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WASTING INFORMATION TECHNOLOGY DOLLARS: 

HOW CAN THE FEDERAL GOVERNMENT REFORM ITS IT INVESTMENT STRATEGY 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

JANUARY 22, 2013 

Serial No. 113–5 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

DOC HASTINGS, Washington 

CYNTHIA M. LUMMIS, Wyoming 

ROB WOODALL, Georgia 

THOMAS MASSIE, Kentucky 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

KERRY L. BENTIVOLIO, Michigan 

RON DESANTIS, Florida 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

JACKIE SPEIER, California 

MATTHEW A. CARTWRIGHT, Pennsylvania 

MARK POCAN, Wisconsin 

TAMMY DUCKWORTH, Illinois 

DANNY K. DAVIS, Illinois 

PETER WELCH, Vermont 

TONY CARDENAS, California 

STEVEN A. HORSFORD, Nevada 

MICHELLE LUJAN GRISHAM, New Mexico 

VACANCY 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

ROBERT BORDEN, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

(III) 

C O N T E N T S 

Page 

Hearing held on JANUARY 22, 2013 ..................................................................... 1 

WITNESSES 

The Honorable Tom Davis, A former Representative in Congress from the 

State of Virginia 

Oral Statement ................................................................................................. 6 

Written Statement ............................................................................................ 9 

Mr. Steven Vanroekel, Federal Chief Information Officer, Office of Management and Budget 

Oral Statement ................................................................................................. 15 

Written Statement ............................................................................................ 17 

Mr. David A. Powner, Director, Information Technology Management Issues, 

General Accountability Office 

Oral Statement ................................................................................................. 22 

Written Statement ............................................................................................ 24 

Mr. Douglas Bourgeois, Vice President and Chief Cloud Executive, U.S. Public 

Sector Division, VMWARE 

Oral Statement ................................................................................................. 72 

Written Statement ............................................................................................ 75 

Mr. Michael Klayko, Advisor and Former CEO, Brocade Communications 

Systems, Inc. 

Oral Statement ................................................................................................. 88 

Written Statement ............................................................................................ 90 

Mr. Chris Niehaus, Director, U.S. Office of Civic Innovation, Microsoft Corporation 

Oral Statement ................................................................................................. 96 

Written Statement ............................................................................................ 98 

APPENDIX 

The Honorable Elijah Cummings, from the State of Maryland, Opening Statement ...................................................................................................................... 120 

The Honorable John Mica, from the State of Florida, Opening Statement ........ 122 

The Honorable Gerald Connolly, from the State of Virginia, Opening Statement ...................................................................................................................... 124 

The Honorable Matthew Cartwright, from the State of Pennsylvania, Opening 

Statement ............................................................................................................. 127 

Questions for Steven VanRoekel from Tammy Duckworth, Jackie Speier, and 

Darrell Issa ........................................................................................................... 130 

Response to questions from Jeff Rangel to Jackie Speier .................................... 140 

Response to questions from Microsoft Innovation Policy Ctr. to Darrell Issa, 

Elijah Cumming, and Jackie Speier ................................................................... 142 

Response to questions from David A. Powner ....................................................... 148 

Response to questions from Douglas J. Bourgeois ................................................ 155 

Submitted Testimony for House Oversight and Government Reform Committee Hearing from Consortium for Citizens with Disabilities ...................... 164 

ICT Sector Trade Associations Comments on FITARA ........................................ 167 

Statement for the Record of the Professional Services Council ........................... 170 

Statement for the Record of The Honorable Robert C. Cresanti, Vice President, SAP America ............................................................................................... 176 

(1) 

WASTING INFORMATION TECHNOLOGY DOLLARS: HOW CAN THE FEDERAL GOVERNMENT REFORM ITS IT INVESTMENT STRATEGY 

Tuesday, January 22, 2013 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

WASHINGTON, D.C. 

The committee met, pursuant to call, at 1:08 p.m., in Room 2154, 

Rayburn House Office Building, Hon. Darrell E. Issa [chairman of 

the committee] presiding. 

Present: Representatives Issa, Mica, Turner, Duncan, Chaffetz, 

Lankford, Amash, Gosar, DesJarlais, Gowdy, Farenthold, Hastings, 

Lummis, Woodall, Massie, Collins, Meadows, Bentivolio, 

Cummings, Maloney, Norton, Tierney, Connolly, Speier, Cartwright, and Duckworth. 

Staff Present: Ali Ahmad, Communications Advisor; Alexia 

Ardolina, Assistant Clerk; Richard A. Beutel, Senior Counsel; Robert Borden, General Counsel; Molly Boyl, Parliamentarian; Lawrence J. Brady, Staff Director; Caitlin Carroll, Deputy Press Secretary; John Cuaderes, Deputy Staff Director; Adam P. Fromm, Director of Member Services and Committee Operations; Linda Good, 

Chief Clerk; Michael R. Kiko, Staff Assistant; Mark D. Marin, Director of Oversight; Laura L Rush, Deputy Chief Clerk; Scott 

Schmidt, Deputy Director of Digital Strategy; Rebecca Watkins, 

Deputy Director of Communications; Peter Warren, Legislative Policy Director; Krista Boyd, Minority Deputy Director of Legislation/ 

Counsel; Ashley Etienne, Minority Director of Communications; 

Jennifer Hoffman, Minority Press Secretary; Carla Hultberg, Minority Chief Clerk; Elisa LaNier, Minority Deputy Clerk; Lucinda 

Lessley, Minority Policy Director; Dave Rapallo, Minority Staff Director; Mark Stephenson, Minority Director of Legislation; and 

Cecelia Thomas, Minority Counsel. 

Chairman ISSA. The committee will come to order. 

The Oversight Committee exists to secure two fundamental principles. First, Americans have a right to know that the money 

Washington takes from them is well spent. And second, Americans 

deserve an efficient, effective government that works for them. Our 

duty on the Oversight and Government Reform Committee is to 

protect these rights. Our solemn obligation is to hold government 

accountable to taxpayers, because taxpayers have a right to know 

what they get from the government. 

2 

Our obligation is to work tirelessly in partnership with citizen 

watchdogs to deliver the facts to the American people and bring 

genuine reform to the Federal bureaucracy. This is our mission. 

Today we advance that mission statement in the area of information technology, which is at the heart of whether the Federal government knows where the waste, fraud, and abuse is; knows or can 

be expected to deliver an efficient and honest return for every dollar contributed by the Federal taxpayers. To that extent, we have 

three panels today. This is not a controversial hearing within this 

committee. But it may be controversial outside of this dais. 

In just the last 10 years, government spending on IT has risen by $46 billion. Even in Washington, that is a lot of money. We now 

spend $81 billion in 2012. As is the case government-wide, spending decisions were often not based on performance results. Program 

failures and cost overruns plague three-quarters of all large Federal IT programs. Federal managers say that 47 percent of their 

budget goes to maintain obsolete or deficient IT resources. Estimates suggest that as much as $20 billion of taxpayer money 

is wasted each year. But let us understand, in this case it is not 

the waste of the $20 billion, it is what that $20 billion could do 

properly applied to our transparency into our government. The 

leveraging of $20 billion to save $200 billion is why it is essential 

that we fix this part of government that seems to be so broken. 

We have built an IT infrastructure that is bloated, inefficient, 

and actually makes it more difficult for the government to serve its 

citizens in some cases. With more than $81 billion spent each year 

on Federal information technology, Americans are not getting anywhere close to what they would expect to get for their money. Just last month, the Air Force announced that a $1 billion logistics system had failed and was being shut down. It was a logistics 

system that was needed. It will still be needed. We will still need 

to make these improvements. 

I want to join with all those who realize that few of our programs 

that fail, fail because they weren’t wanted or needed, they fail for 

other reasons. And that is what this committee is determined to 

get to the bottom of and change the system. 

Often quoted in Washington is Albert Einstein saying, more or 

less, that if you keep doing the same thing over and over and expect a different result, that is the definition of insanity. We will not 

allow the Federal government to continue doing things over and 

over again that, in fact, more money has not made work better. It 

is our choice now to listen to all the parties who will come to bear 

to this committee. People who understand government procurement, of course; people who understand the private sector and 

what works there. 

I have often quoted my working in my old company with companies like Circuit City, Best Buy, and Wal-Mart, companies that in 

some cases were very opaque; in other cases, visual on even my 

desktop, I could see every store, every product from my company, 

and whether, in fact, it was selling or not. I not only could see it, 

but my salesmen could see it. And if something didn’t move in one 

store and moved in another, they knew that they could go and find 

out why. That doesn’t exist in the Federal procurement system. It 

doesn’t exist anywhere in government, and it needs to. 

3 

With that, I would like to introduce Mr. Cummings for his opening statement at this time. 

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

I want to welcome all of our witnesses here today, including our 

good friend and distinguished former chairman, Tom Davis, who I 

just have a phenomenal amount of respect for. 

Tom, it is good to see you again. 

I think this is an appropriate first hearing for this Congress. 

This is a good government hearing that gets right to the core of our 

committee’s jurisdiction. Today we are examining Federal spending 

on information technology. Our committee has jurisdiction over the 

efficiency and management of government operations and activities, including procurement. It is our responsibility to ensure that 

the Federal government is spending money wisely and efficiently. 

I think all of our constituents would agree that they want to 

make sure that their tax dollars are spent that way, effectively and 

efficiently. This includes Federal spending on information technology. The President’s fiscal year 2013 budget projected that agencies will spend $79 billion on IT this year. The Government Accountability Office has found that agencies did not have adequate 

oversight of these investments. In a report last October, GAO found 

that five major agencies have not been using the proper safeguards 

to ensure that their investments in the operation and maintenance 

of IT systems are performing as intended. 

As GAO said, and I quote, ‘‘Until agencies address these shortcomings, there is increased risk that these agencies will not know 

whether the multi-billion dollar investments fully meet their intended objectives.’’ 

I look forward to hearing from Mr. VanRoekel, the Chief Information Officer, about the progress the administration has made in 

improving the quality of IT investments, what is being done to improve oversight of those investments, and how overall spending is 

being reduced. 

In particular, I am interested in hearing about the administration’s efforts to improve transparency of IT investments. I also look 

forward to hearing from the industry leaders who can identify the 

challenges, opportunities we face in our efforts to improve the way 

that government invests in IT. 

And let me say this. As the chairman was speaking, I could not 

help but think about a few years ago when I sat as the ranking 

member on the Transportation Committee of the Maritime and 

Coast Guard Subcommittee. And one of the things that we discovered is that we had a broken procurement process in the Coast 

Guard. And the Coast Guard literally were buying boats that did 

not float, radar systems that were supposed to cover 360 degrees 

that were covering 180 degrees, radios that if they got wet, they 

did not operate. That was in this country. 

But I hope you listened to what the chairman said very carefully. 

When we are wasting money and not using it effectively and efficiently, I mean, that is money that could be used to do some things 

that we really do need done. And so that is why this hearing is so 

important. 

You know, I often talk to my staff about hearings and whether 

we get the value out of hearings. I want the people who address 

4 

us this morning to talk about how we can effectively get this done. 

I mean, it is nice to hear about the problem, but do we need time 

tables, Tom? I mean, what kind of things can be done so that when 

the chairman looks back at his legacy and hopefully we all look 

back at ours, we can say we actually did something and didn’t just 

spend time talking about it. 

I am sure the chairman shares any view. And I am hoping that 

when the folks come up here to testify, you will help us with some 

roadmaps—that is right, take out your pens, write it down—and so 

that we can be effective and efficient. Effective and efficient. 

Finally, I want to applaud the work of our resident technology 

expert, Representative Connolly, the ranking member of the Government Operations Subcommittee. Mr. Connolly held a forum in 

his district last May that explored many of the very same issues 

we will hear about today. He also has taken the lead in introducing 

legislation to reduce waste by consolidating Federal data centers. 

