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75–470 PDF 2002

S. Hrg. 107–148

S. 803—E–GOVERNMENT ACT OF 2001

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

ON

S. 803

TO ENHANCE THE MANAGEMENT AND PROMOTION OF ELECTRONIC

GOVERNMENT SERVICES AND PROCESSES BY ESTABLISHING A

FEDERAL CHIEF INFORMATION OFFICER WITHIN THE OFFICE OF

MANAGEMENT AND BUDGET, AND BY ESTABLISHING A BROAD

FRAMEWORK OF MEASURES THAT REQUIRE USING INTERNET-BASED

INFORMATION TECHNOLOGY TO ENHANCE CITIZEN ACCESS TO GOVERNMENT INFORMATION AND SERVICES, AND FOR OTHER PURPOSES

JULY 11, 2001

Printed for the use of the Committee on Governmental Affairs

(

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS

JOSEPH I. LIEBERMAN, Connecticut, Chairman

CARL LEVIN, Michigan

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MAX CLELAND, Georgia

THOMAS R. CARPER, Delaware

JEAN CARNAHAN, Missouri

MARK DAYTON, Minnesota

FRED THOMPSON, Tennessee

TED STEVENS, Alaska

SUSAN M. COLLINS, Maine

GEORGE V. VOINOVICH, Ohio

PETE V. DOMENICI, New Mexico

THAD COCHRAN, Mississippi

ROBERT F. BENNETT, Utah

JIM BUNNING, Kentucky

JOYCE A. RECHTSCHAFFEN, Staff Director and Counsel

KEVIN J. LANDY, Counsel

HANNAH S. SISTARE, Minority Staff Director and Counsel

ELLEN B. BROWN, Minority Senior Counsel

ROBERT J. SHEA, Minority Counsel

DARLA D. CASSELL, Chief Clerk

(III)

C O N T E N T S

Opening statements: Page

Senator Lieberman ........................................................................................... 1

Senator Thompson ............................................................................................ 3

Senator Carper ................................................................................................. 5

Senator Bennett ................................................................................................ 22

Senator Voinovich ............................................................................................. 25

Senator Carnahan ............................................................................................ 28

Prepared statement:

Senator Cleland ................................................................................................ 65

WITNESSES

WEDNESDAY, JULY 11, 2001

Hon. Conrad Burns, a U.S. Senator from the State of Montana ......................... 6

Hon. Sean O’Keefe, Deputy Director, Office of Management and Budget .......... 8

Anne K. Altman, Managing Director, U.S. Federal-IBM Corporation ................ 31

Costis Toregas, Ph.D., President, Public Technology, Inc. ................................... 33

Aldona Valicenti, President, National Association of Chief Information Officers of the States (NASCIO) ................................................................................ 35

Greg Woods, Chief Operating Officer, Student Financial Assistance, U.S. Department of Education ......................................................................................... 38

Sharon A. Hogan, University Librarian, University of Illinois at Chicago,

on behalf of the American Library Association, the American Association

of Law Libraries, and the Association of Research Libraries ........................... 48

Barry Ingram, Vice President, EDS Global Government Industry Group, on

behalf of the Information Technology Association of America (ITAA) ............. 50

Patricia McGinnis, President and Chief Executive Officer, Council for Excellence in Government ............................................................................................ 52

Hon. Joseph R. Wright, former Director and Deputy Director, Office of Management and Budget, and Vice Chairman, Terremark Worldwide, Inc. ......... 54

ALPHABETICAL LIST OF WITNESSES

Altman, Anne K.:

Testimony .......................................................................................................... 31

Prepared statement .......................................................................................... 72

Burns, Hon. Conrad:

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

Hogan, Sharon A.:

Testimony .......................................................................................................... 48

Prepared statement .......................................................................................... 114

Ingram, Barry:

Testimony .......................................................................................................... 50

Prepared statement .......................................................................................... 124

McGinnis, Patricia:

Testimony .......................................................................................................... 52

Prepared statement .......................................................................................... 130

O’Keefe, Hon. Sean:

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

Prepared statement .......................................................................................... 66

Page

IV

Toregas, Costis:

Testimony .......................................................................................................... 33

Prepared statement .......................................................................................... 82

Valicenti, Aldona:

Testimony .......................................................................................................... 35

Prepared statement with attachments ........................................................... 86

Woods, Greg:

Testimony .......................................................................................................... 38

Prepared statement with attachments ........................................................... 101

Wright, Hon. Joseph R.:

Testimony .......................................................................................................... 54

Prepared statement .......................................................................................... 135

APPENDIX

Copy of S. 803 .......................................................................................................... 147

Prepared statements for the record:

American Federation of Government Employees, AFL–CIO, Bobby L.

Harnage, Sr., National President ................................................................ 242

American Chemical Society, Attila E. Pavlath, President ............................ 246

Center for Democracy and Technology ........................................................... 250

Citizens United for Excellence in E-Government, Marc Strassman, President ................................................................................................................ 256

The Industry Advisory Council, Shared Interest Group on Electronic Government .......................................................................................................... 267

Information Renaissance, Dr. Robert D. Carlitz and Barbara H. Brandon . 269

Information Renaissance, ‘‘Online Rulemaking: A Tool for Strengthening

Civil Infrastructure,’’ by Barbara H. Brandon and Robert D. Carlitz ...... 275

Institute of Museum and Library Services, Beverly Sheppard, Acting

Director .......................................................................................................... 303

Interoperability Clearinghouse, John Weiler, Executive Director ................ 305

OMB Watch, Dr. Patrice McDermott, Senior Policy Analyst ....................... 307

Software & Information Industry Association ............................................... 323

U.S. General Accounting Office, ‘‘Electronic Government: Challenges

Must Be Addressed With Effective Leadership and Management,’’ by

David L. McClure, Director, Information Technology Management

Issues ............................................................................................................. 332

U.S. National Commission on Libraries and Information Science (NCLIS),

Martha B. Gould, Chairperson, with an attachment ................................. 371

(1)

S. 803—E–GOVERNMENT ACT OF 2001

WEDNESDAY, JULY 11, 2001

U.S. SENATE, COMMITTEE ON GOVERNMENTAL AFFAIRS, Washington, DC.

The Committee met, pursuant to notice, at 9:32 a.m., in room

SD–342, Dirksen Senate Office Building, Hon. Joseph I. Lieberman, Chairman of the Committee, presiding.

Present: Senators Lieberman, Carper, Carnahan, Thompson, Stevens, Voinovich, Cochran, and Bennett.

OPENING STATEMENT OF CHAIRMAN LIEBERMAN

Chairman LIEBERMAN. We will now convene the hearing on electronic government. The bill before us is S. 803, the E–Government

Act of 2001.

I want to welcome our witnesses and guests and thank you for

joining us today to examine the new universe of possibilities that

the Internet and other information technologies are providing for

government and the people whom we serve.

I think we have a strong consensus in this country, in both parties, as President Clinton said about 5 years ago, that the era of

big government is over. Our goal is not to make government bigger

but to make it smarter, less wasteful, and more efficient. That

clearly is the responsibility of this Committee as the Senate’s major

oversight committee, and it is the purpose of the bill that is the

subject of this hearing, because today and in the years ahead, I

think there is no better way to make government smarter and

more effective than by using the Internet and information technology (IT).

The reach of the Internet and the speed with which that reach

was achieved may be the big story of the last decade and, notwithstanding the falling fortunes of dot-com stocks, I think it may be

the big story of the next decade and beyond.

In order to get ahead in today’s world, you pretty much have to

be plugged in and powered up, connected and ready for business

24 hours a day, 7 days a week. The result is that just about every

aspect of society in America is undergoing major transformation,

and it is our obligation to see that government does not lag behind

in that transformation.

Information technology offers an unprecedented opportunity to

redefine the relationship between the public and its government

just as it has redefined the relationship between retailers and consumers, teachers and consumers, and in fact in a very different

area, soldiers and their foes.

2

The idea is to apply the lessons of the on-line private sector to

the missions of government. That means providing better services,

more accessible information, and greater accountability at significant cost savings.

At its best, next generation government would exchange what is

now cumbersome, static, and often bewildering for a dynamic,

interactive, and user-friendly government. In the end, hopefully, a

more efficient and more effective government will emerge.

I think this Committee has an important role to play in that

transformation. Today we are going to be considering the E–Government Act of 2001, bipartisan legislation that our guest and

friend and colleague, Senator Conrad Burns of Montana, and I,

along with 12 other cosponsors introduced 2 months ago to bring

focused leadership to electronic government. Our goal is to use information technology to bring about a revolution in current bureaucratic structures so that we can engage the public, restore its trust,

and ultimately increase participation in the democratic process.

As it stands now, electronic government at the Federal level

lacks a unifying vision. Fortunately, though, we are not beginning

at square one. A variety of projects are underway, and several

agencies have created imaginative websites that provide a wealth

of information and numerous services on-line. For instance, taxpayers may submit their income tax forms on-line, and millions do

so. Students may apply for loans electronically. And some agencies

have actually instituted electronic rulemaking already.

But overall, progress in digital government at the Federal level

is uneven. We have a looseknit mix of ideas and projects that are

often poorly coordinated, sometimes overlapping, and frequently redundant.

Remarkable innovations dreamed up by visionary Federal Government employees can be found in some quarters, but elsewhere,

innovations are hampered by regulatory and statutory restrictions,

the inability to move beyond traditional models of governmental

management, and stovepipe conceptions of agency jurisdiction.

The result is that the progress of electronic government at the

Federal level has been inconsistent, particularly in areas that require intergovernmental coordination.

One of the most important impediments to progress is the lack

of concentrated high-level leadership on these IT issues. That is

why our bill creates a Federal Chief Information Officer (CIO), inside OMB to implement information technology statutes, promote

e-government, and foster innovation.

The CIO would not replace the agencies’ authority to pursue

their own IT programs but rather, would provide a much needed

strong, government-wide perspective. Among other things, the CIO

would address privacy and computer security issues, develop e-government initiatives with State and local governments, the public,

private, and nonprofit sectors, and oversee a fund to promote crossagency projects which are central to the kind of integrated service

delivery and consolidation that will truly transform government.

We want people to be able to go to a single site and do a host of

different forms of business with the Federal Government, and that

requires interagency coordination.

3

We also want information and services offered over the Internet

to be accessible to citizens through a single Federal on-line portal,

building on the progress that has already been made by the existing FirstGov.gov website which was launched by the Federal Government last year.

Based on the experience of the private sector, we expect major

cost savings from more efficient agency-to-agency interactions. But

progress in this area requires that we establish standards for electronic compatibility between the agencies and within the agencies.

As the government steadily moves information and services online, I think we have to be wary of what Senator Thompson has

warned against, and that is automating existing inefficiencies. If

we take this moment of opportunity to reexamine our existing processes, then I believe we must also implement performance measures to determine which e-government applications are successful

and cost-effective so we are not duplicating government’s existing

inadequacies.

The task is not going to be without some headaches, but fortunately, we have excellent models in the private sector that have

transformed their practices and now serve customers so much better while saving literally billions of dollars in the process, and we

are going to hear about two of those models today.

As I said when we introduced this bill, and I want to emphasize

it again today, this piece of legislation is a work in progress. It reflects the insights of many people and organizations. But we are

going to continue to seek comments and feedback, especially from

the administration, which is represented here today by Mr. O’Keefe

and also, of course, from Members of this Committee.

I personally expect that the bill will change as we work to

achieve a broad consensus, and I hope everyone involved will maintain an open mind as we strive for that compromise. This is a step

forward that is within our reach, and I think that if we work together, we can take that step together for the benefit of our government and all the citizens whom we serve.

Senator Thompson.

OPENING STATEMENT OF SENATOR THOMPSON

Senator THOMPSON. Thank you, Mr. Chairman.

I think that was an excellent summary of where we are. I have

certainly enjoyed working with you in regard to the interactive

website that we established a while back for this Committee. You

are absolutely right that we are all becoming more and more aware

of not only the need to move in the direction that you suggest but

the need to do it better.

I am struck by the fact that, according to the GAO, we have 809

initiatives right now to disseminate information, which is the simplest facet of e-government; 88 initiatives to provide downloadable

electronic forms; 460 initiatives to allow people to complete a transaction like submitting a patent application. This is all going on

right now, so there are an awful lot of things going on out there,

but we are not doing it well enough. So the question is, what do

we do about that, and where do we put the management responsibility to handle all that; and I think that is what your legislation

addresses.

4

I look forward to these hearings because hopefully I will be able

to put into a little better context for myself the obvious need that

you are addressing with an equally obvious problem that I have

been dealing with for some time. Just before my last day as Chairman, we put out a report which was basically a compilation of

studies of the GAO, Inspector Generals, and others, as to the management situation in our government, and we have a pitiful situation as far as government management is concerned that has developed over several years.

We have a list of areas, government-wide areas, that the GAO

delineates as high-risk areas that continue to be endemic problems

that we seemingly can do nothing about. One of them is information technology. We have shown a remarkable inability to manage

large information technology projects. We have wasted billions and

billions of dollars in starting these big information technology

projects that either did not pan out or were abandoned altogether.

We have human resources problems that are going to be much

greater in the future. Half of our work force will be eligible for retirement in 5 or 6 years. Many of these human resources problems

are in the information technology area. We need some sophisticated, knowledgeable people to deal with these things that we are

talking about. Financial management—hardly any department of

government can pass an audit—waste and duplication, and so

forth.

So that is the context in which the e-government initiative finds

itself. So the question is are we trying to arrange it so that a citizen can get bad information from the government faster; are we

paving over the cow path? What do we do about this circular problem of trying to come up with some new information technology initiatives, when information technology management itself is a major

governmental problem; it is a circular kind of thing as to how we

break through that. Is it essentially a management problem? I

think that in large part, it is. Where should that responsibility lie?

That is what your bill addresses with a new chief information officer. The administration has some different views; they think it

ought to stay with the deputy director for management. That is a

good question we should discuss and debate.

The Clinger-Cohen Act decided at that point that for this general

area, the responsibility should be vested in the various departments and that we could get more responsibility and accountability

that way.

We have just recently received a GAO report saying that the departments are not doing it; they are not meeting this legislative requirement as far as managing their information technology problems.

But we do not want to create a new bureaucracy on top of this

mess and feel that just because we rearranged the boxes this will

cure the underlying systematic, endemic management problems of

government.

So I honestly do not know how all that relates to the various

components. Do we need to solve one before the other? Will the

other help solve the former? Do we need to travel down the road

of trying to do what, I believe, the administration is committed to

5

doing—better management in these areas—as we proceed with a

new e-government initiative?

Those are all questions that you have brought to the fore with

this legislation, and they are good questions that need to be dealt

with. So I look forward to this hearing.

Chairman LIEBERMAN. Thanks, Senator Thompson.

I wonder if any of my colleagues want to make a brief opening

statement?

Senator CARPER. I do, Mr. Chairman. May I?

Chairman LIEBERMAN. Go right ahead, Senator Carper.

OPENING STATEMENT OF SENATOR CARPER

Senator CARPER. This is one that I wrestled with as governor not

too long ago, and unlike the United States, which has over a quarter of a billion people, we have only 750,000 people in Delaware,

and it is a small, manageable operation, but we still struggled with

this. In my last couple of years as governor, we put in place the

ability to provide folks the chance to file their taxes over the Internet, to incorporate in our State, to get many of their permits and

licenses, whether it is auto-related stuff, drivers’ licenses, hunting

licenses, fishing licenses, and we made a fair amount of progress

there.

This is such a rich vein for us to mine. Government has many

jobs and many responsibilities, but foremost among them is serving

people. It is so hard for people to get the kind of service they want,

need, and deserve. A lot of them come to us, to our staffs back in

our respective States, and that is all well and good, but if we can

do this right, we can do our constituents, our taxpayers, a huge,

huge favor.

There are 50 laboratories of democracy out across this country to

look to to see how are you doing this, how are you doing it at your

own level, and to see what lessons we can draw from them. I do

not know if we have reached out to the States to identify just a

handful of States, maybe larger States that, given their size and

scale, might serve as a better example to us, but that is something

that I would suggest we consider.

Two other points and then I will stop. One, if we come up with

an idea about how we think this should be organized and structured and try to impose that on the Executive Branch, which may

not be supportive, welcoming, or cooperative, it will die. We will

have wasted our time and created turmoil for them.

The point that you made about inviting the full participation of

the administration in conceiving of the structure, I think, makes all

the sense in the world.

The last thing I would say is that I always felt that the people

who are best able to come up with some of these ideas are the folks

who are closest to our customers. The idea of folks here in Washington, the people who are running the operations, somehow figuring out what is best to serve people down in the individual

States and at the community level—that is not going to happen. To

the extent that we can avoid trying to mastermind it from Washington, infuse and push down incentives to the local level, to the

folks closest to the customer, to enable them to do that better—terrific.

6

Here in Washington, we need to keep in mind that there are

many different moving parts out there, and they need to be coordinated, but to somehow coordinate them all without taking away

the incentive to be innovative and think outside the box at the local

level. It is a tough balancing act, and hopefully, the hearing today

will help us figure out how to do that balancing.

Thank you.

Chairman LIEBERMAN. Thanks, Senator Carper.

Senator BENNETT. I have no statement, Mr. Chairman.

Chairman LIEBERMAN. Senator Burns, we are honored to have

you here, and I am honored to have you as a cosponsor. You have

become a leader on technology issues in the Senate, and we welcome your presence here this morning.

TESTIMONY OF HON. CONRAD BURNS, A U.S. SENATOR FROM

THE STATE OF MONTANA

Senator BURNS. Thank you, Mr. Chairman.

I want to respond to Mr. Carper. Even though Delaware is a

small State, I have a recommendation from those of us west of the

100th Meridian. Several of you smaller States back here should get

together and make one real State; that would help our situation

out.

Senator CARPER. When you have as many people as we do, we

might do that. [Laughter.]

Senator BURNS. We have got that.

Also, responding to what Senator Thompson said about the retirement of the work force and how close we are to a turnover, I

am not so sure that that is not a good idea, because when we try

to introduce new ideas on doing things in a new way and using the

tools of technology, we run into this situation in the bureaucracy,

whether it be corporate or government, that ‘‘I have done this ever

since I worked here, and my Daddy did it like this, and this is the

way I am going to do it.’’

We are ready for a new generation, I think, whenever we start

looking at things. So I thank the Chairman for inviting me to testify today on the E–Government Act of 2001. I have enjoyed working with the Chairman on some critical issues on technology, and

of course, we have introduced the CANSPAM bill, recently introduced, and we are looking forward to that.

I have long believed in the power of information technology in

general and the Internet in particular making government more efficient to open up the public policy process to everyday citizens.

I want to recommend a study which was released, and we looked

at it yesterday. The Marco Foundation released a study which I

would recommend to the Members of this Committee as you consider this legislation, because it tells you a lot about the Internet,

the attitudes toward the Internet, what people think about it, and

how they use it, and who uses it, and some challenges that we have

in front of us.

Those challenges are the same today as they were a year ago,

and they have to do with privacy, security, and those kinds of challenges. I would recommend that study, and you can check with our

office, and we will be happy to try to get it to you in some fashion.

7

On June 12, 1996, I chaired the first ever interactive Senate

hearing which dealt with the need to reform the Nation’s then obsolete encryption policy. The hearing was cybercast so that anyone

with Internet access could follow it. Citizens were also able to submit proposed questions, several of which the members of the Commerce Committee were asked during that hearing.

