families. It also allows us to recruit

part-time workers with great talents who previously had been unavailable to us, stay-at-home parents who want to work while the

kids are at school, or retirees who want continued income and intellectual challenge. For example, through teleworking, Siemens retained a high-performing Virginia-based contracts administrator

whose husband was transferred to Texas. Instead of going through

the exhaustive and costly process of rehiring, retraining and agonizing over whether the new hire could match the employee’s

standards, Siemens placed her in the teleworking program.

While the Siemens business units continue to thrive with such

solutions, our employees also reap significant quality-of-life benefits. We all are aware of the cost of living and the choices families

must make, PTA meeting or late-night project, coaching Little

League or overcoming deadlines. Successful businesses realize that

these concerns impact employees’ quality of work, tenure, loyalty

and motivation.

Teleworking solutions can mitigate seemingly difficult choices,

because geography and time zones become transparent. Businesses

with telework programs can attract and retain the best in a highly

competitive environment. Society also benefits from teleworking.

The actions taken by hundreds of teleworkers can reduce traffic

congestion, energy consumption and pollution, a practical, not

wacko environmentalism.

Teleworking can present opportunities to improve the quality of

life for many Americans. For example, a key individual in Siemens

became ill with multiple sclerosis that forced him to reconsider fulltime employment. Teleworking came to the rescue. He continued to

share his intellectual capital with his coworkers, impacting our

business as if he were at his desk 5 days a week.

Our teleworking success did not occur overnight. We had to decide to adopt teleworking as a business practice using technology

to facilitate and management to enable. Siemens faced some of the

concerns identified in the recent GAO report for the Honorable

Dick Armey. The report cited management concerns in key areas.

The identification of employees in positions suitable for teleworking, the security of sensitive data and the ability to remotely monitor teleworkers, the impact of teleworking on a business’ profitability all are valid concerns, and, coupled with liability and privacy issues, they are at first glance significant hurdles to implementing teleworking. But imagine, if you will, a three-story building in an office complex ensnarled in nonstop traffic with over

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25,000 square feet for 60 employees sitting at their desks in a highrent area. Day by day in sweltering summer heat or snowy winter

days, the workers commute in to receive calls from clients seeking

technical assistance. Now envision the same group of workers dispersed in over 23 States, not worrying about the road conditions or

the issue of the latch-key children. They continue to perform their

jobs; in fact, are more likely to process more calls, stay with Siemens and maintain high customer satisfaction.

This is the new Siemens customer technical support center, completely operated by teleworking agents. We now manage our teleworkers in a variety of methods, including by objective, by measurable and realtime data and by the traditional performance measurements. The teleworking requires that managers be very clear in

job responsibilities and objectives and quick and forthright in performance communications. Our technology allows us to interact

with our teleworkers by ensuring their business numbers ring

them at home, on their cell phone or in a hotel environment. This

flexibility allows our managers the opportunity to maximize interworking with our teleworkers and maximize the employee’s opportunities to succeed.

As with any business practice, teleworking must be evaluated

through an ongoing dialog between management and employee to

ensure common business goals are achieved. In sum, once acclimated, both management and employees simply view teleworking

as a way of doing business at Siemens and not an individual privilege.

Mr. Chairman, we applaud your leadership in focusing congressional attention on teleworking and its potential benefits to government. We believe teleworking can help incentivize Federal workers

to stay in Government and can be used as a recruiting tool. In addition, as Siemens has demonstrated, teleworking programs can

also reduce costs and improve productivity.

We owe a debt of gratitude to Congressman Wolf for his determined efforts to expand teleworking opportunities for both public

and private sector employees. We believe the Telework Tax Incentive Act introduced by Congressman Wolf is also a model to

incentivize private sector organizations to implement teleworking

programs.

Siemens also recommends that the Federal Government look at

ways to partner with the private sector and consider pilot programs

that capitalize on the expertise and lessons of private sector programs. After all, for most of human history, people worked out of

their homes. It is only recently with the rise of industrial and information revolutions that large centralized office complexes have become commonplace, and commonplace only because communication

and information were bound to a single location. Now, today, communication and information are not limited to single locations, because new technologies have enabled a mobile and distributed work

force. For example, by 2002, there will be more mobile phones in

the world than wired phones, and by 2006, the Internet will be

accessed more by mobile devices than wire devices.

Recently there was a lot of publicity and consternation in the

press regarding the President’s month-long vacation. However,

after having watched the coverage of this and many Presidential

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vacations, I could not help but think to myself that Presidents

often telework, and being a marketing guy, I couldn’t also help but

think what a PR opportunity it could have been. If Presidents can

telework with the most important job in the world, why can’t the

average worker do it with maybe just a little bit less responsibility?

Mr. Chairman, Siemens appreciates this opportunity to discuss

the issues confronting implementation of a teleworking program.

We are proud of the success of our program and feel strongly that

the teleworking business model can be transferred to the public

sector. We fully support your efforts to expand teleworking opportunities.

With that, let me just very quickly show you a couple pictures.

This is just an example of a teleworker coming into our Reston office. And you go into a computer, and you sign into a cube. And,

Tim, if you can show the next slide. And what the teleworker sees

is they see a schematic of the teleworking area, and they click on

the cube that they would like to have for the day, and then their

phone number and their PC all go there.