The administration’s efforts on data center consolidation are expected to save the government $3 billion by 2015. I believe it is 

time to modernize the way the government does business. This will 

require strategic investments in technology. But we should not 

overlook the importance of strategic investments in our workforce. 

Our acquisition community needs to have the tools necessary to effectively oversee increasingly complex systems from beginning to 

end. These professionals ensure that the government is a smarter 

consumer. 

And with that, I yield back. 

Chairman ISSA. I thank the gentleman. 

Because this will be referred to the Government Ops Subcommittee, I would like to recognize its chairman, Mr. Mica, for a 

short opening statement. 

Mr. MICA. Well, thank you for yielding, and also thank you, 

Chairman Issa, for holding this important hearing, hearing that 

deals with government waste, particularly on the eve of the Congress considering expanding our national indebtedness, where it is 

nearly at $16.5 trillion, and we have got to look at every avenue 

and source of wasteful spending. 

This is not a small-potatoes item. IT, we spent in the last decade 

$600 billion. And the information we have today we gain primarily 

from a 2012 report from the GAO which took the opportunity to review what was going on and highlighted the need to address potentially duplicative IT investments to avoid, again, wasteful spending. In fact, in the fiscal year that GAO looked at, 2011, they found 

that the Federal government funded 622 separate human resources 

systems, 580 financial management systems, and 777 supply chain 

management systems. 

So what we have ended up with is various Federal agencies, as 

well as offices within the different agencies, making separate and 

very costly investments in back office systems that often perform 

the same function. And all this duplication comes at some pretty 

significant cost. 

Unfortunately, that has been our approach. And what we should 

be doing is aggregating demand among the agencies and their different offices to get the best prices for various IT products and 

services, which we aren’t properly doing. 

5 

We also waste money investing in systems that fail to become 

fully functional. And the staff, from the report, this GAO report, indicated that, for example, the National Archives and Records Administration, also under our committee’s jurisdiction, poured—now 

listen to this—$375 million into the development of an electronic 

records archive system that has now been put to a halt. And we 

will look further at that. 

Then we look at the office of OPM, Office of Personnel Management, cancelled its Retirement Systems Modernization program 

after spending nearly $0.25 billion on that program. We will look 

at this. 

Despite these failed investments, OMB, unfortunately, recently 

abandoned the practice of including in the President’s budget submission a summary of the extent of the risk represented by major 

Federal IT investments. According to a report issued by GAO last 

fall, the President’s budget submission from 2007 to 2009 included 

an overview of the investment performance over several budget 

years of IT projects in need of management attention. But this 

practice was abandoned, unfortunately, by the White House in its 

last four budget submissions. 

The unfortunate reality is that 16 years following the signing of 

the seminal Clinger-Cohen legislation that laid the very foundation 

for the Federal government’s acquisition and management of IT 

and 10 years after the E–Government Act was passed which established the Federal chief information officers, the program would set 

program failure rates and cost overruns which currently now 

plague us and, unfortunately, they account for an estimated 72 to 

80 percent of large government IT programs. And that is an industry calculation. 

The first step in addressing any problem is determining who is 

responsible and holding people accountable. The Office of Management and Budget also needs to take responsibility for the lack of 

coordination and intelligent investment in IT being done at the 

agency level. OMB has to be willing to step up and take responsibility and say the buck stops here. 

Finally, I am also disappointed that the head of OMB’s Office of 

Federal Procurement Policy, the Federal government’s chief acquisition individual and person responsible, is not with us today, although he was invited to testify. But I am glad we have with us 

today OMB’s financial chief information officer. Look forward to his 

testimony and the others and look forward to working with you on 

this important issue. And yield back. 

Chairman ISSA. I thank the gentleman. 

We now recognize the ranking member, the gentleman who replaced our first witness, for his opening statement. 

Mr. CONNOLLY. I thank the chair. And I thank the ranking member, Mr. Cummings, for his kind words. And I want to thank the 

chair. If the entire 113th Congress can begin on the note we are 

beginning on today, we are going to be making music for 2 years. 

But I want to thank the chair for his leadership in this particular 

area. We are working together and our staffs are working together 

on a draft bill that I think can move us into the bright sunshine 

of this part of the 21st century, giving more flexibility to the Federal government and to Federal managers. Because some of the 

6 

problems outlined by my friend, Mr. Mica, the new chairman of the 

Government Operations Subcommittee, have to do with how the 

government is organized and the flexibility or lack thereof that we 

give to managers. And as indicated, we spend about $81 billion a year, not all of 

that well. Government is slow to pull the plug when we do make 

a mistake, much slower than the private sector. Government has 

a problem in terms of recruiting and retaining the skilled workforce you need for large, complex contracts such as these. 

And so addressing those issues, both in process, procurement, 

and people, I think is very important. 

And so I look forward to continuing to work with the chairman 

of the full committee and with the chairman of the subcommittee 

in trying to come up with legislation that makes sense, that provides flexibility, that gives maybe more discretion to CIOs, to the 

chief information officers of Federal agencies, and that will save 

money and make sure that the deployment of the resources we do 

have is more efficacious. 

Finally, Mr. Chairman, I do want to welcome my predecessor, 

Tom Davis, former chairman of this committee, whose portrait 

hangs here, who preceded me on the Board of Supervisors of Fairfax County, proceeded me as the chairman of Fairfax County, and 

preceded me here in Congress. 

Just last week, Tom was gracious enough to participate in a staff 

retreat I held—I have an annual staff retreat—sort of giving us a 

different take on some issues and how he did it in terms of managing constituent services and legislative assignments in the 14 

years he graced these halls. I want to thank Tom for his graciousness as my predecessor and for making my transition here in Congress as smooth as possible. It is a model for bipartisan cooperation. 

Welcome, Mr. Davis. 

And thank you again, Mr. Chairman. 

Chairman ISSA. I thank you. 

Now we recognize the Honorable Mr. Davis, who has returned to 

the place in which he was hung. 

Mr. DAVIS. Many times. 

Chairman ISSA. Tom, you are my friend, you are my mentor. And 

as you have heard from both sides of the aisle, you are somebody 

whose opinion we respect. And with that, you are recognized. 

STATEMENT OF HON. TOM DAVIS, A FORMER REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA 

Mr. DAVIS. Mr. Chairman, thank you very much. And congratulation to both you and Mr. Cummings on a terrific start. I sat on this 

committee where the rules, sometimes we would be here all afternoon. So that is a good start. And I think the hearing is a great 

place to start because this is not a Republican or Democratic issue. 

We can argue over we have too much government or not enough 

government. But we want the government we are paying for. And 

that is really what this is about today. So I think we can join on 

that. 

I just also say to subcommittee chairman Mr. Mica and to Mr. 

Connolly, Mr. Connolly, you followed me on the Board of SuperVerDate Aug 31 2005 09:28 Mar 15, 2013 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 C:\DOCS\79790.TXT APRIL
7 

visors, as chairman of the board and to Congress, and if you can 

like me retire undefeated and unindicted maybe one day you will 

be a witness as well. 

Chairman ISSA. I think he wants to be hung, too. 

Mr. DAVIS. Take a couple more terms and a switch. But I am not 

going to get into that. 

Let me just also acknowledge, Jim Turner is here. He was the 

author of the E–Government Act. I attached a number of pieces of 

legislation, but Jim was a distinguished member of this committee 

on the Democratic side when I was the subcommittee chairman in 

2002 when we worked that bipartisan legislation together. And I 

think it is time for an update. And I think this is an apt hearing 

for that. 

Let me put all of my testimony in the record and just make a few salient points. The Federal government spends about $81 billion in IT annually, making it the largest single acquirer, adopter, 

and user of IT globally, more than any other nation, global corporation, or organization. So the Federal government should be the best 

at how it plans, sources, implements, and operates IT to achieve 

missions successfully. Doesn’t always do it that way. 

Few thoughts. We could get an improved return on investment. 

In the private sector, IT is an investment, it is a strategic enabler. 

But in the Federal government all too often IT is viewed and treated as a discretionary expense. Cost savings realized from these investments can be many times greater than what you achieve when 

you cut IT and require, and we can achieve part of this by executive oversight. 

CIO authority. Department-level CIOs currently have responsibility and accountability to manage their IT deployments, but they 

lack the organizational and budget authority. 

Too loud? Okay. 

Chairman ISSA. Just if you could, Tom, if you could pull it a little 

bit closer. We are getting a little echo up here. 

Mr. DAVIS. Okay. 

Shared services. Federal government is the only large multinational organization globally who has not implemented shared 

services for its back office functions. OMB should build upon its 

prior line of business and shared first strategies to require agencies 

to move away from the bureau-centric administrative systems and 

to department-wide and government-wide administrative shared 

solution services. 

Also, on cybersecurity, really nothing else matters in Federal IT 

if the government doesn’t get cybersecurity right. We passed 

FISMA, the Federal Information Security Management Act, as a 

part of the E–Government Act in 2002. It needs to be updated and 

operationalized. I know there are jurisdictional problems here in 

Congress, but if we don’t get cybersecurity right, nothing else is 

going to matter. 

Information, devices, and the Federal workforce is becoming increasingly mobile. Therefore, OMB and congressional oversight for 

government-wide implementation of existing cybersecurity priorities is critical. And as the government moves from securing systems and devices to securing data at rest and data in transit for 

information-sharing purposes, the government will need to identify 

8 

and implement new solutions in areas such as continuous monitoring, identity, authentication, and credential management and 

cryptology. 

Let me also move in my last minute and a half, the procurement 

workforce. This has been a problem. We have cut back the procurement workforce, we don’t give them appropriate training, we don’t 

give sometimes enough leeway. This is critical. So many IT functions that go sideways are because we don’t have the appropriate 

oversight, we haven’t empowered our procurement workforce to do 

the job. 

Procurement processes, as you know in government, sometimes 

the mission is not to make a mistake. So you don’t get the kind of 

innovation that you would get in other cases. And I could talk more 

on that during the questions and answers, but I want to get 

through my time. 

Continuing resolutions. CRs kill IT procurements, it kills innovation in government, because no agency head is going to be spending 

their budget on new procurements, follow-on work, if they don’t 

know what their budget is going to be. Their inclination is to protect their people. And we have seen us step backward and backward as Congress doesn’t get budgets done on time and goes 

through CRs. 

And finally, some of the rules that we have that I think are 

passed with good intentions to ensure that lobbyists don’t come in 

and have undue influence also hurt us because many times the 

people writing these have not had appropriate contacts with the 

outside world, small companies trying to get in and share their 

ideas in government and operate in a bubble. 

I think it is a good idea for companies to come in and share their 

ideas and have an open door to policymakers so that they know 

what the existing technologies are, can be aware of what government’s needs are, and therefore can address them in the procurements. And I will stop there on time. 

Chairman ISSA. I have never seen a professional get it exactly to 

the second. Tom, you are good. 

[Prepared statement of Mr. Davis follows:] 

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Chairman ISSA. Because you are an unusual witness, I have so 

many questions that I will just follow up endlessly over dinner 

sometime. 

But, Mr. Davis, the one thing that I wanted your comment on 

that wasn’t in your opening statement was, because you were here 

for the creation of chief information officers, did you ever envision 

having more than one chief per agency and on the average more 

than two chiefs per agency and all but one of them not having any 

budget authority? 

Mr. DAVIS. No. I don’t think anyone knew what would happen 

when we set them up this way. There has certainly been a proliferation of CIOs. But I think you can have as many as you want 

if you give them the right authority. The problem is they are sitting out there and in many cases they are toothless tigers. Some 

great people, very dedicated. But if you can’t enforce this, that is 

why we get so many stovepipes built up. 

Chairman ISSA. So it would be fair to say that the 40 CIOs that 

are in Department of Justice alone would be a little more than you 

would have assigned. 

Mr. DAVIS. I don’t think anybody envisioned that when we did 

it originally. 

