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FEDERAL INFORMATION TECHNOLOGY MODERNIZATION: ASSESSING COMPLIANCE WITH

THE GOVERNMENT PAPERWORK ELIMINATION

ACT

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

JUNE 21, 2001

Serial No. 107–35

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, 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

(III)

C O N T E N T S

Page

Hearing held on June 21, 2001 ............................................................................... 1

Statement of:

Bostrom, Sue, senior vice president of the Internet Business Solutions

Group [IBSG], Cisco Systems; and Curt Kolcun, e-government director,

Microsoft Corp. .............................................................................................. 32

Daniels, Mitchell E., Jr., Director, Office of Management and Budget ....... 10

Willemssen, Joel, Managing Director, Information Technology Issues,

General Accounting Office; Jim Flyzik, Acting Assistant Secretary for

Management and Chief Information Officer, U.S. Department of the

Treasury; John Mitchell, Deputy Director, U.S. Mint; John L.

Osterholz, Principal Deputy Chief Information Officer, U.S. Department of Defense; and Norma J. St. Claire, Director, Information Management for Personnel and Readiness, Office of the Secretary of Defense ............................................................................................................... 61

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

Bostrom, Sue, senior vice president of the Internet Business Solutions

Group [IBSG], Cisco Systems, prepared statement of ............................... 35

Burton, Hon. Dan, a Representative in Congress from the State of Indiana, prepared statement of .......................................................................... 5

Daniels, Mitchell E., Jr., Director, Office of Management and Budget,

prepared statement of ................................................................................... 13

Flyzik, Jim, Acting Assistant Secretary for Management and Chief Information Officer, U.S. Department of the Treasury, prepared statement

of ..................................................................................................................... 80

Kolcun, Curt, e-government director, Microsoft Corp., prepared statement

of ..................................................................................................................... 43

Mitchell, John, Deputy Director, U.S. Mint, prepared statement of ............ 89

Osterholz, John L., Principal Deputy Chief Information Officer, U.S. Department of Defense, prepared statement of .............................................. 140

Towns, Hon. Edolphus, a Representative in Congress from the State

of New York, prepared statement of ........................................................... 156

Willemssen, Joel, Managing Director, Information Technology Issues,

General Accounting Office, prepared statement of .................................... 64

(1)

FEDERAL INFORMATION TECHNOLOGY MODERNIZATION: ASSESSING COMPLIANCE

WITH THE GOVERNMENT PAPERWORK

ELIMINATION ACT

THURSDAY, JUNE 21, 2001

HOUSE OF REPRESENTATIVES,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The committee met, pursuant to notice, at 10:05 a.m., in room

2154, Rayburn House Office Building, Hon. Dan Burton (chairman

of the committee) presiding.

Present: Representatives Burton, Gilman, Morella, Mr. Tom

Davis of Virginia, LaTourette, Ose, Lewis, Platts, Otter, Schrock,

Duncan, Waxman, Kanjorski, Norton, Cummings, Kucinich, and

Watson.

Staff present: Kevin Binger, staff director; David A. Kass, deputy

chief counsel; Mark Corallo, director of communications; Nat

Wienecke and Michael Canty, professional staff members; Robert

A. Briggs, chief clerk; Robin Butler, office manager, Leneal Scott,

computer systems manager; John Sare, deputy chief clerk; Corinne

Zaccagnini, systems administrator; Phil Barnett, minority chief

counsel; Michelle Ash, minority counsel; David McMillen, minority

professional staff member; Ellen Rayner, minority chief clerk; and

Earley Green, minority assistant clerk.

Mr. BURTON. Good morning. We want to try to get started as

quickly as possible. We were informed that there is going to be a

vote on the floor at 10:30, so we will have to break at 10:30 when

we have that vote for probably 15 minutes. So I would like to get

started if we can.

Good morning, Mitch. How are you?

A quorum being present, the committee will come to order. I ask

unanimous consent that all Members’ and witnesses’ written opening statements be included in the record. Without objection, so ordered.

I ask unanimous consent that all articles, exhibits and extraneous or tabular material referred to be included in the record.

Without objection, so ordered.

I have always said that government needs to act more like the

private sector, private business; and that has never been more true

than today. U.S. businesses are more efficient and productive than

ever before. They are cutting costs. They are providing better service. They are responding to changes in the marketplace faster.

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They are doing all this with information technology. They aren’t

just treating computer systems like a cost of doing business; they

are using them to achieve competitive advantage. And that is exactly what we should see and want to see in the Federal Government. We want to see the Federal agencies provide better service.

We want them to be more responsive to our constituents. We want

to see them become more efficient.

If they are going to do all these things, they have to take advantage of new developments in information technology. The problem

is, too many agencies are spending hundreds of millions of dollars

maintaining outdated computer systems. Too many agencies are

saddled with computer systems that can’t talk to one another. Too

many agencies haven’t had the vision to break out of the old way

of doing things.

In our congressional offices, we have people come to us for help

all the time. People have problems with the Social Security Administration. They have problems with the Veterans Administration.

They have problems with a lot of different agencies. These agencies

are bogged down with outdated information systems and paper

files.

Sometimes people have cases that get bogged down for months

or years when it should only take days or weeks. We have got to

do better than that.

I know that there is a serious problem between the Department

of Defense and the Department of Veterans Affairs. When a veteran goes to the VA to apply for benefits, the VA has to request

his personal records from the Defense Department. But their computers can’t talk to each other; it has to be done on paper. There

is such a huge filing backlog at the Defense Department that these

cases sometimes get hung up for years, and that is just not acceptable.

As I understand it, there is an ongoing project at the Defense Department to try to fix that problem. It is going to take years, because there is a huge volume of information they are dealing with.

I am going to ask the Defense Department some questions about

that today.

If the government is going to radically improve the way we do

business, it is going to take leadership from the top. That is why

I am glad we have the Director of OMB, Mitch Daniels, here to testify today. He has made it very clear that management reform is

at the top of his agenda. I think he is sending a very positive signal

by being here to talk in person today about this.

Mitch, thanks for being here. It is nice to see a fellow Hoosier.

I think Congress has tried to do its part to give agencies the tools

they need. In 1996, we passed the Clinger-Cohen Act. It required

all of the major Federal agencies to have chief information officers

to coordinate their information resources.

In 1998, we passed the Government Paperwork Elimination Act.

The idea was to get agencies to let people file government forms

electronically. We gave them a deadline. We asked them to have

electronic filing for their most important and most widely used

forms by October 2003.

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What we need to do now is to conduct oversight to make sure

that agencies are putting these tools to work. That is why we are

holding this hearing today.

We want to accomplish two things. First, we want to see if agencies are complying with the GPEA, and we want to see if they are

taking this mandate seriously and doing what is necessary to make

electronic filing happen.

Second, we want to go beyond GPEA. We want to see if agencies

are thinking strategically and making wise information technology

investments. We want to know if they are really taking a hard look

at the way they do business to see if there is a way to do it more

efficiently.

We have some good success stories out there. The U.S. Mint is

one of them. We have asked them to come and testify today. They

used to have a lot of individual computer systems that couldn’t

communicate with each other. If they needed to get information

from one system to another, they had to print it out on paper from

one and type it into another. Coin collectors had to order Mint sets

through the mail. It took them 2 or 3 months to get their orders.

Over a 12-month period, the Mint changed their entire computer

system—in 12 months. Now everything is compatible. Today, coin

collectors can order Mint products on-line, and they get them in 2

or 3 weeks.

I think that the Mint has been a success story because they had

leadership that was committed at the top. One of the questions I

have is, how can we take the lessons learned at the Mint and

translate them to other agencies?

These are complicated issues. We could all spend days talking

about all the issues at all of the different agencies. What I thought

we would do today is narrow our focus.

We are going to look at two agencies, the Department of Treasury and the Department of Defense. Our starting point is, are they

complying with GPEA? Are they moving forward with electronic filing? If they are doing that, well, then hopefully that is an indicator

that they are doing other things as well, too.

Last October, they were required to file plans with OMB. They

were supposed to lay out a timetable showing when different forms

would be automated. We looked at the Treasury Department’s filing. It was pretty impressive. It laid out a strategic plan. It laid

out a number of initiatives. It said that 55 percent of their forms

will be available for electronic filing by 2003. It was fairly apparent

that there is a high level of support at Treasury for getting this job

done.

We then looked at the Defense Department’s filing. It left us

with a very different impression. It wasn’t very complete. Out of

182 different forms that the public has to fill out, they couldn’t give

us an estimated completion date for over 100 of them. According

to the plan we reviewed, fewer than 25 percent of their forms will

be available for electronic filing by 2003. There wasn’t any evidence

of any strategic planning whatsoever.

We sat down with the people from the CIO’s office. What they

told us is that they just collected the information OMB wanted

from the different services and passed it on. It became fairly clear

that nobody at a senior level was taking responsibility for making

4

sure the job was getting done. They were just collecting information and passing it on; and that is not acceptable.

It seems to me that when Congress passes a law that says you

have to do something, and when OMB sends you instructions on

how to implement the law, it ought to get a little more serious attention than it has been getting at the Defense Department.

Since then, we have learned that there are a lot of different modernization programs going on in the Army and the Navy and Air

Force and other parts of the Defense Department. We are going to

hear about some of them from our Defense Department witnesses

today.

But I am now very concerned about how much leadership there

is at the top for these initiatives. The Defense Department is a big

place with lots of different branches and services. If we don’t have

somebody very senior taking charge, I am afraid they are going to

wind up with lots of new systems that can’t talk to each other, replacing all of the old systems that couldn’t talk to each other.

With the volume of business that the Defense Department does

and the millions of paper forms that get filled out every year, hundreds of millions of dollars could be saved if we could automate

these processes.

We have two witnesses from the Defense Department today, and

I hope they will be able to give us a better comfort level with what

is going on over there.

Let me finish up by going back to what I started with. The government ought to act more like a private business. In the private

sector, billions of dollars have been saved by using information

technology.

We have two witnesses from two of the leading high-tech companies in America here today. They are going to tell us how they did

it. Hopefully, they are going to tell us how the Federal Government

and the State governments can learn from the private sector and

how they ought to do it.

We have Sue Bostrom from Cisco Systems and Curt Kolcun from

Microsoft here today. I want to thank both of you and your associates for being here.

I want to thank Kevin Binger, who has worked very hard on this.

Kevin is very interested in the new technologies, and Kevin is our

chief of staff. I really appreciate all you have done.

With that, I yield to Mr. Waxman.

[The prepared statement of Hon. Dan Burton follows:]

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Mr. WAXMAN. Thank you very much, Mr. Chairman. Thank you

for holding this hearing on the Government Paperwork Elimination

Act [GPEA].

This legislation was passed as an attachment to a supplemental

appropriations bill at the end of the 105th Congress. GPEA requires agencies to give individuals the opportunity to submit information electronically when practicable. In addition, it allows a person to use his or her electronic signature to file the submission.

GPEA, just like the Paperwork Reduction Act, which it amends,

attempts to reduce the paperwork burden placed on the public by

the Federal Government. It has yet to be demonstrated whether

electronically submitting information reduces the number of burden hours it takes people to complete the required submissions.

However, it may have other benefits, such as easy access to forms

or relief from the cost of postage.

I have supported e-government initiatives and believe they can

benefit the public. By using technology to collect and disseminate

information, agencies can help government be more efficient and

more responsive to the taxpayers. E-government should include encouraging agencies to allow people to comment on regulations electronically as well as allowing them to read the comments from others electronically. This saves time, money and effort.

For some agencies, individuals still have to go to Washington,

DC, and review the handwritten docket in order to intelligently

comment on a proposed regulation. Although modest steps have

been taken to address this issue, much work is left to be done.

Care must be taken in developing electronic information collection systems to assure that we protect individually identifiable information, business proprietary information, and truly reduce the

burden placed on those submitting information to the government.

Privacy protections must be paramount.

Over the last decade, we have seen an increase in identity theft;

an individual’s credit cards, Social Security numbers or driver’s license can be stolen or copied with relative ease. As more and more

people electronically submit information with electronic signatures,

we must work to prevent them from becoming victims of identity

theft.

Mr. Chairman, GPEA has the potential to help the Federal Government better manage its information collections. As technology

advances, I am hopeful that agencies with the proper protections

in place will be able to adapt and respond quickly to the needs of

the people.

I look forward to the insight from our witnesses. Thank you very

much.

Mr. BURTON. Thank you, Mr. Waxman.

Do other Members have opening statements?

If not, I want to start off by welcoming the great Congressman

from Tennessee, John Duncan, my very good friend, to the committee. I know he will be a great asset to us.

I ask unanimous consent that he be appointed to the Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs.

Without objection, so ordered.

Well, we want to welcome Mitch Daniels. He has been a leader

in Indianapolis, IN, for a long, long time. He was an executive for

10

the Lilly Co. In fact, I think you were president of International

Trade at one time.

Mr. DANIELS. North America.

Mr. BURTON. North America. Well, that is close. In any event, he

is head of OMB. I think he is a great appointment. I really appreciate you being here. You are recognized for an opening statement.

STATEMENT OF MITCHELL E. DANIELS, JR., DIRECTOR,

OFFICE OF MANAGEMENT AND BUDGET

Mr. DANIELS. Thank you, Mr. Chairman and Congressman Waxman. I appreciate the committee’s hospitality. And let me reciprocate by being very brief in my opening statement. I will submit

a statement for the record, of course.

Let me just say two or three things about this very important

subject on which you gather us today. The administration has announced and will follow through on a major commitment to use the

tools of the Silicon Age to improve the performance of government

and also its effectiveness on behalf—or its interaction with individual systems.

From a very, very lengthy list, the President has selected five

topics as his primary management objectives for this year, and egovernment is among those five.

Last week, we appointed a seasoned professional with experience

both in government and in the private sector, who will work all day

every day on this and this alone. In addition to that, we will, of

course, support his work with all the resources necessary to make

sure OMB upholds its responsibilities here. The Deputy Director

for Management, who is yet to be appointed, will carry as a primary responsibility the job of the President—or of the Federal Government’s CIO and will chair the CIO Council of his counterparts

or her counterparts in each of the agencies.

Let me just summarize the problem areas.

Success stories are abundant, as you have indicated, but I think

the committee and certainly we at OMB want to focus on the areas

where improvement is most urgently needed. By our tabulation,

there are at least 6,000 eligible transactions, citizen transactions,

not yet Web-enabled or with an electronic option. At this point,

agencies can only certify to us that something less than half of

those will meet the 2003 deadline. We don’t consider that acceptable, and we will work to improve—I hope to be able to report to

this committee at a later date that that number is headed northward.

Our scan of the capital planning process at the agencies and

their preparedness to meet the objectives of their assignments here

finds good performers and not-so-good performers. It probably

bears mentioning that the EPA, Treasury, and HUD, as far as we

are concerned, are among the leaders. On the other hand, HHS,

Defense and Justice we think have the furthest to go.

I would also observe that many agencies, I think, will be hamstrung by their own organizational structures. I will say a word

about this as I conclude, but far too many agencies have not one,

but multiple IT problems because they have multiple organizations

all pursuing different and often incompatible agendas and architecVerDate 11-MAY-2000 10:25 Feb 12, 2002 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 C:\DOCS\77192.TXT HGOVREF1 PsN: HGOVREF1
11

tures. HHS might be the most extreme example with its 13 sometimes competing empires.

We will try to focus our attention primarily on sort of the highyield opportunities, those where we think we can make the most

improvements the most quickly, those with the most citizen encounters.

I will cite tax filings. Although the Treasury has done some excellent work, they have perhaps the largest single job to do, and

there are something like 200 applications, I am advised, that could

make more simple and straightforward the taxpayers’ relationship

with the IRS, that have yet to be rendered electronic.

One other general point: I think that the Congress and the committee in its oversight of this law has given the Federal Government yet another opportunity, which I hope we will seize, to clean

house in terms of activities that may not be necessary at all. We

used to say in business there is nothing more tragic than to do

very, very well something which is totally unnecessary.

