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THE DEPARTMENT OF HOMELAND SECURITY’S 

MANAGEMENT DIRECTORATE: GOALS AND 

OBJECTIVES OF THE NEW UNDER SECRETARY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON MANAGEMENT, 

INVESTIGATIONS, AND OVERSIGHT 

OF THE

COMMITTEE ON HOMELAND SECURITY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

MARCH 1, 2007 

Serial No. 110–11 

Printed for the use of the Committee on Homeland Security 

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html 


Congress.#13
COMMITTEE ON HOMELAND SECURITY 

BENNIE G. THOMPSON, Mississippi, Chairman 

LORETTA SANCHEZ, California, 

EDWARD J. MARKEY, Massachusetts 

NORMAN D. DICKS, Washington 

JANE HARMAN, California 

PETER A. DEFAZIO, Oregon 

NITA M. LOWEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

DONNA M. CHRISTENSEN, U.S. Virgin 

Islands 

BOB ETHERIDGE, North Carolina 

JAMES R. LANGEVIN, Rhode Island 

HENRY CUELLAR, Texas 

CHRISTOPHER P. CARNEY, Pennsylvania 

YVETTE D. CLARKE, New York 

AL GREEN, Texas 

ED PERLMUTTER, Colorado 

VACANCY 

PETER T. KING, New York 

LAMAR SMITH, Texas 

CHRISTOPHER SHAYS, Connecticut 

MARK E. SOUDER, Indiana 

TOM DAVIS, Virginia 

DANIEL E. LUNGREN, California 

MIKE ROGERS, Alabama 

BOBBY JINDAL, Louisiana 

DAVID G. REICHERT, Washington 

MICHAEL T. MCCAUL, Texas 

CHARLES W. DENT, Pennsylvania 

GINNY BROWN-WAITE, Florida 

MARSHA BLACKBURN, Tennessee 

GUS M. BILIRAKIS, Florida 

DAVID DAVIS, Tennessee 

JESSICA HERRERA-FLANIGAN, Staff Director & General Counsel 

TODD GEE, Chief Counsel 

MICHAEL TWINCHEK, Chief Clerk 

ROBERT O’CONNOR, Minority Staff Director 

SUBCOMMITTEE ON MANAGEMENT, INVESTIGATIONS,AND OVERSIGHT 

CHRISTOPHER P. CARNEY, Pennsylvania, Chairman 

PETER A. DEFAZIO, Oregon 

YVETTE D. CLARKE, New York 

ED PERLMUTTER, Colorado 

VACANCY 

BENNIE G. THOMPSON, Mississippi (Ex 

Officio) 

MIKE ROGERS, Alabama 

TOM DAVIS, Virginia 

MICHAEL T. MCCAUL, Texas 

PETER T. KING, New York (Ex Officio) 

JEFF GREENE, Director & Counsel 

BRIAN TURBYFILL, Clerk 

MICHAEL RUSSELL, Senior Counsel 

(II)

(III) 

C O N T E N T S 

Page 

STATEMENTS 

The Honorable Christopher P. Carney, a Representative in Congress From 

the State of Pennsylvania, and Chairman, Subcommittee on Management, 

Investigations, and Oversight ............................................................................. 1 

The Honorable Rogers, a Representative in Congress From the State of 

Alabama, and Ranking Member, Subcommittee on Management, 

Investigations, and Oversight ............................................................................. 3 

The Honorable Bennie G. Thompson, a Representative in Congress From 

the State of Mississippi, and Chairman, Committee on Homeland Security .. 3 

The Honorable Yvette D. Clarke, a Representative in Congress From the 

State of New York ................................................................................................ 16 

The Honorable Eleanor Holmes Norton, a Delegate in Congress From the 

District of Columbia ............................................................................................. 18 

WITNESS

The Honorable Paul A. Schneider, Under Secretary for Management, 

Department of Homeland Security: 

Oral Statement ..................................................................................................... 4 

Prepared Statement ............................................................................................. 6 

APPENDIX

Additional Questions and Responses: 

Responses from Hon. Paul A. Schneider ............................................................ 23 

(1) 

THE DHS’S MANAGEMENT DIRECTORATE: 

GOALS AND OBJECTIVES OF THE NEW 

UNDER SECRETARY 

Thursday, March 1, 2007 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON HOMELAND SECURITY, 

SUBCOMMITTEE ON MANAGEMENT, INVESTIGATIONS, 

AND OVERSIGHT, 

Washington, DC. 

The subcommittee met, pursuant to call, at 2:02 p.m., in Room 

311, Cannon House Office Building, Hon. Christopher Carney 

[chairman of the subcommittee] presiding. 

Present: Representatives Carney, Clarke, Norton, Thompson, and 

Rogers. 

Mr. CARNEY. [Presiding.] The Subcommittee on Management Investigations Oversight will come to order. 

Under Secretary Schneider, I would like to thank you for agreeing to appear before us today. Today is actually the first time I am 

officially wielding a gavel. Although I met you informally a few 

weeks ago, I really appreciated that meeting. 

Although you and I have each served our country in various capacities in the past, including in the Navy—thank you for your 

service, by the way—we are both relatively new to the world of the 

Department of Homeland Security. In fact, we were both sworn in 

on our roles on the same day. Congratulations again on your new 

job. 

I think I speak for many in this subcommittee when I say that 

I have been shocked with several issues still afflicting DHS at the 

management level. These include hardships affecting recruitment 

efforts, wasteful procurement issues, like Deepwater, troubling 

failed efforts to unify multiple information systems and dizzying 

staff departures for the private sector, and the list goes on. 

It seems as if you have inherited quite a beleaguered directorate 

over at DHS. In fact, I am sure many of my colleagues are wondering why someone of your outstanding background would want 

to take on such a job. We appreciate you doing it, certainly. 

From what I understand, your predecessor left with, at best, 

mixed reviews for both inside and outside DHS. 

During our conversation a few weeks back, I found your candor 

very welcome. I walked away from the meeting looking forward to 

a productive relationship between you, your staff and this subcommittee, as well as the overall committee. 

2 

I hope we can continue with such frank dialogue. It was heartening to hear you discuss a number of the management shortcomings that now fall under your purview. That said, it is very 

common for people to run when they hear the word, ‘‘oversight,’’ 

but I think you know from your prior service that with the right 

people, both solving problems and overseeing those solutions, the 

best interests of the taxpayers and the government are both addressed. 

This subcommittee looks forward to hearing from you about what 

you have already proposed and begun to implement at DHS, as 

well as how your solutions are fairing. In the coming months, the 

subcommittee is planning a number of hearings where the input of 

your directorate will be invaluable. 

I look forward to continued cooperation between your organization and the MI&O Subcommittee. 

I hear from Pennsylvanians who have not only suffered from the 

so-called 100-year floods, a couple of them, actually, in the last couple years, they again suffered at the hands of a lethargic federal 

response to each of the floods. They expect oversight into these 

issues and others. 

I am sure you are already hearing from individual offices along 

the southern border about the SBInet and from coastal communities about Deepwater. While many in Congress see these as regional problems, these are issues that affect all of us. Our dialogue 

and cooperation is essential to ensuring that DHS is meeting its responsibilities to the American people. 

Neither secrets nor partisanship, nor antagonism will help us accomplish our ultimate goal, which is keeping our country safe, preparing for, preventing and responding to disasters. 

I would be remiss if I did not take a moment to recognize Mr. 

Rogers, the ranking Republican on this subcommittee, as well. 

While I did not yet have the privilege of being a member of Congress during the 109th, I have heard that Mr. Rogers worked tirelessly on management issues and laid a great foundation upon 

which we can continue to build. I look forward to working closely 

with him as well. 

I would also like to recognize Chairman Thompson—perfect timing—and thank him for the opportunity to sit as the chair on this 

subcommittee. His willingness and encouragement to let MI&O determine its own course is certainly welcome. 

I would also like to thank him for the support he has given us 

to accomplish our goals, as well as to restore more regular and vigorous oversight of DHS to this body. 

This subcommittee had a very productive joint hearing yesterday 

with the Subcommittee on Emergency Communications, Preparedness and Response. We heard from FEMA director, the director of 

the former Directorate of Preparedness and one of the deputy inspector generals. I am hopeful that today’s hearing will provide us 

with similar meaningful insight into the Directorate of Management. 

Under Secretary Schneider, I cannot stress to you enough how 

much I am looking to working with you in the future and hearing 

your testimony today. 

Thank you. 

3 

Mr. Rogers? 

Mr. ROGERS. Thank you, Chairman Carney, and I too want to 

congratulate you on your new chairmanship. Thank you for calling 

this hearing and giving us a chance to hear from Undersecretary 

Schneider. 

I want to thank you for taking the time to be here. I know you’re 

busy, and I appreciate your effort. And congratulations on your 

new appointment. 

The department became operational 4 years ago today—so a lot 

of things happened on today recently—in the largest reorganization 

of the federal government in 50 years. DHS now has approximately 

207,000 employees and a budget of $43 billion. 

When the department was created from 22 separate agencies, 

challenges and problems were expected. The Government Accountability Office has acknowledged that, ‘‘Successful transformations 

of large organizations, even those faced with less strenuous reorganizations than DHS, can take years to achieve.’’ 

Improving the management of DHS remains one of the top priorities facing the department today. While much progress has been 

made over the past 4 years, there is much more work to do. 

In the 109th Congress, this subcommittee held a number of hearings on the management structure at DHS. Through our in-depth 

reviews, we identified a number of areas which need to be improved, including the authority of the chief operating officers over 

the department’s component agencies, morale and retention at 

DHS, security of information systems, staff shortages in procurement and contract oversights, financial management that will lead 

to a clean audit opinion and further integration of the department’s 

operations and programs. 

To address these areas, the Committee on Homeland Security reported two authorization bills in the 109th Congress, which included provisions to strengthen the department’s management 

structure. The testimony we hear today will be helpful as the committee drafts its third DHS authorization bill this month. 

I look forward to hearing from Undersecretary Schneider about 

his plans to address the department’s management challenges and 

what goals he expects to accomplish during his tenure in office. 

And with that, Chairman Carney, I yield back. 

Mr. CARNEY. Thank you, Mr. Rogers. 

The chair now recognizes the chairman of the full committee, the 

gentleman from Mississippi, Mr. Thompson, for an opening statement. 

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

Welcome, Mr. Undersecretary. Welcome to the hot seat. 

I appreciate you coming today, but I also appreciate your outreach before this particular hearing. It tells me that even though 

you have a tough job, you don’t mind admitting it. And they tell 

me that is 90 percent of the challenge is to know what you face. 

You have some awesome responsibility is to tell people what they 

need to do, to look at it and somehow get them to understand that 

it is in their best interest. And your office oversees the department’s procurement operations. We heard about SBInet, for instance, yesterday. We know about Deepwater. We know about a lot 

of programs that speak to procurement. 

4 

But it is also your responsibility to unify the department’s information technology, human resources and financial systems. 

MaxHR, I hope you will officially pronounce it dead before the 

hearing is over today, so we can move on to something else. 

But I look forward to your testimony, and I appreciate your service. 

And I yield back. 

Mr. CARNEY. Thank you, Mr. Thompson. 

Mr. King is not here. 

Other members of the subcommittee are reminded that, under 

the committee rules, opening statements may be submitted for the 

record. 

I welcome our witness, the undersecretary for management, the 

Honorable Paul Schneider. 

Without objection, the undersecretary’s full statement will be inserted into the record. 

I now recognize Undersecretary Schneider to summarize his 

statement for 5 minutes. 

STATEMENT OF HON. PAUL A. SCHNEIDER, UNDER 

SECRETARY FOR MANAGEMENT, DEPARTMENT OF 

HOMELAND SECURITY 

Mr. SCHNEIDER. Thank you, Mr. Chairman, Chairman Thompson, Congressman Rogers and members of the subcommittee. It is 

a pleasure to appear before you today for the first time as the undersecretary for management. 

I have been the undersecretary for 2 months. For the previous 

3.5 years, I was a defense and aerospace consultant doing work for 

NASA, Federal Aviation Administration, Department of Defense, 

the United States Coast Guard and several others. 

Prior to consulting, I was a career civil servant for 38 years. I 

began my career at the Portsmouth Naval Shipyard, working as an 

engineer on designing and constructing nuclear submarines. 

My last three government positions, I served as the senior acquisition executive at the National Security Agency, I was the principal deputy assistance secretary of the Navy for research, development and acquisition, and I was the executive director and senior 

civilian of the Naval Sea Systems Command, which is the Navy’s 

largest shore command. 

I am here today to discuss the major management and programmatic challenges the department faces and the areas that I 

am going to focus on as the undersecretary for management. 

The most significant challenge we have is to continue the effort 

that was started with the creation of the new department, merging 

22 agencies with approximately 180,000 people and turning it into 

the most effective force to protect our country. This effort requires 

effective and efficient use of financial and human resources, enabling technology and superb management. 

The major elements are our strategy are to improve acquisition 

and procurement throughout the department, strengthen the requirements and investment review process, acquire and maintain 

the necessary human capital to do the job, seek efficiencies across 

the enterprise in various operations and resources and making the 

5 

key management systems, such as financial and information technology, world-class. 

What we are currently doing is reviewing our major programs 

and investments to ensure that the requirements are clear, the cost 

estimates are valid, technology risk is properly assessed, schedules 

are realistic, contract vehicles are proper and that our programs 

are well-managed with effective oversight. We are ensuring that 

the program offices that manage the major efforts are properly 

structured and staffed with the right people and the right skill 

sets. 

To date, the department’s focus has been on procurement, but 

procurement is only one element that is required and one skill set 

for proper acquisition management. Acquisition includes understanding operational and lifecycle requirements, concepts of operations, how the ultimate product or system would ultimately be 

employed, developing sound business strategies, exercising prudent 

financial management, making tradeoffs and managing program 

risk. 

One of the things I have found in my 2 months here is that we 

need to transition from a focus on procurement to a focus in the 

broader context on management. Prior to DHS’ establishment in 

2003, the department’s components did not have major acquisitions, like the Coast Guard’s Deepwater Program, which require 

large numbers of mature and experienced acquisition personnel, 

like those that are in the Department of Defense. It was a different 

business model, with a different type of business. 

DHS has a shortage of people that are experienced in program 

management, including its related functions, such as acquisition logistics and cost analysis. 

To reduce our reliance on contractors, which I know is a big concern of this committee and others in Congress, for fiscal year 2007 

and 2008, we are focusing on developing from within an acquisition 

workforce through targeted recruiting and advanced training programs for those people we currently have. 

DHS did very poorly in the OPM federal human capital survey. 

Managers and line employees alike delivered a message that the 

leadership has heard loud and clear. As initial steps toward improving employee satisfaction, we have already identified the need 

for better communications throughout the workforce, continued emphasis on performance management training at the supervisory 

and employee level and improved recognition of good performance. 

Those messages came out loud and clear from our analysis of the 

survey. 

There has been considerable publicity about the department’s efforts to implement MaxHR, which is the personnel management 

system. In consideration of the recent court decision on collective 

bargaining, we are considering our next steps in how we implement 

a truly effective personnel management system in the department. 

And so what we are doing is focusing on performance management, we are focusing on targeted hiring and efforts to retain our 

workforce through training and development. 

The OPM survey told that one of the most important things we 

need to concentrate on first is building this performance-based, results-oriented culture, and it is the area that we have to focus on. 

6 

We started with training over 13,000 supervisors across the department to administer the new program and we have implemented an 

automated system to support it. 

We are going to continue to expand our coverage of the new performance management program, because it allows us on the most 

basic level, between supervisor and employee, to understand what 

performance is required of the employee, make sure it is properly 

aligned with the higher level department objectives, and that helps 

us achieve our overall department strategy, and people at the 

working level can relate to their contribution to the overall organization’s goals. 

This clearly was an identified deficiency in the survey, and so 

what we need to do is take the process we started, increase our emphasis on it, expand the performance management aspects in other 

areas, additional training for employees and the like. And so this 

is the centerpiece of our near-term efforts. 

We are also going to be deploying a pilot effort on linking performance and pay in one area, and that is in the intelligence and 

the analysis component. And this will be for the INA people that 

are not part of a collective bargaining unit. We chose this component because, first, they were eager to do it and because we are in 

an intense competition with the private sector and other government agencies for this same talent. 

The talent that we are looking for in the intelligence and analysis area is the same talent the CIA, the NSA, the DIA, the DNI— 

and I forgot all the acronyms—that they are actively trying to compete for. And so what we believe, and in my personal experience— 

I have had considerable experience in the Navy with performance 

pay link systems—the better performers, frankly, are much better 

compensated, and the poor performers are less compensated. And 

so people, once they are in that type of system, they recognize the 

potential. 

So we are going to try this pilot, it is going to give us some good 

examples for the future before we march forward. 

[The statement of Mr. Schneider follows:] 

PREPARED STATEMENT OF THE HONORABLE PAUL A. SCHNEIDER

Thank you Mr. Chairman, Congressman Rogers and members of the Subcommittee. It’s a pleasure to appear before you today for the first time as the Under 

Secretary for Management. 

I have been the Under Secretary for Management for two months. For the previous three and one half years I was a defense and aerospace consultant doing work 

for NASA, FAA, DOD, Coast Guard and others. Prior to this I was a career civil 

servant for 38 years. I began my career at the Portsmouth Naval Shipyard as a 

project engineer in 1965 working on nuclear submarines. My last three government 

positions were Senior Acquisition Executive at the National Security Agency (NSA), 

Principal Deputy Assistant Secretary of the Navy (Research, Development and Acquisition) and Executive Director and Senior Civilian of the Naval Sea Systems 

Command, the Navy’s largest shore establishment. 