I have long shared the Chairman’s drive to make government

more widely accessible on-line. In 1999, I launched a live, first of

its kind, weekly Internet video broadcast where I answered questions from Montanans. For the past couple of years, I have often

posted drafts of my bills on-line so that everyone has access to the

legislative process.

I should add that it is only fitting that the e-government bill

itself is in many ways a product of a collaborative process made

possible through the use of the Internet. Several key provisions

were the result of feedback offered by citizens over the Internet.

So that clearly, the Internet offers unique capabilities which help

break down the boundaries between government and the citizens

it serves.

The future of democracy is digital. It was with this in mind that

I included the e-government bill as an element of my Tech–7 slate

of high-technology bills I announced at the beginning of the 107th

Congress, and I am very enthusiastic to be able to join forces with

the Chairman to move this particular bill forward.

The e-government bill’s guiding philosophy is a simple and practical one—the Federal Government should take advantage of the

tremendous opportunities offered by information technology to better serve its constituents. The bill calls for the adoption by the Federal Government of the basic best business practice of the private

sector—the creation of a chief information officer. This Federal CIO

would serve as a central guiding force to coordinate information

policy across agencies and would allow the government to fully leverage the power of the latest communication technologies. I should

add that industry has been fully supportive of the creation of a

Federal CIO and that the GAO has recommended the establishment of a Federal CIO for several years. And I share some of the

concerns that Senator Thompson has—do we create another mess

to deal with a mess. I think that basically, this is one small step

in the right direction.

The second key aspect of the bill is the creation of a centralized

on-line portal to serve as a one-stop shopping website for citizens.

The Federal CIO would direct the establishment of this portal,

which would build on the work done by the GSA in creating a single, simple website featuring all available governmental resources

on-line. The bill authorized $15 million for the portal for the first

year—2002—which is a small investment in the Nation’s interactive future of digital democracy.

The third key component of the bill is the creation of an interagency technology fund. This fund would help break down the traditional and often arbitrary divisions created by agency boundaries

and focus government resources on meeting constituent needs. I

was interested in your statement about how do we get rid of the

turf wars; how do we get people working in a single direction? A

collaborative approach on information technology issues is far more

8

1The prepared statement of Mr. O’Keefe appears in the Appendix on page 66.

effective than the silo-by-silo way of doing business favored by the

traditional budgetary process. The bill authorizes $200 million a

year to accomplish this aim for fiscal years 2002 through 2004.

In short, Mr. Chairman, I thank you for your leadership on this

particular issue. The e-government bill would bring the Federal

Government fully into the age of the Internet.

I thank the Chairman for moving this legislation with such swiftness and enthusiastically support, his ongoing efforts to address

this critical issue, and I thank you for having me this morning.

Chairman LIEBERMAN. Thank you very much, Senator Burns, for

an excellent statement. I do not believe I could have said it better

myself, and I probably have not, so it is good that you were here

to do it.

Senator BURNS. Thank you very much.

I shall now go and spend your money.

Senator THOMPSON. Just make sure you spend it in the right

places; that is all I have to say.

Senator CARPER. And do not forget the little States.

Senator BURNS. It is ‘‘pork’’ to Tennessee, ‘‘infrastructure’’ to

Montana.

Senator THOMPSON. You are excused. [Laughter.]

Chairman LIEBERMAN. Thanks, Conrad.

I will now call our next witness. We are delighted to have the

Hon. Sean O’Keefe, Deputy Director of the Office of Management

and Budget.

Good morning, Mr. O’Keefe. We welcome your testimony at this

point and appreciate that you are here.

TESTIMONY OF HON. SEAN O’KEEFE,1 DEPUTY DIRECTOR,

OFFICE OF MANAGEMENT AND BUDGET

Mr. O’KEEFE. Thank you, Mr. Chairman. I appreciate it.

If you would permit me, I will submit my statement for the

record and just quickly summarize.

Chairman LIEBERMAN. Without objection, please.

Mr. O’KEEFE. Thank you, sir. It is a pleasure to see you and Senator Thompson and Members of the Committee. It is a delight to

be with you all again since my last opportunity to appear here a

couple of months ago.

I particularly want to thank you for your attention to a very,

very important initiative, one that certainly this Committee and

certainly the leadership of the Committee has championed for several years. It is a critical element, I am very proud to report, of the

President’s management agenda.

Indeed, the five elements of the President’s management agenda

are designed to take advantage of the management tools that Congress has enacted in the past and that this Committee in large

measure has been in the forefront of establishing the parameters

as well as enacting those tools over the course of the last 10 years.

Let me briefly describe those five initiatives and then talk about

the relevance of the e-government initiative in that regard.

The five specific issues that the President has elected as the primary focus of his time in this administration of the management

9

agenda that will be focused on and that has been handed to the

Office of Management and Budget for the purpose of shepherding

through this particular administration are to be found in the February blueprint that was initially the basis upon which the President’s budget was organized, as you will recall, and were fleshed

out very specifically in a Cabinet session that he had with each of

the Cabinet officers about 6 weeks ago where we delved into these

five particular questions at great length.

Each of them are interrelated, and e-government is an essential

element or mechanism to accomplish the tasks that are designed.

The five specific focuses or issues are, first and foremost—and all

of them will have resonance with this Committee again, given the

leadership that you all have demonstrated over the years in enacting a range of different management tools to specifically implement

these particular management agenda items, and they have been selected with that set context in mind, with the purpose of taking advantage of those tools and this unique opportunity now that they

have fully matured to the point where we can actually utilize them

in a different and more creative way.

The first one is a specific, very concerted effort to integrate performance criteria into the budget format. Beginning with the fiscal

year 2003 budget, you will see a very specific outline of performance criteria relative to budget requests that are made to Congress

in the fiscal year 2003 budget request that will be identified by programs and within select agencies and departments, depending on

very specific criteria for how we are going to accomplish that.

The second one is very much in line with that—and again, all of

these are in concert and designed to be complementary for the purpose of achieving the agenda itself—is to focus very specifically on

the strategic management of human capital, an issue again that

this Committee has delved into at great length and has concerned

itself with very specifically. The actuarial tables tell us that indeed

we are going to see a dramatic change in the work force over the

course of the next 3 to 5 years even if we do nothing at all to shape

that work force very actively—but we intend to do just that, to actively deal with those particular questions, and again, e-government has a specific applicability that I will get to in a moment.

The third one is to look at competitive sourcing procedures,

which again is an element that this Committee has delved into and

worked with many different provisions of the law over the course

of the last several years that you have been championing, as a

means to specifically attain the most efficient delivery of public

service and accomplishment and administration of public programs

by competitive means, be that through public or private accomplishment. So our agenda and our focus in those five issues, this

third one, is to very actively pursue an effort to accomplish those

particular tasks by whatever the most efficient, most cost-effective,

and most appropriate method would be.

The fourth is to tackle a series of issues that, again, this Committee has been in the forefront of in dealing with financial systems. That is at the very locus of every matter that we are ultimately going to be dealing with because heretofore, the approach

has been to look at financial management as a series of accounting

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sionmaking tool for the purpose of examining all those. That in

turn leads to the propriety of the fourth, which is the e-government

initiative itself.

There are three primary features of the e-government initiative,

which is the fifth feature and is encompassed in all five of these

particular approaches. It is an essential mechanism to accomplish

three primary agenda items in addition to all the other aspects of

the President’s management agenda as well.

First and foremost is that it be citizen-centric; that it be focused,

as I think several of the opening statements have very strongly

suggested, that it has to be a transparent system that facilitates

the means by which Americans can access information, not just facilitate the faster accomplishment of looking at poor information,

but that we organize it, as you suggested Senator Thompson, in a

more comprehensive way.

Second is that it facilitate the means for business-to-government

transactions and mechanisms to simplify that process and make it

far more efficient as well as expeditious.

Third and most important among all is to look at the intergovernmental relationships between and among agencies, departments, and the State and local communities which in turn are

interacting with those agencies and departments in a more complete way.

Forty-five billion dollars is what we spend every single year on

information technology, and in large measure, the attempt in this

particular initiative and in all the other four that accompany these

five in total of the President’s management agency, is to specifically

focus on how to leverage that $45 billion to accomplish something

that you referred to, Mr. Chairman, very succinctly in your opening

statement—to accomplish interoperability, transparency, and

standards and applications that are at present, at best, uneven.

And as a consequence of that, we see a wide-ranging set of circumstances that we seek to standardize through this approach.

The e-government fund that we propose and that the President’s

budget incorporates is an attempt to start that effort to leverage,

and certainly that is an effort which is encompassed in S. 803 as

well.

I think the Chairman’s and Senator Thompson’s description of

the circumstances that exist today on this was quite accurate. It is

a very uneven, very disparate set of initiatives which need to be

pulled together in a more comprehensive way.

Indeed, today’s objective, and I guess part of the management

focus I can report to you today, is that this afternoon, we intend

to meet as part of the President’s Management Council, which is

the deputy Cabinet officers across the Federal Government, on an

agenda which incorporates the information technology and e-government initiative, one of these five major issues, to lay out an aggressive management plan to implement the President’s vision

which has been outlined very briefly here and in the statement in

a more comprehensive way.

I urge the Committee’s support of the President’s initiative in

this regard and look forward to working with the Committee to

fashion S. 803 in a manner that facilitates the realization of that

11

vision, and I appreciate the opportunity to be here today, Mr.

Chairman.

Thank you.

Chairman LIEBERMAN. Thank you very much, Mr. O’Keefe, both

for the detail and the content of your remarks.

As I said before, I am very eager to have a dialogue and a good

working relationship with the administration in developing this

bill, because it is obvious that we have common interests and common goals here. So I appreciated your comments, those that were

positive and those that were more skeptical, in your prepared testimony.

Let me say, for instance, that your testimony mentioned one area

of concern, which was that the legislation as proposed lacks sufficient performance standards. I want you to know that I absolutely

agree with that comment. It is a point that we have heard now

from others since the bill was introduced, and we are going to address that shortcoming.

I think that perhaps the major point of difference that we have

at this juncture is in how to organize and place and define the responsibilities of the Federal Chief Information Officer. The bill that

Senator Burns and I have proposed, along with others, as you

know, creates a separate Federal CIO within OMB, reporting directly to the director of OMB. In doing so, it builds first on the very

broad experience in both the private sector and in State government, where enterprise-wide CIO’s has been, as I think we are

going to hear from some of our witnesses later on.

I think it also builds on the statement of policy in the ClingerCohen Act that requires each agency to establish a CIO and specifies that the CIO has information resources management as that

official’s primary duty.

So my concern with the model that the administration thus far

seems to have established here, which is by naming Director Daniels’ naming of Mark Forman as Associate Director for Information

Technology and E–Government. While he is not explicitly a CIO,

his responsibilities at this point, as I understand them, appear to

encompass all the things that we would expect the Federal CIO to

do, yet he would then report to the deputy director for management

and CIO, who would then report to the director of OMB.

This leads me to a series of questions which relate to why that

choice has been made and, more particularly, why that choice,

when in the private sector, the choice generally has been to elevate

and separate the position of chief information officer.

Mr. O’KEEFE. Indeed. Well, first and foremost, we concur in your

assessment that the focus on information technology needs to be

elevated within the context of the larger management agenda. And

certainly, within OMB, that is part of our charge. As you correctly

cited, Director Daniels, by selecting and establishing the position of

Associate Director for Information Technology and E–Government,

I would argue is very, very compatible and comparable to how most

corporate industry standards, that I have been familiar with, have

operated for the following reasons.

First and foremost, the President’s very strong statement about

this question over the course of the last year or so has been to

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agement as the Federal CIO, to reside within that office coordination of the Government Performance and Results Act, the Chief Financial Officers Act, Clinger-Cohen—all of those particular efforts,

those tools for management are all means to facilitate better decisionmaking. In and of themselves, they become stovepiped.

My personal experience in this matter is that each time we seek

to look at either financial systems or information technology or procurement systems or anything else as an individual, separable

function with direct reporting requirements to the chief executive,

it inevitably becomes treated as if it were a program element as opposed to a tool or a management process for the purpose of facilitating better, more comprehensive decisionmaking.

So in that regard, having that locus for the purpose of residing

within the deputy director for management, the attention of all

those particular issues and coordination across all elements of the

Federal Government is the primary objective of this particular approach to this.

It also has the practical effect, too, I think, of avoiding what is

again a propensity on the part of any large organizational entity

to focus on information technology as if it were a set of stand-alone

systems and programs for its own use. It is there; it is a means,

as you appreciate better than anybody, to facilitate better management information and, therefore, decisionmaking to accomplish

those tasks, and that is what we are focused on.

In that regard, on par with information technology is the focus

on financial management incentives as well as Federal procurement policy, regulatory focus. All of those issues are ultimately

tools for larger management objectives, which is the primary reason we have organized in the manner that we have.

Chairman LIEBERMAN. I hear you, and I guess I would say that

my concern about locating this activity with the deputy director for

management, apart from what I have already said about that, is

that is a busy office already, and I fear that, therefore, the unique

opportunities here in the chief information officer may be lost because of all the other responsibilities that the deputy director for

management has and that we would be better served if we separated the office but gave it wide-ranging governmental authority to

coordinate with other offices and then bring it all together under

the director of OMB.

So I am going to consider what you have said, and I am going

to keep my mind open. I hope you will keep your mind open. I

think this is a point that we will have to continue to see if we can

work out as we go forward.

Mr. O’KEEFE. If you will permit me, Mr. Chairman——

Chairman LIEBERMAN. Please.

Mr. O’KEEFE [continuing]. I guess the plea I would make in this

case is that this was very much an administrative and management kind of attention question, and as a consequence, given the

initiative that the President has launched in a very comprehensive

manner for the President’s management agenda, of which this is an

essential element, our intent is to follow through. We have some

very specific guidance from the President on how to conduct this.

And as a consequence, to the extent that you see that there is a

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complishing that task within some period of time that you would

consider to be a reasonable gauge, then by all means, let us reenjoin on this question. But we are quite confident that this is

going to be the organizational approach that will accomplish this

particular vision and do it in a way that is most efficient as well

as integrated so as not to create a separate, stand-alone, potentially difficult circumstance of a stovepipe management focus,

which I think is always the most dangerous element. But your indulgence on this point would be most appreciated.

Chairman LIEBERMAN. Yes, we will have to work closely together

on this. My hope has been that we could move this legislation fairly

rapidly. I know that Senator Daschle has listed this as one of the

items on a longer list, all of which is not possible to take up in the

fall, but he has listed it as one of the priority items for taking up

on the Senate floor in the fall. So we will continue our discussions.

Let me briefly, in the minute and a half or so that I have left

on my time, ask you about the e-government fund. We, both in our

approaches to this, have the idea of an e-government fund. The

numbers are a bit different. Senator Burns and I include $200 million for each of the next 3 years; the administration has proposed

$100 million over 3 years, with $20 million available in fiscal year

2002.

I just wonder if you could speak for a bit about whether the administration believes there is value in setting aside money specifically for interagency projects that might not otherwise receive

funding; and more pointedly, whether under the administration’s

plan, the fund that you have in mind, leaving aside the amount of

money in it, will be used primarily for those interagency projects

or for something else.

Mr. O’KEEFE. Well, first and foremost, the objective is to utilize

the fund for the purpose of leveraging the $45 billion that we have

budgeted across the entire Federal departments and agencies.

Again, I could not agree with your assessment more, that what

we have is a very uneven application of standards; so until we complete the review this fall, I cannot attest to the fact that the $45

billion is on comparable standards. If anything, some agencies and

departments just anecdotally that I can see are definitely on cutting-edged, current-generation technology acquisition efforts. Others are still trying to wrestle their way into the 20th Century on

some of these issues.

So as a consequence, there is no relative measure of merit on

how much or how little needs to be spent across the board. The egovernment fund, we believe, is going to be a great opportunity to

leverage those opportunities which have greatest interoperability

and interface between and among different systems across Federal

agencies and departments—and my personal obsession is within

disciplines, so that we do not have a stand-alone procurement system, a stand-alone financial system, or a stand-alone personnel system. To the extent that they are more integrated, those are the

kinds of things that will qualify best for financing under the e-government initiative.

The difference that we have between the amounts is again certainly arguable. This is not a point of great contention. I think we

are about in exactly the same framework, which is to use it as a

14

leveraging mechanism against that larger set of resources involved.

And with all deference to the ranking member of the Appropriations Committee, the determination of exactly how much that will

be is certainly more within the Appropriations Committee’s jurisdiction, and we will certainly negotiate with them for the maximum amount we can possibly attain.

Chairman LIEBERMAN. That is true. We propose and they dispose.

Mr. O’KEEFE. Indeed, sir.

Chairman LIEBERMAN. Just out of curiosity, a quick question. On

first glance, to stress the positive, have you seen one or two government agencies that you think are applying information technology

really well? Do you see any early stars is what I am asking?

Mr. O’KEEFE. Again, very preliminary; we just dove into this

here in the last few months. But I would say that the most aggressive application of current technology that is there in a way to try

to get ahead of what has been an historically difficult set of deficiencies is certainly the IRS. They have aggressively gone after

this, and certainly the commissioner there has identified as contemporary an application of information technology uses across a

wider spectrum as opposed to single dedicated purpose that I have

seen.

Now, would there be better examples of that—I suspect there

certainly are—but the commissioner has identified some of the visible examples of that.

Certainly within the Defense Department, there is a series of locations where you can see the very best and, I daresay, some of the

very worst applications of information technology utility, and some

of the most historic kinds of stumbling blocks that are created by

what I would suggest is the same kind of stovepiping approach that

we have looked at and that has been perpetuated in the past.

Certain elements of the financial community will be out, aggressively attempting to implement current applications of information

technology whereas others will slavishly adhere to what has been

in place for so long because it is a so-called legacy system that they

cannot bear to give up.

So you have the range of those, and unfortunately, within departments and agencies, there are both great examples of its application as well as very poor ones.

Chairman LIEBERMAN. Thanks. That is very helpful.

I commend for your review—it just comes to my mind—the Department of Transportation, which has put some of its rulemaking

on-line, inviting the public to comment on it. It has been very interesting and very interactive.

Mr. O’KEEFE. Thank you for jogging my memory on that one.

You are exactly right. That is a superb example of a system that,

frankly, many of us just ‘‘dumbed onto.’’ Just looking at various

systems around, it is one that really is a very cutting-edge system

at the Department of Transportation—not a place where we would

have naturally gravitated and said there should be residing one,

but it has done an extraordinary job.

Chairman LIEBERMAN. Agreed, and to state the obvious, it provides the opportunity, again 24 hours a day, for someone to come

home, log on, and offer a response to a proposed rule.

15

Mr. O’KEEFE. Thank you for the prompt.

Chairman LIEBERMAN. Senator Thompson.

Senator THOMPSON. I will give Senator Stevens 1 minute of my

time.

Chairman LIEBERMAN. Well, since I have described him in Godlike terms, I think I will have to yield; of course.

Senator STEVENS. That reminds me of the story about Lyndon

Johnson when the policeman stopped him, opened the door and

said, ‘‘Oh, my God.’’ Johnson said, ‘‘Yes, son, and do not ever forget

it.’’ [Laughter.]

I came because the person across the table here looks like the

gentleman who used to sit on my left hand as staff director of the

Defense Appropriations Committee, and I could not pass up the opportunity to ask him a very pertinent question.

Mr. O’KEEFE. Thank you, Senator. It is a pleasure to see you.