As I look at some of the applications or some of the eligible activities of government that could be transformed in an electronic

fashion, I think the threshold question is, is this still necessary in

the first place?

At Agriculture, for example, there are millions of hours of reporting imposed upon farmers and producers, collecting information

that may or may not be necessary. Before we invest the taxpayer

dollars to make collection of that information electronic, we ought

to take the opportunity to check and see if, maybe, this is a oncegood idea that is now obsolete.

I think Congressman Waxman had an excellent question when

he reminded us that we can’t automatically assume that simply by

switching from paper to a terminal, the burden on anyone has been

reduced in the way we hope it will be. I think that question has

to be asked each and every time.

Last, let me just say that I think one of the largest problems and

one we are going to try to work very hard on that encompasses this

subject and, frankly, many more, has to do with the efficiency or

lack of it with which the Federal Government now spends upwards

of $45 billion on IT.

In a $2 trillion budget, you know, a 2.5 percent—something like

that—investment in information technology is low by private sector

standards, but not dramatically below that of many businesses.

Yet, I cannot testify today that that money is being well spent or

spent in an integrated fashion.

In fact, it is my apprehension that much of that money, even as

we sit here this morning, is being spent to make a bad situation

worse; that as we convene here, people with the best of intentions

are assiduously designing and contracting for systems which are

tailored, which are customized, which are not compatible with the

systems with which they need to interact, and that people are

working very hard in a way that is at cross-purposes with this committee’s goals and those of GPEA.

So we are going to try to identify that, and we are going to try

to root it out, try to bring greater cooperation, integration and,

frankly, in many cases, dictation of systems decisionmaking in

12

hopes that we can begin to turn this tanker in the way that the

committee has and the authors of this bill have wisely directed.

Thank you for this opportunity.

[The prepared statement of Mr. Daniels follows:]

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Mr. BURTON. Let me start the questioning by just asking a couple of, I guess, generic questions or general questions.

First of all, I want to get every agency to review whether or not

information that they are requiring from different segments of our

society are necessary.

Then, second, you indicated that—and I read your testimony— that you indicated that there was going to be an effort to have

them coordinate their efforts so that there is not one agency going

in one direction with technology and another going in another direction.

Who is going to be—and you touched on this, but who is going

to be—I mean, this is a huge government. And to go through every

agency to find out whether or not there ought to be an elimination

of some of the information that is coming in and whether or not

they ought to adopt a certain type of computer technology, who is

going to be put in charge of that?

Mr. DANIELS. The Deputy Director for Management will have

this as a principal responsibility. I regret that, yet again, I have

to testify that we don’t have that person in place. We have set the

specifications for that job very high for this very reason and for

several others like it. We have filled every job but this one at OMB,

I am happy to say. But this will be a primary responsibility of my

primary associate.

In the meantime, the other deputy, the general deputy, is acting

in this area. We also were fortunate to recruit on a pro bono basis

the president of the National Academy of Public Administration, a

very seasoned, nonpartisan government administrator, who is filling in and working on these issues now.

As I say, next week, a full-time information associate, Mark

Forman, will be joining us.

Mr. BURTON. Well, I—— Mr. DANIELS. Let me add just one other thing, Mr. Chairman: It

is not simply a matter of interagency, but also intra-agency incapability. Some of the worst problems I have seen in the superficial

look I have had a chance to give so far really exists within departments, as opposed to—in their need to connect or interact with

other departments.

Mr. BURTON. We had a press conference yesterday, and the Majority Leader, as well as others—committee chairmen—were talking about this.

It seems like—and I think you touched on it in your opening

statement—that a lot of the agencies are taking archaic systems

and trying to improve the current system, when they probably

would be better served to junk them and start with the newest

technology instead of trying to bring old technology up to current

standards.

We are going to have Cisco and Microsoft testify in a little bit.

Is anybody working with these various computer companies to find

out what the latest technology is going to be that should be used

for the entire government, so that—like we were talking about—

they can all talk to one another within a given agency, and then

intra-agency-wise as well, and to make sure that they are not in

the process wasting money on old technology they are trying to

bring up to current standards?

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Mr. DANIELS. I think the CIO Council is the appropriate vehicle,

or certainly one, for addressing these sorts of problems. We will

just try to use it as effectively as we can.

Now, I pretend to have no great expertise in this area myself,

but I have, through past vocational experiences, come to some general conclusions. Along the lines of your question, standardization

and simplification, I learned the hard way, are pretty good objectives. And I think that in many cases it will be important to ask

agencies hard questions before they pursue the perfect solution for

themselves, which may aggravate the general problem the government has by virtue of its very customized or, you know, missionspecific character.

Mr. BURTON. Well, I realize that we are asking you questions

that you probably aren’t prepared to answer yet because, you know,

this is a new administration.

Mr. DANIELS. That won’t stop me. I answer questions on unfamiliar subjects all the time.

Mr. BURTON. When I first got elected to the Congress, 1 day I

was a candidate and nobody expected me to know anything. The

next day, I was elected, and everybody was asking me questions

about international policy that I had nothing to do with. So I am

sympathetic with the problem.

Mr. DANIELS. You get away with it pretty well. I will try to do

the same.

Mr. BURTON. OK. Let me end up by saying, before I yield to my

colleagues—and we will have the experts testify in a little bit—it

seems to me and maybe my colleagues that it would be advisable— and you may be way ahead of us on this—to bring in some experts

from the various high-tech areas and have them do a cursory look

at all the agencies to make some recommendations on the front end

to whomever you are going to choose to head this up, so that they

can have at least a basic idea of where they think the high-tech

people think we ought to go. Because technology is moving so fast

that I think that to not include them in the loop—and I am sure

you will, but to not include them in the loop will be a serious problem.

Mr. DANIELS. Let me say that is a great suggestion. One way we

are active on this sort of front, Bob O’Neill, the gentleman I referred to from the National Academy, has already met for the first

time with leadership of some of the Nation’s major consulting firms

about the management agenda, not limited to the IT challenge, but

including it. We expect to call on their patriotism to see if they cannot see their way clear to donate some advisory services that the

government would benefit from.

Mr. BURTON. Very good.

Mr. WAXMAN. Thank you, Mr. Chairman.

Mr. Daniels, thank you very much for being here. I realize it is

early on some of these issues that we are looking at for you to have

definitive positions. You don’t have the Deputy Director in place.

Maybe this hearing today will also be helpful to the administration

in having that Deputy Director be able to review the record of information that comes out of our oversight activities.

The Justice Department seems to have serious concerns about

the use of digital signatures. How will your administration weigh

19

those concerns against the call from GPEA for a serious effort to

increase the role of electronic reporting in Federal information collections. Do you have any view on that at this point?

Mr. DANIELS. Well, this is one of a number of obvious tensions

that we will all have to work together in reconciling. Concerns of

privacy, concerns of security are very, very real.

I will just say that the President, in particular, has placed a lot

of emphasis on the preservation of privacy even as we try to make

progress in this and related areas. I will have to take up Justice’s

specific concerns outside this hearing. In all honesty, I am not sure

how to react to their particular worries in this area; but I don’t

doubt, when I do, I will find that there is some legitimacy to their

hesitation.

Mr. WAXMAN. The Paperwork Reduction Act lays the groundwork

for information management in the Federal Government. That act

has been amended a number of times since being reauthorized in

1995. Some have suggested that the Paperwork Reduction Act

needs to be reworked to address the issues of electronic government in the 21st century.

The Paperwork Reduction Act authorization expires this year.

Will the administration be sending to Congress recommendations

for changes to be included in the reauthorization? And when do you

think those will be available?

Mr. DANIELS. I don’t know the answer to the when, but I do believe that we will have at least some report to Congress, and possibly some recommendations to accompany it, about the act, the

way it is working and how it might work better. I have become

aware already of at least a couple of instances—they may be aberrational—in which ironically the act may lead to more, not less,

burden in terms of paper and information requests.

I think it is our duty to report that there are experiences, good

and bad, with the act, and the reauthorization would be the right

time.

Mr. WAXMAN. Good.

The GPEA report for the Department of Defense shows that it

is not moving quickly to implement the requirements of this act.

Earlier this week, one of the subcommittees of this committee held

a hearing on the Government Performance and Result Act [GPRA].

In that hearing, it was also pointed out that the Department of Defense was not moving quickly to implement the requirements of

that act.

What will your administration do to persuade DOD that it needs

to get on board with these efforts to make government more accountable and user friendly?

Mr. DANIELS. Well, we are placing a number of demands on the

Department of Defense and this administration. This will have to

be high on the list.

I think we should all recognize the immensity of the management challenges that Secretary Rumsfeld and his colleagues face,

and all their predecessors and successors, for that matter, in an enterprise that big. But we will certainly ask them to elevate substantially their attention to this one.

Once again, from a list that, as I recall, was originally about 61

items, we distilled to 5 those that the President has designated as

20

governmentwide, mandatory, top-management priorities; and this

is one. So we will take his direction and stay on top of them.

Mr. WAXMAN. It occurred to me, as I was reading these questions

to you about GPRA and GPEA and PRA, that these are just a few

of the laws that we have to deal with; and you have to deal with

all of them, all of them within the government. And when people

come to you, they must refer to each of these pieces of legislation

as if it were the most important thing on your mind at that moment.

Mr. DANIELS. Well, at that moment, it is. Or at least if it is you

asking, it is.

Mr. WAXMAN. I guess the first thing you have to do is to find out

what the letters stand for. Well, I want to wish you well in your

position.

Mr. DANIELS. Thank you.

Mr. WAXMAN. And I hope that, as this committee looks at these

issues, we can develop a collegial working relationship. We want

the same goals.

Mr. DANIELS. Yes, sir. Well, I trust we will. And I will say very

sincerely that hearings like this and questions from the committee

are very, very useful, both in forcing us to become better educated

about subjects we need to learn more about and keeping our attention from wandering away from important assignments. So we

thank you for this invitation.

Mr. BURTON. Thank you, Mr. Waxman.

And I and others who are here today are very interested in working with you. And if you have legislative requests that will streamline government, make it more efficient, especially from an electronic standpoint, we will be very happy to work with you.

Mr. Schrock.

Mr. SCHROCK. Thank you, Mr. Chairman.

Good morning, Mr. Daniels. You mentioned that agencies like the

Mint are doing a good job and that one agency that is dear to my

heart, the Defense Department, along with HHS and Justice, are

not. Did the Mint create their own program internally or did they

contract out? No matter who created it, if it is successful, why can’t

other agencies use it as a template for their own agencies?

Mr. DANIELS. It is an excellent question. I honestly don’t know.

But fortunately you have the people from the Mint here to tell you

the origins of the program. I only know that it does rise near the

top in the estimation of our people in terms of applications so far.

That is a very important point you make—and this we have

stressed; we are going to try to stress across the entire management front—this government doesn’t transfer learning very well.

There are, on any subject I have looked at so far, always pockets

of excellence. But very, very rarely has that excellence migrated in

the way that a high-performing organization will insist that it do.

You have some people here from some high-performing businesses. I know they will tell you, as was our experience, that in a

good business today, it is considered a grievous malfeasance for a

manager who has done something, or whose unit has done something, innovative to fail to share that information across the organization. It is seen as an affirmative duty.

21

That isn’t happening nearly to the extent it should. I do feel it

is a heavy responsibility because OMB is a hub in a way and does

operate the various councils and so forth, and this should not be

hard to do. We should be able to take whatever the Mint has

learned and spread it far and wide, wherever it might apply.

Mr. SCHROCK. I agree. Thank you, Mr. Chairman.

Mr. BURTON. Mr. Duncan.

Mr. DUNCAN. Thank you, Mr. Chairman.

Mr. Daniels, I heard a report on CBS national news a few

months ago that said 37 percent of the time that people are spending on their computers is spent sending jokes or checking their

stocks or on personal matters. Then, week before last, the Inspector

General of the Internal Revenue Service came out with a report

saying 51 percent of the time IRS employees are spending on their

computers is spent visiting porn sites and sending jokes and checking their stocks and all of these types of things.

The goal of the Paperwork Elimination Act is to make the government more efficient. Is there anything that you know of that we

can do or that can be done to see that less time is spent using

these computers, these government computers for—I noticed in

your testimony a moment ago you said we shouldn’t automatically

assume that paper is always less efficient than the computers.

I just wonder about that. Is anything being done about that or

can anything be done about that?

I have to tell you, I did have a couple of friends, though, who

said they would be upset if it was another government agency, but

with IRS, they would just as soon 51 percent of the time be spent

on personal—— Mr. DANIELS. They might prefer it was higher.

Mr. DUNCAN. Right.

Mr. DANIELS. It strikes me as equally important, but a somewhat

different question than we are talking about with GPEA, where I

think the primary emphasis is on opening up to the external—to

the public the external world the better channels of communicating

and dealing with its government.

The problem you are talking about, I know it is very real. It is

not confined to government. Good managers detect the problem

when it is out of hand and act against it. You know, here too there

has to be some—I think there has to be due sensitivity to employee

privacy. But there are pretty well-established rules, as I understand it, for surveillance or back-checking where there is some

clear evidence of abuse or misuse.

Mr. DUNCAN. The second thing I wonder about, and it is a little

different direction from most people, because it is sort of politically

incorrect today not to worship the computers. And everybody always, I guess, is trying to outdo themselves to say that we should

always go to the next level and the most advanced technology. But

what I think sometimes the computer companies sell us a bill of

goods, because they always want us to buy new equipment all the

time.

Mr. DANIELS. Yes.

Mr. DUNCAN. Obviously they make more money if we do that.

But sometimes I think it is sort of like buying a car. Sometimes

it is more cost-effective and just as efficient if we stick with a car

22

that is a year or two old than if we always try to buy the newest

car with the newest bells and whistles.

What I am wondering about, since your primary responsibility is

the money involved, or that the government is spending, should we

be attempting to make sure that our technology purchases are costeffective and that they will work? I think the chairman or somebody mentioned—or maybe you did in your testimony just now,

about not always having to go to systems that are incompatible and

so forth.

Mr. DANIELS. Yes, sir. I think it is very, very important. A good

capital planning process—I make reference to that throughout the

testimony—will identify the likely rate of return or the benefits to

be derived from an investment. Done properly, that will very, very

often, I think, steer a buyer, a user, away from the bells-and-whistles applications, the latest and greatest. There is a romance about

that. People who are, you know, knowledgeable about technology I

think sometimes get captivated by that and go beyond the point of

diminishing returns.

This is exactly what we are trying to get at in critiquing the capital planning processes within agencies. It is exactly what we will

try to get at if we win—I give the direction to the DDM and the

intelligence—I mean, the information officer to press always for the

simple, the standard, the common, the more easily compatible.

Mr. DUNCAN. All right. Thank you very much.

Thank you, Mr. Chairman.

Mr. BURTON. Mr. Kanjorski, do you have any questions?

Mr. KANJORSKI. Yes.

Mr. Daniels, I don’t know that we have won any awards in the

Federal Government in utilizing new technologies to provide better

service or more efficient service. So I am not certain that I am satisfied that we can accomplish a lot of the things we do in the Federal Government to do that.

But what I am most worried about is areas like Pennsylvania.

Unfortunately, we have, I think, the second largest number of municipal governments in Pennsylvania of any State in the Union—

2,500 municipal governments, 90 percent of which are under 3,500

in population.

So it is interesting to analyze what will happen if the Federal

Government does go to sophisticated computer systems when more

than 45 percent of the governments in my congressional district

don’t have computers. I am just wondering what portion of the population of the United States has the capacity either of having computers or fitting into a network.

What I am most worried about is, we are going to move ahead

very quickly on some of these things, not realizing that we are

leaving behind a very large portion of our population.

We had some testimony on that the other day in the Committee

on Banking in terms of analysts and what they do in stocks and

bonds. I try to draw the analogy, there is a question there, whether

or not the information coming out is objective and responsible. But

one of the bigger problems that I saw in the analysts’ problem that

I see now in the technology problem of the government is, you

know, I think we are missing the point.

