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32–357 PDF 2007

S. Hrg. 109–871

NOMINATION OF PAUL A. SCHNEIDER

HEARING

BEFORE THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

ON THE

NOMINATION OF PAUL A. SCHNEIDER TO BE UNDER SECRETARY FOR 

MANAGEMENT, U.S. DEPARTMENT OF HOMELAND SECURITY

DECEMBER 6, 2006

Available via http://www.access.gpo.gov/congress/senate

Printed for the use of the 

Committee on Homeland Security and Governmental Affairs

(

(II)

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

LINCOLN D. CHAFEE, Rhode Island 

ROBERT F. BENNETT, Utah 

PETE V. DOMENICI, New Mexico 

JOHN W. WARNER, Virginia 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas

BRANDON L. MILHORN, Staff Director 

JENNIFER L. TARR, Associate Counsel 

MICHAEL L. ALEXANDER, Minority Staff Director 

KRISTINE V. LAM, Minority Research Assistant 

TRINA DRIESSNACK TYRER, Chief Clerk 

(III)

C O N T E N T S 

Opening statements: Page 

Senator Collins ................................................................................................. 1

Senator Akaka .................................................................................................. 2

Senator Voinovich ............................................................................................. 4

Prepared statement: 

Senator Lieberman ........................................................................................... 19

WITNESS 

WEDNESDAY, DECEMBER 6, 2006

Paul A. Schneider to be Under Secretary for Management, U.S. Department 

of Homeland Security: 

Testimony .......................................................................................................... 7

Prepared statement .......................................................................................... 21

Biographical and professional information ..................................................... 22

Responses to pre-hearing questions ................................................................ 29

Letter from U.S. Office of Government Ethics ............................................... 62

Responses to post-hearing questions .............................................................. 63

(1)

NOMINATION OF PAUL A. SCHNEIDER 

WEDNESDAY, DECEMBER 6, 2006

U.S. SENATE, COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 3:02 p.m., in room 

342, Dirksen Senate Office Building, Hon. Susan M. Collins, Chairman of the Committee, presiding. 

Present: Senators Collins, Voinovich, and Akaka. 

OPENING STATEMENT OF CHAIRMAN COLLINS 

Chairman COLLINS. The Committee will come to order. 

Today, the Committee will consider the nomination of Paul 

Schneider to be the Under Secretary for Management at the Department of Homeland Security. 

The mission of DHS is to provide a unifying core of leadership 

and expertise for the national network of organizations and institutions that work to secure our Nation and to prepare for and respond to disasters of all types. The Management Directorate is 

responsible for ensuring that the Department’s workforce has the 

resources and systems in place to carry out this vital mission. The 

directorate works in a variety of critical areas, from human resources and administration to budgeting, procurement, and information technology. The collective aim is for DHS components to 

have an effective means of working with each other and with their 

homeland security partners at the State and local levels. 

In addition to its responsibilities for allocating human and material resources, the directorate is charged with identifying and 

tracking performance measures. This would be a daunting assignment under the best of circumstances. In our current situation, the 

phrase ‘‘herding cats’’ comes to mind. 

As the Department of Homeland Security nears the end of its 

fourth year of operations, the unifying core has not yet fully taken 

shape. As the Committee’s investigation of Hurricane Katrina 

made so terribly clear, the goals of effective resource allocation and 

coordination across all levels of government continue to elude us. 

Grant programs remain mired in conflict and controversy. The 

right balance between safe and secure borders and the lawful 

movement of people and commerce has yet to be realized. To be 

sure, progress is being made on all of these fronts, but not at the 

pace our times demand. 

The Committee’s hearing just this morning on the enormous 

waste, fraud, and abuse plaguing the recovery from Katrina proVerDate 0ct 09 2002 14:35 Jun 22, 2007 Jkt 032357 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\32357.TXT SAFFAIRS PsN: PAT
2

vided a stark reminder of what is at stake. As the reform and 

strengthening of FEMA within DHS moves forward, the need for 

effective resource allocation will become ever more urgent, as will 

the need for solid and verifiable performance measures. 

The Management Directorate will need a strong hand at the 

helm. Paul Schneider appears to bring strong credentials to this 

challenge. He began his career in public service in 1965 at the 

Portsmouth Naval Shipyard, which despite its name is located in 

Kittery, Maine. He was a project engineer, and I am sure that was 

indeed a very good start for his career. 

He was appointed to the Senior Executive Service in 1981 and 

served as the Deputy Director of NAVSEA’s Auxiliary Systems 

Subgroup. He later served as the Executive Director and senior civilian of the Naval Sea Systems Command and as the Principal 

Deputy Assistant Secretary of the Navy for Research, Development, 

and Acquisition. In 2002, he became the Senior Acquisition Executive of the National Security Agency. Most recently, Mr. Schneider 

served as a defense and aerospace consultant. 

He holds a degree in nuclear engineering—I guess that would 

make him a rocket scientist after all, perhaps—and has been recognized with Distinguished Civilian Service Awards from the Department of Defense, the Navy, and National Security Agency, as well 

as receiving various Presidential Rank awards. 

I welcome Mr. Schneider to the Committee today, and I look forward to hearing his testimony. 

We are very pleased to have the Senator from Hawaii, Senator 

Akaka, substituting for Senator Lieberman as the Ranking Minority Member today. Welcome, Senator. 

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA. Thank you very much, Madam Chairman. I am 

honored to be in this position today. Before I get on with my statement, I would like to, Madam Chairman, thank you so much for 

your 4 years of leadership here as Chairman of this Committee and 

guiding the Committee with the success of the Department of 

Homeland Security. I really appreciate your dedicated leadership, 

your promptness in action with issues of the Committee, as well as 

your organization of the Committee. I have enjoyed working with 

you——

Chairman COLLINS. Thank you very much. 

Senator AKAKA [continuing]. And look forward to continuing to 

work with you, Madam Chairman. 

I am pleased to join you, Madam Chairman, in welcoming Mr. 

Paul Schneider, who has been nominated to serve as the Under 

Secretary of Management for DHS. This is a pivotal position, perhaps even more important than the Secretary’s job because the 

Under Secretary has line responsibility for ensuring the Department performs its mission. Merging 22 agencies with 180,000 employees into a Department to carry out a common mission is the 

single biggest challenge in the government today. 

As the Ranking Member of the Armed Services Readiness Subcommittee and the Oversight of Government Management Subcommittee here, I know that without sustained leadership neither 

incremental changes nor wholesale transformation will be inteVerDate 0ct 09 2002 14:35 Jun 22, 2007 Jkt 032357 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 C:\DOCS\32357.TXT SAFFAIRS PsN: PAT
3

grated into an agency’s management culture. That is why I have 

sponsored legislation with my friend, Senator Voinovich, to create 

a Deputy Secretary for Management at DHS, which I believe will 

help the new Department avoid the same long-term management 

problems currently plaguing the Department of Defense. 

