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45–574 PDF 2009

S. Hrg. 110–847 

MANAGING THE CHALLENGES OF THE FEDERAL 

GOVERNMENT TRANSITION 

HEARING 

BEFORE THE

OVERSIGHT OF GOVERNMENT MANAGEMENT, 

THE FEDERAL WORKFORCE, AND THE 

DISTRICT OF COLUMBIA SUBCOMMITTEE 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 10, 2008 

Available via http://www.gpoaccess.gov/congress/index.html 

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs 

( 

(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

BARACK OBAMA, Illinois 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

SUSAN M. COLLINS, Maine 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

TOM COBURN, Oklahoma 

PETE V. DOMENICI, New Mexico 

JOHN WARNER, Virginia 

JOHN E. SUNUNU, New Hampshire 

MICHAEL L. ALEXANDER, Staff Director 

BRANDON L. MILHORN, Minority Staff Director and Chief Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL 

WORKFORCE, AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE 

DANIEL K. AKAKA, Hawaii, Chairman 

CARL LEVIN, Michigan 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

GEORGE V. VOINOVICH, Ohio 

TED STEVENS, Alaska 

TOM COBURN, Oklahoma 

JOHN WARNER, Virginia 

RICHARD J. KESSLER, Staff Director 

EVAN W. CASH, Professional Staff Member 

JENNIFER A. HEMINGWAY, Minority Staff Director 

JESSICA K. NAGASAKO, Chief Clerk 

(III) 

C O N T E N T S 

Opening statements: Page 

Senator Akaka .................................................................................................. 1 

Senator Voinovich ............................................................................................. 3 

WITNESSES 

WEDNESDAY, SEPTEMBER 10, 2008 

Gene L. Dodaro, Acting Comptroller General, U.S. Government Accountability 

Office ..................................................................................................................... 5 

Hon. Clay Johnson III, Deputy Director for Management, Office of Management and Budget .................................................................................................. 6 

Hon. Robert I. Cusick, Director, Office of Government Ethics ............................ 8 

Gail T. Lovelace, Chief Human Capital Officer, U.S. General Services Administration ................................................................................................................. 9 

ALPHABETICAL LIST OF WITNESSES

Cusick, Hon. Robert I.: 

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

Prepared statement .......................................................................................... 56 

Dodaro, Gene L.: 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 29 

Johnson, Hon. Clay III: 

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

Prepared statement with attachments ........................................................... 44 

Lovelace, Gail T.: 

Testimony .......................................................................................................... 9 

Prepared statement .......................................................................................... 61 

(1) 

MANAGING THE CHALLENGES OF THE 

FEDERAL GOVERNMENT TRANSITION 

WEDNESDAY, SEPTEMBER 10, 2008 

U.S. SENATE, SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT

MANAGEMENT, THE FEDERAL WORKFORCE, AND THE DISTRICT OF COLUMBIA, OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:32 p.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Daniel K. Akaka, 

Chairman of the Subcommittee, presiding. 

Present: Senators Akaka and Voinovich. 

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA. Good afternoon, everyone. This hearing of the 

Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia is called to order. 

Today’s hearing will discuss the important task of transitioning 

the Federal Government to a new Administration. Every 4 or 8 

years, the Executive Branch of our government changes hands to 

a new leader through a peaceful transfer of power not possible in 

many countries around the world. However, with this peaceful 

change comes many challenges for both the incoming and the outgoing Administrations. 

On January 20, 2009, we face the certainty of having an entirely 

new Administration, one in which neither the sitting President nor 

Vice President will be taking the oath of office. With both major 

parties’ political conventions over, now is a good time to focus on 

the looming challenges ahead. As is the case before almost every 

general election, both candidates no doubt have already begun laying groundwork for a potential move into the White House. 

The issue of especially great importance for this Subcommittee is 

bridging the gap between January 19 and January 21, 2009, to ensure there is continuity in leadership and management at all Federal agencies. Now, Presidential appointees must be acted upon 

quickly. They should be ready to lead when they assume their new 

positions. 

Going back to the first transition between George Washington 

and John Adams, no two transitions have ever been the same. 

While every single one is different, many share the same potential 

barriers to success. Probably the most difficult problem for us to 

face is that of the Presidential appointment and nomination procVerDate Nov 24 2008 09:50 Jul 08, 2009 Jkt 045574 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 P:\DOCS\45574.TXT SAFFAIRS PsN: PAT
2 

esses. The Senate has a direct role in this, but cannot act until the 

Administration has done its job. 

Previous Administrations typically have not filled critical positions for up to 6 months, or longer, after taking office. Unfortunately, much of the delay can come from the tedious vetting process that is used to get appointees confirmed. The White House can 

take its time selecting a nominee. Then the nominee can take his 

or her time filling out the paperwork required by both the Senate 

and Executive Branch before any hearings are scheduled. Even 

after that information is submitted, getting final security clearance 

determinations and ethics sign-off for certain positions can take a 

very long time. 

Another one of the biggest challenges to a successful transition 

lies in the transfer of knowledge from one Administration to the 

next. I know that Director Johnson has been aggressive in getting 

agencies ready for January. I want to thank him for his long service to our country and to this Subcommittee. This is likely the last 

time he will testify before us, and I want him to know that I do 

appreciate his leadership and his willingness to work with us over 

the years. One of his top priorities has been making sure that career civil servants are in place to bridge the gap until Presidential 

appointees are confirmed, and I strongly support that effort. I suspect that he holds the record for appearing before this Subcommittee, and I think, if I heard it correctly, you appeared before 

this Subcommittee more than half a dozen times. And he has been 

a very valuable witness before us. 

Unfortunately, the Federal Government is already facing a 

human capital crisis. Agencies will rely on career individuals to 

continue the critical needs of agency management, not the least of 

which is continuing to recruit, train, and retain an outstanding 

Federal workforce. This will be especially important at agencies 

with non-career chief human capital officers. I hope the Presidentelect will even consider keeping some of these political appointees 

in their positions. 

There is also a new issue for the incoming Administration. Unlike the past, especially since the creation of the Department of 

Homeland Security, there has been an explosion of contractors 

doing government work. Tremendous numbers of contract staff 

work side by side with Federal employees across the government. 

The next Administration will need to make oversight of contracts 

and contractors a high priority. With fewer and fewer career employees at agencies and more and more contractors, it is important 

to fill leadership positions quickly to ensure proper oversight. 

In closing, I want to especially thank Senator Voinovich for his 

partnership on this issue and his continued work on the important 

management issues that this transition will highlight. It is a testament to the bipartisan nature of our job here which is to make sure 

that the government works and continues to work under a new Administration. For our part, we will be working closely with the outgoing and incoming Administrations over the next 5 months. While 

the Senate likely will wind down for the year in the next few 

weeks, I can assure you that this Subcommittee and our staff will 

continue to conduct rigorous oversight of these issues. 

3 

Let me now call on Senator Voinovich for his opening statement. 

Senator Voinovich. 

OPENING STATEMENT OF SENATOR VOINOVICH 

Senator VOINOVICH. Thank you, Senator Akaka, for calling today’s hearing to examine the Administration transition. I would 

also like to acknowledge the partnership that I have had with you. 

We have been at this at least 8 to 10 years. The two of us have 

tried conscientiously to provide legislation that will make it easier 

for the Federal Government to recruit and to retain and to reward 

individuals, and hopefully this Administration and the one coming 

in will benefit from that effort. 

I know that we are very familiar with the transition progress of 

certain agencies, and I think that it is fair to say that the creation 

of a chief management officer whose statutory duties include transition planning is one of the reasons DHS continues to lead by example in this area. I had met Secretary Mike Chertoff in Cleveland 

and congratulated him on the wonderful transition plan that he 

has put together. He is conscientiously trying to make sure that 

when he hands off the baton, it is not going to be dropped. And I 

think that is pretty important, particularly in that agency. 

With just over 4 months before inauguration, I look forward to 

hearing our witnesses discuss our general level of readiness for the 

transition. I also hope we will use this time to take a fresh look 

at the Presidential Appointments Improvement Act and determine 

whether additional reform is needed. Since 1937, when the 

Brownlow committee issued the first report on improving the appointments process, Congress has enacted incremental changes, including most recently the Intelligence Reform and Terrorism Prevention Act. As the sponsor of the last comprehensive Presidential 

appointment reforms bill before the full Committee, I believe our 

transition process could benefit from further reform, including 

streamlining the financial disclosure process and reducing the time 

it takes for individuals to be nominated and subsequently confirmed. And we will probably be hearing from you about some of 

your ideas on that. 

The management challenges of GAO’s high-risk list should serve 

as a reminder that all leaders, regardless of the position to which 

they are nominated, will face unique challenges critical to the effective functioning of our government. Thus, the quality of each Presidential nominee must be carefully scrutinized to ensure our next 

class of leaders has the capacity to identify plans for and implement reform. It is my hope that my colleagues in the Senate will 

use the questions being developed by GAO to assess the management experience and capabilities for nominees to leadership positions. The Senate needs to send a clear and consistent message 

that a nominee’s management qualifications will be an important 

consideration in their appointment. 