Now, I think this is one of the most interesting pictures. Rather

than having filing cabinets, etc., the teleworkers have cabinets,

much like you would have in a high school, and they go to the cabinets and they have some shelves there. You’ll often see pictures of

their families, open cans of Coke, and you can see that they have

a cart. And I have an example of it right here. Let me just walk

around you for a second. And they put their PC on the cart, and

they roll the cart over to the cube, and as you can see, this is a

live cart. It was very heavy to get here. Thank you very much, Tim.

Full of things. You’ll see things, like I said, like pictures, personalization, just like people would do in an office.

And then the next picture is just—it looks like a regular office

cube, because it is. The only difference is that the telecommuters’ phone automatically rings just like it was their office all the time,

and when they leave the office, their cell phone automatically rings

if they would like it to, just like if you called their office number.

Thank you very much.

Mr. DAVIS OF VIRGINIA. Thank you. Thank you very much. That

was a good spin on the President’s vacation. The President’s telecommuting initiative. You ought to let Ari Fleischer know about

that.

[The prepared statement of Mr. Straton follows:]

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Mr. DAVIS OF VIRGINIA. Mr. Milkovich, thank you.

Mr. MILKOVICH. Mr. Chairman, members of the Subcommittee on

Technology and Procurement Policy, I thank you for your invitation

to speak here today on issues relating to commercial real estate solutions for the private sector, specifically as it relates to teleworking. I’m going to work between two sets of paper here. One is my

written testimony, and then the other is to address some of the

questions that were submitted to me in the invitation letter dated

August 27, 2001 from the Chairman.

I would like to say thank you to Mark. Having been on a plane

quite a bit lately, I thought this was a self-administered beverage

cart. So I’m glad to know I have seen these, though, with the work

in the——

Mr. STRATON. Some days it is.

Mr. MILKOVICH [continuing]. Private sector.

Again, I am Robert Milkovich, managing director for

CarrAmerica, and I would like to give just a quick history on

CarrAmerica Realty Corp. We are a publicly traded real estate investment trust [REIT]. We were born out of the Oliver Carr Co. in

1993. Many of you in the NCR region know the Oliver Carr Co.,

which has operated here for over 40 years. Currently, we are in 12

markets across the country. We have 287 buildings that total well

over 20 million square feet of commercial office space.

I bring this to your attention because in 1997, we saw quite a

movement for the alternative workplace solution in the private sector. With that, our research and data that we collected, we invested

in HQ Global Workplaces, essentially an executive suites operator.

Concurrent to that, we piloted a target program called

NOWSPACE in Atlanta, GA, and that essentially was turnkey office space which included the furniture, fixtures and equipment

that people could come in and what we would determine as plug

and play. You could essentially contract for the space on a Friday

and be up and running on a Monday. This program was successful

enough that we also deployed those efforts into the Dallas market

as well. We find that the drivers behind this were the need for

speed, growth, flexibility and low capital expenditure to entry. It

also helped in employee recruitment and retention, to highlight a

few items. I offer this as a background insofar as our company is

concerned because we see a trend in the private sector.

Another case study that I would like to utilize is what we refer

to as the Schwab Hotel experience. In an effort to meet the demands of a longstanding customer, we built, operated an office

hoteling facility for Charles Schwab in Walnut Creek, CA. This facility was opened to meet the needs of the employee base at

Schwab that lives north and northeast of San Francisco and battles

traffic congestion into the city. The space is equipped with FF&E

and a sophisticated reservation software system to allow employees

to schedule and manage their time more efficiently. The reservation system has the ability to track and report on space utilization.

This attribute is paramount to management for controlling costs

and monitoring the work force. Now, the employee-manager relationship can be tracked electronically, and communication can be

made simple.

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Another powerful attribute of this facility is the capability for

employee recruitment and retention. Equally important, this modern technology promotes the seamless integration of the employee’s

workspace at a variety of places. The experience enables employees

to work from a multitude of locations, thus spending less time commuting and more time productively at work. The benefits are endless, supporting the Clean Air Act and other responsibilities that

corporations must meet in today’s competitive world.

The economic benefits are substantial. Most telework and

hoteling programs strive to capture a minimum ratio of one workspace per two employees. This in simple math can result in a cost

savings in annualized rent of as much as 25 percent. In fact, most

of the insurance companies that we have interviewed target 33 percent as a goal. For large private sector space users, this can have

a substantial impact to the bottom line.

Let me address a couple of the items that were in the invitation

letter. One was managerial barriers that we have encountered in

the private sector that we have identified. One is managing from

a distance for employers. That is obviously a big cultural issue, and

we also see it from the employee’s standpoint. Employees’ concern

about career path and being connected to the organization. Certainly technology can help to bridge this gap, but there is that old

style of management that still believes in out of sight is out of

mind. This also calls to question should people work from home or

a third place such as a telework center.

Another issue that I address in your letter is the private sector

implementation, two other cases that I will bring to bear here. One

is Aetna. As an example, they have instituted a program whereby

claims processors can work from home, managers can easily monitor the number of claims processed, and the benefit to the company is less office space. I think this is a particular situation that

addresses how private sectors can monitor the workload.