Mr. Schneider, you will be coming into an agency with deep divisions between labor and management, most of which stem from the 

personnel regulations issued by DHS last year that I believe will 

severely erode employee rights and protections. Strong employee 

protections enhance security by helping attract and retain the most 

skilled employees and by ensuring that they feel free to bring concerns about management actions that could adversely affect our national security to senior leaders without fear of retaliation. 

I urge you to work with the DHS Chief Human Capital Officer, 

who I know from her tenure at the Office of Personnel Management, and with union leaders, management associations, and the 

Senior Executives Association to develop a personnel system for the 

Department that is flexible, transparent, and ensures collective 

bargaining and a fair appeals process. 

I want to mention an issue that came up during the Committee’s 

work on your nomination concerning your stewardship of a classified program at the National Security Agency called Trailblazer. 

We have examined this issue in both open and closed briefings, and 

there is nothing that we have discovered which should adversely 

affect your nomination to this position. 

Mr. Schneider, you have a reputation and a record of getting 

things done, of hiring and rewarding capable people and supporting 

them in their mission. Your talents are sorely needed, given the 

critical roles played by and challenges facing the Chief Information 

Officer, the Chief Procurement Officer, the Chief Financial Officer, 

and the Chief Human Capital Officer (CHCO), all of whose offices 

fall under the Management Directorate. I hope you will not hesitate to reach out to the Committee should problems arise. 

Thank you very much, Madam Chairman. 

[The prepared statement of Senator Akaka follows:]

PREPARED STATEMENT OF SENATOR AKAKA 

Today we are here to consider the nomination of Mr. Paul Schneider to be the 

Under Secretary for Management at the Department of Homeland Security (DHS). 

However, before we turn to Mr. Schneider’s nomination, I would like to thank you, 

Chairman Collins, for your work over the past 4 years as Chairman to ensure the 

success of DHS. I appreciate your dedicated leadership and the comity with which 

you have led this Committee. I look forward to working with you in the next Congress. 

I am pleased to join you today in welcoming Mr. Schneider to the Committee. The 

position to which he has been nominated is pivotal, perhaps even more important 

than the Secretary’s job because the Under Secretary has line responsibility for ensuring the Department performs its mission. Merging 22 agencies with 180,000 employees into a department to carry out a common mission is the single biggest challenge in the government today. 

As the Ranking Member of the Oversight of Government Management Subcommittee and the Armed Service Readiness Subcommittee, I know that without 

sustained leadership neither incremental changes nor wholesale transformation will 

be integrated into an agency’s management culture. That is why I have sponsored 

legislation with Senator Voinovich to create a Deputy Secretary for Management at 

DHS, which I believe will help the new department avoid the same long-term management problems currently plaguing the Department of Defense. 

4

Mr. Schneider, you will be coming into an agency with deep divisions between 

labor and management, most of which stem from the personnel regulations issued 

by DHS last year that I believe will severely erode employee rights and protections. 

Strong employee protections enhance security by helping attract and retain the most 

skilled employees and by ensuring that they feel free to bring concerns about management actions that could adversely affect our national security to senior leaders 

without fear of retaliation. 

I urge you to work with the DHS Chief Human Capital Officer (CHCO), who I 

know from her tenure at the Office of Personnel Management, and with union leaders, management associations, and the Senior Executives Association to develop a 

personnel system for the Department that is flexible, transparent, and ensures collective bargaining and a fair appeals process. 

I want to mention an issue that came up during the Committee’s work on your 

nomination concerning your stewardship of a classified program at the National Security Agency called Trailblazer. We have examined this issue in both open and 

closed briefings, and there is nothing that we have discovered which should adversely affect your nomination to this position. 

Mr. Schneider, you have a reputation and a record of getting things done, of hiring and rewarding capable people, and supporting them in their mission. Your talents are sorely needed given the critical roles played by and challenges facing the 

Chief Information Officer, the Chief Procurement Officer, the Chief Financial Officer, and the CHCO all of whose offices fall under the Management Directorate. I 

hope you will not hesitate to reach out to the Committee should problems arise. 

Thank you again Madam Chairman.

Chairman COLLINS. Thank you very much, Senator Akaka. 

I am now pleased to call upon Senator Voinovich, who is this 

Committee’s leading expert on issues involving human capital, and 

I know that is one of the reasons he is here today. Senator 

Voinovich. 

OPENING STATEMENT OF SENATOR VOINOVICH 

Senator VOINOVICH. Thank you, Madam Chairman. First of all, 

I know this is the last hearing that this Committee is going to have 

in the 109th Congress, and I want to publicly acknowledge the 

great leadership that you have provided to this Committee and the 

bipartisanship that you have emphasized during your Chairmanship. I know that because of the wonderful relationship that you 

have developed with Senator Lieberman, this Committee will continue to make a real contribution to our country. This Committee 

has been the most productive of any of the committees that we 

have in Congress, and that is due to your hard work, tenacity, and 

your ability to work with Senator Lieberman. 

Chairman COLLINS. Thank you. 

Senator VOINOVICH. I would also like to acknowledge Senator 

Akaka. We have worked together for 8 years. Senator Akaka, I 

really appreciate the cooperation and, more importantly, the friendship that we have developed over the years. I am so glad you are 

going to be back for the next six. You and I are going to be working 

together on lots of issues, and so I look forward to the 110th Congress. 

Chairman COLLINS. Thank you. 

Senator VOINOVICH. The Under Secretary for Management at the 

Department of Homeland Security serves as the principal administrator and manager for the Department, although as Senator 

Akaka pointed out, we really don’t like the positions placement on 

the DHS organizational chart. We think the position should be elevated and be reporting directly to the Secretary. 

5

Though the Under Secretary for Management does not serve on 

the front line, the position is critical to our Nation’s homeland security. With the Department still in its formative years, which I 

think people have forgotten, the Under Secretary must provide consistent direction and coordinate numerous interrelated management systems so that they complement the operational components’ 

activities. The guidance must be flexible and durable over time and 

eliminate stovepipes that continue to hinder development of a unified culture. 

As my colleagues know, the Homeland Security Act of 2002 initiated the Federal Government’s largest restructuring since the creation of the Department of Defense in 1947. In hindsight, I think 

a lot of us believe we bit off a whole lot more than maybe we 

should have and perhaps should have started out with the consolidation of fewer agencies. 