Senator STEVENS. I happen to be chairman of the Joint Committee on the Library, the Congressional library, and we have

found that we have two libraries now. We have the printed world,

and we have the e-world libraries. And we are trying to run them

with the same amount of money we provided for the old printed library. We have found that we cannot go too fast, because there are

generations out there that do not use the e-world.

My question to you is are we going too fast in government? We

still serve a lot of people who do not have e-capabilities, and yet

we seem to be moving all of our people into the e-world very rapidly, including the IRS. Very soon, everyone is going to be asked

to provide a disk, and that will be their total submission for their

taxes. But there are many people up my way who cannot provide

that, out in rural America—and beyond that, even in the cities,

who are of my generation.

Are we going too fast? Are you going to accommodate those people in your planning, and will this bill push these people too fast

into the e-world?

Mr. O’KEEFE. Thank you for the question, Senator. I think the

approach that we are after here, I would characterize more as an

attempt to make up for a lot of lost ground of where the commercial sector is now, which is by no means a fully e-commerce-oriented kind of approach to things. If anything, we are still moving

through that process in society in a way that is just beginning to

tap the potential of what the information technology can yield.

If anything, the government is probably more responsive than

most public institutions toward the more standard requirements for

information, and we certainly need to retain those for exactly the

reasons that you cite. To assure access of all citizens to information, however the means and method to accomplish that task, is

what our objective ought to be.

But in this particular case, I think we are way behind in a lot

of respects in terms of an across-the-board kind of application of

where the electronic commerce and transaction information process

needs to go within the Federal Government. Some have attained

that standard that is as good as commercial; others are so far away

from it as to be not even generationally in the same area.

So if anything, I think that our attempt is to at least try to level

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panse and eliminate access through more conventional, traditional

means. I think we are extremely mindful of the point you mention

and will continue to be so.

Thank you.

Senator STEVENS. Thank you. Thank you, Mr. Chairman.

Chairman LIEBERMAN. Thanks, Senator Stevens. Let me point

out that the bill itself tries to respond to your concern by at least

stating the standard that no advances in e-government pursuant to

the bill should result in a loss of services to those who do not have

access to e-government. But my understanding is that it continues

to be a problem.

Senator STEVENS. If you are not careful, you will have to double

the budget. That is why I am here, because you cannot be fully prepared for both e-world and non-e-world. If you are looking at internal management and saying we are going to push them toward

standards and toward total integration of the Federal Government

into an e-capability, I am for that; but if you are saying that all

services must be delivered and all submissions must be received in

terms of e-commerce, then I think you are going too far.

I would like to work with you, and I would urge you to look at

the Library of Congress to see how we have staged this. They are

ahead of the rest of the world in terms of digitizing materials, but

they are still providing the world with our printed word, and I

think they have done that without doubling their budget. They

have had an increase in their budget, but they have not doubled

it.

So I hope it is a cost saving device rather than an increase in

expenditure.

Chairman LIEBERMAN. That is certainly our hope. Incidentally,

we have a witness from the library community who will testify

later on.

Senator STEVENS. Thank you very much, Sean O’Keefe.

Mr. O’KEEFE. Thank you, Senator Stevens.

Senator THOMPSON. May I pick up from here, Mr. Chairman?

Chairman LIEBERMAN. Please.

Senator THOMPSON. Mr. O’Keefe, you heard my opening statement, I guess.

Mr. O’KEEFE. Yes, sir.

Senator THOMPSON. And I am sure it was very enlightening to

you.

Mr. O’KEEFE. Indeed; always.

Senator THOMPSON. Picking up on what you said a moment ago

in response to one of the Chairman’s questions about some bright

lights, you mentioned the IRS, which of course has spent billions

of dollars in times past trying to modernize its computer system

unsuccessfully. And you mentioned the Department of Defense as

having some of the best and some of the worst; but it also has

clearly some of the worst problems in terms of financial management. GAO keeps reminding us of that and remains on the highrisk list and so forth—which gets to an overall concern of mine.

Your personal opinion overview—just sit back and tell us what

you think, big picture—how do these management problems that

we have and these year-after-year inabilities to get our arms

around these information technology problems and these financial

17

management problems—how do these relate to what we are trying

to do as far as e-government is concerned? I guess it kind of relates

to what Senator Stevens was talking about. Strictly from a management standpoint, are we kidding ourselves here? Do we really

have the ability—regardless of whether we have a chief information officer inside or outside or cross-ways or wherever he fits in

the box. Did you ever see the chart that we had showing the Department of Defense acquisition process, that maze?

Mr. O’KEEFE. Yes, sir.

Senator THOMPSON. If we put that on-line, are we accomplishing

anything? [Laughter.]

What is the relationship between these problems and what we

are trying to do in terms of e-government?

Mr. O’KEEFE. A range of responses to whether we would be accomplishing anything by putting that on-line raced through my

mind, and I have elected to offer none of the answers I had in

mind.

I think in part what you put your finger to is, again, my strongest bias on this particular question, and it is the basis of the colloquy that the Chairman and I had a few moments ago. Any time

you set up a condition in which information technology for the service of any individual community, be it financial, personnel, logistics, acquisition—whatever—if it is set up as a means to service

that individual community in and of itself, self-contained, you have

created a marvelous stovepipe that positively self-preserves and

therefore——

Senator THOMPSON. Even if it works.

Mr. O’KEEFE. Even if it works—that is exactly right. And as a

consequence, it realizes Senator Stevens’ worst nightmare, which is

that you spend at least double—it is usually worse. Again, thinking

back to a previous incarnation in public service, my greatest mistake in the financial management community in an opportunity of

dealing with financial management question in the Department of

Defense was not looking at the integration of those individual information systems and forcing, requiring, that there be an interoperability. Instead, we perpetuated, permitted, institutional concerns to continue to preserve individual stand-alone systems as if

somehow those communities were sacrosanct for financial systems,

for personnel, for inventory control—whatever.

There is not a corporate around that survives today with that

kind of approach, at all—which I have subsequently learned a lot

more about. And if there is an opportunity to really reinforce that

in this initiative, that is the approach we are taking to it.

So if anything, I see not necessarily e-government as much as

the application of information technology within an e-government

framework as being the approach we are looking at to facilitate the

accomplish of all those management agenda items identified at the

beginning.

Senator THOMPSON. Well, what does that say about having

standards, government-wide standards, best practice standards?

This legislation has some requirements, as I recall. What does that

say about letting every department find its own salvation with

strong management at the top, versus having best practices or different kinds of standards, or mandates that, government-wide, evVerDate 11-MAY-2000 09:04 Apr 04, 2002 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 75470.TXT SAFFAIRS PsN: SAFFAIRS
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erybody has got to do certain things because there are certain commonalities with regard to the needs and problems.

Mr. O’KEEFE. Well, again, I am extremely reticent to dictate or

to advocate that anyone dictate what a common system ought to

be. Instead—I think you put your finger on it exactly right—if you

identify with a degree of precision and real clarity exactly what

performance standards you expect, that in turn will facilitate the

decentralized management discipline that you have outlined very

succinctly.

A quantum, dramatic improvement that we could do that would

be a real order of magnitude change all by itself is just to bring

it up to commercial standards and to implement and requirement

that those performance standards across the board for information

technology be applied to commercial standards. That would be a

major improvement. It would be a cake walk for some departments

and agencies to accomplish. Certainly, as the Chairman described,

the Department of Transportation system would be an ideal model

for that kind of a case—and on the other side of the equation, to

elevate it to at least those standards would be an improvement.

To look at cost savings objectives of what you anticipate in business operations to meet commercial standards would be a very enlightening approach to it, and to require that the technology be no

more than two generations behind, which as this Committee well

appreciates, we are therefore talking about not more than 3 years

old, because that is how fast the technology moves, would be a

major improvement in performance standards all by itself.

But if you look across the government, you find systems at the

Health Care Financing Administration—until they changed their

name, I guess—where they are operating data collection systems

that trace their genesis back to the sixties and are still maintaining those kinds of systems for those purposes. It is incredible.

Senator THOMPSON. We are told by Silicon Valley that technology

is changing so rapidly that they cannot go through a 30-day licensing process, that that is too onerous for them, and yet you are saying that our systems date back to the sixties.

Let me move on to another question. We keep talking about management. At OMB, the deputy director for management position is

still not filled; controller is still not filled; OIRA is pending a Senate vote. We have spent quite a bit of time lately addressing the

Presidential appointment process, and I think everybody agrees

that that situation is badly broken, and we are trying to do something about it. The Office of Government Ethics testified that one

way to improve the process would be to simplify the financial disclosure requirements, and they have come up with some suggestions. I understand that that is within the bowels of the administration somewhere, over at the White House for counsel’s review,

I suppose.

Do you know where that is and how fast we can expect some

kind of response so that we can move that initiative down the

road? We have got to have White House cooperation with regard

to the FBI background checks. We have got to have Senate cooperation with regard to our forms. We need to review our whole

policy and how many nominations we really want to have hearings

19

on. But a key part of it is the ethics requirement, and it has been

a while since we have had a chance to look at that.

Do you know where that is?

Mr. O’KEEFE. First and foremost, I want to commend you for

championing that initiative. On behalf of all others who are subjected to the confirmation process, that is a—— Senator THOMPSON. About 25 percent of top-level appointees now

are in place—25 percent—and some are saying that it will be well

into next year.

Mr. O’KEEFE. Yes, sir. It is a slow, difficult process which, again,

you have shed a lot of light on through the hearings you have conducted, and I think it prompted the Office of Government Ethics

to move to the legislative initiative and the rules changes that you

have suggested that are under way right now on financial disclosure. As a result, they have pushed that forward. It is in fact in

the coordination process now. I am advised it is with White House

counsel, and they are due to meet on it, I guess, within the next

week to work that through. So there are an awful lot of us who are

very enthusiastic about moving this along expeditiously, and who

thank you for your efforts on this issue.

Senator THOMPSON. Finally, let me ask you very quickly—the

Chairman mentioned the Associate Director for Information Technology and E–Government. How is that going to relate to the Office

of Information and Regulatory Affairs that has statutory responsibility for information technology?

Mr. O’KEEFE. In concert with it, but probably not much more so

than what we see across all the statutory offices—for Office of Federal Procurement Policy, within OIRA, as well as the controller’s

position. I think all of those are going to be, as we discussed a moment ago, the kinds of interdisciplinary functions that will require

a lot of coordinated effort with an information technology focus to

facilitate greater decisionmaking and management coordination.

So in that regard, I think there is going to be as extensive a degree of interrelationship with OIRA within the Office of Information and Regulatory Affairs but also with other elements of that as

well. So it will be very extensive in that regard.

Senator THOMPSON. I am not sure what that means, but it

sounds pretty good.

Mr. O’KEEFE. Can I try again?

Senator THOMPSON. But if I were taking over OIRA, I would be

asking you some follow-up questions.

That is all I have. Thank you, Mr. Chairman.

Mr. O’KEEFE. John Graham seems to be content, if he is ever

confirmed, assuming the Senate moves in a manner in which that

is successful.

Chairman LIEBERMAN. Thanks, Senator Thompson. Senator Carper.

Senator CARPER. Thanks, Mr. Chairman.

Mr. O’Keefe, welcome back. I think the last time you were before

us was for your confirmation hearing. We are glad that you are

where you are and delighted that you are joining us today.

Mr. O’KEEFE. Thank you, Senator.

Senator CARPER. I want us to back up just a little bit. Describe

for me if you will the approach in the current administration, the

20

new administration, for e-government and what—this is a threeparter—just as status quo, where are we right now? What you have

inherited?

Second, what would the administration like to do in this arena?

And third, how does that mesh or not mesh with what is proposed in the legislation before us?

Mr. O’KEEFE. First and foremost, the e-government initiative is

part one of five in an interrelated set of initiatives that the President has selected as his management agenda for this administration and for this term. And it is an integral piece of that; the sum

of the parts is far greater than any individual combination that

would make that work, so they all have to be interrelated in this

regard.

It is primarily focused on three areas that the President is committed to. First and foremost is a citizen-centric focus, which is to

facilitate the information flow with all Americans who want to access through this particular means the information that is available throughout the Federal Government for that purpose and to

make it available for transactions for individuals as well.

Second, is to transact commerce between individual business and

government, to improve the efficiency in that regard as well as

make information reporting requirements and all the other factors

that we require of industry through Federal regulation as well as

through statutory compliance to be reported through that mechanism.

Third, is to facilitate government-to-government relationships,

State and local transactions as well as the Federal interrelationship with those offices for block grants, for a range of different

kinds of direct intergovernmental kinds of activities that occur—reporting requirements, and so on.

Senator CARPER. What was the second one?

Mr. O’KEEFE. Between government and business, again to transact business as well as facilitate faster, more comprehensive reporting compliance.

So those three areas are the means by which it leverages the accomplishment of the other elements of the President’s management

agenda very specifically, which I outlined at the beginning.

In terms of where we are now, again, to borrow a term that the

Chairman used in his opening statement, it is an uneven application right now. At very best, I think you can say that we can see

throughout the Federal Government some of the very best examples of comparable commercial compatibility in some agencies and

departments, and it is not necessarily even dependent upon whether you think they naturally ought to fit in those agencies or departments; it sometimes turn on the aggressiveness or the focus or the

attention of the senior management and leadership of those agencies and departments more than any other variable.

We can also see some of the ultimate examples of information

technology Luddite throughout the Federal Government in other

areas. So I think it is an uneven application across the board, and

where we are now is an attempt to at least raise all boats to at

least that top common standard which we experience within commercial enterprise. That is a very ambitious goal in and of itself

but one that is achievable.

21

In terms of how do we intend to mesh this with S. 803, which

is as I understand the third part of your question, it is to take the

Chairman and Senator Thompson up on their very gracious invitation to work with the Committee to fashion this as a means to facilitate this larger agenda and vision that the President has outlined as part of his management objective for this administration.

Senator CARPER. I want to revisit the structure that you have set

up within OMB. Is there a person who reports to you who is in essence the CIO? I am sorry—you are the CIO; right?

Mr. O’KEEFE. Well, the approach that the President has outlined

is that he will delegate and seek to have the deputy director for

management serve as the Federal CIO, and we are in the active

process right now of recruiting for a deputy director for management. In that regard, that individual will be the Federal CIO——

Senator CARPER. And whom would that person report to?

Mr. O’KEEFE. To the director and myself; the director, the deputy

director, and the DDM would all operate within that process.

The Associate Director for Information Technology and E–Government, Mark Foreman——

Senator CARPER. Who?

Mr. O’KEEFE [continuing]. Mark Foreman—who has been

brought on board and who is no stranger to this Committee, with

industry experience as well as a lot of time here——

Chairman LIEBERMAN. Tom is new; you will have to forgive him.

Senator CARPER. Is he from Delaware? [Laughter.]

Mr. O’KEEFE. One of those 750,000, sir.

Senator CARPER. And counting.

Mr. O’KEEFE. Yes, and counting.

The approach that we have taken there is again on par with and

comparable to the associate directors who have recognizance for individual parts of government review as well as with the Office of

Information and Regulatory Administration, the Office of Federal

Procurement Policy, and the controller. So those are comparable organizational standing for the purpose of facilitating this initiative

in information technology across the Federal spectrum.

Senator CARPER. I guess the person who you will get to fill this

position is the deputy for management?

Mr. O’KEEFE. Right.

Senator CARPER. You need someone who can actually reach out

to the other departments and get their attention, someone who

knows his stuff but can actually reach out and talk to Cabinet secretaries, and they will listen. You need someone who has your ear,

who has the director of OMB’s ear, and also to some extent, the

President’s ear.

Mr. O’KEEFE. We concur. That is exactly the job description we

are looking at.

Senator CARPER. The idea of the approach that you are taking

here of putting this power in OMB, I find attractive, because there

is probably no agency as close to the Presidency as OMB. You have

the money; you control the budget in OMB, and OMB has the clout

to be able to reach out across the government and get people’s attention, and to the extent that we want standards and adherence

to those standards, that would seem to work.

22

I would go back to a point that I made earlier. There is a lot of

innovation going on down at the grassroots that you may or may

not be aware of, and I am probably not aware of, but there are

some really good things going on down there, and part of what we

need to be able to do is to encourage and to incent that innovation.

To the extent that you have agencies that are doing an especially

good job—we alluded here earlier to some things that are going on

in Department of Transportation—to find ways for them to serve

as role models, to get other people excited.

As my last point, I will just build on what you said earlier. If you

look at an agency, and you find that exciting and innovative things

are going on with respect to harnessing the power of e-government

to serve people and do our job more effectively, the leader of that

agency is really important in that arena. And often in the case of

the leaders of those agencies, this is not their shtick. It is not

something that they have grown up believing in or really knowing

about. We find with our schools back in my State, that the schools

that do the best job of harnessing technology in the classroom to

raise student achievement are the ones where the principals understand, and the principals get it. So that somehow, we have to fashion a system here where not just the principals get it but where

the folks who are leading our agencies get it and will say to the

people who work to them: This is important; it is important to me,

and it is important for those whom we serve.

Thanks very much.

Mr. O’KEEFE. Thank you, Senator. I appreciate it.

Chairman LIEBERMAN. Thank you, Senator Carper.

Senator Bennett.

OPENING STATEMENT OF SENATOR BENNETT

Senator BENNETT. Thank you very much, Mr. Chairman. I appreciate the opportunity to be involved here. I have been writing down

questions, and my staff have been writing down questions, and I

am going to ignore all of them—well, not all of them—and go to

an area that has become something of an obsession with me, because I think the other questions that I would ask are being adequately asked by Members of the Committee.

As you may know, Mr. O’Keefe—we have had this conversation

privately—I am very concerned about security, and not just cyber

attacks and terrorism and the kinds of things that give rise to

those sorts of scenarios, but let me talk for just a minute about

interruption-in-service attacks. We have seen the ‘‘love bug’’ virus

which cost the economy $8 billion or more, depending on whose estimates you read. We have seen the interruption-of-service attacks

that hit Amazon.com and some other commercial entities. The vulnerability that the government might have if there were an interruption-of-service attack levied by someone who was more than a

hobbyist—and the attacks that I have described have been very unsophisticated and almost sophomoric in their technology level—the

exposure that the government would have if you moved to the level

of e-government activity that you are talking about here would be

pretty high.

Could you address that general question, and then I would like

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23

ing with that. But first, if you become as accessible for e-government as, say, Amazon.com is accessible for e-commerce, what kinds

of vulnerabilities are there for someone who wants to create mischief?

Mr. O’KEEFE. I guess my personal bias is that we are going to

be vulnerable; there is just no question about it. There are just so

many steps that you can take to be preventive in these cases; there

are defense mechanisms that you can create for those purposes.

But I think the key to the problem is to remain as attentive as you

have suggested we need to be to the fact that it is a vulnerability

that is out there all the time. There is no question that that is

going to be a real challenge.

The approach that we have taken to this, rather than simply say

here are the defensive mechanisms that we think are necessary or

the particular approaches that ought to be used for security, given

the fact that there are lots of different ways to go about this, and

the nature of those attacks are varied, is first and foremost what

we have done in development of even this first budget submission.

But it will really be aggressive in the 2003 submission, and that

is to require the agencies and departments to demonstrate how

they have built in both security and privacy features in the information technology initiatives that they are championing prior to

our advancement of those requests to the Congress for funding of

those initiatives, so that at least we can identify what their plan

is, how they intend to deal with it, and be cognizant of what the

problem is. Because again, I think the lion’s share of the problem

in this circumstance is to be aware of the fact that that vulnerability exists and that it is a fairly easy proposition to break. Given

the fact that we are looking for transparency, that opens us up

even further. So we need to be more cognizant of that, and work

on it very hard.