Chairman ISSA. Or the 35 in the Department of Transportation. 

Mr. DAVIS. Well, I am not picking on anybody. But I just think, 

at the time—what you need are lines of authority and decision 

makers. It is okay to have a multiplicity of CIOs if they have authority. But if they don’t have authority. 

Chairman ISSA. So, in short, if they have their share of the budget and can be held accountable for every penny that goes under 

their jurisdiction, you are okay with it as long as, in fact, that is 

what comes with being a chief, is budget authority. 

Mr. DAVIS. Well, you know, look, you don’t want 40 stovepipes 

out there. You have got to have your CIO for your agency overseeing those kind of things. And whatever you call the other CIOs, 

at the end of the day there needs a congruency there that is not 

always built into the system. CIOs don’t know who to report to. If 

you are a CIO, for example, subsidiary within an organization, do 

you report to your CIO or do you report to your agency head? So 

there is just I think a lot of confusion out there over what the authority lines go. 

Chairman ISSA. Mr. Cummings? 

Mr. CUMMINGS. Tom, when you were chairman of this committee, 

you authored the Federal Information Security Management Act, 

and Chairman Issa and I worked together last Congress to introduce legislation to update FISMA, which has now been in place, of 

course, for over a decade. Our bill would require that the Federal 

government shift to a system of continuous monitoring of information systems. 

One of the things that we hear a lot about, of course, is cyber 

threats. You have already said that you think that FISMA needs 

to be updated. But can you talk about the cyber threats, because 

it seems that that is what we should be worried about, because it 

is my understanding that these threats and cyber attacks can do 

quite a bit of damage, and I just wanted you to comment on that. 

14 

Mr. DAVIS. They do all kinds of damage. First of all, they could 

do societal damage like a 9/11, when you get into it, if they get into 

the wrong systems and were at play. But you have a lot of information being lifted. And I don’t want to get into—you have had situations where we are negotiating trade agreements and we are negotiating with other countries and they have been able to lift all of 

our information off. 

So it is basically the fact that a lot of confidential private government information is being lifted off by our competitors and we are 

providing it to them free. It is a huge cost to taxpayers and a huge 

cost basically to America. 

Mr. CUMMINGS. Now, are there any other changes to the law that 

you think we need to make? 

Mr. DAVIS. Well, I think just on FISMA how you do it there are 

probably a dozen ways to do it, but it needs to be operationalized. 

It has turned into a check-the-box routine. It has had some good 

things, because they weren’t even checking boxes before this. But 

I think your idea of continuous monitoring, testing, prodding of the 

systems is very, very important. So that is the direction I think it 

needs to move. 

Mr. CUMMINGS. Mr. Chairman, I yield back. 

Chairman ISSA. I thank the gentleman. 

Per your agreement, I understand you will be able to answer 

written questions by both sides. 

With that, we will take an extremely short recess and go to our 

next panel. 

Thank you again, Mr. Davis. 

[Recess.] 

Chairman ISSA. While that second panel is getting set up, for the 

new members I think it is important to note that normally Members of Congress who come before this committee testify but don’t 

answer any questions. So Mr. Davis sort of is in that in between, 

and I appreciated that he took a couple of follow-ups. But for future 

reference, and this includes when you may go based on areas of expertise to other committees, that is normally the tradition, is Members are not sworn and Members of the House and Senate normally 

don’t answer questions, although they may. So just a little piece of 

information from an old guy. 

And with that, we recognize our second panel of witnesses. Mr. 

Steven VanRoekel is the Federal Chief Information Officer of the 

Office of Management and Budget. Now, that is a chief’s chief. We 

want to make sure we get that out here, because Mr. Davis defined 

such a thing. And Mr. David Powner is the Director of Government 

Accountability Office, Information Technology Management, and in 

fact for those again new members, GAO works for us. 

So I want to thank both of you for being here today. Pursuant 

to the committee rules that were just passed before your very eyes, 

I would like you to both rise and take the oath. Please raise your 

right hands. Do you solemnly swear or affirm that the testimony 

you are about to give will be the truth, the whole truth and nothing 

but the truth? Let the record indicate that both witnesses answered in the affirmative. Please be seated. 

My previous chairman, Mr. Towns, is now retired, but I will one 

time more introduce the clock the way he did. Everywhere in 

15 

America we know that green means go, yellow means go through 

the intersection real quick, and red means stop. So it is a 5-minute 

clock. Please come as close as you can to it. 

Mr. VanRoekel? 

WITNESS STATEMENTS 

STATEMENT OF STEVEN VANROEKEL 

Mr. VANROEKEL. Good afternoon, Chairman Issa, Ranking Member Cummings and members of the committee. Thank you for the 

opportunity to testify on the administration’s efforts to manage the 

Federal government’s investment in information technology. 

The growth of cloud computing, mobile devices, data and social 

media is creating a demand for government services that is once 

unforeseen. Americans’ expectations of their government have 

reached a critical point even faster than we anticipated. They expect us through the use of technology to provide the same quality 

of service they experience in their everyday lives and we must meet 

these expectations efficiently and securely. 

During my nearly 20 years in the private sector, I woke up every 

day focused on improving and expanding core services and customer value while also cutting costs. We must ensure the Government has the same mentality by driving innovation to meet customer needs, maximizing the return on our investment in Federal 

IT, and in establishing a trusted foundation for securing and protecting our information resources. 

Since the mid-1990s, Federal IT spending grew about 7 percent 

annually. A culture was built which assumed that to do new things 

we must spend more. Had we continued on that growth curve, we 

would be spending over $100 billion on IT today versus the $78 billion to $81 billion we do spend. In 2009, we worked to freeze Federal IT expenditures, and under my watch we have reduced it year 

over year. Although spending is flat or declining, we refuse to use 

this as an excuse to do less with less. Instead, we are applying the 

private sector mentality of continuous improvement to expand and 

improve core services and customer benefit while reducing costs. In 

this time of fiscal austerity, we must ensure that we are always innovating with less. 

But if we focus solely on cost reduction we will overlook the value 

that IT brings to the Government and our country. Few, if any new 

government services will be established without technology as their 

foundation. Strategically investing and deploying IT can provide a 

downstream multiplier effect, not only in efficiency and cost savings, but by making us more productive, more customer friendly 

and more secure. 

Today I would like to highlight the three principles in our approach to innovate with less. First, we are working every day to 

drive innovation into everything we do. The value of government 

programs rests upon their ability to positively impact the lives of 

Americans. Simply put, the American people must be at the center 

of every action we take and no decision should be made that cannot 

be tied to significant customer benefit or savings. 

We must also embrace 21st-century ways of building government 

solutions. For too long the Federal landscape has not benefited 

16 

from productivity gains seen in the private sector. We can’t just 

spend less; we need to change the way we do business. This includes modular solutions, embracing mobile technology in new 

ways, and creating services that were once unforeseen. 

Driving innovation doesn’t end at the walls of government. The 

information maintained by the government is a national asset with 

tremendous potential value to the public, entrepreneurs, and to our 

own programs. The administration’s innovation agenda includes 

multiple initiatives that will open data to enhance information exchanges, interoperability, and public release of data while safeguarding information security and privacy. Open government data 

is creating an incredible platform for innovation in the private sector, continuing to foster an increasingly important role for government in the new data economy. Today, private sector entrepreneurs 

are leveraging this asset to create jobs and provide better service 

for the American people. 

Second, we are focused on maximizing the overall return on investment in Federal IT and are providing agency leadership with 

tools to help look across their IT portfolios to make strategic investment decisions. We are driving cost savings in government through 

many targeted efforts, including investment reviews, our cloud-first 

policy, strategic sourcing, data center optimization and 

PortfolioStat. By gaining efficiency we can not only save money, 

but we can drive innovation in government by culling from inefficient programs and reinvesting in high ROI, mission-focused technology solutions. 

Third, we are advancing cybersecurity capabilities on every front. 

This issue requires creative solutions to address emerging and increasingly sophisticated threats and new vulnerabilities introduced 

by rapidly changing technology. To overcome this challenge we 

must continue to implement initiatives such as the cybersecurity 

agency goals, FISMA and FedRAMP, and to continuously measure 

agency progress in improving information security performance. 

Building on the last four years, our focus going forward will be to 

drive innovation in government and make investments in technology that better serve the American people. We will use technology to improve productivity and lower barriers to citizen and 

business interaction with government, all while bolstering 

cybersecurity. 

Thank you for the opportunity to appear today, and I look forward to our discussion. 

Chairman ISSA. Thank you. 

[Prepared statement of Mr. VanRoekel follows:] 

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Chairman ISSA. Mr. Powner? 

STATEMENT OF DAVID A. POWNER 

Mr. POWNER. Chairman Issa, Ranking Member Cummings and 

members of the committee, we appreciate the opportunity to testify 

on wasteful IT spending. My comments will focus on three areas. 

One, the Government’s poor record when it comes to delivering IT. 

Two, recent OMB initiatives to address the problems. And three, 

what needs to be done to fully address the issues at hand. 

GAO’s work and others over the year have shown that the Government has a poor track record when it comes to managing and 

delivering IT. My written statement lays out several recent examples where billions of taxpayers’ dollars have been wasted on failed 

projects. In addition, the IT Dashboard currently shows nearly 200 

investments totaling $12.5 billion that are at risk, and these numbers are understated. 

To address these issues, over the past several years OMB has 

put in place several initiatives that have resulted in improvements. 

First, the IT Dashboard provides realtime reporting of over 700 

major investments and highlight CIOs’ assessment of each. This information has been used to terminate and scale back projects and 

reduce budgets by nearly $4 billion, according to OMB. In addition, 

the comprehensive IT reform plan covers areas like IT governance, 

program management and procurement. An important goal of this 

plan is for agencies to turn around one-third of their underperforming projects. 

One of the more important aspects of the reform plan is the data 

center consolidation effort, in which OMB claims could result in $3 

billion in savings. And more recently the administration rolled out 

the PortfolioStat initiative that focuses on eliminating duplicative 

IT systems. OMB estimates about $2.5 billion in savings here. The 

big takeaway here is that by turning around troubled IT projects, 

consolidating data centers, and eliminating duplicative commodity 

IT systems, the Government can save somewhere between $5 billion and $10 billion if indeed these initiatives are successfully carried out. 

Based on our work over the past several years, here are key 

areas that need more attention. First, we need even better transparency and more action on troubled projects. This starts with accurate information on the IT Dashboard. We can’t have situations 

where agencies like DOD report no high risk systems when in fact 

they have many. On the other hand, some agencies, like DHS, are 

reporting accurately and moving more of their projects to a green 

status. However, overall agencies are nowhere near accomplishing 

the IT reform goal of turning around one-third of the underperforming projects. I would like to stress the importance of tackling 

these projects in smaller increments. My written statement highlights seven successful IT acquisitions and each took an incremental approach. 

Second, we need to tackle duplication more aggressively. For example, our work shows that 27 major departments and agencies 

have nearly 600 financial management systems and spend almost 

$3 billion on these systems annually. The administration’s 

23 

PortfolioStat process is an excellent initiative to address this duplication. 

Third, OMB and agencies need to follow through on their data 

center plans. Server utilization rates are far below desired 

amounts, consolidation still needs to occur, and ultimately the key 

performance metric here is dollars saved. DOD alone reports that 

they can save $2.2 billion and OMB claims that the Government 

can save $3 billion by 2015. 

Finally, the Government needs to perform the required operational analysis on the operational systems totaling $55 billion so 

that over time we can spend more money on modernizing government operations and less on maintaining old, archaic systems. All 

these areas—improving transparency, turning around large IT acquisitions, tackling duplication, optimizing data centers, and shifting the percentage of what we specifically are spending the $80 billion on—require strong and accountable chief information officers 

and attention to the many GAO recommendations we have made 

in these areas. 