23

The last time I looked at a study, 20 percent of the American

people were functionally illiterate. So, at best, right now, we can

be talking to only 77 percent of the American people. It seems to

me that before we move hell-bent forward on doing a lot of things,

we have to make sure that we are giving access to the American

people, to the government, and to the municipalities.

I have noted recently that—we haven’t done a study on it, to confirm it, but I am sure if you do a study, you are going to find that

there is a decided difference between how communities interact

with the government on some programs to get benefit directly relates to their level of sophistication and technology.

I am just noticing in a lot of these rural districts through the

country, and in particular Pennsylvania because of our archaic

structure, they are just not capable, the local leadership and the

citizenry, of really accessing some of these sophisticated systems.

Then, the only thing I would add to that is, I wish you would

look at the House of Representatives as you go through this system, because I don’t think we are famous for having the best system in the world.

Mr. BURTON. Careful.

Mr. KANJORSKI. And I don’t want to—it is national, not a political criticism, because quite frankly, I would have to give a lot of

credit to the revolutionary forces of 1994. They tried very hard. But

sometimes philosophically they got bent into accomplishing something with technology, and I could call your attention to one thing.

All of us have become purchasing agents now, in the individual

Member’s offices, of equipment. We are ill prepared to do that.

I can tell you that it has been a catastrophe trying to find out

the best system, what systems work. Then when you order a system that is misrepresented and it doesn’t function, what do you do

with it? And negotiating each individual office with a huge or large

contractor who, quite frankly, is probably one of two or three providers and really doesn’t give a damn if you say, I am going to take

out my system. He says, tough luck; go back to typewriters, Congressman, if you are unhappy.

So we have a lot of management problems. In a way, I have been

trying to convince people in the 17 years that I have been in Congress that your office has an interesting title. The management factor inside of your title has really not been well utilized. I think one

of the prior Members mentioned you have great budgets down

there. You have good numbers. I respect both administrations’, how

they happen. They usually come out better than we do up here on

the Hill in number crunching.

But in management direction and skills, I think there has been

a decided failure in the Federal Government in all branches, all

three branches of the Federal Government, to really put their management techniques into place. I don’t know what can be done

about it. Probably government can’t accomplish the standard that

the private sector has to accomplish if it is going to be competitive.

But if in some way you would think about the management aspect of taking this new technology across government, and then, if

we get so sophisticated that we can communicate with Mars, but

we can’t communicate with 23 percent of the American people and

we can’t communicate with 40 percent of the municipalities, I don’t

24

know whether we are going to get value out of the thing. We may

just exclude people from the system.

Right now, I mean, I hate to tell you, but some of the municipalities in my district don’t have typewriters. They actually keep notes

by hand. If that applies in my district, I think if we look across the

country, we are going to find a lot of communities that are totally

devoid of equipment, efficiency, and even if you gave them that— of expertise.

I have been particularly involved in GIS for planning purposes.

We have been doing fairly sophisticated work in Pennsylvania and

across the country with a lot of the GIS movement in how to use

this as a tool for government planning. It is a phenomenal tool, a

tremendous potential cost-saver.

We are working on a program now of land and water reclamation

that we estimate we can save anywhere from 30 to 40 percent of

the costs that normally are spent by the Federal, State and local

governments to do this work, because we can remove the field engineering into the computer operation through use of GIS.

But all that being said, if we don’t have the operators out there,

if we don’t find a way to put in kiosks for access for people who

don’t have computers; and then if we don’t have operators who are

skilled enough to access the Federal Government, the State government, the local government and all this information that is available, I am not sure we are going to be very successful.

So I guess what I would say is, I hope you come forth with a very

comprehensive plan, breaking all these areas down and just seeing

what types of platforms we have to put in place, both in person

skills and various technologies, to get there; or else we are going

to spend—I mean, we don’t want to make—is it the FAA that put

that very sophisticated system together that didn’t work? You

know, that is really unforgivable. Those are people that are in an

area of expertise that should be able to handle it.

I think we are going down the road right now, we may do a lot

of hardware and software and not have the programmers or the

users that are capable of accessing it. And we may just end up

alienating a third to a half of the American population from government, from the Federal Government. Thank you.

Mr. BURTON. If I might just add to that, you hit on the House

of Representatives and how we are all buying our own individual

systems, and there is not a lot of coordination there.

I know that OMB is not going to be dictating to the House or the

Senate on what we do; but what might be advisable is, when you

come up with a strategic plan for computerization and consistency

throughout the Federal Government, you could make a recommendation. Obviously, we wouldn’t always follow it, but you can

make a recommendation to the House and the Senate that it would

be advisable for us to have a plan consistent with the rest of the

agencies so we can all talk to one another electronically.

So that would be one thing from Mr. Kanjorski that I might add

to the mix.

Mr. KANJORSKI. I want to add to that. We could maybe model

after some of the States.

I used to represent municipal governments as an attorney before

I succeeded to this great, high office; and the experience in PennVerDate 11-MAY-2000 10:25 Feb 12, 2002 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 C:\DOCS\77192.TXT HGOVREF1 PsN: HGOVREF1
25

sylvania was that the GAS in Pennsylvania allowed municipalities

to dovetail on their contracts, both for prices and service.

And just within the government, if all three branches could dovetail on what you are doing, you are going to be buying a much larger area. We don’t necessarily have, one, that expertise or that buying capacity to think about dovetailing us in.

I am not sure about even dovetailing in the States and the municipalities, so that anything that you come up with has to be compatible among the three branches of the Federal Government and

all the lower governments in the country to come in and use the

Federal purchasing capacity and expertise of some of this.

Mr. BURTON. Thank you, Mr. Kanjorski.

Mr. Otter.

Mr. OTTER. Thank you, Mr. Chairman.

Welcome back, Mr. Daniels. It is good to see you again. I remember when you appeared before our subcommittee on this very issue.

We had some good exchanges.

You know, it is interesting to hear some of the conversation in

front of the full committee here about how unable we are to respond to this sort of thing. I am reminded, 2 years or 3 years before

I got here, I am sure it didn’t come out of this committee, but I

am sure members of this same committee voted for a law which

told all small business that you have to electronically file your tax

returns whether they had computers or not. But you have got to

do it. You have got to comply. You have got to make it happen.

I know that the Paperwork Reduction Act has been in force for

a long time.

Let me reflect back to our subcommittee. As you will recall, we

had 487 violations last year. We had 710 in 1999 that your department reported on, and 872 in 1998, if my memory serves me correctly or my information. And I think I asked you at the time, and

I just want to ask you again for the benefit of the full committee:

How many people lost their jobs because all those laws were violated, or how many people went to jail? How many people were

fined, as we would the private sector?

Mr. DANIELS. Well, I am unable to report that anyone went to

jail——

Mr. OTTER. Was anybody fined?

Mr. DANIELS [continuing]. Or that there were other meaningful

penalties. I understand the thrust of your question.

Mr. OTTER. So that leads next to my real question to you.

Wouldn’t it be helpful to your organization to enforce this law if we

gave you—as the Congress is always fond of calling it—some

‘‘teeth,’’ like we give teeth to OSHA, we give teeth to EPA, we give

teeth to the IRS? Wouldn’t it be helpful if we gave the Office of

Management and Budget teeth to enforce these laws with the Federal agencies?

Mr. DANIELS. Well, we don’t aspire to police powers, though some

people think we think we do. I would leave that to the wisdom of

Congress, sir, although I will say that even apart from or before

any such powers were conferred on us, I think we have a very

heavy responsibility in this area. It is not as though we are toothless.

26

A primary reason that I favor the continued integration of management and budget functions—and this is a debate that has run

for a long time—is precisely that if we ever get it right, the budget

authority and the interactions we have over something very dear

to the hearts of agencies and parts of agencies, their budget from

year to year resides in the very same place that has the responsibility for oversight or paperwork reduction, GPEA, in all these

other agencies.

That is why we are going to make a determined run at the goal

to strengthen the management side of our operation to train our

people in the requirements of these acts and try to use the budget

hammer, some would call it, to get greater compliance. You all can

work on whether we should also pack side arms and have other

forms of coercion.

Mr. OTTER. Well, I pursue that line of questioning as I did in the

subcommittee, as you will recall, simply because I see that we always advise ourselves that in order to get compliance from the private sector or from the general citizenry, from the people, that we

have to put teeth in the law.

We are about to hear from two sizable corporations here that if

they had violated the law 487 times, they would not have got any

chance to violate the law 487 times in 2000, because they would

have all been in jail from having violated the law 872 times in

1998, whether it was affirmative action or whether it was OSHA

or the IRS laws, the tax laws, or any of the rest of these.

I am wondering, if we are really serious about paperwork reduction, if we are really serious about making the necessary good impact on our own government that we are willing to make on our

own participants in the private sector and in the economy, why

aren’t we just as enthusiastic and why aren’t we just as willing to

champion that same sort of compliance with our own government?

Thank you, Mr. Chairman.

Mr. BURTON. Side arms will be required.

Mr. Ose.

Mr. OSE. Mr. Chairman, thank you. I am tempted to use a portion of my time to celebrate your birthday today.

Mr. BURTON. Do what?

Mr. OSE. To celebrate your birthday today, because I understand

you turned 35.

Mr. BURTON. Thirty-nine.

Mr. OSE. But I am not going to sing for you.

Mr. TOM DAVIS OF VIRGINIA. How many times?

Mr. OSE. Nobody laughed.

Happy birthday, Mr. Chairman.

Mr. BURTON. Thank you.

Mr. 0’SE. That is in the record, right? You got it in the record?

Mr. BURTON. Thirty-nine. Get that in the record, too.

Mr. OSE. This is my time, Mr. Chairman.

Mr. Daniels, I appreciate you coming. You and I have had a couple of conversations in the past. I do want to touch on a couple of

things.

We had a hearing on April 24th at which many of the witnesses

questioned the requirement for reporting extensive and unchanged

information on an annual basis; that is, the same information they

27

reported on the previous year’s form was the same that they are

reporting on this year’s form, in particular as it relates to Interior

and Agriculture issues.

On May 15, I wrote you and Secretary Norton about the results

of our investigation, the Bureau of Reclamation in particular, and

asked for OMB to work with the Interior and Agricultural Departments to eliminate any duplicative reporting.

Where do you stand on your analysis of this problem?

Mr. DANIELS. We assess it as a general problem, even larger

than your letter suggested. I will be meeting with Secretary Norton

next Friday, and this will be one of the topics that we take up. I

can’t tell you this morning how much progress she will have to report. Certainly the work of the committee alerted and sensitized

her, as well as us.

And certainly an area one of the high-yield opportunities that I

made earlier reference to has got to be, you know, alleviating the

burden for repeated update or refiling of the same data; and there

is work afoot to try to make it possible for people, or businesses in

many cases, to file standard information in one place that might

handle multiple agency needs, updated only as it changes.

Mr. OSE. Could they do that electronically, too?

Mr. DANIELS. Sure.

Mr. OSE. One of the issues that came up in our hearings—and

this related primarily to agricultural use of Bureau of Reclamation

water from the Central Valley project in California—is that on the

forms that were being used by the Bureau to basically allocate

water, it almost seemed as if the simple addition of a box that a

farmer could check that says ‘‘no change from the previous year’’ would go far toward giving these people the time that they need

in the fields.

I don’t know if you have considered that or not.

Mr. DANIELS. I have. And also made earlier mention of the fact

that, in Agriculture particularly, there is—what we are dealing

with, with many programs and an enormous infrastructure, field

offices overlapping and all the rest of that, which is a completely

separate management problem, there is at least, I think, the strong

suspicion of a lot of ‘‘make work’’ and a lot of information being collected that need not be collected in the first place.

I said earlier it would be a sad mistake to convert from paper

to some simpler electronic fashion information collection that is unnecessary in the first instance.

Mr. OSE. Your point is very well made.

I met with the FSA employees in the Central Valley, particularly, in my district about that exact point; and they would welcome the opportunity to reduce the redundant or repetitive collection of information of this nature. So I applaud your efforts on it.

Mr. DANIELS. We could use the help of Congress to reducing the

redundant and unnecessary overlap in that agency itself. When you

have separate silos of employees all dealing with the same farmer

but all reporting to different people and all setting up their own

systems, you are going to have multiple information demand.

Mr. OSE. Your single source idea or your single repository is a

great idea. So I want to compliment you on that.

Mr. DANIELS. It may be great, but it is not very popular.

28

Mr. OSE. Before the light turns red, I want to reiterate what I

said at the beginning and say happy birthday to you, Mr. Chairman.

Mr. BURTON. You are a good friend.

Let me just say to Mr. Daniels, if you have suggestions for legislative action that would help you do your job better by streamlining

and cutting out duplication, just call us. I mean there is a number

of subjects here that we will be very happy on both sides of the

aisle to do whatever we can. This is not a political issue in any

way.

Ms. Norton.

Ms. NORTON. Thank you, Mr. Chairman. I regret that I have not

been here long enough to hear this important testimony. It’s an important hearing for this committee to hold.

I would like to yield my time to Mr. Kanjorski.

Mr. KANJORSKI. Thank you very much.

Mr. Daniels, I want to tell you a story of how I got into something. It is interesting.

I spent time with a former Member who was my dearest friend,

Bill Emerson. We used to cross districts. He was a Republican. I

was a Democrat. We always made it a point, if I went to his district, we would go to something special, a laboratory or some Federal installation. If he came to mine, we would do the same.

When I was in Missouri one time, he was very proud of the

USGS facility that is somewhere in Bill’s old district, and we spent

the day there. It was very enlightening, and it could perhaps give

us some guidance here, because I just heard the chairman mention

whether or not we could do something.

When we were mapping the United States some 20 or 25 years

ago, maybe 30 years ago now, of course, the Congress had to authorize the mapping. It was interesting that an interesting question arose that exists all the time when we act here in Congress,

whether this is a Federal question or a State question. There was

the contention that they wanted to have a Federal map of the

United States, but ultimately Congress elected to appeal to States’

rights and authorized to pay for a map that would be awarded and

built by the States, and they did such.

Members may not know this, but when they completed all the

surveys of the United States and they went to reassemble the

United States, it did not fit. Quite frankly, all the information that

was compiled in the lower 48 States just did not come together. We

had to redo the situation at great expense, and that is a tendency

that we have to anticipate here. If you are going to do something,

we should probably get involved in the Congress when we are authorizing but be very certain that we analyze out some of our philosophical positions that can and do cause havoc.

Now, as a result of that, I have been very involved in GIS, both

using it for government planning and structure. I have found that

we are on that same course again, that is in the Federal Government. In almost every department and bureau they are, rather

than having a central repository for GIS information, whether it be

the Library of Congress, the Department of Congress, I don’t care,

some single agency that is responsible for standardization and for

pulling this information together and to making it available, every

29

department in every bureau of the government has their own little

GIS system that they are working with and, unfortunately, a total

lack of standardization.

Now, I am certain in my own mind standardization should not

be established by government fiat and government action alone,

and they are well on their way to coordinating both the Federal

Government and the private sector in developing standards. But

they are—that is extremely important.

I am involved with areas now that we are trying to determine

are we going to be doing the GIS system down to an accuracy of

every 3 feet on the surface of the Earth, every 10 feet on the surface of the Earth, every 30 feet. There are all different measures,

different expenses involved. But a great deal of the limitation is

what this information can be used for and the quantitative savings

that will result therefrom.

One of the things I would call your attention to just think about

it, we have over there in some of the black areas of the government

capacity through satellite use to have tremendous efficiency in

siting and locating materials on the face of the Earth with great

accuracy. It is, to my knowledge, that the private sector is spending

hundreds of millions if not billions of dollars to duplicate that very

service that exists right now.

We would make tremendous strides if, one, we freed up some of

that information. All it takes is the attention of saying that it is

not so radical a secret that it has to be contained anymore, because

they can do it in the private sector, but, rather than duplicate that

expense in the private sector, actually open up those areas.