And, by the way, it is disappointing to me that one of the first 

impressions of government for the new class of political appointees 

will be the antiquated security clearance system. And I know, Mr. 

Johnson, you are working on that. 

As qualified leaders begin their new roles, they must also dismiss 

the rhetoric and bias against individuals who have chosen to serve 

4 

the public as members of the civil and uniformed services. The next 

team of political leaders must find ways to better engage these individuals, who often bring the institutional knowledge and a valid 

perspective to the task at hand. And based on my observation, it 

seems too often that these capable men and women selected on the 

merits are ignored when new political leadership takes hold. 

Last, agency management will be hindered by Congress’ inability 

to pass appropriations bills, and I intend to spend some time on the 

floor of the Senate. We have been working on that for over a year, 

and I think, Mr. Dodaro, you have been helping us, and the Congressional Research Service. It is just unacceptable that we continue to pass continuing resolutions and omnibus appropriation 

bills. The impact that this has on the management of government 

is just horrendous. And then you cascade that down to State and 

county government. 

The new Presidential team will begin on an uneven playing field, 

with agencies trying to meet their program needs under a continuing resolution while preparing for their first budget of the new 

Administration, scheduled for release less than 20 days after the 

inauguration. The fiscal health of our Nation will require tough 

choices at every agency, an unenviable but necessary task. 

Mr. Chairman, before I conclude, I would like to take a moment 

to thank Mr. Johnson for his dedicated service. I think the Chairman of the Subcommittee has laid out pretty clearly that you have 

been around here quite often. 

Mr. JOHNSON. A usual suspect. 

Senator VOINOVICH. Yes. I suspect you have spent more time 

here than any of your predecessors. And I know that you have had 

a very difficult job. When I came here, my goal was to reinsert the 

‘‘M’’ into OMB, and I think that when you leave, you can say, ‘‘I 

was responsible for putting the ‘M’ back into OMB.’’ I really appreciate your service. Senator Akaka and I also appreciate the strategic plans that you have put forward to address the management 

challenges of agencies that are on the high-risk list. We are going 

to take all of that material and build on it. 

So, again, sharing what Senator Akaka said, you can be assured, 

all of you, particularly you, Mr. Johnson, that we are going to take 

the work that you have done, and we are going to continue to stay 

on top of it and build on what you have been able to achieve during 

your time in the Administration. We really appreciate the fact that 

you are sticking around until the end and not tipping your hat and 

leaving. Thank you. 

Senator AKAKA. Well, thank you very much, Senator Voinovich, 

and I always appreciate your strong interest in oversight of the Administration transition. 

It is now my pleasure to welcome our witnesses here today. Gene 

Dodaro is the Acting Comptroller General at the Government Accountability Office. 

Clay Johnson is the Deputy Director for Management at the Office of Management and Budget. Mr. Johnson also led the transition team for President Bush in 2001. 

Robert Cusick is the Director of the Office of Government Ethics. 

Gail Lovelace is the Chief Human Capital Officer at the General 

Services Administration. 

5 

1The prepared statement of Mr. Dodaro appears in the Appendix on page 29. 

As you know, it is the custom of this Subcommittee to swear in 

all witnesses, so I ask all of you to stand and raise your right hand. 

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

this Subcommittee is the truth, the whole truth, and nothing but 

the truth, so help you, God? 

Mr. DODARO. I do. 

Mr. JOHNSON. I do. 

Mr. CUSICK. I do. 

Ms. LOVELACE. I do. 

Senator AKAKA. Thank you very much. Let the record note that 

our witnesses responded in the affirmative. 

Thank you, and I look forward to this hearing, and I would like 

to ask Mr. Dodaro to please proceed with your statement. 

TESTIMONY OF GENE L. DODARO,1 ACTING COMPTROLLER 

GENERAL, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. DODARO. Thank you very much, Mr. Chairman and Senator 

Voinovich. We are very pleased to have this opportunity to talk 

about GAO’s planning for the upcoming transitions. 

As you well know, we have a long tradition of helping each new 

Congress get its agenda together and begin its progress. But there 

were amendments made to the Presidential Transition Act in the 

year 2000 that also cite GAO as a resource for incoming Administrations to tap to learn about their management challenges and 

risks. And so we take these responsibilities very seriously and are 

planning our efforts to support these transitions with several objectives in mind. 

First, we want to provide our insights based on work we have 

done, our institutional knowledge, and to pressing national issues. 

Some examples include the oversight of the housing and financial 

institutions and markets, including recent developments regarding 

Freddie Mac and Fannie Mae, as well as the status of the Bank 

Insurance Fund, and a range of national security and homeland security issues, including U.S. efforts in Iraq and Afghanistan. 

Second, we want to underscore the need for the incoming Administration to realize there is a growing need to not only organize 

within departments and agencies, but more issues require collaborations and partnerships at different governmental levels and with 

other countries and with the nonprofit sector. Some examples here 

that we will highlight are financing challenges associated with 

modernizing our transportation infrastructure, food safety issues, a 

range of planning efforts for health care, emergencies as well as 

the National Response Plan for both potential manmade and natural disasters. 

Third, given the pressing budget challenges that we have, we are 

going to highlight and target areas where resources could be conserved to help support new initiatives. There are improper payments being made right now, over $55 billion a year. Efforts have 

been made to try to bring that down, but that can be a source of 

additional savings, as well as trying to bring the cost growth of 

DOD weapons systems under control. Our last report showed that 

6 

1The prepared statement of Mr. Johnson with attachments appears in the Appendix on page 

44. 

the cost growth had been $295 billion over a few years, and so that 

is another area. 

We also have a tax gap that IRS estimates, a net tax gap of $290 

billion. And so there are ways to really begin with concerted efforts 

to try to tackle these areas. They will not be easy, but with concerted efforts, we think they could yield substantial benefits. 

Also, we want to highlight the capacity-building efforts that are 

required within individual departments and agencies. If these capacity-building efforts are not attended to, they are going to affect 

the policy implementation of whatever agenda the new Administration is going to pursue. Over one-third of the Federal workforce will 

be eligible to retire on the next Administration’s watch. As has 

been pointed out here today, we are going to emphasize the need 

to fill some of the senior leadership teams in those departments 

with experienced managers. 

We also agree with statements that have been made, Senator 

Akaka, by you and Senator Voinovich that there is an increasing 

reliance on contractors to carry out activities, and the new Administration needs to approach their management responsibilities with 

that recognition as well as bringing poor-performing information 

technology projects into line going forward. 

Also, we are going to continue to emphasize the need to maintain 

the momentum on the high-risk efforts. This Subcommittee is to be 

commended for the attention that it has given to that area. I would 

like to acknowledge the commitment that Mr. Johnson has made, 

and OMB, to that area. The high-risk area really has helped serve 

as a management improvement agenda, not only for the Bush Administration but for the Clinton Administration before then. And I 

think that great progress has been made, but attention needs to be 

continued on these efforts, and we are going to emphasize that 

going forward. 

Last, I would say we are going to evaluate how this Presidential 

transition unfolds. A lot of things have changed since the Presidential Transition Act provisions were put in place, and there may 

be a need in a post-September 11, 2001 environment to look at 

other legislative provisions that could be modernized to help provide better transitions in the future. 

We hope that our efforts support both new leaders as well as returning leaders, and we look forward to working with the Congress 

and the new Administration on these challenges facing our country. 

I would be happy to answer questions when we get to that stage. 

Senator AKAKA. Thank you for your statement, Mr. Dodaro. Now 

we will hear from Mr. Johnson. 

TESTIMONY OF HON. CLAY JOHNSON III,1 DEPUTY DIRECTOR 

FOR MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET 

Mr. JOHNSON. Senator Akaka, Senator Voinovich, thank you very 

much. Let me in my opening remarks talk about the specific issue 

about what we are doing, what all agencies are doing to maximize 

the chance and the probability that the next Administration will 

come in and take up where this Administration left off in terms of 

7 

working to cause the Federal Government to better spend, more effectively spend the taxpayers’ money, and more effectively every 

year. 

We cannot mandate what the next Administration is going to do 

on any management front, but the one thing we are doing is making sure that every Federal program, every management area, procurement, financial management, IT management, people management, program management, for every GAO high-risk list item, for 

security clearance reform, for national security professional development, for every do-it-better initiative, that by the end of the year 

there is a very clear definition of success; what the definition of 

success is for financial management at DOD and by what approximate time frame. Weapons system acquisition, what is the definition of success for weapons system acquisition at DOD by what 

general time frame? Make sure that this is a definition of success 

that GAO is in agreement with, that anybody relevant to this issue 

in the Senate or the House is comfortable with and OMB is comfortable with and the people in the agencies are comfortable with; 

that they agree with the time frame, they agree for the implementation plan to get there; it is clearly defined who is accountable; 

and all of this is made very transparent and very public. It is made 

available on every agency’s home page on their website, you are 

aware of it, GAO is aware of it, all the interest groups are aware 

of it, all constituent groups are aware of it, and employees are 

aware of it. And all SES who work on these GAO high-risk list 

items or on the programs or on financial management, whatever it 

is, those 2009 activities that are involved in getting to where we 

want to be on all these matters are built into the senior executives’ 

formal performance goals for fiscal year 2009. 