The second one I would offer to you is that our greatest challenge

in this case is, again, back to some organizational stovepiping that

exists. If it is not in some department’s jurisdiction, they consider

it to be somebody else’s problem. So part of the approach that has

been taken on is to create an interagency effort in this regard that

is about to be codified in an executive order that the President will

consider that has been in the vetting process for several weeks

now, through the National Security Council and all the appropriate

players involved.

Senator BENNETT. I am very familiar with that one.

Mr. O’KEEFE. OK. That is the two-prong approach we are trying

to take with this.

Senator BENNETT. We held a hearing in the Joint Economic Committee on the vulnerability of the economy as a whole, and just to

repeat as background for my next comment, 85 percent of the

things that are vulnerable in our society are in private hands; so

even if we had the very best of security on the government level,

we would still be vulnerable to someone who wished us ill by attacking the phone system or some other key infrastructure circumstance in the United States. I have had some preliminary conversations with Chairman Lieberman about this, and I understand

that he wants to pursue it further, as I do.

24

One thing that came out of the testimony before the Joint Economic Committee is that the witness from—I believe it was the

CIA, but there were enough other witnesses that I may have it confused in my mind—he said we are approaching this challenge

tactically, and we are not thinking strategically. We are not backing away from it to get the whole picture and understand the strategic vulnerability and opportunities that are there for the United

States with respect to this world.

And let us understand, as Chairman Stevens has indicated, that

we are living, whether we like it or not, in a full new world, and

we have the old paradigms that are constricting us.

So if we are talking about a Federal CIO, wouldn’t the responsibility to view this whole question strategically lie primarily with

him or her, and would OMB be in a psychological circumstance

where they could accept that kind of a strategic view, so that we

are not just talking about from one agency to the other, but we are

talking about the whole economy here and some Federal leadership

that says, OK, we have to recognize the new world in which we

live; it has potential for enormous productivity increases, enormous

increases in sharing of information, enormous increases in efficiency, but at the same time, concomitant increases in vulnerability. And someone who either wants to shut down the government because they do not like us or steal money—organized crime

is finding that unlike Willie Sutton, who robbed banks because

‘‘that is where the money is,’’ they can rob the Internet sites, because that is where the money is, and we have had examples of organized crime, not in this country but from other countries, trying

to break into American banks and steal money electronically. You

are talking about putting an enormous amount of Federal information now available on the Internet and the vulnerability of people

coming in and saying, OK, let us screw up the Federal Government

by coming back at it.

Are any of these concepts on OMB’s radar screen or are you saying, as you did in your earlier comment—and I am not being critical about it; I am just pursuing it—that this belongs to

Condoleezza Rice’s level——

Mr. O’KEEFE. Oh, no.

Senator BENNETT [continuing]. And she has spent a lot of time

thinking about it—I have had several conversations with her about

it—so we at OMB can stovepipe to the extent that we can say no,

our mission is just to get it efficient, and we will leave this other— or are you and your potential CIO thinking in these strategic

terms?

Mr. O’KEEFE. I appreciate the further clarification. I did not

mean to suggest that this was something that we considered on

somebody else’s table. If anything, OMB has this as a dominant

issue in the equation. I can assure you that just in the last couple

of weeks, having spent several hours with an intergovernmental

group co-chaired by me and Condy Rice’s deputy, Steve Hadley,

working through the very issues you are talking about here—so if

anything, I associate myself with your remarks very directly, because I think we have failed to consider this on a strategic level

and consider it to be more of a coordinative function and one that

requires a lot more proactive stance to it. That is part of what the

25

President’s initiative—the executive order pending that you are familiar with—is intended to deal with.

So we spent a lot of time vetting through that, and again, really

pushing through the colander the kinds of requirements that I outlined on what the department and agencies have in mind, at OMB

looking specifically at how they intended to address security and

privacy issues, is a criterion we have pursued there.

So if anything, Condy Rice has done a tremendous job of leading

the charge in this regard, convening the National Security Council

sessions, with Steve Hadley as the deputy, but it is one that we

have a very active part in at OMB and in which we are involved

very closely in accomplishing that task.

That is a lot of the reason as well why our effort to recruit the

Associate Director for Information Technology and E–Government

was so essential, is to coordinate this on a more strategic level as

opposed to continually looking at it as individual programmatic

kinds of questions that fail to have that interrelationship.

So we concur with your assessment entirely.

Senator BENNETT. Thank you very much.

Thank you, Mr. Chairman.

Chairman LIEBERMAN. Thanks very much, Senator Bennett, for

raising this subject. You and I have talked about it, as you said.

I appreciate your interest and concern, and I share it. The obvious

fact is that the Internet and information technology open up extraordinarily exciting new possibilities to communicate in every

way, and the more we do it, the more we become dependent on it

and the more, also, there is a vulnerability. And of course, it provides people outside the United States who may for one reason or

another wish us ill an unprecedented opportunity to strike at us directly. This evokes some of the thoughts that have been bouncing

around here for a while about homeland defense, but we have become vulnerable in a very different kind of way.

So I hope the Committee can find a thoughtful and constructive

way, and I look forward to Senator Bennett playing the leadership

role in it, to pursue these issues and again, of course, to work with

the administration. So I thank you.

Senator Voinovich.

OPENING STATEMENT OF SENATOR VOINOVICH

Senator VOINOVICH. Thank you, Mr. Chairman.

As the Ranking Member of the Subcommittee that oversees the

management practices of the Federal Government, I am very interested in discussing the future of electronic government and how information technology can improve the delivery of services.

I think we all agree that the Federal Government lags behind

the private sector, but Mr. Chairman, one thing—and maybe it is

because I was a mayor and a governor—that I have noticed in Congress is that we have a tendency to mandate on the administrative

branch of government how we think the management side should

get the job done. I think the most positive thing I have heard today

is that the administration is going to work with this Committee to

try to figure out how we can best help. And I would hope that the

final result of that is not that we impose something on the administration that it does not think it needs to get things done. So we

26

will be anxious to hear from Mr. O’Keefe how he thinks we can

help.

I think we also cannot forget the fact that e-government is going

to require a technologically savvy work force and that we would be

remiss if this hearing did not include a discussion of how the Federal Government is going to recruit and retain the high-tech work

force of the future. I would suspect that one of the reasons why

many Federal agencies are not as competitive as the private sector

side is the fact that we have not been able to retain and attract

the kinds of people that you need in those agencies. I would respectfully suggest that hiring somebody to be the top person to run

this show is in itself not going to get anything done unless you

have capable troops out in the agencies.

I think I have talked to Mr. O’Keefe about this before, but I really think that the most important thing the administration should

be doing is doing an inventory of the human capital resources that

you have in respective departments, including the status of your

capacity in the information technology arena, trying to make sure

that you keep the folks that you have and also try to figure out

how you can attract the folks that you do not have.

One of my first legislative priorities when I came to Congress

was the passage of the Federal Financial Management Assistance

Act. This act streamlines the application process for financial assistance by consolidating Federal paperwork requirements.

I would really like to receive from you a status report on the implementation of that Federal Financial Management Assistance

Act. It is my understanding that OMB has designated the Department of Health and Human Services as the lead agency to coordinate the efforts of the various grant-making agencies and that a

joint implementation plan has been drafted by the agencies that

promotes the use of electronic grant projects.

My questions are: Do the agencies have sufficient resources and

training to administer these grants electronically? What, if any,

barriers prevent this act from fully implemented? And what assistance can this Committee give you?

The only reason I bring it to your attention is that here is an initiative that we started a couple of years ago, and I know that when

we were talking about implementing that legislation, I had an argument—or, let me say a discussion—with the House sponsor

about how fast the agencies would be able to move forward, and

as we looked at the time line, part of it went from one administration to the next, and I suggested that the next administration

might be going through a transition period, and it might be difficult to reach the time line.

But I think that if you looked at that legislation and where it is

at, it would give you a very good insight into just how difficult it

may be to do some of the things that this Committee thinks can

be done if we had some person who was just dedicated to making

it happen.

You have mentioned in your testimony that ‘‘E-government initiatives must be linked with other management reform initiatives

such as the strategic management of human capital, budget and

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27

cial performance.’’ I would be interested in how the administration

proposes to integrate these various management reform initiatives.

The other thing that you talked about was the issue of standards, that you felt this proposed legislation does not provide the

performance standards to be effective.

So if you could, in the few minutes that you have left, share with

me—maybe the best way to start off is with the standards. What

are your suggestions on how those standards could be put in place?

Mr. O’KEEFE. As usual, Senator Voinovich, you have posed an extremely challenging set of questions that I will try to tick through

quickly.

Let me start with the standards question at your request and

then move through the balance of the other questions as well. First

and foremost, the standard that we are seeking is to at least make

an order-of-magnitude leap to a commercial standard, which would

be an improvement in and of itself; if we could establish that again

as a more level kind of approach to things, that would be an accomplishment that I would be very, very pleased with in and of itself,

because there are so many cases in which we are woefully behind

even commercial standards.

The second one is to think more in terms of how to achieve costefficiency in just basic, garden-variety business operations. To

achieve a cost-efficiency target or objective in that regard, which is

a standard commercial practice anywhere, to just adopt that approach would be a useful mechanism as well.

The third one, very generically, is to look at the accomplishment

or the attainment of a generational condition that is no more than

two generations old which, by definition, is no more than 3 to 5

years. As a matter of fact, given the speed with which information

technology advances are introduced, 5 years is probably way beyond two generations—it is probably much earlier than that—but

I just use that as a general benchmark. So that would be an approach to start with and to flesh out even further than that, but

it is one that the Chief Information Officer’s Council, the CIO

Council, will be charged with trying to establish what those standards ought to be and agree to terms that make more specifically

who would apply in those three cases.

Let me work through a couple of other points you raised as well,

because they are very important ones, and they cut directly to the

issues that we are involved with.

First, in working with the Committee, I agree with you wholeheartedly, there is no question that we are dedicated to the proposition of making S. 803 a bill that will facilitate and help accomplish the President’s initiative in this regard. So there is no doubt

about it, this is a very helpful move and initiative in that regard.

We are anxious to work together to do that and appreciate very

much your sensitivity to the administrative and managerial realities of how this has to be done relative to legislative imperatives,

and we seek to combine those and make them as compatible as

possible.

Second, as far as the work force and the overall strategic management of human capital question, you are exactly right. Our objective is to inventory, and we are about that business right now.

We have asked each agency and department to produce a work

28

force planning objective which, as a matter of fact, is due right

now; we are seeing it coming in from each of the departments and

agencies. They have been working on it for the last 3 months, to

produce exactly what their objectives and targets are for not only

overall personnel levels but specifically what skill sets and expertise requirements and training efforts are necessary, all of which

we have asked for now as a means to factor into the fiscal year

2003 budget review and the 2003 budget presentation that we intend to make before Congress next winter.

So this is our effort to try to accomplish that task, get the information that is necessary, and try to factor that into the budget

itself.

Finally, on your question on the Financial Management Assistance Act, indeed HHS has done a tremendous job of pulling this

together and taking a leadership role that I heard about, as a matter of fact, just this morning in terms of an update of where they

are on that.

Secretary Tommy Thompson has really taken this on personally,

has been actively involved in it, and has, as I gather, assembled

some 26 different agencies for the purpose of trying to pull together

all the information necessary to comply and to work through

this——

Senator VOINOVICH. I might make a suggestion that just by doing

that, it will give you an insight into where those agencies are in

terms of the personnel that you need.

Mr. O’KEEFE. Absolutely, and as I understand it, that was one

of his observations, that this has demonstrated some of the glaring

issues that are required there. And apparently, they have worked

through this in the course of the last several months with the intent of developing a very comprehensive response to the requirements of the act that will go through not only what the training

requirements are, what the funding requirements are, but also

identify whatever statutory as well as administrative impediments

and barriers may exist that we will identify for you and accompany

all of that as part of the fiscal year 2003 budget submission.

So it was a very important initiative and one that has been

taken seriously, and I was delighted to learn that Secretary

Thompson has embraced this with a lot of enthusiasm.

Senator VOINOVICH. Thank you.

Mr. O’KEEFE. Thank you, sir. I appreciate it.

Chairman LIEBERMAN. Thanks, Senator Voinovich.

Senator Carnahan, welcome.

Senator CARNAHAN. Thank you very much, Mr. Chairman.

I would like to take a brief moment to make a few opening remarks, if that is all right.

Chairman LIEBERMAN. Please.

OPENING STATEMENT OF SENATOR CARNAHAN

Senator CARNAHAN. I would certainly like to applaud you for

your leadership on this very forward-looking proposal. The time

has come for government agencies to follow the example set by the

private sector. We must begin to use the Internet and other information technology to increase efficiency, bolster accountability, and

cut wasteful spending.

29

E-government will enable users to interact with government

agencies at their convenience, 7 days a week, 24 hours a day. This

is exactly what Americans have come to expect on-line from the

private sector.

Electronic access provides a means to avoid trips to government

offices and to avoid the aggravation of standing in line. We want

to allow citizens to be on-line and not in line.

I am glad that one of today’s witnesses will testify about States’

efforts in regard to e-government. I am proud to say that the State

of Missouri is engaged in an aggressive effort to deliver digital government services, and I look forward to hearing about the status

of e-government in other States around the Nation.

Mr. Chairman, I am extremely pleased that this initiative contains provisions designed to protect users’ on-line privacy and security. I have just come from a Commerce Committee hearing where

the topic was the collection, use, and dissemination of personal information by commercial websites.

I believe strongly, however, that government must take the lead

in guaranteeing on-line privacy protection. Especially as we move

government into the digital age, we must pay particularly close attention to guaranteeing privacy and security on-line. I believe

strongly in the importance of e-government. I am concerned, however, that the benefits that e-government promises to deliver will

only be available to those Americans who have a computer and access to the Internet. As such, today’s discussion must also address

the so-called digital divide. Digital government must engage everyone, not just those who have the means to access the Internet.

Your legislation today, Mr. Chairman, begins to address this concern by calling for the Department of Education to evaluate the

best practices currently being used by Community Technology Centers that receive Federal funds. These centers focus on providing

Internet access to all visitors with the goal of making on-line services available to everyone. The bill also promotes the availability

of Community Technology Centers through a variety of assistance

measures.

But more needs to be done, and I am committed to finding ways

to bring the benefits of Internet access, particularly high-speed access, to more Americans. E-government is a perfect example of the

type of opportunity that is unavailable to Americans who do not

have access to the Internet.

I am extremely supportive of your efforts to provide an on-line

government that is seamless and efficient and secure, and I am

convinced that digital government will provide countless benefits

for the American people.

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

that digital government is accessible to all Americans. I have a

question for the witness.

Mr. O’Keefe, we can create a solid e-government foundation and

a complex service network, but citizens will not use these on-line

services if they do not know how to access them or if they are unaware of their existence. What can be done once digital government

is fully implemented to ensure that the American people are informed of the new service that is available to them?

30

Mr. O’KEEFE. I think that first and foremost is to keep it simple.

Accessibility is in and of itself simplicity. I think the information

technology industry has evolved to the point where they have emphasized accessibility. And again, its virtue is the simplicity of it.

If it is complicated, any of us as humans then end up looking at

the problem, whether we are interested in information technology

or not, and do not want to go through the mechanics of making

that happen. So it is one of the greatest advances in the industry.

What has, I think, made the market for the products of this industry so appealing to us as humans is that it is so much easier,

much more—the old shopworn phrase—‘‘user-friendly.’’ That has

got to be the first guide, and that has got to be the first fundamental premise, to make this as transparent and as ‘‘user-friendly,’’ to use that old term, as we possibly can.

That therefore means it has got to be more interoperable with

other systems. It cannot be a stand-alone proposition, and it cannot

be something that only a department or an agency can maintain

or operate or deal with for the purpose of advertising its own objectives.

One of the great advances that this Committee was on the forefront of initiating is the establishment of the FirstGov.gov system.

It is a nascent effort, it is a beginning, but it nonetheless is intended for that purpose of portability, interoperability with a number of different systems, and a means to access a wide range of different government efforts just be a very simple, basic accessing,

click-on kind of approach to things that they have designed in that

site.

We have to take more and more of those kinds of cues to make

this a user product, one that citizens and citizen-centric kind of

focus can always emphasize but that also has the sophistication to

it necessary to make business and government transactions and

government-to-government transactions. All those things are

achievable, and the state of the industry, the state of the commercial products that exist out there now, is such that this is an attainable objective and one which we ought to be able to aspire to.

Senator CARNAHAN. Thank you very much.

Mr. O’KEEFE. Thank you, Senator.

Chairman LIEBERMAN. Thanks, Senator Carnahan. I look forward to working with you on this subject.

Mr. O’Keefe, we have no further questions. Thanks very much for

your testimony. It has been a good interaction.

I just want to repeat my commitment to working with the administration on this, and I would really like to do it soon. In other

words, to state the obvious, this technology is moving so rapidly,

and we have great opportunities. If there are differences—and

there are some differences, but I do not consider them by any

means unbridgeable—we ought to try to bridge them as quickly as

we can so that the country can enjoy the benefits of the best information technology in the Federal Government that we can manage.

So we are going to be in touch with you real soon to see if we

can begin the process of going forward with the legislation.

Mr. O’KEEFE. I am anxious to do that. I appreciate your gracious

hospitality as always, Mr. Chairman. It is nice to see you.

Chairman LIEBERMAN. Thank you. You, too. Have a good day.

31

1The prepared statement of Ms. Altman appears in the Appendix on page 72.

We will now call the third panel, which includes Anne K. Altman, Managing Director, U.S. Federal-IBM Corporation; Dr. Costis

Toregas, President of Public Technology, Inc.; Aldona Valicenti,

President of the National Association of Chief Information Officers

of the States; and Greg Woods, Chief Operating Officer of the Student Financial Assistance of the U.S. Department of Education.

Thank you all for being here, and I appreciate your testimony.

Ms. Altman, why don’t you begin?

TESTIMONY OF ANNE K. ALTMAN,1 MANAGING DIRECTOR, U.S.

FEDERAL-IBM CORPORATION

Ms. ALTMAN. Thank you, Senator.

Chairman Lieberman, Senator Thompson, and Members of the

Committee, I am delighted to be here today to speak to you about

IBM’s views on e-government.

I am Anne Altman, the Managing Director for IBM Federal. I

was really eager to testify today, because we believe the E–Government Act of 2001 will truly speed the transformation of the Federal

Government to a more contemporary enterprise, a government that

can improve services for its citizens, improve efficiencies, reduce

costs, and continue the leadership of the United States into this

networked society.

S. 803 also hits very close to home for those of us at IBM. We

have gone through our own transformation out of necessity. So I

would like to spend a moment talking a bit about IBM’s transformation.

Incorporating Internet technology into our core business allowed

us to be successful in today’s very global and changing economy.

We have become an e-business leader, and we have done so by

breaking down silos or the walls between our own business; we

have integrated across business through our processes and systems, and we now approach the market as one IBM, a single integrated organization rather than the 20 separate business units

that we had several years ago. The results of that transformation

were well worth the risk and the discomfort that we experienced

along the way.

