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PUBLIC SERVICE FOR THE 21ST CENTURY: INNOVATIVE SOLUTIONS TO THE FEDERAL GOVERNMENT’S TECHNOLOGY WORKFORCE CRISIS

HEARING

BEFORE THE

SUBCOMMITTEE ON TECHNOLOGY AND

PROCUREMENT POLICY

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

JULY 31, 2001

Serial No. 107–91

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 July 31, 2001 ............................................................................... 1

Statement of:

Kelman, Dr. Stephen, Albert J. Weatherhead III and Richard W.

Weatherhead professor of public policy, Harvard University, John F.

Kennedy School of Government; Martin Faga, CEO and representative

of the National Academy of Public Administration [NAPA], the Mitre

Corp.; Dr. Ernst Volgenau, president and CEO, and representative

of the Information Technology Association of America [ITAA], SRA

International; and Steve Rohleder, managing partner, Accenture ........... 89

Walker, David, Comptroller General, U.S. General Accounting Office;

Kay Coles James, Director, Office of Personnel Management; and Stephen Perry, Administrator, U.S. General Services Agency ....................... 12

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

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

State of Virginia, prepared statement of .................................................... 5

Faga, Martin, CEO and representative of the National Academy of Public

Administration [NAPA], the Mitre Corp., prepared statement of ............ 102

James, Kay Coles, Director, Office of Personnel Management, prepared

statement of ................................................................................................... 52

Kelman, Dr. Stephen, Albert J. Weatherhead III and Richard W.

Weatherhead professor of public policy, Harvard University, John F.

Kennedy School of Government, prepared statement of ........................... 92

Perry, Stephen, Administrator, U.S. General Services Agency, prepared

statement of ................................................................................................... 64

Rohleder, Steve, managing partner, Accenture, prepared statement of ...... 125

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

prepared statement of ................................................................................... 9

Volgenau, Dr. Ernst, president and CEO, and representative of the Information Technology Association of America [ITAA], SRA International,

prepared statement of ................................................................................... 119

Walker, David, Comptroller General, U.S. General Accounting Office,

prepared statement of ................................................................................... 14

(1)

PUBLIC SERVICE FOR THE 21ST CENTURY:

INNOVATIVE SOLUTIONS TO THE FEDERAL

GOVERNMENT’S TECHNOLOGY WORKFORCE

CRISIS

TUESDAY, JULY 31, 2001

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON TECHNOLOGY AND PROCUREMENT

POLICY,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

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

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

(chairman of the subcommittee) presiding.

Present: Representatives Davis, Horn, and Turner.

Staff present: Melissa Wojciak, staff 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. TOM DAVIS OF VIRGINIA. Good morning. I would like to welcome everyone to today’s oversight hearing on the information technology human capital management crisis facing the Federal Government. As many of you know, the GAO added human capital

management for the Federal Government to its annual high risk

list in January of this year. Governmentwide, we face significant

human capital shortages that will only get worse as 35 percent of

the Federal work force becomes eligible to retire in the next 5

years. The numbers are even more startling in highly specialized

fields, where the government is recruiting in direct competition

with the private sector. Nowhere is this more evident than with the

technology work force. It is estimated that 50 percent of the government’s technology work force will be eligible to retire by the

year 2006.

Today’s hearing will examine the problems the Federal Government faces in recruiting and retaining technology workers, as well

as the challenges facing the government in competing against the

private sector for this highly skilled highly sought after work force.

Over the past decade, the Congress and the government have

worked together to bring about significant management reforms.

We have passed financial management reforms, information technology management reform, acquisition reform and government

performance and results legislation. But unfortunately, no one has

updated the laws and regulations governing the management of

the government’s single most valuable resource, its people. The priVerDate 11-MAY-2000 10:01 Nov 20, 2002 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\81423.TXT HGOVREF1 PsN: HGOVREF1
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vate sector long ago made an end-to-end review of human resources

management and learned a lesson our government has yet to recognize. A company’s value is only as strong as the people that come

through the door, and those people who come through the door

every day bring knowledge, new ideas and innovation.

A recent KPMG report on human capital management within the

Federal sector noted that government is operating with personnel

tools utilized and developed in the 1950’s and 1960’s. The same

study noted that industry undertook major human management reform in the 1980’s, followed by ongoing updates that occur as often

as three times a year.

For the past decade, the government managed through minimum

mandatory personnel ceilings and hiring freezes. Today we see the

results in nearly every GAO report on a wide range of government

programs. For instance, the Department of Defense lost so many of

its civilian personnel, the Pentagon faces growing challenges in

managing weapons acquisitions and logistics. This is coupled by

the fact that 50 percent of the remaining DOD acquisition work

force is eligible to retire by the year 2002.

A July 2001 Department of Energy Inspector General report

found that recruitment and retention of highly skilled technical

personnel has fallen so far behind that the Department was failing

to meet mission goals. Specifically, the work force at DOE has been

downsized by 24 percent over a 3-year period without any strategic

planning by agency leadership. This led to a 2-year shutdown at

Livermore’s plutonium facility, as there were not enough Federal

personnel in place to oversee daily operations.

At NASA downsizing has left the space shuttle launch team

short of qualified personnel to oversee shuttle safety and launch activities.

Unfortunately, I could share with you many additional examples

within Federal agencies. Today we must address this reality, both

in the long- and short-term. First and foremost, we must move beyond black and white arguments for and against outsourcing as a

part of a comprehensive human capital strategic planning initiative.

I am encouraged that the Office of Management and Budget this

year requested work force analysis reports from all executive agencies that include identifying future personnel needs, succession

planning, and recruitment and retention strategies. I would like to

request that the GAO review these reports that were due into OMB

on June 29 to see if agencies are actually tackling this challenge.

In addition, I am heartened that human capital is expected to be

a part of every agency’s performance plan. In the coming months

I plan to work closely with the GAO, Federal employee groups, the

private sector, and the administration to identify additional steps

that must be taken to allow the government to address the human

capital crisis.

While it is my firm belief that the larger human capital management crisis will not be solved without the efforts of the Congress,

the administration, Federal employees, and the private sector, we

have to look to more immediate solutions to solve the work force

shortages faced in highly skilled technical areas to ensure that govVerDate 11-MAY-2000 10:01 Nov 20, 2002 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\81423.TXT HGOVREF1 PsN: HGOVREF1
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ernment agencies are able to effectively and efficiently perform

their missions while enhancing service delivery to the taxpayers.

Today, e-government is a top priority for the Federal Government. The promise of e-government is revolutionary, but we face

severe implementation challenges. As we heard at a hearing on acquisition reform before this subcommittee in May, too many of our

complex IT procurements continue to fail, upwards of 40 percent.

In addition, we have over 1,300 different e-government initiatives

under way. But we have no measurement of which projects are

worthwhile or which should be expanded across agency or across

government to truly make service more accessible.

I am pleased the administration has just named an Associate Director of Information Technology within OMB and a new eGov

council to review and assess IT spending. However, I believe we

need individuals who can work daily on reviewing the status of IT

modernizations or cross-agency initiatives to assist in the success

of this new team. Unfortunately, the government can’t attract midlevel IT managers who can perform these functions.

That is why I have introduced legislation today to create a Digital TechCorps. I believe we can help government transform itself

by creating a new vision of public service for the industry. According to the National Academy of Public Administration study on the

Federal IT work force, the primary barriers to recruiting new IT

workers are salary and length of time between job announcement

and the actual hiring of an individual. Moreover, of the five categories identified by IT professionals when considering job opportunities, the Federal Government received a low score in all but one

category. The creation of a tech corps would help eliminate those

hurdles.

First, my proposal sets up an exchange program that can begin

as soon as an agency negotiates an exchange agreement with a private sector entity. Next the private sector individual will come into

government at the GS–12 to 15 levels for a period of up to 2 years.

But they will continue to receive pay and benefits from their private sector employer. In addition, the Federal Government’s midlevel IT managers will have the opportunity to go to work in the

private sector for up to 2 years, while retaining their government

pay and benefits.

This type of public-private exchange program will allow for greater knowledge and understanding between the public and private

sectors. I believe it will foster greater innovation and partnership

for government. I think it is a win-win scenario.

The Federal Government sits on the brink of tremendous opportunity. We must utilize every opportunity available to us to achieve

real transformation. This includes a comprehensive review of our

human capital management. For too long the Federal Government

has been considered the employer of last resort, this despite the

tireless efforts of Federal employees who continue to be treated as

costs to be cut rather than the greatest asset of every agency and

bureau within the government.

I look forward to discussing what creative solutions can be

brought to bear against the looming crisis facing our government

today. The subcommittee will hear testimony from David Walker,

Comptroller General of the General Accounting Office, Kay Coles

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James, the new Director of the Office of Personnel Management,

and Stephen Perry, the Administrator of the General Services Administration.

On our second panel we will hear from Dr. Steve Kelman of the

John F. Kennedy School of Government, Harvard University; Mr.

Martin Faga, the CEO of Mitre Corp., representing the National

Academy of Public Administration; and Dr. Ernst Volgenau, CEO

of SRA International, representing the Information Technology Association of America; Mr. Steve Rohleder, the Managing Partner of

Accenture.

I now yield to Congressman Turner for his opening statement.

[The prepared statement of Hon. Thomas M. Davis of Virginia

follows:]

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Mr. TURNER. Thank you, Mr. Chairman. Today’s hearing will

focus on the challenges the government faces in attracting and retaining a skilled information technology work force, and on possible

innovative approaches to addressing those challenges.

This hearing is very timely. Despite the recent slowing growth of

the U.S. economy, the unemployment rate still remains below 5

percent, and it has been there since 1997. We know that much of

the employment growth that has occurred in this economy has been

attributed to the growth of information technology, and the rise of

the so-called dot.coms. The demand for highly skilled information

technology workers has consequently grown at an unusually rapid

pace, despite the recent downturn in our economy, and the resulting layoffs that we have seen.

A recent study by the Information Technology Association of

America found that U.S. companies will seek to fill 900,000 new IT

positions in the near future, and 425,000 of those positions will go

unfilled because of lack of applicants.

The shortage of information technology workers is exacerbated in

the Federal sector for a variety of reasons, the disparity in pay between the private sector and the government. Two years ago, the

Commerce Department found that starting salaries for computer

science graduates from the Federal Government averaged $10,000

to $15,000 less than the starting salaries paid in the private sector.

The Office of Personnel Management has recently attempted to address this disparity, and I look forward to hearing from the directors this morning regarding progress that we have made.

We also need to examine the important nonpay benefits, such as

training for career advancement opportunities and family friendly

benefits, flexible work schedules, and meaningful recognition for individual performance as a way to attract and retain individuals

with information technology skills. With its generally recognized

good benefits packages, this is an area the Federal Government

may be able to use to help attract IT workers.