Mr. Chairman, GAO’s plan is to stay on top of these important 

issues as we currently have worked, looking at the Dashboard, 

PortfolioStat, data center consolidation and IT duplication. We look 

forward to further assisting you in your important oversight role. 

This concludes my statement. I would be pleased to respond to 

questions. 

Chairman ISSA. Thank you. 

[Prepared statement of Mr. Powner follows:] 

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Chairman ISSA. For all the members, be aware that somewhere 

in the 2 o’clock time range we will have our first and only series 

of votes for the day. It will be no more than three votes, and we 

will return immediately following that. I will go down the order 

normally, but if somebody is here ahead of you, then I will go to 

that person first and then return to the normal order. 

Mr. Powner, I guess the first problem we seem to have is that 

the software for the IT Dashboard is not performing properly, if I 

heard you say, that in fact what we are getting there in reporting, 

granted it is not automated reporting, but that reporting is not factual. In a nutshell, how do we fix that? How do we get that reporting to fairly reflect the real green, red, yellow that we should? 

Mr. POWNER. Well, Mr. Chairman, there is reporting on cost and 

schedule performance, but there is a key report on CIO assessment 

and that doesn’t require the software to function. That requires the 

CIO to be on top of their projects and to accurately report. So we 

issued a report late last year that highlighted some of the problems. 

We have some departments and agencies reporting accurately. 

DOD reported zero red investments, and that was soon after they 

cancelled the one investment that you highlighted in the opening 

to the hearing here. So we need to make sure that we get accurate 

reporting, that CIOs are on top of the status of these 700 major IT 

investments. 

Chairman ISSA. Let me follow up briefly. There is 243 CIOs. 

Only one has full budget authority, and that is Veterans Affairs. 

Do you see a difference between the one and the 242 in the sense 

of accountability? I know that is a very small offsetting number. 

We don’t have a second example. But can you give us a contrast 

that you think budget responsibility and authority can bring? 

Mr. POWNER. Clearly budget authority helps with your authorities, but there is also some CIOs in the Federal government, I can 

point to several examples, where even without budget authority 

they are still quite successful. And some areas, if you look at IRS 

as an example, over the years they have greatly improved. Their 

chief information, chief technology officer there gets a lot done, gets 

it done well. DHS is another good example where even without 

budget authority they still can be quite successful. 

Chairman ISSA. Before I move on, this committee has a long history of bringing people in when they screw up. How do I do what 

you just did? How do I find the areas of excellence, identify them 

and recognize them? And not just I, I mean our Government. Because certainly we do have, and I have met many of them, these 

information officers that are doing an excellent job that are on top 

of it, but out of 243 clearly some are not. 

Mr. POWNER. Well, you know, I mentioned a few agencies that 

are performing better than others, but clearly Steve VanRoekel has 

the best picture into who those stronger CIOs are across the Federal government. He meets with them frequently in many of his 

initiatives, he has seen them firsthand, in addition to our work at 

GAO. But he has much more hands-on working experience and I 

would rely heavily on him. 

Chairman ISSA. Then I will go to the gentleman. Can you give 

me your best and brightest and tell me how I leverage the accoVerDate Aug 31 2005 09:28 Mar 15, 2013 Jkt 000000 PO 00000 Frm 00052 Fmt 6633 Sfmt 6633 C:\DOCS\79790.TXT APRIL
49 

lades to them so that the others will realize that excellence is rewarded? 

Mr. VANROEKEL. I am happy to provide names and lots of examples of best practices that we have done. 

Chairman ISSA. We will take them. 

Mr. VANROEKEL. We are taking this direction and actually institutionalizing a lot of this work in the CIO Council. We have stood 

up an effort this year to immortalize best practice sharing in a way 

that really has never been done before, putting examples of best 

case around procurement, around implementation of different technologies and things like that, as well as starting a CIO university 

that we bring new CIOs that are entering the Government to bear 

to consume our handbook, hear from the better CIOs on how to get 

best results and things like that. 

Chairman ISSA. By the way, who is the IRS CIO that you mentioned? 

Mr. POWNER. Terry Milholland. He goes by CTO, but in fact he 

is their chief information officer. 

Chairman ISSA. Excellent. I am going to just touch on a couple 

of areas. Ms. Duckworth actually brought this to me, so sometimes 

the most important questions are from freshmen. 

I have been in Congress for 12 years. Before I was in Congress 

I worked on a voluntary basis for my county. So as far back as 

about 16 years ago I was acutely aware that we put a lot of money 

into interoperable systems so that our counties, our cities, our fire 

departments and so on could communicate, particularly in times of 

emergencies, which San Diego tends to have a fire, a major fire 

every year or two. It is now more than a decade later and these 

systems are generally no better. Additionally, we reported in fiscal 

year 2011 we funded 622 separate human resource systems at a 

cost of $2.4 billion. 

The frustration that I have, the frustration the gentlelady has 

from Illinois is how do we stop looking at things 6 years, 10 years, 

20 years later and find out that what we said the job was to consolidate, the job was to go to a single interoperable system and so 

on, just as we are doing here today, how do we stop it from expanding? Because I am sure that we are not 622 separate human resource systems, and I know for a fact that the systems used by fire 

and emergency operations around my State at least are not 14 

years old. They are systems that don’t talk to each other that were 

bought after we recognized the problem. 

Mr. VanRoekel? 

Mr. VANROEKEL. I think a primary way to think about this is if 

you look at the history of technology and the way it grew up, even 

in the private sector, and I was, as I mentioned in my opening 

statement, in high-tech in the private sector for 20 years, most of 

that at Microsoft Corporation, so I saw a lot of evolution in this 

space. 

The industry grew up in a way that was very single purpose, 

where it was unthinkable on a server to install multiple kinds of 

software. You would just put an e-mail on one, a database on another and things like that. There is now technology available that 

allows us to do things massively different. 

50 

I think the private sector has realized that. As Mr. Davis said 

in his opening statement, there is this inflection point we all go 

through where technology is seen as this very discretionary thing 

to a very strategic thing, as you mentioned, the way to connect to 

customers or sales people or data, things like that. We are in the 

midst of that inflection point in government and it hasn’t been fully 

realized. And I think that, coupled with the cost pressure, the 

cybersecurity pressure, and probably most importantly the expectations of citizens, are going to drive a different behavior. 

What I have probably noticed the most coming into government 

is that we spend a lot of time focusing on a single role, saying a 

CIO kind of owns this function, procurement professional owns this 

function, CFO, human resources, et cetera. And one of the things 

I am working very hard to instill is across C-level conversation on 

these things. 

When I ran the PortfolioStat process last summer, my agenda 

with that process was not just to look at the IT portfolio and sort 

of have an assessment there, but it was to get people around the 

table and teach from the deputy secretary and all the C-level executives how to run a private sector investment review board meeting, how to actually take a look at all the levers they can pull and 

how to make this strategic. So our initial goal was really consolidation at that level, saying it is unthinkable to run more than one 

email system if you are in an agency, and many are running more 

than one. It is unthinkable to run more than one other system. And 

so encouraging them to drive that level of consolidation. 

And then Joseph Jordan and I, the head of the Office of Federal 

Procurement Policy, worked last year and launched the Strategic 

Sourcing Leadership Council that is a group of C-level executives 

from some of the largest agencies in government representing the 

majority of our IT spend who are right now working on a plan to 

do a minimum of those 15 systems of consolidations. They are 

going to be reporting back to us in the next month or two. 

Chairman ISSA. Thank you. 

Mr. Cummings. 

Mr. CUMMINGS. Thank you very much. Mr. Chairman, I am glad 

you asked Mr. Powner about the person at IRS that apparently is 

doing it right. That is a good thing. I think it is important that we 

highlight those people who come in and do the right thing and do 

it well. 

And that leads me to you, Mr. VanRoekel. When you were talking about best practices and trying to put them into policy, are we 

getting—you know, a lot of times people try to guard their little 

turf. They feel like they are doing everything right. And maybe 

they have been there for a while and they see somebody like Terry 

McMillan, is it? What was the name? Terry? 

Mr. VANROEKEL. Milholland. 

Mr. CUMMINGS. Milholland come along and they are resistant. Do 

you find that to be a problem at all? 

Mr. VANROEKEL. Definitely we have many challenges in government around moving the ball forward, embracing innovation. I 

often will call it blinking light syndrome, where people just love to 

own their own servers and have their own thing, where they like 

the blinking lights of those servers. Culture is an inhibitor. Past 

51 

behavior and people saying, well, that is the way we have always 

done it, I assume that is the way we should always do it in the 

future, is definitely a challenge we see. 

Mr. CUMMINGS. Are we getting the skills? Several people have 

mentioned skill levels of people coming in. Are we getting the kind 

of skilled people that we need to do the job? Because certainly if 

you don’t have the skills, you can be the blind leading the blind 

and losing money and effectiveness at the same time. I am just 

wondering. And if we are not getting those kind of people, how do 

we go about getting them? 

Mr. VANROEKEL. In my many years in the private sector, including a stint as Bill Gates’ assistant and being by his side and seeing 

some of the most fascinating, amazing people in the technology 

field, probably the biggest surprise I have had coming to government is the quality of some of the people in government. And you 

find many of them around government who are either yearning or 

doing things in amazingly innovative ways. 

A lot of times it is about giving those people permission, and I 

think that is the essence of good policy, is giving them a permission 

slip to go innovate, to break the culture of the way things have 

done in the past and move forward. I often hear from people after 

I have issued some policy around doing something massively differently than we have done before, they run around their agency 

holding that in the air saying, see, I can now do what I have been 

wanting to do, and that is creating a nice dynamic. 

We have also got, you know, there are people that have been in 

government a long time, haven’t maybe been trained to the level 

of 21st-century ways of doing things, and we have worked really 

hard to build new training mechanisms for them. And probably the 

most impactful thing we have done in the last year is we have 

launched what is called the Presidential Innovation Fellows Program that actually does rotations of private sector professionals in 

a non-conflicted way into government to work side-by-side with 

public sector employees to work on innovation challenges that the 

country is facing, but more importantly teach them how to do 

things in a 21st-century way. And that has beared incredible fruit. 

Mr. CUMMINGS. One of my concerns is cybersecurity. Do you believe that the updates to FISMA might help OMB and DHS in your 

efforts to ensure that the government information is protected from 

cyber attacks? 

Mr. VANROEKEL. I think the essence of what we need to do is 

really about flexibility. Cybersecurity threats are evolving every 

day. New technology, new devices present new threats. And having 

a mechanism like FISMA where you only do assessments on a not 

very regular basis is a good check and balance, but it is not the 

ultimate solution. And so I am probably most encouraged about our 

work in the continuous monitoring areas that we funded last year 

and are now starting to roll out this year. And this is a great highlight of across-government shared service where a procurement 

went out that is going to allow not only the Federal government 

to take advantage, but State, local and tribal are also eligible for 

this procurement to get volume and scale in our buying power, to 

actually look at a consistent view of cybersecurity threat monitoring across the government. 

52 

Mr. CUMMINGS. My last question is you recently said that you 

are encouraging agencies to evaluate the mission of their agencies 

when evaluating how they will cut their budgets if Congress does 

not pass legislation in time to avoid sequestration, and this is what 

you said, and I quote. ‘‘Cybersecurity is a top priority. When people 

are making the right priorities to meet the mission of the agencies 

in the most safe, secure and protecting citizens’ privacy way, we 

will make the right trade-offs I think to assure that this is happening.’’ And that is the end of the quote. 

How could budget cuts impact cybersecurity initiatives and how 

much do you worry about that? 