To regain control of our IT environment, we consolidated 155

data centers across IBM. We replaced segregated networks into one

global network. We appointed a single, enterprise-wide CIO responsible for defining consistent architectures and standards. And we

restructured our IT strategy to be consistent with the overall business strategy of IBM—and that is something that has been brought

up today—very important in aligning that IT strategy with the

mission and objectives of the business of government.

These changes enabled a lot. We did $23 billion over the Internet

last year. That is nearly one-quarter of all of IBM’s revenue.

Chairman LIEBERMAN. That was business-to-business or business-to-consumer?

Ms. ALTMAN. Both business-to-business and business-to-consumer. That is up 350 percent in just 2 years.

32

We also provided a means to handle 99 million self-service, selfcustomer service over-the-web transactions. That was up from 14

million just 2 years ago.

But that is not all. We did 96 percent of all of our procurement

with paperless invoicing.

The benefits of these changes were truly significant. We save

now 70 percent of the cost of every service transaction that we do

over the web versus the old paper way. Seventy percent is tremendous.

All told, we saved $377 million in 2000, and beyond the hard savings is the actual cost avoidance. That was $2.4 billion for IBM, or

nearly 2.7 percent of our revenue. If you were to apply these

metrics to government, you begin to focus on the size of the opportunity that e-government offers.

Consider, for example, the discretionary spending in the HHS

budget alone, at $55 billion—2.7 percent cost avoidance there

would be nearly $1.5 billion; or for HUD, with discretionary spending in their budget of $30 billion, that cost avoidance would be

around $810 million.

So for the Federal Government, transformation will not be easy.

There will be problems. We have talked about some of them this

morning—technical, political, bureaucratic problems. But I assert

that the results will be well worth it.

To create transformation, government leaders have to focus on

several critical policy issues and choices surrounding leadership, integration, and infrastructure. In addition, you have to address

human resources, privacy, security, and resistance to change. This

bill successfully addresses the most crucial of these.

Developing a transformation plan in the starting point. The E–

Government Act of 2001 begins the process and will address the

most important issues in creating linkages to integrate the entire

government enterprise—interoperability, funding, and leadership.

The most fundamental aspect of the transformation is creating a

technical foundation that will enable the agencies to communicate

with each other and with the outside world. With the breadth and

size of the technology currently used in the Federal Government,

I think that this interoperability is key.

To that end, those serious about e-government must create and

maintain standard, spaced information infrastructure. The speed of

technological advancements in our networked world demands this,

and the technology exists today to do it.

The second major aspect of the bill is the e-government fund.

Once you recognize the need for connection between or within

agencies, you then have to get them to actually do it. Our experience has shown that starting in small steps through pilots projects

such as those anticipated with the e-government fund helps break

down resistance to change.

Pilot projects reduce risk, they create momentum, and they allow

success to breed success. It results in providing an example and

raising the bar of success for everyone involved.

The fund will promote interagency cooperation, it will provide an

incentive for savings to the people doing the saving themselves, it

allocates money based on the value of a project, not on the basis

33

1The prepared statement of Mr. Toregas appears in the Appendix on page 82.

of a fiscal year time line. All are excellent means to drive cooperation which is necessary for the success.

The funding level proposed in the bill is a start. It is a minimum

necessary to have impact. But I believe that to truly implement

transformation, agencies must have their skin in the game within

their ongoing IT budgets.

A third point regards the Federal CIO provisions of the bill. In

our experience, executive leadership is the critical element in enterprise-wide transformation; without it, nothing really happens.

This is especially true in large organizations with great inertia and

the ability to wait it out, wait until the next, less demanding leader

comes along.

We believe that the title ‘‘CIO’’ is not as important as the accountability and the strategic leadership of the position. To move

forward quickly with interagency cooperation, visionary, aggressive, top-down leadership is required. This leader must be appointed by the President, recognized by most senior leaders in the

government as a peer and a partner. This leader must focus on

cross-government IT infrastructure and on implementation.

The E–Government Act of 2001 is a giant step toward closing the

growing gap between e-transformation in the public and the private sectors.

Chairman Lieberman, Senator Thompson, and Members of the

Committee, I thank you for the opportunity to be here today. IBM

is ready and able to work with you on this issue.

Chairman LIEBERMAN. Thanks very much, Ms. Altman, for a

very thoughtful statement.

Dr. Toregas, thanks for being here. Please proceed.

TESTIMONY OF COSTIS TOREGAS, Ph.D.,1 PRESIDENT, PUBLIC

TECHNOLOGY, INC.

Mr. TOREGAS. Chairman Lieberman, Senator Thompson, and

Members of the Committee, I am very pleased to be here representing the voice of local governments.

Public Technology, Incorporated is a nonprofit, tax-exempt institution created over 30 years ago in the belief that technology has

a role to play for cities and counties—the very rubric of our society.

Our mandate is to focus on technology, and you will not be surprised to hear that cities and counties have been experimenting

around the edge of this e-government opportunity since the early

1990’s when the City of Palo Alto and the City of San Carlos and

a few other small communities set up what they thought was an

experimental thing called a ‘‘website’’ on the Internet. This was 7

or 8 years ago, before most of us appreciated the power that was

to be an electronic government potential.

I would like to share with you a couple of lessons that the local

governments, the cities and counties of this country, have learned

in the true hope and belief that we can learn from one another.

First, we have found that in order for e-government to work,

there has to be an e-citizen. I think the Committee has already

heard quite a lot about the concerns about accessibility. The only

slightly different answer that I would give to the answer that was

34

given to Senator Stevens on the question about how about the people who cannot access is that I would just overturn the order and

make that my priority. I would make it my priority to make the

system, the technologies, become more and more accessible to those

who do not have it today.

I think that allowing the systems as currently existing to separate people from their government is not right. So I would urge the

Committee and I would urge this bill, S. 803, to enhance the opportunities for the elderly, for the young, for those who do not have

the financial resources to find access to the Internet.

Second, the opportunity from e-government is massive in the

area of reengineering. The consultants would call it ‘‘business process reengineering’’ or BPR. We have found at the local government

level that it is not as important to have a beautiful website as it

is to do the work behind the website and to get the departments

and agencies to begin to butt some heads and change the way they

have traditionally done their business. I believe that Ms. Valicenti

will also speak to that from the State perspective.

That opportunity to reengineer is a tremendous opportunity,

speaking to Senator Thompson’s concern about how can we get the

whole government mandate reformed. E–Government is an opportunity and a tool for government reform.

The fund that the bill contemplates is a wonderful idea for what

I would call horizontal systems, where you try to integrate systems

across departments and agencies. But I would add the little footnote that it is across departments and agencies of the Federal Government. The States have exactly the same concerns, and the cities

and counties have exactly the same concerns.

So what we have are three parallel platforms, each spending billions of dollars, each committed to some kind of organized and integrated approach. I would say that instead of thinking only horizontally, we have to start thinking about the vertical dimension,

the intergovernmental dimension. And more important is the diagonal dimension, because the citizen does not really care whether

it is the Federal Government, the State Government, or a county

or a city that provides the service; they simply want the service,

and they want it quickly, cheaply, and efficiently.

So that imperative for diagonal systems development and implementation I think is a tremendous opportunity that S. 803 has a

great chance to focus on.

My final quick remark—and Mr. Chairman, I do have prepared

testimony, and I believe it will be made part of the record——

Chairman LIEBERMAN. Yes, indeed, Dr. Toregas. We are going to

accept testimony from all the witnesses, and it will be printed as

part of the record.

Mr. TOREGAS [continuing]. Thank you, Mr. Chairman—the last

point I want to make is about the opportunity that e-government

offers us to learn how to work together in a more collaborative

fashion and in a nonhierarchical fashion.

The Internet is a very strange animal. If I have a website and

you have a website, and you attach my website to yours, you do

not lose control of your website, but all of a sudden, you become

enriched with what I have. It is that horizontal, that networked

35

1The prepared statement of Ms. Valicenti with attachments appears in the Appendix on page

86.

feeling of connection between agencies, departments, and levels of

government that I think the American public will really enjoy.

If I can, I would like to end with my own definition of e-government, because it is very difficult to have a bill on e-government

without knowing exactly how you feel that e-government should be

defined.

Our own definition of e-government at the local level has three

very important components. The first one is service delivery—making sure that the residents, the citizens, and the taxpayers receive

prompt and efficient service.

But there are two other components. The second one is economic

activity. I believe you touch on it when you speak about the massive investments that we make in IT overall. Those investments

have to produce economic activity, jobs, happiness, and food on the

table. I think that e-government has a great opportunity to do just

that in the area of trade promotion, in the area of job creation at

the local level.

Finally, democracy is the third and most important component

that e-government has to begin to address. This very hearing here

today is a hearing done in old style. We are here physically, we

speak with you—but imagine the thousands of people who would

like to contribute.

I will tell you a quick story. In Des Moines, Iowa, they set up

a communication system for their city council. Traditionally, they

would get about 40 or 50 e-mails per week from residents of Des

Moines. One significant issue came up in front of the council, and

they received 5,000 e-mails in a week. Now, that says two things.

One, we had better make sure that our democratic systems are

able to accommodate that kind of surge of people who want to become involved in democracy once again. On the other hand, how do

you deal with 5,000, or 10,000, or 100,000 e-mails in a week’s time?

The very mechanisms of government that we have may not be

quite ready for it. So I would say that the e-government direction

also has to begin to prepare us to change the democratic principles

and institutions that we have.

Mr. Chairman, the localities and the counties of this country

stand very, very ready to work with you and the Members of the

Committee and with the private sector, which is an important

counterpart, and our friends at the State level, to implement the

results of your bill.

Chairman LIEBERMAN. Thanks very much, Dr. Toregas. That was

very helpful.

Next is Aldona Valicenti, who is President of the National Association of Chief Information Officers of the States.

Welcome.

TESTIMONY OF ALDONA VALICENTI,1 PRESIDENT, NATIONAL

ASSOCIATION OF CHIEF INFORMATION OFFICERS OF THE

STATES (NASCIO)

Ms. VALICENTI. Thank you very much, Mr. Chairman, and thank

you for the opportunity to be here.

36

Senator Thompson, in this Committee, it is great to have an opportunity to talk about what the States are doing.

I bring to you probably a blend of experiences, and as President

of the National CIO organization, very much about what the States

are doing. I bring to you the experience of Kentucky, because I am

the CIO for the Commonwealth of Kentucky. And third, in my past,

I come from the private sector, so I bring to you a meld of experiences.

First of all, I very much appreciate the opportunity for the organization to comment on this bill, because we in fact have spoken

out on various parts of the bill over the last few years in terms of

direction for the Federal Government.

I would like to do that by commenting in a couple of areas—first,

the leadership issue, the integration issue, consultation and what

has gone on in the last couple of years, the investment part that

is addressed, and last but by no means least, that this is now a

citizen-centric world, and we are in the service business.

The leadership issue is one where I would like to draw from my

own experience. I was specifically recruited into the State of Kentucky to become its first CIO, to sit at the executive cabinet level.

So I have enjoyed the luxury of actually creating my position. The

vision for the position in many ways is very similar to what you

have envisioned in this bill. It is someone who will have not only

the budgetary accountability, but someone who will have the vision

and the responsibility to look forward at how to best manage the

information technology process.

Technology waits for no one. It turns over every few weeks or

every few months. It is our ability, though, on when we invest in

it to make it useful.

We have looked at various models, and I would suggest to you

that much of what I heard this morning was very interesting discussion. Ultimately, I think it is not so much about titles, but it

is very much about accountability and whether the constituency

will buy into that leadership.

At the State level, we see more and more States creating a CIO

position. In many cases, that position reports directly to the governor because it is viewed as being so important, not only from an

expenditure perspective but also from a perspective of leadership

and how technology will be used to serve not only the citizens but

to make government much more efficient.

The integration issue is a very important issue. We have heard

various facets of that this morning. Traditionally, departments,

agencies, and cabinets tended to have their own control and viewed

the IT direction strictly from their own perspective. We cannot

serve citizens that way. Citizens do not know our structure, do not

want to know our structure, and should not need to know our

structure. All they need to know is, from a functional perspective,

where can they get the service and how quickly can they get the

service. And by the way, that is not confined to State boundaries

any longer or to county boundaries or to city boundaries. In fact,

it is not confined to any boundaries.

So that how we work together is very important, and that is one

reason why the Federal CIO position is so important, because it

has to continuously drive that.

37

Some of the discussion this morning was about whether things

can be done from a departmental perspective or an enterprise perspective. I suggest to you that this is not an and/or proposition. We

have to do both, and we have to figure out how to do both.

Our organization very much appreciates the part of the bill about

the consultation process. It is only through consultation, because it

is not just a horizontal integration but is also vertical integration.

So the ability now for the Federal Government to actually propose

legislation, which in many cases is really enabled through information technology, and the States actually become the implementers

of that technology. Consultation is vital to that process.

On the investment portion, I will refrain from speaking about the

amounts, because frankly, I am not sure that I am the best person

to comment on that. But I think investment is critical, and I would

like to use the example that we actually had in Kentucky. We set

up a technology trust fund, not only to talk about enabling the new

processes but also about reengineering processes. I would suggest

to you that that is probably the most important part that we have

discussed here today. We need to redesign how we work, not necessarily enable how we work today and do it much faster.

The last point is on citizen-centric and service delivery. I have

brought you a piece of technology to show you a couple of State portals, because I think there is an opportunity to look at the portal.

And by the way, a portal is described as nothing more than a gateway to services. If we think of it as a gateway or a doorway—hopefully, you can see them on the screen.

Chairman LIEBERMAN. Yes, we can.

Ms. VALICENTI. Let me address the first issue. Citizens really are

consumers first—I want to do it myself, on my own schedule, fast

and easy. I think you have already heard that this morning.

Chairman LIEBERMAN. Senator Thompson and I both identify

with those three things. [Laughter.]

Ms. VALICENTI. The first one that you see up there is Connecticut. The portal is not organized according to the traditional

lines of structure, but according to services.

Let us move on to the next one—I think I have chosen the right

two—Tennessee.

Chairman LIEBERMAN. Excellent. I understand this was a random selection.

Ms. VALICENTI. Very random, Mr. Chairman.

I think you can see the idea that citizens do not have to know

the organizational structure; they really need to know what it is

they would like to do.

The third one is the State of Washington, and one must give

credit to Washington, which has been viewed very much as a leader in the digital State. They have been very successful. And by the

way, we borrow from each other, very proudly; it is called sharing

of best practices.

Pennsylvania has been very instrumental in organizing their

website to services. What you see now is true portals and examples

of portals.

The State of Michigan very recently unveiled their portal, and

again, it is all about services.

38

1The prepared statement of Mr. Woods with attachments appears in the Appendix on page

101.

North Carolina is one where the citizen can design it, so it becomes my portal, and I will see my information. Again, many of us

will probably repeat that in what we are doing at the State level.

Utah recently unveiled a new portal which is all around citizen

services.

The last but hopefully by no means the least is Kentucky, ‘‘Kentucky Direct.’’ We do the same. You can get your hunting or fishing

license. You can sign all kinds of forms to start a business. You can

order birth certificates and death certificates; tax filings.

We have one more, and I would like to address this one specifically, because it is also an opportunity to educate. It is the Kentucky Virtual University. We now have over several years enrolled

almost 10,000 students. This is another way to learn—not only to

use the technology but to upgrade your skills.

Chairman LIEBERMAN. Is that 10,000 from within Kentucky or

outside as well?

Ms. VALICENTI. It is available to anyone.

Chairman LIEBERMAN. That is great.

Ms. VALICENTI. Thank you very much, Mr. Chairman.

Chairman LIEBERMAN. Thanks, Ms. Valicenti, for sharing your

experience. I look forward to asking you some questions.

Mr. Woods, thank you for being here.

TESTIMONY OF GREG WOODS,1 CHIEF OPERATING OFFICER,

STUDENT FINANCIAL ASSISTANCE, U.S. DEPARTMENT OF

EDUCATION

Mr. WOODS. Thank you, Mr. Chairman, and Senator Thompson.

I am the Chief Operating Officer for the Student Financial Aid

Program within the Department of Education, and I was asked to

testify about our use of the web and our e-commerce strategy.

The context for this story is a new kind of government organization, the ‘‘performance-based organization.’’ Congress made us the

first PBO. The heart of the PBO idea is a contract where we are

held accountable for results and given control over the things that

determine those results.

Congress wanted our organization to improve service, cut costs,

to get off the GAO high-risk list, and to do it by modernizing what

was a tangle of old computer systems.

Most of my career was spent in the private sector, where I ran

businesses in the technology community, so these kinds of challenges were a natural for me.

Secretary Paige has made systems modernization one of his six

major management goals in his Blueprint for Excellence, his plan

for correcting the management problems and restoring the confidence of the Congress and the American public in the Department.

To get all this done, we do not just do websites, but we are

changing practically everything. We changed the people, we

changed the organization, we changed the financial systems, how

we make investments, how we contract to buy new systems. By the

39

way, we are already using share-in-savings contracting to finance

our modernization.

We have built numerous award-winning web products in the

process, and we have had a number of firsts. We tied all this to

a strong use of back office operations and systems proven in the

commercial financial sector, tools used by Wells Fargo, Bank of

America, and others.

The idea behind all this is to be able to integrate customer services—and this is a key point I would like to make—so that once

we get an electronic customer, we keep him as an electronic customer. We do not chase him back to paper.

We do this with a series of websites. Let me show you what this

means for students, who are our primary customers. The first business that a student does with us is the completion of his application for aid. This is known as a FAFSA. A few years ago, practically nobody filed the FAFSA via the web, but customers vote

with their mouses, and this year, half of our applicants, about 5

million, will file electronically. The counter on my slide shows that

we have a visitor to this site every 1.1 seconds.

Chairman LIEBERMAN. So that 5 million people will apply for financial assistance this year electronically.

Mr. WOODS. Five million, yes, sir; half of our population.

Chairman LIEBERMAN. That is great. How old is this site?

Mr. WOODS. We are trying to operate at web speed, so we are actually on the fifth iteration of our website, our fifth iteration of this

application. We change it not just annually but within the year

whenever it is appropriate.

To get a loan to make this whole thing happen, people have to

sign a promissory note. This is the toughest piece of litter to get

off the information highway, because of its legal standing and its

importance in enforcement. Thanks to GPEA and the E–Sign legislation, they can now even sign with us on-line. This application actually went live last week; it is the first of its kind in government

and probably the first of its kind in the world. Private lenders use

our system to make their student loans. The e-signature promissory note process, because it has inherent checks, balances, and extensive electronic recordkeeping, actually produces a lower-risk system for us than a paper version.

Next, we keep these e-customers in the system with our direct

loan site, where direct loan borrowers can service their loans online. They can see their account status, including the private sector

loans, not just the government loans; they can change the payment

schedule and see what the impact will be on them; they can opt

for automatic debit payments, which is growing exponentially; and

they can get deferrals and forebearances. They can also do a number of other things. Customers using this website have climbed to

3.5 million this year.

We have similarly reengineered the process for how we deal with

schools and members of the financial community. It is all tied to

another one of Secretary Paige’s priorities, that is, to completely retool and modernize our financial system so that we can produce

auditable reports, the kinds of reports that you need for oversight

and that we need in order to manage this operation.

40

I think a key question is whether e-commerce really saves

money. My answer to that is yes, it does, but it is not that simple.

I know from my business experience that you cannot just automate

a current system and assume that you save money.

Look at that FAFSA process that I talked about, that application

for student aid. If you look at the electronic application itself and

compare it to the paper version, you will find that the electronic

application costs about 50 percent as much as the paper one.