While carrying out its critical mission of securing the Nation 

from terrorism and natural hazards, the leadership of DHS must 

be mindful of the major organizational, operational, and cultural 

issues associated with large mergers. It is indeed a challenge to 

unify 180,000 employees from 22 different Federal agencies and 

programs. This is not meant to be as a criticism of the Secretary 

or any single individual at DHS, but rather to acknowledge the fact 

that the Department faces significant hurdles as it matures. The 

Department must be honest with itself about its management challenges and must devote focused, high-level attention to overcoming 

them. 

I am concerned that DHS continues to face a high rate of vacancies and turnover in key leadership positions, including within the 

Management Directorate. This issue could be further complicated 

as this administration finishes its elected term. 

As the Chairman of the Oversight of Government Management 

Subcommittee, improving the management focus at DHS remains 

one of my top priorities. During my long career in public service, 

including as mayor and governor, I have repeatedly observed that 

the path to organizational success lies in adopting best practices in 

management, including strategic planning, performance, and accountability measures, and effectively leveraging human capital. 

When instituting reforms as mayor and governor, individuals involved with implementation would tell me they did not have time 

for Total Quality Management because they were too busy putting 

out fires. I appreciate that DHS is also busy putting out fires, but 

the connection between good management practices and operational success should not be lost. That is why the position of 

Under Secretary for Management is so vital to the success of the 

Department of Homeland Security. 

Mr. Schneider, if confirmed, your job will be to tackle the formidable management challenges at the Department of Homeland Security and institutionalize long-term changes that will last way beyond your tenure. After reviewing your significant experience in 

senior management positions at the Department of Defense and the 

National Security Agency, I believe that you are well qualified for 

the position of Under Secretary for Management. I appreciate your 

willingness to return to Federal service and make a contribution to 

6

our Nation’s homeland security, and I applaud your courage in accepting this nomination and the challenges it brings. 

I look forward to learning of your vision for fulfilling the duties 

of the Under Secretary for Management. If you are confirmed, this 

Committee will be closely monitoring your progress. We also want 

to help ensure you have the necessary visibility and leverage within the Department to get the job done. Accordingly, I encourage you 

to be as candid as possible with us about the Management Directorate’s resource needs and its concerns. 

Thank you, Madam Chairman. 

[The prepared statement of Senator Voinovich follows:]

PREPARED STATEMENT OF SENATOR VOINOVICH 

Thank you, Madam Chairman, for holding this important hearing. The Under Secretary for Management at the Department of Homeland Security serves as the principal administrator and manager for the Department. Though the Under Secretary 

for Management does not serve on the frontline, the position is critical to our Nation’s homeland security. With the Department still in its formative years, the 

Under Secretary for Management must provide consistent direction and coordinate 

numerous interrelated management systems so they complement the operational 

components’ activities. The guidance must be flexible and durable over time, and 

eliminate stovepipes that continue to hinder development of a unified culture. 

As my colleagues know, the Homeland Security Act of 2002 initiated the federal 

government’s largest restructuring since the creation of the Department of Defense 

in 1947. While carrying out its critical mission of securing the Nation from terrorism and natural hazards, the leadership of DHS must be mindful of the major 

organizational, operational, and cultural issues associated with large mergers. It is 

indeed a challenge to unify 180,000 employees from 22 different federal agencies 

and programs. 

It is not meant as a criticism of the Secretary or any single individual at DHS 

to acknowledge the fact that the Department faces significant hurdles as it matures. 

The Department must be honest about its management challenges, and must devote 

focused, high-level attention to overcoming them. I am concerned that DHS continues to face a high rate of vacancies and turnover in key leadership positions, including within the Management Directorate. This issue could be further complicated 

as this Administration finishes its elected term. 

As the Chairman of the Oversight of Government Management Subcommittee, improving the management focus at DHS remains one of my top priorities. During my 

long career in public service, including as a Mayor and Governor, I have repeatedly 

observed that the path to organizational success lies in adopting best practices in 

management, including strategic planning, performance and accountability measures, and effectively leveraging human capital. 

When instituting reforms as Mayor and Governor, individuals tasked with implementation would tell me, ‘‘We don’t have time for Total Quality Management, we 

are too busy putting out fires.’’ I appreciate that DHS is also busy putting out fires. 

But the connection between good management practices and operational success 

should not be lost. That is why the position of Under Secretary for Management is 

so vital to the success of the Department of Homeland Security. 

Mr. Schneider, if confirmed, your job will be to tackle the formidable management 

challenges at the Department of Homeland Security and institutionalize long-term 

changes that will last beyond your tenure. 

After reviewing your significant experience in senior management positions at the 

Department of Defense and the National Security Agency, I believe you are well 

qualified for the position of Under Secretary for Management. I appreciate your willingness to return to Federal service and make a contribution to our Nation’s homeland security, and applaud your courage in accepting this nomination and the challenges it brings. 

Mr. Schneider, I look forward to learning of your vision for fulfilling the duties 

of the Under Secretary for Management. If you are confirmed, this Committee will 

be closely monitoring your progress. We will also help ensure you have the necessary visibility and leverage within the Department to get the job done. Accordingly, I encourage you to be as candid as possible with us about the Management 

Directorate’s resource needs and concerns. Thank you, Madam Chairman.

Chairman COLLINS. Thank you. 

7

1The prepared statement of Mr. Schneider appears in the Appendix on page 21. 

Mr. Schneider has filed responses to a biographical and financial 

questionnaire, answered pre-hearing questions submitted by this 

Committee, and has had his financial statements reviewed by the 

Office of Government Ethics. Without objection, this information 

will be made part of the hearing record, with the exception of the 

financial data, which are on file and available for public inspection 

in the Committee offices. 

Our Committee rules require that all witnesses at nomination 

hearings give their testimony under oath, so Mr. Schneider, if you 

would please stand and raise your right hand. 

Do you swear that the testimony you are about to give to the 

Committee will be the truth, the whole truth, and nothing but the 

truth, so help you, God? 

Mr. SCHNEIDER. I do. 

Chairman COLLINS. Please be seated. 

Mr. Schneider, I understand that you have family members 

present with you today, and I would invite you to introduce them 

to the Committee at this time, if you would like to do so. 

TESTIMONY OF PAUL A. SCHNEIDER1 TO BE UNDER SECRETARY FOR MANAGEMENT, U.S. DEPARTMENT OF HOMELAND SECURITY 

Mr. SCHNEIDER. Sure, Senator. Right behind me on my left is my 

wife, Leslie, and cousin Carolyn Griffin, and a row of many family 

friends. 

Chairman COLLINS. That is great. We welcome you all to this 

hearing today. We know that public service involves the entire family and that there are many sacrifices involved, so we welcome you 

to the hearing today. 

You may proceed with your statement. 