Mr. VANROEKEL. Well, I definitely worry about cybersecurity all 

the time, and it is something we have to be ever vigilant on, no 

matter what the budget situation is. And certainly budget cuts may 

have some impact, unforeseen impact on that. But the 

cybersecurity is a unique category of spend because it is in everything we do. It is not just one line item on the balance sheet. It 

is something that we look at and think about. Across, you know, 

from your mobile device to your desktop to your server room to 

your data center and everywhere in between, cybersecurity is a factor. So as agencies are looking at possible budget cuts, they have 

to look across that landscape and say, if I cut this program, this 

element of cyber that is associated with it may go away and does 

that change the dynamic on what our cyber stance is. It certainly 

could be that case, and we hope that is to be avoided. 

Mr. CUMMINGS. Thank you very much. 

Mr. MICA. [presiding.] Thank the gentleman. 

What we are going to do is they have called a vote, and I guess 

we have about 12, 13 minutes. So I would like to ask a few questions. We probably have time for one more on this side to be fair. 

We go in order of seniority. And then we will come back and pick 

up where we left off and the witnesses will return. 

Does staff know how many votes there are? Three votes. So it 

will probably be almost a half-hour. 

So with that, let me just ask a couple of questions, recognize myself. Usually the components you need to be successful are policy 

or a law in place, and then you have to have the personnel to execute it, and then you have to buy the right IT equipment to make 

this stuff work. 

My first question would be, are there changes in law that you 

would recommend that do not give you the ability to be successful? 

Mr. VANROEKEL. I think there is definitely room within the existing law on the policy side, implementation of people side, that definitely allow us the flexibility to be successful. I think the fact that 

we have—— 

Mr. MICA. So within existing law you have the authority by law 

and ability to do what you need to do to be successful? 

Mr. VANROEKEL. I do believe so. The challenge I think we face 

is probably around budgeting and thinking about how do we—and 

I know this is not an appropriations hearing—but how from a 

budget standpoint are IT dollars spent. One of our inhibitors I 

think on implementation of IT is that oftentimes for most agencies 

it is single-year spend, and without being able to extend that—— 

53 

Mr. MICA. Well, then there is something missing, too, because 

you said you have people who have great ideas, very great capabilities, but they don’t proceed. So somewhere they are not getting the 

policy which would either be set from your level, which you just 

said when you give them the authority they run around with the 

paper. So somewhere we are missing the ability to move forward. 

The second thing, Mr. Powner, on the IRS, you mentioned IRS, 

and we get into personnel. And Mr. Cummings I think mentioned 

this too. You have got to have the best personnel. You said we have 

many of them, but sometimes we have turnover, we don’t keep 

them or we don’t attract them. 

When this committee worked on some reform of IRS, years ago 

I worked on that, one of the problems we had, we had these very 

expensive IT systems and computer, massive operations, but we 

weren’t retaining, able to recruit or maintaining and keeping folks 

that could do this work. We came back and changed the parameters of being able to hire people. Sometimes in the private sector 

you can make three and four times what we were paying them. So 

do we have the ability to hire people and pay them and retain 

them, from your experience? 

Mr. POWNER. Yeah, IRS is a good example. And you are right, 

they were the poster child for years, and then there was a fair 

amount of congressional interaction and there was critical positions 

pay granted at IRS, and a number of those positions were granted 

towards the IT professionals. So their pay was bumped up. And 

then also when you mention about continuity of leadership, over 

the last nine years they have had two CIOs. One was there for 4 

years, he is the current CIO at DHS, and the current one has been 

there for more than 4. So the turnover is a big deal. 

Mr. MICA. I know we did that for IRS, and I know I worked on 

something for a CFO actually in Transportation because we 

couldn’t get one or retain one. Government-wide, though, do we 

still have a problem as far as this personnel issue and the flexibility to retain and pay people? 

Mr. POWNER. Turnover is a big deal, because currently I think 

the average CIO, it is around 2 years and they are in and out, and 

that varies a little bit depending on how you break it down by political appointees and career, but not much. But on average it is 

about a 2-year turnover. 

Mr. MICA. What do you think, Mr. VanRoekel? 

Mr. VANROEKEL. Yeah, I think there is quite a bit of turnover. 

But the essence of a lot of what we try to do is institutionalize best 

behavior and best practices in a way that will kind of mitigate 

some of the turnover. 

Mr. MICA. We can look at that. And then if you said DOD has 

$2.2 billion worth of potential savings, is that what you said, identified? 

Mr. POWNER. Yes. That was when you look at their data center 

consolidation efforts, their current plan projects $2.2 billion in savings. 

Mr. MICA. And why isn’t that moving forward, or is it? 

Mr. VANROEKEL. It is moving forward. In their last public budget submission, they represented I think around or slightly over $300 

million in saving. 

54 

Mr. MICA. But the balance of the Federal government is $3 billion identified in savings. That billion just beyond defense doesn’t 

seem realistic. I think there is probably a lot more room, wouldn’t 

you agree? 

Mr. VANROEKEL. I think we are at the tip of the iceberg on some 

of this, yes. 

Mr. MICA. Okay. And finally, maybe for the committee you could 

submit—now, I am fascinated by Obamacare. I just came from 

Transportation, government buildings. They came to us. I guess we 

passed the law that allowed them to acquire a building to house 

5,000 bureaucrats, just the folks that are going to be administrating Obamacare. I am interested to know, they are going to have 

to set up IT systems and everything, maybe you could provide the 

committee with information that you have on where they are going 

with that. 

This is going to be a huge agency, a huge operation and requiring 

a lot of IT investment. Maybe you could share that with the committee. I will ask you. You don’t have to respond. 

Mr. MICA. Mrs. Maloney? 

Mrs. MALONEY. First of all, thank you very much. I want to ask 

a question about the Office of Financial Research, which was created under Dodd-Frank, and the purpose of it was to have the authority to collect data across the industry to look for systemic risk. 

So when you are talking about these data systems, they are put in 

place in many ways to save money. So taking out elements of them 

and whatever may hinder their ability, obviously if we had had 

such a system that could have foreseen the systemic risk and taken 

steps to prevent the subprime crisis and other credit default swaps 

and other instruments that were rocking our economy. I want to 

note that the chairman and I during this committee did a series 

of amendments trying to really legislate parts of the Office of Financial Research, so this is a bipartisan effort. 

But my question is, what factors go into determining which data 

centers will be closed? Certainly someone thought they were important to begin in the first place. And if you do close one, is there 

an appeal process where the agency or others can say you are telling us to close three data systems, but these are three or four elements that we think are going to save money in the long run, save 

lives or prevent financial crises. 

So how is that happening? Obviously you could go in and say, 

well, close down all the data systems, we are going to save money. 

But actually they are put in place for many reasons, one of which 

is to save money and to manage government better. 

Mr. VANROEKEL. Right. This is the essence of why I like to focus 

on data center optimization versus just closures. One of the reasons 

data centers that exist today in the Federal portfolio are inefficient 

is because of the way we use the data center itself versus what is 

actually running in the data center. The way IT has grown up, it 

is very inefficient to use single servers in data centers for single 

functions. New technology allows you to run multiple functions on 

single machines at a much lower cost than you have seen in the 

past. So in essence we are going to optimize and close data centers 

by shifting the resources of one to other ones, to more efficient data 

centers, not taking away services, not deprecating any service that 

55 

we provide. And if anything, while we make that shift, we actually 

modernize those systems to provide even better service. So it is a 

really nice opportunity to build efficiency and effectiveness at a 

much lower cost. 

Mrs. MALONEY. Well, your statement and Mr. Davis’ and others, 

I agree completely that cybersecurity is a national security concern 

and it should and is a bipartisan concern. And if there was one 

area that we should be moving swiftly on, it is cybersecurity. It is 

not only hitting the Pentagon, but financial institutions, trade institutions, commercial institutions. It is everywhere and every day, 

and countries have complete government agencies out there just 

going after our information. 

The fight before us reminds me very much of the intelligence 

fight we had after 9/11. It was basically a turf fight. No one wanted 

to give up turf. We were told our basic problem was a lack of upto-date intelligence. We had to create better interagency talking 

and preventive methods to make our country safer. 

And we have a turf battle now on cybersecurity. No one wants 

to give up their turf. Obviously OMB is the enforcer, but you need 

an agency that comes in and pulls all of this together and forces 

these agencies to work together, talk together, move together, to do 

that. 

What agency do you think would be the best lead agency if we 

were going to pull everyone together? I think we have a huge, huge 

turf battle that is preventing us from going forward. 

Mr. VANROEKEL. We have done a lot to move the ball forward on 

thinking about coordination in the cyber realm. And we take it sort 

of in two views. One is the classified network side, and then one 

is the public network side, the unclassified side. I am a chair member on a safeguarding committee that looks at the classified side 

and we should have another venue in which we talk about some 

of that. 

On the unclassified side, we have made the decision and worked 

very closely with Department of Homeland Security to provide the 

cyber capabilities, operationalize the cyber capabilities of the Government along with OMB and the White House to focus on what 

our capabilities are on cyber. So they run incident response 

through a group called US–CERT, the Cyber Emergency Response 

Team. They are leading the charge on the implementation of the 

government-wide continuous monitoring system, and then they 

work with us on CyberStat reviews which are going out and implementing FISMA, but a more regular touch base on cyber capabilities at the agency level. And I think we have done a lot there, 

along with the CIO Council, to coordinate our cyber activities in a 

way that I feel very confident that we are making not only good 

progress, but great progress on. 

Mr. MICA. There is one minute left in the vote. We will recess 

at this time. I would ask both of the witnesses if you would stay 

in recess and then be available, we will see if there are future 

questions. 

The committee stands in recess. 

[Recess.] 

56 

Chairman ISSA. [Presiding] Earlier, when I talked to Mr. Davis, 

as a friend and mentor, I did sort of badger him on the question 

of, for example, 40 CIOs at DOJ. I would like to revisit that again. 

The term CIO, one that you have, what is it supposed to mean? 

And do we, in fact, find another title for people who are less than 

the CIO and, in fact, those who either don’t have budget authority 

or who receive their budget authority as a subset of somebody else 

who has budget authority? If you would like to comment on that. 

Mr. VANROEKEL. Yes. As Mr. Davis said, I think it is not necessarily just a titling problem or opportunity that we maybe have 

in front of us. The title of CIO, it varies in many agencies. I think 

the thing that we need to examine as a tech community in looking 

at Federal IT is really the role and responsibility of the CIO and 

the CIO’s organization across the enterprise. You know, there are 

many agencies where the person at the top of the org chart has less 

budget and less authority than they maybe had when they were a 

subcomponent agency CIO. And so we see challenges there, challenges in governance, challenges in the ability to have influence 

and visibility across the entire IT portfolio. 

The very first memo I issued in my job when I took over for Mr. 

Kundra—— 

Chairman ISSA. Is this the 25-point plan? 

Mr. VANROEKEL. No. I did inherit that, which is great. But the 

first memo I issued was a memo that actually addressed CIO authorities and brought to bear new OMB guidance that CIOs need 

to be more empowered in agencies to make decisions around commodity IT and things like that across the agency. And so many 

agencies are operational I think now. 

Chairman ISSA. And I think, rightfully so, you know, the question of portfolio is a big part of the answer to the question. 

But let me ask a different question. To a certain extent, don’t we 

have a proliferation of CIO as a title because it also comes with 

pay; that is, an expectation that, you know, that you can’t get 

somebody above a given level unless you give them that title, and 

by creating that title, you create, quite frankly, a more expensive 

employee? 

Mr. VANROEKEL. I think pay could be a factor there. 

Chairman ISSA. By the way, just so you know, my limited experience outside of Congress was trying to get a clerk-typist to be, first, 

a secretary and then a stenographer. It was the same person, 

worked for the same colonel, but he wanted to pay her more, while 

I was in the military. I am very aware that titles, in fact, change 

pay. And so when you say ‘‘could be,’’ I am presuming you say almost inevitably must be in some cases. 

Mr. VANROEKEL. I just think there are other factors that play 

out in the Federal landscape. Having come from the private sector 

as I did and the position I was in before I came here, I certainly 

didn’t take this job for pay, even though I am the highest ranking 

CIO, conceivably, in the Federal government. It was more about 

the scope of responsibility. 