I was pleased yesterday that this committee’s bill regarding allowing Federal employees to keep their frequent flyer miles was

passed on the floor of the House, a small step toward increasing

attractiveness of Federal employment. I commend the chairman for

the legislation that he has announced today on the Digital

TechCorps. I think it is an innovative approach to business by creating an exchange program between the public and the private sectors for technology managers.

Mr. TOM DAVIS OF VIRGINIA. I could hear you fine, just for the

record.

Mr. TURNER. Particularly that last sentence. And I do, Mr.

Chairman, look forward to working with you on this innovative

idea.

Thank you.

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

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Mr. TOM DAVIS OF VIRGINIA. Thank you very much. Mr. Horn.

Mr. HORN. Thank you, Mr. Chairman. This is one of the most

leading issues that affects the executive branch, the legislative

branch, government all over America. And I commend the Comptroller General, Mr. Walker, who has been on this for months, and

that’s human capital, not just building bridges and everything else.

They’re important, but if we don’t educate our human capital the

government will not have the talent it should have.

The President of the United States should tell everyone of his political appointees that you spend a few days on a college campus,

either the community colleges, the private colleges, the State universities, which are the ones that really turn out most of the individuals that go into the government. The Services have done well

with upgrading their people, sending them off to universities for

master’s degrees, doctor’s degrees, and that has happened.

We also ought to think about the retirees that are gone in some

areas, private, public, local, State, Federal, and these are very talented people. They still have a lot to give and we ought to work

with those individuals, have retraining, have a chance to upgrade

their skills and help us. And those of us in Congress who are elected, we ought to be out to the college campuses and doing what we

know, that you never get as much responsibility in many of the

service opportunities with millions of dollars of equipment, millions

of dollars in human capital, and we ought to also start with the Department of Education to work with those that know how to educate people in IT and that they must do some work basically on the

campuses in their area, and we ought to be there right with people

from the executive branch and without that, and we ought to start

in kindergarten on educating people. And I think it’s a shame when

we are importing people from abroad when these are $60,000 jobs

you’re talking in technology, and there ought to be a sequential

education in terms of logic, computing, a liberal arts education, a

number of things. And we ought to get to it right now.

Thank you, Mr. Chairman.

Mr. TOM DAVIS OF VIRGINIA. Thank you very much, Mr. Horn.

I’ll now call on our first panel of witnesses to testify. David Walker,

the Comptroller General of the General Accounting Office; Kay

Coles James, the Director of the Office of Personnel Management.

This is your first time. Is it your first time up here, Kay?

Ms. JAMES. Absolutely, yes.

Mr. TOM DAVIS OF VIRGINIA. Kay is a Fairfax County veteran,

served on the school board when I was chairman of the county

board. It’s great to have you here. And Stephen Perry, the Administrator of the General Services Administration. If you would just

please rise. It’s the policy of this committee that all witnesses be

sworn before they testify.

[Witnesses sworn.]

Mr. TOM DAVIS OF VIRGINIA. Thank you very much. You can be

seated. We have read everybody’s statement. What I’d like to do is

try to sum up in 5 minutes. You’ll have a light in front of you. It’s

green but after 4 minutes it turns orange and that gives you a

minute to sum up, and then we’ll go right to questions.

Thank you very much. Mr. Walker, we’ll start with you and move

straight down.

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STATEMENTS OF DAVID WALKER, COMPTROLLER GENERAL,

U.S. GENERAL ACCOUNTING OFFICE; KAY COLES JAMES, DIRECTOR, OFFICE OF PERSONNEL MANAGEMENT; AND STEPHEN PERRY, ADMINISTRATOR, U.S. GENERAL SERVICES

AGENCY

Mr. WALKER. Thank you, Mr. Chairman. It’s a pleasure to be

here today to address the Federal Government’s human capital or

people challenges with a specific emphasis on the information technology and acquisitions work forces. I would ask that my entire

statement be inserted into the record, Mr. Chairman, and I will

move to summarize that statement at this time.

GAO, as you know, designated human capital strategic planning,

or I should say the lack thereof, as a high risk area in its January

2001 high risk update. This is due in part to the after effects of

the downsizing of the Federal Government in the 1990’s. Those

after effects include a smaller government, but one that is out of

shape with skills and balances in major success planning challenges. Many agencies and functions are at risk of not being able

to effectively achieve their mission in the future as a result of these

challenges. The acquisition and the IT work forces, based upon the

preliminary work that we’ve done, appear to be at above average

risks as compared to other Federal agencies and functions in the

human capital area. Failure to effectively address these human

capital challenges in a timely, reasonable and responsible manner

will have serious adverse consequences.

First, it will serve to reduce the economy efficiency and effectiveness along a broad range of governmental activities. Second, it will

slow the effects of government’s attempt to better connect itself

with its citizens and to improve overall responsiveness. And in addition, it will end up serving to increase potential national security

or personal privacy threats associated with rapidly evolving technologies and related trends.

Human capital strategic management is not the only high risk

area with people dimensions on GAO’s latest high risk list. For example, we noted that the IRS, the FAA and the DOD’s systems

modernization efforts are also deemed to be high risk. Clearly the

people aspect of these areas represent a major contributing factor

to the high risk designation. In addition, DOD and NASA’s contract

management functions are also deemed to be high risk. Clearly, the

people element associated with these functions are a major contributing factor as to why they’re deemed to be high risk.

Irrespective of whether certain governmental functions are performed or—pardon me. Even if certain governmental functions are

performed by contractors, it is absolutely essential that the government retain an adequate number of skilled and knowledgeable professionals to be able to maintain—to be able to manage cost, quality and performance of said contractors. All too frequently this is

not the case.

In addition, DOD’s weapons acquisitions programs and practices

are also on our high risk list, in part because of the planned turnover of key program officials which serves to decrease the effectiveness and the accountability of these major development programs.

And there are various Federal programs that are on our high

risk list, of which the human capital dimension is a major contribVerDate 11-MAY-2000 10:01 Nov 20, 2002 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 C:\DOCS\81423.TXT HGOVREF1 PsN: HGOVREF1
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uting factor, including the Postal Service, the SSI program, the

Medicare program and selected HUD programs.

Many individuals have a role to play in effectively addressing

these human capital challenges from the President, to OMB and

OPM, to heads of different departments and agencies, to GAO, to

the Congress to the press and many others.

We believe at GAO that a three-step approach should be taken

to address this challenge. First, every agency should do everything

they can within the context of current law to address these issues.

We believe that at least 80 percent of what needs to be done can

be done in the context of current law.

Second, selected legislative reforms that would provide management with some reasonable flexibility and enhance the appreciation

that the government has for its employees should also be considered. The frequent flyer legislation that Congressman Turner mentioned is a small step, but it sends a big signal.

In addition, we need to build the consensus for broader Civil

Service reforms in the future, which reforms should be based primarily on placing additional emphasis on skills, knowledge and

performance as a basis for hiring, promoting, rewarding and disciplining Federal employees, rather than the passage of time and

the rate of inflation, which is all too frequently the case. GAO is

attempting to lead by example in this area.

Figure 3 on page 15 notes a number of administrative systems

that we have already taken. Figure 4 on page 16 notes a number

of legislative actions that we’ve also taken as well in order to try

to help us serve the Congress and the American people. We also

note on pages 18 and 19 of my statement other possible incremental legislative reforms, including the possibility of fellowship programs, which would be very similar in concept, Mr. Chairman, to

the legislation that you introduced today.

In summary, the government overall and the IT and acquisitions

work force in particular, face an array of challenges. Government

must begin to treat its people as an asset to be valued rather than

a cost to be cut. In a knowledge-based economy of which people are

the source of all knowledge, it is critical that the Federal Government have top quality professionals. The Federal Government represents 18 to 20 percent of the U.S. economy. It is the only superpower on Earth. We cannot afford to have anything less than top

flight professionals managing that type of enterprise. The stakes

are simply too great to do otherwise.

Government must focus more on results rather than process in

discharging its responsibilities, and the key missing link in this regard is the lack of effective human capital management, both as it

relates to administrative matters, as well as the need for legislative

reforms in this area.

We will at GAO, Mr. Chairman, look to work with the Congress

in trying to help maximize the performance and assure the accountability of the government, both overall and in the area of

human capital.

Thank you very much.

[The prepared statement of Mr. Walker follows:]

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Mr. TOM DAVIS OF VIRGINIA. Thank you very much. Ms. James.

Ms. JAMES. Thank you, Mr. Chairman. I appreciate the opportunity to testify before you today, and in your invitation you indicated that there were four topics or questions that you’d like for me

to address, and I will try to summarize each of them briefly. And

also, for the record, I have a longer statement that I would like to

submit.

First, I was asked to address OMB’s work force analysis order.

As you know, the Office of Management and Budget recently asked

all agencies to complete a comprehensive assessment of their current and future work force needs. I have not had the opportunity

yet to review all of the agencies’ submissions or to analyze them,

but I do know that OPM worked very hard last year to bring attention to the importance of work force planning.

Also, this year, we made a five-step work force planning model

and an information Web site available for all agencies to use. OPM

provided data and technical advice that helped agencies carry out

their assessments.

I share your concern about the impact of the technology worker

shortage and the government’s ability to deliver services to the

public. Although we are still able to rise to extraordinary challenges like the Y2K crisis, the government, like virtually all our

employers, is facing a shortage of qualified workers in the information technology field. It stands to reason that difficulty in maintaining a high quality IT work force would affect agency missions.

We need creative strategies to address this challenge and we

know, for instance, that even though pay is not always competitive

with the private sector, it’s not the only barrier to hiring and keeping a highly qualified IT work force. Outstanding technology workers also seek the chance to work on very challenging problems as

well as training opportunities and work place flexibility. We at

OPM are working with agencies to improve recruitment strategies

and marketing of Federal IT employment opportunities.

What are OPM’s proposed solutions? We’ve been exploring both

legislative and administrative remedies to these problems. We have

been considering proposals to enhance recruitment and retention

incentives for the Federal work force generally. For instance, we’ve

been considering ways to make the current authorities for recruitment relocation and retention incentive payments more flexible and

easier for agencies to use in a very targeted way.

Meanwhile, we’ve already taken other concrete administrative

systems to alleviate these recruitment and retention problems.

First, we have established special salary rates for entry level and

developmental level information technology employees under the

general schedule. The new rates will be more competitive for recruiting the talent we so desperately need.

Second, we have issued a new classification standard for IT specialist positions. The standard which our customers are using enthusiastically reflect new and emerging technologies and identifies

10 new specialty areas. We’ve designed the standard to be a flexible document that we can adapt as new specialties and technologies emerge.