I can tell you just in the area of land reclamation and water

treatment in this country we are talking about the capacity to save

billions of dollars in just opening up that technology, taking and

use what we have rather than reconstructing a commercial-identical force. But even worse than that, one that has no standardization.

So I think what you could do in management is work to make

sure that we find central information sources, then work with the

private sector to standardize and see that we are not having

mismatches and wasting our money and our time that can’t later

on be put together. It would be a tremendous saving just to begin

with, and I could offer any information I have. I am very well connected in the GIS system, the private sector that has been doing

tremendous work in this country. If we could just pull the government into it, it would be a phenomenal advancement we could

make.

Final suggestion we would make—I am taking upon myself as a

member of the minority to make these suggestions to a new administration, but something I have been trying to get some presence

to do for a long time in the Congress, we have a unique opportunity

right now at the beginning of this century to reexamine the structure of the Federal Government. And with at least three very vital

former Presidents still in existence, we potentially could use their

insight to help us restructure to be a more functional executive

branch of government.

But please don’t stop there. Let us have a Hoover Commission

to handle the Federal bureaucracy and the Federal executive

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branch of government. But then let’s get the Congress to contemporaneously be working with them so that our structure fits your

structure.

If we want to be efficient, rather than taking individuals like

yourself and having you come up here to 8 or 10 committees to talk

about the same nonsense, we really only need you one time with

the proper function of the committees with the departments of government. It can’t be done in a slow period of time. But if we pin

the model time to year 2008 when we don’t know who the new

President will be but certainly it will be a new President, but we

could go about reforming our government and reshaping our government in a more efficient, effective manner that would save time,

save money, speed up processes, and also put it functionally more

organized, hopefully, to serve the people better.

You know, I think we have that opportunity. I would suggest to

the new President that this may be something that isn’t sexy and

isn’t too politically important in a contemporary sense but could be

politically contributing in a great sense if we took the opportunity

at the beginning of this century and feed on that possibility of getting this government organized better so we know how to have the

interaction occur.

Mr. BURTON. Thank you, Mr. Kanjorski.

Did you have a response?

Mr. DANIELS. Well, I will take the idea back; and it ought to be

viewed seriously by whatever means. It is a great time for the Federal Government to examine, and each of its branches, whether it

is properly configured. Because we all know that, in many ways,

it is not. I like the idea of testifying electronically, if we could work

that out.

I am glad to post my comments on the Web site, and every committee can have them there.

Mr. BURTON. The one thing we have all noticed today, Mr. Daniels, is that you are a very, very good listener.

Mr. Gilman.

Mr. GILMAN. Thank you, Mr. Chairman; and thanks for arranging this birthday celebration by trying to reduce paperwork in the

Federal Government.

I recall when we first had the first hearing on reducing paperwork, it goes back a number of years, the committee issued a 400-

page report on how do we reduce paperwork. I hope we don’t do

the same in this hearing.

But I want to commend our Director, Mitch Daniels, for attacking a lot of these problems. I see he has touched on the farm service area, USDA, international trade data, simplified ways of reporting systems, SEC filings. I hope we will take a look at court paper

filings, and also licensing bureaus throughout our country have

massive amounts of forms that they require to be filled out.

But I also, in looking ahead at some of the testimony coming up

from Microsoft, they are talking about some areas that I am not

familiar with—hypertext markup lag and hypertext transport protocols, XML transformers, how applications talk to each other. Are

you familiar with all of those, Mr. Daniels?

Mr. DANIELS. Oh, intimately, Congressman.

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Mr. GILMAN. Certainly I don’t know if the committee is, but it

sounds like we are on the verge of getting into some very highly

technical areas that could save us a lot of paperwork and a lot of

money up the road, and we look forward to working with you.

That is the extent of my comments, Mr. Chairman.

Mr. BURTON. Thank you, Mr. Gilman.

We now go to Mr. Davis, who has been very involved in the hightech area for a long time as well as politics.

Mr. TOM DAVIS OF VIRGINIA. I am just happy to be here to celebrate your birthday as well. We appreciate Mr. Daniels being here.

I am going to be quick, Mitch. We have got a lot of questions that

I think have already been covered in here, and we have a couple

of other panels. Let me just say we have enjoyed working with your

office. We will continue to on a number of issues.

I just want to say how much I appreciate your candor in assessing the Federal agencies’ GPEA compliance thus far. I also want

to applaud your decision to support the new associate director for

IT and e-government and the President’s commitment to creating

a citizen-centric government.

In a hearing with my subcommittee, a hearing we held in April

on the role of State and local CIOs, one point was raised that relates to the scope of electronic government in the context of the

Federal Government.

Now in local government we do kiosks, and citizens can call in,

but the Federal Government is a little bit different because there

are more interactions between governmental agencies than between the Federal Government and State governments. To what

extent does OMB’s implementation of e-government priorities account for IT planning and infrastructure that will interoperate

across all of these areas—citizens, business, interagency, governmental—instead of just one?

Mr. DANIELS. All very, very important. The interagency issue is

a big one. As I mentioned earlier, even within agencies we have

major conductivity and interoperability issues.

Internally, I am pleased to say that—at least I am told—that

substantial progress is due in the near term in linking first gov,

which is meant to be the central Web site of the Federal Government, to thousands of local governments, many of whom are far

ahead of the Federal Government in this area. I am told this is a

task that on which some real progress is imminent, and we will

work to make that so.

It could be that we can break some logjams or at least open

much wider accessibility by sort of leveraging the connections that

citizens already have convenient to them locally or at their State

level simply by making the appropriate linkages.

Congressman Kanjorski made a number of important points. But

I guess one that really sticks with me is that, my view, anyway,

sophistication in systems equals accessibility and simplicity. And

just as an amateur at this, as a veteran of making some mistakes

made in business and elsewhere, I will be very, very skeptical of

sophisticated systems that only a handful of, you know, the anointed can operate. I trust that the people who will follow on other panels fully understand that and much of the genius that they bring

to this subject really comes from making, through the most sophisVerDate 11-MAY-2000 10:25 Feb 12, 2002 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 C:\DOCS\77192.TXT HGOVREF1 PsN: HGOVREF1
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ticated tools available, systems which any of us, even I, can manipulate easily. So—— Mr. TOM DAVIS OF VIRGINIA. Again, I appreciate the proactive

role you are taking over there. I look forward to working with you.

Mr. BURTON. Thank you, Mr. Daniels. I have known you for so

long, I just feel I ought to call you Mitch. I knew you when you

and I were both young. You still are.

Let me just say, thank you very much for being here. We really

appreciate it, and we look forward to working with you to try to

solve some these problems. As I said before, if there is anything

legislatively that you think we ought to undertake to help you, just

give us a call.

Mr. DANIELS. Thank you, and thank the whole committee.

Mr. BURTON. Our next panel, we would like to welcome to the

table Sue Bostrom and Curt Kolcun. Sue is from Cisco Systems and

Mr. Kolcun is from Microsoft, two of the leaders in this industry,

and we are anxious to have you give us the solutions to all of our

problems.

We normally swear in witnesses, but I don’t think today it is necessary. So we will just start with Ms. Bostrom and ask if you have

an opening statement you’d like to make.

STATEMENTS OF SUE BOSTROM, SENIOR VICE PRESIDENT OF

THE INTERNET BUSINESS SOLUTIONS GROUP [IBSG], CISCO

SYSTEMS; AND CURT KOLCUN, E-GOVERNMENT DIRECTOR,

MICROSOFT CORP.

Ms. BOSTROM. Yes, I do, Mr. Chairman.

Thank you, Mr. Chairman and members of the committee. I am

Sue Bostrom. I am the senior vice president of the Internet Business Solutions Group at Cisco. First of all, I would like to start out

and thank you for your support and commitment and focus on this

important issue of how e-government initiatives can be accelerated

across the Federal Government.

I will make a short statement, but the full record of my statement is on file with the committee.

In terms of some background, over the last 6 or 7 years at Cisco,

we have used the Internet to really transform the way that we do

business both in terms of employee-facing applications, our supply

chain, customer-facing applications, really across the entire way

that we operate as a company; and what it has resulted in is a phenomenal bottom-line impact for the corporation. Last year alone,

we saved approximately $1.4 billion on a revenue base of $18 billion. In the process, we also increased customer satisfaction by over

25 percent.

Over the last few years, my team at Cisco has met with about

75 percent of Fortune 250 leaders, CEOs as well as leaders from

government organizations, both here in the United States as well

as across the globe. What has been interesting is that, while 3 or

4 years ago it was typically the CIO or the network manager, network director that was interested in what technology could do, now

we are finding that it is business and government leaders that are

interested in what technology can do to transform the way that

they operate; and, in fact, over the last 6 months we have had over

300 of these folks visit.

33

Other private sector companies beyond Cisco are also seeing

what the transformations of the Internet can do. I think many of

you are probably aware of Jack Welch’s comments at GE is about

how the Internet is now on his list of one, two, three and four top

priorities for the company; and he is expecting a $1.6 billion bottom-line impact for General Electric alone.

What we have seen at Cisco is that the way—one of the ways to

think about the possibilities of the Internet, in addition to improving service levels for citizens or constituents or customers, there is

also the opportunity to have this return on investment. We found

that there are models that can be used, whether you are looking

at what it costs to process a travel and expense report going from

$50 per expense report to $2 or whether it is the entire process of

how you manage a complete process across the organization. There

are significant opportunities to have direct bottom-line benefits. We

have seen this both in the private and public sector.

One of the public sector examples I like to use is what we have

seen in the State of Colorado where Governor Owens has really

embraced the Internet as a tool to link agencies across the State.

They took over 700 licensing and permitting operations and combined them to have a single face to the citizenry. Now, what has

been required, of course, is a strategic plan. They also brought in

an outside private sector CTO for a period of time, and they drove

coordination across 20 different agencies, which is now resulting in

about a $15 to $25 million bottom-line impact for the State and,

of course, taxpayer savings.

I would like to suggest that, based on what we have seen at

Cisco and some public sector organizations, there are about five

key success factors that I believe could be very helpful in helping

the Federal Government accelerate the initiatives already under

way.

In order of priority, the first one is very strong, visible top-down

leadership. What I mean by this is both the Congress as well as

the administration as well as agency secretaries. While I think that

in both the private and public sector we like to believe that is all

the issue or opportunity of the CIO, in fact, to transform some of

the processes that you were referring to earlier it really requires

an agency secretary and the entire staff there that gets behind the

redesign and the reorganization opportunities.

The second major key success factor is around budgeting and

funding and ensuring that there are mechanisms that can facilitate

flexible and fast funding of Internet initiatives. With the speed

with which technology and applications are changing, the idea of

committing to a plan that could be 3 to 4 years out is somewhat

concerning in that maybe in a few months there could be applications that the agency would want to take advantage of.

The third component of this is around accountability, and, again,

who is held responsible. What we have seen is that business or

functional leaders are really the folks that need to drive the fundamental change within the organization, and those are the people

that we have seen from our experience are the ones that should be

held accountable with the IT executives.

Fourth was a point you have been mentioning quite a bit around

enterprise priorities and architecture. I think that we have seen

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the successful organizations almost have an approach of where the

CIO or the chief technical officer is almost like a benevolent dictator when it comes to setting enterprise standards across the organization. You might want to think about it like a highway and cars,

where you want that chief technical officer to be responsible for

what the highway looks like, how large it will be, what the standards will be, allowing each one of the agencies or functional owners

to build cars so whether it be a Volkswagen or Ferrari it can scale

on that highway infrastructure.

The fifth point is something that we refer to at Cisco as ruthless

execution against these initiatives. It is very possible in the Internet age to have 90 to 120 projects and determine what is working,

what is not working and make very aggressive changes. Many of

the organizations and customers that I talk to may not feel comfortable with the word ‘‘ruthless,’’ and they have tried to suggest

terms like ‘‘relentless,’’ but that actually means something quite

different, as I am sure you all know.

So the point of saying what are the projects, how can they be implemented, what’s working, what is not, and putting the timeframe, the speed which is possible on the Internet into some of

these initiatives across the Federal Government would be a significant advantage.

So, in summary, I think that you do all play very significant

roles in terms of helping to break through some of the perceived

barriers and bring together some of the silo thinking that is natural in terms of this organizational structures that currently exist.

The opportunities of the Internet are significant, whether it be

within an agency or within this House itself or within your own administrative functions of your office. We at Cisco look forward to

seeing more examples within the Federal Government’s base, and

we stand ready to help in any way that we can. Thank you.

Mr. BURTON. Thank you, Ms. Bostrom.

[The prepared statement of Ms. Bostrom follows:]

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Mr. BURTON. Mr.—I want to make sure I pronounce that correctly—Kolcun.

Mr. KOLCUN. Good morning, Chairman Burton and members of

the committee. I am Curt Kolcun. I am Microsoft’s e-government

director for Microsoft’s government sales organization. In my role,

I am responsible for implementing Microsoft’s e-government strategy with Federal as well as State and local government customers.

Thank you for this opportunity to appear before you to discuss

Microsoft’s e-government vision and how Internet standard technologies are reshaping business and governments around the

world.

E-government is a deceptively simple term to use to describe

something remarkably broad. Essentially, e-government is about

doing the business of government better, more efficiently and more

effectively.

Microsoft appreciates the responsibility government stewards— particularly those who make spending decisions—have to taxpayers

to spends tax dollars wisely and responsibly. Which problems government chooses to address and how government addresses those

problems are questions for public debate that will ultimately be decided by elected officials at all levels of government. But there is

no question of whether or not government ought to do its business

efficiently and economically, and this is where e-government has so

much to offer those serving in the public trust.

A revolution is upon us. Revolutions are a way of life in the computer industry. Only 20 years ago the world was in the mainframe

era. Few people had access to or used computers. The PC, the

graphical user interface, and the Internet, though, transformed the

personal computer into a mass-market product.

Within this information revolution, there is a transformation

under way for governments as well. The first phase of this revolution was initially focused on government agencies and organizations creating a Web presence with read-only content and organizational information. Today, we are in phase two, which began when

some government sites made simple forms available online.

But we are moving to a final phase of e-government transformation and one in which the greatest opportunity lies. That is

the digital transformation phase. It is in this phase that governments will be able to interact with their customers by accepting

electronic forms, information requests and payments from the Web

via PCs, wireless handheld devices, via telephones and on Web-enabled TVs. In this phase, the digital economy will be represented

by new constellations of computers, devices and services all working together to deliver broader, richer solutions to everyday challenges.

At the heart of the digital transformation phase is a new language for the Web, already widely deployed, called eXtensible

Markup Language [XML]. XML is an open industry standard managed by the World Wide Web Consortium. That is, no company

owns it, controls it or licenses it. Just as the Web revolutionized

how people talk to applications, XML transforms how applications

talk to one other.

But what is more important than the technology itself is how

government businesses and their customers will benefit from it.

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The industry is creating a new type of software that use XML to

provide Web-based service that will enable consumers to receive

and act on information any time, any place and with any device.

To illustrate the power of XML Web services, one can consider

the multiple interactions with government new homeowners might

face. They might change their address, register their car, register

to vote, set up utilities, ensure government benefits follow them,

announce their presence to the new tax jurisdiction and enroll their

children in school. These services are independently managed by

various government agencies and public utilities.

Now imagine if each of these government agents were to use

XML provider service and instead of having to repeat that same information at multiple government agencies on multiple forms the

new homeowner simply enters her new address once and the relevant government agencies and utilities will have access and act on

that information securely, offering choices where appropriate.

Today, government services are provided through a variety of

channels including retailers, banks and the post office. The government service network that has evolved to reach citizens through

multiple channels in the physical world is instructive on how government should reach citizens in the virtual world. Somebody who

banks over the Internet should be able to pay their bills and taxes

through their online financial institutions. Somebody who buys

their fishing gear from an e-commerce site should be able to buy

their fishing license at the same time from that same Web merchant.

Citizens can interact with government not only through government Web sites but on e-commerce sights or public portals such as

Yahoo, AOL or Microsoft’s MSN. It is in the government’s interest

to reach citizens through as many service provider channels as possible. Public portals can reach as many citizens in 1 day as a government Web site can in a month or more.