I am here today to discuss the major management and programmatic challenges 

the Department faces and areas I will focus on as the Under Secretary for Management. 

The Government Accountability Office (GAO) has continued to designate transforming DHS as high risk. Their report and other Inspector General reports address, in large part, the status of the integration of DHS’ varied management processes, systems and people in areas such as information technology, financial management, procurement, and human capital, as well as administrative services. The 

GAO report said DHS has made some progress in management integration, but still 

7 

needed a comprehensive strategy. GAO noted that in such a strategy, DHS would 

integrate planning across management functions to identify critical interdependencies, interim milestones and possible efficiencies. As the Under Secretary for Management, I support the strategy proposed by the GAO. The GAO indicates some of 

the plans and directives already issued by DHS could be used in building the needed integration strategy. I am reviewing the DHS progress against each of the elements of the integration strategy to confirm that the effort is headed on the right 

track. My role is to direct this effort and to be the forcing function across the Department. 

The most significant challenge we have is to continue the effort that was started 

with the creation of the new Department: merging 22 agencies with approximately 

180,000 people and turning it into the most effective force to protect our country. 

This effort requires effective and efficient use of financial and human resources, enabling technology, strong processes and superb management. These are the challenges that are the focus of my efforts. 

The major elements of our strategy are: • Improving acquisition and procurement throughout the Department. • Strengthening the requirements and investment review processes. • Acquiring and maintaining human capital. • Seeking efficiencies across the enterprise in operations and the use of re- sources. 

• Making the key management systems, such as financial and information technology, world class. 

Our approach has a common thread through all of these areas. That is to ensure 

that there is a comprehensive and integrated strategy with specific and measurable 

goals, and that these goals support the activities and priorities of the Department. 

On a practical level, we will ensure the success of this strategy by having a team 

with the right knowledge, skills and abilities to support these programs, the overall 

transformation and integration efforts. Our progress will be measured against 

metrics and milestones. 

Acquisition and Procurement 

The Department of Homeland Security is just beginning or is in the midst of 

many crucial acquisitions that are vital to the success of DHS. That is why Chief 

Procurement Officer Elaine Duke and I are working to strengthen acquisition and 

procurement by institutionalizing solid processes. To this end we are: • Strengthening the requirements and investment review processes by improving the Joint Requirements Council (JRC) and Investment Review Board (IRB) 

process. 

• Reviewing the major programs and investments to ensure that the requirements are clear, cost estimates are valid, the technology risk is properly assessed, schedules are realistic, the contract vehicles are proper, and the efforts 

are well managed. 

• Building the capability to manage complex efforts by ensuring that program 

offices are properly structured and staffed with the right people, and the right 

skills, to ensure efficient and effective program management and oversight; and 

aggressively hiring where we have known shortages. 

To date, the Department’s focus has been on procurement. Procurement, however, 

is only one element of acquisition management. Acquisition also includes understanding operational and life-cycle requirements, such as formulating concepts of operations, developing sound business strategies, exercising prudent financial management, assessing trade-offs, and managing program risks. Best practice acquisition 

management is executed by teams of professionals who understand and are able to 

manage the entire life-cycle of a major program effort. DHS has a shortage of people 

that are experienced in program management, including its related functional areas 

(e.g. acquisition logistics, cost analysis). I will focus on this area as one of my major 

priorities by identifying needed skills and processes and considering expedited delivery of training in key disciplines for those individuals involved in the management 

of the Department’s major programs. 

We have established a department-wide real property asset management plan 

with performance metrics to govern investment decisions regarding our buildings, 

structures and land. We are expanding this approach to all tangible assets through 

the investment review process with an Asset Management and Services Board with 

representation by the component chief administrative officers. 

Contracts 

DHS’ $12 billion procurement budget provides for the development, fielding and 

support of significant homeland security capabilities. For example, US Coast Guard 

contracts are providing aircraft and ships from the Integrated Deepwater System 

8 

(IDS) and search and rescue capability from the Rescue 21 program. Transportation 

Security Administration (TSA) contracts are providing additional capabilities via the 

Electronic Baggage Screening Program (EBSP) and Transportation Worker Identification Credentialing (TWIC) program. Consistent with the SBI Strategy, U.S. Customs and Border Protection (CBP) is developing and fielding the capabilities at and 

between our nation’s ports of entry to gain effective control of our borders. 

Our model for using contractors has been to address immediate staffing shortfalls. 

Because the Department has launched a number of new large scale initiatives, our 

acquisition workforce requires skill sets and experience that are very different from 

an ordinary acquisition program. Prior to DHS’ establishment in 2003, the Department’s components did not have major acquisitions like the USCG’s Deepwater program, which require large mature and experienced acquisition support services such 

as those that exist in the Department of Defense for major weapons systems and 

ship-building. To reduce our reliance on contractors, for fiscal year 2007 and 2008 

we are focusing on developing a mature acquisition workforce through targeted recruiting and advanced training programs. Our goal is to build our own pipeline of 

people from within the Department and we’ve begun to do this. 

Also, it is worth noting that DHS has exceeded the Administration’s goal for small 

business prime contracts as well as our own goal of 30 percent. I am happy to report 

that in fiscal year 2006, 34.6% of the procurement dollars went to small business 

prime contractors. Of that 34.6%, 12.1% went to small, minority owned businesses. 

Office of Personnel Management (OPM) Federal Human Capital Survey 

(FHCS) 

DHS did very poorly on the OPM Federal Human Capital survey. Through the 

survey results, managers and line employees alike delivered a clear message that 

the leadership has heard loud and clear. Leadership teams across DHS are committed to identifying the underlying reasons for DHS employee dissatisfaction and 

are seeking ways to address them directly. 

As initial steps toward improving employee satisfaction both at the headquarters 

and within the operating components, we have already identified the need for better 

communication throughout the workforce, continued emphasis of performance management training at the individual supervisor and employee level and implemented 

improved recognition of good performance. Although the general results of the survey were disappointing we are encouraged by the fact that DHS employees have 

passion for our mission. 89% percent of employees report that they believe the work 

they do is important, and 80% percent like the work that they do. This is a strong 

foundation to build upon for improvement. 

We will continue to evaluate the detailed results of the survey, analyze the practices of Departments that are recognized for their high performance, and use this 

information to develop additional steps that will lead to DHS’ employee satisfaction. 

This summer, we will conduct another survey of our workforce to ensure that our 

efforts are on track with addressing key employee concerns. 

Additionally, the leadership team in each operating component and headquarters 

unit will discuss details of the survey with our workforce in order to gather employee suggestions and recommendations that will inform the way forward. 

Human Capital 

We are aggressively moving towards building a world-class organization by continuing to hire and retain a talented and diverse workforce. There has been considerable publicity about the Department’s initial efforts to implement the MaxHR personnel management system, mostly resulting from recent court decisions regarding 

the labor relations portion of the system. In consideration of the recent court decision on collective bargaining, we are considering next steps in this area. 

In the meantime, our Chief Human Capital Officer Marta Brito Pe ́rez and I are 

broadening our efforts to encompass a wider range of human resource effectiveness 

with an initial focus on performance management. A performance-based management system compensates and rewards employees based on merit, that is, their performance and contribution toward the achievement of the Department’s mission. 

Moreover, a performance-based management system requires work on everyone’s 

part, as staff members at all levels of the Department to collaborate and define requirements, establish targets towards desired results, and agree on management 

methods for measuring and evaluating success. Based on the results of the OPM 

survey this is the area we need to focus on first. 

Building a performance based, results oriented culture at DHS is very important. 

It will foster an environment of open communication and feedback between the supervisor and employee. 

To date, we have implemented the new performance management program to over 

14,000 employees, trained over 13,000 supervisors to ensure they develop the skills 

9 

needed to administer the new program, and implemented a new automated system 

to facilitate the new performance management process. We will continue to expand 

coverage of the new performance management program as it will allow us to work 

seamlessly across components with the goal of aligning the work we do with the 

overall strategy, vision and values of the Department. 

In addition to establishing a performance-based management program, we will 

soon be deploying a ‘‘performance-based’’ pay pilot in the Intelligence & Analysis 

component for non-bargaining unit employees. We chose this component because we 

are competing with the private sector and other government agencies for the same 

talent and it will give us experience and employee feedback before we proceed with 

a wider implementation. 

Other efforts underway are captured in a recently developed two year Human 

Capital Operational Plan. Key goals in the human capital area include: 

• Developing career paths to broaden career opportunities for employees. 

• Implementing an automated recruiting system to improve our hiring efficiency. 

• Providing learning and development programs for DHS employees at all levels. 

• Promoting a leadership environment that encourages and supports cross-developmental opportunities. 

In addition, we will be improving our hiring processes by educating our hiring 

managers and human resource officials on the flexibilities that are currently available as well as implementing an enterprise E-recruitment system. We have established a Department-wide branding initiative and will implement proactive recruitment strategies to fill 979 mission support vacancies that cross component lines in 

areas such as information technology, acquisition, and human resources. 

We are well on our way to achieving our hiring targets in our frontline mission 

critical occupations as well. In ICE, we have already filled over 50% of the 1,477 

authorized positions for this fiscal year. As the President committed to last year, 

we are looking to have 17,819 Border Patrol Agents by the end of FY08 and 18,319 

by the end of 2008. 

Our recruitment strategies will be designed to ensure that DHS reflects our Nation’s diversity. The percent of Hispanic females and males in the DHS workforce 

is 4.59 and 12.11 respectively Hispanic males are employed at twice their rate in 

the National Civilian Labor Force. The percent of African-American females is 7.63, 

and for males is 6.86, which also exceeds CLF percentages. However, we must do 

better in ensuring our leadership ranks reflect the Nation’s diversity. The Secretary, 

Deputy Secretary, and I are committed to ensuring that the talent pool for Senior 

Executive Service positions, in particular, is representative of our Nation as a 

whole. 

Financial Management 

The Department has many substantial challenges to overcome in its effort to improve its financial management processes. Chief Financial Office David Norquist 

and I are working to make measurable, demonstrable progress in the following 

areas: 

• To improve systems and processes eventually leading to sustainable clean 

audit opinions. 

• To provide assurance about our internal controls over financial reporting via 

a sound internal controls program. 

• To provide greater visibility into DHS’ financial activity through timely accurate and useful financial related data. 

• To provide efficient financial management services. 

Success in these areas rests upon a framework of people, policies, processes, systems and assurance. We have efforts underway in each of these areas which include: 

aggressive hiring and development programs; the ‘‘Internal Controls over Financial 

Reporting (ICOFR) Playbook’’ -a corrective action plan that addresses identified 

audit weaknesses; the development of a comprehensive set of financial management 

policies which represent the best practices of the Federal Government; and a plan 

to continue the migration and reduction in the number of our financial management 

systems. 

Of particular importance are internal controls. Sound internal controls are essential to effectively meeting the Department’s mission. DHS must have a process in 

place by which it can test whether our internal controls are well designed and operating effectively on a continuous basis. This means that management must move 

away from reliance on what outside auditors determine is wrong, and be able to 

independently prevent and address issues before they become problems. 

10 

Additionally, we are working to ensure that the Department’s grant programs 

have the necessary internal controls in place, are adhered to, and that funds to 

State and Local first responders are monitored to achieve success with measurable 

outcomes. 

Information Technology 

The Department has established and institutionalized Department-wide business 

processes and systems for managing information. The DHS Chief Information Officer (CIO) Scott Charbo, heads the CIO Council, whose membership includes the 

CIOs from all of the DHS components. The council works to standardize business 

practices where it makes sense across the Department in order to improve information sharing. These efforts will improve our IT operations and reduce costs by eliminating duplicative IT systems. At this time, more than 60% of information management investments are managed through earned value principles. 

Moreover, the DHS CIO has established program management offices (PMOs) to 

oversee selected major investments. In addition, DHS has awarded the EAGLE and 

FirstSource contracting agreements, the largest contracting vehicles in the Federal 

Government for the procurement of IT and program management services, which 

should result in more streamlined and cost-effective procurements. • The Department’s Enterprise Architecture Board (EAB) reviews investments at 

various stages in the IRP and CPIC cycles. • The EAB has published the DHS Enterprise Architecture Version 2.0 to be consistent with best business practices. The Homeland Security Enterprise Architecture 

2006 was rated ‘‘green’’ by OMB and rated 5th of 27 in the Federal Government 

for maturity by GAO. The enterprise architecture informs the creation of DHS strategic plans and all investment reviews. • Consolidation of major networks and systems continues, reducing seven widearea networks and creating one common e-mail operation. • The first 24,000 square feet of the primary data center has been opened. The 

next 40,000 square feet is under construction and due to open in July. We have migrated systems and more are scheduled to move. The RFP for the second DHS data 

center has been released. 

The Chief Information Officer is working to unify and improve DHS’ IT security 

that is essential to accomplishing our mission. The DHS CIO and Chief Financial 

Officer (CFO) are working through the Internal Controls Assessment Project to 

bring information security policy and actions to the Federal Information Security 

Management Act (FISMA) standards. We are executing a plan to fix identified 

FISMA deficiencies. • When we held our first IT security conference (Fall 2005), certification & accreditation (C&A) completion was approximately 22%. We have since increased 

C&A completion to 95% (Fall 2006), which reflects a 73% increase. 

• A baseline list of systems has been integrated into our budget and procurement process. 

• Security controls testing increased from 54% to 87% of DHS systems. 

• Annual DHS-wide IT security awareness stands at 88% with training for certain specialized job functions at 97%. 

• Key policies and procedures have been revised to assure protection of personal identifiable information. 

Consolidated Headquarters 

DHS’ mission demands an integrated approach, yet the Department’s legacy facilities are dispersed in more than sixty locations with 7.1 million Gross Square Feet 

(GSQF) of office space throughout the National Capital Region (NCR). This dispersal adversely impacts critical communication, coordination, and cooperation 

across the Department. Consolidating executive leadership in a secure setting of no 

less than 4.5 million GSQF of office space for policy, management, operational coordination, and command and control capabilities at the St. Elizabeths campus is 

vital to the long-term success of the Department. It will ensure a unity of effort and 

command for the Secretary as well as build a culture and a spirit which are essential to having a happy and productive workforce. 

Without federal construction at St. Elizabeths, DHS will continue to be housed in 

more than 50 locations in the National Capital Region (NCR). If the project is not 

funded, the cost to continue housing DHS in leased space is approximately $5.1 billion based on a net present value (NPV) analysis. The St. Elizabeths development 

NPV is $4.1 billion ($3 billion program investment), a $1 billion dollar NPV difference providing an equivalent annual cost advantage of $63,953,000. 

Moreover, Congress’ approval of this project would reverse the current situation 

where DHS is currently located in 70 percent commercially leased space and 30 percent government owned space. 

11 

Consolidating our facilities will increase efficiency and communication, as well as 

help foster a ‘‘one-DHS’’ culture to optimize prevention and response capabilities 

across the Department. I request that Congress support this effort by authorizing 

and appropriating the funding for DHS’ consolidation at St. Elizabeths West Campus. 

Authority of the Under Secretary for Management 

Throughout the process that ultimately led to my Senate confirmation, the question has been raised as to whether the Under Secretary for Management has sufficient authority to do the job. My answer is an unqualified, yes. I have sufficient authority to direct the type of sustained leadership and overarching management integration and transformation strategy that is needed Department-wide. Under section 

701 of the 2002 Homeland Security Act, and internal Departmental directives and 

delegations, there is a very clear mandate of management authority for the USM. 

I also have the full support of the Secretary and Deputy Secretary. The Secretary 

has advised me that if there is any authority that I need that I don’t have to do 

my job, he will provide me that authority. In addition to the statute, I operate with 

the Department’s leadership fully knowing the job I am chartered to do, and that 

I operate with the full authority of the Secretary to get it done. 

Conclusion: 

Secretary Chertoff has expressed that one of his key goals for DHS is to strengthen DHS core management, policy and operational integration. I think DHS has 

come a long way since its inception in management and we will continue to improve 

by institutionalizing management processes and procedures over the next few years. 

I know from my 2 months on the job that we have major challenges ahead but I 

look forward to them with energy and enthusiasm. Thank you for your leadership 

and your continued support of the Department of Homeland Security and its management programs. I look forward to working together in shaping the future and 

success of DHS. Thank you for this opportunity to be here today and I am happy 

to answer any questions that you may have. 

Mr. CARNEY. Thank you for the testimony that you have given 

so far, and of course, we have your written testimony. We certainly 

appreciate that. 

I will remind each member that he or she will have 5 minutes 

to question the panel, to question Mr. Schneider. 

I am going to go out of order. I am going to allow Mr. Rogers to 

go. He has an urgent appointment he has to make. So he will be 

able to ask the first question for 5 minutes. 

Mr. ROGERS. And I thank the chairman. 

Mr. Schneider, as you know, and I have talked with you privately, the morale at DHS has been an issue that this committee 

has been attentive to during the 109th Congress and concerned 

about and have held hearings on it. And you also know that OPM 

recently conducted a survey of all federal employees, and DHS obviously was included in that. 

On January 30 of 2007, Deputy Secretary Jackson issued a 

memo to all DHS employees regarding that OPM survey. In that 

memo, Mr. Jackson stated that, ‘‘Strengthening core management 

is one of the secretary’s highest priorities and the key elements of 

an effective communications and proper recognition of our workforce.’’ 

Mr. Jackson further indicated in that memo that you, he and 

Secretary Chertoff would be evaluating that OPM survey. Have you 

had a chance in your brief tenure to review that OPM survey? And 

if so, what goals have you been able to yield from it, and what are 

your expectations? 

Mr. SCHNEIDER. Yes, sir. I have spent considerable time looking 

at all the statistics, not just at the macro department level but the 

individual components, the operating components and the headquarters, and what we see is in certain areas a common thread. 