You also have the most successful model that has been out there

in the private sector, and that is large accounting firms that are

practicing and perfecting this type of business model for years. The

genesis of this success is due to the nature of the work. To be profitable they must have employees in the clients’ offices, requiring

less office space for themselves. Telecommuting offers significant

benefits to the private sector, and those are obvious in space reduction, flexibility, employee recruitment and reduction.

Concurrently, or in conclusion, I should say—I am looking at the

clock now. My apologies. In conclusion, teleworking in the private

sector is an effective tool in use by many companies for employee

recruitment and retention and offers an economic benefit. Thank

you.

Mr. DAVIS OF VIRGINIA. Thank you very much.

[The prepared statement of Mr. Milkovich follows:]

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Mr. DAVIS OF VIRGINIA. We are going to start with questions. I

will start with Mrs. Capito.

Mrs. CAPITO. Thank you.

I believe, Mr. Robertson, you may be able to answer this question. In thinking of the telecenter in Jefferson County where I mentioned there were seven folks who have been on the waiting list for

quite a while to try to telecommute at least 1 day a week, from a

variety of different agencies, now when you look at a private company, lots of times they will have, you know, a structure where

there is a personnel office that is, you know, handling all of these

kind of concerns. Do you see that one of the problems is the variety

and the vast differences between the different agencies in the Federal Government, that is one of the stumbling blocks, or is it something else?

Mr. ROBERTSON. We didn’t specifically look at telecommuting

centers, but I imagine that when you have several different Federal

agencies working out of the same center with several different sets

of rules and regulations, you know, they can act as obstacles to

making the most efficient use of that telecenter.

Mrs. CAPITO. Well, may I ask then, Mr. Straton from Siemens,

in your telecommuting experience are all the rules and regulations

centered in one personnel office, or is it done through the different

departments?

Mr. STRATON. Yeah. We have learned a lot about how to do it,

and there is actually in the handouts that we have a good overview

of some of the policies, so we have pretty explicit agreements with

each teleworker. Now, one of the things that we do differently and

is a problem that we encountered is teleworking—employees love

it, so they are like, OK, I want to telework 2 days a week, but what

they want to have is they want to have an office fully functioning,

and then they want you to have a fully staffed office at their home.

So one of the things that we had to do is you can’t be both. You

make a choice. It’s either an office worker or a teleworker. And

that doesn’t mean you wouldn’t allow somebody to telework a day

a week or something like that, but you are not going to pay for

both as a company because the driver for the company is productivity and cost savings, and I think those are the right drivers for the

government as well.

So I would say that yes, we have common practices we differentiate between teleworkers and office workers. And the other thing

is that teleworkers, they still need that community, and so that is

why I think the hoteling concept that I showed you is specific to

in this particular case a sales and engineering function so that

when they do come in, they do get together. So I think that is

something you have to think through because the communications

when you are dispersed becomes key.

Mrs. CAPITO. That is the end of my questions. Thank you.

Mr. DAVIS OF VIRGINIA. OK. Thank you.

Mrs. Morella.

Mrs. MORELLA. You know, it comes down to leadership, a belief,

a commitment to doing what is right, trust. This reminds me of our

Y2K, Mr. Miller, the whole concept of the need to trust, and then

it comes down to security also. And I just wondered if—maybe I

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will start off with Mr. Robertson. If you would indicate what you

have seen with regard to the security issue.

Mr. ROBERTSON. Well, we have talked about it already this morning. I think the point has been made that the security issues are

big in the public and private sector, even before you throw in telecommuting to the mix. And when you throw in telecommuting, and

you are talking about accessing possibly an organization’s central

data base, then, you know, you raise the level of concern. And there

are people who can talk more about how to build firewalls and so

on and so forth. But it is an issue in both the public and private

sector.

I am not sure, you know, what the solution is or if there is an

easy solution beyond using the technology as best as possible to secure that data, but there could be simple ways of addressing some

of the security concerns, too, just through—and this is very nontechnical—but basically having in the Federal Government, for example, making sure that all workers were aware of how to handle

sensitive data, and making sure that all Federal workers who are

telecommuting in particular understood what to do and how to

handle this type of data. And it may in some cases, require that

there be some limits on the use of certain types of sensitive data

by Federal telecommuters.

Mrs. MORELLA. You know, one thing I noted in listening to the

wonderful testimony that each and every one of you presented, I

don’t think there is any partnerships going on or any sharing of

best techniques or standards or practices with the public sector and

the private sector. I mean, we hear from ITAA and from Siemens

and CarrAmerica about how teleworking is succeeding. It seems to

me there should be more of a sharing.

Would any of you like to comment on whether there are any attempts to do that and whether or not you think this is a stellar

idea that we should develop further?

All right. Mr. Bibb.

Mr. BIBB. I would just say from the standpoint of GSA, yeah. It

is a great idea, and we are trying our best to do that. We are prime

members of the International Telework Association and Council,

which is a joint partnership of private sector firms and the Federal

Government. In fact, we are trying to do that in many of the arenas where we operate. And our Web site which we have talked

about, the joint OPM-GSA Web site, does contain the best practice

success stories and that sort of thing.

So, yes, it makes all the sense in the world, you are absolutely

right, to learn from the private sector firms, and we think vice

versa in some cases.

Mrs. MORELLA. And you may want to have an exchange of people, too. I mean, they may want to go visit and see how it is working. Do you want to comment on that, Mr. Miller?