As an example, the United Kingdom Cabinet Office recently embarked on a groundbreaking new XML government gateway project

to deliver secure Internet transactions to its citizens and businesses. Let’s say that a Briton needs to send a Value Added Tax

form to the government. He would simply use the VAT application,

fill in the form and hit the send button. The information is electronically signed and relayed to the government gateway which authenticates it and redirects it to the appropriate Customs and Excise system.

In summary, there are two things we should do to reach the full

potential e-government has to offer in the United States. First is

adopt XML as an integration standard for government computer

systems; and, second, make government services and programs

that citizens and business rely on available through multiple Webbased channels.

Microsoft’s e-government vision is to enable the public sector to

lead the information society by providing it with great software to

deliver services that can be accessed any time, anywhere and from

any device. Working within public-private partnerships and in consortiums, Microsoft aims to ensure that its solutions and those of

its partners are able to empower citizens, businesses, government

employees and elected officials.

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Thank you, Mr. Chairman and members of the committee.

Mr. BURTON. Thank you, Mr. Kolcun.

[The prepared statement of Mr. Kolcun follows:]

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Mr. BURTON. Let me start off by asking you, Ms. Bostrom, you

said you need a benevolent dictator, or words to that effect. So I

presume what you are saying is that at the executive level in government for the executive branch that you have to have is somebody up there that is responsible, who can dictate to all the agency

heads and department heads this is the system that we are going

to use, approach we are going to use, and you all have to follow

it. Otherwise, you are not going to have the kind of coordination

that you think is necessary, is that correct?

Ms. BOSTROM. Yes.

What I was referring to was there is—as I mentioned, there are

almost two levels of technology. One is the underpinning infrastructure that is required. So that may be the data base, it could

be the network connectivity, it could be the legacy systems. And I

think that what Director Daniels was talking about earlier is that

there needs to be some level of standardization that is established

so that various systems and agencies can talk to one another.

Even with standardization at that level, there is still quite a bit

of flexibility and autonomy that can be allowed then at the agency

level or at the functional level. Because, based on the standards,

the data can communicate with each other. So at that base level

of standards it usually does require a decision on what those standards will be.

And the word benevolent was very explicit there because typically the way this is approached in the private sector and also in

some public sector environments is a group of individuals gives

input as to what might be required, and then some final decisions

are made. So it is actually quite collaborative, but at the end of the

day there are decisions that are adhered to.

Mr. BURTON. I might just say that I know that Mr. Daniels is

gone, but whatever recommendations both of you have for a basic

approach to dealing with this problem of governmentwide we will

submit to them for their perusal; and, hopefully, they will take that

to heart.

You, Mr. Kolcun, were talking about the UK gateway project;

and that was, I am sure, a major undertaking. The UK government

is a lot smaller than the government of the United States, but I

presume that the approach that you took would be a similar approach to the U.S. Government. Can you tell us a little bit about

that, the difficulty that you encountered in dealing with their government and how that would translate into dealing with ours?

Mr. KOLCUN. Certainly. You are correct, Mr. Chairman, that the

government in the UK, their system was designed to support about

60 million citizens. Their approach in looking at how they would

interface to the existing legacy of the older systems that were there

within their various departments was to standardize on XML

through their government organization through what they called

an electronic government framework and interoperability framework that received input from all the agencies and from all the

CIOs to define the XML interfaces to the existing systems that

they had.

Their approach was, rather than rearchitecting or replacing the

existing investment that they had in technology, they would use

the secure gateway that communicated via XML with citizens

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through public portals as well as through business and applications. So this gateway, run through the office of the e-envoy, manages these transactions; and they approached it from the standpoint of being able to facilitate interaction between the existing

systems that were there and securely exchanging data through this

gateway using the XML technology that I mentioned in my testimony.

Mr. BURTON. So I gather from what you just said that our government might be able to utilize a lot of the technology that they

already have by this gateway approach that you are talking about

where you could take the new technologies and link them in, is

that correct?

Mr. KOLCUN. That is correct. The XML technology will allow for

the access to those legacy systems. Really, the effort is opening up

that back-office data and make it available to the front office. So

through efforts and through discussions that we have started with

the XML Working Group of the Federal CIO Council, this has been

a proposal that we have provided for government to move forward

and to open up communications between the existing systems that

we have today without replacing them.

Mr. BURTON. Well, that is new information for me, because I

thought we would probably have to replace a great deal of what we

already had.

They had a target date of 2005 over there, and I guess that is

achievable goal. We have a target date of 2003, and we are not

anywhere near there. Do either one of you have suggestions on how

we can meet that goal? Is that a realistic goal?

Why don’t you start, Ms. Bostrom.

Ms. BOSTROM. Well, I think that, based on our experience, I

would always suggest an aggressive goal is always a good goal.

I believe that one of the factors that I think there was quite a

bit of discussion on a little bit earlier was what do you target first

and what really makes sense to put on the Web, etc. So what I

think would be most effective would be to very clearly establish the

top priorities.

So if you said that by 2003 these either key transactions or key

interfaces, whether they be government agency to employee or to

citizen, our top priority is where we are going to get the greatest

impact in the shortest period of time and let’s strive very aggressively for that by 2003. I think that would be a very achievable

goal and would demonstrate success that could then be rolled out

more aggressively across other groups that were not impacted as

dramatically in the near term.

Mr. KOLCUN. I would say, as to Ms. Bostrom’s statement, that we

see the same thing in the UK government in the effort in the work

done to look at quick wins and to analyze the systems we have

today that will have the most impact on the citizen as far as their

interactions with government. I think that by selecting pilots and

working with progressive States, Colorado, the State of Washington, the State of Pennsylvania, who have some systems in place already, I think that we can quickly do this.

I would point out that the e-government gateway was developed

in 15 weeks of time with about 50 developers. So the technology

has evolved to allow us to do these things quickly; and that allows

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us to get these quick wins, demonstrate success and move forward

in a structured fashion.

Mr. BURTON. Fifteen weeks.

Mr. Kanjorski.

Mr. KANJORSKI. Before we get to that on the Federal Government, let me say some distinction I see between the UK and the

United States is different layers of government. We have 50 States

in between that they don’t have.

Second, I don’t know if they have resolved the security problem.

But we are still wrestling over that as to what level of security we

are going to go to; and I think our intelligence agencies, both the

CIA and the FBI, want to constrain to what level we go to so that

they can utilize this information and intercept it.

So doesn’t that bring us to a forceful philosophical argument that

the country has to undergo as to what information should be made

available to intelligence agencies and what type of protection can

we put in place or shall we put in place? And isn’t that a decision

under our system that constitutionally has to be made by the Congress?

Mr. KOLCUN. Sir, I would address that.

I agree that security and privacy are key points to e-government

as well as government in general, and they continue to be. In the

UK, they decided on an implementation of a public key infrastructure with digital certificates. And I think the determination for

government to look at is determining what level of security need

be applied for the type of information interaction that the citizen

or consumers are doing with the system itself.

Mr. KANJORSKI. As I understand, we have not agreed to go to the

amount of security that Europe has accepted as a standard. The

United States wants, our agencies want a much lower standard so

that they can exercise their inherent right as they define it to

intercept communications between citizens and citizens and the

government. Is that not correct?

Mr. KOLCUN. I am not familiar with that, sir.

Mr. KANJORSKI. I don’t want to appear to be against it. If I were

young again, I would hope to be engaged in your type of activity.

It offers tremendous efficiencies and growth of wealth and protection of people’s rights if we do it right.

But I am trying to point out some of the frustrations on this side

and in the Congress we get, one being that I had just recently gone

through a hearing with securities commissions to the 50 States.

And for stock fraud, for instance, in this country we still don’t have

a single repository of information on individuals that commit intrastate fraud. There are some frauds committed, and the same individual goes to each individual State, and some have practiced in 13

and 15 States. And any State in the Union can’t find out that they

have been prosecuted and have provided that.

Now that necessitates standardization and clearinghouse operations that aren’t very sophisticated really, but the fact that we

don’t have them raises the question why. And I really think it is

an argument—two things, one, privacy and, two, that jealousy of

States’ rights as opposed to national standards and national rights.

It seems to me the Congress and the people have to engage in that

debate and get over it rather quickly.

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Whereas in the UK they have had the debate. They have decided

they trust their government. They decide their government will impart a standard that is sufficient to protect people’s privacy, and

they have moved on. Here, every day that issue comes up in committee hearings or on the floor; and we really haven’t developed a

philosophical standard consistent in the country to allow you all to

move ahead and put in a system.

But I am worried about doing partial things that can’t complete

the action. And in testimony you said to try and define something

that is reachable. I can see some areas that we could do that with,

probably cause some efficiencies in government but wouldn’t necessarily allow us to have the opportunity to have a superstructure

in place to really move ahead with what we are all hoping will be

a tremendous e-government facility in the United States of a highly

sophisticated nature.

I am just wondering whether or not is it up to your companies

and your industry and your professions to come forward and start

shaming the Congress and the American people into addressing

some of these political and philosophical issues that no longer can

be put under the rug and ignored but must be faced, decided upon,

and then moving out from there. Other than that, aren’t we sort

of just skating around hoping to do little things but not in context

and not comprehensively?

Ms. BOSTROM. Well, Mr. Kanjorski, I believe that there is quite

a bit of truth in the statement that you make. I believe that the

challenge that the Federal Government faces or the public sector

faces here in the United States is very similar to similar challenges

that are faced in the private sector, one being that there is almost

simultaneous initiatives that must go on, one area being the rearchitecture of the things that you are describing, the data bases,

and combining information. And many of those are philosophical,

longer term decisions that must be made.

At the same time, though, there is the opportunity to perform

initiatives and take on initiatives that will begin to offer quick

wins. What I found in the private sector is that oftentimes those

quick wins can accelerate change in that core rearchitecture. Because, as you see what is possible, whether it be private sector organizations like Cisco or Microsoft or whether it be the citizens,

they begin to see what is possible and begin to help accelerate the

architectural or structural, philosophical decisions that need to

occur.

So my thinking would be that there needs to be simultaneous action at both levels, and I think for any one situation what ultimately drives the kind of transformation I think you and I are hoping for I think time will tell.

Mr. KANJORSKI. Yes. And I just make the comment that the difference between the private sector and government is that the private sector is politically an authoritarian dictatorship. That is why

it gets done. The CEO says it shall be done, and the implementation gets it done.

Unfortunately—or fortunately—government is a democratic process—that could be a bad quotation—and it makes it much more difficult.

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But what you are suggesting, as I understand it, is for us to

identify something that can be rather quickly resolved and handled

with your new technology that will create the dawn to create the

political sympathy both in the citizenry and in the Congress to

think about maybe appointing an e-government czar to help us, but

under constraints, but building on one win or several wins and successes that will trust the authority to go there until proven otherwise to start implementing the entire system. Is that what you— taking care of the different structures of the private sector?

Ms. BOSTROM. I think there needs to be a mechanism, whatever

it is, that helps to establish these standards. In addition, there

needs to be accountability, whether it be at the agency level or otherwise, where the agency heads or functional heads are being held

responsible for helping to drive these initiatives. So not a central

point of control from that perspective. But I think that could certainly be helpful in leveraging a lot of the good work that has already been done within agencies and accelerating more work to

occur.

Mr. BURTON. We have to go to Mr. Davis. He has a luncheon. Mr.

Davis.

Mr. TOM DAVIS OF VIRGINIA. Thank you.

Let me ask both of you, from the work of the full committee staff

and my staff have done in examining the progress of the Federal

Government with respect to implementing the GPA and thinking

outside the traditional stovepipe information manage the structure,

the progress of agencies in implementing the GPA as the first

phase of an e-government we think is uneven at best. Would you

give me a private sector perspective on what would be the preliminary steps that any organization, including the Federal Government, would take to achieve the cost efficiencies and improve services that have been realized in the business world?

Start, Mr. Kolcun, with you.

Mr. KOLCUN. OK. I think that some of the things that we have

talked about, Congressman, already are the support and—the management support for looking at the process. It is one thing to be

able to place a form online, but that form represents a process, and

you have to make sure that when we look at this form and put

these forms online that we are also analyzing the process. What is

the process? Is it a necessary process?

I know at Microsoft when we moved—we use the term ‘‘eat our

own dog food’’ when we use our own technology to change. When

we moved our systems online, the chief executive of our company

was intimately involved in looking at the process and questioning

the process to find out if it was involved and then applying technology accordingly.

I think that at the Federal level we need to really elevate the

CIOs to be able to do that and look to that organization to be able

to help and be tied to the strong management organization to be

able to move these initiatives forward.

Mr. TOM DAVIS OF VIRGINIA. OK.

Ms. BOSTROM. Congressman Davis, I think the approach that I

might suggest in an agency that isn’t moving quite as quickly as

one might like, I would say first is establishing what the top priorities are. By that I mean, in a quite simple way, we talk to the citiVerDate 11-MAY-2000 10:25 Feb 12, 2002 Jkt 000000 PO 00000 Frm 00061 Fmt 6633 Sfmt 6633 C:\DOCS\77192.TXT HGOVREF1 PsN: HGOVREF1
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zens that the agency serves. I would talk to the employees, and I

would find out what are the two or three key things that really

make it difficult to do business with that agency or to be an employee within that agency. And then I would prioritize those initiatives based on the ability for the Internet or Internet capabilities

to make the difference there as well as how easy they are to implement. So, in other words, how many philosophical debates need to

occur before progress can be made?

Second, I would hold the accountability with the functional executives inside of that agency and create an IT functional partnership so that the people that are required to change the process

have skin in the game to help make it happen and understand

what the returns can be for their organization.

And, finally, we put a terrific amount of emphasis on near-term

tracking and results and really looking over, whether it is 90 days,

120 days or 6 months or 9 months, what progress is being made

so that corrective action could occur very quickly.

Mr. TOM DAVIS OF VIRGINIA. Thank you. That is all I have.

Mrs. MORELLA [presiding]. Thank you, Mr. Davis.

I am sorry that I wasn’t here to hear your testimony, but, of

course, I have your written testimony. It is difficult when you have

three different committees meeting at the same time.

Spencer Abraham was speaking to us on the energy policy, which

actually ties in, because there is this demonstration program

called, let’s see, Don’t Pollute, E-commute, which is being done

with businesses where they can store up the energy that they have

preserved and sell it and keep it in the bank. I just think the idea

is great, and the District of Columbia region is part of that.

But I would like to ask you both maybe the same question. In

order to receive most government services, citizens must first provide some personal information. The idea of the government agency

sharing all of this information over the Internet with other government Web sites sounds like it might present security problems. So

I just wonder how you would respond to that. When the citizen

wants to work with government online, how do you protect their information and what control will they have to limit the way their

information is handled? That security and privacy is one of the biggest issues. I know that Mr. Davis shares that, since we have

worked on this in the past.

Maybe, Mr. Kolcun, you want to respond first.

Mr. KOLCUN. Thank you, Congresswoman.

Yes, I would point out that, as we discussed, security and privacy

are key aspects of e-government. Some of the same laws for security in the sharing of information between agencies exists today,

and those same laws would still apply in the Internet world.

I know that has been a lot of discussion around privacy and initiatives such as the Platform for Privacy Preferences, P3P, which

actually allows the citizen to determine what type of information

they would like to provide in the commercial world. So as a user

I can determine and set preferences on my computer to say that

I want this Web site to get this type of information or I don’t. And

if I access the site that tries to get that information, I will get the

warning to say that it is trying to get that information, and it won’t

allow that to happen.

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From the government perspective, the issue of privacy also needs

to be included in privacy statements that we have today on our

government Web sites. And the point I will make, as far as government being able to monitor the sharing of information, is that, from

the technology perspective, we will be able to apply audit controls

to that information in ways that we have not been able to in the

paper world.

So I would say that the existing laws and regulations we have

will be able to be applied more efficiently and more effectively with

Internet technology.

Mrs. MORELLA. That is if we implement the current laws that we

do have, and I think that has been one of our difficulties with the

Federal agencies.