12 

We know that certain organizations have some very serious 

issues, and that is based on the number of respondents relative to 

the overall population. And so we also know that we have to do a 

better job on this performance management. 

When you look at the answers to all the questions, people feel, 

in large part, that they are not property acknowledged for the work 

that they do. This is linked to performance management. They, in 

many cases, feel that the communications—and this gets down to 

the individual survey questions—communications between them 

and their supervisor are poor. In some cases, they don’t believe 

that their development requirements are being properly recognized 

by their management so that they can get the skill set and development they need. 

So what we have been doing, and I have been working—I chair 

Management Council, my counterparts of the operating component. 

I have met with them. The deputy secretary and myself have met 

with the seven operational component heads, we have gone through 

the results of the survey. We have a framework for a package that 

focuses on communication, change processes for even how we do 

the future-year or out-year planning where everybody is part of the 

team and everybody can kind of understand what our objectives 

are. 

We have got an effort under way with focus groups to go down— 

I mentioned in my opening statement we have trained 13,000 supervisors. We are going to go target several of those across the enterprise and find out what went wrong, okay? They were trained, 

they should have worked with their employees, we should have 

performance plans in place. We are going to go in there and we are 

going to audit these things. 

Mr. ROGERS. What timeline do you expect to do this on? 

Mr. SCHNEIDER. We are in the process of putting together the 

focus teams right now. I can’t give you the actual timeline. It is 

something that is currently under development. 

Mr. ROGERS. Conceptually, when would you like to see this done, 

completed? 

Mr. SCHNEIDER. I would like to see some of these focus groups 

under way in the next 60 days. I think we have got a broad outline 

of an improved communications packages, of how we get the information out to the employees. As a start, the secretary this afternoon, literally as I am speaking, is conducting an all-hands meeting, and we have arranged for that message to get out. 

So I can tell you that the recognition that we have to do a better 

job of communications top down, all the way throughout the 

180,000 people is well-understood, and we have got efforts under 

way. 

Mr. ROGERS. And along that line, one of my pet peeves in the last 

Congress is the fact that your department uses the phrase, ‘‘human 

capital,’’ instead of calling it the Office of Personnel or something 

that normal people would use. And on page 2 of the report, ‘‘The 

Culture Task Force, which reviewed this, recommends referring to 

employees by dropping the buzz word, ’human capital,’ and replacing it with ’employees’ or ’members.’ ’’ 

Do you agree with that recommendation? 

13 

Mr. SCHNEIDER. Yes, sir, I do. I don’t like the phrase, ‘‘human 

capital,’’ and when I read that report from that committee, I raised 

the question, ‘‘Why do we use that?’’ I have not traced it down, but 

I am in the process. Apparently, there is some—what has been told 

to me, there is some law that says that is the proper term. So when 

I trace that down— 

Mr. ROGERS. You let us know. We will change the law. 

Mr. SCHNEIDER. Yes, sir. With all due respect, I hate the— 

Mr. ROGERS. Good. You and I have something in common. 

Mr. SCHNEIDER. Well, it doesn’t reflect truly the value of the individual. 

Mr. ROGERS. Great. Thank you. 

My time has expired. 

Thank you very much, Mr. Chairman. 

Mr. CARNEY. Thank you, Mr. Rogers. 

I will now recognize myself for 5 minutes. 

Mr. Schneider, integrating 22 legacy agencies into one functioning department is a tremendous challenge; we all appreciate 

that. How do you plan to use your directorate to facilitate this goal, 

and what tangible evidence of progress can we look forward to in 

the coming year? In other words, what are your benchmarks? 

Mr. SCHNEIDER. There is a whole series of them. Let’s start with 

the one that gets the most visibility, which is the—and I believe 

it was in your opening comments—internal controls. And so let’s 

just take that. 

We have serious weaknesses in internal controls. I have met with 

the inspector general. We have a plan, and I refer to it in my statement, called, ‘‘A Way Ahead,’’ which is we call it the internal controls over financial reporting, ICOFR. And what it is, it is the road 

map at the department and operating component levels that addresses every one of the internal weaknesses that has been identified by the I.G. and their accounting firm KPMG. 

I have met with the I.G. We are starting a series of meetings 

that I am personally running between the chief information officer, 

the chief financial officer at headquarters and then the components 

that go address each of these identified deficiencies. 

We have a plan for each component and the headquarters that 

is focused on a timeline for partial remediation, full remediation 

and then assurance. That is the benchmark that I look for in terms 

of internal controls. 

The deputy secretary and I have met with the heads of each of 

the operating components. We have gone through the framework. 

They understand they are signed up to do it. And I believe that 

with periodic monitoring and implementation—this is hard work, 

but it is not something that is beyond the realm of doing. I mean, 

it is just hard work, but people can do it. And that is why I believe 

in our plan. That is our measurement or benchmark. 

In the case of the financial management systems integration, 

there is reference to the 22 different agencies, a myriad of financial 

management systems. We have an outline of a similar architecture, 

possible solutions without getting into whether it is SAP or Oraclebased, et cetera. We are working out at a very definitive plan to 

start migrating each of the financial management systems off their 

existing platforms to one of those two that meets our architecture. 

14 

So I think finance is a big part of it. 

In terms of the human resources, one of the problems we have 

at MaxHR was that it focused on six elements. It didn’t address the 

broader context of human resource type things, like hiring and 

leadership and development and things like that. 

So one of our benchmarks is hiring, how well do we do as a corporation. We have efforts under way to try and substantially meet 

our hiring goals as well as how do we improve the hiring process, 

both at headquarters and within each of the operational components. 

I have already engaged in several discussions where people are 

taking a look and doing process reengineering at the operational 

component level to how they can streamline their end of it. We, at 

the corporate level, have to figure out how do we basically merge 

the best practices and do much more efficient hiring? 

The consolidation of I.T. infrastructure, I am frequently asked, 

do I have all the authority I can to do the job? And there are others 

that have made some proposals that perhaps enhance that. Well, 

in my discussion with the secretary about 3 weeks ago, we were 

talking about, ‘‘How are we going to integrate this I.T. infrastructure? How are we going to, basically, cut costs, move people to the 

right types of platforms, basically, execute our enterprise architecture?’’ 

We have an enterprise architecture. The problem is in enforcing 

it. And so he asked me, ‘‘Do you have all the authority that you 

need and that the CIO needs to make this happen?’’ And I said, 

‘‘No, I don’t.’’ So he said, ‘‘Fine. You tell me what authority you 

need for you and the CIO to make sure you can execute this thing 

and I will sign it.’’ And 8 days later, he did that. 

So we are in the process right now of structuring, how do we migrate this massive I.T. infrastructure to what we believe is the correct end state based on our enterprise architecture. 

So I think I have captured, between financial I.T. and human resources, some of the major elements. 

My plan is for every one of these areas, have a clear, definitive 

approach, just like we have in the internal controls playbook, that 

the I.G. and the GAO can monitor us on. And I am very hopeful 

that we will, if we do that, start making progress and that those 

two oversight agencies will recognize the progress that we make. 

Mr. CARNEY. We do look forward to those benchmarks and 

watching the progress that DHS makes. It is very important, as 

you know, to certainly the safety of this nation. 

I now recognize Mr. Thompson for 5 minutes. 

Mr. THOMPSON. Mr. Undersecretary, can you say to the committee how you propose to change how the employees view the 

agency they work for? Right now, as you know, it ranks dead last 

in the eyes of the people who work for it, and that is a challenge. 

So tell us how you see that changing? 

Mr. SCHNEIDER. Well, we are starting with a good foundation 

where a very high percentage, high 80s, think the work they do is 

important and they think the mission of the organization is important, and they understand how their work relates to the mission. 

So we are starting with a very good benchmark. 

15 

I believe it gets down to how people are treated. As somebody 

that came up through the ranks, I started as a GS–5. I was very 

fortunate that I had good supervisors who clearly, in my career, explained what was expected of me, would work with me, and if I did 

what I was required to do as part of my performance, saw that I 

got the recognition. I was properly recognized for it, and I could 

rise through the ranks. 

I think that is where we have to focus on, and I spent a lot of 

time going out talking to people, I personally run town hall meetings. I believe that part of our communication strategy, top down, 

at all leadership levels, is to get the message out to the people, 

focus on these employee-supervisor relationships at the lowest 

level, the mid level and the high level and make it work. 

Mr. THOMPSON. Let me tell you what some of us hear. If I am 

a GS–12 and I am a federal employee, next to me is a contract employee, that contract employee makes one and a half to two times 

more money than I do and we are doing the same job. You will 

never get morale up that way. 

Mr. SCHNEIDER. I would like to address that. I agree with you 

if the two people are doing the same job. I personally have a problem that that situation would exist. I believe there are jobs that are 

inherently governmental that should be done by government employees, and there are those that could be properly done by contractors. 

And so from my standpoint, we shouldn’t be in that situation, 

Congressman, where we have two employees doing the same job. 

Because I would agree that that would be a demoralizing factor, if 

you will, in employee? 

Mr. THOMPSON. That is the concern. Let me give you another 

one. 

We put procurements on the street. We don’t have enough employees to manage the procurements, and, therefore, we either get 

behind on the procurements or, as you know, in times past, we 

have had to cancel procurements and projects, ISIS and some others, but we are in the middle of one now called, SBInet. 

We found out in a hearing yesterday that our next management 

task we don’t have the employees in place to move forward. But yet 

and still we are pushing out a multibillion dollar project, and we 

don’t have staff in house to staff it. And we are told by the I.G. 

and GAO that the staff we need are very complicated tasks that 

you have to have special people. You can’t use interns, you can’t 

use entry-level people. 

So I think the challenge you are going to have to do is to how 

first get a hand on the procurement, and so we can’t go out with 

this procurement unless we can adequately staff it. And that is a 

real problem. 

Mr. SCHNEIDER. Yes, sir. And I agree with you, and that is why 

this is one of those cases where the devil is in the details. 

For example, on SBInet, it takes a mix, if you will, of contracting 

people to execute contracts. It takes a mix of the right system engineers to know whether or not the architecture that is ultimately 

being developed right now for Project 28, the first 28 miles, is in 

fact a good architecture that is modular and can be scalable to the 

entire southwest border. It takes test engineers that frankly can 

16 

work with the Army, who is going to be the independent test agent 

this May and June, to have the expertise in testing to look at and 

evaluate whether or not those test and evaluation results are proper. 

So some of those areas we are short. We are not short in every 

one, and I think it is a question of, do we have the right talent 

looking at the specific task at the right time so you can move 

ahead? And that takes going into the level of detail almost on a frequent basis to make sure as the program ramps up we have all the 

specialties covered. 

Mr. THOMPSON. Thank you. 

Mr. CARNEY. Thank you, Mr. Thompson. 

The chair would also like to recognize the presence of the gentlewoman from the District of Columbia at today’s proceedings. Representative Holmes Norton has a particular interest in the topic at 

hand today and approached the committee about participating. 

I ask for unanimous consent to allow Representative Norton to 

sit and question the witnesses at today’s hearing. 

Without objection, it is so ordered. 

I now recognize Ms. Clarke, but before I do that, a series of five 

votes has been called. The committee will recess, subject to the recall of the chair, to allow members the opportunity to vote. When 

we return, we will continue with the questions, beginning with Ms. 

Clarke. 

[Recess.] 

Mr. CARNEY. The subcommittee will return to order. 

I recognize Ms. Clarke from New York for 5 minutes. 

Ms. CLARKE. Thank you very much, Mr. Chairman. 

Undersecretary Schneider, I thank you for coming before this 

committee and for your indulgence with the procedures here. I am 

sure you are probably more accustomed to it than—well, actually, 

you are pretty new here too, so we are probably all experiencing 

this simultaneously. 

Past leadership has led to many serious concerns and problems 

within the directorate of management, and now they have sort of 

left all of this for you to clean up. I just wanted to express my concern, as many of my colleagues have, with respect to the personnel 

problems within DHS and highlighted specifically by the OPM survey. 

You or the agency is 36 out of 36 in job satisfaction, 35 out of 

36 in leadership and knowledge management, 36 of 36 on resultsoriented performance culture, 33 out of 36 on talent management. 

And your employees are your most valuable asset, and I think before we left you kind of reaffirmed that. 

With statistics like these, DHS cannot possibly expect to recruit 

and retain the very best possible people when there is a sharp competition coming from the private sector, as, again, you have stated. 

I see this survey and your hiring as a possible turning point, and 

I hope you will take the reigns and provide the fresh insights that 

are obviously needed to right this ship. Since the only direction we 

have to go is up, the opportunity could not be a better one. 

My question has to do with your testimony in which you noted 

that the department failed, HR Max personnel system has drawn 

much publicity lately because of court decisions opposing the deVerDate Nov 24 2008 10:33 May 21, 2009 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6601 H:\DOCS\110-HRGS\110-11\35270.TXT HSEC PsN: DIANE
17 

partment’s proposed treatment of labor relations. You then state, 

‘‘In consideration of the court decision on collective bargaining, we 

are considering next steps in this area.’’ 

Today, you have discussed at length your general ideas for reforming the personnel and human capital system, but I have not 

heard you address the future of collective bargaining within the department. 

Please tell me, do you intend to allow your currently eligible employees to retain union membership and collective bargaining 

rights, and do you feel that the department attempts to end collective bargaining through HR Max had an impact on the OMB survey? 

Mr. SCHNEIDER. Congresswoman, I do think—and that is a personal opinion—that the uncertainty with MaxHR did have an impact on the survey, and that is one of the reasons why what we 

are trying to do is to explain to people what are the elements of 

our human resource management system. 

This is the problem, as I see it: MaxHR was comprised of six elements. It was performance management, classification, pay and 

pay administration, labor management relations, adverse actions 

and appeals. There were six elements. 

The problem, I think, was that with the court case it focused on 

one of those six, the labor management relations. And because of 

that, I don’t think we did a good job of explaining to the workforce, 

what exactly were the other five elements of the personnel system. 

And so there was a great deal of uncertainty, which what was 

this MaxHR across the workforce. Shortly after I was sworn in, I 

conducted a series of town hall meetings with all of my employees. 

Filled up the auditorium at GSA and the chapel out at Nebraska 

Avenue. I was asked a lot of questions about it. 

And so what appears would happen was the department tried to 

do too much, too soon, and when people started to think about the 

fact that we are going to start linking pay and performance, et 

cetera, nobody really had taken the time to explain to them how 

that was going to be done, coupled with the visibility in the press 

regarding labor relations issue. 

I think people didn’t know what was going on, and when people 

start feeling that their pay is going to be tinkered with, not understanding exactly how it is going to work, I think that creates an 

area of concern. 

So the first part of your question is, I do think it had an impact, 

which is why when we are moving—when I say we are moving to 

a human resource management system, it encompasses the major 

elements of MaxHR, but it also focuses on hiring, leadership and 

employee services, which is why that wasn’t covered—those other 

elements were not covered by MaxHR. 

So what we have done is we are focusing on performance management, we are deferring the labor relations issue till we have discussions with the proper union representatives, and we are going 

to do a pilot on pay-for-performance in the INA sector. And then 

get the basics down right and then move toward the other elements. 

And I think that once we explain that, and that was one of the 

things that I believe the secretary did in his all-hands meeting in 

18 

transmission this afternoon. Once we do that and we start getting 

the word out, explain what we are really doing, I think it will go 

a lot toward alleviating a lot of the people’s concerns. 

Mr. CARNEY. Thank you. 

I now recognize the gentlewoman from the District of Columbia. 

Ms. NORTON. Chairman, I thank you for your courtesy and the 

courtesy of the ranking member and allowing me to sit it on this 

hearing. I am a member of the full committee but not a member 

of this subcommittee, and I appreciate what I have heard of what 

you are doing in this particular hearing, in particular. 

By the way, I didn’t hear the gentlelady’s original question about 

pay-for-performance. This came up in government reform, and I am 

afraid what the government has not come to grips with, as why we 

have a civil service system in the first place when you have thousands and thousands of employees. And you are in a system that 

is a public system where the 14th Amendment due process applies. 

Maybe you all are smarter than everybody else, but no one has 

been able to figure out how to do a system with due process, which 

assumes everybody is treated the same way, and do the kind of individualized pay-for-performance you are describing without getting, first, a gazillion grievances and, second, simply complying 

with due process. 

When Mr. Schneider talked about a consultation with the affected unions, I was pleased to hear that since the statute setting 

up the Department of Homeland Security all but wiped out collective bargaining, which is part of the problem. I don’t know how you 

run an agency so demoralized by wiping out the rights of workers 

but then proceeding to do something that has never been done and, 

I am going to say as a lawyer, think can never be done, at least 

in a public system and that is to say, ‘‘We are just like General Motors.’’ I shouldn’t say General Motors because that is a unionized 

system they are following, which isn’t quite that way either. 

But we are just like any old corporation. We are going to decide 

on an individual basis who gets paid what in a federal system, but 

the reason that hasn’t proceeded, I believe, is because it is all but 

impossible. There may be better ways to do it than the way we are 

doing it, but what has come forward in pay-for-performance invites 

court suits and invites overturning. 

I don’t have questions. 

I just wanted to thank you, Mr. Chairman, for making the St. 

Elizabeth’s campus part of this hearing and making it part of the 

hearing on management. 

Mr. Chairman, the president of the United States, when he had 

a Republican Congress and a Republican Senate last year, put in 

money for the homeland security headquarters and they did so for 

a reason I think we can all understand. And, yet, that Congress did 

not pass this bill. It is amazing since I think this president considers homeland security his signature issue. 

The reason for the consolidation is that you simply can’t manage 

this agency without it. I do not believe we have an agency yet. 