Third, we piloted a new approach to assessing qualifications for

IT work. The new model is much more flexible than the old standVerDate 11-MAY-2000 10:01 Nov 20, 2002 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 C:\DOCS\81423.TXT HGOVREF1 PsN: HGOVREF1
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ard and will greatly assist managers in developing vacancy announcements and selection criteria for any IT position. The pilot

project has the added advantage of allowing agencies to bring in

applicants at whatever grade levels match their competencies, regardless of how much experience they have.

Finally, you asked me about OPM’s view on a government-private sector employee exchange program for information technology

workers. Like you, Mr. Chairman, I find the concept interesting

and attractive. OPM has explored the idea in the past although not

exclusively for the IT work force. I know that you just introduced

a bill that would establish an exchange program for technology

workers, and I look forward to reviewing your proposal.

I understand that there are ethics implications to some specific

approaches that need to be explored very carefully and thoroughly.

We would defer to the Office of Government Ethics and the Department of Justice on those matters. At the same time, we are eager

to work with interested parties to design an effective exchange program that would help strengthen not only our technology work

force, but the Federal work force generally. Improving communication and cooperation between the Federal Government and the private sector can help identify new, more effective ways for government and industry to work together. I am particularly interested

in ways in which an exchange program might create opportunities

to improve customer service and business practices in the government.

I look forward to working with you, Mr. Chairman, to explore

ways to make this interesting concept workable. Thank you.

[The prepared statement of Ms. James follows:]

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Mr. TOM DAVIS OF VIRGINIA. Thank you very much. Mr. Perry.

Mr. PERRY. Chairman Davis, members of the subcommittee, I appreciate having the opportunity to appear before you today to talk

about the challenges facing the government in recruiting and retaining information technology associates, and also to discuss the

proposed legislation to establish an information technology executive exchange program. With your permission, I’d like to submit my

formal testimony on this matter, the written testimony for the

record.

Mr. TOM DAVIS OF VIRGINIA. Without objection.

Mr. PERRY. It is certainly the case that IT skills are critical to

the performance of every single Federal agency, and that certainly

is true at GSA. In recent years at GSA we’ve undergone dramatic

changes in the concept of our operations for purposes of improving

our ability to meet our customer agency needs and thereby help

them better serve the public and taxpayers. It certainly is the case

that as we continue to adapt to the new way of doing business, this

will have a continuing effect on the mix of skills and competency

needed by GSA associates, and chief among them will be IT skills.

My written testimony submitted for the record provides details

with respect to some items that GSA has been involved in in recent

times and what we plan to do, so I’ll spend my allotted time rather

focusing on the specific questions that was in the invitation letter

regarding our IT work force.

First, with respect to the question on GSA compliance with

OPM’s request for work force analysis, that analysis was submitted

to OMB on July 6th. We believe that is a very helpful thing and

an important part of our work force planning. The next step that

we’ll take in that process will be a comprehensive review of our existing work force and our future work force needs, and this will be

done as a part of refining and clarifying our strategic plan. As part

of this work, we will identify the skills and competencies that the

GSA IT work force must have in order to achieve our performance

goals. This strategic planning work is currently under way.

Regarding the second question, we have reviewed the proposed

Information Technology Executive Exchange Act of 2001, a legislative draft, and we support the concept, and we believe that this

proposal offers a creative approach to providing the Federal Government with IT professionals from the private sector. The administration looks forward to working with Congress to craft the Work

Force Exchange Program that achieves the desired goals on behalf

of the government.

The question regarding the impact of technology, as resulting

from the work force shortage, I would say that while GSA has to

this point been able to stay reasonably on track in terms of delivering programs and accomplishing our goals, the technology work

force shortage certainly has created challenges for us in developing

and managing our IT systems, challenges also in terms of carrying

out any significant new initiatives and challenges in terms of finding the staff with the technical skills and competencies that we

need for the future. As a result of this, we have hired contractors

to assist us in the support and development of IT systems that we

need to accomplish our service and our missions.

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You asked also about tools that I might be aware of from the private sector that may impact upon this issue of work force shortage

and the issue of better work force planning at GSA. Certainly as

you’re aware, private sector companies in the United States have

used approaches such as developing alliances with universities to

attract students, providing internships as an approach, recruiting

on a global basis, as opposed to a U.S. basis, use of H1B visas and,

in fact, in cases outsourcing technology projects to be done by workers in other countries.

Obviously, not all of these tools would be desirable from a public

sector perspective. During the short term the public sector will continue to have difficulty competing with the private sector to attract

and retain highly skilled IT workers. Consequently, we will need

to aggressively apply the recruitment and retention tools that are

discussed in my written statement. We will also need to develop

additional creative solutions such as this information technology

exchange program.

Better work force planning will be accomplished at GSA by improving our human capital management process and integrating

this into our performance management process as is necessary to

build the organizational capability that we need to accomplish our

mission and goals. In our strategic planning, which we at GSA are

calling Creating a Successful Future at GSA, we have identified

the need to do this as a part of an initiative to create a world class

work force and a world class workplace. This process will buildupon

the work that’s already in place at GSA and it includes the following steps, which I would mention as being part of best practice, as

David Walker has pointed out in many occasions on work force

management.

The first step is to have more clearly stated and documented

goals with performance accountability measures; second; to define

the organizational structure and the specific skills and competencies that we must have in each position within the organization in order to be able to achieve our goals; third, to conduct a

comprehensive assessment of our existing organizational structure,

our existing skills and competencies and thereby identify the gap

between the desired organization and the existing organization

that we need to achieve our goals, bridging this gap through succession planning, associate training, associate development, targeted recruitment and targeted retention initiatives. This process

will be pursued consistent with the administration’s competitive

sourcing initiative.

In closing, I want to reemphasize our agency’s commitment to

work with the subcommittee and other agencies to develop creative

solutions to address the information technology work force shortage

challenges that we face. We will work with you to identify and implement solutions that will be effective, and will enable us to help

our customer agency better serve the public.

Mr. Chairman, this concludes my formal oral statement. I’ll be

happy to answer questions you may have.

[The prepared statement of Mr. Perry follows:]

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Mr. TOM DAVIS OF VIRGINIA. Great. Thank you very much. We’ll

go right to questions. I’ll start with Mr. Horn.

Mr. HORN. Thank you very much, Mr. Chairman. The one question I want to raise is—and I’d like—it may be within your document here and I just haven’t had a chance to get it. But Ms. James,

I am curious about the incentives for management. And I do that

based on an experience. Back 35 years, members of the old Civil

Service Commission were hired to start what is now the California

State University System, the largest in the country. And we

changed that when I got in there and in the 1970’s and we got a

management operation that would go from $10,000 to over

$100,000 and it was all based on a contract and a number of things

the manager is going to reach in, say, 6 months or 1 year. And we

had an absolute turnaround. And they could have the contract,

they could see what they had done, hadn’t done, so forth.

So I am curious since you—and I am delighted to see you as Director of the Office of Personnel Management. What’s your thinking in that area to stimulate management?

Ms. JAMES. Thank you. I am sure that there’s much more going

on inside OPM right now than I am fully aware of, having been on

the job for about 10 working days, so I can’t give you a complete

answer to that. I will tell you that I think that managers should

be given all the appropriate tools in order to manage effectively,

which means that they should have the flexibility that they need

as a matter of principle to attract and recruit and retain.

What that means in practice is that they have to have the training that’s necessary and required, the flexibility, as I mentioned,

that would give them the opportunity to manage their agencies in

ways that would be productive. There’s probably a lot more going

on inside OPM that I am not prepared to share with you just yet.

I do know that is a principle that we believe in very strongly.

Mr. HORN. Well, I appreciate that.

Mr. Perry, do you have any thoughts on this? You have a huge

organization and a lot of talent there. What can we do to stimulate

management?

Mr. PERRY. Well, among the things that in addition, along the

lines of what Ms. James has said, I would just comment to the

need for focus organizationally, and one of the things that brings

about the focus is to more clearly define our goals and objectives.

Every agency if asked would say, of course we have goals and objectives. But when pressed to say well, what are they, and how detailed are they, how specific are they, I think oftentimes we find

that they are not as specific as they might be.

To my mind, one of the things that managers can help themselves with is by making sure that their organization is more focused and then they spend their time obviously on working on having the associates of the organization be strongly aligned and committed to achieving those goals.

Now, things that are done in terms of incentives, compensation

and so forth are——

Mr. TOM DAVIS OF VIRGINIA. Mr. Perry, could you pull that

microphone a little closer?

Mr. PERRY. I am sorry.

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Things that are done in the area of compensation and incentives

are very important, as studies have shown. At the same time this

issue of having a positive, productive work force is also very energizing and challenging to managers. So I think that’s an aspect

that I would add to what Ms. James had to say.

Mr. HORN. Comptroller General, you have a different type of personnel system.

Mr. WALKER. We do—— Mr. HORN. Yes.

Mr. WALKER [continuing]. Mr. Horn. But let me comment first on

your question. I think one of the things that has to happen in government is that we have to be able to take the strategic plans

which are required by GPRA. We need to make them more than

an annual paperwork exercise. They need to become the framework

for how these do business every day. We need to define key performance indicators. We need to link institutional and individual

performance measurement reward systems to those key performance indicators to achieve desired outcomes, and we need to reward

people more based upon their skills, knowledge and performance in

achieving those outcomes.

We’re a long way from that today in the government as a whole.

Fortunately, we’re a lot closer at GAO. We’re a lot closer at GAO

because, A, of all the things that we’ve done administratively in

order to put us in a position to be able to do that. And second, as

you noted, we do have some additional legislative flexibilities available to us that other agencies do not. However, I think other agencies that don’t even have these flexibilities can go a long way toward achieving this linkage within the context of current law if

they just get on with it.

Ms. JAMES. Mr. Chairman, there’s one thing that I would add to

that, and that is that in—one of the things that I think is so vitally

important is to, in those linkages, link not only mission goals and

objectives in terms of bottom line, but to make sure that our managers today understand that the human capital issue is a strategic

issue that should be an important part of the agency’s mission and

objective. Many times we have to fight to make that a priority for

our managers without them understanding that it does have a very

important bottom line function in their ability to achieve their mission. And so I think we have to link that to performance as well.

Mr. HORN. Mr. Walker.

Mr. WALKER. One quick followup on that. I totally agree, and one

of the things that we’ve tried to do at GAO is that we’ve tried to

have a so-called balanced scorecard approach from a philosophical

standpoint. What we are looking to try to achieve and how we

evaluate people is, No. 1, results, desired outcomes. So results are

No. 1.

No. 2, client feedback. What do our clients say about what type

of job we’re doing? And third, employee feedback. What do our employees say about how we’re treating them?

I think those three factors are very important and they can take

you a long way.