Ms. Bostrom.

Ms. BOSTROM. Congresswoman Morella, on the security issue, I

believe that, like you, I have concerns about the feelings of citizens

in terms of providing information online. There is certainly the

technology that can ensure that citizens will feel that the information they have provided is secure and that will only go to certain

Web sites. But at the end of the day what I think is required is

education around what is available, what is possible.

Referring back to the point that you made, Mr. Kanjorski, that

you made earlier about the comfort level that the average person

has with technology, I think it will require some education so that

individuals will know that when they provide information exactly

where does it go. I must also say, though, in the paper world oftentimes you provide information and you have no idea where it goes.

So I think that same form of education will be required so that people understand that the technology is in fact providing them with

greater privacy and security than in some cases they may have had

in the paper world.

Mrs. MORELLA. Thank you.

I will now defer to Mr. Kanjorski for another round of questioning, if he has any.

Mr. KANJORSKI. Let me ask a question. Something did disturb

me. Most recently, within the last 2 years I think, one of our national core manufacturers inserted a chip in an automobile that

kept track of where the automobile was and the processes it was

going under, supposedly for better engineering purposes, to have a

sample test, but unbeknownst to the buyers. I am sure it shook up

some people that found out that their activities could being traced

that thoroughly with just the addition of a very cheap chip and

that in fact it was monitored and therefore their information or

their privacy was in some way invaded unbeknownst to them.

I think there are enough stories out of that happening even in

the private sector, that adding on the natural suspicion of government and the black helicopter conspiracy that some people have of

government that I agree with you that if you could undertake that

as a corporate contribution to the U.S. Government to really educate the American people that would probably be the greatest contribution you could make.

There are a high number of people in this country that are fundamentally somewhat ignorant of new technology and the use of it

and even the potential use of it but in that ignorance can only

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imagine or apply their wildest imagination. Therefore, in protection

of what they consider a very important right, and I do, too, their

privacy, they’d rather have it all.

They are a large segment of our population we have to deal with

and have an obligation to be fair with in implementing and passing

laws. So, if I had my way, I think the great contribution to the government has been made by C–SPAN. If people can at least see

what we do, make some judgments of how ridiculous we are sometimes, and maybe if we had a C–SPAN of high technology, it

wouldn’t be bad. I mean, it would start raising the level, if you will,

of some people to understand, some people I am talking about are

old codgers like me that have been born and been in the generation

long enough to know and think that most of this is awfully new

stuff. I guess it is when you think about it. It can be frightening

to those who resist change or are traditionalists.

I guess I am interested in how fast we could get there, what we

could do to create that ease, that political comfort level and then

to have an understanding of whether there are functional or fundamental changes in government and organization that have to be

made. I think we need a national repository of information, as opposed to having it—I sort of analogize it to the Yucca Mountain.

Would you rather have all the nuclear waste in the Yucca Mountain or do you want it at 110 nuclear plant sites around the country? It is tough to make the decision, but the decision has to be

made. I tend to come down to I would rather have a single place

that I have to protect, rather than having to protect 120 or a number of sites.

This information is just too scattered, too unstandardized, requires too much programming to interface with the material.

I am working on a program in the Commonwealth of Pennsylvania now, on applications for welfare programs that are interactive, and I am not too impressed with the idea that they want

to take a 19-year-old program and try to update it because it has

a great deal of material in it. But in the updating of it, it creates

ever so many more likelihoods for error and mistakes to be in the

system.

I think we have to. But what does impress me is that it is interactive so that, when you work, you can ask a question and you

don’t have to necessarily read the answer; it orally can come to

you. And to the people on welfare, that is a much larger percentage

of the population that are functionally illiterate than the general

population. So at least we are taking into the consideration that

they may not have the capacity to type or even spell or punctuate

correctly and can still extract the information.

I would hope that is where government sensitivity is, knowing

that we have this generational and educational span that we have

to get over and to make it—we could do the e-world of the future.

But then those of us that are old duffers wouldn’t be part of the

world, and we would like to be part of that world.

So anything that your companies—and I have respect, tremendous respect, for both of them; if you can interact with the government some special way, make sure that we constantly change and

grow and adapt to the flexibility of that tremendous technological

change.

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One of our problems in government very often is that we set

upon this course you talk about, 5 years; by the time we implement

it, it is obsolete. It is useless and stupid and expensive, and other

breakthroughs have occurred in the meantime; but we were too inflexible either because of our bidding process and our contracting

process or implementation process to understand that.

We are dealing with a new world, almost instantaneous change

and breakthroughs and new things happening, and yet we are operating on a very slow horse and buggy, and we are having difficulty getting into the speed age. So you can help us more than

we can help you.

Thank you.

Mr. BURTON [presiding]. Well, thank you, Mr. Kanjorski.

Let me just thank both of you very much. As you can tell from

our questions probably, we are neophytes in this area, and you

folks are the experts. If you have suggestions—and I made the

same comment to the head of OMB, Mr. Daniels, if you have suggestions that you think we ought to take a look at and try to come

up with some kind of a plan to deal with this problem, we would

sure like to have it. We will make sure that Mr. Mitch Daniels at

OMB, as well as the leaders here in the Congress, can have it so

we can get into the 21st century, as we should.

We really, really appreciate—and, once again, Kevin, thanks for

all your help on this. He worked very hard on this. Thanks a lot.

Our next panel is Joel Willemssen from GAO; John Osterholz

from DOD; Norma St. Claire from DOD; and Jim Flyzik—is that

correct—Jim Flyzik from Treasury. Would you please—I am sorry;

I guess we have others here we haven’t included.

OK, 1 second.

Forgive me. Joel Willemssen, Jim Flyzik, John Mitchell, John

Osterholz, and Norma St. Claire.

Since we are going to be asking you to give testimony on what

you are doing, I think I will have you sworn, so we have it for the

record. Will you all please stand and raise your right hands? Is

somebody back there pointing a finger? Do you want to be sworn

as well.

Mr. MITCHELL. The chief and commissioned officer has asked to.

Mr. BURTON. Oh, sure.

[Witnesses sworn.]

Mr. BURTON. We’ll start with you, Mr. Willemssen. You have an

opening statement.

STATEMENTS OF JOEL WILLEMSSEN, MANAGING DIRECTOR,

INFORMATION TECHNOLOGY ISSUES, GENERAL ACCOUNTING OFFICE; JIM FLYZIK, ACTING ASSISTANT SECRETARY

FOR MANAGEMENT AND CHIEF INFORMATION OFFICER, U.S.

DEPARTMENT OF THE TREASURY; JOHN MITCHELL, DEPUTY

DIRECTOR, U.S. MINT; JOHN L. OSTERHOLZ, PRINCIPAL DEPUTY CHIEF INFORMATION OFFICER, U.S. DEPARTMENT OF

DEFENSE; AND NORMA J. ST. CLAIRE, DIRECTOR, INFORMATION MANAGEMENT FOR PERSONNEL AND READINESS, OFFICE OF THE SECRETARY OF DEFENSE

Mr. WILLEMSSEN. Thank you, Mr. Chairman. I’ll briefly summarize our statement.

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As requested, we looked at the GPEA plans for three departments and agencies—Treasury, EPA, and Defense. We found that

the plans submitted by Treasury and EPA generally provided the

kind of information specified by OMB.

For example, in its plan, Treasury pointed out the criticality of

its electronic activities in fundamentally redefining how it performs

its missions. Excluding IRS, Treasury identified more than 300 information collection processes that could be done electronically

rather than by paper.

In its submission, EPA highlighted that it was undertaking several activities to provide electronic services, including developing

an overall computer network as a central focal point for electronic

reporting and also improving computer security weaknesses, which

we previously reported on.

Regarding Defense, its plan did not include a description of the

Department’s overall strategy. DOD officials could not provide us

with documentation specifically addressing a Department-wide implementation strategy. In addition, in taking a look at DOD’s submission, we found indications of inaccurate, incomplete, or duplicative data. In those cases, Department officials agreed to followup

to correct potential discrepancies.

Speaking more globally, from a governmentwide perspective, we

see several challenges that Federal departments and agencies are

facing in meeting the goal of providing services electronically.

First, security and privacy assurances must be provided through

the use of public key infrastructure technology, especially for sensitive transactions. That will be needed very critically as Federal

agencies move forward in this area.

Second, it’s going to be important to adequately plan and implement computer network and telecommunications infrastructures to

provide the capacity and connectivity needed to support increased

electronic traffic.

Third, agencies will need adequate capabilities for storing, retrieving, and disposing of electronic records.

Fourth, agencies are going to have to implement disciplined investment management strategies to ensure that the full cost of providing electronic filing and record keeping are examined within the

context of the benefits of doing so.

And, fifth, agencies need to make sure that they have addressed

their IT human capital needs so that these systems can not only

operate effectively, but they can provide oversight of contractors developing the systems for them.

OMB is also going to be challenged in its role of ensuring that

agencies comply with the law. The plans that we looked at, that

were submitted by the agencies, really don’t provide sufficient information with which to assess the strategic activities and other

tasks expected to be performed and schedules and milestones for

completing those tasks.

Accordingly, from here on out, OMB may want to consider proposing more comprehensive agency status reporting so that they,

OMB, will have a sense, especially from a priority perspective, on

where those agencies stand and that they are pursuing the most

cost-beneficial opportunities for moving from paper to electronic

submissions.

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That concludes the summary of my statement. I will be pleased

to address any questions you may have.

Mr. BURTON. Thank you sir.

[The prepared statement of Mr. Willemssen follows:]

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Mr. BURTON. Mr. Flyzik.

Mr. FLYZIK. Mr. Chairman. First of all, happy birthday.

Mr. Chairman, members of the committee, my complete record

will be submitted. I will summarize briefly here.

I do appreciate the opportunity to appear today to discuss the egovernment initiatives within Treasury and our efforts to comply

with GPEA, and also how GPEA fits in our overall information

technology strategic plan.

I want to thank you, Mr. Chairman, and the other members for

your continued support and encouragement toward improving information technology management and reform in the government.

As many of you know, I serve as the Acting Assistant Secretary

for Management and the Chief Information Officer at the Treasury

Department. I have also served, since February 1998, as the vice

chair of the Federal CIO Council where I play a key role in the

strategic direction of the Council and the Federal Government’s use

of information technology.

At Treasury, we are making great strides in harnessing the

power of the Internet to improve customer service, mission effectiveness, and all of our operating efficiencies.

CIO Council’s strategic plan places e-government at the forefront.

The Department is aggressively and proactively developing plans

and launching new initiatives. We intend to be a leader in the Federal Government in electronic government. We are supporting the

use of Public Key Infrastructures, Virtual Private Networks,

SmartCard and Portal technology to put in place the platform to

do everything we do electronically.

As an example, we are now delivering new value to citizens,

businesses and government partners through the Financial Management Services’ pay.gov initiative. It is an Internet portal and

transaction engine that will offer a package of electronic financial

services to assist all agencies.

Services of pay.gov will allow for collections, form submittals, bill

presentment, authentication and agency reporting, all electronically. Pay.gov will help all government agencies to accept forms

electronically by October 2003.

We have an information technology investment portfolio system

which is a government-owned, off-the-shelf tool. Treasury hosts this

system for use throughout the entire government. It is a Web-based

e-government solution that supports selection control and evaluation of all information technology projects. Treasury requires all of

its bureaus to use this, and we were the first agency this year to

submit all of our consolidated budget information electronically to

OMB.

We are also the governmentwide project manager for this tool.

Over 20 agencies are now reporting the use of I-TIPS. It will support GPEA by replacing all the annual paper-based IT Planning

Call submissions to OMB.

We also hosted the Federal Bridge Certification Authority Project

for the Federal Government, which we now have operating at GSA.

The bridge allows agency public key infrastructures to interoperate

as it permits digital credentials, issued by each agency to its employees, to be accepted with trust and confidence by other agencies.

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I suggest you think of the power of that as we begin to proliferate

that across government.

Agencies will be able to perform Internet-enabled transactions,

such as credit card collections through banks, or secure e-mail between agencies with previously unattainable trust and confidence.

PKIs of five different organizations within the United States, the

Canadian Government and academia were cross-certified through

the prototype. The agencies were able to interoperate successfully,

exchanging digitally signed electronic mail messages. It will be

used by NASA, the USDA’s National Financial Center, FDIC,

Treasury, the State of Illinois, and Canadian Government for moving documents electronically.

Our Bureau of Public Debt, partnered with the Financial Management Service, Mellon Bank, MasterCard and IBM to build an

Internet-based system to sell savings bonds directly to the public.

Savings Bond Direct allows citizens to buy a savings bond on a 24

x 7 basis using a credit card. The Bureau of Public Debt sells directly to the public instead of traditional networks. The system cost

$350,000 to develop and implement, and within its first 18 months

of operation, it generated over $230 million in bond sales.

The Bureau of Public Debt’s Treasury Direct Electronic Services

allows individuals to directly manage their investments in U.S.

Treasury marketable securities, using either the Internet or telephone. It promotes self-sufficiency among 700,000 customers and

facilitates debt collection and consolidates from 37 Federal Reserve

Banks to 3. By using this system, public debt reduced the processing cost of a tender to 50 cents, as opposed to $30, to process a

paper transaction form.

U.S. Mint also has the on-line store recognized as one of the top

20 e-tailers of the Nation. I’ll defer to my good friend and colleague,

Mr. Mitchell, to talk a little bit more about the Mint.

We also operate the Electronic Federal Tax Payment System,

which is the largest payment collection system in the world. The

primary objectives of that are to reduce the filing burden by providing flexible payment choices to taxpayers, increasing speed, efficiency and accuracy of all revenue collections.

IRS, of course, has its e-file program, which continues to break

records. Our U.S. Customs Service continues to use electronic

means to get goods and products into the country, and the international trade data system, which Director Mitchell spoke about,

as a way to facilitate that.

Our Alcohol, Tobacco and Firearms now has an electronic program which will permit 630 members of their industry to file all

forms electronically securely over the Internet. They will use the

same technology to solicit, award, administer and pay commercial

vendors conducting business with ATF.

Our electronic funds payment program continues to grow on an

annual basis, and our strategic plan supports all the goals of

GPEA.

In summary, I would like to reiterate that the Department drive

to be at the forefront of electronic government extends well beyond

just GPEA requirements compliance. We are seeking to fundamentally redefine the ways we perform all of our fundamental mission

objectives.

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I would like to thank the subcommittee for the support it has

given to e-government. Without your support, we would not be able

to achieve the national success we enjoy to date. I would like to

thank the members of the committee for the opportunity to be here

this afternoon.

This concludes my formal remarks. I look forward to questions.

Mr. BURTON. Thank you, Mr. Flyzik.

[The prepared statement of Mr. Flyzik follows:]

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Mr. BURTON. It sounds like you’re doing a good job over there.

Mr. Mitchell.

Incidentally, to the Members, we have 10 minutes on the clock

on a vote. I will conduct the hearing here until we have about 5

minutes. And if you want to leave, you can leave, or you can come

back later.

Mr. Mitchell.

Mr. MITCHELL. Thank you for this opportunity, Mr. Chairman,

and members of the committee. With your permission, I would like

to submit my formal testimony and the Web site customer analysis

that we provided to the committee for the record—— Mr. BURTON. Without objection.

Mr. MITCHELL [continuing]. And briefly run through a

PowerPoint presentation which you see on the screens before you.

On the second page, you can see that back in 1993 the Mint had

many challenges, including a disclaimer on its financial statements, very few measures, and no strategic plan.

On the third page, you can see what we affectionately refer to

as our ‘‘spaghetti chart.’’ This was a legacy of no—never having

automated—excuse me, implemented an automated system across

the Mint and having a hodgepodge of nonintegrated systems with

a lot of manual processes. In short, it was not helping us drive the

strategic objectives and visions of the Mint.