They are located in 60 different locations. In other words, they are 

as we found them. What good did it do to set up a Department of 

Homeland Security that is still spread in the very same places that 

it was before when we said the whole reason for setting up, in light 

19 

of 9/11, was to consolidate the agencies so that they could have 

cross-agency coordination and action and that it was dangerous not 

to have them so that they could have the unity of action that would 

come with putting them in the same agency. 

The president has requested that they be placed into the only 

place left in the District of Columbia large enough to accommodate 

what amounts to several agencies, a consolidated Homeland Security agency. 

We have been over there, introduced it to the community when 

we thought it was coming the last session. Another reason, of 

course, that this was chosen is that the old St. Elizabeth’s campus 

is government-owned. We have very little land that is government 

owned, but still—so that means we don’t have to buy the land as 

well as the rest of it. 

As I say, I think that the chair has legitimately put your dispersed situation in a management structure. I believe that you 

could have done a lot more at DHS in 4 years to establish the semblance of any agency. I will grant you, however, that as long as you 

are left as you were, it is asking a great deal to say what the statute envisioned. Make an agency, make it whole, make it cohesive. 

I can only ask, Mr. Schneider, part of what I think happened last 

time that as much as the agency was committed, to this, they 

didn’t try hard enough. I was in the minority. 

Ms. NORTON. And it seemed to me that the burden on the president, his agents and his congressman. Instead, the money was used 

up. To show you the kind of respect they had for the agency and 

the need to have a coherent agency, the Senate, just found and 

used it for four courthouses. The president has put money for those 

courthouses in his budget. 

Mr. Schneider, I have come to the hearing only to say to you that 

I am chair of the subcommittee with jurisdiction over GSA, which 

is charged with building this agency. I believe Secretary Chertoff, 

I believe, your deputy, when they say this means everything to 

them, given your position in the agency, I hope that you will use 

your good office as well to make sure that this happens this time. 

I think this is the last clear chance, and the president has put 

the money again in this budget. I think he has done all he can. It 

is going to be up to the agency to press very hard for it. It is your 

agency, it is your dispersal, and it is yours to do something about. 

Mr. SCHNEIDER. If I may, Congresswoman, I really appreciate 

those comments and your support. I have personally walked the St. 

E’s campus looking at these buildings and have gone both through 

the DHS $120 million portion of the budget and the GSA, I think 

it is, $345 million of the budget. 

I personally track the progress that GSA is making in dealing 

with the National Capital Planning Commission as well as satisfying all of those that have interest relative to the National Historic Preservation Act and the specific executive orders. 

My personal take on this is, we have got a lot of issues to work 

to make this happen, and we may have a lot of budget year, as you 

indicated, with those seven, but we can still make the majority of 

that schedule if we can work through these historic preservation 

issues, environmental impact statement issues. 

20 

And so I appreciate your support of this. This move is absolutely 

critical to the department. 

I have walked just about every building on Nebraska Avenue 

complex. In many cases, those facilities are not adequate to house 

this department. 

Ms. NORTON. If I may say, I wish you would take off the table 

the environmental impact issue. That is not yours to work on. 

There will be a full-blown environmental impact statement. And in 

terms of the historic issues, you may not know this, Mr. Schneider, 

but the federal government has an extraordinary record, the best 

in the country, of building in places that have historic buildings 

and preserving them. 

So I want to take that right off your mind so that you can focus 

on the one thing that seems to me that is your responsibility and 

that is making sure that the Congress understands this time that 

you, the agency, must have this construction and need to have it 

this time. Those other issues are not your issues, sir. 

Mr. CARNEY. I thank Ms. Norton for her comments, her insight 

and her willingness to push this stuff through. It is very important. 

And, Mr. Schneider, again for your comments. 

We are going to start round two of the questions now. I think 

both Ms. Clarke and I have another round and we will get to them 

right now. 

Mr. Schneider, last month, Deputy Secretary Jackson told us 

that, ‘‘MaxHR is dead.’’ He also told us that he asked Secret Service detail but they thought of MaxHR after they did their training, 

and they told him that they hated it. MaxHR is dead is a pretty 

unambiguous statement. 

So I was a little surprised to hear your office describing the new 

human capital operational plan as ‘‘encompassing all MaxHR initiatives and more.’’ 

Mr. SCHNEIDER. Let me? 

Mr. CARNEY. Let me finish the question, and then we will get to 

it. 

I am pretty sure that those Secret Service agents hated more 

than just the name, MaxHR. I am concerned that your just stripping the title and repackaging the old Max HR in a shiny new 

wrapper. 

What parts of MaxHR are actually dead? What has changed? 

Mr. SCHNEIDER. The one we are not pursuing is that one element 

of the labor relations, which is the item that was the basis for the 

court hearing—those elements focuses—we have a template that 

focuses on those other five elements and the additional ones that 

I talked about, which were leadership and development, quality 

employee services, servicing centers, if you will, as well as our hiring effort, okay? 

So those are the elements of our human resources plan. These 

are all documented in what will ultimately be issued as a human 

capital operating plan. And so that is what is our centerpiece for 

human resources. 

Our game plan is to focus on an incremental basis on selected 

portions of this, heavy emphasis on performance management, a 

pilot on pay-for-performance with the intelligence and analysis 

group, leadership development. We have already instituted a felVerDate Nov 24 2008 10:33 May 21, 2009 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6601 H:\DOCS\110-HRGS\110-11\35270.TXT HSEC PsN: DIANE
21 

lows program, we have instituted an SCS counterdevelopment program. We have several other leadership and development programs 

that are under way. We have extensive hiring efforts under way. 

Those efforts that could be done across the department as a total 

enterprise, those that are operating unit-specific. 

So that is our plan, if you will. 

And we don’t call it MaxHR, we don’t—and the reason is, 

MaxHR equals a court case, equals a failed system, equals something that people didn’t understand. And so we are going out now 

and explaining to people what exactly is our human capital operating plan. And we have a large effort in front of us because the 

experience that you got with the Secret Service is typical across the 

enterprise. And that is because we didn’t do a good job of explaining our plan. 

And so when the secretary says, ‘‘MaxHR is dead,’’ it is dead as 

it was envisioned and explained or poorly explained to people. 

Mr. CARNEY. I think I understand that. 

[Laughter.] 

Thank you very much. 

Ms. Clarke? 

Ms. CLARKE. Thank you very much, Mr. Chair. I guess let me— 

MaxHR is dead? Okay. 

I wanted to just in light of the whole element piece that you went 

over with us, you said the piece that you are not pursuing is labor 

relations. And I wanted to ask, do you feel that the department’s 

attempt to end collective bargaining through MaxHR had an impact on the OPM survey? 

Mr. SCHNEIDER. I think, as somebody on the outside who was 

trying, when I was first nominated by the president for this job, as 

somebody that was trying to understand what this MaxHR was, it 

was very confusing to an outsider, and I read all the available public information, and I was confused about exactly what the basis 

for the court case was, exactly how and pay and performance were 

linked together. 

And I could clearly understand why, if I was an employee in the 

department, why I would be very suspicious about what exactly 

was envisioned and how it would affect my performance, how it 

would affect my compensation, how it would affect my employee 

rights. 

And so I believe that that really did have an impact on the survey, because, frankly, the department did not do a good job of explaining what was MaxHR. 

Ms. CLARKE. So you think the employees sort of saw it as a 

threat or the end of collective bargaining as they knew it, because 

the elements that you just described is something that most employees associate with their affiliation and their membership with 

the labor organization, in effect, collective bargaining. 

Mr. SCHNEIDER. I think it had impact on two accounts. One, 

those employees that were covered by collective bargaining clearly 

perceived that as a threat and a loss of rights, without arguing 

whether that is a valid position to have or not. Those that were not 

under the collective bargaining, I think the general uncertainty of 

what MaxHR was and how it would directly impact them I think 

22 

gave cause for concern as to what the impact of what MaxHR 

would be on them individually. 

So I think you had a double hit, frankly, those that were covered 

by collective bargaining and those that were not. And I think it 

would have an impact. And I can understand, again, as somebody 

who tried to understand based on the available literature, the documentation, what exactly was MaxHR. I can reasonably understand 

why somebody would be suspicious and concerned that their pay 

was going to be tinkered with and they would have no rights. 

And so that might considered jumping to conclusion, but I see 

the paper trail could have easily led somebody to that conclusion. 

Ms. CLARKE. And just, finally, as you institute a more performance-based system, pay-for-performance, and managers will have 

an increased amount of control over their employees, what type of 

system do you envision will be in place to resolve inevitable disputes between employees and management, and would this system 

incorporate cooperation with unions? 

Mr. SCHNEIDER. Well, first of all, I think for those that are subject to collective bargaining, we have to follow the practice in terms 

of how we institute any system, okay? So that would get addressed 

in the collective bargaining process. For those that do not come 

under collective bargaining, we would have what I would consider 

the menu of appeals and grievances. 

And so in other departments, like the Department of Defense, 

where pilot pay-for-performance and performance management systems were implemented, there is a menu of grievances and appeals 

for the employees. So we would have those menus of appeals and 

grievance processes so that they would be entitled to protection of 

their rights. And that is a very important part of that. 

So it would be handled differently for those that were covered 

and those that were not under collective bargaining. 

Mr. CARNEY. Does the gentlewoman have any further questions? 

Ms. CLARKE. No. 

Mr. CARNEY. I have none either. 

I want to thank you, Mr. Undersecretary, for the testimony and 

all the members who asked their questions. 

The members may have additional questions, and if you could expeditiously respond to them in writing, we would appreciate it. 

Hearing no further no business, the subcommittee stands adjourned. 

[Whereupon, at 4:26 p.m., the subcommittee was adjourned.] 

(23) 

A P P E N D I X 

ADDITIIONAL QUESTIONS AND RESPONSES

QUESTIONS FROM THE HONORABLE BENNIE G. THOMPSON, FOR HONORABLE PAUL A. 

SCHNEIDER RESPONSES

In its report on the acquisition of the National Security Cutter, the Inspector General stated that he ‘‘encountered resistance from the Coast 

Guard’’ and that ‘‘responses to document requests were either delayed or 

incomplete,’’ ultimately leading the IG to suspend fieldwork completely for 

five weeks. 

Question 1.: Please explain your understanding of the IG’s statutory right of access to Departmental records and other material. 

Response: The Inspector General’s right of access is very broad. According to the 

Inspector General Act, the Inspector General of the Department of Homeland Security (DHS) is authorized ‘‘to have access to all records, reports, audits, reviews, documents, papers, recommendations, or other material available to the applicable establishment which relate to programs and operations with respect to which that Inspector General has responsibilities under this Act.’’ Consistent with this statutory 

grant of authority, DHS Management Directive 0810.1 requires Component agencies 

to provide prompt access for the Office of the Inspector General to any files, records, 

reports, or other information that may be requested, and directs DHS employees to 

cooperate fully by disclosing complete and accurate information pertaining to matters under investigation or review. 

Question 2.: Do you believe it is appropriate for employees to provide materials directly to the IG, or must materials first be provided to a central 

unit or audit liaison? 

Response: As noted previously, DHS requires departmental employees to cooperate fully with the Inspector General by disclosing complete and accurate information 

pertaining to matters under investigation or review, in accordance with the DHS 

Management Directive 0810.1. 

In addition, the Departmental GAO/OIG Liaison Office routinely works with the 

Office of Inspector General to facilitate the flow of information in the context of the 

Management Directive. Indeed, the DHS Inspector General testified before this 

Committee on February 7, 2007, regarding DHS cooperation and indicated that he 

was not concerned about denial of any information. Moreover, the IG regularly 

meets with senior DHS officials to discuss and resolve such matters. 

Nevertheless, we are constantly striving to improve the Department’s internal 

processes in the context of prudent management practices. In this way, we can move 

forward to fulfill lawful requests thoroughly and comprehensively. 

Question 3.: Do you believe the IG has a right to all Department records 

or can draft, privileged, privacy protected, or classified materials be withheld from the IG? 

Response: As previously stated, the Inspector General Act grants the IG broad 

authority to obtain relevant records, reports, audits, reviews, documents, papers, or 

recommendations within the Department. Moreover, the Department maintains a 

strong Management Directive which requires that its Components provide the IG 

with prompt access to any files, records, reports, or other information requested. 

The documents provided to the OIG often include classified or otherwise sensitive 

information, and in these instances, DHS employees are to advise the OIG about 

such markings in order to ensure proper handling of the documents. As a result, 

the Department has provided the Office of Inspector General with many thousands 

of pages of documents—frequently containing classified and otherwise sensitive information—and has assisted the OIG in issuing hundreds of reports. Further, there 

24 

may be documents that implicate certain legal principles that require careful consideration. 

Question 4: Please explain your understanding of the conditions under 

which employees may meet with the IG. In particular, must employees report all contact with the IG to their supervisors, or are they free to meet 

confidentially with the IG at any time? Are employees free to provide information directly to the IG, orally and in writing, without notifying management? 

Response: DHS employees are not required to report their contact with the Office 

of Inspector General. Typically, the OIG will meet with employees without supervisors being present. Indeed, DHS Management Directive 0810.1 recognizes that the 

OIG is authorized to ‘‘[p]rotect the identity of any complainant or anyone who provides information to the OIG.’’ This procedure is consistent with Section 7 of the 

Inspector General Act and the provisions of the Whistleblower Protection Act. 

In addition, DHS Management Directive 0810.1 specifies that Component agencies will ‘‘assist in arranging private interviews by [OIG] with staff members and 

other appropriate persons.’’ This approach operates in accordance with prudent 

management practices, and is, in no way, intended to inhibit the free flow of information to the Office of Inspector General. Instead, it reflects the need for supervisors to be aware of employees’ whereabouts and activities within their office or 

Component. 

Question 5: Do you think it is appropriate for the Department or one of 

its Components to require a representative of management or an audit liaison to sit in on all interviews with the IG? 

Response: DHS does not require the presence of a management representative 

or audit liaison at all interviews of employees or contractors. We are not equipped 

or staffed to handle such a workload. As the Secretary recently testified before the 

House Appropriations Subcommittee on Homeland Security, DHS believes cooperation with the OIG is imperative. Nevertheless, when an employee requests a Department representative to accompany him/her to a meeting with the Office of Inspector General, we will consider such a request and honor it when appropriate. In 

evaluating such situations, we carefully consider the employees’ rights under the 

Whistleblower Protection Act and other related statutes. 

Question 6.: Please explain your understanding of the Government Accountability Office’s (GAO) statutory right of access to Departmental 

records and other material. 

Response: The Government Accountability Office (GAO) has a broad right of access to a wide range of materials and information within the Department. In particular, section 716(a) of Title 31 of the U.S. Code provides the Comptroller General 

with access to various information about the Department’s ‘‘duties, powers, activities, organization, and financial transactions,’’ so long as it falls within the proper 

scope of GAO’s authority and competency. Consistent with this statutory framework, 

DHS Management Directive 0820 ‘‘requires all employees of DHS to cooperate with 

all employees of GAO to the fullest extent consistent with the obligations of the Department and its Organizational Elements.’’ 

Question 7: Do you believe it is appropriate for employees to provide materials directly to the GAO, or must materials first be provided to a central 

unit or audit liaison? 

Response: As discussed previously, DHS Management Directive 0820 requires 

DHS employees to cooperate with the Government Accountability Office (GAO) consistent with the Department’s obligations. In addition, DHS employees are provided 

guidance as to when it is appropriate to consult with senior officials in order to ensure prompt, accurate and complete responses to GAO requests. Moreover, the Departmental GAO/OIG Liaison Office routinely works with the GAO to facilitate the 

flow of information and keep track of the materials provided in accordance with prudent accountability and good management practices. In this way, the Liaison Office 

helps to ensure proper marking of documents and compliance consistent with applicable statutory provisions (including 31 U.S.C. Section 716). 

As the Secretary testified on February 8, 2007, DHS is putting mechanisms in 

place to create incentives for DHS employees to make information flow a top priority 

and linking employee performance reviews to their responsiveness. We are always 

striving to improve the Department’s processes in the context of consistency, coordination, and prudent management practices. In this way, we can move forward to 

fulfill lawful requests thoroughly and comprehensively. 

25 

Question 8: Do you believe that there are any limitations to the types or 

classes of documents that the GAO can request? If so, please describe the 

limitations. 

Response: DHS works cooperatively with the Government Accountability Office 

(GAO) in responding to its requests. Indeed, DHS has provided GAO many, many 

thousands of documents in response to numerous GAO requests and hundreds of 

GAO audits and investigations. 

DHS employees are provided guidance for reviewing document productions before 

disclosing the information to the GAO. For instance, DHS—due to nature of the 

work it performs—handles very sensitive information, the inappropriate disclosure 

of which can lead to severe consequences. While fully cooperating with the GAO, the 

Department must strictly adhere to applicable laws and regulations related to the 

disclosure of such information. The Department’s ability to obtain the information 

critical to our mission—particularly from the private sector and other stakeholders—is based upon our extreme vigilance to ensure that the release of materials 

will not be made in an inappropriate manner. Further, we must ensure that such 

disclosure will not negatively impact the open atmosphere in which the information 

is shared in the first place. Failure to demonstrate such diligence may ‘‘chill’’ or inhibit the willingness of various stakeholders to provide useful information to the Department. Therefore, it is important to have an organizational mechanism and 

structure in place to consider documents prior to disclosure. DHS will nevertheless 

continue to work with and cooperate with the GAO to improve the proper flow of 

information and materials consistent with 31 U.S.C. Section 716. 

QUESTIONS FROM THE HONORABLE CHRISTOPHER CARNEY

Question 9.: Integrating 22 legacy agencies into one functioning Department is a tremendous challenge. How do you plan to use the Directorate 

to facilitate this goal, and what tangible evidence—what benchmarks—of 

progress can you describe for the coming year? 