Mr. SCHNEIDER. Chairman Collins, Senator Lieberman, and distinguished Members of the Committee, it is an honor to appear before you today as you consider my nomination by the President to 

be the next Under Secretary for Management at the U.S. Department of Homeland Security. I am deeply honored and humbled that 

President Bush has nominated me to serve this great country and 

its people, and I thank Secretary Chertoff for his support throughout this process. If confirmed, I look forward to the opportunity and 

privilege of serving under his direction with the dedicated men and 

women who are working to secure our homeland and defend our 

freedoms. 

I owe this country a lot. I started at the Portsmouth Naval Shipyard in Kittery, Maine, as a 21-year-old GS–5 engineer who was 

obsessed with building nuclear submarines. At that point in time 

in history, naval shipyards actually built nuclear submarines. As I 

progressed up through the ranks, I was afforded a number of opportunities to serve in positions of increased responsibility, seeing 

and doing things that one could only have dreamed of as a kid 

fresh out of school. 

More than 40 years later, on September 11, I was in the Pentagon. I saw firsthand the devastation to which our enemies commit themselves. As I lay in the grass by the river, as we were told 

8

to do because we were advised another airplane was inbound, I saw 

the fire and the smoke rising from the building and I saw two F–

16s flying combat air patrol over the Pentagon and the District of 

Columbia. Three things came to my mind. 

First, I was a kid who grew up in the Cold War, practicing duckand-cover drills. I could not believe that this was happening in our 

country. 

Second, the ‘‘battle space’’ to which those in the military frequently refer to now, was not in Europe, not in the Middle East, 

not in the Far East, but right here in U.S. airspace. 

Third, I realized that our lives would never really be the same. 

I hope that my integrity, competence, continued willingness to 

serve the public trust, and ability to accomplish significant and 

challenging objectives demonstrate the skill set and experience 

needed to meet the significant responsibility required by the Under 

Secretary for Management’s charge. 

If confirmed, I commit to working with you and your staff, other 

governmental departments and agencies, businesses, both large 

and small, and our international partners to make a contribution 

to securing our homeland for today and tomorrow. 

Thank you very much for this opportunity to appear here today. 

I am happy to answer any questions you may have. 

Chairman COLLINS. Thank you. 

I will start my questioning with the three standard questions 

that we ask of all nominees. First, is there anything that you are 

aware of in your background that might present a conflict of interest with the duties of the office to which you have been nominated? 

Mr. SCHNEIDER. No. 

Chairman COLLINS. Second, do you know of anything personal or 

otherwise that would in any way prevent you from fully and honorably discharging the responsibilities of the office? 

Mr. SCHNEIDER. No. 

Chairman COLLINS. And third, do you agree without reservation 

to respond to any reasonable summons to appear and testify before 

any duly constituted Committee of Congress if you are confirmed? 

Mr. SCHNEIDER. Yes. 

Chairman COLLINS. We will now start with a round of questions, 

limited to 6 minutes each, and there will be a second round, just 

so that my colleagues know that. 

Mr. Schneider, as you are well aware, the success of any enterprise, including that of the Department of Homeland Security, depends upon the people, the employees. Recently, a U.S. Court of 

Appeals for the D.C. Circuit upheld the District Court’s opinion 

striking down part of DHS’s new personnel system, the pay-for-performance plan for those DHS employees subject to collective bargaining. This is the MaxHR Pay-for-Performance Plan. It is my understanding that the Department of Justice is unlikely to appeal 

that decision to the Supreme Court, so the result is that the labor 

representatives and DHS officials will have to go back to the drawing board to design a new plan. 

If you are confirmed, what do you plan to do to ensure that this 

time a personnel system that is acceptable to both the employees 

and the management of the Department can be designed and successfully implemented? 

9

Mr. SCHNEIDER. Senator, I am aware in general of the issue with 

the Court of Appeals. I am also aware that MaxHR has six elements of the plan. Probably the most important that needs to be 

addressed initially is a solid performance management plan. My 

understanding is the court specifically struck down the segment 

having to do with pay. 

Now, I have had a lot of experience in personnel management in 

large organizations and especially in the Navy, where the Navy 

was the lead in instituting the pay-for-performance plan that has 

sort of served as a model for the Department of Defense as well as 

Homeland Security. What we learned in the Navy was you need to 

spend a lot of time up front in the performance management aspects because that is where many of the current pay plans, performance plans, fall apart. There needs to be conveyed between supervisor or manager and employee a clear understanding of what 

their responsibilities are, what they are supposed to accomplish. 

There needs to be frequent communications and feedback. In my 

experience, most plans fall apart when this is not properly communicated. 

It is my understanding talking to the Chief Human Capital Officer at DHS that the emphasis now is on developing and instituting 

a solid performance management plan across the Department. At 

the same time, what I have found to be very instructive is to work 

with the workforce, work with the unions, and have constant communications and articulate what the objectives of management are. 

Too often, in my experience in the Navy with dealing with labor 

relations, too often, you don’t have that communication. There is a 

lack of sensitivity to the issues that the workforce and unions have. 

So what I would do, if confirmed, was to focus on getting a solid 

performance management plan instituted, establishing the appropriate forums to have that constant dialogue, and working with the 

workforce and the unions on structuring the pay aspects as well as 

grievance procedures, adverse action, and the classification elements, which are also key to making MaxHR successful. 

Chairman COLLINS. DHS also faces unusual financial management challenges that need to be addressed as it continues to integrate the components of the 22 Federal agencies into a single Department. One of the difficulties is that each agency is still dealing 

with a lot of legacy systems, and in many cases these are poorlydesigned systems, and there, in general, is inadequate financial 

management. 

Now, there are some agencies that have worked hard. I know one 

has hired the consultant Deloitte, for example, and has made real 

progress in reducing the number of material problems identified in 

audits. But in general, what do you see your role as being to bring 

more uniformity, more consistency, and higher quality across the 

Department in the financial management area? 

Mr. SCHNEIDER. Senator, I am aware of the issues with financial 

management. Internal controls, which there have been numerous 

IG and GAO reports on that fault the Department for the lack of 

internal controls, I have gone through them. I have analyzed what 

the issues are. As you pointed out, you mentioned Deloitte. ICE 

hired Deloitte, I believe, to help them go look at these internal conVerDate 0ct 09 2002 14:35 Jun 22, 2007 Jkt 032357 PO 00000 Frm 00013 Fmt 6633 Sfmt 6601 C:\DOCS\32357.TXT SAFFAIRS PsN: PAT
10

trols. They were one of the major problem areas. ICE has been 

turned around. 