Mr. HORN. Thank you. Thank you. Oh, Mr. Perry, you have—— Mr. PERRY. If I just may add a small detail. Often the question

comes up, what best management practices could we apply to govVerDate 11-MAY-2000 10:01 Nov 20, 2002 Jkt 000000 PO 00000 Frm 00084 Fmt 6633 Sfmt 6633 C:\DOCS\81423.TXT HGOVREF1 PsN: HGOVREF1
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ernment operations in order to improve our performance? And I

think again I would just emphasize what Mr. Walker has said.

What GPRA embodies is the answer to that question. The issue

then is how rigorously will we apply it, and it’s a matter of execution. I don’t think we need to search much further for the best

management practice. I think it is well-outlined there. It’s a matter

now of rigorously executing that directive.

Mr. HORN. Thank you. Thank you, Mr. Chairman.

Mr. TOM DAVIS OF VIRGINIA. Thank you very much, Mr. Horn.

Let me start, Mr. Walker, with you. I’ll just go straight down and

there’s no one else here. I’ll just go till I finish my question and

we’ll get on to the next panel.

In 1969, an exchange program was established that lasted

through the early 1990’s. What’s your opinion of that program and

do you know if there are any other initiatives that are currently

underway?

Mr. WALKER. My understanding is that program involved exchanges, both public sector people going to the private sector and

private sector coming to the public sector, for up to around 2 years,

which is similar to yours, that there were about 800 to 900 individuals that took advantage of that program during that period of

time, and that ultimately I believe it was terminated in the early

1990’s by former President Bush, if I am not mistaken. My understanding is that as time went on, there became some reluctance on

behalf of the Federal managers to allow their employees to go out

into the private sector; that there was a desire to be able to obtain

private sector individuals to come into government for a period of

time, but there was less desire on behalf of the public managers

to allow their people to go out to the private sector because in

many cases they felt that they didn’t have enough people to begin

with and they needed to have a net plus if there was going to be

some type of a fellowship program rather than just an even exchange.

I am not aware of any overall programs. Director James may be.

I know that we at GAO from time to time have had exchange programs and fellowship programs, and I have found that one of the

things you have to be careful of in that regard, and I think your

bill incorporates this, you need to have a cooling off period. You

need to have a cooling off period whereby if the private sector

sends somebody to government, then there’s a period of time in

which the government promises not to hire that individual, and

vice versa. If the government sends somebody to the private sector,

there’s a period of time in which that employer promises not to hire

that individual in order to provide reasonable assurance that

they’ll come back. I think you do have that in your bill. I think

that’s important.

But I think in reality what’s going to end up happening is you’re

going to find that there will be great demand on behalf of the public sector to have private sector people. There’ll be some willingness

to allow public sector employees to go to the private sector, but not

in as great a number, I believe, as the other way.

Mr. TOM DAVIS OF VIRGINIA. OK. You’ve seen the basics of what

we’ve proposed. What are your comments on that? You skimmed

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over it in your remarks. What are the pluses and minuses as you

see it?

Mr. WALKER. Well, I haven’t read the exact bill. From a philosophical standpoint I think it has great conceptual merit. As I mentioned, you know, you’ve got it as a two-way program. You’ve also

attempted to deal with some of the conflict of interest issues. That’s

obviously a matter that was always in the forefront of people’s

minds. I think those are manageable, but we need to have them

in the forefront of our mind. You also have a cooling off period,

which I think is a positive. I think the major point that I would

make, Mr. Chairman, is I think realistically, given the fact that we

have a significant shortfall in an adequate number of skilled and

knowledgeable professionals in the Federal work force in the IT

area, I think from a realistic standpoint you’re going to find that

this program will work best if you have more people coming into

government than you have going out. And I think realistically

that’s the way it’s going to work.

But you do allow flexibility, as I understand, for each individual

department and agency to decide what should be done. And I think

that’s appropriate because I think, you know, it’s going to vary

agency to agency as to what the right answer is there.

Mr. TOM DAVIS OF VIRGINIA. You’ve reported that agency efforts

to address human capital challenges in the IT area have generally

been challenging. It’s still a serious issue even though we’re seeing

layoffs and so on. Do you see the government stepping up their recruitment efforts as we get layoffs in the region at this point? And

I’ll let Ms. James or Mr. Perry answer that as well.

Mr. WALKER. I think we need to try to capitalize on the current

slowdown, but I think we have to recognize that it’s just a slowdown in the IT sector. The fact of the matter is the numbers that

I have seen is there’s still 400,000 to 500,000 net unfilled positions

in the IT sector, you know, U.S.-wide. It was up to 900,000 to a

million, and so while the imbalance is not as great as it was before

the slowdown, it still is significant.

And you know, clearly we have to sell what we have to sell. I

mean, the government has some things to sell that the private sector doesn’t. It has the ability to sell in many cases additional responsibility, the ability to be able to make a difference for your

country, better work-family balance, I think, than many private

sector, somewhat better job security. There are certain things that

it does have to sell and it does provide reasonable compensation

where I think we need to look at whether or not we need to have

even more flexibility with regard to critical occupations.

But if people are looking to maximize their net worth rather than

their self-worth they’re not going to come into government. They’ve

got to be looking to maximize their self-worth.

Mr. TOM DAVIS OF VIRGINIA. I just have an article in front of me

from a local newspaper. It said that the jobless rate rose in Prince

William County, which is right outside of Washington, which is in

my district, last week. It rose to 2.1 percent. And that Manassas

Park rose to 1.6 percent unemployment. So you have to put it in

perspective, which is, I guess, what you’re saying.

I am going to ask if Ms. James or Mr. Perry have any comment.

You don’t have to. And then I am going to yield to Mr. Turner.

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Ms. JAMES. Certainly. I would just say several things to a couple

of the questions that you posed to Mr. Walker. In terms of governmentwide exchange programs there have been, from time to time,

programs like that within the Federal Government, not specifically

targeted necessarily to the IT profession like this particular legislation that you’re proposing does.

Yes, there was a program that was much talked about and heralded in the early 1990’s and I would just like to say that, Mr.

Chairman, my understanding of that is that program did not fail

on its merit, but failed because of some of the administrative and

management issues surrounding it. And so I think that it’s important to understand that it is a good idea and one that the Federal

Government I believe could benefit from.

I know that in your specific legislation you try to address some

of the issues that were surrounding that first program. The one

that seems to be most troubling of course is the conflict of interest

that caused some serious concern. And I trust that as it goes

through the legislative process, that those concerns will be addressed and even strengthened.

Yes, I think you point out quite accurately that while there may

be some cooling off in the IT market, that certainly isn’t indicative

of what we see in this particular area. It is still highly competitive

and it is still difficult. All you have to do is ask some of our managers how difficult it is for them to recruit and retain a skilled IT

work force. And so there is a lot yet to be done and we look forward

to working with you on resolving some of those issues.

Mr. PERRY. Just a quick followup on one point that leads to a

thought about the two-way flow of these people. First of all, as has

been pointed out, as we are all keenly aware, this is not a shortterm imbalance shortage issues. This is a very long-term issue.

And as Mr. Walker pointed out, many statistics show that many

of the IT jobs of the type that we’re talking about will remain vacant because the people in the short term are just not available.

So as we think about this, I think that has to be a part of our

thought process. We’re not fashioning a solution to bridge some

short-term problem that’s going to go away in 2 years. This is going

to be with us for a while.

And in that regard, if you, in my judgment, take a look at the

issues facing the Federal Government, IT security, and again the

things that Mr. Walker eloquently outlined in his opening statement, one could easily argue that the crisis or emerging crisis facing the government is even more significant than that which faces

the private sector. And as a result, there should be an effort to

make sure we take care of what the government needs to have

done, which may mean that there should be a greater emphasis on

bringing people in.

Now, it’s obviously the case that as we move people out to the

private sector, they can gain some knowledge that will be useful to

the government when they return. The question is, can we wait 2

years to make that happen?

My only point is I think the situation that we face would cause

us to want to give heavy emphasis to bringing people in.

Mr. TOM DAVIS OF VIRGINIA. Let me just make one comment. If

you go back 10 to 15 years, a lot of people went to the government

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because of security. You did get security in a government job. You

did get some of the financial rewards or advancements but there

was some predictability. However that’s no longer true if you look

at how the Federal work force has shrunk.

We have also cut benefits. The FEHBP has been threatened back

and forth. We have seen COLAs that have been cut. If you’re retired getting your Social Security, you got your COLA on time. If

you’re a Federal retired employee, you got your COLA delayed. We

have seen parking taken away. We saw government shutdowns.

Again, we have just used this as a budget item to be cut instead

of our greatest asset. And the legislation that we have proposed

here is just a small step in trying to—it is still a recognition that

our employees are an asset. And we have these folks and if we

properly train them and motivate them for the taxpayers of America, we can get more out of it. We’ve got some great people who

have given their lives to government service. And we abuse them,

from our perspective. We are just not using that asset. This is an

opportunity to ask some of these people to go out and grow professionally and bring ideas, cross-pollinate public and private and

bring them both—that’s all we’re talking about here.

Let me yield to Mr. Turner.

Mr. TURNER. Thank you, Mr. Chairman. I just want to followup,

Mr. Perry, on what you’ve said. You seem to be saying that you believe that the more important thing to accomplish with the chairman’s legislative proposal is to bring people into government, rather than to send government employees out. Expand on that just a

little bit for me and what is your fear about Federal employees

going out or your concern about that?

Mr. PERRY. Yes, Congressman. I don’t have a fear about Federal

employees going out. In fact, I think, as I say, it will be a useful

thing. The experience that they would gain and bring back would

be very beneficial, no question about it.

It’s a question of as we think about what we want to try and accomplish, for example, in the area of government and in the area

of providing IT security and all that entails, it just seems to me

that as we would supplement our current Federal work force with

people from the outside who may have had different experiences

with respect to those matters, and I can envision them now working side by side to accomplish some of these really big tasks that

are on the table in front of us, I think both the private sector person and the Federal employee working together in that scenario

would benefit from the kind of things they would be working on

and it would enable us to get out in front of the curve on some of

these issues.

So my concern is a matter of urgency. If, in fact, we believe that

some of the IT issues facing the government are that urgent, then

it would appear to me that we would put the full court press on

those urgencies.

Mr. TURNER. Now I would assume that current practice is in

many cases to bring private contractors in to perform tasks and to

take on these big projects you are talking about, so that we really

don’t depend currently on Federal employees to do a lot of these

bigger tasks. Is that an accurate assessment?

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Mr. PERRY. At least in part. But I think it falls to the Federal

Government manager to develop the idea or the business process

improvement. We don’t go to the private sector, for example, and

say—I don’t think in many instances—ask them to initiate what

business processing improvement we should work on in a given

agency.