Response: An effort of this magnitude requires effective and efficient use of financial and human resources, enabling technology, strong processes and superb 

management. These are the challenges that are the focus of my efforts. 

The major elements of our strategy are: • Improving acquisition and procurement throughout the Department. • Strengthening the requirements and investment review processes. • Acquiring and maintaining human capital. • Seeking efficiencies across the enterprise in operations and the use of re- sources. 

• Making the key management systems, such as financial and information technology, world class. 

Our approach has a common thread through all of these areas: Ensure that there 

is a comprehensive and integrated strategy with specific and measurable goals that 

support the activities and priorities of the Department. On a practical level, we will 

ensure that this strategy succeeds by having a team with the right knowledge, skills 

and abilities to support the programs, the overall transformation and the integration efforts. 

Question 10.: The Department has requested over $120 million to consolidate its headquarters in Washington, D.C. However, we have yet to see a 

complete budget estimate for this 10 year project. The $120 million for FY 

’08 is the short run cost. Looking at the long term costs of this project, 

what guarantees can you give us that this project will stay within budget 

and not become another ‘‘Big Dig’’ or Capitol Visitor Center? 

Response: Both the General Services Administration (GSA) and the Department 

of Homeland Security (DHS) are committed to executing this project in a fiscally responsible manner and will institute controls/systems throughout the design and construction phases to effectively manage the scope, schedule and budget. 

The DHS NCR Housing Master Plan submitted to the Congress on October 24, 

2006 as directed in the FY 2007 Homeland Security Appropriations Act (P.L. 109– 

295) establishes the DHS requirement in terms of the minimum density of development necessary for the Department to effectively function as a Unified Headquarters. This requirement is for up to 4.5 million gross square feet of office space 

plus parking. GSA is preparing a Master Plan and Environmental Impact Statement (EIS) for St. Elizabeths West Campus which has 3 alternatives that meet the 

DHS requirement. The Master Plan will set the framework for development, including density, locations for development, design guidelines, adaptive reuse of historic 

structures and demolition. This effort is being coordinated with the Regional Planning and Review Agencies, including the National Capital Planning Commission, 

26 

the U.S. Commission on Fine Arts, the District of Columbia Office of Planning and 

other stakeholders such as the Advisory Council on Historic Preservation. Since the 

site is a National Historic Landmark, consultations in accordance with Section 106 

of the National Historic Preservation Act (NHPA) are also being conducted. 

The final Master Plan with design guidelines and the programmatic agreement 

from the Section 106 consultations will help form the basis of the scope control as 

all development will have to conform to the limits and requirements of these documents. 

To prevent the project from undisciplined cost growth and schedule extensions 

confronting the ‘‘Big Dig’’ and Capital Visitors Center, the General Services Administration (GSA) intends to reduce risks and uncertainties and will focus on the design and construction process to deliver a high quality product within the schedule 

and budget. Our plan is to concentrate key leadership, management, policy, and operations coordination functions to enhance DHS’s mission execution. Design Guidelines will be established that will standardize office sizes, furniture, furnishings, 

equipment, and will maximize shared use amenities. Generic office plans will allow 

maximum flexibility for the occupancy so changes to the program will limit impact 

to the design and construction contracts. GSA plans to employ a ‘‘Construction Manager as Constructor’’ (CMc) delivery model for the St. Elizabeths development that 

will facilitate fast tracking of design and construction for expedited delivery. The 

CMc model will improve design and construction coordination because the CMc is 

brought onto the project team early in the design to provide pre-construction phase 

services such as constructability reviews, coordination of long lead items, construction cost estimating and construction market analysis to reduce the likelihood of 

cost overruns when the design is complete. This delivery model fosters a better team 

environment and cooperation between all parties reducing the potential for contract 

damages and claims. 

The GSA/DHS team will also implement an oversight process for the St. Elizabeths development that applies technical and administrative direction and surveillance over the lifecycle of the design and construction of the project. We will control 

changes, record and report information needed to manage the delivery process, track 

the status of proposed changes and implementation status of approved changes. We 

will also audit change orders to verify conformance to specifications, drawings, and 

other contractual requirements. 

The Congress will play a critical role in the long term cost control of the project 

by providing the necessary funding to maintain the project schedule for both GSA 

and DHS. We are concerned that the FY 2007 Continuing Resolution did not fund 

GSA’s request to begin construction of the USCG Headquarters, which will have 

both cost and schedule impacts. Your support of the combined budget requests from 

DHS and GSA for the consolidated DHS Headquarters will help reduce uncertainties and risk by allowing the St. Elizabeths development to proceed and will limit 

the impacts of partial funding to the design and construction process. 

Question 11.: The Homeland Security Advisory Council’s Culture Task Force recommended eliminating the buzzword ‘‘Human Capital’’ to describe employees at the 

Department. We have heard that Department employees find this term demeaning 

and that it makes them feel expendable. It may seem like a small thing, but sometimes small things say a lot. You told us during your testimony that you do not like 

it. 

What do you intend to do implement this recommendation? 

Response: Section 704 of the Homeland Security Act created the position of the 

Chief Human Capital Officer. Further, as a consequence to the Chief Human Capital Officers Act of 2002, most other agencies re-named their human resources offices Human Capital Offices. This was done for consistency with both the language 

in the Act, and the language in related guidance issued by the Office of Personnel 

Management (OPM). In fact, the establishment of Human Capital Officers at Federal Agencies is included in the Act that created the Department of Homeland Security (DHS). 

Although legislation created the office for human capital, we are aware of the fact 

that we may refer to our greatest asset using some other ‘‘buzzword’’ or phrase. As 

is the case with most employers, DHS most often refers to its greatest asset as employees. 

As I stated in my testimony, I am not particularly fond of the term human capital 

when referring to employees and I am exploring other possible terms that might be 

used. My research of this topic, though, has caused me to discover that there may 

have been very well conceived intentions behind the use of the term ‘‘human capital’’; 

27 

The term ‘‘human capital’’, it seems, was coined in order to provide for stronger 

argument when articulating a need to ‘‘invest’’ in the workforce, i.e., training, 

development, education expenses, etc., just as we invest in physical capital, i.e., 

buildings, office machines, office furniture, etc. 

The term has also been defined by some as ‘‘a loose catch-all term for the practical 

knowledge, acquired skills and learned abilities of an individual that make him or 

her potentially productive and thus equip him or her to earn income in exchange 

for labor’’, and utilizes the word ‘‘capital’’ metaphorically to describe the ‘‘quality of 

labor’’. 

I expect that the use of the term ‘‘human capital’’ will remain throughout the federal government for some time, and may very well continue to be used by DHS 

when referring to investments by the Department in various plans and reports to 

the Congress. However, as I said previously, I will continue to examine other possibilities and will consider all the recommendations offered by the Homeland Security 

Advisory Council’s Culture Task Force. 

Question 12.: As you know the Department’s procurement offices are understaffed. Your plan to develop home-grown experts through an internship is a good 

long-term idea, but really won’t do much in the short term. Other short-staffed 

areas of the Department have had success in hiring federal annuitants. 

Would you support this for the procurement area, and if so do you have 

an estimate of how many would be needed? 

Response: Yes. The Office of the Chief Procurement Officer is working with the 

Office of the Chief Human Capital Officer on several key efforts to address the issue 

of staffing shortages. In fact, one of the first initiatives taken was to seek the authority to maximize the use of hiring flexibilities such as Direct Hire Authority and 

Re-Employed Annuitants for procurement personnel. In working closely with CHCO, 

the CPO is utilizing centralized recruiting efforts, incorporating the use of the direct 

hire authority to rapidly bring identified talent on board. By actively recruiting at 

Veteran specific job fairs, placing job announcements in military publications, capitalizing on acquisition professionals whose commands were affected by the Base Realignment and Closure initiative, and teaming with The Department of Veterans Affairs, we will alleviate our immediate staffing needs while acquiring the expertise 

of experienced professionals. 

There is a pressing need to begin filling CPO positions as soon as possible. However, at this time we do not have an estimate of the number that would be needed 

to adequately resolve our staffing problem. 

QUESTIONS FROM THE HONORABLE MICHAEL D. ROGERS

Question 13.: The Department of Homeland Security was established just over 

four years ago. Yet, it already has undergone major reorganizations. The first major 

reorganization occurred as a result of Secretary Chertoff’s Second Stage Review in 

2005. The second major reorganization is currently underway as mandated by Congress to reform and strengthen the Federal Emergency Management Agency 

(FEMA). 

In your view, what impact do such reorganizations have on the operations of DHS and the morale of its employees? 

Response: In my view, the business need for reorganization is essential. It is important to carefully review the mission and how the organizational structure supports the mission. During our reorganizations, we have done everything within our 

power to try to ensure that the transition for employees is seamless—from a human 

resource perspective that employees pay and benefits are not interrupted, that the 

supervisory chain is clear and that performance plans are adjusted; from a security 

perspective that all of the security clearances, badges and key cards are obtained 

before transferring from one component to another; from an IT perspective that 

proper adjustments are made to telephone numbers, computers, etc.; and from a facilities perspective that furniture, key cards and offices are relocated in such a way 

as to keep the disruption for employees to a minimum. However, I don’t want to 

diminish the fact that change can be unsettling. 

What are some of the lessons learned from the need for such reorganizations of a new Cabinet department? 

Response: Since the Department is newly formed, reorganizations can be deliberate. Even so, we should attempt to minimize the urge to reorganize. The bottom 

line is that reorganizations interfere with a certain security that employees draw 

from their work environment and have an adverse effect on those impacted by the 

change, no matter how small. During reorganizations employees spend valuable 

28 

time concerned about the impact of the reorganization on their job, job security, 

physical moves, etc., instead of the job which we are paying them to perform. 

With that in mind, any reorganization within the Department must be well 

thought out and planned with a long-term strategic view, instead of a knee-jerk reaction to address an immediate failure or deficiency within the Department, which 

will invariably end up being a short term solution necessitating yet another reorganization. The employees of the U.S. Fire Administration are a good example of this. 

They were pulled out of FEMA nine months ago, moved to the Under Secretary for 

Preparedness, and are now being moved back to FEMA. We must end this practice 

of repeatedly moving employees back and forth between organizations. I think this 

can be done through better strategic planning. 

Do you believe the Department is adequately organized, or do you anticipate or recommend another reorganization in the near future? 

Response: I don’t see the need for further reorganization in the near future. 

Question 14: Section 841 of the Homeland Security Act of 2002 authorized the 

Secretary of Homeland Security to establish a human resources management system for DHS. Congress intended that the system include the flexibilities necessary 

for the Department to be able to take necessary actions and respond appropriately 

to protect our Nation from terrorist attacks. 

The Department’s original proposal has been delayed by protracted litigation. It 

is critical that the Secretary have the tools he needs to manage the Department to 

fulfill its overarching mission of protecting our homeland. 

What needs to be done to ensure the Secretary has the necessary flexibilities to manage the Department’s work force? 

Response: We believe that we have the critical flexibilities we need to manage 

our workforce through existing government-wide flexibilities, as well as those provided through the Homeland Security Act of 2002 and the 2005 Department of 

Homeland Security Human Resources Management System (Part 9701) regulations 

implementing the MAXHR program. 

However, as part of our strategy moving forward under the 2007—2008 DHS 

Human Capital Operational Plan, the Office of the Chief Human Capital Officer will 

also be working with the components to identify areas where additional regulatory 

and/or statutory changes would help. For example, one area that we will be looking 

at very closely is hiring flexibilities. We will work with our components to review 

current flexibilities in order to determine if there are other changes we may need 

in order to more readily hire qualified individuals into our mission critical occupations to meet mission requirements.

Once these determinations are made, we will reach out to Congress to request 

those additional flexibilities and report on our efforts. We will also be reviewing our 

internal policies and regulations, in partnership with the DHS EEO/Civil Rights Offices, to find additional efficiencies, where possible. 

The Committee has been advised that the Department will no longer use the term 

‘‘MaxHR’’ to describe its new personnel system. Could you please comment on 

how DHS plans to proceed with implementing a flexible personnel system? 

Response: The flexibilities provided to the Department (which were branded 

using the name MAXHR) provided an excellent start, but they did not go far enough 

in addressing the broad range of needs for a 21st century human capital program 

across the Department. For this reason, we will no longer be using the brand 

MAXHR as we move to address broader initiatives that are essential for us to be 

successful in the future. 

As you know, DHS received flexibilities in the following six areas: 

• Classification 

• Pay and Pay Administration 

• Performance Management 

• Labor-Management Relations 

• Adverse Actions, and 

• Appeals 

Over the past few years, we have made significant progress in laying the foundation for a robust human capital program using the flexibilities provided. The cornerstone of our efforts has been the development and implementation of our DHS Performance Management Program. Implementing this program under MAXHR has 

helped many of our component organizations achieve new levels of accountability 

and transparency by improving manager-employee interaction and recognizing top 

performing employees. 

At the same time, it became evident that the human capital needs of the Department extended beyond the six areas provided for in the regulations. To address all 

29 

the critical areas, we have developed a Human Capital Operational Plan to serve 

as a roadmap to integrate key human capital practices. This plan will allow DHS 

to adjust to changing directions and priorities while identifying five operational 

goals. These goals are designed to improve DHS’ capacity to build and sustain a 

high-performing workforce with the knowledge, tools and resources to achieve the 

Department’s vital mission. They are: 

• Hiring and retaining a talented and diverse workforce 

• Creating a DHS-wide culture of performance 

• Creating high-quality learning and development programs for DHS employees 

• Implementing a DHS-wide integrated leadership service 

• Being a model of human capital service excellence 

Under the five goals, we will continue the valuable work begun under the 

MAXHR program, but will also broaden our focus to other key areas, including development of career paths to expand career opportunities and investment in learning and development programs to give employees the knowledge and tools they need 

to be successful. We will also modernize hiring and retention programs to make sure 

we can attract and retain the best talent. With respect to the programs initiated 

under MAXHR, we will: 

• Expand the implementation of the DHS Performance Management Program 

to allow us to work more effectively across components and align the work we 

do with the strategy, vision, and values of the Department. 

• Delay the implementation of a pay banding program until the DHS Performance Management Program has been fully implemented and evaluated. 

• Conduct a pay-for-performance pilot program in a small component or organization to validate, measure, and refine the pay band models and processes. 

• Work with the Office of Personnel Management and collaborate with employee representatives to decide on next steps consistent with recent court rulings. 

By proceeding in this deliberate manner, we will ensure that performance management is well-established in the Department, and that we have adequate time to 

properly train the workforce. These actions will also support our efforts in addressing the issues raised by the Federal Human Capital Survey. 

As we look to a future of increasing challenges, our need for innovative, state-ofthe art human capital programs is clear. The framework for these new programs 

is described in the DHS Human Capital Operational Plan, which will guide our efforts to sustain our high-performing workforce of today—and build our workforce of 

tomorrow. 

Question 15.: The Department of Homeland Security (DHS) and the General 

Services Administration (GSA) have developed a plan to relocate and consolidate a 

number of DHS facilities in the National Capital Region to one main, secure facility 

on the site of St. Elizabeth’s Hospital in Anacostia, District of Columbia. 

The President’s Budget for Fiscal Year 2008 requests $120 million for DHS and 

$345 million for GSA for this relocation. 

What is the proposed total cost and timeline for this relocation? 

Response: The overall cost of the St. Elizabeths West Campus development is a 

function of the final Master Plan layout and density selected in conjunction and in 

consultation with the review agencies. While a programming level estimate has been 

developed, it continues to be refined and revised as more of the details of the various ongoing studies are completed. Currently, the preliminary estimate of total 

project cost, inclusive of GSA infrastructure/building costs, DHS tenant specific costs 

for the construction and renovation, IT, furniture, fixtures and equipment, and move 

costs may approach as much as $3 billion. Most of the DHS specific costs will be 

incurred irrespective of the St. Elizabeths West Campus development due to the 

need to replace expiring leases over the coming years. 

According to ‘‘The Automated Prospectus System’’ (TAPS) analysis conducted by 

GSA, consolidating up to 4.5 million gross square feet (GSF) of the DHS office space 

requirement at St. Elizabeths West Campus will result in an approximate $1 billion 

Net Present Value (NPV) savings over a thirty year period as compared to individually replacing commercial leases without any consolidation. 

DHS is currently housed in more than 50 locations and over 80 buildings dispersed throughout the National Capitol Region (NCR). Over the course of the next 

10 years approximately 4.7 million GSF of DHS leased office space will have to be 

replaced. Without consolidation of up to 4.5 million GSF of office space plus parking 

at St. Elizabeths, DHS would be compelled to occupy predominately leased space at 

an overall greater cost. We would also forego multiple vital efficiencies gained 

through shared services, while incurring higher real estate and security costs. 

30 

The original 3-phase schedule for development of the St. Elizabeths West Campus 

as proposed by the General Services Administration (GSA) and included the DHS 

National Capital Region Housing Master Plan submitted to the Congress as directed 

in P.L. 109–295 (FY 2007 Homeland Security Appropriations Act) is listed below. 

The schedule proposed construction funding beginning in FY 2007 for the first phase 

of the development (USCG Headquarters Relocation) and completion/occupancy of 

the third and final phase in FY 2015. 

Phase Component Proposed Construction Start 

Proposed Occupancy 

1 USCG Headquarters FY2007 FY2011 

2 DHS HQ/FEMA HQ 

National Operations Center 

(NOC) FY2009 FY2013 

3 Remaining Operating 

Components FY2011 FY2015 

Due to the lack of funding for the St. Elizabeths project in the recently passed 

Continuing Resolution, we are concerned that the overall schedule may be delayed 

with corresponding adverse impacts on DHS operations and integration. We are currently working with GSA to update the schedule and I look forward to working with 

the Congress on options to recover from any schedule slippage as a result of the 

FY07 C.R. in future year budget submissions. 