I guess the largest number of internal control deficiencies are 

currently attributed to the Coast Guard. And so I have talked to 

the Chief Financial Officer, and I am aware of the plans underway, 

working with the appropriate leadership in the Coast Guard, with 

help, I believe, from Deloitte, to go tackle these internal control 

issues. My opinion is that if ICE was able to successfully address 

these issues in a timely manner, then there is no reason why the 

Coast Guard wouldn’t be able to do the same thing. So from an internal control deficiency standpoint, I am optimistic that the Coast 

Guard will make great progress, and overall, that would, frankly, 

eliminate probably the biggest offenders relative to having weak internal controls. 

On the migration of financial management systems, my understanding is that there are several systems within the operating 

components that are good, that are satisfactory. There are some 

that are weak. So if confirmed, what I would do would be to see 

why those that are good can’t be used as the model, and rather 

than starting off and trying to create a brand new system from 

whole cloth, why not migrate these poorer systems to those that 

are known to be satisfactory? 

Chairman COLLINS. My time has expired, so I want to yield to 

Senator Akaka, but I would just tell you to take a hard look at 

FEMA, as well. We held a hearing this morning that confirmed 

that the GAO has found that due to lack of good management and 

an absence of internal controls, that FEMA had some $1 billion in 

improper and fraudulent payments in the wake of Hurricane 

Katrina, clearly a completely unacceptable situation. So I would 

add FEMA to the top of your priority list in that area. 

Senator Akaka. 

Senator AKAKA. Thank you very much, Madam Chairman. 

Before getting to my question, I just want to add to my statement that I have enjoyed working with Senator Voinovich in Committee and the Subcommitte he chairs. We did a lot on government 

management and the Federal workforce issues, as well as with the 

District of Columbia. I just want him to know that I look forward 

to working with him. And also to add to the Chairman’s comments 

that I made, that I have really appreciated the comity in which she 

led this Committee and has done a great job with that. 

Mr. Schneider, I want to thank you for your statement. I felt 

your statement was heartfelt and demonstrates how you will be 

handling your responsibilities. This is a good beginning for me. 

Senator Collins has mentioned the DHS court decision. The 

Homeland Security Act of 2002 ensured that DHS employees would 

continue to have collective bargaining rights. However, the regulations issued by the Department last year were found to violate that 

requirement by the U.S. Court of Appeals for the District of Columbia. 

My question to you is will you commit to this Committee that 

you will comply fully with the statutory obligation and ensure collective bargaining rights at DHS, if confirmed as Under Secretary 

for Management? 

11

Mr. SCHNEIDER. Senator, if confirmed, I will commit to carrying 

out the collective bargaining responsibilities as required by law, 

regulation. I think that is an inherent part of good management, 

if you will, because this workforce is absolutely key to securing the 

homeland and protecting our borders. That is part of the world I 

have come from in the Navy, where whether it is at naval shipyards, aviation depots, laboratories, etc., and I believe that I have 

a reputation for frank and open communications with the leadership of the collective bargaining units. 

Senator AKAKA. Thank you. Mr. Schneider, much of your professional experience is with the Department of Defense, so you understand DOD’s management culture, which generally retains reporting authority within the component or service. There are some real 

pluses to such a chain of command approach, and there are some 

real minuses that unfortunately lead to significant inefficiencies, 

mismanagement, and internal system failures. Too many times, 

Congress has had to mandate structural changes by statute, and 

too many times, these requirements have been ignored by DOD. 

Last year, Deputy Secretary England stood up the Business 

Transformation Agency, which is a step in the right direction and 

one that I hope will lead to broader control department-wide. You 

have provided this Committee with the areas that you will focus 

on to lead change. What I would like to know is what immediate 

steps you will take to review the current organization structure 

within the Management Directorate and whether you believe a 

BTA approach for DHS could work. 

Mr. SCHNEIDER. Senator, first, I am very familiar with DOD’s 

Business Transformation Office. I worked for Secretary England 

when he was the Secretary of the Navy, and I guess, when Secretary Rumsfeld took over as Secretary of Defense across the services, we were asked to put together, if you will, to actually start 

the business transformation operation. A large portion of the, I will 

call it the core team that was put in place were people that worked 

for me in the Navy. It had the management attention directly of 

Secretary England, who then had to report to the Secretary of Defense. It has been subsequently institutionalized in its current 

form. 

One of the things I would do, if I confirmed, is I would look at—

there is, from what I understand, a Business Transformation Office 

in the Department of Homeland Security. I would look at the structure of that. I would look at the areas that they are currently looking at. And based on my experience in terms of the areas that the 

business transformation operation ought to look at, see if, in fact, 

these efforts are properly focused and, if not, take whatever action 

was required to get them on track. 

Senator AKAKA. I am glad to hear your approach. From all of 

your experiences, I look forward to you being successful in doing 

that. My time has just expired. 

Chairman COLLINS. Thank you. Senator Voinovich. 

Senator VOINOVICH. Mr. Schneider, I question whether the 

Under Secretary for Management has sufficient authority to direct 

overreaching management integration and strategy across the Department. In fact, I heard through the grapevine that your predeVerDate 0ct 09 2002 14:35 Jun 22, 2007 Jkt 032357 PO 00000 Frm 00015 Fmt 6633 Sfmt 6601 C:\DOCS\32357.TXT SAFFAIRS PsN: PAT
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cessor felt rather frustrated in terms of getting the job done, and 

that is one of the reasons why she decided to leave. 

As Senator Akaka has mentioned, we introduced the Homeland 

Security Restructuring Act of 2000, which would elevate the management responsibilities within the Department to the Deputy Secretary level. 

From what you have observed of the Under Secretary for Management position and the various chief officers within the Management Directorate, do you think the office to which you have been 

nominated possesses adequate authority to effect change throughout the Department? If confirmed, how will you work within the existing dual-accountability command structure to ensure that influence of the Management Directorate is robust enough to ensure a 

common culture of management excellence throughout the Department? Finally, what other positions have you held in the past in 

which you have not had sufficient authority but you were nevertheless able to accomplish your objectives? 

Mr. SCHNEIDER. Senator, on the first part, when you mentioned 

the deputy—recommending elevating to a Deputy Secretary, was 

that in S. 1712? I reviewed that proposed legislation that proposes 

elevating the position to the Deputy Secretary for Management, 

and I compared it very closely to the Homeland Security Act, and 

it appears that there are some very specific changes, one in terms 

of tenure. I believe it proposes a 5-year tenure. 

I envision the Under Secretary for Management by the authorities that are invested in that position by law, that Homeland Security Act, and by my detailed discussions with the Secretary and 

Deputy Secretary that in practice, even though I would not be 

called a Deputy Secretary, but in practice, there is absolutely no 

doubt in my mind that I am like a Chief Operating Officer of a department. 

And part of that has to do with the law is very helpful because 

that Act very clearly specifies what authorities I would have. What 

is even more helpful is the obvious confidence that the Secretary 

and the Deputy Secretary have in me, and that will become very 

obvious to the leadership in the Department. 