So I think there is some level of IT management inside the organization, which is under the jurisdiction of the Federal employee,

to first decide what it is that we need to do. And then I do agree

with you that when it comes to execution, then we often would

defer to contractors in the private sector to help with the execution.

But the initial idea generation or system design is often done by

people inside the agency.

Mr. TURNER. Mr. Walker.

Mr. WALKER. Mr. Turner, I think you will find that most IT operations in the Federal Government will have a core group of Federal

workers and they will rely, to differing extents, but fairly significantly, on outside contractors, in part because they made the judgment that there are certain types of activities that should be contracted out and in part because even though there are certain activities they would prefer to be done by Federal workers within the

government, they have not been able to attract, retain and motivate an adequate number of qualified people to get that done. And

therefore, they have been placed in the position of having to contract out in certain circumstances activities, because they really

have no other choice in order to be able to get it done.

What is critically important is that irrespective of what does get

contracted out, is that we got to have an adequate number of people with the right kind of skills and knowledge to manage cost,

quality and performance of those contractors. Because without

doing that, then both the government, the taxpayers and, frankly,

I would say the contractors as well are at risk as a result of that.

So it is going to be a serious and continuing challenge, I think, in

this area.

Mr. TURNER. Mr. Walker, Mr. Perry of course made the emphasis

on the more urgent need of bringing outside private sector folks

into the government, and I was interested in your assessment of

whether or not there may be some resistance on the part of the private sector to participate in this exchange program because I would

think that if they felt we were bringing people in from a company

that might have the opportunity or currently be contracting for

those IT services, they may not want to loan that employee to the

Federal Government and transfer that skill in-house for the government rather than having the option of continuing to contract it.

Mr. WALKER. My personal view is I think it needs to be a twoway street. I think it is beneficial for it to be a two-way street.

However, I think from a practical standpoint that there will be

more people coming into government than will be going out of government.

Clearly, in exchange, there are a number of potential benefits.

First, both sides benefit from the exchange of knowledge and experience. No question about that. But post-exchange program, I

would argue that the private sector is in a position to benefit potentially more on a recurring basis than the government might

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benefit because both are benefiting from the exchange and that is

because a growing percentage of information technology projects

are being done by contractors. And obviously, to the extent that

you have a contractor who is willing to participate in this exchange

program and they gain knowledge of the government and how it

operates and its systems and its processes and the key players,

then they are obviously in a good position to hopefully more effectively compete for future government work.

There’s nothing wrong with that. I mean, we need quality contractors to be able to help us address our challenges here.

But I think realistically, my view is that while exchange is a

good idea and while it ought to be a two-way street, that realistically, we would need relatively more people to come in than we’re

probably going to be able to send out. And I hope and I expect,

quite frankly, that firms like Accenture are not doing this merely

for the profit motive, they’re doing this to do something for their

country. Personally, I believe everybody ought to do something for

their country, and this is a pretty constructive way to get that

done, I think.

Mr. TURNER. Ms. James.

Ms. JAMES. There’s a sort of hidden benefit, I believe, in this program and it’s sort of an unspoken benefit that I think is worthy

of note, and that is, as we talk about the exchange and, you know,

who is to benefit more, people as they go out to the private sector

or the private sector as they come in, one of the challenges that we

have before us with the Federal work force right now is to create

environments where workers—to recruit and retain excellent employees. One of the unspoken fears, I believe, is if they go to the

private sector, they might not come back, that they will find that

environment so seductive.

I think that our challenge as Federal managers in this, people

who have been given the task of building a Federal work force is

that we will create an environment with the proper incentives,

with the proper authority for managers in terms of the work and

creating interesting work. The challenges that people have in the

Federal Government in terms of the types of work that are available to do just aren’t available in the private sector. If you are an

IT manager and you want to be on the cutting edge and have the

opportunity to work on some of the most interesting and exciting

work going on in your field, in many cases that is happening in the

government.

So I think it creates an opportunity for us to become competitive

and more excellent in terms of what we offer workers in the work

force, in terms of the work itself, not just in terms of incentives.

Mr. TURNER. Mr. Perry.

Mr. PERRY. If I may add on this issue of the two-way street, I

think what is really good about this legislation is that it enables

that flexibility. I am only suggesting that we don’t stay only with

that.

There certainly will be some contractors in particular who will be

very interested in the exchange for various reasons. But there, I

believe, on the public service side of this, will be a number of companies who are not contractors and have no continuing interest in

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less have IT professionals on their staff doing e-government types

of things, and those people would benefit immensely from having

an opportunity to come to the government to work on a project that

is much bigger than they might work on in their own place. It

would be a developmental thing for that person to come to the government to work on such a project.

And in addition, there is that issue of public service. And as it

is the case that we’ve got some big challenges ahead of us, I think

there would be a number of private sector companies who would be

willing to participate in this on a nonexchange basis. The legislation enables it to happen both ways, and I think we ought to take

advantage of both aspects of that.

Mr. TURNER. Thank you. Thank you, Mr. Chairman.

Mr. TOM DAVIS OF VIRGINIA. Thank you very much. Let me just

go through my questions.

Mr. Walker, last October, Congress gave GAO additional personnel authorities through legislation. These included the authorities

to offer voluntary early retirements, voluntary separation incentives to reshape the GAO work force as well as the authority to establish senior level positions to meet critical scientific, technical or

professional needs in such areas as economics and information

technology. Do you think other agencies would benefit from this

flexibility?

Mr. WALKER. From a conceptual standpoint, yes, I do, Mr. Chairman. I would divide them into two categories. In the area of the

senior level position and also the area of voluntary early outs and

buy-outs in order to realign the work force rather than downsize

the work force, I believe that has broad application and, in fact,

broad acceptance based upon my experience last year.

The last proposal, which is the proposal that we had which

changed the way in which RIFs are conducted, is somewhat more

controversial. I believe it has merit, but I believe it is an issue that

should be considered within the context of broader Civil Service reform at a later date as part of a comprehensive package with discussions with all the interested stakeholders in conjunction with

that, because it’s really focused on the central premise that more

decisions in government should be made based on skills, knowledge

and performance rather than years of service. And I think while

that has considerable merit, it relates to more of the element of

more fundamental Civil Service reform.

Mr. TOM DAVIS OF VIRGINIA. It’s also come to our attention that

many agencies view legislative relief from Title V as their only option to solving hiring challenges. Many agencies view the application process for existing flexibilities to be either too burdensome to

meet or too time-consuming.

In your view, do you think agencies understand what hiring and

recruitment and retention flexibilities are available to them?

Mr. WALKER. I don’t think that they have a good sense of all the

flexibilities that are currently available. And I know that OPM recently published a document that was intended to try to help them

gain a better understanding of what flexibilities are available.

I think that it’s also important for OPM to take a look at how

many of those flexibilities require OPM approval and to what extent can more authority be delegated to the agencies, possibly with

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periodic followup to make sure people aren’t abusing any of that

delegated authority, because clearly one of the biggest challenges

we have right now is being able to hire people in a timely manner.

That is a huge problem. People have too many different options.

They aren’t going to wait around when they have these other options, and so I think it’s clearly an area that needs additional focus.

Mr. TOM DAVIS OF VIRGINIA. Mr. Perry, let me ask you a couple

of questions. You mentioned mentoring in your testimony as an important benefit offered to employees. I agree with that. Some of the

testimony today mentions the importance of reverse mentoring,

which is where young IT professionals are paired with senior level

managers for a specified period of time. Have you considered offering such a benefit to your acquisition and IT work forces in your

recent recruitment and retention efforts? And have you measured

the percentage of individuals under 30 or under 35 coming into

government, and do you know how many of these individuals are

coming in at the GS–12 to 15 range? Do you have any feel for that?

Mr. PERRY. Let me talk about the mentoring aspect first. I certainly agree that can happen and should happen. That’s very powerful. We haven’t talked about it in terms of one-on-one mentorprotege, as I have used it in the private sector, but we have certainly talked about that in terms of groups.

Now with respect to the work force, people that we’re bringing

in and their average age, I am not able to quote the average age

of our recent recruitments. I know that we have brought in about

29 IT professionals. My expectation is that they are under 30, but

I don’t know as a fact. I know our average age for our IT people

is about 46, and we have a little over 1,100 of them. So that tells

you that our work force is on the higher age side.

Mr. TOM DAVIS OF VIRGINIA. That’s the younger age side from

my perspective.

Mr. PERRY. Relative to their remaining work years, on the higher

side.

Mr. TOM DAVIS OF VIRGINIA. Also, you mentioned the newly created CIO University. Is this a governmentwide program?

Mr. PERRY. It is a governmentwide program. It is an on-line selfpaced study program. As I understand it, there is a great deal of

utilization by IT people and that is the case within GSA as well.

So it’s just another one of those tools to provide for the updating

of the IT work force. I think it is being used very successfully at

this point.

Mr. TOM DAVIS OF VIRGINIA. I think those are the questions that

I wanted to ask. Anybody want to add anything before we get to

the next panel?

I would like to say to all of you, we appreciate your being here.

Ms. James, thank you on your maiden testimony up here. You did

great. We look forward to hearing from you again. And why don’t

we take about a 2-minute recess as we switch panels.

[Recess.]

Mr. TOM DAVIS OF VIRGINIA. I would like to welcome our second

panel to the witness table. We have Dr. Steve Kelman of Harvard

University; Martin Faga of MITRE Corp.; Dr. Ernst Volgenau of

SRA International; and Steve Rohleder of Accenture.

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And as you know, it is the policy of the committee to ask everyone to swear and raise your hands.

And let me just say, Dr. Kelman, to start with, I have seen your

daughter is in the room and your father-in-law, Senator Metzenbaum, is here, and we welcome you, Senator, to these proceedings.

Would you stand, please, and raise your right hands. We’ll swear

you in.

[Witnesses sworn.]

Mr. TOM DAVIS OF VIRGINIA. I think you know the rules. Orange

light will go on 4 minutes in, and try to sum up and we’ll go right

to questions.

Steve, we’ll start with you and then Mr. Faga and move straight

on down the row.

STATEMENTS OF DR. STEPHEN KELMAN, ALBERT J.

WEATHERHEAD III AND RICHARD W. WEATHERHEAD PROFESSOR OF PUBLIC POLICY, HARVARD UNIVERSITY, JOHN F.

KENNEDY SCHOOL OF GOVERNMENT; MARTIN FAGA, CEO

AND REPRESENTATIVE OF THE NATIONAL ACADEMY OF

PUBLIC ADMINISTRATION [NAPA], THE MITRE CORP.; DR.