This is something that would not have been possible 8 years ago 

because we were not able to hold—we did not have legislation that 

allowed us to hold senior executives accountable for performance. 

They were held accountable for having certain levels of competencies. Now they can be held accountable for the performance. 

And I believe you were integrally involved in passing that legislation. But that is a very valuable tool that we have now. 

But the definitions of success, what we are trying to accomplish, 

how we are trying to accomplish it, and who is accountable will be 

very clearly defined to everybody’s mutual satisfaction, and it will 

be very apparent, very public, and very transparent. 

The next Administration, when they come in and they are trying 

to sort out what their priorities are, will inherit a lot of purposefulness, a lot of do-it-better, a lot of spend-the-money-more-effectively 

purposefulness. They will come in and almost certainly seek to install different priorities. But they will inherit a lot of purposefulness, and they will benefit from the capability that agencies have 

now, the greater capability that agencies have now to spend taxpayers’ money more effectively. Every agency can more effectively 

spend taxpayers’ money today than they could 8 years ago. So that 

will benefit this next Administration and all subsequent Administrations. They will not inherit an empty blackboard. They will inherit a blackboard full of lots of clear goals, lots of accountability, 

lots of specific ways forward. They can replace that. They can 

choose to go faster. They can choose to go slower. But they will inVerDate Nov 24 2008 09:50 Jul 08, 2009 Jkt 045574 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 P:\DOCS\45574.TXT SAFFAIRS PsN: PAT
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1The prepared statement of Mr. Cusick appears in the Appendix on page 56. 

herit a lot of way forward, and I am confident that GAO and you 

and your counterparts in the House will ensure that the next Administration continues to place the priority on spending the taxpayers’ money effectively that this Administration has placed on it. 

I look forward to your questions, and anything else between now 

and the end of the year you want to engage in. 

Senator AKAKA. Thank you very much, Mr. Johnson. 

And now we will hear from Mr. Cusick and your statement. 

TESTIMONY OF HON. ROBERT I. CUSICK,1 DIRECTOR, OFFICE 

OF GOVERNMENT ETHICS 

Mr. CUSICK. Thank you, Chairman Akaka, Senator Voinovich, for 

inviting me here today to talk about the role of the Office of Government Ethics (OGE) in the Presidential transition. I welcome the 

opportunity to share with you some of what has gone on to prepare 

for this important task. Even though the transition will be peaceful, it will be difficult nevertheless. 

Our role as the leader within the Executive Branch in ethics is 

never more important than during a Presidential transition. Since 

I became Director over 21⁄2 years ago, I learned and OGE has 

learned the lessons from past transitions and has prepared diligently for this one. 

There are over 1,100 presidentially appointed, Senate-confirmed 

positions in the Executive Branch. As the Director of OGE, it is my 

responsibility under the law to certify that a nominee’s financial interests do not conflict with his or her prospective government duties. 

This is not an easy process because the financial disclosure reports are like snowflakes. No two are alike, and the duties and 

issues that may pertain to a nominee will vary from agency to 

agency. Additionally, the complexity of investments and financial 

instruments is boundless and continues to expand. 

Frequently, a nominee will need to take certain steps in order to 

avoid conflicts of interest. These may include the sale of stock or 

other financial interests, and working with the White House and 

the agency where the individual will serve, we develop ethics 

agreements to memorialize what a nominee must do, or refrain 

from doing, in order to avoid conflicts. I understand fully the need 

for the President to have critical members of the national security 

team and others in place as soon as possible. And OGE is prepared 

to do its part to meet this challenge. 

My written testimony, which I ask be made part of the record, 

gives more detail about what OGE has done to prepare for the 

transition. But I do want to give the Subcommittee some brief examples. 

We have met with Mr. Johnson to discuss a number of possible 

actions that will speed up the financial disclosure vetting process. 

We have also had meetings with appropriate officials of the Department of State and have scheduled meetings with the Department 

of Defense and the Department of Homeland Security in order to 

discuss what we see as possible improvements to the process. We 

have contacted representatives of both Presidential campaigns to 

9 

1The prepared statement of Ms. Lovelace appears in the Appendix on page 61. 

offer briefings at their earliest convenience concerning OGE’s role 

and responsibilities. 

As the leader in Executive Branch ethics training, OGE trained 

over 250 ethics officials last February here in Washington. They 

were from more than 70 departments and agencies, and the training referred specifically to nominee financial disclosure. That training was very well received. 

We have issued written guidance to help agencies deal with complex financial instruments. Next week, OGE will conduct the 16th 

National Government Ethics Conference. This is a week-long training event for over 600 Executive Branch agency ethics officials, and 

the entire theme of this year’s conference is transition. We are producing a short video presentation introducing the financial disclosure process and conflicts-of-interest analysis for PAS appointees to 

assist them in this process and help them understand it. 

After the election and before the inauguration, we will work intensively to review financial disclosure reports of potential nominees. We will ensure clear channels of communication between the 

transition teams. And we will make OGE personnel available to 

brief members of the new Administration. These steps will ensure, 

we believe, expeditious clearance and certification of financial disclosure. 

It is an honor to be here today. It is an honor to lead the Office 

of Government Ethics, and I welcome any questions you may have. 

Senator AKAKA. Thank you very much, Mr. Cusick. 

And now we will hear the statement from Ms. Lovelace. 

TESTIMONY OF GAIL T. LOVELACE,1 CHIEF HUMAN CAPITAL 

OFFICER, U.S. GENERAL SERVICES ADMINISTRATION 

Ms. LOVELACE. Good afternoon, Chairman Akaka and Senator 

Voinovich. I am pleased to be with you here this afternoon on behalf of the General Services Administration. Presidential transition 

is the top priority for GSA, as stated by our Acting Administrator, 

Jim Williams, during his confirmation hearing before the full 

Homeland Security and Governmental Affairs Committee. Acting 

Administrator Williams, and all of us at GSA, are fully committed 

to a successful and smooth transition from the current Administration to the next. 

I believe that the transition from one Administration to the next 

is an exciting time for government. I am honored to be able to play 

a role in ensuring the smooth transition as envisioned by the Presidential Transition Act of 1963. Part of GSA’s mission is to leverage 

the buying power of the Federal Government to acquire best value 

for taxpayers and our Federal customers. We deliver superior workplaces, quality acquisition services, and expert business solutions. 

Our responsibility during Presidential transitions is to provide 

many of these same services to the President-elect, Vice Presidentelect, and members of their President transition team. We have 

started early and have good teams in place. We have secured space 

in Washington, DC for the Presidential transition team and are 

currently well positioned to provide furniture, parking, office equipment, supplies, telecommunications, mail management, travel, fiVerDate Nov 24 2008 09:50 Jul 08, 2009 Jkt 045574 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 P:\DOCS\45574.TXT SAFFAIRS PsN: PAT
10 

nancial management, vehicles, information technology, human resources management, contracting, and other logistical support as 

necessary and appropriate. We are partnering with the Secret 

Service and the Federal Protective Service as they provide security 

for the President-elect and Vice President-elect. 

We recognize that a transition can be perceived as a time of vulnerability for our country, and we have identified alternate locations and workplace solutions for the Presidential transition team 

in the event of an emergency. 

GSA provides space, services, and logistical support to the Presidential Inaugural Committee and the team that plans and stages 

the various events that make up a Presidential inauguration. GSA 

similar logistical support services to President Bush and Vice 

President Cheney to help them establish their offices when they depart the White House. GSA assists in establishing the former 

President’s office, as we do for all former Presidents. 

The Presidential Transition Act of 2000 expanded GSA’s role in 

transition specifically in two areas. We now prepare a transition directory, in conjunction with the National Archives and Records Administration, and we assist the incoming Administration with appointee orientation. The President’s fiscal year 2009 budget requested $8.5 million to 

support the Presidential transition. In the event of a continuing 

resolution, GSA will need to make sure that funds are available for 

obligation by the incoming Administration. This will require a special provision in the continuing resolution. We have notified the 

Appropriations Committee, and we are hopeful that Congress will 

ensure that these funds are in place. 

Looking inside Federal agencies, I have had the pleasure of 

meeting with many agencies, individually and in groups, to explain 

GSA’s unique role with them and to share some ideas about getting 

ready for transition. We have created a special section on our 

gsa.gov website to share information across agencies and with the 

public. We are actively working with Mr. Johnson to bring all agency transition directors together for a special session focused on 

transition. This session will reinforce the recently transition guidance that was issued by the Executive Office of the President. 