I think the third element that makes this work and why I believe 

that on the surface I would have all the authorities that I need is 

because of the power of the personality, and I am not a shy person. 

I know how to take action and to be aggressive, and I think between what is specified in law, the relationship that I would have 

with the Secretary, and the nature of how I do business, that those 

are sufficient tools for me to be successful. 

On your second part of this question regarding dual accountability, DOD, in fact, does have dual accountability. I mean, you 

have a comptroller, you have an acquisition executive, you have the 

Under Secretary of Defense for Personnel, and they do not have, 

with one exception and that is on the acquisition side, in general, 

line authority over the service components. They basically effect 

control by policy and procedures and exercising oversight where it 

is needed. I have lived in that process. I know from the service 

standpoint the kind of help that I used to get from the DOD at the 

DOD level, and I think that the business unit chiefs, whether it is 

the CIO, the Human Capital Officer, and the Chief Financial OffiVerDate 0ct 09 2002 14:35 Jun 22, 2007 Jkt 032357 PO 00000 Frm 00016 Fmt 6633 Sfmt 6601 C:\DOCS\32357.TXT SAFFAIRS PsN: PAT
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cer, by policy and by procedures and oversight appear to me to 

have sufficient authority to go do their jobs. 

I think in the case of the Chief Procurement Officer, she has 

even stronger control. She can do several things. She can pull the 

warrant of a contracting officer in one of the operating components. 

She can specify her review of any procurement above within a certain threshold. She can issue policies that say, I don’t want you to 

use these types of contracts in these situations. She, today, has a 

tremendous amount of authority. 

Regarding the third part of your question, my past experience, I 

have always pushed, if you will, the edge of the envelope, and I believe the secret to success has been my competence, but more importantly, the confidence that my leadership has shown in me and 

the latitude that they have given for me to basically define the job. 

You are always going to have a give and take, and that is part of 

the way business gets done, but I don’t recall, frankly, anything 

where I was really limited, if you will. 

Senator VOINOVICH. Thank you. 

Chairman COLLINS. Mr. Schneider, many of the Federal Government’s more experienced acquisition personnel are now eligible for 

retirement. Reforms are also placing new demands on the acquisition workforce. Acquisition staff must have a greater knowledge 

than ever before of technology, of market conditions, of industry 

trends, of the technical details of the services and commodities that 

they procure. At the same time, we have seen the number of procurement actions increase by 12 percent with the greatest amount 

of work coming on contracting actions over the simplified acquisition threshold of $100,000. In other words, the procurement workforce is being asked truly to do more with less. 

I am concerned that we are rapidly losing the personnel workforce that is needed to manage procurement of increasing complexity. In addition, we are not seeing an influx of younger people 

to replace the procurement staff that are eligible for retirement or 

about to retire. We have also seen the problems that have occurred 

at FEMA because of understaffing in the procurement workforce, 

understaffing that in the end ends up costing us far more than if 

those positions had been filled. 

What additional tools do you believe are necessary at DHS to ensure the recruitment and retention of highly qualified individuals 

to the acquisition workforce? 

Mr. SCHNEIDER. Senator, I think for starters I have reviewed the 

recent FEMA Act. I was encouraged to see a couple of really major 

incentives in there where FEMA was granted the authority to pay 

bonuses for recruitment as well as for retention up to about roughly 25 percent of salary. That goes a long way in trying to make 

FEMA, if you will, a desired place to work. 

I think the other aspect of it, and that is not to say that is going 

to solve the large number of vacancies, there needs to be aggressive 

recruiting programs. I have spoken to the Director of Management 

at FEMA, somebody I have known for a long time, and the Chief 

Human Capital Officer. They have a series of what I would consider to be very aggressive actions to initiate intern programs in 

the critical disciplines, aggressive hiring with teams of people that 

14

target specific geographic areas, and so I think I am satisfied that 

from the interim standpoint that they can make great progress. 

I think a bigger problem, quite frankly, is at the mid-level, especially on the contracting officers. From the time a boot intern walks 

in the door until the time they are a journeyman contracting officer 

takes a long time. So what is really needed is that we need to have 

an influx at the mid-level. That is going to require, I believe, getting the word that the Department of Homeland Security is the 

place to be. 

In the 1970s and the 1960s when I grew up, it was either Defense or Space. I think the place where the action is for this time 

and for the near-term future is in Homeland Security, and I think 

the Department has to do a better job of advertising why Homeland Security is the place to work, and frankly, I believe a lot of 

personal recruiting at the mid-level would help go a long way. 

Chairman COLLINS. Certain of DHS components, certain agencies 

within the Department, in order to carry out their mission, must 

compile and maintain personal information on American citizens. 

We have seen earlier this year very disturbing incidents where, for 

example, at the Veterans Administration a computer containing 

personal data on millions of veterans was stolen. What can you do 

and what will you do to minimize the risk that personal information stored on DHS computers and in DHS information systems is 

not compromised? In other words, have you looked at the computer 

security policies of the Department? 

Mr. SCHNEIDER. Senator, I have not looked at the computer security policies of the Department, but from my previous experience, 

I know there are things you can do, starting with the encryption 

of hard drives and the like. I think in this particular area, and I 

recognize the sensitivity, I believe that the Deputy Director of the 

Office of Management and Budget for Management, Clay Johnson, 

III, has issued three memos, which I have read, one in May, one 

in June, and most recently in September 2006, that talk about very 

specific policies, procedures, and what happens in the case of, I believe it is called, personal identifiable information. So I believe 

there is a blueprint out there of steps that need to be taken for prevention and specific actions in terms of notifications, both—if, in 

fact, there is a loss of PII. 

Chairman COLLINS. Thank you. Senator Akaka. 

Senator AKAKA. Thank you very much, Madam Chairman. 

Mr. Schneider, as a retired Federal employee who returned to 

Federal service after September 11, you appreciate the need to attract and retain skilled and trained workers, especially those safeguarding the Nation against manmade and natural disasters. 

Many of these jobs are inherently governmental, which is why it 

is so important that DHS ensures that it has the personnel and resources to carry out its mission. As an example, the Chairman 

spoke on FEMA and the champion of Federal employees, Senator 

Voinovich. 

Mr. Schneider, I would appreciate your assurance that Congress 

will receive regular updates on the Department’s use of training 

funds, retention bonuses, student loan repayments, and other efforts to recruit and retain a skilled workforce. I also ask that the 

DHS Chief Human Capital Officer regularly meet with this ComVerDate 0ct 09 2002 14:35 Jun 22, 2007 Jkt 032357 PO 00000 Frm 00018 Fmt 6633 Sfmt 6601 C:\DOCS\32357.TXT SAFFAIRS PsN: PAT
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mittee’s staff to keep us informed of the agency’s use of personnel 

flexibilities. Do you have any comment on that? 