On page 4, you can see that instead of—a decision was made in

1996 and 1997 that instead of spending approximately $20 million

to do a Y2K solution and not gain any additional functionality, and

stay with systems that were not delivering for the Mint, we decided

instead to start from scratch, do a requirements analysis, and go

out and select systems off the shelf with no customization that

would meet our requirements. And we chose PeopleSoft as our core

solution, along with other systems.

That system was implemented in 12 months in October 1998.

And as you can see on slide 5, in December 2000, we completely

upgraded that system and added additional functionality to it, our

system called COINS 2.0.

On slide 6, you can see that we have two upgrades under way,

one of which we will be implementing this August that will add

substantial functionality to our e-retail site. This will be our third

upgrade of the site since we implemented it. And later in fiscal

year 2002, we will be adding personnel functionality and

outsourcing our payroll processing.

Page 7, you can see that as a result of these systems, we have

eliminated all of our Federal Manager Financial Integrity Act and

FFMIA material weaknesses. We have no material weaknesses at

the U.S. Mint. We close our books every month in 10 days or less.

We have greatly improved our customer service, and our ERP implementation provided the foundation for our e-retail launch.

On page 8, you can see the statistics that are fun statistics about

the growth of our Web site in the year 2000. As Jim Flyzik mentioned, we actually had orders in the neighborhood of about $156

million that put us in the top 20 to 30 e-tailers in the Nation.

Where are we now? On page 9, you can see that we have generated record revenues and profits for the U.S. Government and

the American people. Last year, we generated $2.6 billion in botVerDate 11-MAY-2000 10:25 Feb 12, 2002 Jkt 000000 PO 00000 Frm 00090 Fmt 6633 Sfmt 6633 C:\DOCS\77192.TXT HGOVREF1 PsN: HGOVREF1
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tom-line profits, which was roughly four times our previous record

set just a few years ago. I stress, that’s bottom-line profit that goes

to the Treasury general fund, reduces the amount of debt issue,

and saves hundreds of millions of dollars.

The employees of the U.S. Mint are proud that in addition to our

customer-centric focus, we’re contributing in some small way to the

American public. Seven consecutive clean audit opinions and other

attributes you see there.

On page 10, you can see a brief summary of the most recent

macro and micro-level surveys that we conduct. We have conducted

both of these for the last 5 and 6 years.

On page 11, you can see a summary of the University of Michigan’s prestigious customer satisfaction index. Heinz absolutely

blew the rest of us away with a 90 score on the scale of 100. You

can see that the U.S. Mint received a score of 84, which equates

us with amazon.com, BMW, and others. ‘‘World class’’ is determined by a University of Michigan to be score of 80, and the private sector median is a score of 71.

You can see our scores on page 12 that we have participated and

received since 1995.

On page 13, I want to give you an example of how we have improved, yet how much further we have to go. You can see our results for the year 2000 were anywhere from OK to poor. You can

see that so far this year, we have increased tremendously, including answering our calls within 17.5 seconds.

By the way, a lot of what we do, we benchmark against the public and private sector and aspire to be the best in all of our functional areas. However, you can also see some poor results toward

the bottom of the page.

In the Web survey that was conducted on our behalf, we had

over 25,000 respondents that let us know what was well and what

was not well in terms of what they needed from us on our Web site.

You can see the good news is, nearly 80 percent rated us as excellent or very good. You can see those numbers on the next page that

follow out from the January through the May surveys.

At the same time, you can see from page 16 that there are a

number of things they both told us in terms of feedback as well as

what they would like to change that included the fact that even

though we’ve won many awards for our Web site, there are still

components of it that are not best practices.

With our August launch, we will now be able to have customer

service self-servicing on our Web. They will be able to communicate

via e-mail with us through our e-retail site and other components.

In closing, several slides I would like to give to you. Page 17,

you’re no doubt familiar with. Your leadership role, as well as the

Council For Excellence in Government, noting that 73 percent of all

adults consider e-government to be a high priority. And also the

Mint’s commitment not only to compliance, but a proactive approach to GPRA and GPEA.

Let me just say that in terms of our customer-centric focus, recruitment and retention is a challenge for us, especially as high, as

private-sector-oriented as we are. But our ultimate success will be

measured by the fact that everyone—our employees, the American

public, customers, our business partners—we want them to get evVerDate 11-MAY-2000 10:25 Feb 12, 2002 Jkt 000000 PO 00000 Frm 00091 Fmt 6633 Sfmt 6633 C:\DOCS\77192.TXT HGOVREF1 PsN: HGOVREF1
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erything they need from the U.S. Mint products and services electronically.

Mr. BURTON. Thank you very much, Mr. Mitchell.

[The prepared statement of Mr. Mitchell follows:]

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Mr. BURTON. We have to go vote. We will be back in about 10,

12 minutes. And then we will get to the DOD folks.

Thank you very much. We stand in recess.

[Recess.]

Mr. BURTON. The committee will once again come to order. We

will now hear from Mr. Osterholz.

Mr. OSTERHOLZ. Thank you, Mr. Chairman. First of all, I join everybody in wishing you a happy birthday. My son had a birthday

a few days ago. I’ll report to him that he is in very good company.

I would like to give some brief opening comments to supplement

the written statement, which you indicated is placed in the record,

and give you a better, a more broad picture, a more comprehensive

picture of what we’re doing with respect to GPEA.

To provide a functional view—and this is very critical, because

as the folks from industry pointed out, getting a functional buy into

anything that utilizes information technology is so vital today—I

have Norma St. Claire, who is the information technology senior

executive in our Personnel and Readiness community. So she is

here to provide you with a functional perspective as we walk

through this.

The GPEA report, in response to the data call, represented only

a portion of what we are doing with GPEA and related activities.

And I acknowledge, while I didn’t have cognizance of this area at

the time of the report, I have got to acknowledge the shortcomings

of that report. I went over it yesterday, and in fact it is not the

best product we could have submitted.

At the enterprise level, which really is the level that we are operating at, what we are responsible for as the Chief Information Officer of the Department of Defense is those cross-functional issues

that come as a result of the process reengineering and the integration of the process reengineering that occurs within the business

functions of the Department.

As a result of that, a lot of our emphasis is in the areas of architecture, enterprise, capital planning, and in the area of assurance,

because the way we achieve security and assurance for our transactions needs to be uniform in order not to open up vulnerabilities

as a consequence of different procedures leaving seams that, in

fact, could erode confidence with our partners on our systems.

The execution of GPEA is a decentralized affair, and it’s tied to

those directly responsible for the processes in the Department, the

business processes in the Department. And that is consistent with

the testimony that you heard in the prior panel.

Our functional process owners are responsible for process transformation. However, doing that, we must ensure the ability to electronically protect both citizen and employee privacy, the intellectual property rights of our partners—very important—and sensitive

DOD information, particularly that information that might be revealing of plans to be executed.

The Department is on a path to achieve strong electronic authentication of sensitive documents. The Department has an aggressive,

probably the most aggressive, public key infrastructure and public

key enablement initiative in the Federal Government today and is

partnering with many of our agencies.

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The Department, as such, is involved in a number of implementations to validate our steps and journey toward GPEA compliance.

These pilots and initiatives are absolutely necessary to prove that

we can properly apply—not only on a small scale, but on a large

scale, the Department has these solutions.

Before I bring you down close to the weeds, I just wanted to

point out a few things that gets to some of the opening statements,

opening points, you made earlier.

Secretary Rumsfeld has just announced the formation of a Senior

Executive Council which will consist of himself, the Deputy Secretary, the Under Secretary for Acquisition Technology and Logistics, and the service Secretaries. The purpose expressed to that is

to bring together those senior individuals, each one of which is a

captain of industry in his own right, in dealing with new ways of

doing business within the Department of Defense.

So, yes, we’re poised for the kind of leadership—looking at the

way, bringing the private-sector approach within the Department

in a way that I don’t remember in recent memory. So we’re looking

forward to the leadership that will come from that panel or that

council to kind of bridge together the islands of excellence that we

have got in the Department.

Another point that I would like to make before I bring you again

close to the weeds is, we now have, as a result of a lot of hard

work, the first enterprise IT architecture in Department of Defense

history. So we now have the ability to look across the enterprise

known as the Department of Defense and address the value of information, how hard we need to protect it, what are the interoperability difficulties associated with moving that information around

both within the Department and externally, and be able to address

the value of the capital investments necessary to move us further

forward toward GPEA compliance.

That is a major achievement, to have that enterprise architecture. We didn’t have that before. I point out that was required by

Clinger-Cohen.

Another point is, we looked at interoperability very hard. Some

of the other members mentioned interoperability more than once.

When we looked at interoperability within the Department ourselves—and title 10 was modified in 1999 to make the Chief Information Officer of the Department of Defense responsible for ensuring interoperability across the Department—we looked at the process that basically provided that interoperability.

We found that policy was 10 years old. That policy goes back to

when we may have argued about whether e-mail was a relevant

way of doing government. We have gone past that point.

So we basically have taken the entire interoperability process

down to bare metal and have rebuilt it back up, so it effectively

works in the network age and the GPEA. And the progress in

GPEA will, of course, benefit from that new process that we’re putting in place under this administration.

Along the same lines, the acquisition of our capabilities to include information technology now incorporates interoperability as a

key performance parameter. That is a technical term in acquisition

talk. But what it means is failing to meet a key performance paVerDate 11-MAY-2000 10:25 Feb 12, 2002 Jkt 000000 PO 00000 Frm 00142 Fmt 6633 Sfmt 6633 C:\DOCS\77192.TXT HGOVREF1 PsN: HGOVREF1
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rameter is cause to stop a program. So interoperability has now

achieved that importance within the Department of Defense.

So those are some of the kind of top-level things that get at the

very important and correct questions that you brought up.

Let me, if I may, take you a little closer to the weeds. We are

cosponsoring with a number of others the Federal Bridge Certificate Authority that Jim Flyzik discussed earlier. That started out

as a Navy project through the Department that was housed in GSA

and—excuse me, Treasury—and has moved to GSA for

instantiation.

That is a very important activity and initiative to us because

that allows for addressing differences among agencies from the

point of view of security and transactions. So that bridge will be

kind of a gateway in the sense of allowing us to arbitrate and deal

with security differences between partners and between members

of the Federal Government in a way that we still can preserve the

benefits of electronic business.

We are issuing SmartCards, those common-access cards that you

might hear about. Here is an example. We are, in fact, issuing

them; we have issued 25,000 to date, and we are going to be

issuing, at the end of the game, 3.5 million of these.

This revolutionizes our ability to gain access to information technology services in a paperless way. It increases our ability to audit,

as I think was brought up by some of the members earlier, the uses

of our IT to make sure that the IT utilizations are lawful and legal,

that they do not usurp resources that are needed elsewhere.

So this is a very important reengineering step where technology

is applied for the purposes of better electronic business.

We are pursuing initiatives to use PKI in the export licensing

process involving the Departments of Defense, Commerce, State

and Energy, a very critical reach-out from our point of view. That

will include 10,000 businesses.

We are making great strides toward achieving a paperless endto-end contracting process. Today, we are able to achieve 83 percent paperless. That is the capability we can get to. The 7 percent

that is beyond our reach at the present time requires us to implement the public key infrastructure [PKI], that I talked about and

also to recognize that some of the smaller business partners will

have difficulty working electronically because of the investment

necessary on their end. That is an important point that we are

mindful of. But that 7 percent, our last mile, if you will, we are

working hard to overcome.

Finally, we are moving toward electronic submission and processing of claims for payments we called e-invoicing. The target date

for that is October 2002, which is 1 year before, 1 year ahead of

the GPEA target. So we have a number of short-run milestones on

our plate.

Other than to introduce Ms. St. Claire, this concludes my comments, sir. Ms. St. Claire is here to give you a quick summary of

Personnel and Readiness initiatives, again focusing on the importance of the functional buy-in for any of our information technology

investments.

[The prepared statement of Mr. Osterholz follows:]

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Mr. BURTON. Ms. St. Claire.

Ms. ST. CLAIRE. Good afternoon. I am pleased to be here to tell

you about the way we are implementing GPEA in the DOD personnel community. The Office of the Under Secretary of Defense for

Personnel and Readiness works with all of the services within the

Department of Defense, as well as with all of the external agencies

that need to have access to DOD personnel records.

As a matter of fact, a couple of years ago, we did this report— we did this study on what the external customer base was for the

military personnel records, so that we could prioritize those areas

where we had the most problems. And as you mentioned in your

opening statement, we recognize that we do have some issues with

Veterans Affairs in being able to provide them the paper that they

need as quickly as possible.

Our goal is the elimination of redundant data capture forms and

other paperwork. And that is a critical component of our entire

business process reengineering program.

We have a Personnel and Readiness strategic plan and a Military

Personnel Management Information strategic plan. They are on our

Web site. I can give you the address for our Web site. Our entire

business process reengineering program is described there. It is

www.mpm.osd.mil. We would be happy to have you look at everything there.

We have already implemented a number of initiatives that we

feel satisfy the GPEA requirement, and they are discussed in more

detail in my written statement.

We are trying to ensure that the way we do this is smart. We

do not want to automate processes and forms that would be better

eliminated. And that’s what the goal of our business process reengineering program is. We are finding that we can eliminate a lot

of the forms and paperwork, and then we wouldn’t have to worry

about automating them. So we are trying to take this in a very

smart way.

The work that we do in military personnel impacts our entire

community, and it impacts military personnel through their entire

life cycle. Our military people, we start with when they first access—actually, when we first start recruiting them.

They come into the military. They go back and forth between Active and Reserve components, of course. They leave the military.

And we still have an obligation to them as they go out and are entitled to benefits that they are entitled to because of their military

service. We also track all of their dependents. So we have a very

large community that we take care of.

I would like to close by emphasizing that both in P&R and in the

Department, we fully support the goals of GPEA, and we have actually used this law to help highlight some of our issues and problems to help us move faster with our whole program for business

process reengineering and making maximum use of new technology. Thank you.

Mr. BURTON. Thank you.

Let me start the questioning to Mr. Willemssen.

We asked you to look at the GPEA plans for the Treasury Department and the Defense Department, and I have some questions

about both of those.

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Have you reviewed the plan of the Defense Department that was

submitted to OMB? Have you reviewed that yet?

Mr. WILLEMSSEN. Yes, sir. We did, Mr. Chairman.

Mr. BURTON. What was your impression of it?

Mr. WILLEMSSEN. We were disappointed with the lack of a strategy that would have detailed the Department’s approach to addressing GPEA. The plan, instead, was a listing of potential activities that could be electronically done, rather than by paper; but we

did not see any kind of strategy.

Upon meeting with Department officials, we again did not receive any kind of documented strategy.

Mr. BURTON. So I presume you conclude that by the goal of 2003,

they won’t be able to comply?

Mr. WILLEMSSEN. Based on progress to date, it will be a challenge for them. Setting up interim milestones would be a step in

the right direction. If the Department can lay out tasks and milestones to try to get there, that is definitely where they need to go.

Mr. BURTON. Did your staff then meet with people from the Defense Department to determine, you know, how they were going to

put the plan together?

Mr. WILLEMSSEN. Yes, we did.

Mr. BURTON. I know you have heard some of the things today

that were positive.

Mr. WILLEMSSEN. We did contact the Department to try to understand the process that they used. And, bottom line, what we

could determine is, the process was going out with the data call to

component level and then—component levels and then the data call

continuing to go to lower levels, and then the data coming back up

through the chain. And, unfortunately, we did not see any evidence

of review of what came back up; and that is when we looked at the

collection information.

It also appeared that some of the entries were duplicative and inaccurate. Upon talking with the Department on that, they agreed

to followup. And I think they can speak for themselves, but I think

they did find those types of discrepancies.

Mr. BURTON. We will get to that in just a second. As I understand it, if you saw that they were, in essence, just cutting and

pasting things that had already been determined.

Mr. WILLEMSSEN. Yes. Rather than thinking strategically about

what should be done electronically versus paper, it appeared to us,

based on the audit work we did, that it was an approach of, let’s

go out with a data call and ask people what they currently do and

what they can do electronically instead of on paper. So the data

call went out, data came back, and it was aggregated without, from

our viewpoint, critical review.