I think oftentimes that that title comes with a lot of responsibility. And thinking to the concept of I want to get the best person 

either inside government or outside government to take the job, the 

title actually matters because it equates to the scope of the responVerDate Aug 31 2005 09:28 Mar 15, 2013 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6633 C:\DOCS\79790.TXT APRIL
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sibility related there. Look at the Department of Transportation as 

an example. I would certainly want someone looking over the FAA 

to be a CIO, to be a person that has actually got that title and that 

authority. 

Chairman ISSA. But do you think the DOT has 35 such needs? 

Mr. VANROEKEL. I think the essence there is good governance, 

good policy inside the agency. You mentioned the Department of 

Justice. After we—— 

Chairman ISSA. Yeah, they top the list with 40. 

Mr. VANROEKEL. Yeah, they do. And after we issued the guidance on the Department of Justice, every dollar spent within the 

agency on IT, even at the level of purchase cards, goes across the 

desk of the main CIO in the Department of Justice. So they now 

have spending transparently and have built mechanisms to do that 

spend based on the guidance I issued, which is about the ability 

to manage and govern spending at that agency. So I think it is not 

a titling problem, it is a governance and management problem. 

Chairman ISSA. I hope you are right. And I am going to go to the 

gentleman from Texas. But I might mention that since they don’t 

seem to be able to read wiretap warrants to find out that, in fact, 

they would expose wrongdoing at ATF under their watch, I would 

suggest that they probably aren’t looking at every credit card receipt all that well. 

Mr. Farenthold? 

Mr. FARENTHOLD. And I want to expand a little bit on that, and 

on the Dashboard system, in particular. I am concerned we have 

a system here of garbage in, garbage out. And what kind of checks 

and balances do we have to make sure that we are getting good 

data in there? Is it just coming from the agencies? Do we have 

some sort of, you know, other checks and balances? 

Mr. POWNER. So a couple things. That is a legitimate concern, 

and we see it varies by agency. So we have issued numerous reports looking at the accuracy and reliability of what is going into 

those Dashboard ratings. The good news is over time we see that 

accuracy improving. But we still have some agencies that aren’t as 

accurate as we need them to be. 

Obviously, it is on the CIOs at those agencies to ensure that we 

have accurate reporting. OMB plays a key role. If they see something that raises red flags, you know, they can pick up the phone 

and make sure that we have better accuracy there. And we will 

continue to that do in our work for the Congress, looking at the accuracy. 

Mr. FARENTHOLD. Is there something we can do to help improve 

that? 

Mr. POWNER. Sure, there are some things you could do, I think, 

with your oversight. You can look at the Dashboard right now and 

you could look at some rather large departments and agencies and 

you see zero high-risk investments, similar to DOD. And some of 

these are large departments and agencies. And I think congressional hearings such as this where you have panels of those agencies that have zero reds would be a good thing. 

Mr. FARENTHOLD. All right. Let’s talk a little bit, Mr. VanRoekel, 

you worked for Microsoft for a while. And I think part of the problem that we have here is when we are buying things, how we are 

58 

specifying them and how we are deciding what we need and how 

it is all happening. You know, in the consumer market, and small, 

medium, and even to some degree large business market, Microsoft 

dictated what the standard was. Industry said: This is our product, 

do with it as you may. 

In the government, you tend to have the government come up 

with all of these detailed specifications for stuff that has to be custom coded or whatever. And then you look at probably the biggest 

success story coming out of the government, which was the Internet, which came out of DARPA, and it was a collaborative, almost 

open-systems sort of thing. 

Is there a way we can adopt the Internet model for developing 

the overall computing scheme of the government rather than having all these different agencies come up with all of these different 

technical standards, or relying on manufacturers saying, this is 

what our product is, take it or leave it? 

Mr. VANROEKEL. Yeah, I think the normal motion in the government in the past has been one where you say, well, I am faced with 

some challenge, some opportunity to build some system. You do one 

of two things, and you highlighted one of them. I think one is you 

go out and buy packaged software that exists and then you hire an 

integrator to try to glue it all together to come up with some solution. Or what you do is your requirements are so unique, exactly 

to your point, you describe this very monolithic, big solution and 

you have someone try to build it from scratch. 

And the problem with both of those approaches is that the risk 

surface is so incredibly high, and the outcome of that effort is not 

realized until much farther down the road. If you think about a 

quarterback throwing the long ball, you know, that you have a 

much higher likelihood that that thing is going to not be caught or 

intercepted, or it is just very, very risky, versus a 4-yard pass down 

the road. We have a lot more product managers in government that 

can throw the 4-yard pass that can actually architect a long-ball 

pass. 

And so what we need to do and what we have proposed in policy 

and what we are doing working with the industry is to really scope 

a modular approach, to say, you know, we don’t need to build these 

big monolithic things, we don’t need to absorb that much risk on 

the side of government. What we need to do is build smaller solutions that interoperate and work with each other. The private sector has been doing this for years, the government has not. And we 

are working with the private sector on developing that. 

Mr. FARENTHOLD. And I think one of the struggles we have in 

the government is getting—I mean, we have got some good people 

here. But we don’t offer what—you go in the private sector, you 

have got a great idea for doing something or solving a problem, you 

work out of your garage for a while, and then you have an IPO and 

then you are Steve Jobs. Pardon me for me going right after your 

one of your former employer’s biggest competitors. 

But is there a solution, maybe, again, going back to the Internet 

model, of having some of our standards and solutions developed in 

the academic field, rather than, you know, trying to get it done 

with employees, many of whom are really looking for the long term, 

you know, to be the next Mark Zuckerberg? 

59 

Mr. VANROEKEL. Yeah. I think the approach we are seeing 

emerge in government is something that is encapsulated in a strategy I published last summer called the digital strategy for the 21st 

century government. And what it basically prescribes is exactly 

that, using open standards, open-source software and other approaches to say there is a new way of building these solutions 

where you can have data interoperability across agencies, you can 

have system interoperability, that when we build solutions within 

government, we should built it once and use it many times, versus 

using these siloed approaches. 

So if you look at the use of technologies like GitHub, where we 

are now sharing code across government, some of our best practices 

work and some of the solutions we are building, this is the approach that I think is going to be the new default within government. 

Almost every project that I have text added in government where 

I can have a face-to-face meeting with a project that is going awry, 

I have recommended they go to this modular approach, and then 

in every single case it has turned out well. 

Mr. FARENTHOLD. I am out of time. We could go on for a long 

time. Maybe I will—— 

Chairman ISSA. Call your own hearing on this. I thank the gentleman. 

We now go to the gentlelady from the District of Columbia, Ms. 

Holmes Norton. 

Ms. NORTON. Thank you, Mr. Chairman. I wanted to get back to 

get some clarification on savings. You know, this Congress is very 

interested in savings, for good reason. And we know that there 

should be an incentive to use cloud first, we know it is the government’s policy, because you pay for the service you use. And yet we 

have contrarian responses. There are some agencies, apparently, 

where it would be cheaper to stay with a data center. I don’t understand why. But that is apparently the case. But I was, frankly, 

shocked to read a column yesterday about—here’s a figure that was 

in the column. It’s called ‘‘My Cup of IT,’’ Steve O’Keefe. ‘‘GAO tells 

us Feds spend 69 percent of the $81 billion IT budget on hospice 

care for geriatric systems,’’ you know. 

Let’s leave aside his characterization for the moment. But it 

would seem to imply that these systems are long past their usable 

lives. And yet it looks like the lion’s share of money is spent on 

propping them up. 

Why aren’t agencies rushing toward cloud, saving themselves 

money, and doing what the government’s policy says they should 

be doing in the first place? Either one of you can answer that question. I would appreciate it. 

Mr. VANROEKEL. I will take the first take on it. I think the challenge that we often face is the capital expenditure it takes to make 

the transformation. You often can’t just pick up a system you 

have—— 

Ms. NORTON. Well, of course. 

Mr. VANROEKEL. —and just move it to the cloud, you actually 

have to spend money to do that. 

Ms. NORTON. So is the administration budgeting for capital expenditure? 

60 

Mr. VANROEKEL. In many cases we are. But in this fiscal environment, my approach has been, let’s go find savings where we 

can, where we find low-hanging fruit, and then reinvest those savings. So my budget guidance I put out to agencies, for example, 

was to cut 10 percent of their IT budget in targeted areas. And I 

gave them the target areas, things around we’ve just been discussing today, commodity IT and other places where it doesn’t take 

that capital lever to move. And then I, to net to a 5 percent down, 

I gave them 5 percent of that 10 back to say, okay, now this is capital you should be investing in these new areas. And the new areas 

should be focused on systems modernization, cybersecurity, employee productivity or citizen-facing services, making those run in 

a better way. 

And then I ran the portfolio set process to help them find that 

10 percent within their agency in a very data-driven way. We went 

and analyzed all the commodity IT systems they were running and 

things. And so this is a spirit that I am trying to inject into government. 

Ms. NORTON. Because it looks like for sometime now there is not 

going to be the capital. I mean, the cloud is an ideal. A cloud is 

what we would like to see. But let’s face it, like so much of IT, if 

it takes heavy capital investment, it just can’t happen for some 

time. It is going to happen very gradually. Isn’t that so? 

Mr. VANROEKEL. That is right. Unless you inspire this let’s examine what’s working, what’s not working, take what’s not working, cut it, and then move it in. 

Ms. NORTON. Have you all ever done a cost benefit? I mean, 

would it be worth it to speed it up because of the savings? Or is 

this just not something we could bring money to bear on at this 

time, no matter what? 

Mr. VANROEKEL. In certain cases, definitely, it would be. It 

would be advantageous. But what you have to be careful about is 

looking at the—you don’t want to just take bad behavior that is 

local and move it, that bad behavior, to the cloud. You should think 

about, how am I re-architecting these systems? And that’s part of 

the underlying work we are doing, thinking about these open architectures and modular design and things that are going to be evolutionary as well as revolutionary in there. 

Ms. NORTON. What kinds of agencies are there where it would 

be cheaper to stay with a data center than to go to the cloud? 

Mr. VANROEKEL. In an aggregate world, I don’t think it is cheaper in many cases that they would not be running to the cloud provider. Where it is more around, do I have the money today to invest to move that capital expenditure? And I think the cheapness 

equation comes in a single-year view, because that is the way we 

budget in many agencies, versus the long year. We often see this 

with Federal real estate, where it would be cheaper to buy a new 

building than rent an expensive building or things like that, where 

the capital expenditure to move is challenging. 

Ms. NORTON. Thank you, Mr. Chairman. My only concern is, if 

these systems are really as old and presumably unreliable as is implied by this columnist, I really do wonder about cybersecurity and 

about investing in cybersecurity in such old systems only to have 

to reinvest it when the cloud comes. 

61 

Chairman ISSA. If the gentlelady would yield? 

Ms. NORTON. I would be glad to yield to the chairman. 

Chairman ISSA. Perhaps there is one salient point that you 

would appreciate, but 75 percent or so of the budget is spent on 

legacy systems, some of them are so internal and can only be run 

locally and they are operating on obsolete computers and obsolete 

operating systems and they are written in COBOL, they are written in Fortran, they are not able to process through the cloud at 

all. They are pretty much hack-proof. That is the one good part, is 

they don’t go into cyberspace. Therefore, they actually—— 

Ms. NORTON. You mean all that hacking is done on only cloud 

systems that we read about every other day? 

Chairman ISSA. Well, I think the gentleman would probably tell 

you that some of the systems he looks at do not, in fact, have a 

portal for remote access through an Internet-based process. 

Mr. VANROEKEL. That is right. 

Chairman ISSA. That is not the good part. I am just saying, it 

is so bad that hackers can’t even bother to go back. There are 

aren’t old enough hackers for it, perhaps. 