Mr. MILLER. I would agree from the private sector standpoint. I

was very interested to hear Ms. Jenkins comment about the

telework leadership seminar. If there is some role for the private

sector to play in that in terms of giving some examples, companies

like Siemens could testify about their success, if that is helpful, to

give real-world examples.

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Let me go back to your first question, Congresswoman Morella,

about the security. I think that is an excuse, not a reason, for telecommuting. I certainly agree with what Mr. Robertson says. There

are myriad challenges, but as we know from where the government

itself already is when they are not telecommuting, they are pretty

far behind in information security, the recent GAO report on Department of Commerce just being one very glaring example of how

the government is behind.

There is no intrinsic reason though the telecommuters, whether

they are telecommuting from a telecenter that Congressman Capito

talked about or telecommuting from their home, that they cannot

be properly outfitted with the technology and the people and the

processes to secure information. Obviously there are some types of

jobs that are so sensitive that you would never want to have anybody outside the building, but for most of the government work

force we are talking about, I don’t see any obstacles whatsoever

that can’t be overcome fairly straightforwardly.

Mrs. MORELLA. Can be overcome.

Did you want to comment on that Ms. Jenkins?

Ms. JENKINS. Yes, please. As far as partnering with the private

sector, we have done a lot of work with AT&T since their testimony

here in March. They participated with us within a strategic planning session, acting as our advisors and consultants on how we can

help the agencies comply with the public law, and we are continuing to partner with them. We have learned a great deal from

AT&T. They have helped us to expand our thinking about how we

can increase the number of teleworkers. They have talked to us

about training efforts that they found to be appropriate, and we

have adopted many of their philosophies.

And as far as our upcoming leadership conference, we do plan to

extend an invitation to both Siemens and AT&T. We think that it

is important for agency leaders to hear firsthand about how

telework can actually work and help them with their human capital issues.

And on the issue of security, we have a number of things that

we have been doing at OPM. We have had many conversations

with the Federal CIO Council, particularly the security committee,

on how we can perhaps establish some governmentwide guidance

for agencies to use. We encourage agencies to include the security

officials on their planning team when they are establishing

telework policies. We also encourage managers to precede a

telework arrangement by addressing security issues with their employees, and ensuring that they have up-to-date virus protection

and proper firewall software on their computers. Thank you.

Mrs. MORELLA. I thank you.

And I know my time has elapsed, but I just want you to think,

Mr. Bibb, about the fact that you have 100 percent participation in

Frederick, MD. Are there particular factors there that you don’t

find in Montgomery County, MD, where we could establish such a

record?

Mr. BIBB. Well, as you know, we are going to be taking a look

at the feasibility of a couple of centers in Montgomery County, MD.

I don’t have answers to that, but that will certainly be some of the

items we are looking at as to whether we can make a go of it. We

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will be responding to the report language in the House appropriation bill and giving you a full report on how those compare.

Mrs. MORELLA. Splendid. Thank you very much.

Thank you, Mr. Chairman.

Mr. DAVIS OF VIRGINIA. Thank you.

Let me just note that our colleague Mr. Moran has just joined

us, another strong champion of telecommuting here in the Washington suburbs.

Jim, do you want to make any statement at this point?

Mr. MORAN. It is not necessary. I am sure that anything profound and constructive has already been said that could be said

from the dais, so——

Mr. DAVIS OF VIRGINIA. I think I got most of that in my opening

statement.

Mr. MORAN. I trust you did. And certainly Mr. Turner had a

statement. I am sure that covered it as well.

Mr. DAVIS OF VIRGINIA. Well, we finished the panel. And let me

ask a few questions as we go through the panel.

First of all, great testimony. Let me start; we have heard a great

deal about the need for incentives to promote telework. As you

know, Mr. Wolf has introduced the Telework Tax Initiative Act. In

Virginia, Governor Gilmore introduced the Telework Virginia, a

public-private matching program to provide financial incentives to

Virginia businesses to start or expand existing telework programs.

Can any of you think of any incentives that could encourage Federal agencies and employees to embrace telecommuting more fully?

And let me just say, we are working on our CERA bill coming out

of this committee that will, I think, enhance Federal contractors,

Mr. Miller, with what you suggested, allowing them to use more

telecommuting in what they are doing.

A lot of this is managerial, and managers are just not comfortable; they are in the old paradigm. But having heard AT&T’s

testimony last time and what Siemens and Carr have done shows

us that the private sector has found this to be excellent for recruiting and retention.

Mrs. Norton mentioned the traffic situation. It has many good

elements if we can learn to utilize it correctly. But are there more

incentives that we can give you at the Federal level to make it

more palatable so we could move this faster? We have used the

stick. I mean, I think Mr. Wolf’s legislation was kind of the stick.

We give you deadlines and so on.

Mr. MILLER. I think in the private sector the incentives are—frequently simply are strictly financial. You simply say to a manager,

here is a way to save money. It was covered in testimony from my

colleague on the left about Siemens, the savings in real estate, the

more productivity out of the workers, and obviously it is much

tougher in the Federal Government where you don’t have as many

bonus systems. But there are SES bonuses given based on various

performance factors, and this could be looked at perhaps as one element of the incentives for managers to save money in terms of

making the work force more productive, and that may incent them

to promote more telecommuting.