Good—it looks like a victory for e-commerce—but not so fast. If you

look at the total system, you will find paper everywhere; we are

mailing out and printing signature pages; we are printing and

mailing out PIN numbers; we are printing and mailing the results

from the web application itself. And even though millions more applicants file with us electronically, the schools were still ordering

the same number of paper applications to distribute to their students. And we found that the web applications were calling our 1– 800 number, asking simple questions but being connected with our

most expert and most expensive operators to get those questions

answered.

So we attacked this issue. We revamped the phone system. Now,

most of the calls are handled by a voice response unit. We are

weeding the paper and mailings out of the web process, and we are

working with schools to cut down on their demands for the paper

FAFSAs. When I am done with all this, I expect that my electronic

version will cost one-third or less compared to the paper version.

The lesson in this that I want to leave is that e-commerce is a

powerful tool in this battle of the budget, but you cannot win this

battle from the air. This thing is trench warfare, and you have got

to get down there and change the system.

Thank you for listening to the story. I believe it is one of the success stories that the deputy director of OMB has not gotten to yet.

Chairman LIEBERMAN. I agree.

Mr. WOODS. Thank you for the E–Sign and GPEA legislation.

They have made a huge difference in reality and attitude about

how you do this business. And thank you for making SFA a PBO

and giving us a chance to improve this important system for America.

Chairman LIEBERMAN. Thanks, Mr. Woods. In fact we invited

you because we think you are one of the success stories. We appreciate very much your story.

How many are filing today in paper as opposed to the 5 million?

Mr. WOODS. Five million each.

Chairman LIEBERMAN. Five million each. And I presume you

have no doubt that the number filing electronically will go up in

the years ahead?

Mr. WOODS. We make people very much aware of that. Our goal

is to get that number as high as we can. Our particular population

will include people who do not have computer access. We are mindful of that, but we believe that with the population that we serve,

numbers up in the 90 percent utilization range for the electronic

aspect of our business are well within reach, so that is where we

are headed.

Chairman LIEBERMAN. We have had discussion throughout the

morning about the digital divide. I know it exists, but I saw numVerDate 11-MAY-2000 09:04 Apr 04, 2002 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 75470.TXT SAFFAIRS PsN: SAFFAIRS
41

bers recently over the last 5 years which showed a remarkable increase in the percentage of people who are now on-line. But you are

the experts in this. Does anybody have a number of what it is

today and what it is projected to be?

Ms. VALICENTI. Mr. Chairman, I think it really depends on whatever survey you look at and how recently it was done, but that

number is probably well over 50 percent in many cases. I know

that Kentucky has had a digital divide and continues to have a digital divide issue, but 53 percent of our population can actually get

to the computer through work, home, school, or the library.

Chairman LIEBERMAN. This is somewhat to the side of the e-government program, but obviously not, really, if the aim is to extend

services and involve more people. We are talking in this bill about

support for Community Technology Centers, which Senator

Carnahan pointed to in her statement.

Let me ask any of you what you think about those, and what

other ideas do you have for rapidly closing the digital divide?

Dr. Toregas.

Mr. TOREGAS. We asked cities and counties, and about 2,000 responded in a survey about 3 months ago. One question we asked

was what are you doing to implement a digital divide bridge. Not

surprisingly, about 83 percent of the cities and counties that answered—and this included about 2,000 cities and counties, so it is

a very large percentage of the major cities and counties in the

United States—provide Internet public access at government facilities. More important, 45 percent are working with local schools to

establish bridges and provide the capability not only for the students but for their parents to come in, sign on, and become part

of the e-generation. In addition, 22 percent are funding technology

technical support efforts for the citizens out of their own local

budgets.

Those are three numbers that might give you some examples of

ways that you can begin to look at the digital divide. A smaller

number, about 13 percent, is using the Community Technology

Centers. Perhaps what this indicates is that we need to make sure

that these programs are well-understood and easy to get to by the

localities.

Chairman LIEBERMAN. Ms. Altman.

Ms. ALTMAN. I will just make one comment which is really more

on the technology side. The transformation of technology is occurring at such a pace that the device we think of as interacting with

government or with business today, we think of as a PC, but very,

very soon, devices like the handheld telephone and other devices

will be the means for accessing information, and through that, accessing our government.

So I think that although the digital divide is real, it is going to

be shrinking based on the fact that technology will be so accessible

to everyone.

Chairman LIEBERMAN. That is great. Thank you. I agree.

There was some testimony here and I think a good-natured, good

faith discussion between Mr. O’Keefe and members of the panel

about how to construct the CIO office. I take it from your testimony

that you feel that the closer the connection between the CEO and

42

the CIO, the better off we are, and the more you can highlight and

separate the CIO functions, the better it is going to be.

Based on your various experiences, Ms. Altman, Dr. Toregas, and

Ms. Valicenti, could you respond to that point?

Ms. ALTMAN. Yes, I would be happy to. Certainly, in industry

and IBM, our CIO is both the business transformation executive

and the CIO, and in that capacity is responsible for defining our

strategic growth with technology, marrying that strategy to our

business strategy as well as executing the overarching information

technology plan, which includes, as you are discussing, an interoperable architecture, an overall architecture to allow us to move

our business forward.

I do not know that I can make a real judgment on where this

individual should reside, so as I read through the proposed legislation, having this individual in OMB is fine; it is really a matter of

is this individual accountable, is this individual a leader, is this individual going to hold a place at the table with the senior leadership of this government and be able to project the change and be

essentially a change agent for this e-government transformation?

Chairman LIEBERMAN. Thank you. Dr. Toregas.

Mr. TOREGAS. I would add to what Ms. Altman said the fact that

it is not only the technology argument that is important in transformation but also the programmatic one. Somehow, whether you

do it in the flesh of another human being or intellectually, you

have to get the programmatic initiatives of the agencies linked

with the information technology question. You cannot address business transformation from an IT perspective alone. You have to

have the programmatic people there. In fact, the absence of a table

around which the information technology experts and the program

people who are responsible for delivering programs and the elected

officials who have the mandate to do that is, I think, something

that stymies our ability to transform government. Such a table,

such an intergovernmental, interdepartmental platform to discuss,

dialogue, and make decisions to change the way government is

done is a weakness right now of our system. I think S. 803 could

be strengthened by providing a platform not only for a single

human being, the CIO, but a platform between program people, IT

people, and the elected officials who ultimately hold the will of the

people to discuss how we transform government along the intergovernmental dimension.

Chairman LIEBERMAN. Would you write into the law some committee of that kind?

Mr. TOREGAS. Some ability to dialogue between three levels of

government and across programs. It is almost an impossibility to

imagine as a bill paragraph, but perhaps we need a new process.

We need something. Right now, there is no place to discuss these

e-government issues and opportunities.

Chairman LIEBERMAN. Yes, and to state it as a goal.

Mr. TOREGAS. That is right.

Chairman LIEBERMAN. Ms. Valicenti.

Ms. VALICENTI. I would like to emphasize a couple of things that

were said before that I would like to put a little different spin on.

I think that being a peer at the table is very important. I think

the investments that have been made in the past have been done

43

strictly from a technology perspective—that I now need to automate the system, and I will put a system in place; I now need to

do e-government, and consequently, I will put up a website.

I would suggest to you that the dialogue that goes on with your

peers is before you implement anything. It is whether the process

is the right one. Do we need to change the process? Do we need

to make two or three agencies work together that traditionally

have not worked together?

I can tell you from my own experience that we would have built

three imaging centers if we had not come to the table and said

maybe we only need to build one and share it, and we need to build

it with standards that all of us can use it. I talk about technology

standards, not just performance standards. Both are important, but

I would suggest that technology standards are as important to

make interoperability work and to have a vision for what we are

going to deliver.

When we embark on what we now call ‘‘e-government’’ or ‘‘digital

government,’’ I think we are at the low end of investment yet. We

are primarily thinking about commerce and commercial transactions. Ultimately, I would suggest, as has already been talked

about, where is e-democracy, how do we involve our people in the

democratic process differently.

I think the only way that we are going to be able to do that is

if we get this part somewhat right.

Chairman LIEBERMAN. Amen. Thank you. Those were very helpful responses.

Senator Thompson.

Senator THOMPSON. Thank you very much, Mr. Chairman.

This is a very good Committee—a very good panel, I should say—

well, it is a good Committee, too.

Chairman LIEBERMAN. Thank you. We are just trying to build on

the record of the previous leadership.

Senator THOMPSON. It reminds me of several things. Ms. Altman,

we often say that some people say government ought to be more

like business, and other people say it is different because we are

not in the profit business and so on, but I think that at least in

your area, you are reminding us that in some respects, we can certainly learn from business, because what you are talking about has

been one of the driving forces of the savings that you have achieved

through increased productivity. And while we may not be striving

to make a profit, we certainly need to not have so much in losses

and deficits that we have had in some departments, and we can increase our productivity. I think that that is one of the things that

we are looking for.

Dr. Toregas, I was taken by your comment about the Des Moines

example, and it caused me to think about the Federal Government.

If we are having such difficulties in doing some of the things we

are trying to do, and if we really get geared up the way we are

talking about, are we going to be able to handle the volume that

we may be asking for. We feel it in our own offices now. So that

is going to be something.

Ms. Valicenti, you mentioned accountability. I think that having

someone like you probably in large part accounts for the success

44

that Kentucky has had, and that is certainly important and something that we have not had in times past.

Mr. Woods, your department or your program represents what

troubles me the most about what we are talking about—and I hope

that this is constructive, because to me, it goes to the heart of what

we need to address and some things we need to avoid as we move

forward in a way that we all want to move.

I am talking about this idea of having a shiny, new chassis over

an engine that is not running, and the car is not going anywhere.

The student financial aid programs have been on GAO’s high-risk

list ever since the high-risk list started in 1990. You were made a

PBO 3 years ago and given some additional flexibility to do some

things. There are some positive signs, but you are still on the highrisk list, in large part because financial management is lacking.

Here is what the GAO said in January, ‘‘These student aid programs, however, continue to be at high risk for fraud, waste, error,

and mismanagement, because education lacks the financial and

management information needed to manage these programs effectively and the internal controls needed to maintain the integrity of

their operations.’’

The IG and GAO for some time have addressed this problem. It

is not just yours, but yours is one of the 23 or so on the list, and

one of the few that has been on the list for a decade as subject to

waste, fraud, abuse, and mismanagement.

The GAO said in March of last year, ‘‘Beginning with its first

agency-wide audit effort in fiscal year 1995, Education’s auditors

have each year reported largely the same serious internal control

weaknesses, which have affected the Department’s ability to provide financial information to decisionmakers both inside and outside the agency.’’ That is department-wide.

Talking about the student financial assistance program, ‘‘highly

vulnerable to waste, fraud, abuse, and mismanagement’’; ‘‘have

been on the list since 1990’’; ‘‘have been included in every update

since then.’’

‘‘Student assistance programs,’’ according to the IG, ‘‘have

spawned a cottage industry of criminals who counsel students and

their parents on how to obtain loans and grants fraudulently.’’ And

they have been very successful. In the Inspector General’s report,

they recount numerous instances of where this has happened, and

these are the ones that we know of.

‘‘The IG recommended that the Department develop a method to

estimate how much it loses each year in improper payments.’’ Millions of dollars are sent out by the Department improperly. ‘‘Thus

far, the Department has failed to act on this recommendation. Also,

the Department has failed to implement a 1998 law intended to

allow it to verify with the Internal Revenue Service income information submitted by student aid applicants.’’

In the financial management area, both the GAO and the IG

have reported year after year on largely the same financial management problems. The IG found many cases that proved the point

of the financial management weaknesses. In October 1999, for example, the Department’s system generated several duplicate payments; one was a $19 million double payment of grant funds.

45

There are information technology management problems. One is

the Department’s failure to comply with the Clinger-Cohen Act,

which goes to the heart of what we are trying to do here, because

that has to do with management of information technology. The

Department is not complying yet.

Another problem is its computer systems security. They say the

weaknesses constitute a significant threat. And the last audit of

Ernst and Young, the most recent audit last year, talks about approximately $859 million, primarily representing funds drawn

down by schools for which the loans have not yet been recorded.

That means that the schools have not yet demonstrated that they

are eligible for those loans—but they have already drawn down the

$800 million.

So you have drawn the short stick, I guess, today by accident. I

could go through this with a lot of other departments. But here we

are celebrating a website with regard to a program that in many

ways is a basket case in terms of waste, fraud, abuse, and mismanagement.

If you talk about accountability, I do not know where our accountability is in Congress. Long before you got here, and I trust—

I do not mean this personally to you; you do have an excellent

background, and I am sure you are trying your best. Maybe it just

shows how endemic the problem is and how difficult it is to solve,

but you have been dealing with it for 3 years now. But we are talking about what—making it so that these criminals can rob the Department of Education more efficiently? Could that be part of what

would be happening here?

We clearly have not been able to get a grip on these basic management problems, and I am worried that if we get more people

using this, and we have the human resources problems that we

know we have and keeping our arms around it, can one guy over

at the OMB ride herd on all this?

As I said, I am talking to you about a lot of problems that you

do not have anything to do with, but some of them, you do. I guess

I am interested in knowing if you appreciate the interrelationship

of these things that I am talking about. It does not matter what

kind of website you have or how many people are using it if your

underlying management is that deficient, it seems to me.

Now, I have laid out quite a lot of charges here, and you should

have a right to respond at whatever length you wish, or as far as

the Chairman is concerned.

Mr. WOODS. May I respond, Senator?

Chairman LIEBERMAN. Yes, sir.

Mr. WOODS. I take the criticism as constructive. The reason I

started my remarks by talking about changing everything is because these issues of integrity and program integrity are at the

heart of what we are trying to do. One reason I was reluctant to

testify here about websites is because we are not just about

websites. We are completely retooling these computer systems. The

financial problems, the financial audits that we have had and the

systems that we have had are nothing like the tools I had to manage my businesses in the private sector. We do things with spreadsheets. We are replacing all that. We have half the modules up for

46

a brand new system that will kick in for next year’s audit. We are

very proud of things like that.

We do work with the IRS to do statistical matches that allow us

to verify that students seeking Pell Grant monies are reporting the

proper income. We do not have the ability to do individual data

matches with them. Their legal counsel does not believe that the

law allows them to do that. But we have pushed that as hard as

we can.

Across the board, we have hundreds of people reporting and

working on all of these issues, and I can report progress to you in

all of those areas.

Maybe the most important thing goes to where the biggest dollars are. Defaults in this program were by GAO and others viewed

for years as our biggest issue. In the past several years, the default

rates come from 22 percent down to 6.9 percent. I would hasten to

point out that defaults are only dollars at risk; they are not dollars

lost. In the past 2 years, years of the PBO, the collection efforts

have brought more money back in than has gone out in default. We

have turned the corner on that, and the computer systems are part

of that. The systems we use in debt collection, for data matching,

for comparing profiles and identifying addresses for people who owe

us money—those tools are powerful forces in trying to combat exactly the ills that you described.

We are not about websites. We cannot get it done just with

websites. Websites are the customer service window, but the back

end stuff, this back office stuff, the kinds of tools used by the best

banks and the best in the private sector, have to be part and parcel

of it, and I think that given time, sir, I could convince you that we

are making progress in those areas.

Senator THOMPSON. Well, I hope so. The GAO suggests that the

downward trend in defaults may be more attributable to the strong

economy of recent years. They also have a problem with the calculation method used by the Department; they say that it understates the default rate.

So we could talk about all of this in detail for a long time, but

the bottom line is—and please take it back to the Department and

let it, hopefully, soak in to you, who have been there for 3 years— if I were you, I would concentrate on the things that I was talking

about along with the high-tech glitter stuff that we are all interested in and we need to make progress on, because the bottom line,

we talk about accountability, and we talk about results-oriented

government, and by either of those measures, the student loan program has real problems. I would bet that 90 percent of the people

in the audience, or whoever might be watching or listening to this,

are not aware of that because it is part of a much bigger problem.

It is a government-wide problem, and that is the point. Like I said,

you happen to be here today, but I could go through this with any

number of folks.

To me, it shows perhaps a wrong emphasis or not appreciating

that you have got to walk before you can run. I really am concerned with regard to some programs and some departments—if we

put all this emphasis on this stuff, and we gear up, and we have

all these applications coming in that we are dealing with, and all

these programs, we already have numerous schools that are not

47

qualified for loans being reimbursed by the Federal Government.

And all that is going on now under the current circumstances. I do

not want to make that easier to do. I want to make it easier for

the ones who need it and deserve it, but that can only be done

while being accompanied by progress in these other areas.

I do not know what else to do. When an area stays on a highrisk list for a decade, and the GAO—it is not us; it is not just the

Members of the Committee—when the GAO tells us that they

make recommendations for changes that are not being carried out;

you still get funded in the same ways every year; budget time rolls

around, and we take a look at this and say ‘‘That is a shame,’’ and

we give you the same amount of money or even increase it—it is

a real problem.

So I would just ask you to take back from this today, while you

are doing the good things that you are doing in terms of e-government, to realize that it is going to create more problems than it

solves unless we do something about the underlying management

of your program.

Mr. WOODS. Yes, sir. We will take it back, and I assure you that

those issues that you have addressed and raised we take to heart,

and those things are being fixed as I sit here.

Senator THOMPSON. Thank you, Mr. Chairman.

Chairman LIEBERMAN. Thanks, Senator Thompson.

Senator Thompson makes a strong point. E-government is a

means to an end; the end is government, and government is an imperfect instrument that we are constantly trying to make better.

There are obviously ways in which e-government not only allows

more people to more conveniently, for instance, apply for student

loans, but if used properly, as you have all testified and as our experience suggests, allows us to be more efficient as well—in other

words, not just to improve ease of access but to actually reorganize

internally so that you are doing what you are supposed to do better. And of course, both of those are our hopes in this bill.

I thank this panel very much. You have been extremely helpful.

If you have any afterthoughts, we will keep the hearing record

open for a while for you to submit those to us.

Thank you very much.

We will now call forward our final panel today, which includes

Sharon Hogan, University Librarian, University of Illinois at Chicago; Barry Ingram, Vice President and Chief Technology Officer of

EDS Government Global Industry Group, who is here on behalf of

the Information Technology Association of America; Patricia

McGinnis, who is President and CEO of the Council for Excellence

in Government; and finally, Hon. Joseph Wright, Jr., former Director and Deputy Director of OMB and now Vice Chairman of

Terremark Worldwide, Incorporated.

Thanks very much to all of you for being here. Thanks for your

patience in listening to the preceding discussion. I hope you found

it as interesting as I have.

Ms. Hogan, it is a pleasure to hear from you now.

48

1The prepared statement of Ms. Hogan appears in the Appendix on page 114.

TESTIMONY OF SHARON A. HOGAN,1 UNIVERSITY LIBRARIAN,

UNIVERSITY OF ILLINOIS AT CHICAGO, ON BEHALF OF THE

AMERICAN LIBRARY ASSOCIATION, THE AMERICAN ASSOCIATION OF LAW LIBRARIES, AND THE ASSOCIATION OF RESEARCH LIBRARIES

Ms. HOGAN. Good afternoon. I am Sharon Hogan, University Librarian with responsibility for academic computing at the University of Illinois at Chicago. I am testifying today on behalf of the

American Association of Law Libraries, the American Library Association, and the Association of Research Libraries.

We want to thank you, Senator Lieberman and Senator Thompson, for your leadership on e-government, and we want to acknowledge our appreciation for the work of your Committee staff, especially Kevin Landy.