How will the initial $120 million for DHS be used? To the extent you may 

know, how will the $345 million for GSA be used? 

Response: The DHS FY08 Budget Request of $120M is for the following: 

• USCG Headquarters Building Tenant Improvement construction liability for 

FY 2008 including the main headquarters facility and shared spaces 

• Tenant specific design costs for Phase 2 of the development will include DHS 

Headquarters (including components with only liaison presence on campus), 

FEMA HQ, the National Operations Center (NOC ) 

• Tenant specific pre-design costs for Phase 3 of the development will include 

the remaining operating components 

• Project team staffing to manage the initiative 

The GSA’s FY08 Budget Request of $345M is for the following: 

• Phase 1 construction of USCG Headquarters 

• Management and Inspection costs 

• Phase 2 design of DHS Headquarters, FEMA Headquarters, the National Operations Center (NOC) and other shared use facilities 

• West Campus Infrastructure 

• Site Acquisition for new access into the campus 

What DHS components will be relocated to the new site? What components in the National Capital Region would not be relocated? 

Response: The table below is excerpted from the DHS NCR Housing Master plan 

submitted to the Congress on October 24, 2006 as directed in P.L. 109–295 (FY 2007 

Homeland Security Appropriations Act). All DHS and Component Headquarters will 

have some level of presence on the campus. The campus occupancy will be focused 

on senior leadership, policy, mission execution/operations coordination and program 

management functions. Mission support functions that cannot be accommodated on 

the campus will be consolidated where possible off-campus to support functional integration. 

St. Elizabeths West Campus Proposed Occupancy Plan 

Component 

Estimated Level of 

Presence[1]

S = Significant 

L = Liaison 

F = Full 

Relocation Phase 

According to GSA’s 

planned schedule 

Executive Office of the Secretary F 2 

Office of the General Counsel F 2 

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Component 

Estimated Level of 

Presence[1]

S = Significant 

L = Liaison 

F = Full 

Relocation Phase 

According to GSA’s 

planned schedule 

Assistant Secretary for Policy F 2 

Under Secretary for Preparedness S 2 

Director of Operations Coordination F 2 

Office of Intelligence and Analysis S 2 

Assistant Secretary for Legislative and 

Intergovernmental Affairs 

F 2 

Office of Public Affairs F 2 

Under Secretary for Management S 2 

Director of Counternarcotics Enforcement F 2 

Screening Coordination Office F 2 

Chief Privacy Officer F 2 

Citizenship & Immigration Services 

Ombudsman 

F 2 

Officer for Civil Rights and Civil Liberties F 2 

FLETC Washington Office F 2 

U.S. Coast Guard F 1 

Federal Emergency Management Agency F 2 

Customs & Border Protection S 3 

Immigration & Customs Enforcement S 3 

Transportation Security Administration S 3 

U.S. Secret Service L 2 

Science & Technology L 2 

Domestic Nuclear Detection Office L 2 

US-VISIT L 2 

Citizenship & Immigration Services L 2 

Office of the Inspector General L 2 

[1] S = Significant Presence means Component Heads and their senior leadership for operations, planning, 

policy, management and some limited support functions. Remaining support staff will be consolidated with 

other Components back-office functions ‘‘off-campus’’ where possible to minimize locations and take advantage of functional integration opportunities. 

L = Liaison Presence means a limited coordinating staff only with the bulk of the Component space located off-campus. 

F = Full Presence means the entire office or component. 

Question: What other sites were considered, and what was the rationale 

for selecting the St. Elizabeth’s campus? 

Response: The following table was excerpted from the DHS NCR Housing Master 

Plan submitted to the Congress on 24 October 2006 as directed by P.L. 109–295 

(Homeland Security FY2007 Appropriations Act) and lists the locations that GSA 

32 

considered to house DHS and why each was eliminated from further study. Only 

Federal sites were examined by GSA to avoid incurring unnecessary acquisition 

costs. Privately owned properties were excluded from the analysis given that GSA 

already controls a federally owned site capable of accommodating DHS’s need. GSA 

has determined the only site under Federal Government control that has the size, 

potential capacity, security features, and availability to meet DHS minimum urgent 

consolidation needs is St. Elizabeths West Campus, Washington, D.C. 

Alternative Location Analysis 

Site Reason Eliminated 

Germantown Campus, 

Germantown, Maryland 

Insufficient space—only 1.3 million SF of space available. 

Suitland Federal Center, 

Suitland, Maryland 

Insufficient space—only 800,000 SF of space available. 

Federal Research Center at White Oak, 

Silver Spring, Maryland 

Insufficient space—only 1.7 million SF of space available. 

Franconia Storage Depot, 

Franconia, Virginia 

Insufficient space—only 55,000 SF of space is available. 

US Geological Survey Campus, 

Reston, Virginia 

Insufficient space—only 450,000 SF of space is available. 

Cotton Annex & 12th and C Streets, 

Washington, D.C. 

Insufficient space—only 56,636 SF of space available. 

Southeast Federal Center, 

Washington, D.C. 

Insufficient space—only 1.8 million SF of space available. 

Reservation 13, Washington, D.C. The site is under control of the District of Columbia. 

Armed Forces Retirement Home, 

Washington, D.C. 

The site is projected to be redeveloped via ground lease to 

compatible users to replenish the Armed Forces Retirement 

Home Trust Fund. GSA cannot pay for both construction 

costs and ground lease payments, since another Federal 

site (St. Elizabeths West Campus) is available. Also, GSA 

would not pay for full reimbursement of the site (in a 

transfer context), given that there is already a Federal site 

available for development. The property would also not 

likely be available in a timely manner. 

Robert F. Kennedy Stadium Site, 

Washington, D.C. 

The site is under control of the District of Columbia. 

Nebraska Avenue Complex, 

Washington, D.C. 

Insufficient space—if site was developed to full capacity, 

only 1.2 million SF of space is available. 

Walter Reed Army Medical Center, 

Washington, D.C. 

The property would not be available until 2012, which is outside the timeframe required by DHS. 

Beltsville Agricultural Research Center, 

Beltsville, Maryland 

The U.S. Department of Agriculture currently determines types 

of development on this site and has indicated the site is 

not available. 

In addition, language in PL 109–241, Coast Guard and Maritime Transportation 

Act of 2006, dated 11 July 2006, requires GSA to specifically evaluate the following 

properties for the USCG Headquarters: 

1. The current Department of Transportation Headquarters located in the 

Nassif Building above the L ́ Enfant Metro station in Southwest Washington, 

D.C. 

2. The Waterfront Mall Complex in Southwest Washington, D.C. 

Although GSA will formally provide evaluation of these properties to the relevant 

Congressional Committees, as required by PL 109–241, since the USCG HeadVerDate Nov 24 2008 10:33 May 21, 2009 Jkt 000000 PO 00000 Frm 00036 Fmt 6601 Sfmt 6621 H:\DOCS\110-HRGS\110-11\35270.TXT HSEC PsN: DIANE
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quarters is part of the up to 4.5 million GSF minimum departmental consolidation 

requirement, neither of these facilities has the required size or security setbacks to 

meet the needs of the consolidated campus that DHS seeks. 

Since DHS Headquarters is expected to relocate, will DHS continue to 

use the Nebraska Avenue Complex (NAC)? If so, how? 

Response: DHS and Component Headquarters currently require about 7 million 

Gross Square Feet (GSF) of office space. GSA has determined there are no sites already federally owned that are available and can accommodate the entirety of DHS 

real estate needs in a single location in the NCR. Moreover, the St. Elizabeths West 

Campus is the only site that has the potential to accommodate up to 4.5 million 

GSF of new and adaptively reused office space plus parking as well as meet our security requirements. Consequently, the Department carefully analyzed the critical 

functions that must be collocated on the secure campus and the remaining requirements that may be consolidated elsewhere. As we finalize the specific levels of presence for the components listed above, we will look closely at all of the properties 

and capacities that remain. Our goal is to reduce the number of locations housing 

DHS entities to as few as possible. 

The NAC was selected as the initial headquarters when the Department was 

stood up in 2003. As DHS organizations and mission requirements have matured 

and expanded over the past three years, it is obvious that the physical limitations 

of the property make the NAC wholly unsuitable as the permanent headquarters 

for the Department. Lessons learned from Hurricane Katrina and the Second Stage 

Review underscore this conclusion. We appreciate that Congress appropriated funds 

to support the NAC, and these funds are vital to sustain the current operating capability of the Department. Although the physical limitations of the NAC render it unsuitable as the permanent DHS headquarters, over the longer term it is certainly 

likely that the NAC can well serve as a site for consolidation of certain DHS mission 

support functions that can utilize the much needed recent facility improvements. 

A number of buildings on the site date back to the 1800s. How will they be utilized, and what is the cost-benefit analysis that will determine whether to 

renovate the historic buildings versus building new office space? 

Response: GSA is responsible for the costs of renovating historic buildings to 

meet current codes and standard office requirements. DHS costs are for tenant specific requirements above the tenant improvement allowance provided by GSA. There 

are two overarching considerations that influence GSA’s approach to renovating historic properties. They are the National Historic Preservation Act and applicable Executive Orders. The other factor is requirements imposed by the National Capital 

Planning Commission. As the central planning agency for the Federal Government 

in the National Capital Region, NCPC is charged with planning for the appropriate 

and orderly development of the national capital and the conservation of important 

natural and historic features. Within that context, GSA is engaged in working with 

DHS to protect the most significant historic resources as part of an integrated campus for DHS. 

Executive Order 13006: Locating Federal Facilities on Historic Properties in our 

Nation’s Central Cities requires Federal agencies, when operationally appropriate 

and economically productive, to give first consideration to historic properties within 

historic districts. St. Elizabeths is a National Historic Landmark. As GSA is committed to complying with Executive Order 13006 and Sections 106 and 110 of the 

National Historic Preservation Act, consideration of the site’s historic significance 

is a major focus of GSA’s planning efforts. GSA is guided by the principal goals of 

its Historic Buildings program in carrying out this project. Those goals are to realize 

the objectives of the National Historic Preservation Act by developing: a) strategies 

that enable the reuse of GSA’s historic buildings; and other contributing elements, 

such as the cultural landscape b) creative design solutions to resolve conflicts between preservation, codes, and functional requirements of modern office use. In 

keeping with these preservation and planning goals, GSA is seeking to satisfy 

DHS’s programmatic requirements in a manner ensuring that ‘‘to the maximum extent possible, [GSA has] undertake[n] such planning and actions as may be necessary to minimize harm to [the] National Historic Landmark.’’ The Master Plan includes both development objectives and planning principles that recognize the importance of preserving and protecting the important tangible, as well as intangible, 

historic characteristics of the campus while ensuring operational effectiveness for 

the Federal user. The National Capital Planning Commission uses an approved 

Master Plan as the basis of approving follow on building designs. The master plan 

for the St. Elizabeths West Campus development and the subsequent building designs are subject to review (advisory only) by the U.S. Commission of Fine Arts. 

34 

With regard to the cost-benefit analysis that will determine whether to renovate 

the historic buildings versus building new office space, this is also a GSA responsibility and they intend to approach this task on a campus wide basis that seeks to 

preserve the historic resource while introducing new construction. The final cost of 

developing the campus continues to be refined as more information is learned about 

the site and individual buildings. GSA advises the costs of renovating historic structures will be dependent upon the results of consultation process as required by the 

National Historic Preservation Act. 

The alternative to housing DHS in a campus environment (which includes new 

and adaptive re-use space at the St. Elizabeths West Campus) would require GSA 

to house DHS in leased locations that would be more costly to the tax payer. here 

are no other Federal sites that have the potential to meet the DHS minimum housing requirement. According to ‘‘The Automated Prospectus System’’ (TAPS) analysis 

conducted by GSA, consolidating up to 4.5 million gross square feet (GSF) of the 

DHS office space requirement at St. Elizabeths West Campus will result in approximate $1 billion Net Present Value (NPV) savings over a thirty year period as compared to individually replacing commercial leases without any consolidation. 

GSA is currently consulting under Sections 106 and 110 of the National Historic 

Preservation Act of 1966 with the District of Columbia State Historic Preservation 

Office, Advisory Council on Historic Preservation, National Capital Planning Commission, U.S. Commission of Fine Arts as well as other local planning and other 

planning agencies including National Capital Planning Commission and preservation organizations. The consultation will help identify appropriate mitigation measures necessary to minimize harm to the National Historic Landmark. Mitigation 

consultations are expected to begin when a preferred alternative is made available 

to the public in July 2007 and are expected to be completed in March 2008. 

Question 16: The Government Accountability Office (GAO) has recommended 

that the Department of Homeland Security and the Department of Defense each 

should establish a new Deputy Secretary position specifically to focus on management and transformation. GAO also advocated that this position should be filled by 

longer-term executives to provide for greater continuity within the departments. 

What is your opinion on this GAO recommendation to create a new Deputy Secretary position? 

Response: I have been given, as the Under Secretary for Management, the Secretary’s authority to manage the entire department. I’ve been told by the Secretary 

that I should prepare management directives that will strengthen any areas of authority that I feel I do not have. 

I don’t agree with elevating it to deputy. First of all, I think title inflation doesn’t 

necessarily add any value. At some point the Under Secretary has to get the work 

done, and making me a deputy secretary doesn’t make it any easier. It has a negative effect. 

There should be only one deputy in a department. That person, who happens to 

be very able—Michael Jackson—is the one person who knows everything that the 

Secretary does, including the most highly classified things. Anything that muddles 

his authority in the Secretary’s absence is counterproductive. 

Wouldn’t the same goals be accomplished by simply augmenting the authorities of your position within DHS? 

Response: Yes. 

Wouldn’t a new Deputy Secretary just be another layer of bureaucracy 

which would overlap the role of the existing Deputy Secretary at DHS and 

create confusion within the organization? 

Response: Yes, it could. 

Wouldn’t a longer-term executive serving in this new position create inherent conflict with changes in leadership of the Department? 

Response: Yes, it could. 

Question 17: During the last Congress, this Committee held a number of hearings and passed legislation to strengthen the ability of the chief operating officers 

to oversee their counterparts in the Department’s legacy agencies. 

In your first few months in office, have you identified any specific problems in the areas of financial management, procurement, and personnel 

that could be related to the lack of direct line authority for the chief operating officers at the Headquarters level? What recommendations do you 

have to improve management in these areas? 

Response: Yes, I determined that the DHS Chief Information Offer (CIO) did not 

have sufficient authority to execute the Information Technology (IT) transfer required across the Department. The Secretary agreed with my assessment and shortVerDate Nov 24 2008 10:33 May 21, 2009 Jkt 000000 PO 00000 Frm 00038 Fmt 6601 Sfmt 6621 H:\DOCS\110-HRGS\110-11\35270.TXT HSEC PsN: DIANE
35 

ly thereafter, he issued the appropriate Departmental management directive giving 

the CIO the authority he needed to successfully execute his responsibilities. 

When it was determined that the CIO did not have sufficient authority, specific 

steps were taken to give him the authority he needed. 

Question 18.: Comptroller General David Walker testified on January 31st 

that DHS ‘‘continues to face challenges in creating an effective, integrated 

acquisition organization.’’ 

What is your assessment of the existing acquisition organization at DHS? 

Response: The Department of Homeland Security is just beginning or is in the 

midst of many crucial acquisitions that are vital to the success of DHS. That is why 

we are working to strengthen acquisition and procurement by institutionalizing 

solid processes. To this end we are: • Building the capability to manage complex efforts by ensuring that program 

offices are properly structured and staffed with the right people, and the right 

skills, to ensure efficient and effective program management and oversight; and 

aggressively hiring where we have known shortages. 

• Strengthening the requirements and investment review processes by improving the Joint Requirements Council (JRC) and Investment Review Board (IRB) 

process. 

• Reviewing the major programs and investments to ensure that the requirements are clear, cost estimates are valid, the technology risk is properly assessed, schedules are realistic, the contract vehicles are proper, and the efforts 

are well managed. 

What changes in the organization do you plan to implement? 

Response: To date, the Department’s focus has been on procurement. Procurement, however, is only one element of acquisition management. Acquisition also includes understanding operational and life-cycle requirements, such as formulating 

concepts of operations, developing sound business strategies, exercising prudent financial management, assessing trade-offs, and managing program risks. Best practice acquisition management is executed by teams of professionals who understand 

and are able to manage the entire life-cycle of a major program effort. DHS has a 

shortage of people that are experienced in program management, including its related functional areas (e.g. acquisition logistics, cost analysis). I will focus on this 

area as one of my major priorities by identifying needed skills and processes and 

considering expedited delivery of training in key disciplines for those individuals involved in the management of the Department’s major programs. 

We have established a department-wide real property asset management plan 

with performance metrics to govern investment decisions regarding our buildings, 

structures and land. We are expanding this approach to all tangible assets through 

the investment review process with an Asset Management and Services Board with 

representation by the component chief administrative officers. 

Question 19.: Many of the legacy components of DHS have their own procurement offices. 

What is the Department doing at the Headquarters level to ensure the accountability of these different processes? 

Response: To ensure accountability of acquisition and procurement processes at 

the DHS Components, the Chief Procurement Officer has established the following 

top priorities: 

• First, to build the DHS acquisition workforce to enhance the Department’s acquisition program. 

• Second, to establish an acquisition system whereby each requirement has a 

well defined mission and a management team that includes professionals with 

the requisite skills to achieve mission results. 

• Third, to ensure more effective buying across the eight contracting offices 

through the use of strategic sourcing and supplier management. 

• Fourth, to strengthen contract administration to ensure that products and 

services purchased meet contract requirements and mission need. 