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Mr. DAVIS OF VIRGINIA. And I would think from a parking perspective and some of these problems around some of the buildings

where you have it up, it could help on all of those kind of things.

Mr. Straton and then Mr. Milkovich.

Mr. STRATON. Yeah. I just want to echo what Harris said. I think

if you look at Siemens as a model, IBM also is another good model,

what drove both these companies was cost. We were under intense

competitive pressure, and we had to reduce our expenses, and because it is difficult to ask managers to change, it is difficult to

manage in a distributed environment, it takes different skills. You

have to do different things.

So, you know, the one thing that you could do, I think, to get it

really widespread within the Federal Government and then I think

it has a ripple effect into the private sector is you just simply tell

them that they have to reduce their real estate expenses, and the

rest will follow. But people don’t change unless they have to.

Mr. MILKOVICH. Let me submit, obviously we have talked about

the backbone being cultural, technological, you know, the kind of

social benefits, if you will, I think, from the private sector, Mr.

Straton is on, that there has to be an underlying economic benefit.

It has to be a reduction in space. It has to be a better efficiency

on occupancy levels and use of space.

I think that the Federal Government is in an enviable position

in the sense that you control a substantial amount of leasehold interests, so you have a lot of room to make those type of moves. I

am not sure I am correct on this, so it is almost a statement in the

way—formed in a question, and that is, if a particular department

is able to reduce its real estate costs, if there is a way that they

could see that benefit to their department, it would be recorded or

somehow recognized for that department, I think you would see a

stronger shift toward teleworking.

Mr. DAVIS OF VIRGINIA. OK. Let me ask—sure. Ms. Jenkins.

Ms. JENKINS. All the things that were stated I think are important incentives, and I think the Federal Railroad Administration is

a good example to follow relative to the space reduction and the incentive to encourage managers to allow more employees to telecommute.

In addition to what has been said, and it sort of follows upon

what has been said, is that it seems to me the most important and

critical incentive is tying telecommuting to the business needs of

an organization, and that would also include the human capital

challenges that managers are feeling right now with a potential

huge numbers of employees about to retire; that utilizing telework

as a retention strategy, utilizing telework as a recruitment tool to

gain the best and the brightest college graduates into the public

service are real incentives for managers, and that is what it is that

we are trying to do at OPM is trying to get that word out and really tie the impact of telecommuting to the business of an organization.

Mr. DAVIS OF VIRGINIA. It just seems that right now we are getting the worst of all worlds. We are not getting any office space reduction from this plan yet because we just don’t have the penetration in the work force that we ought to have. And yet we are spending money for these telecommuting centers. So it is really a net

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cost right now. And the reaction we tend to get is, ‘‘I guess we have

to do it. Congress wants us to do it. And we really don’t understand

what it can do for our work force and for other things.’’ But when you listen to Siemens and you listen to Carr and you

listen to IBM and you listen to AT&T and some of these private

companies and how it is helping them in their business plan, you

feel like you ought to do a seminar with some of your managers

and show them what the possibilities are.

Ms. JENKINS. Yes. And that is exactly what we intend to do.

There is really good data out. AT&T particularly has done a costbenefit analysis relative to the impact of telecommuting on productivity, and we plan to push that information out. The Internal Revenue Service, an aspect of the Internal Revenue Service has done

a cost-benefit analysis which we intend to help them market. It is

wonderful to talk about the money that can be saved when you

don’t have to recruit for individuals that leave your organization.

It’s estimated between 93 and 100—150 percent of annual salary

is spent on recruiting, and we need to translate that into dollar figures for Federal agencies. So that is something that we are planning to do, not only in our October leadership conference, but also

in our January conference where we really get to the managers and

the supervisors.

Mr. DAVIS OF VIRGINIA. OK. Sure. Mr. Bibb.

Mr. BIBB. Just to make one point. On the space reduction, I don’t

want to leave the impression that this is a space reduction program. I have done a lot of interaction with the private sector, and

in some companies it may result in space reduction. In others it

may not result in space reduction at all, but it may result in getting the job done better. It may result in much lower turnover rate,

the ability to attract and retain good employees.

So the whole thing, from my perspective, is it is about the business. How do you best get the business done. How do you offer the

associates or employees the best range of a combination of working

in the office, working at home, working in the field and linking

that all together with the technology. And that calls for a lot of

careful planning, a lot of thinking and a lot of willingness to make

those options available.

Mr. DAVIS OF VIRGINIA. Well, there are many benefits. And I

think, as you say, you don’t employ this with one thing in mind.

But, clearly, on recruiting and retention, we find some specific

examples in the testimony today about people who you can get into

the business and you can retain them because they can spend more

time at home with their families and do other things. That is something, with the Federal Government spending as much as money

it does recruiting and retaining people, that is a plus.

Also, you will get some space reduction, obviously, with your

work force; and you walk through Siemens and you see it.

Third, traffic reduction. This helps people who aren’t telecommuting by getting a few cars off the road. It is much cheaper

over the long term to move cars off the road than it is building new

highways. That is a byproduct. It is not the reason we are doing

this, but it can be a significant byproduct.

Also, on very bad days, an employee might get off down in Dale

City in my district or out in Reston or out in West Virginia, see

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what the traffic is like and say, ‘‘This could be a long day today,’’ and they can telecommute on that given day.