We cannot have an effective e-government without access to government information. Our Nation’s libraries are key access points

for the American public and already are and should be members

of e-government teams at the Federal, State, and local levels.

While there are many Federal agency success stories exemplifying good practices for public access to Federal Government information, the move to an e-government has not been accompanied

by the development of a comprehensive policy framework focusing

on the life cycle of electronic government information.

There are three principal points I would like the Committee to

keep in mind as they consider S. 803.

One, centralized coordination is necessary to make government

electronic information accessible, usable, and permanently available. That is why we support S. 803. Such coordination is ultimately needed for all branches of government.

Two, legislation is absolutely imperative if we are to embody life

cycle principles in e-government dissemination activities. Agencies

are not doing it today. This bill recognizes the needs and puts a

framework in place to accomplish that goal.

Three, the legislation must be adjusted to incorporate and built

on the institutions and activities going on today.

I would like to elaborate on these three points. First, access and

coordination. Librarians, working with the American public every

day, find that locating the government data or document can be exceedingly frustrating because ‘‘finding tools’’ are inadequate and

not comprehensive. Also, much web-based government information

that one might have accessed a month or a year ago disappears

from agency websites. While many agencies do a great job of posting important electronic documents to their websites, there is often

no recognition of the long-term value of that information and the

need for it to be publicly available for continuous future use and

preservation. In the electronic environment, an Executive Branch

CIO can provide leadership where there is currently a lack of coordination, cooperation, guidance, or a means to oversee and measure agency compliance with many existing statutes. However, the

emphasis on technology should be balanced by an emphasis on public access.

49

Second, build a new framework. We want S. 803 to promote the

teamwork necessary to serve the American public within and between agencies. A benefit of section 215 will be to bring together

within the planning and policy functions how agencies manage and

coordinate the flow of information within agencies as well as to and

from the public.

Agency CIOs play an important role in issues related to technology but often do not have the time or resources, do not have a

strong background in information dissemination, nor are they always aware of the agency’s responsibilities for public use. Agency

records managers, webmasters, privacy officers, public affairs staff,

and agency librarians should work together.

Three, use existing agencies, institutions, and resources. You will

not need to reinvent all services or functions. For example, in setting cataloguing and access standards, librarians and information

scientists—not information technologists—are the specialists in establishing cataloging, classification, indexing and metadata standards for government information products. Cooperative international bodies already set current cataloging and classification

standards.

We are also pleased that S. 803 contains important provisions in

sections 205 and 206 to improve access to information from the

Federal courts and regulatory agencies. However, the courts and

regulatory agencies should not be given permanent opt-out options.

There should be an annual statement of progress each year and a

set time frame for compliance. We support repeal of current statutory language permitting the Administrative Office of the U.S.

Courts to charge fees to access PACER. Congress should appropriate adequate funding for this purpose.

We recommend clearer roles for the Library of Congress and the

national libraries as well as the Institute of Museum and Library

Services and the Federal Library and Information Center Committee. Further, permanent public access can be accomplished

through a comprehensively coordinated program that includes Federal agencies, the Superintendent of Documents, the National Archives and Records Administration, the Library of Congress, other

national libraries, depositories, and other library partners.

Effective public access for the American people is the first step

toward effective e-government. S. 803 includes many important

provisions that can improve public access. Collaborative approaches

and government-wide policies across all branches and levels of government will be necessary to fulfill the potential of e-government.

The library community stands ready to work with you.

Thank you for this opportunity to testify.

Chairman LIEBERMAN. Thanks very much, Ms. Hogan. Just while

it is in my mind, I believe you were here when Senator Stevens

spoke and expressed his concern about the fact that effectively, we

have two libraries now at the Library of Congress—the one that we

are familiar with and the new one which is on-line—and that the

net effect would be to add costs. That was his concern—obviously,

he hopes we would save. How would you respond to that?

Ms. HOGAN. I would say that all libraries are now running two

libraries. We are all running our print libraries and trying to build

electronic ones. And yes, at the moment, it is costing us more. I

50

1The prepared statement of Mr. Ingram appears in the Appendix on page 124.

would hope that it would not double our costs, but it absolutely is

increasing it. We are making investments in the new technologies.

Once these investments are made, we hope that increased access

will make them all worthwhile. But yes, right now, it is not cheaper.

Chairman LIEBERMAN. So that is the hope, that obviously, you

are involving more people in using the services of the library.

Ms. HOGAN. Correct. We are seeing libraries all over this country

increase access not only to the collections themselves but also to

the electronic collections. There is actually an explosion of use in

libraries as people come to libraries to access the technology, to access electronic resources—and, by the way, to use the print.

Chairman LIEBERMAN. From the user point of view, obviously, it

is one of the more thrilling aspects of the whole Internet revolution, which is that you can suddenly plug into the resources of the

Library of Congress and every other library in America.

Ms. HOGAN. And then you have more questions, because you

have accessed the information, so we are finding that people then

want to ask even more questions.

Chairman LIEBERMAN. I see. Thank you. Mr. Ingram, welcome.

TESTIMONY OF BARRY INGRAM,1 VICE PRESIDENT, EDS GLOBAL GOVERNMENT INDUSTRY GROUP, ON BEHALF OF THE INFORMATION TECHNOLOGY ASSOCIATION OF AMERICA

(ITAA)

Mr. INGRAM. Good afternoon. Thank you for this opportunity to

testify before you today on this important topic.

My name is Barry Ingram. I am Vice President for EDS’ Global

Government Industry Group. You already have my testimony, so I

am going to give you a slightly shorter version.

I have over 37 years of experience in information technology,

over 20 of those working with governments, and have led many innovative e-government initiatives locally, nationwide, and globally

for EDS. This morning, however, I am representing the Information Technology Association of America, or ITAA, which is the Nation’s leading trade association for IT industry.

ITAA represents over 500 member companies across the United

States which produce products and services in the IT industry, and

the association plays a leading role in public issues for the IT industry.

ITAA has been a long-time proponent of electronic government

and, as you know, helped provide input on principles used early on

to develop this legislation. We are particularly eager to generate

the same interest and progress in e-government at the Federal

level that we have witnessed at the State and local levels. We believe the E–Government Act of 2001 contributes in a meaningful

way to these goals.

Mr. Chairman, we applaud you, Senator Burns, and the colleagues who have officially joined you in introducing this E–Government Act of 2001. We are particularly pleased with the importance that the legislation places on the need for a well-funded

government innovation fund, and with the emphasis on the existVerDate 11-MAY-2000 09:04 Apr 04, 2002 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 75470.TXT SAFFAIRS PsN: SAFFAIRS
51

ence of someone at the highest level who has the responsibility and

the authority to move the Federal Government into the e-government sphere. It is crucial for this person to have the means, both

the budget and the staffing, to implement and oversee these efforts

for the enterprise, and we hope that those resources can be made

available in the 2002 budget.

However, when I say e-government, I do not mean only Internetrelated efforts, but any efforts where governments are using newer

technologies to improve their business processes and provide enhanced services to citizens, businesses, and government employees

or other governments. If we limit our thinking only to Internet-related efforts, we are limiting the scope of the possible.

In these efforts, I have seen a mixture of successes and challenges. The challenges are being overcome, and as you are acutely

aware, finding and achieving innovative ways of funding e-government is very difficult. Curtailing stovepipe or purely single-agencyoriented development, while still promoting innovation and productivity improvements, requires a real vision and a solid execution

plan.

Fortunately also, the successes are many, and in general, I see

that State and provincial governments are leading the charge, for

several reasons. They have more transactional processes, such as

license renewal and property tax payments. They have somewhat

smaller systems than the Federal and national governments, and

the most successful ones have senior leadership in the form of a

chief executive or a CIO who is sponsoring and visibly behind the

e-government efforts.

Some of the most successful implementation are also taking place

at the national level. In the United Kingdom, for example, the Inland Revenue, the equivalent of our Internal Revenue Service, is

undertaking a massive rejuvenation of the tax system, and they are

already implementing some of the improvements. They have developed a National Gateway to government and have implemented the

ability for citizens to self-assess and pay their taxes over the Internet, directly to the government, without an intermediary.

Our own portal, FirstGov.gov, is an excellent start but now needs

to be expanded to encompass citizens’ transactions with agencies.

Without going into a lot of detail, I put together a short list of

top 10 lessons learned for e-government, and I want to highlight

just four of those.

The first one is that implementing successful e-government requires sponsorship and visibility from the top, senior leadership

and championing.

Second, we need to ensure citizens’ privacy and security with

good information assurance capabilities, and we need to build this

into the architecture before privacy and security become a problem;

we cannot wait.

Third, many existing business processes will need to be reengineered—but do not just reengineer—reinvent wherever possible

and look at new ways of doing business.

Finally, provide incentives for citizens and businesses to use the

new e-government processes. Incentives will enable the move to the

new methods.

52

1The prepared statement of Ms. McGinnis appears in the Appendix on page 130.

In conclusion, as this important piece of legislation moves

through the legislative process, I leave you with two thoughts. E–

Government modernization is the use of technology to transform

government from the silo organizations that many of us have

talked about to a seamless organization, or this one-stop shop. But

it is centered around citizens’ needs and focused on productivity

improvements.

Finally, the success of e-government modernization is not only

experienced in building and operating our websites. It is in the

transformation of government processes, wrapped in the security of

a robust infrastructure supporting and enabling that transformation.

I thank you for your time and attention. ITAA and EDS both

look forward to working with you and answering any questions

that you might have.

Chairman LIEBERMAN. Thanks, Mr. Ingram; well-said. And

thanks to you and the members of the association for the input

that you have given the sponsors of the bill as we have gone along.

Ms. McGinnis, welcome back. We look forward to your testimony.

TESTIMONY OF PATRICIA McGINNIS,1 PRESIDENT AND CHIEF

EXECUTIVE OFFICER, COUNCIL FOR EXCELLENCE IN GOVERNMENT

Ms. MCGINNIS. Thank you very much, Mr. Chairman and Senator Thompson, for inviting me to be here today to talk about this

very important issue.

As you know—well know, because there has been a lot of involvement from the Committee and the staff—the Council for Excellence

in Government worked in partnership with 350 leaders from business, civic groups, the research community and government to develop a blueprint for e-government, which we released last February, and I think you all have copies of it. It, of course, can be

viewed on our website.

We call the report ‘‘Electronic Government: The Next American

Revolution’’ because we believe so strongly that information technology and the Internet have the potential not only to revolutionize

the way that government operates but also to put ownership back

in the hands of all Americans.

This is not only about e-government; it is also about ‘‘e-the people,’’ a play on words which I think has a lot of meaning if you

think about it.

Two recent Council opinion polls conducted by Peter Hart and

Bob Teeter over the last year show that Americans today recognize

the potential of electronic government, even those who are not online, amazingly. A large majority, about three-quarters, says that

developing e-government should be a high priority for the new

President. Even the 44 percent of Americans who believe that

government is ineffective—these are the cynics—are bullish about

e-government and say that tax dollars should be invested in it. But

by a margin of 2 to 1, the public says that privacy and security are

its top priorities, so we have to deal with those issues.

53

The people’s vision of e-government goes beyond efficiency in

services to the opportunity to become more involved and to hold

government officials accountable. It surprised us that more people

would rather see candidates’ voting records on-line than renew

their driver’s licenses on-line.

The dot-gov revolution is just beginning——

Chairman LIEBERMAN. That is unsettling. [Laughter.]

They ought to do both on-line.

Ms. MCGINNIS. It might have something to do with privacy and

security, but I think it also has to do with this accountability issue.

Even at this early stage in the dot-gov revolution, there are lots

of examples of productive use of the Internet by government. You

heard about a lot of them in the last panel. The growth in student

financial assistance applications—up to 5 million this year—is

amazing and quite a growth. Taxes can be filed on-line not only

with the IRS but in many States. Procurement on-line is growing

at the Federal and State levels, as are regulations on-line. You

know that the Department of Transportation has all of its regulations on-line at this point.

These examples of e-government all fall into two categories—government to citizens, G to C, and I would put that maybe even a

little differently—agency by agency, one agency at a time to citizens—and also government to business, G to B, one agency at a

time to businesses.

What is missing from this? Government to government. At this

point, there is very little cross-agency or intergovernmental collaboration on-line, and this is a very significant problem.

The e-government fund in this bill recognizes, as does the President’s budget, that we need to invest in collaboration across agencies, levels of government, and with the private sector in order to

break down these very formidable stovepipes that now give us egovernment agency by agency, and that is fine if the service or information you need happens to be organized that way. That is not

true for most people and for most businesses.

The answers may lie in more powerful search engines building

on the FirstGov start portals or on-line exchanges that can integrate and offer a range of services based on need and eligibility.

The innovative know-how to accomplish this vision of e-government

exists in the public and private sectors, but it has to be harnessed

in a new way.

The bill, S. 803, now before you addresses the important issues

required for e-government to succeed. The details of the provisions

are not exactly the same as the recommendations we make—you

can look at all of our recommendations—but we both address the

same dimensions—leadership, strategic investment, a skilled e-government work force, access, education, and privacy and security.

I think you may find, as we did in developing this blueprint over

a period of about 14 months, that the process of engaging the key

players in government, business, and the other communities to refine this legislation will build ownership and commitment that are

necessary to make it work in the end.

I am delighted that the administration is so eager and willing to

work with this Committee to fashion successful legislation.

54

1The prepared statement of Mr. Wright appears in the Appendix on page 135.

I want to highlight three of our specific recommendations for

your consideration. One is creating a public-private council that

would bring the best thinking of private entrepreneurs and a crosssection of Federal, State, and local leaders to the e-government enterprise. S. 803 calls for a number of forums that engage these different communities. I would suggest one conversation, bringing

them all to the table.

Second is establishing a Congressional Office of Electronic Government to help members of the House and Senate connect more

effectively with the public and to advise not only members but committees on using e-government to achieve policy goals. Senator

Thompson and Senator Lieberman launched the first ever Senate

website to gather ideas and comments used to develop this legislation. That ought to be commonplace, and there are many more

powerful uses of e-government in the Congress.

Third is organizing public forums around the country to engage

people, including those on the wrong side of the digital divide, in

the design and implementation of e-government.

There is a lot to do. Together, I think we can seize this opportunity to make e-government a reality, and I thank you very much

for your leadership and the opportunity to be here today.

Chairman LIEBERMAN. Thank you, Ms. McGinnis. That was very

interesting and helpful information.

Mr. Wright, we appreciate your patience, and we look forward to

hearing from you now.

TESTIMONY OF HON. JOSEPH R. WRIGHT,1 FORMER DIRECTOR

AND DEPUTY DIRECTOR, OFFICE OF MANAGEMENT AND

BUDGET, AND VICE CHAIRMAN, TERREMARK WORLDWIDE,

INC.

Mr. WRIGHT. Thank you, Mr. Chairman, and Senator Thompson.

I appreciate you including an old war horse from the prior management improvement wars at this hearing. I have got to say that

I spent many, many hours in this particular room during the

1980’s, and I just want to know why you let Sean O’Keefe go for

2 or 3 months without having to come back.

Chairman LIEBERMAN. An oversight.

Mr. WRIGHT. I have prepared testimony that I would like to submit for the record and will just highlight some of the points.

Chairman LIEBERMAN. Fine. It will be entered in total.

Mr. WRIGHT. Thank you very much.

I believe that e-government is a national priority, as I stated, for

several reasons. First, it is occurring anyway in the private sector

as well as in the State and the local governments, the associations,

and citizens are coming to expect it. As Pat McGinnis said—and I

congratulate the Council for coming out with a report as early as

they have in the administration; I think they are one of the first

to do this—but one of the Council’s findings was the Hart-Teeter

survey, which said that citizens are beginning to expect the same

performance from their government because they are getting it

from the private sector.

55

So the pressure is going to start coming in, ‘‘on us,’’ if I may still

use that term, because at this stage, it is going to be not only pressure for improved services, but it is going to be public pressure,

and it is going to be political pressure. So I think the timing of this

is very, very good.

Second, the reason why it is occurring anyway to some extent is

because there is already an extraordinary amount of money being

spent in the IT area. I have $77.6 billion in expenditures here,

while I know the number that you are used to seeing is $40 to $45

billion. The difference is the intelligence community; we normally

do not include the IT work in the intelligence community in this

IT total. So let us back down to the $40 to $45 billion. Of that number, you have probably heard that on e-government, you have about

$1.5 billion to $2 billion being spent. You add portals and some

modems, and you are going to have another $1.5 to $2 billion being

spent. Now you are up to about $3 billion. But while you have that

$40 to $45 billion growing at about 4 to 5 percent every, single

year, the e-government piece that OMB has been able to identify

is growing at about 30 percent a year. So you are going to have a

dramatic increase in spending that is basically spending, as my fellow panelists here have said, on a stovepipe, or agency and program, basis.

We heard a wonderful example here in the Department of Education. That is a very impressive demonstration of a citizen-oriented stovepipe.

So the money is being spent anyway, but what is it being spent

on for the most part—and I am saying this from my old home, the

Office of Management and Budget—is for agencies to further automate their incompatibilities. But the problem is that our citizens

and our businesses are not incompatible. They are a single entities

who are coming in and making a request of his or her government.

And it is going to be tough to get our agencies to think in those

terms. They will say those terms, but will they share files? Will

they share compatibility? Will they share budgets, which is really

what drives program priorities in this town.

I have gone into some of the stages that I think are important

in developing e-government. Some of my fellow panelists have already talked about some of the States which are doing a very good

job on this. I agree. I think that Washington State has done a terrific job. The State of Massachusetts has joined the group but was

not included in prior statements. They just announced an e-government strategy which to me sounds exactly like what we are trying

to do here. It is intentions-based rather than agency-based; citizencentric; a portal to break through the stovepipes; break across traditional agency boundaries. I think that is what we all want to do.

I was in a presentation the other day, Mr. Chairman, in New

York City, where I live right now, where Mayor Guliani surprised

me. He had a group of mayors come in to see what New York City

has done in the whole area of e-government. And to hear the mayor

of a large city speak to the people who are coming in to get licenses

for business and tell them that now, with all those licenses, you

can come in to one location; to hear about how they are allocating

law enforcement assets to where the problems are, using e-government and information services, to make a substantial difference, to

56

be able to improve the way it will get jobs for people who need

them. I have got to tell you I was very impressed, and I am sure

we can see that in many of the cities as we go across our country.

Chairman LIEBERMAN. Excuse me. In other words, in New York

City now, a business can apply for a series of licenses on-line.

Mr. WRIGHT. Yes, sir—which has not been publicized very well.

Again, I live there, and I was not aware of it. A silly example is

if you come in, and you want to open a restaurant—as you know,

in New York City, you cannot keep up with all the new restaurants

that open and close—you have got to go through a whole series of

licensing steps. You can now do that on-line with a single application.

Well, if you are the mayor of a city, you want to be able to provide that simply because of the fact that you want to bring the

business people into your city. So I would imagine that you are

going to see that model being used elsewhere.

You have heard about Britain coming in with e-government. One

thing that was not said is that they have a goal of 100 percent of

government transactions being on-line by 2005. That is tying in all

of their 200 central and 482 local government institutions with all

60 million citizens and 3 million businesses.

Whether that is achieved or not, the planning they will have to

go through and the steps they will have to go through to simply

allocate the resources to achieve that goal is going to make a dramatic improvement.