These four goals were flowed down to each of the eight Heads of the Contracting 

Activities through the component heads to ensure alignment and focus on these high 

priority items. Progress in these four areas will significantly strengthen the Department’s ability to perform its mission and to execute acquisition programs successfully. Additionally, the CPO is implementing a 4 step oversight process intended to 

ensure Components are using effective procurement processes. These steps include 

acquisition planning, Component self-assessments, Component operational assessments and procurement management reviews of the Components. Considerable 

progress has been made in implementing this oversight plan, with the initial impleVerDate Nov 24 2008 10:33 May 21, 2009 Jkt 000000 PO 00000 Frm 00039 Fmt 6601 Sfmt 6621 H:\DOCS\110-HRGS\110-11\35270.TXT HSEC PsN: DIANE
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mentation of the first three steps largely done, and the implementation of the last 

step commenced. 

What organizational changes, if any, would you recommend to ensure acquisition by the legacy components of DHS is integrated to maximize 

economies of scale? 

Response: I would not recommend any organizational changes at this time. It is 

not clear that the current organizational structure is the reason for any problems 

that have been identified. The single largest reason for identified problems has been 

the shortage of acquisition personnel and skills to accomplish the mission. Organizational change will not necessarily resolve people shortages. I’ve have taken a number of steps to address the people and skills shortage including a Department-wide 

acquisition recruitment initiative. I’ve asked the CPO to lead this effort with support from the Chief Human Capital Officer. 

What additional tools would you recommend be given to the DHS Chief 

Procurement Officer to strengthen oversight of acquisitions by the Department’s component agencies? 

Response: I intend to review programs on a regular basis and the process that 

is used to manage programs within the Department. I will make adjustments as appropriate to ensure that DHS programs are effectively managed. 

Question 20.: The DHS Inspector General testified on January 31st that many 

of the procurement offices within the Department are understaffed. 

What are your plans to address this issue? 

Response: The Office of the Chief Procurement Officer is working on several key 

efforts to address the issue of staffing shortages. The first initiative taken was to 

seek the authority to maximize the use of hiring flexibilities such as, Direct Hire 

Authority and Re-Employed Annuitants for procurement personnel. In working 

closely with the Office of the Chief Human Capital Officer, the CPO is utilizing centralized recruiting efforts incorporating the use of the direct hire authority to rapidly bring identified talent on board. The centralized recruiting efforts include: department-wide vacancy announcements, print advertisements in major media publications as well as attendance at key acquisition recruiting events such as: the Federal Acquisition Conference/Expo and the National Contract Management Association 2007 World Congress. Future recruiting initiatives will focus on the employment of Veterans, such as Veteran specific job fairs, job announcements in military 

publications, capitalizing on acquisition professionals whose commands were affected by the Base Realignment and Closure initiative, and teaming with The Department of Veterans affairs utilizing existing programs such as ‘‘The Wounded 

Warrior’’ whenever possible. A longer term approach, and capstone to the plan is 

the centrally managed Intern Program. In order to satisfy the long term need for 

qualified personnel, the Office of the Chief Procurement Officer sought centralized 

funding in order to attract, hire, and train exceptional new talent in order to ‘‘grow’’ 

a workforce. 

How long will it take to ensure DHS has the requisite number of properly 

trained procurement officers? 

Response: The Office of the Chief Procurement Officer will utilize all resources 

available to attract and retain qualified talent and provide training and development opportunities to the procurement workforce across the Department. Currently, 

the CPO’s office is contracting a study to assist in determining a methodology for 

forecasting future workforce needs. The training and development of procurement 

personnel is an on-going endeavor and the lifecycle is dependant on where in their 

experience level in their careers an individual enters the Department. For instance, 

in order to fulfill the Federal certification requirement a new entrant with no experience will be required to obtain a minimum of four years experience and complete 

over four hundred hours of procurement training during that time period. 

Question 21.: In the 109th Congress, this Subcommittee held a number of hearings on DHS contracts that were riddled with waste and mismanagement. 

The Inspector General testified before this Subcommittee that DHS lacks the necessary number of procurement officers and a number of the procurement staff on 

board are not properly trained. 

What are your plans to ensure DHS has the necessary number of trained 

procurement officers? 

Response: The Office of the Chief Procurement Officer is utilizing the methodologies as outlined in question number 35 in order to increase the numbers of procurement personnel. To ensure they are properly trained they are embarking on a number of key initiatives. The first was to seek centralized, specific funding for acquisiVerDate Nov 24 2008 10:33 May 21, 2009 Jkt 000000 PO 00000 Frm 00040 Fmt 6601 Sfmt 6621 H:\DOCS\110-HRGS\110-11\35270.TXT HSEC PsN: DIANE
37 

tion training. Those funds will be used to supplement certification training provided 

by the Federal Acquisition Institute with specialized targeted training identified 

such as: Safety Act, Performance Based Acquisition, and Buy American Processes 

and Compliance. The department has also launched an almost monthly series entitled, ‘‘Excellence in Contracting’’ which are seminars targeted on hot and emerging 

topics in procurement. The Acquisition Workforce division is also working closely 

with the Oversight Division to identify deficiencies as procurement reviews are conducted and plan to develop and/or buy specific training to close those skill gaps as 

necessary. 

Based on your experience at the Department of Defense, what are some 

of the major differences in contracting and procurement that you have 

seen within DHS? 

Response: DoD has well established protocols and procedures. The processes that 

DHS does have in place, because of the Department’s infancy, have not had a 

chance to mature. The acquisition and procurement career field is also better staffed 

at all levels, providing a more solid resource base to lay out complex efforts. 

What are some of the lessons learned from your experience at DoD that 

you plan to implement at DHS? 

Response: I plan to adapt best practices in all areas. 

Question 22: On January 31st, the DHS Inspector General testified that 36 Federal grant programs may duplicate grant programs administered by the Department. 

Will you work with the Inspector General’s Office to identify these programs? 

Response: The DHS Office of Inspector General’s (IG) testimony, before the Subcommittee on Homeland Security on February 6, 2007 and Committee on Homeland 

Security on February 7, 20027, stated that they ‘‘identified 36 federal assistance 

programs that have the potential for duplicating DHS grant programs’’. The grants 

process and the requirements associated with each assistance program can be complex, and generally are stipulated by the Congress with administrative requirements 

provided by OMB Circulars. The DHS Chief Procurement Office has responsible for 

oversight of assistance programs within DHS and has assigned the Office of Grant 

Policy and Oversight to contact the OIG’s to request the list of federal assistance 

programs they identified in order to determine if there is a duplication of effort, or 

whether the grant programs address different sets of requirements and recipients. 

It is not unusual for assistance programs awarded under grants sponsored by different agencies to address similar missions, but generally the agencies are aware 

of the potential duplication and coordinate the efforts to avoid such duplication. 

What can be done to eliminate this bureaucratic overlap? 

Response: The DHS CPO/GPO will continue to work with the DHS program offices, the Office of General Counsel and the Office of Inspector Generals to identify 

Federal assistance programs that appear to be overlapping with DHS assistance 

programs, and notify the DHS program offices of potential duplication possibilities 

and request that they contact the program respective agency to coordinate program 

mission and/or awards. 

Question 23.: This Committee has consistently been concerned with reports that 

first responder grants were used for unrelated or ineligible uses. 

What can the Department do to better manage grants once the awards 

have been made to ensure that funding is being spent appropriately? 

Response: Although the Department of Homeland Security (DHS) gives the State 

Administrative Agency (SAA) maximum flexibility to determine State and local 

funding priorities, the Office of Grants and Training (G&T) provides several levels 

of oversight for Federal grant funds. 

• The SAA provides sub-grants to local jurisdictions for their use, and monitors 

the sub-grantees to ensure compliance with G&T program guidance. 

• G&T’s Preparedness Officers (POs) are in almost daily contact with State 

grantees to serve as a resource for questions. 

• G&T requires each State and identified urban area to develop a homeland security strategy, based on a comprehensive assessment of threats, 

vulnerabilities, and assets. Last year’s strategies were further enhanced by the 

requirement that States align their existing State/urban area strategies with 

the national priorities as listed in the National Preparedness guidance. States 

must expend grant funds in accordance with identified goals and objectives listed in their strategies. 

• POs continually monitor grant implementation, including appropriate and 

timely obligation and expenditure of grant funds. This office-based monitoring 

38 

is conducted through quarterly financial status reports, bi-annual progress reports, correspondence, and routine communication with grantees. 

• G&T has an established programmatic monitoring protocol requiring that at 

least one onsite monitoring visit be conducted each year with the SAA. During 

this visit, POs may conduct interviews with State program implementation 

staff, review records, review State procedures and guidelines, visit sub-grantees, 

and verify equipment purchases. Monitoring protocols also require the review 

of progress made toward the goals and objectives noted in the State strategies, 

as well as compliance with national initiatives such as National Incident Management System and Homeland Security Presidential Directive-8 implementation. 

In addition to the programmatic administrative oversight described above, G&T 

financial monitoring is now being conducted to ensure the appropriate use of homeland security funds consistent with Government Accountability Office (GAO) recommendations on assessing and addressing risk. Risk can be measured in association with dollar volumes, incidence significance (meaning that there are trends or 

other indicators that show a need for more in depth analysis), or with a combination 

of discretionary and random risk elements (measuring a population of awards, for 

instance). Monitoring is done using both onsite and desk reviews of grantees. 

G&T financial monitoring also includes an assessment of the flow of funds 

through the States to the localities to identify impediments and to test the appropriate use and distribution of funds. These reviews, which are conducted as part of 

an annual onsite monitoring plan by both programmatic and financial personnel 

from G&T, include the assessment of financial performance as part of a tandem 

visit. 

G&T also incorporates financial management training and assistance to grantees 

to enhance internal control measures and the proper oversight of subgrantees (localities). G&T uses internal reports, grantee financial and programmatic progress reports, and a new financial monitoring protocol and profile that assists in performance assessment and control measures. 

Although there have been periodic media inquiries regarding alleged misuses of 

our funds by State or local entities, DHS has been able to refute the vast majority 

of these claims. In many cases, outside entities do not clearly understand how DHS 

programs work, and, as such, the Department is committed to education and outreach to help clarify any questions. 

It is also worth noting that after numerous audits by various governmental agencies, including GAO, there has not been any evidence of widespread abuse of homeland security grant funds. Given the fact that the Department has granted more 

than $15 billion dollars since 9/11, this is a testament to the commitment to preparedness at the Federal, State and local levels. 

Questions 24.: The Inspector General testified on January 31st that FEMA has 

made progress in addressing problems in its contracting, such as increasing the 

number of pre-negotiated contracts. In addition, the Department has created a Disaster Response and Recovery Internal Control Oversight Board. 

Do you believe these steps will help to reduce waste, fraud, and abuse in 

future disasters? 

Response: FEMA has developed a National Contingency Plan which assists the 

Agency in preparing for upcoming disasters. As part of this plan, an acquisition 

tracker was developed which identifies procurements that support future hurricane 

seasons. The tracker helps to support the contingency plan to compete contracts for 

requirements which may be needed in the future. By aiding FEMA in competing 

contracts prior to the advent of a hurricane, the acquisition tracker will help preclude the need to procure disaster relief and recovery with unusual and compelling 

urgency. 

What else can FEMA to combat waste, fraud, and abuse in its contracting? 

Response: Supporting acquisitions prior to disasters will help combat waste, 

fraud and abuse by enabling procurement officials to include proper oversight and 

monitoring controls in the contract to counter abuse as well as ensure FEMA resources are available to properly administer and supervise the contracts. Overall, 

the use of contingency contracts will help FEMA to more effectively control its procurement and contract management processes. 

In addition to the competitive award of contingency contracts, strong contract administration will protect against fraud, waste, and abuse. FEMA has established 

contracting offices in each of the Gulf states, staffed with qualified contracting personnel. Additionally, FEMA has added contracting officer’s technical representatives 

(COTRs) in the region to ensure appropriate acceptance of good and services. Also, 

39 

it has published a FEMA contracting field guide establishing the contract administration procedures for the major contracts.

What is your role in the current reorganization of FEMA? 

Response: My role is to facilitate the reorganization. 

Question 25.: On January 31st, the DHS Inspector General testified that the Department’s internal control weaknesses, specifically those at the Coast Guard, Immigration and Customs Enforcement, and the Transportation Security Administration, 

weaken financial management within DHS. 

What is the Department doing to resolve the internal control weaknesses? 

Response: To resolve the internal control weaknesses, the Department issued its 

first ever Department-wide corrective action plan in a document entitled the Internal Controls Over Financial Reporting (ICOFR) Playbook. The ICOFR Playbook outlines the additional steps the Department will take to resolve material weaknesses 

and build management assurances. 

What additional steps should the Department take in this area? 

Response: Substantial progress was achieved in our FY 2006 financial statement 

audit. Two components, U.S. Customs and Border Protection (CBP) and the Federal 

Law Enforcement Training Center (FLETC) received favorable audit outcomes. CBP 

obtained an unqualified opinion on all financial statements and FLETC achieved an 

unqualified opinion on its first ever balance sheet audit. Significant progress has 

also been achieved in reducing conditions that comprise the Department’s material 

weakness structure. For example, most significantly the U.S. Immigration and Customs Enforcement (ICE) eliminated five of its seven component-level material weakness conditions. 

Question 26.: In 2004, Congress passed the Department of Homeland Security 

Financial Accountability Act which strengthened the role of the Chief Financial Officer and required audits of the Department’s internal controls. 

What is the status of the Department’s compliance with this Act? 

Response: The Department has made steady and continuous progress in implementing the Department of Homeland Security Act. In FY 2005, Secretary Chertoff 

issued an assurance statement on internal control over financial reporting. In FY 

2006, the Department’s Inspector General issued an audit opinion on the Department’s internal controls over financial reporting. In addition, the Department’s 

Chief Financial Officer was confirmed by Congress. Finally, Secretary Chertoff approved the Department’s first ever Department-wide corrective action plan to address material weaknesses reported in the Secretary’s assurance statement and the 

Inspector General’s audit opinion. 

When do you believe the Department will receive its first clean audit 

opinion? 

Response: A favorable audit opinion is dependent upon successful execution of 

corrective action plans. Currently corrective actions are scheduled to be completed 

by 2010. 

Question 27.: The DHS Inspector General testified on January 31, 2007, that his 

information security audits identified a number of information technology (IT) risks 

and vulnerabilities within the US-VISIT program. 

What are these vulnerabilities? 

Response: OIG–06–39 Enhanced Security Controls Needed for US-VISITs System Using RFID Technology Audit Closed—As of November 7, 2006, in a memo 

from Assistant Inspector General Frank Deffer, all recommendations associated 

with this audit were closed. 

OIG Report 06–16 US-VISIT System Security Management Needs Strengthening 

Recommendation 1: Ensure that CBP’s Information Systems Security Manager 

follows up with the local system administrators at the ports-of-entry (POE) to ensure that the security vulnerabilities identified for US-VISIT systems are remediated. 

Original DHS Response: Both the US-VISIT Program Office and CBP management concurred with this recommendation. Based on the vulnerability scanning results, the US-VISIT Program Office will independently determine whether US-VISIT 

information or assets are at risk. CBP Technology Operations will organize a team 

of local administrators to generate a plan for the recommendation of identified POE 

vulnerabilities and for addressing subsequently identifies vulnerabilities by March 

31, 2006. 

DHS 5/23/06 Update: On March 30, 2006 CBP generated a plan for the recommendation of identified POE vulnerabilities and for addressing subsequently idenVerDate Nov 24 2008 10:33 May 21, 2009 Jkt 000000 PO 00000 Frm 00043 Fmt 6601 Sfmt 6621 H:\DOCS\110-HRGS\110-11\35270.TXT HSEC PsN: DIANE
40 

tified vulnerabilities. By August 31, 2006, CBP plans to remediate currently vulnerable US-VISIT systems. By May 31, 2006, CBP plans to implement a vulnerability 

management process for US-VISIT systems. 

OIG 10/3/06 Evaluation: The attached ‘‘Plan for Correcting Security 

Vulnerabilities in US-VISIT Systems’’ meets the intent of our audit recommendation. US-VISIT systems will be tested to ensure existing vulnerabilities have been 

remediated when we schedule a subsequent follow-up audit of the US-VISIT security program. 

Status: CLOSED 

Recommendation 2: Establish MOUs and Interconnection Security Agreements 

(ISA) between CBP, ICE and the US-VISIT Program Office for the interconnections 

to the US-VISIT backbone. US-VISIT, in conjunction with CBP and ICE, has completed all required actions resulting from this finding. 

Recommendation 3: Revise the MOU with the Department of State to ensure 

that it defines the responsibilities for establishing, operating, and securing the interconnection between US-VISIT and the Department of State systems. Additionally, 

the US-VISIT CIO should formally approve the MOU and ISA with the Department 

of State. US-VISIT is continuing to work with Department of State to update the 

Memorandum of Understanding to reference the appropriate Interconnection Security Agreement. 

Recommendation 4: Establish MOUs with key US-VISIT participants to ensure 

that security requirements are documented and agreed to before non-DHS systems 

are connected to US-VISIT’s backbone. US-VISIT partially concurred with this recommendation. All external connections to the US-VISIT backbone are documented 

in appropriate ISAs. The OIG accepted US-VISIT’s response that all current external connections to the US-VISIT backbone systems are documented in appropriate 

ISAs. US-VISIT will continue to follow existing policies and procedures to ensure 

that MOUs are established and reference ISAs (where appropriate) to ensure that 

security requirements are agreed upon with external agencies prior to connecting 

non-DHS systems to the US-VISIT backbone. 

Recommendation 5: Ensure that ISAs for the systems comprising US-VISIT’s 

backbone and external organizations are current and formally approved by the USVISIT CIO. Remaining action items reside within CBP for mitigation. 