And fourth is something that we haven’t talked enough about but

it was mentioned in the testimony today and that is productivity

increase. The fact of the matter is that people who telecommute are

working after their 40-hour weeks, are working more hours at

home than employees who don’t telecommute. It is a cultural

change, and their job can become part of their life this way but not

interfere with the other parts of their life.

So those seem to me to be really significant benefits.

I have more questions, but let me ask my friend, Mr. Moran, if

he would like to ask any questions at this point.

Mr. MORAN. Thank you, Tom.

I appreciate you holding this hearing, Mr. Chairman; and for all

of the reasons that you just listed it is imperative that we find the

obstacles to expansion of telecommuting and then find ways to address those, overcome those. So I would like to bring up two such

potential barriers.

First of all, in terms of the Federal Government, I want to ask

Mr. Bibb and Ms. Jenkins to comment on the security aspect. Because in northern Virginia, for example, the largest Federal employer by far is the Department of Defense. Yet my sense is that

the telecommuting that goes on within the Defense Department is

pretty limited, and my—I would guess that, if we pushed them, the

first thing they would come up with is security. We can’t compromise the data that our employees are dealing with. Then, of

course, normally we would be intimidated into—or at least inhibited from pursuing that any further.

I would like for you to address that aspect of the security of information that is dealt with when you are using home computers.

Obviously, we have had some very public examples of some of our

chief executives in intelligence agencies, for example, compromising

intelligence that they had available through their home computers,

and that became a problem. So I would like to see how you would

address that.

And let me just give an opportunity for the private sector people

to think about the second thing, which is the Tax Code and how

the Tax Code is related to telecommuting, both the tax advantages,

potentially, for individuals, but also some of the complications. For

example, if there are two State income tax regimes that you might

have to deal with if you are telecommuting. So I just want to get

you prepared for that.

And Mr. Bibb and Ms. Jenkins.

Ms. JENKINS. Well, certainly, within the Defense Department, I

agree that the security issue is the biggest obstacle there. At 0.5

percent of the work force telecommuting right now, or as of April,

that is a huge obstacle to overcome.

Some of the things that we are doing in OPM to help overcome

the governmentwide obstacle to security is working with the Federal CIO Council and the Security Committee to come up with

some ideas that will help us to help agencies such as Defense overcome this concern of theirs.

We also already have a number of pieces of guidance that we

have provided to the agencies to help them to overcome some of the

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security concerns that they have, such as making sure that they

have the proper firewall protection and virus updates and simple

things like, if your computer is home, make sure it is secure and

away from your children so that there aren’t any accidents that

might occur while the computer is at home. Those simple things we

are publicizing to the agencies so think about.

Coupled with that is that when agencies plan their telecommuting programs they must include a variety of stakeholders and individuals within the organization to help plan the program and some

of the most important people are the security officials and to identify how they can overcome some of the security obstacles that—

and to prevent problems. So we realize that, particularly for the

Defense Department, their culture is such that they are more concerned about the security issue than perhaps some other agencies

and we need to work perhaps personally with them to help them

overcome some of their obstacles.

Mr. MORAN. You began your response by noting that only onehalf of 1 percent of the largest agency in the Federal Government

has any telecommuting going on.

Ms. JENKINS. Yes, sir. A lot of work to do.

Mr. MORAN. Yes. I wonder if it isn’t to some extent a

generational thing, too, in terms of management wanting hands-on

control over employees. But, Mr. Bibb, unless you have something

to add to Ms. Jenkins’ very comprehensive and very good response,

informative response, let me ask Mr. Miller about the tax implications of telecommuting in the private sector.

Mr. MILLER. Could I first address your first question, Mr.

Moran?

I think that we have to make a bit of a distinction here, because

telecommuting frequently blends together two concepts. There is

telecommuting from home and there is telecommuting from telecenters which are controlled by the government in one way or another,

either directly or through contracting with a private vendor. And

it seems to me that even in the most severe security concerns of

the Defense Department at least many of these telecenters can be

just as secure in terms of protecting the information technology,

the data, etc., as they are if they were coming into the Pentagon

or some other Defense Department building that is immediately

approximate to the Defense Department. So it seems to me that

this can be a bit of a bogus issue.

If the issue really is legitimately concerned about security and

we don’t want people taking things home, nevertheless they still

may be able to work at a telecenter in Dale City or some other relatively remote location, and so we need to make that distinction.

I think it is very important.

Mr. MORAN. I appreciate that, Mr. Miller. But, of course, these

telecenters in the long run are going to be only a marginal amount.

I suspect the most telecommuting is going to take place at the

home if it is really effective. Because to get to a telecenter that has

a sufficient critical mass of employees and resource equipment,

supplies and so on, it is—you have a transportation hassle there,

anyway. So, I mean, if you are coming from, you know, south of

Springfield and trying to get into the Springfield mixing bowl

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where we have a telecenter, we have defeated the purpose in large

part.

But I do think there is a security issue with home computers,

where the individuals use that computer for personal use as well.

And when you can attach cookies on your—on banner ads and so

on, it seems to me it is pretty easy to then access information that

is being used for work. I mean, it may be my ignorance, but I don’t

know how you buildup sufficient firewalls to prevent—to separate

your personal usage and official usage.