Mr. BURTON. Did you, when you were going through the process,

ever identify anyone who was responsible for implementing GPEA?

I mean, was it just nobody was responsible?

Mr. WILLEMSSEN. Well, at the Department level, I believe the

current CIO is in an acting position. And then we had a couple of

meetings with a Mr. Grant, who was in the Office of CIO, and then

several of his staff. I believe Mr. Grant’s title is e-business, e-government.

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But in terms of, I think, being consistent with Clinger-Cohen, the

accountability has to stop with the CIO and the Secretary.

Mr. BURTON. So, in essence, you didn’t really find anyone that

was?

Mr. WILLEMSSEN. We didn’t find, from a departmental perspective, somebody willing to sit and take the reins and say, this is

what we need to do from a strategic perspective, this is what

makes the most sense, as opposed to continuing with business as

usual.

Mr. BURTON. We heard what Mr. Osterholz and Ms. St. Claire

just said. But do you think they are making a serious effort over

there to comply?

Mr. WILLEMSSEN. I think oversight activities, such as the hearing

today, can make a tremendous difference in the extent to which

this is viewed as a priority at the Department. So I sense that,

even within the last 1 to 2 weeks, there has been much more of

an effort and more of a priority placed on this particular area.

Mr. BURTON. Have you done—well, of course, you are pretty

much working just on the Defense Department, aren’t you, over

there on your reviews?

Mr. WILLEMSSEN. I have responsibility for IT across the government.

Mr. BURTON. You do?

Mr. WILLEMSSEN. Yes.

Mr. BURTON. Have you found other agencies of the government

that are in the same predicament as the Defense Department?

Mr. WILLEMSSEN. Yes. The Defense Department is certainly not

alone in the challenges it faces in—— Mr. BURTON. Could we get a list of those agencies? Because what

we will want to do is—I think we ought to send a letter to them

telling them of this hearing and telling them that the Defense Department, we think, is now moving in the right direction; but that

if they don’t, they will be subject to being called before the committee, along with you, to explain why they are not moving in the

right direction to make sure they comply by 2003.

So—would you make a note of that?

So we would like to have that list so we can contact them. So

if you can get that to me, I would really appreciate it.

Mr. WILLEMSSEN. Yes, sir.

Mr. BURTON. Mr. Osterholz, we want to be fair to you. We didn’t

bring you up here to beat on you with a ball bat or anything, although I’ve got one.

I understand from what you said that there are a number of good

automation programs under way, and hopefully, they’ll produce results. At the same time, as you can see, you haven’t come off looking as well as you would like.

But you feel like you’re now moving in the right direction?

Mr. OSTERHOLZ. We are moving in the right direction.

I have to echo what Mr. Willemssen said, that the Department

is a very large enterprise. And we have tremendous responsibilities

with respect to information technology to support our core missions

of warfighting. And prioritization is a daily occurrence with us.

And I think clear prioritization is important, keeping us on the

right path.

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Mr. BURTON. Let me—with Mr. Kanjorski’s approval, I would

like to ask just a couple more questions. Then I’ll yield to you.

Who is the most senior person at the Defense Department who

is responsible on a day-to-day basis for implementing the GPEA

and electronic filing programs?

Mr. OSTERHOLZ. The Acting Chief Information Officer is Dr.

Linton Wells.

Mr. BURTON. You say ‘‘acting.’’ Mr. OSTERHOLZ. He is the Acting Chief Information Officer. He

is the Acting Assistant Secretary of Defense for Command, Control,

Communications and Intelligence. The President hasn’t filed an attempt to nominate a successor. That gentleman is not on board, obviously, and has not been confirmed yet.

Mr. BURTON. We ought to check and find out when they plan to

submit that name for confirmation.

So did the person who is currently in charge, did he review the

plan before it was submitted?

Mr. OSTERHOLZ. No, sir, I believe he did not.

Mr. BURTON. Why was that?

Mr. OSTERHOLZ. I cannot answer that, sir. I do not know.

As I said, I took cognizance of this issue. I can speculate. I took

cognizance of this issue after that had gone on. As I said, last night

and the last week, I went through this process to verify that in fact

what was discussed was substantively correct. I cannot tell you

why he did not, at what level it was reviewed. I can only tell you

that he did not review it.

It was probably reviewed at a Director’s level at the Department.

A lot of things get done by e-mail. Unfortunately, things get sent

out under the press of a time line that don’t get the review that

they require. Not an excuse, but an explanation, sir.

Mr. BURTON. But that won’t be the case in the future, though?

Mr. OSTERHOLZ. Certainly not, sir.

Mr. BURTON. OK. Good. What is that person doing on a day-today basis to move the process along?

Mr. OSTERHOLZ. Mr. Wells is the chair—is the chair of the Chief

Information Officer Executive Board, which makes the information

technology decisions for the Department. That board involves all of

the IT service providers in the Department, as well as the functional process owners in the Department, so that we have the joint

of technology and process that again was discussed in the earlier

panel. And so information technology is his primary responsibility.

In addition to that, the guidance that was put out, which was put

out under Art Money, who is the predecessor to Mr. Wells, is very

clear about—if I may just simply read the key pieces of it—new or

redesigned GPEA-compliant electronic transaction applications will

be based upon the following: redesigned business processes, again

making sure we’re not paving the cow path; relative cost benefits

and risk analysis, providing the basis for attempting to maximize

benefits by minimizing risks; inclusion of DOD privacy and information security policies and practices; again, the balance between

access, what you project, what you protect; the termination and

documentation of the chosen electronic signature alternative.

And electronic signatures are interesting in that the technology

is certainly there. Its acceptability in some cases is questionable.

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We’ve had rulings that said electronic signatures, good idea, but

send the paper anyway. And that is an important piece to look at.

And review of policies to adequately support electronic transactions.

So that’s the guidance that was given out in January of this year

to our components with respect to their GPEA activities. So there

is an active role, but it is one role among a number of things that

the Chief Information Officer does.

Mr. BURTON. Mr. Kanjorski.

Mr. KANJORSKI. Thank you very much, Mr. Chairman.

I guess this is the wrap-up panel. And I don’t know whether accolades are in order or whether we should be questioning why all

the departments and agencies aren’t in the same thing.

But let me just run through some of the testimony that I heard

and get corrections.

In the Treasury area, I understand that you think you are moving along very well and making great strides. But besides efficiencies and movement of paper, there is the thing of picking up

fraud and abuse, and particularly in tax returns.

What I can’t understand is, if we do have a sophisticated computer system operating in Treasury, how is it that prisoners can

still file for tax returns by the hundreds and receive them, direct

mail to their prisons, and we don’t have a system that picks that

type of fraud up.

Mr. FLYZIK. Yes, sir. The IRS has a very aggressive program to

modernize. The issues you are raising are well known, they are

well documented, they are well publicized. It is also well known

and well publicized, the history of attempts to modernize in the

IRS.

I perhaps was able to say in the past that was not my watch.

I can no longer say that. I am directly involved in the modernization of the IRS today. I feel real good about the progress we are

making.

We have a lot of legacy applications in the IRS that date back

a long time. And I feel happy with the fact that Commissioner

Rossotti is there. He has got an IT background. I feel we have got

a governance structure in place, we have got due diligence in place,

and we will fix those problems.

I think that most of those problems are due purely to the sheer

complexity of the legacy systems that exist today in the IRS and

the inability to do a lot of interoperability kinds of programs.

I like to think the Internet knows no time boundaries like these

old legacy applications do; and obviously, what we need to do is get

these applications on line to do real-time editing and error correction before the errors can get into the system.

And that is our goal. It won’t happen overnight, but it will happen.

Mr. KANJORSKI. In my district, there is a county prison, and one

of the prisoners operates a network across the country on the Internet with other prisons. And they are just notorious and extremely

successful in making applications for income tax refund checks.

And they get them by the dozens, I mean literally.

And I have had complaints from the warden of that prison just

saying, you know, he just doesn’t understand how this can continue

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to go on. You would think one or two times that they would catch

it, but this is year after year.

Now they are spreading out through the prison system across the

country, and I don’t know whether it’s on a commission basis that

they’re doing it, but they are being very successful and still requesting these checks and getting them.

Naturally—probably there is strong publicity when that occurs.

But you have to understand how offensive it is to a legitimate taxpayer when they find out that all you have to do is get sentenced,

go to prison, start filing your returns and make several hundred

thousand a year. It tends to rub us the wrong way.

But I think you’re on the right track. It was a good report.

I particularly want to compliment that part of the Treasury that

is known as the U.S. Mint. And they are obviously up here because

I guess they are the four-star or five-star agency here. They not

only are very good in showing how they can correct the system and

make the hard decisions to go to a modernized system under the

2000 problem; they showed us all that thinking ahead and using

your money wisely can really accomplish some great things.

So, Mr. Mitchell, you should take back my compliments. But

mostly because you have the good foresight to have press representatives and public relations people like Eva on your staff. I

happen to know how competent she is. So that’s very good.

In regard to Defense, it is a huge agency. And of course if you

are not on board, everything everybody else does is minor by comparison. I think that both the Department of Defense and the Department of Energy have real needs to get into the modern age and

to work through their systems.

I am particularly interested in disposal of property and knowing

what assets are out there that are excess or surplus and how we

can get utilization of them and get a handle around them in a big

way.

The only other thing that I would say that did bother me, and

I don’t know whether it was the Defense Department or the Department of Energy, they seem to have slipped in their awareness

of technology and what can be erased from computers. And I know

for a fact where they excessed to the waste pile hundreds and hundreds of computers that had all the formulas for nuclear weaponry

on them; and we just can’t afford to have those types of failures

in the system where people aren’t aware of what potentially they

are throwing away.

I happened to find out about it because I was dealing with people

who were trying to do construction—or destruction and

demanufacturing of computers and found a lot of that material

readily accessible on the computers that were discarded. And I

would hope that we would tighten up. It’s not only to accomplish

a paperless society or reduction in paper, but it certainly is important that we protect information, particularly highly classified information such as that.

So that, as we go down this road, it seems to me that all the

component parts, including disposal of materials, is very important.

And I would hope that the departments of government would cooperate.

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Let me ask you this question, would it be helpful to the various

departments to have a centralized clearinghouse operation that

would establish the standards of how to handle things, the programs that are available and the information, as a central repository; or do you think it’s absolutely essential that each department

have its own system and sometimes without standardization and

without the capacity to be accessed by other departments of government or outside interests?

Maybe I’ll direct that as an open question.

Mr. FLYZIK. I would like to believe that the Federal CIO Council

is stepping up to becoming the central repository for a lot of issues.

We now have in place a Federal Government architecture model.

We are looking at the standardization process. We have an architecture at Treasury, as does DOD, as mentioned. Our Treasury architecture complies with the Federal architecture standard that is

being defined.

So I think we are getting there.

I would like to think the CIO Council has gone through an interesting evolution. Like any other group first put together, we went

through kind of a bonding process to figure out who we are and

how we work. And I think, though, over the last year or so, it has

really evolved into taking on specific, tangible programs and

projects that will deliver the kind of results that you’re addressing

here.

Mr. KANJORSKI. Do you ever see a day where those of us that sit

up on the Hill, that want to find out what is available to a constituent, can dial in that information and type it in, and it is going to

source it out and find it?

Right now, most of the departments of the executive branch of

government, and the bureaus, unless you know what program they

are administering and how it works, you can’t find it. I mean, it

is the most closely held secret.

Very simple questions, you know, is there a disaster relief for

mortgage holders in a disaster area, and does the Federal Government have a program like that? Unless you know exactly the name

of that program or where it is, it is hard to access.

Mr. FLYZIK. Yes, sir. And I believe I refer you to—we did roll out

the portal First.Gov, www.first.gov, and it is designed to do exactly

what you are suggesting here. That individual constituent, without

any knowledge whatsoever of the functions of government, can get

answers to specific questions. I think First.Gov is merely scratching the surface of where we are going to go, because for the first

time we will begin to understand the way customers see government.

And I agree with you. They don’t see government on an agencyby-agency basis. They see government on a functional basis.

I think First.Gov is our first start at fundamentally restructuring. I think we will go through phases here where First.Gov will

lead to kind of virtual agencies, agencies that are working together

in common functional areas. And I think, in the long run, looking

out beyond it could actually lead to fundamental restructuring of

government.

Mr. KANJORSKI. Very good. Maybe I’ll put this to the Defense Department.

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Your part of the agencies or departments that are involved, not

all of them obviously, but you have an awful lot of technology that

is still black-bagged, that is already being duplicated in the commercial area that could be of great assistance to other governments

and the commercial interests of the country.

How do we go about freeing that stuff up?

Mr. OSTERHOLZ. I would tell you that—to be honest, tell you,

that is a very complicated question, because some of those other

parties who would want that technology would not necessarily be

interested in using it for the betterment of our interests.

So that is a very, very complex question. And it’s hard to give

you a general answer except perhaps to point out some of the

issues that we have to wrestle with today.

Understanding what a corporation is and what its interests are

and what its pedigree is is an interesting question for us. What a

U.S. company is today is sometimes a very complicated question to

get an answer on. So understanding the motives for technology

transfer is a vital piece of answering that question.

To move technologies, you referred to ‘‘black-bagged,’’ you are referring to classifying technologies perhaps, such as you might find

in geospatial information systems, things that you were very familiar with.

Very frankly, we look at commercial geospatial information systems as a very positive factor in that their existence for us gives

us access to information that we may not be able to get to because

of limited resources on our end. Our own assets obviously are very

heavily tasked, and the availability of additional geospatial sources

of information is very positive thing for us.

Now, we worry a lot about who else has access to that, No. 1,

because we would hate to see that sort of capability used against

our forces with the sorts of resolutions that I am sure you are

aware of that are coming around the commercial world.

No. 2, we have to be careful as we deal with them from an electronic commerce point of view. We would buy that information from

them. We want to make sure that wasn’t necessarily revealing of

our interest. It would be very unfortunate if our buying of, say,

commercial imagery products revealed an operation pending and

put our forces in jeopardy. So we have to worry about that. And

that’s where the PKI issues come really to the fore.

But I think you are going to see, and increasingly—in fact, there

aren’t a lot of black-bag technologies, as you put it—that the commercial world is, in fact, the place where the technologies are and

that its first adoption is not necessarily behind the green door, as

it used to be. Its first adoption is in Silicon Valley. Its first adoption may be in the government agency, sir.

Mr. KANJORSKI. As to the programs, I agree with you. They are

probably ahead of the government in what they can do.

But the delivery systems, the satellite systems, etc., that could

be utilized to help out, particularly in environmental protection,

fire protection—I’ll throw that out there and leave it; you probably

know what I’m talking about—you know, we can save inordinate

amounts of money and benefit to the general citizenry, the individual States and individual communities if we can find a way to open

up and use the excess capacity that we have in the Defense DepartVerDate 11-MAY-2000 10:25 Feb 12, 2002 Jkt 000000 PO 00000 Frm 00158 Fmt 6633 Sfmt 6633 C:\DOCS\77192.TXT HGOVREF1 PsN: HGOVREF1
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ment for the private sector, for the government, for State and municipal governments in particular.

So I just throw that out there and leave it.

Mr. Chairman, I just want to congratulate you for calling this

hearing. It seems to me it’s one of the more progressive ideas in

the role of this committee; and I hope we stay on this course, because for us, as members, who are so ill-informed in this new technology, to have the opportunity to get the testimony and hear the

statements of this type of expertise is very rewarding. So thank

you very much.

Mr. BURTON. Thank you, Mr. Kanjorski. We will try to do just

that.

I want to thank all of you for being here. We appreciate the

input. We appreciate the progress that you have made both at the

Mint and Mr. Flyzik.

And the Defense Department, we hope and wish you well in the

future. We will be watching and trying to work with you.

With that, we stand adjourned. Thank you.

[Whereupon, at 1:15 p.m., the committee was adjourned.]

[The prepared statement of Hon. Edolphus Towns follows:]

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