ERNST VOLGENAU, PRESIDENT AND CEO, AND REPRESENTATIVE OF THE INFORMATION TECHNOLOGY ASSOCIATION

OF AMERICA [ITAA], SRA INTERNATIONAL; AND STEVE

ROHLEDER, MANAGING PARTNER, ACCENTURE

Mr. KELMAN. Thank you very much for holding this hearing

today to try to focus attention on the government’s need and ability

to get good people working in public service.

Congressman Turner, in his opening statement, made some reference to the passage in the House yesterday of the bill on allowing

government employees to keep frequent flyer miles. I had the privilege while I was in the government of getting such incredible travel

perks as a trip to Warren, MI in February to visit the Army Tank

and Automotive Command. There were other similar perks of my

office. And I think——

Mr. TOM DAVIS OF VIRGINIA. That explains why you are at Harvard, I guess.

Mr. KELMAN. Whatever. I think as the Comptroller General

pointed out in his testimony, it is a small thing, but it is a good

signal to the Federal work force about a more positive attitude.

As a professor in an institution devoted to training people for

public leadership, I see myself as a sort of frontline soldier in the

government’s war for talent. And we should all be disturbed,

though, by a very dramatic statistic, which is that 20 years ago or

so, about three-quarters of graduates in our Public Policy Program

at Harvard took their first job in government. And now that figure

is down to about one-third. And, in fact, our dean, Joe Nye, is so

concerned about this problem that he is going to be personally

chairing a series of four meetings up in Cambridge during the next

academic year with senior government and private sector people to

try to figure out what we can all do together to help the government win its war on talent.

Let me just highlight a few things from my testimony. First is

the issue of recruiting people from outside government for midlevel positions, and there are three facts I think is very important

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to keep in mind. One is about how the government works, which

is traditionally the government has recruited from people from the

outside only at two levels, entry levels and senior political levels.

That is fact 1.

Fact 2 is that a lot of my students and a lot of young people

today fully expect to be doing a number of jobs during their career

and not stay in one place.

Fact 3 is that a lot of young people, actually more than ever before because of high school and college programs, have experienced

an interest in doing some public service.

When my older daughter—not the one who is here today—my

older daughter was applying to college this last year, a number of

the college applications from the schools she was applying to include in the application a thing saying, what public service have

you done?

So the idea of doing some public service is more and more something that a lot of young people understand.

So I think that these three facts together suggest to me that government is missing an opportunity, No. 1, because people switch

jobs a lot, to recruit some people at mid-levels rather than just

entry levels, taking advantage of people switching jobs or whatever;

and No. 2, by, in the career work force, only having people who are

going to be doing entire careers in the Federal Government, missing an opportunity to allow young people who want to do a brief

period of time in public service to do that. And I think there are

potentially a lot of strategies the government should be looking at

to try to take advantage of mid-level recruiting.

The one we are specifically considering today and I think is a

fantastic innovative initiative that you announced this morning,

Mr. Chairman, together with Steve Rohleder from Accenture, is the

idea of giving industry an opportunity to lend some of their midlevel employees to do a 1 or 2-year period of public service and help

the government out with its human capital crises in the IT area.

And some conversations I’ve had with senior government career

people, I know they’re very eager to get this Digital Tech Corps underway. So I hope we can do it at something more like Internet

time than traditional time.

Second thing I wanted to talk about briefly is addressing human

capital problems through other than just traditional H.R. kinds of

issues, because there are a lot of things that are in the jurisdiction

of this subcommittee and the full committee that don’t come packaged to you as human capital issues, but really are human capital

issues or partly human capital issues.

One area that I’m obviously interested in is procurement reform,

where you and this whole committee have been engaged. One of

the benefits of reducing for the customers within the government

of the procurement system, of reducing the hassles and delays in

the procurement system, is to make the government a more attractive workplace for those people so they don’t have to deal with

something where they have to wait 3 months to get a simple thing

delivered to their office.

In this regard, just to take something that’s been in the news the

last few days, there have been these reports, you know, on small

numbers, tiny numbers of abuses of the government credit card;

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you know, 100 out of 50,000 transactions or something like that,

some of which, on closer examination, turn out not even to be

abuses.

But if we were to react in an old-fashioned knee-jerk way and

say we have a few abuses and say we are going to destroy the

whole system, it would not only hurt the taxpayer because the administrative cost savings of this—of the credit card are far, by a

factor of 10, 20, 30, 40, greater than the cost of abuses, but it also

would have a bad implication for the human capital crises for the

government because it would return the front line government employee to a situation where they need to wait months just to get

the simplest of things in their office.

So that’s an example of where things that don’t come under the

rubric of human capital crises actually are part of it.

Similarly, and I will conclude here, the work that we do—you do

in the subcommittee and the full committee does with the ClingerCohen Act or the Government Performance Results Act, young people want a workplace that is results-oriented, that is a high performance workplace. Taxpayers need that. So anything this committee does to get the Federal Government workplace a more results-oriented workplace is making the government a more interesting place to work for young people.

So as we think about the human capital crises, we shouldn’t just

think about narrowly things called ‘‘HR,’’ but broader kinds of

changes, many of them under the jurisdiction of this committee,

that make the government a more attractive workplace.

[The prepared statement of Mr. Kelman follows:]

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Mr. TOM DAVIS OF VIRGINIA. Thank you. Mr. Faga.

Mr. FAGA. Thank you very much, Mr. Chairman. It is a pleasure

to appear here this morning on behalf of the National Academy of

Public Administration. As you know, Mr. Chairman, the Federal IT

Work Force Committee of the Chief Information Officers Council

has asked the academy to undertake an alternative pay systems

study and also to assess related human resources management

issues as it affects the Federal Government’s ability to attract and

retain information technology talent.

It hardly needs to be said here that the number of qualified

workers currently available in the United States is way below the

number of growing vacancies in the field. We find not surprisingly

that the Federal Government needs a flexible and responsive

human resources management system that it does not currently

have. The currently available tools we find are not sufficient to the

job.

The academy project team undertook an extensive search of literature and, importantly, interviewed chief information officers, financial officers, human resource directors and line managers from

the public sector, from nonprofit organizations, from academia and

the private sector. We paid particular attention to the innovative

practices that we found in some private sector companies.

Several themes emerged from this. Research is clear on one

thing—not surprising. To compete for and retain qualified IT professionals, salaries must be within a competitive range. Now the

usual definition of competitive range is within 10 percent of the

market norm. Interestingly enough, there are categories of IT

workers in the government that are in that range. There are many

others who are not.

There are a number of new and modified compensation approaches that may help to improve recruitment and retention of IT

professionals. They certainly do in private sector. They do at

MITRE. One is establishing market-based pay systems.

Second, a broad-band approach to the pay structure, that is, allowing pay for a given job to range as much as plus and minus 50

percent from the average for that job. Moving to compensation systems where pay is based on skill and experience—I’m sorry on skill

and experience in the field and not on the definition of the job. Pay

systems where annual pay increases are based on merit rather

than length of employment, a change we made at MITRE just a

few years ago. Ensuring that compensation is linked to the organizational goals and objectives, as we invest in training people so

they can carry out jobs that are important to the institution, not

something that is just a peripheral interest perhaps of the employee.

Compensation systems for IT professionals need to be separate

from the compensation system for other kinds of jobs. This is the

case at MITRE and many private corporations. And there is the

need to use various mechanisms to increase total compensation.

These are bonuses and other special forms of pay. Once pay is in

the competitive range, it does not play a major role in retaining IT

professionals. In our studies of ourselves at MITRE, it ranks

fourth.

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Five key nonpay factors that are important include good management. In fact, employees generally don’t leave employers, they

leave managers; that is, their immediate manager is somebody

they don’t want to work for.

A good work environment. This includes physical environment

but also the IT environment, of course, and the nature of the work.

Challenging work. This has been spoken to by the previous

panel, and it cannot be overemphasized.

Flexible working arrangements, allowing people to work essentially on flex hours to the extent that the job permits, and the government is in pretty good shape in this regard.

Training and development. Throughout a career, people need lots

of additional training, including a form of training we find very important at MITRE, and that is supporting employees toward getting a degree, which is something generally the government doesn’t

do.

Now we have been able to implement most of these principles in

our technical work force at MITRE with good results, And I’d be

happy to talk about that in the questions. I’d also like to add my

support to your information and technology executive exchange initiative. I think this is an important step in bringing people to government with special skills as well as loaning people from government. Moreover, importantly, I think that it recognizes that government won’t and probably shouldn’t hire all of the skilled people

it needs on a full career basis. This is a big change for government,

as has been said before.

In summary, Mr. Chairman, information technology has the

power to transform the level, quality and quantity of government

services provided to American citizens. To realize this goal, the

Federal Government must have the tools needed to win the war for

talent. The tools in the current system are not adequate to do the

job.

Thank you very much.

[The prepared statement of Mr. Faga follows:]

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Mr. TOM DAVIS OF VIRGINIA. Thank you. Dr. Volgenau.

Mr. VOLGENAU. Mr. Chairman, as CEO of SRA International, we

are very familiar with the problems of the information technology

shortage. We are a system integration and consulting firm in the

area of information technology and we understand the problem

quite well.

I also have a second job, which is chairman of the Information

Technology Association of America Work Force and Education

Committee. ITAA represents 500 companies in its membership and

works very hard to solve work force and other IT problems. Each

year, we have an annual information technology work force convocation. We bring together government, academia and business to

discuss work force issues.

In addition to that, we have partnerships and grants with various government organizations that look at such subjects as how to

make education and training more relevant to the workplace and

how to employ more people with disabilities and minority members.

In January, ITAA completed a study, which is one of a continuing set of studies that we have had of the work force. We found

there are more than 10 million IT workers in the United States,

and that this year, 2001, there will be a demand for 900,000 workers. In addition to that, the projected shortfall at that time was

about half that number, 425,000 workers.

Now these figures are dynamic. If we were to take that survey

today, it might be a smaller figure of openings. Nevertheless, we

believe that there is a shortage of supply compared to demand.

I’ve been in information technology for about 40 years and I have

seen it grow almost continuously.

Recently, ITAA completed its 11th annual survey of Chief Information Officers of the Federal Government. They all cited the concern that other speakers have made about the large number of

Federal employees who can retire in the next few years, and they

all cited competition with the private sector as far as recruiting

and retention. Government can alleviate some of this shortage

through outsourcing, which is an increasing practice, even in the

private sector. But even with outsourcing, government still needs

people to manage the contracts, and there are certain government

jobs that simply don’t lend themselves to outsourcing.

Government should, as other speakers have said, use some of the

practices of the private sector in terms of attracting and retaining

workers.