Mr. MILLER. Actually, it is not. I mean, the technology is there;

and the technology has been developed to a large extent for exactly

the reason that telecommuting has become so popular in the private sector. And the private sector is no less worried than the public sector is about data being compromised when it is used by telecommuters.

The trick is not whether the technology exists or not. The technology does exist. The trick is to make sure people implement it.

As you know, part of the problem is that people don’t always update their technology. They don’t always make sure that they have

the latest anti-virus software. They don’t make sure that the firewalls are current. So part of the big challenge here is again a management challenge.

It is one thing to tell people that the technology is available,

which means that people can’t come in through remote locations

and access data bases if they do A, B and C. It is another thing

to make sure they do A, B and C.

Mr. MORAN. And it is not just the employees’ responsibility; it is

the employers’ responsibility to instruct them.

Mr. MILLER. Absolutely. Fortunately, there are monitoring systems. There are technologies available and companies that specialize in monitoring to make sure that both central locations and remote locations are following the procedures. So you do have to in

a sense put another layer of protection on. You would have to have

some kind of monitoring system to make sure that the telecommuter would have his or her computer monitored. And if the monitoring service found out that they hadn’t updated their firewall or

hadn’t updated their software or whatever was necessary to protect

the information technology then basically it would cut that telecommuter off until he or she had updated that technology to the appropriate levels of security.

But I don’t think the vulnerabilities are quite as high as you

might be imagining if the corporation or the government do everything possible to use the latest technology that is out there.

Mr. MORAN. Well, invariably, if there is a will there is a way. Although I suspect that this is one area where our defense and intelligence agencies are going to find an easy excuse not to do anything.

Mr. MILLER. On the tax issue, I certainly agree with you, Mr.

Chairman; and I notice that the GAO mentioned—or Mr. Moran,

rather, mentioned this in his testimony also, that this whole tax liability and multi-State jurisdiction—as you know, we have 7,500,

approximately, taxing jurisdictions. It is particularly a challenge

for small businesses because they are not used to having to pay

employees in all types of jurisdictions. They are used to, in most

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cases, just having employees in one jurisdiction. Also, some States

are now trying to use the presence of employees as an excuse to

set up what is a so-called nexus which, as you know, is a big issue

in terms of interstate taxation.

So it is something that is potentially going to become a problem

as more and more small businesses—most large businesses, frequently they already have employees in multiple jurisdictions. So

it is a pain, but it is a pain they are used to dealing with. But

when you are talking about a small business and trying to

incentivize them, the tax—multiple taxing issue can be a problem.

Mr. MORAN. Well, a clever business, or at least a business with

clever accountants could easily locate their—if it is a business that

buys supplies and equipment and so on on line, they could simply

locate their employees in those jurisdictions that have the lowest

sales tax regime and maximize the opportunity through telecommuting.

But did you want to add something, Mr. Straton?

Mr. STRATON. I don’t really have much to add. The only thing I

would say is you would take the Defense Department—I mean,

when these guys are on the battlefield or, you know, out doing

practice sessions they are communicating. They are teleworking. I

mean, you have a very small subset—or it is small, but you have

a subset of employees that have very, very secure information.

They clearly should be in a secure environment. But you have a

whole other subset that, you know, they are ordering supplies or

whatever it is. It just doesn’t matter.

So, as it relates to us, my view would be for secure—you know,

there is janitors come in and clean things at night. Stuff is not

locked up, PCs not turned off. You are probably more secure at

home. I don’t know what a 3-year-old is going to do with confidential Siemens software information. So I don’t think it is a big issue.

I think it is a big excuse, to be honest.

Now, as it relates to the government, I mean, and the taxation

for us, it has not been a problem. I think the companies gaming

the system, as you stated, needs to be thought through; and I think

you have to make sure the company is not in a position or the employers are not in a position when they are paying taxes to multiple States.

I think that the Wolf idea of a tax incentive to jump-start this

thing is a good idea. I think a better idea, though, is to have the

government take a leadership role at the senior levels. I think with

all the government agencies you just say that, you know, over a

certain period of time you have got to have 10 percent less real estate; and I guarantee you, you will. And you will probably have better results and everything else.

Yes, what other private sector issues? You just have to make

sure that the laws for liability, privacy and performance issues

don’t penalize the companies. I will give you an example.

One of the—you know teleworking is not a right. And I have had

that problem in my own department where we actually had a secretary who teleworked. Circumstances changed, and she had to

come back in. And so, needless to say, she got upset. So my point

is that, in the performance things, you can have the exact same job

and two different people and that job can—one of those people can

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telework and one of them can’t. And there is a lot of factors that

come into it—whether they have small kids at home, how responsible they are with their performances.

So that is an area that I am probably the most nervous about

being penalized as an employer, because it becomes a fairness

issue, for example. But it really comes down to can the job telework

and does their performance allow them to telework.

Mr. MORAN. Thank you. Oh—— Mr. MILKOVICH. I will just add real quickly on the two jurisdictional tax issue. I think it hits at the heart of recruitment; and it

could potentially, depending on the company, hit at the heart of recruitment and retention. And I think private sector companies

today are starting to view teleworking as part of a standard offering, much like a 401(k) plan or medical benefits. Many people are

asking about teleworking today.

Let me digress for 1 quick second just to say that when I talk

about space efficiencies it is not always as if the glass is half

empty. I also think that teleworking is a very potent tool to manage your growth. As agencies grow, that can’t acquire the space

fast enough, teleworking is an excellent tool to facilitate the

growth.