Recommendations 6: Establish a formal structure for the oversight and management of the security for the US-VISIT Program. US-VISIT deferred to the DHS 

CIO for response. The OIG has requested that the DHS CIO formally respond with 

the actions that have been or will be taken to address this recommendation. 

Recommendation 7: Provide US-VISIT’s CIO with sufficient authority to oversee 

all elements, including the system security, of the future architecture of the USVISIT Program. US-VISIT deferred to the DHS CIO for response. The OIG has requested that the DHS CIO formally respond with the actions that have been or will 

be taken to address this recommendation. 

Will the program’s reorganization into the new National Protection and 

Programs Directorate have an impact on their information technology 

problems—either negatively or positively? 

Response: The reorganization of the US VISIT program into the new National 

Protection and Programs Directorate will have a positive impact on US VISIT information technology problems. The new National Protection and Programs Directorate 

CIO and his staff are from the Preparedness Directorate Information and Technology Division. This office is recognized throughout the Department of Homeland 

Security and the government as one of the top performing Information and Technology (IT) organizations. Their strengths are in Project and Program Management, 

Enterprise Architecture, and IT Security as demonstrated by awards from the IT 

industry. 

What progress has the Department made in its efforts to establish resiliency and continuity of operations for its information technology systems 

in the event of a disaster? 

Response: DHS is establishing a redundant IT architecture to ensure continuity 

of operations is maintained in the event of a disaster. We are transitioning IT applications from over 17 data centers to 2 active-active data centers with coop capabilities established as a design feature in these new data centers. Additionally, the department is establishing a common email system and reducing its five WAN to one 

WAN (with two active-active Network Operations Centers and Security Operations 

Centers and supported by two separate carriers) to ensure resiliency. 

What are the major IT challenges at the component level of the Department? 

Response: 

41 

a. Some component CIOs do not have sufficient visibility into all the IT being developed or proposed to be developed within their agencies. They are unable to ensure elimination of duplication where not desired and consistency with the target 

architecture of DHS. 

b. Components have a lack of understanding and implementation of Earned 

Value Management and portfolio management principles. 

c. Component Information Security challenges stem from the rapid adoption of 

new information technology by DHS to more effectively accomplish its mission. 

ew IT drives the need for new security policies and architecture to enable its 

use at an acceptable level of risk. Further, NIST and OMB continue to evolve 

security requirements and standards to address emerging threats to information systems. These new and emerging security requirements drive the need for 

continuous updates of DHS information security polices, implementation oversight and metrics reporting. 

As new requirements and standards are issued, there will be specific audit findings by the DHS Inspector General (IG) and the Government Accountability Office 

(GAO) for improvement with implementing processes and verification procedures to 

meet these new requirements. New weaknesses that are identified as a result of additional requirements will increase remediation efforts across DHS and impact the 

amount of management and oversight required by the DHS Information Security 

Program. 

d. Components are implementing the One Infrastructure vision and migrating 

to the consolidated infrastructure environment. The consolidated infrastructure 

which is being developed and deployed by the Department’s Infrastructure 

Transformation Program (ITP), provides capability for addressing continuity of 

operations requirements and establishes a resilient technical infrastructure that 

is managed at the enterprise level. (1) Migration efforts to the enterprise email 

and network solutions are underway. Migration to the consolidated data center 

environment has initiated, and in that regard, a migration strategy is being developed to support Components in their understanding of the planning, scheduling, funding, and the technical resources required achieve a data center migration, as well as engineering support to facilitate any necessary modification 

of applications to run in the enterprise data center environment. 

e. Components are challenged with working through legacy barriers and component-specific data repositories to obtain visibility across the Department. (2) 

Headquarters has established the Global Address List for email which provides 

a centralized data repository as well as the management processes neeeded to 

ensure accurate, timely information at the Component level. Additionally HQ 

has chartered the Single Sign-On project which will develop and deploy the 

technical solutions needed to provide secure, consistent, authentication to Component and Department resources. 

How is Headquarters working with the components to assist them in addressing their IT challenges? 

Response: 

a. Through its investment and procurement review process DHS is instilling the 

concept of IT as a utility service that is obtained from the component agency 

CIOs. Individual programs and projects should not own their technology but receive that service from the CIO. 

b. By establishing a contract vehicle whereby component Program Management 

Offices can conduct Earned Value Management assessments and surveillance of 

their major investments in a developmental phase, and by working with component IT and functional staff to establish operational portfolio management organizations. 

c. By developing guidance and training material for component Program Management Office staffs to enhance the awareness of Earned Value Management 

and portfolio management principles, and IT investment and budgeting reporting procedures. 

d. By providing detailed guidance through distribution of the DHS Information 

Security Handbook, the DHS Certification & Accreditation Methodology, the Information Security SM Guide, and the Plan of Action & Milestone Guide. 

e. Making available specialized training and training material: POA&M Training, FISMA Reporting Training, C&A Training, NIST SP 800–53 Training, Annual DHS Security Workshop & Conference, Annual Security Awareness Training Materials, and Component Specific Training as requested. 

f. Performing Component Information Security Assistance Visits: Information 

Security Teams are made available to all components for assisting in FISMA 

reporting, C&A, POA&M Reporting, and Remediation Activities. 

42 

Question 28.: Recognizing that the Department was under tremendous 

time pressure to roll out an information sharing network at the earliest 

possible time, is it fair to say that the Homeland Security Information Network (HISN) has provided a benefit to states and localities? 

The Inspector General’s Major Management Challenges report states that ‘‘potential users do not regularly use HISN’’ because of a lack of training by the Department at the time of the program’s establishment. Anecdotally, the Committee has 

heard that the Department is using HISN to issue a number of homeland security 

alerts and the network is being used by states and localities. 

What type of training or other guidance would you suggest the Department institute for HISN users? 

Response: 

Many states have adopted HSIN as the centerpiece for information sharing 

throughout the state. They are using it for situational awareness, emergency management and law enforcement coordination, and collaboration with the private sector. 

In the past the HSIN program office retained ownership of many aspects of the 

system that inherently belong to the end users. These aspects included content control, personnel access, and individual site administration. This control has contributed to low user rates. The new program office is relinquishing ownership of these 

aspects through a controlled release. Training, policies, and procedures are being established to ensure proper use and understanding of the technology. This effort is 

promoting a renewed interest in participation across the communities of interest. 

Efforts are underway to provide technical bridges between HSIN and other collaboration tools in use within the states. This initiative will enable states to be part 

of the HSIN community of users while they to continue to use the solutions they 

have invested in and built long-standing processes around. 

Although training has been cited as one of the prime reasons for limited use of 

HSIN, it is more accurate to cite the lack of mission-focused operational training. 

The program has lacked the involvement of the operational components of the Department. HSIN was deployed as the primary tool for sharing terrorism and all hazards information but the program office failed to engage the Department components to ensure that content would be delivered. In an effort to rectify this deficiency Operations Coordination is: 

• Standing up the HSIN Advisory Council. This council will work to create policies that will help overcome major obstacles preventing information flow, 

• Hiring a full-time resource to help establish governance and procedures for 

sharing content across HSIN, and 

• Standing up a department-wide group—HSIN Mission Coordination Committee—that will focus on ensuring the system is developed to enable the specific information sharing missions of each of the components. 

A few components are using HSIN extensively in the execution of their mission. 

FEMA has integrated the tool in all emergency management coordination and has 

conducted extensive training across the nation. The USCG has begun to use the tool 

as its primary coordination tool for exercises and missions that require large-scale, 

real-time collaboration. CBP has constructed collaboration space for each of its sectors to enable seamless information flow and situational awareness. 

Although these examples demonstrate the viability of the system, efforts to connect the mission owners and the information they produce remains a work in 

progress. Initiatives underway to connect mission owners include: 

• Single-Sign-On and Identity Management—this will enable seamless interaction and trusted sharing across communities 

• Security layering—this will enable appropriately restricted information flow 

and relieve reluctance to share data 

• Additional collaboration tools—to include geospatial data exchange and event 

visualization 

• Information feeds from other agencies’ collaboration tools—to include 

Intelink-U, RISS, and LEO 

Question 29.: The Integrated Deepwater System Program (Deepwater) is a $24 

billion, 25-year acquisition program designed to replace and modernize the Coast 

Guard’s aging and deteriorating fleet of ships and aircraft. The Committee is informed that approximately $5 billion has beenobligated to date. 

The DHS Inspector General has released audits reflecting a number of significant 

challenges with the Deepwater program. 

How are you working with the Coast Guard to improve the contract oversight in the Deepwater program? 

43 

Response: The Chief Procurement Officer (CPO) has been actively engaged in the 

oversight of the Deepwater program since the inception of the Department. Separate 

from the general oversight of the USCG Acquisition Operations, Deepwater has 

been the specific subject of numerous reviews by the CPO and CPO Staff. CPO and 

the Acquisition Oversight Staff have been part of every major review of the program 

beginning with the review of the updated ORD to account for changes in requirements brought on by the attacks of 9/11/01. We have reviewed each change to the 

Program and each quarterly report to Congress as well. The CPO Acquisition Oversight staff participated with the Deepwater staff in several GAO and DHS OIG reviews conducted over the past 3 years. The DHS CPO was instrumental in advising 

USCG to seek outside assessment on the critical portions of the Deepwater acquisition. The DHS CPO Acquisition Oversight Team was one of the first offices outside 

USCG to review and comment on the application of Earned Value Management data 

on the program and sought refinement of several cost estimates as a result of that 

review. Reviews of the Deepwater program have been conducted by several levels 

of DHS Management and the CPO and CPO Acquisition Oversight staff have been 

intimately involved in each. The DHS CPO Acquisition Oversight Team closely reviewed, for example, the entire process for assessing and awarding the first Award 

Term for the Deepwater contract. 

What steps should DHS take in the short-run—and long-run—to ensure 

this major program is managed most efficiently and cost-effectively? 

Response: First and foremost, the DHS CPO is supporting the USCG in its implementation of the USCG Blue Print for Acquisition Reform. This initiative, begun 

by the Commandant shortly after assuming command, will fundamentally change 

the way that the USCG does business and will focus assets in the areas of requirements generation, program management, contracting and logistics where needed 

and when needed. DHS CPO supports the request to Congress by USCG to have 

personnel costs shifted from Deepwater specific appropriations to the general Operations Expense appropriation so as to give the USCG the flexibility to place human 

resources in the most efficient manner possible and no longer be constrained by 

rigid personnel limitations in program specific appropriations. The DHS CPO and 

the CPO’s Acquisition Oversight Team will continue to engage the USCG at every 

level in the routine oversight activities involved in the review of Acquisition documents such as Acquisition Program Baselines, Acquisition Plans, selected contract 

documents. The Acquisition Oversight Team is part of the departmental executive 

review of each major action and attends every meeting involving Deepwater with 

DHS external organizations. As circumstances arise, the DHS CPO has the ability 

and commitment to assign special reviews to the Acquisition Oversight Team and 

has done so recently with respect to the coordination of the updated set of Acquisition Documentation including an updated Program Baseline and Acquisition Plan. 

The Team has recently reviewed the Acquisition Plan for the Fast Response Cutter 

(FRC) B-Class and has submitted numerous comments on the draft plan. his plan 

provides evidence of the changes that have taken place in the Deepwater program 

in the past several months as it marks the departure from the Systems Integrator 

as the sole acquiring agency for major Deepwater Assets. 

Question 30.: In the 109th Congress, the Management, Integration, and Oversight Subcommittee, which I chaired, held three hearings as part of its in-depth examination of the current camera system on our borders known as the Integrated 

Surveillance Intelligence System, or ISIS. The Subcommittee found rampant waste 

and mismanagement in the Department’s oversight of the ISIS program. 

Last September, DHS announced the award of the new Secure Border Initiative 

contract, known as SBInet. This multi-year, multi-billion dollar program is intended 

to cover both the Northern and Southern borders. 

On November 15, 2006, we held a hearing on the SBInet contract, and the Inspector General testified and released a Management Advisory raising specific concerns. 

One of the issues raised in the Management Advisory was that the Department 

lacked the necessary number of acquisition and procurement staff to manage a new 

major acquisition program like SBInet. 

Do you believe the Department currently has the necessary number of 

trained personnel to effectively manage the SBInet contract? Other major 

contracts? 

Response: No. The Department has grown significantly over the last couple of 

years in terms of personnel and acquisitions. It has been a challenge to grow the 

acquisition and procurement workforce commensurate with Department growth. Ensuring that DHS has the right number of acquisition professionals with the right 

skills is one of the top priorities. DHS is conducting an assessment on the utilization 

of acquisition professionals in the Department to ensure that people with optimal 

44 

skills currently work in DHS. To complement this, the Undersecretary for Management has initiated a Department-wide acquisition recruitment effort. The CPO has 

been asked to lead this effort with support from the Chief Human Capital Officer. 

As DHS continues to recruit, it will consider using non-DHS resources to help address our staffing shortages—this includes use of non-DHS government personnel 

for acquisition and procurement support (such as the Defense Contract Management 

Agency and the Defense Contract Audit Agency) as well as some contractor support. 

How do you plan to monitor the Department’s progress to limit the potential for waste and abuse in SBInet and other major contracts? 

Response: With regard to monitoring the Department’s progress on achieving effective acquisition and procurement, the CPO is responsible for implementing the 

four-step Acquisition Oversight program. These steps include acquisition planning, 

Component self-assessments, Component operational assessments and procurement 

management reviews of the Components. Considerable progress has been made in 

implementing this oversight plan, with the initial implementation of the first three 

steps largely done, and the implementation of the last step commenced. Programs 

of significant importance and size, like SBInet, will receive additional reviews as appropriate. 

QUESTIONS FROM THE HONORABLE MICHAEL T. MCCAUL

Question 31.: Under the National Technology Transfer and Advancement Act, 

Federal agencies are required to use voluntary consensus standards that are developed by private sector standards bodies. This policy correctly directs federal agencies to rely on the expertise of our nation’s private sector standards development 

system as a means to prevent duplication of efforts and to save taxpayer dollars. 

Importantly, the Act also requires federal agencies to participate in the activities 

of voluntary, private sector, consensus standards bodies. 

I am very concerned that DHS and its agency components have not regularly participated in the standards development activities of private sector standards bodies 

developing standards in critical areas that go to the heart of your agency’s functions 

and mission: intrusion detection, access control, video surveillance, and other efforts 

related to the interoperability of disparate electronic security system components. I 

believe the active participation of DHS in these private sector standards areas 

would be a wise use of agency and taxpayer resources. 

Could you please explain the current level of DHS participation, or lack 

thereof, in these standards areas? 

Also, what plans have been developed or are being developed to promote 

DHS participation? 

Are there any regulatory or statutory issues that need to be addressed to 

promote participation? 

Response: The Department takes an active role in private sector standards organizations’ standards development activities and has specific ongoing efforts in these 

areas. 

The Department has adopted a policy that all standards activities will be conducted in accordance with the relevant provisions of the National Transfer and Advancement Act (PL 104 113) and the Office of Budget and Management (OMB) Circular A–119. In 2006, DHS reported 35 agency representatives involved in 100 activities. 

The Science & Technology Directorate’s Office of Standards coordinates and encourages participation in standards development across the Department and with 

private sector standards organizations. This includes partnering with the American 

National Standards Institute’s Homeland Security Standards Panel (ANSI–HSSP), 

which promotes a positive, cooperative partnership between the public and private 

sectors in order to meet the nation’s needs for homeland security standards. The 

ANSI-HSSP has membership from over 40 private sector standards development organizations including the National Electronics Manufacturers Association (NEMA), 

the Security Industry Association (SIA) and the American Society for Industrial Security (ASIS International). The ANSI–HSSP provides a forum that engages DHS, 

the private sector, and private sector standards development organizations on homeland security standardization issues. 

In the area of access control, the S&T Directorate is engaging the standards community to help facilitate the transfer of an access control technology known as the 

Policy Machine to commercial entities. This effort, which includes publishing papers 

and performing demonstrations, mirrors the process used to develop the Role-based 

Access Control Standard adopted by ANSI and the International Committee for Information Technology Standards (INCITS), ANSI INCITS 359–2004, which is in 

45 

wide use today. Additional plans include developing a suite of related standards and 

promoting these standards as a member of an ANSI INCITS working group for the 

development of a national access control standard. 

In the area of interoperability of disparate electronic security system components, 

the S&T Directorate is providing input to standards development organizations such 

as the Institute of Electrical and Electronics Engineers (IEEE) and the Open 

Geospatial Consortium (OGC) on standards (such as the IEEE 1451 standard) for 

sensor interfaces for sensor and security networks and on the use of sensor networks for building applications. Current work aims to find standard ways by which 

data from various sensor networks can be used across platforms, and will aim to 

develop metrics and test methods by which sensor networks can be tested for compliance with DHS standards and requirements. The S&T Directorate is also working 

across DHS and standards development organizations on the harmonization of sensor and alert-related standards. 

Also what plans have been developed or are being developed to promote 

DHS participation? 

Response: In 2006, the S&T Directorate established a DHS Standards Council 

to improve coordination and participation in the development and implementation 

of voluntary consensus standards. The DHS Standards Council is working with the 

S&T Directorate’s Office of Standards to create guidance on Departmental participation in the development and use of non-Government Standards. This guidance is expected to be issued by year’s end. At the next Council meeting in April, the S&T 

Directorate plans to request that the council develop a strategy to improve DHS 

overall participation in standards bodies that affect the interoperability of electronic 

security systems components. 

Are there any regulatory or statutory issues that need to be addressed to 

promote participation? 

Response: Through the DHS Standards Council, the S&T Directorate Office of 

Standards will work with General Counsel, to explore if there are any regulatory 

or statutory issues that need to be addressed to promote participation. 

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