Like all other agencies, GSA is diligently working to ensure 

smooth transition within our agency. As part of our internal efforts, 

GSA has created four teams to plan for a successful transition. 

These teams are focused on: One, support to current political appointees leaving; two, continuity of GSA programs, operations, and 

services; three, logistical support to Presidential transition team 

members that may come into GSA; and, four, preparing a new 

team of appointees. As an agency, I believe we are well positioned 

to do our part to ensure a smooth transition. 

In closing, Chairman Akaka and Senator Voinovich, I want to 

thank you again for the opportunity to address you this afternoon. 

I will be happy to answer any questions you may have. 

Senator AKAKA. Thank you very much, Ms. Lovelace. 

My first question is to Mr. Dodaro. As you know, this Subcommittee has worked closely with GAO over the years to improve 

management at all agencies. Many of the issues you bring up in 

your testimony speak to the importance of management issues for 

11 

the next Administration. Unfortunately, new Administrations often 

do not recognize this importance early enough. GAO, along with 

the Congress, has made it a point to educate Administrations about 

management, but often the information is just lost in the blizzard 

of other issues. 

What can we all do to focus incoming policymakers on management issues? 

Mr. DODARO. Mr. Chairman, I think, first, what we are trying to 

focus on is to distill down very precisely what the biggest challenges are. So, in other words, prioritizing what those challenges 

are, I think, is pivotal. 

Second, I think illustrating and underscoring the effect that unless those challenges are made, they are going to implement whatever policy agenda is being pursued. 

I have been in a number of transitions over a number of years 

with different Administrations, and I would say my one observation 

consistently is that people underestimate the implementation challenges associated with any new policies they want to put into effect. And unless they understand that and we can communicate 

that to them, I think there is a tendency not to take some of these 

management challenges as seriously as possible. 

Third, unless the challenges are addressed, they can sometimes 

consume attention if management problems all of a sudden reach 

the point of a public story about waste or inefficiencies, or whatever, that divert their attention from other issues that they want 

to spend their time on and that are important for the country for 

them to spend their time on. 

So I am planning in my current capacity to try to outreach to 

new leaders as they are put in place and to underscore these basic 

points, which I think are very important and I think are going to 

become even more important given the serious budgetary and fiscal 

constraints that our government is going to face going forward. 

Senator AKAKA. Thank you. 

Mr. Johnson, you suggest that for a successful 2008 transition 

the new Administration will need to work closely with Congress 

very early on. Given your experience leading the 2000 transition 

for President Bush, what should the new Administration do differently in working with Congress? 

Mr. JOHNSON. To get its new team on the field or to work on 

management matters, or both? 

Senator AKAKA. Yes, both. 

Mr. JOHNSON. OK. Let me talk about the management challenges first. 

I know the next Administration is going to come in and inherit 

a lot of goals—goals that you think are important, that GAO thinks 

are important, and that career employees think are important—in 

terms of how to do their business, how to spend this amount of 

money to teach illiterate adults how to read. They are going to inherit a policy on this issue or that issue. And they can change 

those priorities. They could decide to do it faster or slower, but they 

are going to have to do that in the light of day, and I bet you they 

have to do it with your agreement and GAO’s maybe editorial comment. 

12 

So if you are inclined to encourage them to pay as much attention to management or even more attention to management matters than we did, I bet you will be able to communicate that to 

them, and they will have little choice but to take what they inherit 

and build from there. I cannot imagine that they can in the middle 

of the night simply walk away from the whole challenge of working 

to make the Federal Government more effective. 

So I personally am confident that the stage has been set primarily by the work of this Subcommittee and comparable committees in the House and by the continued good work with GAO and 

a little assistance from OMB and agencies and, most importantly, 

the Federal employees and agencies understand all this work is 

good for them. It is good for their agencies. It helps their agencies 

be more effective. It makes them better places to work. And they 

would make it very difficult for a new Administration to come in 

and say, we really do not care about this anymore. 

So I think you emphasizing, as you can do very effectively, to the 

next Administration how important these things are, and if they 

decide to change the priorities, that you ask why. Why are you 

choosing to go slow? Or why are you choosing to place less emphasis on this than in previous Administrations if that is the case? So 

you can bring a lot of pressure to bear on their continued attention 

to management matters? 

In terms of working with the Senate, getting the new team on 

the field, the biggest responsibility is on the new Administration to 

do the work they need to do before the election and during the 

transition and then in the early part of the new Administration to 

identify qualified people that they want to nominate to you and 

load up the Senate with lots of nominations. The thing that drives 

the Senate primarily in terms of the timeliness of their confirmation process is having a big stack of nominees that they have to 

process. They do not like it being said by the press that they are 

not doing a good job of helping the new Administration get their 

team in place. 

So it is their responsibility to put a lot of pressure by doing a 

lot of their work quickly, to put pressure on the Senate to do their 

work quickly. And when they are ready—so they need to prepare 

you for the kind of volumes that they are hoping to bring forward 

to the Senate. If they expand the capacity or change the ability to 

clear people more quickly, they need to make sure they do that in 

partnership with you because you look at the same clearance information that the White House looks at, and it has to be clearance 

information that you are satisfied with and that you can make a 

proper confirmation determination from. 

So when this Administration, the current Administration, is 

ready to suggest possible changes for the new Administration, they 

will come up and talk to the appropriate leaders up here. But all 

this will be done with the Senate, and it is supposed to be and it 

will continue to be. 

Senator AKAKA. Thank you. Ms. Lovelace, let me ask you to put 

your CHCO hat on for a moment. Can you discuss how human capital leaders in career positions at agencies such as yourself prepare 

for new political leadership at their agency? 

13 

Ms. LOVELACE. Senator Akaka, I would be happy to answer that 

question. The Chief Human Capital Officers (CHCO) Council have 

spent much time talking about preparedness for the upcoming 

transition. We have spent much time talking about ensuring that 

there are no gaps behind the political leaders who will likely be 

walking out during the time of transition and right after the inauguration. I believe that we are all well positioned or well on our 

way to be positioned to ensuring that there are people ready to step 

up and take those positions, those critical positions. After all, we 

are there to ensure that agencies continue to be able to carry out 

their mission, which does require that we have people in senior 

leadership positions and in other roles within our agencies. 

I can assure you that through the Chief Human Capital Officer 

Council and some other venues, we are actively discussing exactly 

those issues at the CHCO Council. 

Senator AKAKA. Thank you. Senator Voinovich. 

Senator VOINOVICH. Thank you, Mr. Chairman. 

Mr. Johnson, I would again like to congratulate you on identifying individuals in each department to handle transition. I understand it takes some scheduling, post-employment training, and documenting agency priorities and missions for the incoming Administration. 

What efforts have you made to make sure that they get the job 

done? 

Mr. JOHNSON. I knew you were going to ask that question because we had a meeting at noon today with the President’s Management Council, and I said, ‘‘I will bet you one of the two Senators 

is going to ask me, ‘Are you doing what we instructed every agency 

to do in that memo of July 18th?’ ’’ And so was anybody not aggressively doing what we instructed you to do. And they all agreed that 

they were going to accomplish all those goals at least by the date 

that was laid out, and most of them are October 15 and November 

1, 2008. 

Most of that work had already begun before I met with the PMC 

on this subject in May. As Ms. Lovelace said, the career staff and 

the political leadership of agencies understand full well what the 

challenges are at the end of this year, and they did not need much 

whip-popping by me. It is really just a little orchestration and facilitation. Everybody was working on it. We just made sure everybody was working on the same thing and had the same set of priorities. 

So we are looking forward to this meeting that Ms. Lovelace referred to on September 24, when we are bringing in all the transition leaders, because they have approached Ms. Lovelace with 

questions that they have above and beyond the kinds of answers 

that I thought we provided in that July 18 memo. And they have 

other more detailed questions that we will provide them. And if the 

transition leads in every agency want to meet every week, we will 

meet every week. We will get them together and provide them with 

answers to whatever questions they have. 

So there is a really strong commitment by every agency and by 

the Administration to provide whatever support is called for by 

both candidates for President and by the career leadership in every 

agency, as we have all said, to make this as effective a transition 

14 

as there has ever been and hopefully one that can be used as a 

model for years to come. 

Senator VOINOVICH. Thank you. At the July meeting that we 

had, you made reference to reforming the White House vetting 

process for high-level appointees and that you were working with 

Fred Fielding and the FBI on that. 

Mr. JOHNSON. Yes, sir. 

Senator VOINOVICH. How are you coming on that? Is it something 

that you can do from an administrative point of view that does not 

require legislation? 

Mr. JOHNSON. I think most of it can be done administratively. 

Fred Fielding is working with the FBI, and the Presidential personnel are looking at—and talking to both campaigns to impress on 

both campaigns the importance of preparing to make appointments—nominations to the Senate faster than ever before and 

what kind of work has to be done before the election and after the 

election and during the transition to make that possible. And they 

are meeting with the FBI to impress upon them the importance of 

clearing people faster than ever before and working through what 

has to be done to make that possible. 