Ms. NORTON. Be grateful for small favors. 

Chairman ISSA. If the gentleman from Virginia would give me a 

dispensation, the gentlelady from Illinois and the gentleman 

from—where the heck are you from? 

Mr. POCAN. Wisconsin. 

Chairman ISSA. Wisconsin, Madison, Wisconsin, returned so 

promptly, would you mind if I took one of them first? 

Mr. CONNOLLY. Go right ahead, Mr. Chairman. I was just going 

to say, thank you for making that point, though. Who knew that 

actually obsolete and antiquated systems were helping in the fight 

against cyberattacks? Thank you. 

Chairman ISSA. You two figure out which one of you go. The 

gentlelady is recognized. Smart move. 

Ms. DUCKWORTH. Thank you, Mr. Chairman. So I hope to build 

on the bipartisan nature that you have started these hearings 

today with. 

My question, which is really one coming from a freshman Democrat who is concerned about a Governor’s rights and States’ right. 

Specifically, 95 percent of our military support to civilians within 

the homeland is conducted at the State level through State activeduty status, which is funded out of State coffers or Title 32-funded 

State missions which are Federally funded. I am concerned about 

a Governor’s ability to command and control his forces, such as 

during a natural disaster, if we defund his State IT network and 

attempt to replace it with a Federal solution that may prioritize 

Federal military missions over National Guard homeland domestic 

operations. I am concerned that building a new Federal solution, 

such as an IT backbone, purchase of routers, the like, could be 

more costly than continuing to fund existing IT solutions that the 

States have already built to meet their specific mission requirements. 

Louisiana and New Jersey have very different needs than my 

home State of Illinois, although some remain the same. And they 

have different commercial IT networks that can be leveraged. I 

would like to see Federal and State Governments leverage existing 

62 

commercial networks for cost savings wherever possible rather 

than pay to build new solutions. 

I am also weary of infringing on a Governor’s ability to command 

his or her National Guard forces. As I see it, consolidating of IT 

is a great thing, but it does set up a tension between the DOD Federal priorities and the State priorities. You know, it works well to 

consolidate for Federal Title 10 mission support, but tends to 

prioritize the Governor’s National Guard forces below active component for funds. This low priority threatens the ability of Guard 

forces to respond to and coordinate efforts and really for the Governor to remain in control of his or her State active duty and Title 

32 forces. 

So I have two questions and either gentleman can choose to answer. The first question is this: How does the centralized Federal 

IT acquisition process support military operations at the State 

level? 

And my follow-on question is, are there any safeguards that 

would ensure that State IT requirements, missions, such as under 

State active duty or Title 32 missions, can be given the same priority as the Federal forces under Title 10? Thank you. 

Chairman ISSA. Clearly, the gentlelady is not new to asking 

questions. 

Mr. VANROEKEL. I am not a subject matter expert on the tactical 

aspects of technology deployment at the State level. So especially 

the second question, I think I would love to take back for the 

record and get you a response that is much better than one I would 

postulate myself. 

But on the first, the military at the State level and thinking 

about integrated acquisition at that level, one of the things I think 

we do pretty well and are getting much better at is setting up more 

centralized requirement gathering. You know, one of the main challenges we see, both on the Federal side and the private sector side 

working with the Federal government to supply services, is the unpredictability. You know, when we are unpredictable in our procurement of cloud computing, for example, prices tend to go up, 

variability in cyber protection goes up, and other challenges are 

presented. 

So I will definitely work with the Office of Federal Procurement 

Policy and DOD to get you an answer to this. But I think the essence of this is going to be around not necessarily just setting up 

a one-size-fits-all for the entire country, but more around, you 

know, how are we coming together as a community to solve a common mission purpose around a set of predictable requirements but 

flexible requirements that allow variability at the State level, I 

think is essential. 

Ms. DUCKWORTH. And I think it is a very specific case, a very 

narrow situation. You rarely have this type of situation where it 

is the same unit, entity that has both a Federal and a State mission. I just want to make sure that we are not infringing on a Governor’s right to control his or her forces when they are under that 

State active duty or Title 32 and to make sure that that is given 

the same priority by DOD. Because if DOD gets access or control 

over the funds, the acquisition funds for the entire military, including Guard, they will naturally, I would assume, prioritize Title 10 

63 

or active-duty missions over the equally important State missions. 

And I just want to make sure that there is some way to ensure 

that those State requirements, as set forth by the Governor, are 

well respected. 

Mr. VANROEKEL. Great. 

Chairman ISSA. Would the gentlelady yield for just a second? 

Ms. DUCKWORTH. Gladly, sir. 

Chairman ISSA. When you are answering her question, would 

you sort of try to the best extent you can include how we best leverage, either through this act or other things that you are currently doing, the dollars being spent federally being made available, if you will, for cheap or free to the States? In other words, 

our procurement falling to their benefit, and particularly if you 

look at source code, where a State may choose to modify the software but they have to be able to get the software and source code 

basically at no cost for the Federal use and then be able to add on 

their hooks for the State. And I think that is a big part of what 

the gentlelady is speaking about. If you could answer how you envision that, I think the committee would appreciate it. 

Thank you. We now go to the gentleman from Virginia for five 

minutes. 

Mr. CONNOLLY. Thank you, Mr. Chairman. 

I am going to ask three categories of questions. And I am going 

to do it as fast as I can. And I ask you to be as fast as you can. 

Process. It seems to me that when you compare it to the private 

sector, the Federal process is hopelessly out of date and not at all 

suited for this kind of IT procurement. You know, you have got 

long lead times. By the time we have figured out the RFP, we have 

figured out the contract award process, we have awarded the contract, we have set the terms, we have dealt with the protests, the 

technology has already passed us by. Or the mission, technologically, has been redefined necessarily. And we don’t seem to be 

very flexible in addressing that. And that is to say nothing of the 

fact that, you know, we have this stovepipe process all over the 

place. 

The Chairman has pointed out that we have 243 CEOs. That 

sounds likes way too many. What could go wrong with that in 

terms of accountability, a point of decision making? It seems almost 

a system to make sure there is no accountability. 

Your comments, both of you, on process? 

Mr. POWNER. That is a very valid point on the long lead times. 

And if you look at many of these large acquisitions, the time between major milestones sometimes is years. And that is still the 

case. I think Steve’s comments earlier about modular development, 

we need to have the procurement side of the house align with the 

technology side of the house. So modular contracting along with development is clearly where we need to go so that we can get a bit 

more modern here in the Federal government. 

When you look at the CIO issue, yeah, there are a lot of CIOs 

across the Federal government. The thing we like, and we have 

been looking at large-scale IT acquisition problems for years now 

at the Government Accountability Office, is having the Dashboard 

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tions answered. And that actually caused a lot of problems when 

the Dashboard was rolled out because there wasn’t a single person 

to go to and there was a lot of scrambling that needs to go on to 

get status. And we are still probably feeling the effects of that. We 

like that model where there is a single CIO, where you have other 

CIOs, where you figure out the reporting. That is what is really 

needed. 

Mr. CONNOLLY. Okay. Mr. VanRoekel? 

Mr. VANROEKEL. I think on your two points, first, the process on 

long lead, I couldn’t agree more on that is a big challenge. I think 

part of solution to this is in existing law and exists in the realm 

of myth-busting, where we are explaining to agencies there are new 

ways and new approaches of doing this. The two that are most encouraging to me are, one, are just flexible contracts, having an open 

contract where, when you need a resource and you need a developer to develop some solution, you need something done, you can 

call upon them and bill as you go. We have seen that as a great 

model. 

The second is modular contracting, as Mr. Powner said. Getting 

agencies to embrace modularity, smaller deliverables that can be 

done in a much faster pace really ups the level of both quality and 

agility on their ability to deliver. Joe Jordan and I delivered just 

in 2012 modular contracting guidance for agencies that is new policy around teaching both the acquisition community and the IT 

community how to deliver on modular. 

On the number of CIOs, I think from a titling perspective, we 

have a lot of CIOs. And I think there are many cases where there 

is span-of-control and some government challenges that we need to 

get our arms around, thus, the first memo I issued out of my office 

that went right to the heart of this. 

I think part of the solution to that is, first, getting all those CIOs 

out of the job of things that should be centralized across their agency. You know, having multiple email systems in an agency doesn’t 

make sense; you should run one. Having multiple—— 

Mr. CONNOLLY. When you were at our field forum, I thought you 

said that one agency had, like, 36 emails systems? 

Mr. VANROEKEL. Yeah. Over 20 I think is what I said. And that 

same agency, over 1,000 mobile contracts. They now have one. It 

is one email system. It is a third of the cost. And the 1,000 mobile 

contracts went to a few blanket purchase ones, which is massive. 

So if you get CIOs at the fringe out of the business of managing 

that commodities stuff and more focused on the mission of their division or their agency or their bureau, you can really up the quality 

of the citizen services and the effectiveness of that agency. And 

that is part of the magic of the mix. 

Mr. CONNOLLY. I am going to run out of time, so I am not going 

to get to all three of the things that I think the chairman and I 

are both trying to look at in the legislation, unless the Chairman 

wants to be a little generous here. I am trying to lay some intellectual—— 

Chairman ISSA. Start asking before you run out of time. 

I ask unanimous consent the gentleman have an additional 

minute. Without objection, so ordered. 

Mr. CONNOLLY. I thank the chair. 

65 

Tom Davis testified about procurement personnel, that that is 

one of our problems, the lack of skill set. Often the person selling 

has a higher skill set than the person purchasing. Your views 

about that problem in the Federal government? 

Mr. VANROEKEL. I agree that that is a challenge. You often have 

the person doing innovation in an agency, not the person that also 

purchases. And there is a divide there. 

What we are encouraging—and this is coming straight out of the 

Office of Federal Procurement Policy—is, first, is integrated program teams. Getting those communities’ human capital, acquisitions, IT, finance, and others sitting around the table, as I mentioned earlier, and getting involved with integrated acquisition 

teams on specific projects that are of high priority is just so essential, to have everyone sitting around the table. 

And the second is IT acquisition cadres, getting areas of expertise and specialization within agencies that can focus on certain solutions or certain challenges. You know, negotiating a very effective 

mobile contract with a mobile carrier is not easy and there is some 

complexity in that. If you have a team in government that focuses 

on it and thinks about it, that is a recipe for success. 

Chairman ISSA. I think the gentleman. 

Mr. CONNOLLY. I thank the chair. 

Chairman ISSA. We now recognize the gentlelady from Wyoming 

for her questions. 

Mrs. LUMMIS. Thank you, Mr. Chairman. 

And, Mr. Powner, I apologize if this question has already been 

brought up in my absence. But my question is, we know that agencies are supposed to analyze legacy systems and try to keep ahead 

of the technology curve, but we also understand from GAO’s work 

that many are not doing that. 

Can you describe the extent of that problem and perhaps include 

in your answer roughly how many billions are being spent on IT 

programs for which we have no analysis of where the agency is on 

its technology curve? 

Mr. POWNER. Well, let’s just talk about framing how much we spend on legacy systems. So of the $80 billion, roughly, you have 

$55 billion, or 70 percent is being spent on legacy systems. 

There is a very good requirement that OMB has that on an annual basis each of the legacy systems need to be evaluated. And, 

basically, what it asks for is this: Is it continuing to meet the mission needs? And can it be done in a much more efficient way? So 

with the discussion we had prior about going to the cloud, perhaps 

we can go to the cloud and do it much cheaper. 

There are also things we can do with back-end systems. If you 

really went in and analyzed some of these old archaic legacy systems, there are tweaks we could do to make that pot of $55 billion, 

we could spend that much more efficiently going forward. Cloud is 

clearly one way to get there. 