Mr. SCHNEIDER. Senator, no. I support that. I have met with the 

Chief Human Capital Officer. She has been in the job, I think, 

about 60 days. She is a dynamo, and she has had tremendous experience, if you will, both at the State level in OPM, she has had extensive experience in how to use these types of incentives, and I 

am personally thrilled that, if confirmed, I would have the opportunity to work for her in these types of efforts. And I would commit, if confirmed, to provide you and the staff any information that 

you would want in this particular type of area. 

These are some of the metrics, Senator, that if I was confirmed 

that I would use to gauge how well are we using these tools that 

are available and is there some measure of effectiveness of what 

it is costing versus what the return is. 

Senator AKAKA. Thank you for that response. I think we can both 

agree, Mr. Schneider, how important it is for DHS to have strong 

recruitment and retention policies. With this in mind, I would like 

to discuss a situation that has arisen with the Federal Protective 

Service at DHS. The press reports that FPS faces a $42 million 

shortfall. To address this financial problem, DHS announced it will 

offer early retirement to FPS personnel and end retention bonuses, 

which would save about $3 million. 

I am wondering if human capital decisions are adequately 

factored into this funding decision. I would appreciate your looking 

into this situation and getting back to the Committee on this. 

Mr. SCHNEIDER. Senator, if confirmed, I would do that. 

Senator AKAKA. Are you aware of that situation? 

Mr. SCHNEIDER. Somebody briefly mentioned it to me the other 

day, but I did not probe into it. 

Senator AKAKA. Mr. Schneider, a Gallup survey released yesterday found that although government employment is attractive to 

young adults, there are many obstacles to overcome in the recruitment of younger employees. I was interested to see, however, that 

agencies involved in national security, including DHS, scored high 

with those surveyed. In fact, DHS scored number four out of 25 

agencies in terms of employment interest. Nonetheless, DHS scored 

second to last in employee satisfaction of the 30 agencies ranked 

by a 2005 survey of employed Federal workers. 

Given these two surveys I have just mentioned, how would you 

address the perception of those who might be interested in working 

for DHS versus those who currently work for DHS? 

Mr. SCHNEIDER. Well, on the first survey, it is encouraging because it shows that DHS is where the action is for the future, so 

if you want to make a contribution, that is the place to work. So 

I would expand on that. 

On the second survey that you mentioned, I think it is a responsibility of leadership to convey—to make the workforce a place 

where people want to come to, and that is where they like it. It is 

not just the work that they like, but they trust their management, 

they feel that the management listens, and there is an environment of open communications back and forth. I think this is a leadership issue, and if confirmed, I believe I can be of help, if you will, 

in energizing the leadership to focus on that type of an issue. UnVerDate 0ct 09 2002 14:35 Jun 22, 2007 Jkt 032357 PO 00000 Frm 00019 Fmt 6633 Sfmt 6601 C:\DOCS\32357.TXT SAFFAIRS PsN: PAT
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less the Department or any agency has a reputation as a good 

place to work because the leadership listens, you are not going to 

attract people and this Department would be down in the cellar. I 

think it is really a leadership issue, and the employees have to 

have the confidence that their management listens and that they 

can trust them. 

Senator AKAKA. I thank you very much for your responses, Mr. 

Schneider. Thank you. 

Chairman COLLINS. Thank you. Senator Voinovich. 

Senator VOINOVICH. Mr. Schneider, building on what Senator 

Akaka just discussed with you, I would like to have in writing your 

plan to change the attitude of the people in the Department in 

terms of their job satisfaction. This will enable the Committee to 

monitor the program that you are going to institute and revisit the 

issue a year from now to see whether or not it has made a difference. 

Second, before I forget it, I would like to say that I am very much 

impressed with your familiarity with the Department. I have sat 

through a lot of these hearings, and you seem to be more familiar 

with the operation and the job to which you have been nominated 

than anyone that I have heard in recent times. I congratulate you, 

and if your preparation for today’s hearing is any indication of the 

success you are going to have, I think you are going to do a good 

job. 

Mr. SCHNEIDER. Thank you very much, Senator. 

Senator VOINOVICH. Mr. Schneider, you have the responsibility 

for overseeing the Department’s budget and appropriation requests 

and expenditure of funds. Since 2002, the Federal Government has 

more than tripled government-wide spending related to non-defense homeland security, a big increase. I continue to believe that 

DHS needs to do a better job of conducting risk assessments and 

allocating our limited budgetary resources based upon risk and 

strategic planning priorities. Do you agree? 

Mr. SCHNEIDER. Yes, I do. I think, frankly, Senator, one of the 

reasons I believe that Secretary Chertoff and the Deputy Secretary 

found me as an attractive candidate for this position is my ability 

to take a look at an entire effort, and it is what is the objective, 

what are the requirements, how is it going to be used, what are 

the cost trades relative to different levels of performance, understanding what the total cost of the effort is as opposed to this fiscal 

year it is going to cost X-number of dollars and next fiscal year it 

is going to cost Y-number of dollars. That is the world I come from. 

I have been responsible for making a lot of those types of decisions 

where resources are limited and the number of opportunities are 

great. 

What I would do is to look at the current processes. There are 

several that are in place right now. A Joint Requirements Board 

is an investment requirements review board. I have already talked 

to the Deputy Secretary about this. This is one of his priorities for 

me, and I believe we are on a common mindset of what needs to 

be done. 

There needs to be a total understanding of what the major expenditure is going to be and what the options are. There is usually 

more than one option, and a lot has to do with maybe the 99 perVerDate 0ct 09 2002 14:35 Jun 22, 2007 Jkt 032357 PO 00000 Frm 00020 Fmt 6633 Sfmt 6601 C:\DOCS\32357.TXT SAFFAIRS PsN: PAT
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cent solution 10 years from now at X-number of dollars is not the 

right answer. Maybe the 70 percent solution 5 years from now with 

substantially less dollar investment is the right answer. 

That is the type of process that I have lived in and grown up in. 

That is the process that I believe has instilled discipline in the Defense Department, and what I would try to do is to see how the 

existing processes within the Department would need to be 

strengthened in order to give management a better insight into the 

decisionmaking process. 

Senator VOINOVICH. Well, I must say to you that DOD leaves a 

lot to be desired. 

Mr. SCHNEIDER. Yes, sir. 

Senator VOINOVICH. Of the items on GAO’s high-risk list, I believe eight of them are Department of Defense programs and six of 

them are government-wide programs for which the Department of 

Defense shares some responsibility. We are doing oversight on the 

supply chain management and security clearance procurement 

process. So I hope that you don’t look at that operation as a model. 