So the leadership of the transition planning is within the White 

House, in the Chief of Staff’s office, and work with White House 

Counsel and Presidential Personnel. At an appropriate time before 

you recess, they will want to come up and make sure that the committees know, particularly the committees that deal with Homeland Security, Defense, and State, which will be the most important nominees to deal with in the very month or two in the Administration, understand what kind of volumes both candidates hope 

to be presenting to the Senate so that the Senate is prepared to 

receive those and quickly dispense with them and effectively dispense with them in terms of the nomination process. 

So they will be up here when they have something that specifically they want to brief you on. 

Senator VOINOVICH. Is there a boilerplate letter that you send 

out to the candidates, Ms. Lovelace? And who sends out the letter 

to the candidates saying, ‘‘Hey, you might get elected. Let’s think 

about doing something, about putting your team in place?’’ Who 

does that? 

Mr. JOHNSON. First of all, let me jump in here before you violate 

a law. I think that is against the law to promise—not that you 

would break the law, sir, but to promise the possibility of an appointment. 

Senator VOINOVICH. No, you misunderstand, what I am saying is 

to tell them what it is that they ought to be doing in terms of putting together some kind of task force to deal with the transition, 

to get them to start thinking about it. Is that a boilerplate letter 

that you send out to them and say, ‘‘Hey, here are things you better start thinking about in the event that you are elected.’’ 

Mr. JOHNSON. Yes. I don’t know of a letter. One thing that the 

Intelligence Reform and Terrorism Prevention Act allows is both 

candidates identifying before the election people that they want to 

use to advise the President-elect during the transition, between 

election and inauguration, and it calls for them to provide the 

names and background material of those people that they want to 

15 

serve as their adviser during the transition to update their clearances, to provide them clearances, so that they are able to deal 

with secure information—— 

But my point is that will allow on the national security front the 

preclearance of some number of people that will almost certainly 

be considered for Cabinet and sub-Cabinet positions. But I am not 

aware of a standard boilerplate letter that is typically sent out—— 

Senator VOINOVICH. Well, having been through transitions as 

mayor and then as governor, I know that in both instances, as kind 

of a gift to the new Administration, I put a lot of work into a very 

comprehensive document about transition and what they should be 

looking for and so on and so forth. 

Are you doing that, or is that something that—— 

Mr. JOHNSON. I believe the White House Office of Presidential 

Personnel—I know they have engaged both campaigns, and both 

campaigns are very committed to preparing to govern. And I know 

that Presidential Personnel is providing information to both major 

party candidates that they need to begin to think through the people part of this now before the election, to give them knowledge 

that they would be hard pressed to get otherwise about the positions, the kind of qualities you look for, the process, the confirmation process, the clearance process, the timing involved, the process 

and so forth. 

My impression is that both major party campaigns, candidates, 

are very pleased with the support that they are getting from the 

White House. I also believe it is the first time that both candidates 

for President have been reached out to by the existing Administration. It is fairly customary to go to a like party, but I believe it is 

the first time that an exiting Administration has reached out to 

candidates from both parties. 

Ms. LOVELACE. Senator Voinovich, I would like to answer that 

question as well. GSA did not send a standard form letter of any 

type to both campaigns, but we, much like the White House, have 

reached out to both campaigns in preparation for Presidential transition, have been actively sharing information with them and asking questions of them to make sure that we are making it a smooth 

transition for them. So we have been actively working with them 

and with PPO and the Office of Administration and Mr. Johnson 

to make sure that we are meeting their needs for transition. 

Senator VOINOVICH. Well, it sounds like a lot of communication, 

but I am kind of shocked that there is not some document that you 

put together for transition to the nominees. 

Mr. JOHNSON. Right. Oh, I recall. 

Senator VOINOVICH. When was it that we finally learned who the 

President—— 

Mr. JOHNSON. December 13. 

Senator VOINOVICH. December 13. I will never forget President 

Milosevic, when I congratulated him, said, ‘‘It took me a shorter 

time to become President than your President to get elected’’—or 

find out who it was. 

Mr. JOHNSON. There is one document that explains what somebody preparing for a transition needs to think about, and it is not 

an official document. It is my own personal advice on what—it is 

one of the attachments that I provided you, and I do know that 

16 

both campaigns, their transition people have read it and appreciate 

it and are using it to structure their transition organizing. 

Senator VOINOVICH. Thank you. 

Ms. LOVELACE. And, Senator, if I could add to that as well, to 

add to what Mr. Johnson is saying, we also have the responsibility 

under the Transition Act of 2000 to create a transition directory 

that pulls together a host of information from different agencies to 

help the transition. We actually pull information from the OGE, 

from GAO, from OPM, and other places to pull it all together in 

one place for the incoming Administration. We shared with both 

campaigns an outline of that directory and some information that 

will be part of that directory, in addition to Mr. Johnson’s memo 

that he has attached to his testimony, which I think is actually 

very well written. 

Senator VOINOVICH. Thank you. 

Senator AKAKA. Thank you. 

Mr. Johnson, in your suggestions for a successful 2008 transition, 

you mentioned that the White House Personnel Office is working 

to set up road maps for the next Administration to work 100 appointees through by April 1, 2009. Is this something that you think 

the next Administration will use? And is there any coordination 

with GSA on these plans and how they can get it to the transition 

teams? 

Mr. JOHNSON. What the White House has recommended—and I 

think very persuasively—to both candidates, and they have agreed 

wholeheartedly, is that they have to nominate more people faster 

to the Senate than ever before. And the most number of people that 

have been confirmed by the Senate by April 1st is 25, which is just 

not enough. And what we have suggested they think about is that 

instead of being 25 or 30, it be something closer to 100. It would 

be great if it was 200, but it is hard to make the math work if it 

is 100. 

They have agreed that they need to be both committed to that, 

and we have provided them—the White House is in the process of 

providing them information which they can use to pick the most 

important 100 positions, to focus on what those people in those positions do, what the appointment process consists of, what the 

clearance process, what the confirmation process consists of, so that 

the people working on this before the election, during the transition, and after the inauguration will be very knowledgeable about 

what is involved and so that they can assemble the appropriate 

people to do the appropriate work to try to do it multiple times 

faster than it has ever been done before. 

My impression and understanding is that both candidates are 

really engaged and really eager to tackle this assignment. They understand the importance of it. They understand that our enemies 

understand that we are potentially weak at this time in a transfer 

of power and that we need to be well prepared to respond and deal 

with just about any national security or homeland security matter 

that could arise. 

Senator AKAKA. What steps, Mr. Johnson, outside of relying on 

the Archives will you take to get this information to the next Administration? 

17 

Mr. JOHNSON. Well, the White House is in communication with 

this and lawyers are involved, as they are with everything—campaign lawyers and White House lawyers—and my understanding is 

they are asking lots of questions, the candidates are, the candidates’ representatives are, and the White House is producing answers very quickly. So there is a good communication there. The 

specifics I do not know about. This is something that the White 

House specifically is in charge of, but there is lots of engagement 

and lots of transfer of information back and forth. 

Both candidates, my impression is, are very committed to put 

their team on the field much, much faster than ever before, primarily because they understand the need. 

Senator AKAKA. Thank you. 

Mr. CUSICK. Mr. Chairman, may I comment on that point? 

Senator AKAKA. Yes. 

Mr. CUSICK. I have been familiar for some time with Mr. Johnson’s proposal of 100 by April and 400 by August. We, at OGE, are 

prepared for those numbers. We believe that the financial disclosures can be completed on time, assuming they are received at appropriate intervals, appropriately early in the Administration, or 

even before inauguration. 

Senator AKAKA. Mr. Cusick, the Presidential Transition Act of 

2000 required that the Office of Government Ethics submit a report 

to our Subcommittee with recommendations for improving the vetting process. One of the recommendations in that report was the 

simplifications of the SF–278 financial disclosure form. After 7 

years, the forms and the process have not changed. Why is this? 

Mr. CUSICK. Well, Senator, we have made a legislative draft proposal that we submitted earlier this year that would simplify the 

form. We are not able to simplify it because it is a creature of statute. But we have made proposals to simplify it. 

I agree that for the purpose of the Office of Government Ethics 

in identifying and resolving conflicts, the form is unnecessarily 

complex, and we would like to see it simplified to some degree in 

line with our proposal submitted several months ago. 

Senator AKAKA. You have given thought to this. On this can 

there be other steps that can be taken without a new law? 

Mr. CUSICK. Not with respect to simplifying that form, Senator. 

I think that requires legislation. But we would welcome a form that 

was more simple in its structure and detail. 

Senator AKAKA. Thank you for that. 

Ms. Lovelace, GSA now provides orientation for incoming appointees. Could you talk more about what specific orientation GSA 

will be providing and how that orientation was developed? 

Ms. LOVELACE. Senator Akaka, the Transition Act of 2000 does 

give us the authority to provide for appointee orientation. We actually work with the incoming Office of the President-elect and the 

incoming transition team to determine what will be included in 

that orientation, how it will be given, who it will be given to, and 

when. 