Anderson Consulting has said that the United States ranks third

behind Canada and Singapore—and I guess now, the United Kingdom. Why? Why are we third, with our resources, and more important, our inventiveness. Most of all, the Internet was invented

here, in this country. So it bothers me that we are falling behind

others.

In terms of our e-government initiatives right now, you have

heard over and over again, and I think the Council also stated in

their report, that we have such a low success rate simply because

we have not had organized central leadership in this entire area.

That is bothersome, because the Federal CIOs have said the biggest problems are not technology, but they are turf wars, and government structure.

The National Electronic Commerce Coordinating Committee also

points out that policy issues, not technology, are the main problems

governments face as they adopt e-government. Pat McGinnis and

the Council said that a barrier to implementing e-government is

government-wide leadership—and so on and so on.

The Congress in many ways has done its part by passing the

Government Paperwork Elimination Act. Mr. Chairman, you know

that there is a deadline of October 2003 to meet the requirements

of the act, and you know what the chances are of the agencies

meeting that deadline. In some cases, you will care about it a great

deal that they did not meet it; in other cases, you will not. But

where is the priority list? I have never seen a priority list. I have

never seen the Congress lay out a priority list. I have never seen

a status in terms of where the agencies are or are not. I have heard

of some of the problems, but 2003 is coming pretty fast.

57

FirstGov.gov was one of the first portals, as you know. We have

over 50 million pages on it right now. State and local information

is now on it. It is only information. It has to have an improved

search engine and it has to have improved security features. There

are security programs within the Federal Government that I think

are pretty good, and I know that when Social Security tried to open

up their files last year, they did have problems with hackers coming in. And I know that the IRS has done a pretty good job in

terms of bringing in their e-files system—but that is not on-line,

that is not on the Internet. And, for example, GSA and their ACES

program looks pretty good. The Postal Service, which we have not

heard about today, and their Net Post-Certified Program, also looks

pretty good.

The main thing, I think, is that the FirstGov.gov expansion has

got to be part of a well-coordinated management effort. And I like

what Sean O’Keefe said in terms of including it as part of a total

management improvement program. And Senator Thompson, the

comments that you made about the Department of Education are

exactly what he is talking about. That is, you cannot automate a

program that, for whatever reasons, is not working for other reasons.

Again, I am not picking on the Department of Education, either—OMB picks on everybody—but I believe that what Deputy

Director O’Keefe said about making e-government a part of the

overall management review is very important.

I will finish by saying that, I am delighted that you introduced

S. 803. But on the position of the CIO—we should not focus so

much on the ‘‘boxes’’ in S. 803 as on the responsibilities. And it is

the right move, Mr. Chairman, to have e-government responsibility

in the Office of Management and Budget.

This town, whether we like it or not, speaks in terms of the

budget. That is the power structure within this town. In the private sector, it is not—but over here, it is. People in Washington do

not ask you so much what you are going to do on a program, but

how much are you going to spend more than you did last year, and

that is a measure of whether you care.

If you do not have the power of the budget, you are not going

to have the power of the implementation. Therefore, OMB is the

right place to do it. But Mr. Chairman, the person to hold responsible for it is the director of OMB—not a new CIO.

I came before this Committee for years, objecting to breaking out

the deputy director of OMB, because I said the deputy for management will not have the power of the budget. But it was done anyway.

Beyond that, there are many parts of S. 803 that I agree with.

I do not necessarily agree with your spending levels, but I do believe that a fund is needed. The only thing I would suggest in closing is that it is very prescriptive in too many ways; it adds a lot

of committees and councils. I would look at what is already being

done. It adds too much spending; I think it is about $250 million

in total if you add everything up. It does not say what is already

being spent in those areas in many cases, and I think you may find

the dollars there.

58

Finally, I would say that OMB, Mr. Chairman, also has a great

flexibility to be able to what I call ‘‘reorient’’ agency funding. That

is the nicest word I can use for it. If this is a priority, they can

leverage the $100 million over the 3 years that they ask for 5-, 10-

and 20-fold. The key is to agree on the goals, to make sure that

this Committee, which is the oversight committee of the performance, has a reasonable reporting mechanism to hold the director responsible and to ask OMB to report on the progress on an everyday

basis, cutting across administrations.

Thank you, sir.

Chairman LIEBERMAN. Thanks, Mr. Wright, for your very interesting testimony.

I started to interrupt to say that part of our hope here in the way

we have constructed this CIO is to focus on the responsibilities and

to make sure that we created an office in which the CIO had responsibilities that focused almost entirely on information technology and not one of several as the deputy director for management has.

Mr. Ingram, from the point of view of ITAA, do you have any

counsel about the construction—I know you made a few general

statements—of the CIO, and I suppose particularly on the question

of whether the CIO ought to concentrate primarily on IT issues?

Mr. INGRAM. Yes, sir, I do. First of all, let me relate it back if

I could to our corporate structure and how a CIO operates. For

many years, we had multiple architectures throughout the corporation—this is EDS now—we had multiple architectures, we had

multiple business units. Everybody went their own way, and we

had stovepipe systems.

Now we have a CIO at the corporate level who reports to the

highest position in the company. When he speaks, we listen, and

we follow. It is for several reasons. First of all, he has a position,

he has leadership, he owns budget, and he sets priorities. He sets

priorities by working with business unit leaders, or in this case,

agency heads. But now, through that direction, we have one common architecture around the entire corporation for all of our

desktops, all of our PDAs and our Blackberries that we are carrying around and so forth, and we are very consistent.

We have one single format for our web pages and our Internet

and intranet sites so that everybody knows the common look and

field, and it is easy to navigate. We are sharing data across all of

those, and we have one standard architecture for everything. I

think that that is the way it should work in this situation also, absolutely.

Chairman LIEBERMAN. Thank you.

Ms. McGinnis, I know that one of the recommendations contained in the Council’s e-government blueprint, which is a very impressive document, is the creation of an e-government strategic

fund which would receive $3 billion over a 5-year period. And I

wanted you to talk to us a bit about how that figure was arrived

at and how you would hope that the money would be used.

Ms. MCGINNIS. We used the Y2K initiative as a model for this,

and the amount is comparable to that and represents, when you

look at this $40 to $45 billion being spent on information techVerDate 11-MAY-2000 09:04 Apr 04, 2002 Jkt 000000 PO 00000 Frm 00062 Fmt 6633 Sfmt 6633 75470.TXT SAFFAIRS PsN: SAFFAIRS
59

nology, only about 1.5 percent of that per year. So we did not see

it as an excessive investment.

I do not think the exact amount is as important as achieving this

flexibility in using the money across agencies for collaborative initiatives. If there is a way of tapping into the $45 billion and creating more flexibility, bringing these agencies together to invest in

initiatives that will go beyond the boundaries of their agencies,

then that is a way of getting at this.

But the notion here is that the E–Government Investment Fund

be focused on cross-agency, intergovernmental, and public-private

initiatives that address the priorities that were identified in our report and making these systems more interoperable, using the best

technology to provide services, addressing issues of privacy and security.

Chairman LIEBERMAN. Let me ask a final and broader question,

which is that one of our expressed hopes in going more and more

to e-government is not only that it will make the government internally more efficient and make it more convenient for the citizenry,

for instance, to apply for licenses for restaurants or to gain access

to library services, but that in a broader way, it will help to revive

or stimulate the vitality of our democracy. From the point of view

of the Council, I wonder if you think this is pie-in-the-sky or if it

is a practical possibility that will come from better e-government.

Ms. MCGINNIS. I think it is not pie-in-the-sky. I think it is absolutely essential when you look at the symptoms of our anemic democracy in terms of the number of people, particularly young people, who are voting and participating. And we see in our polling— we saw in this polling, and we have seen in a whole series of polls

that we have done with Peter Hart and Bob Teeter over the

years—that people do want to be more involved. They see themselves as part of the solution, and they feel rather frustrated that

they do not have opportunities beyond going to the voting booth in

November in election years, and many are not exercising that opportunity.

So in fact I suggested these public forums. I do not necessarily

think that you have to write that into the legislation here; we can

just do it. You will find, as we did in our polling and focus groups,

that people are very willing to engage and say what they would

like to have on-line, how much they think needs to be offered offline, what is most important to them.

We were quite surprised, and I know that Bob Teeter and Peter

Hart were, too, quite surprised, to find that people’s vision of e-government goes far beyond this notion of just being able to apply for

licenses on-line or get information on-line. They want to be able to

communicate with you. They want to be able to communicate with

their elected officials at every level and to ask for and get information and have input even into the policy process of the Federal Government and other levels of government.

I think that that is the dimension, that is the definition of excellence in government that we see as equally important to making

this all more efficient and operate better.

Chairman LIEBERMAN. That is a very helpful answer. I believe

you are right, and I am encouraged by the fact that the pollsters

found that kind of attitude among the public.

60

I want to thank the four witnesses, and I am going to yield to

Senator Thompson. I apologize that there is now ongoing a farewell

luncheon for a long-time employee of my office, and I would be derelict if I did not go. So I am grateful for your testimony, and I am

grateful to Senator Thompson for being willing to wrap up the

hearing.

So I now turn the gavel back to Senator Thompson temporarily.

Senator THOMPSON. Do you have that other piece of legislation

that we had? [Laughter.]

Chairman LIEBERMAN. Thank you.

Senator THOMPSON [PRESIDING.] Thank you very much, Mr.

Chairman.

Several comments have been made that I think have been right

on point. Ms. McGinnis, you mentioned in your statement the concern over privacy; we never talk much about that, but that is another hurdle that we are going to have to overcome. The concern

that you mentioned that people have is very well-placed.

Congressman Inslee and I passed an amendment to the appropriations bill last year, requiring the Inspector General to report to

Congress on how agencies collect and share personal information

from the Internet site. The IG compiled data from 51 IGs—three

hundred persistent cookies, or information-collecting devices, were

found on the website of 23 different agencies. There were hundreds

of violations. According to one report, 116 of 206 State Department

websites, well over half the Department’s sites reviewed, had no

privacy statements and therefore no means of advising users of any

information collected on the sites.

That is something that we are going to have to deal with. We are

not doing a very good job of that so far. I think they are making

improvements in that now that the spotlight has been focused on

them, but we will have to wait and see.

Mr. Wright, you mentioned the Government Paperwork Elimination Act, and you are absolutely right; it requires Federal agencies by 2003 to provide the public or businesses that deal with Federal agencies the option of submitting or receiving information electronically. But the GAO has recently reported that agency plans for

implementing the act do not adequately address the requirements

set forth in the legislation. They concluded that OMB will be challenged in providing oversight of agency activities because the implementation plans submitted by the agencies do not document key

strategic actions nor do they specify when they will be undertaken.

So it is another act they are not going to comply with.

Mr. WRIGHT. Well, Senator Thompson, the Government Paperwork Elimination Act is just part of a huge amount of management

legislation passed during the 1990’s. I just went through it, and in

some ways, I feel a little bit sorry for my successors at OMB. On

the other hand, what a great challenge for them. We did not have

the Internet in the 1980’s, and I can remember the battles that we

had to go through—I do not even want to bore you with it—but it

was difficult just to get agencies to use credit cards or to just try

to get them to use a general ledger system. Now, those are about

the most boring subjects in the entire world—but they will fight to

the death over it. Or it was difficult to get agencies to use AFT and

lockbox systems—but we got that one done because there was quite

61

a bit of money involved. We also did not have the advantages then

that the existing Congress has in your oversight.

Senator THOMPSON. But on the other hand, we keep adding layers of government in all these agencies.

Mr. WRIGHT. Yes, you do.

Senator THOMPSON. We keep adding programs; we keep duplicating and overlapping programs. So the tools are greater, but the

problems are greater too, aren’t they?

Mr. WRIGHT. Well, I was just looking at the GAO report on all

the management improvement legislation, and much of it complements prior legislation and much of it is overlapping. I do not

want to make your life more complex, but if this Committee were

to combine all these former bills into a single omnibus piece of legislation—that would be an extraordinary service.

Senator THOMPSON. That is a very interesting idea. I have often

wondered about that myself. For example, you mentioned the nineties. The Clinger-Cohen Act and the Paperwork Reduction Act, I

am informed, placed the responsibility of the things that we are

talking about now—maybe they did not realize the significance of

it then—but they placed it with the director of OMB. So I sometimes think we spend an awful lot of time rearranging the boxes

and putting new slots in place and so on, all in a vain effort to try

to vest someone with responsibility or figure out a way of holding

them responsible when it has nothing to do with the organizational

structure. It is almost like we need a one-line piece of legislation

that says the director of OMB is responsible, and he had better do

it or else.

Mr. WRIGHT. The problem is the director of OMB is being hit

with a budget issue every 15 minutes that must be resolved. Management issues are weekly, monthly, and yearly issues. So therefore, OMB handles the issue that has to be resolved right then.

The Government Paperwork Elimination Act requires OMB to

submit a report to the Congress as part of the budget—but in addition, look at all the rest of the reports they have to submit. How

in the world is the director of OMB going to pay attention to all

of those requirements when they are not combined in a ‘‘single’’ or

in a ‘‘limited’’ number that he can focus on?

Senator THOMPSON. So what you are suggesting is that we are

overloading that position. Obviously, the budget is always going to

be the most important part of it. I have been critical in the last

several years that it has been about the only part of it. Management has drifted. The budget is going to have the priority. But

after all that is over, with the additional reporting requirements

and additional legislation and complication that we put into government now, maybe it has gotten to be an impossibility for one

person to handle or even have direct responsibility for all that. And

you are suggesting that we simplify at least the management side

of that, maybe, by combining or streamlining all this management

legislation into something that is more manageable. Is that what

you are suggesting?

Mr. WRIGHT. First, I believe that a lot of people have objected to

if you want to call it the heavy-handedness of OMB forever. When

I was up here and elsewhere testifying, I said that is fine—if you

do not want OMB, disband it, but you are going to have to have

62

another OMB. You are going to have to have somebody who is

going to be there to carry out the policies, ‘‘of the President’’ and

communicate these through the budget and other terms of the Congress.

I saw the way the National Performance Review was done in the

prior administration, and many of those initiatives were very, very

good ideas, but they separated it away from the budget. And I

knew that that was not going to be long-lasting and the agencies

were not going to pay that much attention to it.

So I think that in terms of this legislation, putting it into OMB

is the correct thing to do, but it is one more piece of management

legislation that is placed on top of another whole group of requirements that the director is going to satisfy in addition to around 20

additional reports with the budget.

Senator THOMPSON. So do you think it makes any difference,

really, whether or not we have a CIO as this legislation suggests,

or whether we have the newly-created position under DDM, as Mr.

O’Keefe described it?

Mr. WRIGHT. A newly-created position reporting to the Executive

Office of the President will simply compete with OMB. And I am

not saying this out of——

Senator THOMPSON. Even if it is within OMB?

Mr. WRIGHT. Oh, no, not if it is within OMB. I am sorry.

Senator THOMPSON. I think the legislation has it within OMB.

Mr. WRIGHT. Yes. If it is within OMB, I would make it simple.

I would not create another deputy to the director. It is tough

enough the way it is right now.

I will tell you, Sean O’Keefe is a wonderful man; he is still

geared toward the same 15-minute issues hitting him all the time.

When you now have the deputy for management coming in and

saying, ‘‘By the way, we are going to provide management guidance

to the agencies on our data call which is going out in a couple of

weeks—and I want this to be in it,’’ he is going to be negotiating

with Sean O’Keefe in terms of that guidance.

Now you have a third person come in, and what if you have a

fourth person come in on the next Congressional imperative? What

you are doing is complicating the life of the director of OMB substantially. That is all that I am saying.

I would hold the director of OMB responsible for performance

under S. 803 and I would make it as clear as possible. I would simplify all of these prior management reform acts—this Committee

could take the lead on that—and make e-government part of that.

Senator THOMPSON. That means we would have to read all of

them first. Therein lies the problem. [Laughter.]

Mr. WRIGHT. Yes, sir, that is your problem, and that is why you

are a Senator.

Senator THOMPSON. We could go on for a long time here with the

other panel members, but it is one o’clock, and I think we should

wrap it up.

I really appreciate your being here and making your contribution. I think this has been extremely helpful. Hopefully, we have

been able to point out some of the opportunities as well as some

of the potential pitfalls, and we can move in the right direction.

63

The record will be held open for 1 week to accept statements on

e-government and S. 803.

We are adjourned.

[Whereupon, at 1:01 p.m., the Committee was adjourned.]

(65)

A P P E N D I X

PREPARED STATEMENT OF SENATOR CLELAND

Mr. Chairman, on the 4th of July thousands of Americans lined up at the National Archives to pay their respects to a 225-year-old piece of parchment. The

words contained on that faded medium are the words of our independence as a nation and the ideals that have guided this country for its entire history. The Declaration of Independence, along with the other Charters of Freedom, have now been removed from display at the National Archives to undergo 2 years of treatment and

re-incasement to preserve both the fragile medium and the message that we work

every day to protect. I understand that when the documents go back on display in

2003 they will be presented in new encasements, more accessible to all Americans,

including those with disabilities.

Acessibility of government information is why S. 803, the E-Government Act of

2001, is so very important, Mr. Chairman, and that is why I join you in supporting

its vital goals. From the parchment of the 18th century to the electronic records of

the 21st, we must preserve and make available the records of our national life and

thereby ensure accessibility of government services to the people. The life cycle of

e-government records can not end with first time distribution, but must guarantee

availability to the people into the decades and centuries ahead. That is why, Mr.

Chairman, I wish to take this opportunity to note the vital work of the National

Archives and Records Administration (NARA) in that preservation task.

Building an Electronic Records Archives (ERA) is one of the most critical efforts

to ensure preservation and access to Government records since the establishment

of the National Archives in 1934. The pace of technological progress and the spread

of electronic government initiatives make the need for electronic records solutions

urgent. Among other problems, this progress makes the formats in which the record

are stored obsolete within a few years, threatening to make them inaccessible even

if they are preserved intact.

NARA has been working in collaboration with the Georgia Tech Research Institute, the National Science Foundation, Defense Research Projects Agency, United

States Patent and Trademark Office, the Army Research Laboratory, and the San

Diego Supercomputer Center to find solutions for the preservation and access to

electronic records that are sustainable over the long term. Progress in these collaborations enabled NARA to announce in March 2000 that they foresee the possibility

of implementing an Electronic Records Archives within a few years. Goals of particular interest to private sector records managers is NARA’s commitment to make

solutions transferable and scalable to a wide variety of public and private applications.

In addition to the important link with Georgia Tech on this project, Mr. Chairman, Atlanta, Georgia is a proud host to one of the 14 regional archives of NARA.

Currently housed in an inadequate WWII warehouse, the Archives has been invited

to build a new facility on land contiguous to the campus of Clayton College and

State University in Morrow, Georgia. I am working with the College, the Georgia

State Archives, and my friend from the 3rd District, Mac Collins, to try to make

that a reality. The exciting possibility in reference to the subject of e-government

today, Mr. Chairman, is the fact that the most attractive feature of Clayton College

and State University to the Archives is their information technology curriculum.

This specialty will allow the University to partner with NARA on technology

projects that can make the regionally-created e-records more accessible to the American public. Talks are already underway on how these collaborations might be accomplished.

So in conclusion, Mr. Chairman, it is my pleasure to support S. 803, as we take

particular note of our responsibility to making the records of our government more

accessible to the people. From the Charters of Freedom to the latest records of the

Centers for Disease Control or TVA, we must do our part to support the institutions

that will ensure accessibility both today and tomorrow.

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Æ