ITAA supports the Information Technology Executive Exchange

Program. As a matter of fact, we attempted an exchange program

in 1999 with the Department of Justice, and that concerned the

Cyber Citizen Program. After fairly extensive discussions, we abandoned that program for a variety of reasons. Nevertheless, the objections to that exchange program we feel are surmountable. ITAA

and its member companies want to work with the government to

deal with this problem, and we look forward to working with this

committee to help you do that.

Thank you very much.

[The prepared statement of Mr. Volgenau follows:]

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

Rohleder, thank you for being here.

Mr. ROHLEDER. Chairman Davis, thank you for inviting me to

testify today on the Federal human capital crises.

I would like to ask that my full testimony be submitted for the

record, please.

I am Steve Rohleder, the managing partner of Accenture’s U.S.

Government Practice. Accenture is the world’s leading provider of

management and technology consulting services and solutions. We

employ more than 75,000 employees in 46 countries, generating

$93⁄4 billion in revenue in year 2000. We employ about 2,500 people

in RST, and the majority of which work in our U.S. Government

practice.

Today my testimony will focus briefly on the impact the technology work force shortage has had on the ability of agencies to develop effective solutions to improve taxpayer services and highlight

three areas where I believe the private sector can help address government’s human capital challenges.

The shortage of high-tech workers over the past decade is legend.

That shortage has had a disproportionate effect on the Federal

Government, which has been unable to compete with the private

sector for these critical, new-age workers. The impact on government’s ability to manage its $44 billion annual IT investment has

been profound. There’s a shortage of highly skilled managers to

oversee complex IT programs. There is a severe shortage of IT professionals with cutting edge Internet-based skills. And the IT work

force has not been able to fully harness the power of technology to

save taxpayers billions of dollars while improving efficiency.

One solution we support is the establishment of a Digital

TechCorps. It would allow public IT middle-level managers to be

loaned to the private sector and, conversely, the commercial IT

managers to be loaned to government for 1 to 2 years. Accenture

believes that a Digital TechCorps comprised of the best and the

brightest of both government and industry can be funneled toward

projects that will help transform the Federal Government into a

21st century government.

Accenture applauds the legislation you’ve drafted, Chairman

Davis, and believe it will pave the way toward helping address the

human capital crises by committing managerial high-tech talent to

unique e-government challenges. It will also serve as a model from

government and private sector collaboration. It will break the paradigm whereby entry to government service generally takes place

only at the entry level and very senior levels with very little entry

at the mid-career.

And finally, it will serve as a final step to reinvigorating a culture of public service for a whole new generation of technology

managerial workers.

There are three areas I believe the private sector can help.

First, Accenture has committed to loan five of our best and

brightest to the Digital TechCorps for the first 2 years as soon as

the legislation is passed and will challenge others in our industry

to match our offer. We would hope that the initial TechCorps would

be comprised of government and industry professionals dedicated to

working on cross-agency e-government initiatives at the direction

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and in collaboration with the Office of Management and Budget

and the Chief Information Officer Council.

Second, there are many innovative human resource management

best practices that government can and should adopt from world

class private sector organizations. In our written testimony, we

have offered some innovative solutions on how an organization can

assess their work force, prioritize their risks and then mitigate

them.

Specifically, we believe agencies and Congress should review

strategies to preserve the brain trust, embrace talent management

and deployment, develop the next generation of Federal servants

and achieve operational excellence.

Third, as Federal agencies begin developing their human capital

management assessments and mitigation strategies, it will be apparent that they do not have the tools to adequately track, manage

and assess progress in aligning their human capital with their organizational mission. Human resource technology can enhance the

quality of performance evaluation, skill tracking, training, knowledge transfer in recruiting and retention efforts.

In conclusion, consistent with Mr. Walker and Mr. Perry’s testimony, we believe the private sector can play an integral role in

helping the Federal Government reshape its work force for the 21st

century. Accenture is committed to helping launch a governmentindustry Digital TechCorps fostering a knowledge exchange beneficial to both industry and government.

There are numerous human resource management commercial

best practices that can and should be adapted to the Federal Government. Some will need legislation. Others need only be implemented.

Finally, Accenture recommends that Congress continue to urge

agencies to utilize technology to help manage the Federal Government’s most precious asset, its people.

Thank you.

[The prepared statement of Mr. Rohleder follows:]

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Mr. TOM DAVIS OF VIRGINIA. Thank you all very much. Let me

start, Mr. Faga, with you.

Does MITRE, being an FFRDC, have constraints on its hiring

and the way it can remunerate people through other government

contractors? You can’t do stock options because you are not a stock

company.

Mr. FAGA. We have to attract people basically purely on salary

and opportunity to serve the public service, which by the way,

proves to be a very important incentive. Because of those limitations, though, a year ago our attrition rate was running about 12

to 14 percent. Right now, it’s running 5.

Mr. TOM DAVIS OF VIRGINIA. The tightening job market also

helped that, you think?

Mr. FAGA. Absolutely. And employees who are staying are talking about now the stability of the work as opposed to the attraction

of going for the brass ring.

Mr. TOM DAVIS OF VIRGINIA. Sure. I was intrigued when you

talked about good managers making a big difference. We lose a lot

of people because they are managed badly and go out. I think this

can help with that. But most of all is making this challenging

work, giving people an opportunity to step outside of government

for a year or two and see what it is like there, learn new innovative

techniques as part of a career path in government.

Mr. FAGA. Let me say just one more word about the idea of challenging work. One of the things I found, having been in government and also at MITRE, the challenge is to some degree self-generated by a group and there needs to be a critical mass of people.

For example, in the field of information security engineering, we

have about 200 technical people. They work on projects throughout

the company. If they did not stay together as a mass—doesn’t have

to be as large as 200, but it can’t be one and two. And one of the

problems that you see in government is having—trying to hire 1 or

2 people who are specialists in a field and then hope that they

would stay current and productive in that field for many years.

Cannot be done.

That’s one of the beauties of your TechCorps is—I mean, we have

all kinds of people, and I’m sure that my colleagues do, too, who

would love the opportunity to spend a couple of years right inside

of government helping with problems they think are important.

And I might add further, Mr. Chairman, there is a related program called the Intergovernmental Personnel Act Program, which

allows the government to exchange and nonprofits like us to contribute. We have about 12 people in those assignments now. This

does not supplant what you are doing. It doesn’t meet the need, but

it does prove that it can work because it is already working in a

small scale way.

Mr. TOM DAVIS OF VIRGINIA. Dr. Kelman, I have a question for

you. You noted in your testimony that one-third of your graduating

professionals are interested in entering the government work force,

which is down, and I ask if that means you are letting more Republicans into Harvard.

Mr. KELMAN. Many Republicans go to work for the government,

especially now.

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Mr. TOM DAVIS OF VIRGINIA. What type of career paths are they

interested in? What are they doing instead of government?

Mr. KELMAN. We still, even now, we have 70 percent of our graduates going into what I would call some version of public service

broadly conceived. So this is ballpark. We have about 35 percent

go into government, about 25 percent go into nonprofit and about

20 percent go into the public sector divisions of private sector

firms. They might work for the public sector division of Accenture

or another firm. So we still got around 70 percent going into public

service of one sort or another. And we consider that, broadly speaking, part of our mission.

But we agree with the statement that you made and a number

of the statements witnesses have made earlier on, the government—there’s public service that’s not just government service.

However, the government needs talented people.

So we want to make sure that a significant number of our people

do go into government service. Now the ones who don’t go in—and

many of them, because we got concerned about these numbers—we

do interviews both when they graduate—students who don’t go into

government—or we do interviews a few years out. Many, many of

those who have not gone into government express an interest in an

opportunity during their career or more than one opportunity to

have a chance doing some public service, even if it’s not their whole

career. We need to make it more easy for people who don’t want

to devote a whole career in government and are not at the level of

senior political appointees, assistant secretaries, whatever, to have

some chance to do public service.

Mr. TOM DAVIS OF VIRGINIA. It seems, then, of your graduate

pool, most of them aren’t going in to make money. They are really

going in to, like you said, nonprofits, other public sector areas for

the mission. And our key is to give them a mission in government.

So many times, it seems you go into government and there is no

mission. It’s regulation-driven.

Mr. KELMAN. And I think that, again, when we interview our

students—and we are doing a lot of work on this because we are

very concerned about this problem—I mean it’s the center both to

our commitment to public service and the mission of our institution—when we interview our students, a lot of them express—and

I’m going to call it stereotypes because I don’t think it is necessarily true across the board by any means—but a lot of them express a stereotype that if you go into government, it is not results

driven, that it is filled with bureaucracy, red tape and regulations

and so forth.

And there—and in early May, the fairly newly elected mayor of

Baltimore, Mayor O’Malley, came to speak at the Kennedy School

and talked about some of the things he’s trying to do in Baltimore.

He brought with him a bunch of overheads about—and he sort of

sees his goals that there are about five or six performance measures for the city of Baltimore: Crime rate—he had a bunch of them.

He’s tracking them every week and brought along charts. And I

happened to be in the audience and a number of my students came

up to me and asked, can I go to work for this guy?

I think that young people, talented young people want challenging and results-driven work. And as I said in my testimony, anyVerDate 11-MAY-2000 10:01 Nov 20, 2002 Jkt 000000 PO 00000 Frm 00141 Fmt 6633 Sfmt 6633 C:\DOCS\81423.TXT HGOVREF1 PsN: HGOVREF1
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thing that we can do as a government that you can do from your

perch on this subcommittee to get the government workplace less

bureaucratic, more results-driven, we couldn’t do anything more to

attract good Federal workers than that. That’s the biggest thing we

can do in a lot of ways.

Mr. TOM DAVIS OF VIRGINIA. Dr. Volgenau, let me ask a couple

of questions. What are some of the benefits that you extend to your

employees to get them to come there and to retain them—I guess

many were constrained by going into government? And what could

you offer us in government?

Mr. VOLGENAU. First of all, as other speakers have said, Mr.

Chairman, the best thing that any organization, government or private, can offer its people is leadership and the inspiration that

comes with good leadership.

In terms of financial incentives, we compensate our people better

than the average in the private sector. We offer bonuses for good

performance. And on top of that, we have stock options. We are a

privately listed firm, but we have a provision where we’re appraised by an independent outside company so people can, even in

a company that is not publicly listed, can do very well in terms of

stock options.

Mr. TOM DAVIS OF VIRGINIA. You are obviously a very highly-regarded company. Do you feel there would be managers and employees in your company who would welcome the chance to come into

government for a year?

Mr. VOLGENAU. Yes, particularly if they felt they could really

make a national contribution. Again and again, people are inspired

by that. I’m a product of that system. The government sent me to

the Naval Academy and then during the course of my military

service for a Ph.D. in electrical engineering, and I ended up spending 20 years in the military and another 3 years in a senior position in Civil Service. And I felt for most of that time, even though

the salaries were better for engineers, that the idea of national

service and having real responsibility, the opportunity to make a

contribution, caused me and many other people to stay. And I

think that still holds today.