As a matter of fact, I think that if you were to look at the most 

recent high-risk list, you would find that DHS is very high on 

Comptroller General Walker’s list. So I guess I am saying to you 

I am not that impressed with what the Department of Defense has 

done in the past. I think we can do better than that. 

Mr. SCHNEIDER. Yes, sir. If I may, I think one of the things when 

I was at NSA that we did was we tailored the DOD process where 

we thought it had some strengths and we discarded some of those 

areas where we thought it was weak. 

Senator VOINOVICH. In terms of the budget process, what concerns me, and maybe this is because I am an old mayor and a governor, is the Department’s allocation of resources. The Department 

has had a continued increase in terms of their budget as contrasted 

to some of the other non-defense discretionary spending. But if you 

examine current spending, you can identify items that may not be 

as high a priority as something else that the Department has been 

asked to do. You will also find that this Committee is going to have 

all kinds of ideas about other things that you ought to fund that 

unfortunately come with a very large price tag. You can’t do it all. 

One of the things that is of concern to me right now is our spending on border security. If you talk to Judd Gregg, who is head of 

the Appropriations Committee for Homeland Security, he will tell 

you that there isn’t enough money for us to get the job done. You 

are going to be asked to get the job done, and the issue then becomes, how much money are you going to really need to get the job 

done, are you going to request those dollars in the 2008 budget, or 

are you going to be told by OMB that you will have to decrease 

funding for another priority in order to have the resources necessary for the task at hand? 

There has got to be a point where you make the determination 

that what we are going to have to depend upon is the intelligence 

to decrease our vulnerability to attack. 

I plan to spend a lot of time on the Department’s budget because 

I think part of our problem here is that we don’t have a broad picture of our homeland security activities, of the associated allocation 

of resources, and on understanding how we can get the best return 

18

on our investment. I am hoping to talk with you more about that 

as you take on this job. 

Mr. SCHNEIDER. Yes, sir. 

Senator VOINOVICH. Thank you, Madam Chairman, for the time. 

Chairman COLLINS. Thank you. 

I would like to thank Mr. Schneider for appearing before the 

Committee today. It is my hope that this Committee will act on 

your nomination before we adjourn so that you can be considered 

by the full Senate. I think your position is a very important one, 

and given the widespread support for your nomination and your excellent performance today, my hope is that we can take the Bob 

Gates model and act that quickly to approve you and get you on 

the job because the Department really does need you. 

You can facilitate that by returning very quickly the additional 

questions that I and others may have for you. Without objection, 

the record will be kept open until noon tomorrow for the submission of any additional written questions or statements for the 

record. The sooner you turn those around, the happier I will be because then we can move to considering your nomination. 

I want to join Senator Voinovich in thanking you for your public 

service, for returning to public service. I think that your background is exactly what the Department needs, and I am pleased to 

lend my voice in support of your nomination, as well. 

This hearing is now adjourned. Thank you. 

[Whereupon, at 4:05 p.m., the Committee was adjourned.] 

(19)

A P P E N D I X 

PREPARED STATEMENT OF SENATOR LIEBERMAN 

Thank you, Madam Chairman and welcome to you Mr. Schneider. The position 

for which you have been nominated—Department of Homeland Security Under Secretary for Management—is unusual, if not unique, in the Federal Government. If 

confirmed, you will be responsible for core, cross-Department functions such as 

budget and financial management, procurement, IT systems, and human resources, 

and the Management Directorate that you will lead will be central to addressing 

some of the key challenges facing DHS. 

When we created DHS 4 years ago, it was with the intent to bring together the 

Federal Government’s previously balkanized antiterrorism resources in one Department and to take advantage of the synergies that resulted. By doing so, I am confident that we have made the country safer. As the Department matures, however, 

there continue to be growing pains, and the Under Secretary for Management plays 

a central role in ensuring that a coherent Department emerges out of DHS’s many 

component entities. 

Moreover, if the Department is to succeed in its ultimate mission of protecting the 

Nation from man-made and natural disasters, it must be run well, with its resources managed wisely and an ability to attract a sufficient and talented workforce. 

It will fall in large measure to you—if you are confirmed—to ensure that is so. 

I am interested in hearing from you today how you will address some of the most 

pressing management challenges faced by the Department. 

For example, how are you going to help the Department build the stable and experienced workforce it needs to carry out vital homeland security missions. The Department continues to face major challenges in recruiting, training, and retaining 

personnel to ensure that the workforce contains the skills needed by the diverse 

components of the Department. Much work remains in establishing the human resources management system that Congress authorized in the Homeland Security 

Act, especially now that a Federal court has blocked portions of the Department’s 

regulations establishing that system. I am also interested in hearing your ideas 

about how to establish a performance management system that inspires the best effort and performance from our workforce, that is objective, reliable, and transparent, 

and that contains other safeguards to ensure that the system is fair and effective. 

I am also interested in your ideas for ensuring effective implementation of the 

FEMA restructuring legislation that Senator Collins and I introduced and that was 

signed into law as part of the Homeland Security appropriations bill this fall. As 

I’m sure you know, the organizational changes mandated by that legislation are required to be in place by March 31, 2007, and other provisions of the law take effect 

earlier. I would like to hear from you what steps you will take and what your role 

will be in ensuring that the changes mandated by the law are implemented effectively and on time. 

Another critical area for which you will be responsible is procurement. The Washington Post recently publicized an outside study of the Department’s procurement 

operations that found glaring and systematic deficiencies in many of the contract 

files it reviewed. The Department since its inception also has been embarrassed by 

a series of cost overruns on large contracts totaling hundreds of millions of dollars. 

Furthermore, the Department’s increasing reliance on less-than-fully-competitive 

contracting procedures is depriving the Department—and the U.S. taxpayers—of the 

best value for its dollars. I am interested in hearing from you what actions you intend to take to improve the Department’s acquisition management system and ensure that the Department is spending its contracting funds wisely and engaging in 

effective oversight of its contracts. 

Improving and integrating the Department’s information technology systems is 

another significant challenge. In FY07, the budget for DHS’s IT investments will 

20

reach $4.16 billion. Yet, according to a report released by the President’s Management Council in October, DHS could defend less than half of its IT investments. I 

would like to hear how you would work with the Chief Information Officer to improve IT management at the Department. 

Mr. Schneider, you have a formidable record of 40 years of experience, largely in 

the Federal government, including as Principal Deputy Assistant Secretary of the 

Navy for Research, Development and Acquisition and Senior Acquisition Executive 

for the National Security Agency, and I am hopeful this considerable experience will 

serve you well if you are confirmed in this post. Certainly, the myriad management 

challenges of the still-new Department can be daunting. But it is also essential that 

these challenges be met and conquered if the Department is to live up to its potential and effectively protect the nation’s citizens.

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