Mr. MORAN. That is a very good point. I didn’t ask anything of

GAO because your report is so extensive, comprehensive. You have

done a good job at looking at all the problems.

Mr. ROBERTSON. May I make an observation, anyway?

Mr. MORAN. Sure.

Mr. ROBERTSON. I guess this goes back—you know, we have been

talking, and it is not on the tax issue so much as the data security

issue that we have been—seem to come back to several times during the hearings. I am just—to me, that whole discussion is it an

issue, is it an issue is a great illustration of what, I think, Representative Morella was talking about at the beginning. And that

basically had to do with, you know, we have really got to get a really good handle on the extent to which these management obstacles

that we have talked about as GAO and as a group today exist in

each individual Federal agency. I think that should be a prime action area for OPM, basically.

Mr. MORAN. That is true. Thank you very much.

Chairman Davis, thank you again for having this hearing and for

the generous time you allotted for the questions and responses.

Mr. DAVIS OF VIRGINIA. Thank you.

I have just a couple of questions.

First of all, at the GSA, you have gotten beyond, I think, to some

extent, managers’ fear of letting employees work outside the workplace. But that seems to be the major paradigm that we need to

move. How do you manage if you can’t see the people? It seems to

me that is our biggest obstacle for managers. How have you gotten

beyond it? What do we need to do to change that?

We have seen, you know, from the testimony of the private sector

how they have moved well beyond that and are actually being more

productive.

Mr. BIBB. Well, I think we—we haven’t totally gotten beyond it.

They are still plenty of supervisors who have some distrust. But,

yes, our numbers are good, and it has been a combination of things.

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One is our continued emphasis that this is a way of getting the

work done, that it makes sense for both the supervisor and the employee. If it does make sense, then there ought to be teleworking.

Second way is to continue to discuss with our supervisors that

you measure the work the same way you measure the work when

they are in the office. You set performance targets and they are hit

or they are not. And if they are not then you have the same performance discussion.

In my own case, half of my associates telework, and they are

held to the same standards as any others. So that is the basic way

you are able to monitor the performance.

I think the other piece—and have good, sound policies in place.

The other piece is cultural, and it does in part come from the top

with the recognition that this is a viable way to work. It will be

supported and where it makes sense we will go after it.

So it is a combination of having the right policies in place, common sense approach and top management support.

Mr. DAVIS OF VIRGINIA. OK. I think that is all the questions. Let

me just ask about the OPM tracking system that we are working

on, imperfect at this point. What are we doing to try to improve

it and get a good baseline?

Ms. JENKINS. Well, the tracking system that we are working on

governmentwide is under the auspices of the Human Resource

Data Network, which is a system that will streamline and improve

reporting and eliminate paper records within human resource offices. So we have already established data elements that can be included in either the government’s payroll or personnel systems that

would be able to track the number of teleworkers.

We won’t be able to get that system in place as quickly as we

would like—hopefully in 2002. But I am not sure at this point that

it will happen in 2002. Meanwhile, we are providing agencies with

some guidance, and many of them are taking our guidance.

For example, the Defense Department has decided that one of

the ways that it is going to help with its tracking system is to require all telecommuters to be on agreements, even their ad hoc episodic telecommuters. That will help them to better track. Other

agencies are doing something similar, and there are even other

agencies that are requiring their various departments to report to

them monthly so that they can get used to the fact that they are

going to have to be reporting their teleworkers on a regular basis

and to help them to establish and refine their current tracking system. So it is an issue that we are addressing governmentwide.

But we have also seen significant progress within the agencies

because they fully understand that there is a requirement to report

to OPM on their progress and they are making strides in establishing and refining their tracking systems.

Mr. DAVIS OF VIRGINIA. OK. Thank you.

Let me just ask one other question. Are there any union issues

on this where you have to renegotiate to try to do this kind of

thing? Any prohibitions under agreements that anybody is aware

of?

Ms. JENKINS. What is required under the Federal labor management relation statute is that there is an obligation by Federal

agencies to negotiate telework with their employee unions, things

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like telework. And we know that agencies are doing that and we— one of my other jobs at OPM, besides the Work-Life Programs, is

the governmentwide Labor and Management Relations Program;

and we have brought the labor relations directors together just last

month to go over the requirements of negotiating contracts and

providing sample bargaining language to the agencies.

Mr. DAVIS OF VIRGINIA. OK. Thank you very much.

Anything else anyone want to add?

Well, let me thank all of you. Before we close, I just want to

again thank everybody for attending the subcommittee hearing

today.

I want to particularly thank the witnesses, Congressman Turner,

who had to leave early, Representatives Moran and Norton and on

my side Mr. Wolf, who couldn’t be here but has been such a leader

in this element, and, of course, Mrs. Capito and Mrs. Morella, who

were here, and thank them for participating as well.

I want to also thank my staff for organizing this. I think it has

been very productive.

I would enter into the record the briefing memo distributed to

subcommittee members.

We will hold the record open for 2 weeks from today for anyone

who might want to forward a further thought on this or supplement your remarks.

I thank you again, and these proceedings are closed.

[Whereupon, at 11:12 a.m., the subcommittee was adjourned.]

[Additional information submitted for the hearing record follows:]

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