Mr. TOM DAVIS OF VIRGINIA. How often do you undertake a work

force assessment of your organization to ensure that you are adequately meeting the needs of the changing marketplace? And what

kind of attrition rate do you have?

Mr. VOLGENAU. Mr. Chairman, are you talking about my company as opposed to ITAA?

Mr. TOM DAVIS OF VIRGINIA. You can do both.

Mr. VOLGENAU. ITAA wouldn’t have a formal——

Mr. TOM DAVIS OF VIRGINIA. So your company would be a good

example.

Mr. VOLGENAU. I’ll start with ITAA.

Mr. TOM DAVIS OF VIRGINIA. And you’re here for them. That’s

fine.

Mr. VOLGENAU. We do an annual assessment. And it’s very comprehensive and it includes not only openings, but skilled categories.

And then every year, ITAA does an assessment—survey of Chief

Information Officers in the government. From a company standpoint, we are continually assessing our competitiveness and we use

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many outside studies to make sure that our—particularly our executives are paid well. We pay our people in the 75 percentile in

terms of cash compensation. And when it comes to stock option, we

are up in the 90 percent. But for that, we demand performance. If

they are going to be paid at the 75 percentile, then our company

must perform at the 75 percentile and they individually must perform at that rate.

Mr. TOM DAVIS OF VIRGINIA. You note that the ITAA tried for a

year to develop an information security work force exchange program. What kind of roadblocks and difficulties did they encounter?

Mr. VOLGENAU. Well, some of the things that the government

speakers mentioned this morning, there was the concern about an

exchange being perceived as a gift. There was the worry on the

government side that people might, having gone to the private sector for a year or so, decide to stay there. Pay inequity was an issue.

And then there was the concern that if those executives came from

government contractors, that somehow or other those government

contractors would have an advantage in competition compared to

others. All of those items we feel are surmountable.

Mr. TOM DAVIS OF VIRGINIA. Sure. Thank you.

Mr. Rohleder, let me ask you a couple of questions. You mentioned 6 percent of Accenture’s annual budget is spent on training.

Do you know what it is in the Federal budget?

Mr. KELMAN. The best we have is about 1 percent.

Mr. TOM DAVIS OF VIRGINIA. Have you measured the results of

your training to ensure that your employees are receiving the most

up-to-date skills and how critical is that? This is a bell. We will go

on for about 10 more minutes and then we will adjourn.

Mr. ROHLEDER. First of all, the training is absolutely critical. It’s

a fabric of the firm. We hire about 80 percent of our people right

off of campus. Next to the Federal Government, we are the largest

recruiter off of campuses in the United States. So training is an absolute critical component to a person’s development with our firm.

In fact, they’ve got a 5-year training program that they go through.

And we manage and promote them based on that training and

their performance on the job.

Mr. TOM DAVIS OF VIRGINIA. And for you, then, that is a recruitment tool, the fact that they are going to be constantly trained?

Mr. ROHLEDER. Absolutely. I think the people that we recruit see

that as a differentiator for our firm. They see that training program and that commitment to development as a key component in

their decision to come work for us.

Mr. TOM DAVIS OF VIRGINIA. I think one of the problems in government is that when budgets are cut, training is just one of the

first things to go. And it’s a demoralizer, but it also just puts us

behind the 8 ball on so many different issues.

Mr. ROHLEDER. Especially in the technology area where technology is changing so often that you have to keep your skills current to be able to develop the solutions that are going to help you.

Mr. TOM DAVIS OF VIRGINIA. You note in your testimony that

part of e-government is improving communications and service delivery between the Federal Government and State and local governments with whom they have to communicate. Would Accenture be

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interested in pursuing this type of an exchange program with State

and local governments as well?

Mr. ROHLEDER. Yes, we would. In fact, I have had conversations

already in California with the commissioner of the tax board out

there. Interestingly enough, his point was he wasn’t interested in

information technology exchange, but auditors. So they were interested in going into a different direction, but the need is still there.

I don’t think the human capital crises is only an issue in Federal.

You can see it happening in State and local governments as well.

Mr. TOM DAVIS OF VIRGINIA. Some of today’s testimony noted

that many agencies view legislative release from Title V as their

only option for solving their hiring challenges. Many agencies view

the application process for existing flexibilities as either burdensome or just too time-consuming. In your opinion, do agencies understand what hiring and recruitment and retention flexibilities

are available to them now?

Mr. ROHLEDER. I think some do. I think you take some agencies

that have been relieved from their Title V requirements and they

have gotten a little bit more creative. Most, I think, are still caught

in H.R. policies and practices in the last 10 years. And I don’t think

they really do understand.

Mr. TOM DAVIS OF VIRGINIA. Doctor, let me go back to you. A recent Computer News article stated that over 57 percent of government managers believe that information systems are critical to the

agency’s mission. In your experience, in and out of government, is

the current IT work force shortage impacting the ability of government agencies to accomplish their missions?

Mr. KELMAN. Yeah. I think particularly—again, as Dave Walker

and others have suggested—from a contract management perspective—and I think that—my own view is it doesn’t make sense to

say we need to keep a whole bunch of computer programmers in

the government just so we can have people come up the system and

be able to manage contractors. If it doesn’t make sense to have the

programmers in the government and it makes more sense to

outsource them, we should outsource them. But we do definitely

need IT—or skills of people who know something about IT to help

establish strategy, requirements, evaluate RFPs, do contract management.

I think that we need to be—and again, I think a lot of those people can initially come in at the mid-career level and move up there.

They can come in, you know, at an 11, 12, 13 level and work up

from there. But I think that, as you mentioned earlier, we still

have a big problem with failed IT projects in the government. And

we just—yes, IT is crucial to the government’s ability to serve citizens better and being able to manage IT at the front end of strategy and design and at the back end, of managing contractors, is a

crucial, central skill for the government. And I think actually being

able to manage—it’s really a management issue, not doers, managers, executives, leaders. I think this is becoming a core competency for government to be able to manage those kinds of situations, and it hasn’t got the attention it needs.

Mr. TOM DAVIS OF VIRGINIA. Let me ask each of the private sector reps. I mean the idea of coming in and working on a massive

program at the governmental level that they may not be able to get

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for your company would have an appeal, wouldn’t it? You get that

kind of experience and then they can come in and it gives you—

later on, it gives your company someone who has actually worked

with a wide body. You probably get some of that when you hire

people from the Federal Government already. But for a younger

person to work on that level could be a great tool.

Mr. ROHLEDER. Absolutely.

Mr. TOM DAVIS OF VIRGINIA. Dr. Kelman, have you shared the

concept of the Digital TechCorps with your students, and what’s

their reaction to this kind of thing?

Mr. KELMAN. I haven’t shared this specific idea with the students. I was involved in a focus group with some 30 something

Accenture employees on this and they were as a group—we did a

focus group with eight of them. Seven of them said under the provision of your legislation, it was important that they continue to be

able to maintain their association with their own firms and salaries. But with those conditions, they were very, very—seven out of

the eight said they want to apply.

So Steve may have—you said the best and the brightest. You

probably got a lot of people to pick among. I think it’s interesting—

if I could just tell another interesting story.

I have shared this with my colleagues back at Harvard. I went

and saw a government team unit at Accenture, some new employees working in their Government Division, and they showed a little

training film developed within Accenture for new employees in the

Government Division. You know, it was interesting. The appeal to

public service there and the flag and making a difference, I’m almost embarrassed to say, I think they did a greater job selling public service to their employees at Accenture than we a lot of times

do in the government selling public service to our own employees.

Mr. TOM DAVIS OF VIRGINIA. Well, we forget the product we have

sometimes when we do that. But I’ll tell you, the last 10 years have

been—20 years have been difficult for Federal employees with the

downsizing and the benefit cuts and everything else. It’s been very

demoralizing. And I think when we can start recognizing employees as an asset instead of a line item to be cut and nibbled at, it

just changes the whole perspective.

Mr. KELMAN. You know, Mr. Chairman, I mentioned this in my

written testimony. One of the things that you could do and this

subcommittee could do is why not hold a hearing every 6 months

or even once a year, whatever, where you bring in career people in

the government who have been involved in delivering some improvement and service through information technology and start

sending the message that when career people are called before a

committee like this, they are not just being called to be hectored;

that every once in a while at least they are called to be honored

because they deserve it. And that’s a contribution that you could

make and the subcommittee could make.

Mr. TOM DAVIS OF VIRGINIA. That would be a first.

Mr. KELMAN. Let’s show we can break the mold.

Mr. TOM DAVIS OF VIRGINIA. We are long overdue. And I will

take that under advisement. And that’s a good idea.

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Let me ask Dr. Faga. They have now changed some of the IT positions in government in terms of their salary that you and Ms.

James have testified on that. Is that going to be helpful?

Mr. FAGA. I’m sure it will. I am not very familiar with how

they’re doing it in government at this moment. I did discuss with

your staff the fact, for example, at MITRE, we moved a few years

ago to 29 different job categories, to recognize the idea that, you

know, some skills are hot at any given time and some skills are

not. We have to differentiate them.

Mr. TOM DAVIS OF VIRGINIA. And you can do that in the private

sector a lot easier than we seem to be able to.

Mr. FAGA. And I think that’s what Ms. James is talking about,

is better recognizing what are the skills.

Another point I might throw in while I have the mic that I think

is related to this is there can be a tendency to overspecify positions

and their requirements to fulfill them. There are a large number

of people who have IT skills who would not qualify for jobs in the

government and many cases in a place like MITRE. And I’m trying

to break that mold at MITRE.

For example, we just hired a young man who went into the Army

after high school, got excellent technical training and became familiar with some programs that we work on for the Army, and we

have hired him as a technician. He has some college that he gained

while in the Army. He will complete his degree while at MITRE

and become a member of the professional staff 2 or 3 years downstream. So we and the Army are getting good service from him now

at the technician level. We’ll see him as a computer engineer downstream. We have to go on our own. We just have to make more of

them.

Mr. TOM DAVIS OF VIRGINIA. Thank you. We have a vote on and

I don’t want to hold you longer. So I want to take a moment to

thank everybody for attending this very important oversight hearing today. I want to thank all the witnesses, Congressman Turner,

Representative Horn and other Members who participated and

thank my staff for organizing it. I think it’s been a very productive

hearing.

I’m going to enter into the record the briefing memo that was

distributed to the subcommittee members.

We will hold the record open for 2 weeks from this date if you

want to forward an additional submission or an additional thought

that occurs to you. We very much appreciate your time and your

testimony today.

Thank you. These proceedings are closed.

[Whereupon, at 12 p.m., the subcommittee was adjourned.]

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