In the change of Administration from the Clinton Administration 

to the Bush Administration, we actually worked with Mr. Johnson 

in making sure that appointee orientation was, in fact, carried out. 

18 

There were specific details that were put in place and an action 

plan to carry forward. 

We have already provided both campaigns with preliminary information on what is required as part of the act and are just beginning preliminary conversations with both in terms of what they are 

looking for in orientation. We more so play a facilitator role than 

an actual provider role. 

Senator AKAKA. Well, thank you very much for that. Senator 

Voinovich. 

Senator VOINOVICH. As you know, we have been very interested 

in developing metrics to judge the performance of the Department 

of Homeland Security. Mr. Dodaro, you probably remember that 

there was a difference of opinion about whether or not DHS was 

complying with what GAO thought they should be. I understand 

that GAO is working conscientiously with DHS to develop this metric system so that we will have something next year to look at to 

see how they are doing. 

Mr. DODARO. As a result of the hearing that you are referring to, 

there was an effort made by DHS to begin to seek our input as 

they put together the performance measures that they were going 

to use, and we were providing informal comment in that. And we 

provided correspondence to the Senate saying that had been completed and that DHS was soon to complete their strategic plan. I 

believe they have finished that, and we are in the process of reviewing it now, Senator, going forward. 

But there was, as you mentioned we had created some metrics 

using some material that had been in congressional documents and 

other documents to judge the performance. In many of those areas, 

there were not performance measures that everybody agreed to. So 

we are in the process of providing them input, recognizing that it 

is their responsibility to put the metrics in place. And GAO is not 

going to put itself in a position of management, but we are providing our input and then are critiquing their strategic plan. 

Senator VOINOVICH. I would be interested, Mr. Johnson, in your 

thoughts about the interpersonal relationship between OMB and 

GAO because they are the group that comes and looks over your 

shoulder at the feasibility or the opportunity that is there in terms 

of getting good communication going back and forth so that you do 

not run into a situation where, when it comes time for the reporting, that there is a big difference about what the metrics are and 

what people are being judged as to. 

Mr. JOHNSON. Yes, for sure. And that is one thing I am planning 

to do is, here is the way I think you should relate to GAO and here 

is the relationship you should aspire to create and here is how to 

relate to the IG community and the Federal employee community 

and this Subcommittee and so forth and so on. 

I think that the important thing is not that DHS adopts the 

metrics that GAO recommends because there it is always 

territoriality and not invented here and it is just human nature to 

want to develop your own metrics. So the role I would suggest for 

GAO is that they insist that metrics be developed that can allow 

you and the agency, with their help, GAO’s help, to monitor performance at DHS, and performance is defined by this and this and 

this, and they be challenged to come up with the metrics to do that, 

19 

and then you provide the agency with the appropriate commentary 

about the adequacy of those metrics, and they can choose to improve them or double them or something. 

But I know that Homeland Security is very measure- and manage-oriented with a lot of prodding from you, and that Paul Schneider is committed to the success of the transition, which is written 

into law, I think the only agency that has that written into law, 

and to have lots of good measures they can use to manage performance. 

Senator VOINOVICH. Too bad we did not get a term, but we will 

keep working on it. 

One of the things that I remember telling Mitch Daniels and his 

successors, was that, if I were in his shoes, I would really work on 

the high-risk list. 

To my knowledge, the corrective action plans tied to the highrisk list are not a part of the Government Performance and Results 

Act. In other words, Mr. Dodaro, I think you said something about 

the fact that if you look at the high-risk list, it pretty well reflects 

some overall management problems that need to be addressed in 

the Federal Government across the board, not just one agency. But 

I think there are about seven or eight of them that are agencywide. 

What about the feasibility of requiring that there be a plan to 

deal with those problems that they are confronted with, a written 

plan, a part of their Government Performance and Results Act 

work? 

Mr. DODARO. One of the things that we have been very supportive of over time—and, actually, the problems on the high-risk 

list led to the creation of some statutory management reforms because of the pervasive nature of the problems, for example, the 

Chief Management Officer Act, the act that put in place Chief Information Officers in Government, and in part that led to some reforms, which information technology, financial management technology, human capital—we put that on the high-risk list, and there 

were a lot of reforms made there, my point being, Senator, that one 

of the ways to guarantee continuity between Administrations is to 

have some of these management reforms in a basic statutory 

framework that transcends Administrations. And certainly I would 

support the possibility of that being focused on some of these areas 

that we have discussed. Some of them have been on our list for a 

number of years. Other ones are new and they are changing. As 

you know, we just added the 2010 census to the list, and early in 

the next Administration, they are going to have some critical issues 

there. 

So I think having a statutory underpinning for management reforms conceptually is a good idea. 

Senator VOINOVICH. One of the things that we have yet to do is 

reach agreement on how to streamline the financial disclosure form 

for Executive Branch employees. Mr. Cusick, I believe you have 

some ideas on how to do that. 

Mr. CUSICK. Yes, Senator, we do. 

Senator VOINOVICH. Our last attempt required agencies to examine the number of appointed positions requiring Senate confirmation; allowed Presidential candidates to receive a list of appointed 

20 

positions after they receive the nomination, and required the Office 

of Government Ethics to review the Federal Government’s conflictof-interest laws. We never did get this passed, so shame on us. 

Do any of you want to comment on that? Mr. Johnson. 

Mr. JOHNSON. I have forgotten why we were asked to present a 

list of potential positions that could be reclassified from PAS to PA. 

But I had forgotten that there was actually legislation that had 

prompted that question. And I think it was in 2003, we submitted 

a list of positions that we thought it could be argued they should 

not require Senate confirmation. And I thought that number was 

80-some. I think it was 150-some-odd positions, full-time positions, 

and the Senate took that list of positions and considered these positions that were not policy positions, they were legislative affairs, 

government affairs, communications positions, general counsels. 

We recommended CFOs, some CIOs—not policy, not critical operational—— 

Senator VOINOVICH. I remember that, and the people that were 

charged to do that were Harry Reid, who was running for leadership, and Mitch McConnell. With all due respect to both those gentlemen who encouraged me to do this. And then when the time 

came to look over the appointment process what happened was 

they ran into the jurisdiction of some of the committee chairmen 

who wanted to bring these people before them. Would you agree we 

ought to revisit that? And, by the way, Senator Akaka, I sent a letter off to them about a month ago asking them if they might be 

willing to review that now that they are both leaders. 

Mr. JOHNSON. Well, I think the White House would welcome a 

revisit of that issue. 

Senator VOINOVICH. Thank you. 

Senator AKAKA. Mr. Johnson, as I said in my opening statement, 

I am concerned about maintaining effectiveness oversight of the 

large numbers of contracts and contractors during the transition. 

It is possible that the next Administration may greatly scale back 

on contracting or have different contract priorities than the current 

Administration has now. 

Has the Administration scaled back on seeking bids for new contracts? Or has OMB given any guidance to agencies in this area of 

contracting? 

Mr. JOHNSON. The percentage of contracts that are competitively 

bid has remained remarkably constant over the last period of time, 

from the prior Administration into this Administration. I could not 

tell you what the percentage is, but it has moved almost not at all. 

So there is as much competition in our contracting as there has always been. But there needs to be more. There are always opportunities to buy things better with the help of competition. 

I think prompted by some hearings on this subject last year, our 

Office of Federal Procurement Policy issued guidance to agencies 

and suggested best practices on—creating a competition officer, I 

think, in each agency to study this and monitor this and to facilitate this. So, again, we are raising the focus on it in response to 

concerns about our ability to contract effectively. We need to be 

better at managing contracts, whether competitively bid or not, but 

also continuing to inject—I mean, inject even more competition into 

the process. 

21 

One of the comments you made, sir, at the beginning was that 

we are doing more contracting for government work. I think it is 

true that the work we are contracting for is not inherently governmental work. It is work that can be done by Federal employees in 

some cases, but it is commercial in nature work that is being contracted for. I am not aware of inherently governmental work that 

we contract for. 

Senator AKAKA. Thank you. Ms. Lovelace, GSA has an interesting position in the transition. It manages the transition for the 

President-elect and at the same time is under the leadership of the 

current Administration. Do you foresee any problems with gaining 

the trust of all parties involved in these orientation programs and 

training for new appointeeS? 

Ms. LOVELACE. Senator Akaka, I do not see any issues coming 

forth in terms of working with the current Administration or the 

incoming Administration. We are actively working with Mr. Johnson, with Presidential Personnel, with the Office of Administration 

at the White House, as well as both campaigns, to make sure that 

we meet the spirit and intent of appointee orientation. We are also 

starting to get engaged with the Office of Government Ethics, with 

the Office of Personnel Management, and other parts of the government to make sure that we are ready to provide orientation for new 

appointee orientations. I actually see no problems whatsoever. 

Senator AKAKA. Thank you. Mr. Dodaro, your statement generally made the point that management needs to be a priority in 

the next Administration. Can you tell us any specific management 

issues or projects that the next Administration should be concerned 

about or what we should be concerned about? 

Mr. DODARO. I think, first, as I mentioned in my statement and 

we talked about earlier, the No. 1 priority from my perspective is 

to get people in these senior management positions that have the 

experience of managing large enterprises. And I think people underestimate some of the size and in terms of the budgets and the 

dollars and also the ability to manage for results, to have detailed 

plans, performance measures, etc., but also to work across departments and agencies. It is not only managing nowadays within a department or agency, but managing with colleagues throughout the 

Federal Government, throughout State and local government. So 

that is No. 1, get the right people in these right positions that are 

experienced and can handle the tasks ahead of them because these 

are large enterprises with difficult issues. 

Two, there is more reliance on contracting. You need to have people who can effectively set requirements. Part of the problems with 

the contracts is that there is not enough management direction as 

to what the type of requirements are that the government is trying 

to buy and trying to ensure is put in place and that there is effective oversight over these contracts so that they properly deliver on 

what the government really needs and the government is not pursuing a contract that is not well defined and is not adequately 

monitored. So there needs to be senior people in the agencies to 

manage those contracts, and that is to include information technology contracts as well going forward. 

The other issue really, I think, is the question of capacity in the 

human capital area. We have put that on the high-risk list. I think 

22 

during the 1990s there was a lot of downsizing in some management functions in departments and agencies, and I think given 

what the agendas are that need to be pursued, there really needs 

to be good succession planning in identifying what are the right 

skills that you need to have in the departments and agencies. It 

is fine to contract out for services, but you need senior people that 

can manage those contracts effectively for you to get the results. 

So the right skill level, the right mix of people, and really the 

people who are best positioned to do that are senior department 

leaders that understand what it takes and have run large enterprises before. So those would be the efforts. 

Then one last point I would make is that there has been progress 

made in a number of areas, and that progress needs to be sustained. We now have the 24 largest departments and agencies. At 

least 18 get clean opinions on their financial statements, and there 

have been efforts made to improve internal controls. That is largely 

due to the efforts of this Administration and a prior Administration 

to implement some of these statutory reforms, and I would encourage the next Administration to build on the progress that has been 

made because I think that is pivotal to have them have better financial information to make good decisions. 

Senator AKAKA. Mr. Dodaro, what about projects? What projects 

would you recommend or signal to the new Administration to set 

those priorities? 

Mr. DODARO. I think, Mr. Chairman, our transition work will 

highlight for every department and agency what particular management challenges are unique to that agency and what they need 

to do to focus on this. 

For example, let’s take NASA. They are retiring the Space Shuttle. That to me is a huge project that needs to be focused on because they are going to have a gap in that process going forward. 

This whole issue for the Federal Housing Finance Agency, who 

is now going to be in conservatorship for Fannie Mae and Freddie 

Mac, that is a huge activity going forward. 

It was just announced today that the Department of Defense is 

deferring the contract on the tanker provision into the next Administration. That is a very important decision that needs to be made. 

So we will highlight for every major department and agency, we 

are planning to make our information available through our 

website so it is electronically available, publicly available as well, 

because I think that Mr. Johnson’s point that providing some 

transparency over these issues is really important. 

The census is another project that is terribly important to apportionment and also to the distribution of hundreds of billions of dollars in Federal assistance, and that needs to be attended to. 

So we will have those projects, and, of course, our high-risk list 

provides a real helpful listing and prioritization as well. 

Senator AKAKA. Before I call on Senator Voinovich, let me follow 

up with Mr. Johnson on this same question and on projects that 

he would recommend as a priority to the Administration. 

Mr. JOHNSON. The most important thing that I believe is missing 

in the Federal Government is the proper—what we need more of 

is we need clearer goals and we need more accountability for accomplishing them. Too often, employees will answer the question, 

23 

‘‘What do you do?’’ Well, I work on this or I work on that. We have 

to get beyond that. We need to be trying to accomplish specific 

goals in specific time frames, and people really need to be held accountable for doing—that does not mean punish them if they miss 

them, but that means that the goals are real and that you and the 

leaders in the Executive Branch really want them to be accomplished by the dates that the agency leadership said they can be 

accomplished, and that there be a level of purposefulness that 

today does not exist in the Federal Government. 

We had the beginnings of that. The first thing you have to have 

is every program has to have a goal, an outcome goal. That exists. 

It took 5 years to do it and then another 2 years to improve it. But 

every program has outcome goals and efficiency goals. They have 

a plan for accomplishing them. These are public so that agencies 

can be held accountable for accomplishing them. 

If you could only ask one question of an agency head or a program head up here, the question I would suggest you ask is: What 

are you being held accountable for accomplishing this next year? 

And then when the year is up, how did you perform relative to your 

goals? You missed them or you did better? What are you going to 

do as a result of that? That question is not asked often enough 

within the Executive Branch or by Congress of the Executive 

Branch. 

And so the goals are not clear enough—they are not outcome-oriented enough, they are not clear enough, and there is not enough 

real accountability for it. 

We have goals now—when we first started evaluating programs 

8 years ago, half the programs in the Federal Government that we 

looked at could not demonstrate a result—good or bad. Nobody had 

ever asked the question. That is different now. So a foundation has 

been laid to go to the next level, which is continue to improve the 

goals, but continue to build more ‘‘So what?’’ into the fact that we 

have goals, and we can now start holding managers, leaders, employees accountable for accomplishing the goals. So that the level 

of purposefulness to get to a desired outcome is real and significant. To me, that is the primary—whether it is high-risk weapons 

systems acquisition, adult literacy, whatever it is. To me, that is 

the primary thing that we need to add to what goes in the Federal 

Government that does not exist now, to the extent to which we desire it to exist. 

Senator AKAKA. Thank you very much for that. Senator Voinovich. 

Senator VOINOVICH. I am interested in following up on that. As 

you know, we passed legislation to strengthen pay for performance 

for the Senior Executive Service, and implementation is still a little 

bit uneven. But if you really get at management, what you were 

just talking about, it begins with your Senior Executive Service and 

the whole idea of a performance evaluation is to sit down with an 

individual and talk about the goals and what is expected of them 

and then continue to have a dialogue with them. 

Maybe you can answer this next question privately sometime. I 

wonder how often were the Secretaries of the various Federal agencies evaluated by anybody—you or anyone else? One of the hardest 

things I had to do when I was mayor and governor, was the evaluaVerDate Nov 24 2008 09:50 Jul 08, 2009 Jkt 045574 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 P:\DOCS\45574.TXT SAFFAIRS PsN: PAT
24 

tion of the people who ran the department. So I started out with 

them about what it was that I expected of them and held their feet 

to the fire and we have that. 

I’ve introduced legislation to strengthen performance management that includes a provision whereby if somebody’s performance 

was not acceptable, they would not get a pay increase. Of course, 

there was a lot of noise about this provision. But it seems to me 

that one of the ways you can accomplish what you have just been 

talking about, Mr. Johnson, is to follow up on that kind of a program. I would like to get the comments here of all four of you in 

terms of what you think about that. 

Mr. JOHNSON. Well, one thing, the legislation that called for pay 

for performance for SES was really important, and we are now in 

the second or third year, I guess, of the implementation of it, and 

the implementation quality is not what it needs to be, but it is a 

priority of OPM to work with agencies to make sure that there are 

meaningful distinctions being made between the evaluation of the 

performance of all the senior executives. I agree with you. If you 

can get those 7,000 career and 700 political SESs moving in the 

right direction at the right speed, the whole government will follow. 

And so we have the legislation we need now, and I think we 

know what we need to do, led by OPM, to implement it more effectively this next year than the year before. 

Along the same lines, but there is no pay tied to it, every agency 

for every employee by the end of fiscal year 2009 is being held accountable by OPM to implement a—I forget the title. It is something like an ‘‘Effective Performance Management System,’’ so that 

every employee is evaluated on their performance, a significant 

portion on their performance, not just on competencies. That is a 

big step forward. There is no pay tied to it, but most people would 

agree that the primary value of a pay-for-performance system is 

the performance management part of the pay for performance. The 

pay part of it is a way to drive the seriousness of it because you 

have to give someone an $800 raise versus a $600 raise, so they 

have to take it really seriously and explain why they are getting 

$600 and not $800 or $800 and not $600. But the key is that you 

be able to evaluate performance and define goals effectively and so 

forth with every employee. 

Every agency will be formally committed to do that by the end 

of fiscal year 2009. That was a pipe dream 8, 10 years ago. 

So the foundations are being put in place to do what you are 

talking about, and the key going forward will be not to get it 

launched, but to get it implemented and realize the full potential 

of it. 

Senator VOINOVICH. I think it would really be interesting, too, 

Mr. Dodaro, if GAO looked at the TSA. I have gotten to know a 

lot of these people because I have a pacemaker, and so I just stop 

and say, ‘‘How is your pay system coming along—PASS?’’ I would 

say about two-thirds of them think it is a good idea, and some really complain that they do not like it, it is arbitrary and so forth. But 

I would really like to know what difference that kind of thing has 

made, if any. I think it has made a difference on how we get things 

done. 

Are there any other comments from the other two witnesses? 

25 

Mr. CUSICK. Senator, we have in OGE what we refer to as the 

Leadership Initiative. What we try to do is to push discussions of 

ethical conduct as high in an agency as we can get it, often with 

the Secretary of the agency. And we believe that the good example 

of senior leaders is the single biggest driver of ethical conduct in 

an organization. 

With that in mind, the Interior Department has been particularly responsive to our suggestions that performance of employees—in particular, senior employees—include the ethical dimension. If you have a lackadaisical approach to deadlines on disclosures, for example, or if you are perhaps enduring or tolerating 

something in your division or agency that you should not be from 

an ethical point of view, in the Interior Department, Secretary 

Kempthorne has made important policy changes. 

Now, it is a little difficult when you are talking about pay for 

performance to take my narrower ethical scope and make generalizations about it, but—— 

Senator VOINOVICH. I have to tell you that to me would be maybe 

the No. 1 criteria. The problems we have seen in government have 

been ethical breakdowns that have embarrassed individuals and 

departments. 

Mr. CUSICK. I could not agree more, and that is why we think 

the engagement of leaders—in particular, senior leaders—is essential to the reputation of the government, its individuals departments, its various levels of leadership. And so we encourage the active involvement—Secretary Kempthorne has in particular taken 

our suggestions and I think made them work in the Interior Department. 

I am not as well informed about other departments, but I know 

that the general notion has been well received when we have presented it. 

Senator VOINOVICH. Thank you. 

Ms. LOVELACE. Senator Voinovich, we work very actively in GSA, 

and I know in other government agencies, to implement the SES 

pay-for-performance system. 

Senator VOINOVICH. Well, I know one thing, that Steve Perry did 

it. 

Ms. LOVELACE. Yes, he did. 

Senator VOINOVICH. Because he worked with me, my goal when 

I came here, we were going to do Total Quality Management, and 

it got lost somewhere. I guess we were worried about the human 

capital crisis that we had. But I know at least Mr. Perry worked 

on that pretty hard when he came in. 

Ms. LOVELACE. You may remember that Mr. Perry and I came 

up and briefed you several times in terms of what we were doing. 

We both talked—and Mr. Perry actually helped us design our system within GSA when the act was first implemented for us to implement pay for performance. The cornerstone for that system then 

and the cornerstone for it now is having a really strong performance management part of the system. 

Senator VOINOVICH. You have cascaded it down all the way 

through the department, I know, not connected with pay increases, 

but just letting folks know that you like what they are doing and 

26 

you have a feeling that they belong to the organization and are 

making a difference. Yes? 

Ms. LOVELACE. You gave my answer for me. [Laughter.] 

I am thrilled that you remember that, yes, and we have actually 

strengthened our goals and our measures, both at the Senior Executive Service level and down throughout the organization, and a 

very clear connection with our strategic plan. And, clearly, as Mr. 

Johnson, I think, suggested, we can all make improvements on 

this, but we think we have made great strides to implement pay 

for performance. 

Senator VOINOVICH. Meaning that some other agencies could do 

it without legislation if they wanted to. 

Ms. LOVELACE. At the SES level, we needed legislation in order 

to be able to do that. Below, we are cascading it down, but it is 

not linked directly to compensation changes. 

Mr. JOHNSON. They all are doing it. 

Senator VOINOVICH. This is a question—and this will be my last 

one—that I think Senator Akaka will like. At the beginning of this 

Administration—first of all, in the Clinton Administration, they 

had a labor-management partnership, and I recall recommending 

to Mitch Daniels that they should continue it, because my experience was when I was mayor and when I was governor that I had— 

I wanted communication with my labor unions. And as you know, 

we have been up and down on some of this. Early on, I think, Senator Akaka, we were doing pretty good. A lot of that legislation we 

got passed was only passed because the labor leaders went along 

with it. And since that time, I think things have kind of gotten a 

little bit tight. 

You are on your way out. What are your thoughts about the next 

Administration putting together a labor-management partner 

where even the President would meet periodically with the labor 

leaders to hear what they have to say to soften things up? Because 

I think in many instances—I mean, I am not telling you how you 

should answer this, but I think in many instances there were real 

concerns that the communication really was not there. They felt 

like they did not have access to the people that they needed. And 

in some instances, I have to say that it was just an excuse not to 

go along with something. So it is both of it. But it would seem to 

me that if you have some kind of a dialogue going on that level, 

that would help matters and maybe a lot more could be accomplished because there would be a better dialogue between management and labor. 

Mr. JOHNSON. I have made efforts when I first went over to OMB 

to reach out and establish strong lines of communication with the 

heads of the two unions, and what I found it to be a function of 

was not whether they had a union or not, but which one it was. 

And so I found I was able to establish a strong line of communication with one but not the other. So it is personality driven, not subject driven, topic driven, or union/non-union driven. 

I also found that as soon as the leadership of the Congress 

changed from Republican to Democrat, union leadership’s interest 

in communicating at all with my office went to zero. But there are 

examples of it working very effectively. When Homeland Security 

was developing their personnel system, when DOD and Gordon 

27 

England was developing their personnel system, Mr. England went 

to great lengths to establish an effective working relationship with 

union leadership, and I think did so. And they had the difference 

of opinion, and agreed and disagreed and so forth. But that would 

never have happened if Mr. England had not been as effective as 

he was, Secretary England, working with union leadership. 

Senator VOINOVICH. I am familiar because I told them to slow 

the thing down because they were moving too quickly on that. And 

I said it will never work, it will blow up in your face. But I still 

think today that had we provided in that legislation that there 

would be a more robust dialogue back and forth and that if there 

were differences between management and labor and had it gone 

to an arbitration and let that decide, I think both parties would 

have done a better job of putting their best foot forward because 

there would be some downside if they did not; and then once it was 

done, no one could complain afterward that we did not have our 

say. And to this day, if you talk to the labor leaders, they say they 

just did what they wanted to do, in spite of the fact that for sure 

I know Mr. England really worked at it conscientiously. 

One last thing. I know I am taking too much time, but, Mr. 

Dodaro, you did pay for performance, and Senator Akaka and I just 

passed legislation dealing with some people in your shop that were 

unhappy with what you did. And I think that it was kind of a 

shock to your predecessor about—would you like to comment on it? 

Mr. DODARO. Yes. As a result of some of the dissatisfaction of our 

employees—as you know, we have a union now at GAO. I just had 

a meeting with them this afternoon. I have opened up the dialogue. 

I am trying to create a constructive dialogue with them. We have 

these meetings. We are in our first effort to structure an interim 

collective bargaining agreement. So I think only good can come 

from good constructive communications, and that is the tenor that 

I am taking at the GAO as a follow-up to the creation of a union 

within our organization. 

I would also like to go back to your point on the SES performance evaluation process and pay for performance. We would be 

happy to take a look at that, but when we do, I think the most important thing would be to see how that is anchored and the clear 

goals and objectives of the agency from the very beginning because 

if that is not there, then you are not going to have an outcome-oriented link going forward. And I would relate what Mr. Johnson 

said before, and I would agree with him, that the single biggest 

problem is not clear goals and objectives with clear outcomes to 

know where you are going to be at the end of the day. If you have 

that, the SES pay-for-performance system can be a powerful tool to 

ensure that it is implemented and cascaded throughout the organization. That is how we run the GAO, and it is a very effective system. 

Senator VOINOVICH. Senator Akaka, thank you for entertaining 

this long questioning, but I thought you might be interested. 

Senator AKAKA. Thank you very much, Senator Voinovich. This 

has been a great hearing for us, and I just want to mention that 

I have a labor-management partnership bill that I would be glad 

to have passed this year. Unfortunately, it is not the way the 

28 

schedule is set up at the present time, but I think we need to continue to pursue that. 

Let me say that your statements will be included in the record 

for all of our witnesses. And at this time, Senator Voinovich and 

I would like to thank all of you for appearing here today and for 

your service to our country. The upcoming transition is a critically 

important issue, and you are critical players in making sure that 

it succeeds. 

I also want to especially thank again Deputy Director Johnson 

for coming before this Subcommittee many times over the years, as 

well as thank you to GAO. While we have often disagreed, it has 

proven that working together can achieve results, and I hope that 

we can all come back a year from now and look back on a successful transition. 

At this point let me ask, Senator Voinovich, whether you have 

any compelling remarks? 

Senator VOINOVICH. No. Thank you. 

Senator AKAKA. Otherwise, the record of this hearing will be 

open for 2 weeks for additional statements or questions other Members may have pertaining to this hearing. 

This hearing is adjourned. 

[Whereupon, at 4:17 p.m., the Subcommittee was adjourned.] 

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