What we did is we looked at a small sample. We looked at five 

agencies in the review that you are talking about. And what we 

saw was, the Department of Homeland Security and Health and 

Human Services, they actually had a policy and they were doing 

these operational analyses. Now, they weren’t doing them well in 

all cases, but they had a policy and they were doing them. We had 

66 

agencies like DOD, VA, and Treasury, no policy. In the year that 

we looked at, they didn’t do a single operational analysis. 

So what we found in our little samples, we had about $3 billion 

in systems that were not evaluated. So that $3 billion investment, 

technically, that could have been invested much more efficiently if 

we looked at that in the appropriate manner. 

Mrs. LUMMIS. Thank you. 

And a follow-up for Mr. VanRoekel. So knowing that—and I assume this is not new information to you—knowing that, what is 

your plan for all agencies to complete operational analysis? And 

when should we expect full compliance? And I say that with the 

caveat that we have been waiting for a clean audit from DOD forever. They have never had one. And so now to hear that DOD is 

one of the agencies that has not completed this analysis is not surprising either. But do you have a plan to get these people onboard? 

Mr. VANROEKEL. So it is our expectation that both through our 

policy and accountability mechanisms that agencies will step up. 

And we have made a lot of improvements, as I think has been 

highlighted a little bit here today on IT Dashboard, to expose some 

of the areas where we think the quality of the information that is 

being submitted isn’t there or it is just lacking altogether. 

One of the features that we have added is data quality reports 

that actually look at, if a date is unrealistic, if numbers don’t line 

up, if due dates are too far out, that is actually now highlighted 

on the IT Dashboard to build a level of accountability for these 

agencies. That, coupled with our budget guidance, which is putting 

a lot of pressure on agencies to really examine these legacy systems, I think are elements of how we are going to get there. 

You know, something I used every day because I was part of a 

team that ran a pretty large P&L within the private sector company I was a part of, was depreciation. You know, we thought 

every day about, how do we wind down the things we have done 

in the past in order to fund the things going forward? 

You know, we used our balance sheet as a strategic tool. In the 

public sector, we tend to use the balance sheet just as an auditing 

tool, just to check back on how we have done. And a clean audit 

is success, versus are we properly managing this turnover of old 

and giving to new, stealing from the OPEX column to give to the 

CAPEX column. So the budget guidance gets right to the heart of 

this, and I think will inspire more action than actually doing oversight assessments through the IT Dashboard. By telling agencies 

you need to cut 10 percent and you need to take 5 percent of that 

and put it back into the top of your priority list, I think we will 

start to see more turnover. And definitely from a trending analysis, 

looking at where the old system support is going, we are now starting to see it, which is very encouraging. 

Mrs. LUMMIS. And, Mr. Chairman, one more question. 

For either of you, have you seen a State that represents the best 

practice among States in getting a handle on these same issues? I 

know in my State, I was in all three branches of State government 

during different times in my life. And in every branch of State government, we struggled with these very issues, especially in the executive branch. 

67 

So is there a State that is the leader in this that even the Federal government could look to for some streamlining? 

Chairman ISSA. If you say Wyoming, you will get a lot of points 

here. Illinois will work, too. Southern California. 

Mr. POWNER. I don’t know if I can point to one State, but I will 

say this, because we do a lot of work with the National Association 

of State CIOs. And I think when you look at the budget situation 

in a number of States across the country, they were forced to consolidate data centers. They had no choice. Things were getting cut 

and they needed to find ways to lower their overall budgets. 

So there are a number of states that I am aware of through the 

National Association of State CIOs, but they face very similar problems. They are trying to put in place Dashboards so they get better 

performance on their large acquisitions. But I do think you will see 

many success stories at the State level on data center consolidation. 

Mr. VANROEKEL. And the other thing we are seeing at the State 

level is groups of States now getting together and saying let’s create a regional authority to look at sharing procurement, sharing 

technology, and sharing other things. And that has been very successful as well. 

Chairman ISSA. Excellent. 

Mr. Pocan? 

Mrs. LUMMIS. Thank you, Mr. Chairman. I yield back. 

Chairman ISSA. I would say so. 

Mr. POCAN. Thank you, Mr. Chairman. And thank you, gentlemen. 

I am going just going to ask one question and then I am going 

to try to yield my time back to Mr. Connolly so he can get his third 

question in. 

Mr. Powner, I know there has been some progress made in consolidating data centers, but your GAO report highlighted that 

many agencies have failed to produce complete data center inventories and plans and the vast majority even the basic requirements, 

such as schedules and cost estimates. And that without these plans 

and inventory there is a lack of consistency among agencies, it is 

difficult to summarize projections. I was just wondering, based on 

your research, why are so many agencies failing to complete these 

requirements? 

Mr. POWNER. So a couple comments here. We looked two periods 

of time looking at data center consolidation inventories and plans. 

And you are right, the last time we looked, the last we reported, 

there were three agencies that had complete inventories, that was 

SSA, HUD, and National Science Foundation. And then only one 

agency had a complete plan when you look at the requirements 

that were laid out by OMB, and that was the Department of Commerce. 

Some agencies, like DOD, really struggle to get their arms 

around their inventories. It is somewhat expected. But our point is 

that you need to keep on, on the task, make sure that you identify 

all those centers that are out there so that you can look to optimize, consolidate, and ultimately save money. 

There has been a lot of good work. I mean, we now know there 

are almost 3,000 data centers across the Federal government. 

68 

There has been this goal to close about 1,200 of them. Ultimately, 

you want to get to a point where you get away from the inventories 

and plans and you get down to the action on actual optimization 

and consolidation. And that is really what we are looking with our 

recommendations going forward. With sound baselines, that is 

clear. But ultimately, it is about the actions. And that is why I say 

when you look at the ultimate performance metric on data center 

consolidation, whether you are talking consolidation, optimization, 

it is dollar savings. And if DOD says there is $2.2 billion, there is 

probably more than that. And I think the estimate of $3 billion 

that OMB has, it is likely more than that also. 

Mr. POCAN. Thank you. And then I would just like to yield my 

time to Mr. Connolly. 

Mr. CONNOLLY. I thank my colleague. 

And the third set of questions I wanted to ask, again referring 

to the testimony of our former colleague, the chairman former 

chairman of this committee, Tom Davis, he talked about how budgets matter, especially when we put ourselves on a continuing resolution. He actually said it stifles innovation, it sets us back in 

terms of thoughtful Federal IT procurement. 

I want to give you both an opportunity to comment on that, your 

views about that. 

Mr. VANROEKEL. When I was in the private sector implementing 

solutions in technology or even building products, about 2 days 

after the beginning of the fiscal year we would get our full year 

budget. And of course we had to make adjustments based on quarterly returns and things, since we were a large enough division to 

affect the stock price and other parts of the balance sheet. 

But in large part, we were able to predict, you know, not only 

what our operating budget was that year, but based on certain 

other parameters we could make investments that were around solutions that were going out into out years. I could say I am going 

to incubate a product, I am going build it, and it is going to take 

4 years to do it, but it is going to have this much ROI at the end 

of that. 

In the Federal government, we often face a situation where we 

get to back-to-back CRs or other elements where the money that 

is budgeted is allocated so late in the fiscal year that you have 2 

to 3 months, if that, often to not only procure what you are hoping 

to procure once you know the money you have, but then try to implement and get things done in time. And that is a real limiter on 

the ability to drive innovation and a long-term view of where you 

could go with some of this. We have seen capital budgeting and 

some other things in government be helpful in that area. 

Mr. CONNOLLY. Mr. Powner? 

Mr. POWNER. Well, in addition to innovation, I know I do work 

specifically on weather satellites. And there has been situations 

where with the weather satellites, they are very important, you 

look at polar-orbiting satellites in this country, they were essential 

to predicting the Sandy superstorm. That was a real success story 

in terms of the accuracy of when that storm hit. It was spot-on, due 

to these weather satellites. And I know the current acquisition on 

those satellites has been affected in a negative way due to some 

CRs. 

69 

Mr. CONNOLLY. Well, I thank you both very much. I do think it 

is other constraint we have to look at in terms of our own process 

in Congress and how, perhaps unwittingly, we contribute to some 

of the problems in the whole process of Federal IT procurement. 

Thank you both so much. 

Thank you, Mr. Chairman, and I thank my colleague. 

Chairman ISSA. Thank you. Would the gentleman further yield? 

Thank you. I just want to have something answered for the record. 

This committee took a keen interest under both Mr. Waxman 

and Mr. Davis in the failures of FTS 2000, the telecommunications 

modernization. At least at the last time that we had a hearing, 

what we found was that agencies had simply refused—they didn’t 

say refused—but never implemented the cost savings that came 

with modernization. 

We now have, it has now been renamed in that 2009 networks. 

And many agencies are still struggling to, if you will, take advantage of cost savings of buying better telecommunications for less. 

And as we talk about the cloud, obviously, if you don’t have a lowcost, high-speed Internet connection, you are going to also resist 

the cloud. 

So could you, there is no time left right now, but either at the 

end or in writing, if you would answer on your vision of where we 

go there, because, tangentially, it is part of the problem. 

Chairman ISSA. With that we recognize the gentleman from Tennessee, Mr. Duncan. 

Mr. DUNCAN. Thank you very much, Mr. Chairman. And it seems 

to me that this is a pretty important subject, and I appreciate your 

calling this hearing. And I think almost every member should be 

upset or should be at least concerned if they would read what was 

in our committee memorandum. And it says, ‘‘Despite spending 

more than $600 billion over the past decade, too often Federal IT 

budgets ran over budget, behind schedule, or never deliver on the 

promised solution.’’ And it says, ‘‘Some industry experts have estimated that as much as 70 percent of new Federal IT acquisitions 

fail or require re-baselining’’—70 percent. I mean, that is almost a 

shocking figure that I don’t think we would accept in almost any 

other field. 

Just a week and a half ago, I read in the New York Times a 

story that said that conversion to electronic health records has 

failed so far to produce the hoped-for savings in the healthcare 

costs and has had mixed results, at best, and said optimistic predictions by RAND in 2005 helped drive explosive growth in the 

electronics records industry. And yet today it says this 2005 report 

that helped lead to all this explosion in the technical equipment for 

the Federal government was paid for by a group of companies, including General Electric and Cerner Corporation, that have profited by developing all this equipment. 

And so often in other committees I have heard, whenever a government agency messes up they always say one of two things or 

both. They say they are underfunded or their technology is outmoded or out of date. And yet the technology in the Federal government is usually much newer than anything that most of the private 

sector has. 

70 

And I was thinking about this a few minutes ago, and I thought 

back to something that former Governor Rendell, when he was 

mayor of Philadelphia many years ago, he was having trouble with 

city employee unions. And he testified in front of the House Ways 

and Means Committee and he said that government does not work 

because it was not designed to. He said, there is no incentive for 

people to work hard, so many do not, there is no incentive for people to save money, so much of it is squandered. 

And what I keep seeing in this, the only people who really understand this subject are techies who want us to buy all the newest 

and latest equipment and all the bells and whistles even though we 

really can’t afford it and it is not cost effective it is not producing 

the results that we are paying for. 

And so I guess the only real question I have is, can either of you 

think of any way that we could put more good Federal employees, 

since the money to buy all this new equipment and spend all these 

mega-billions each year is not coming out their pockets. So they 

don’t really have any incentive or any pressure to hold these down 

costs or not buy new equipment every year or every other year. 

Is there some way that we can get some incentives or pressures 

to do better? I mean, surely we sure need to do better in this area. 

Mr. VANROEKEL. I very much agree. And I am in my job now 

largely because of that fact. And I think we are able to have much 

of the conversation. You were able to cite some of the statistics you 

were in your comments because we are making progress in these 

areas. 

The accountability mechanism of the IT Dashboard, the ability 

for us to put a public-facing Web site up that says, here is what 

we are doing in government and IT, here is where people are implementing certain technologies, here is what is happening, down 

to a very granular level with new features being added to that all 

the time is creating a really interesting dynamic of accountability 

relative to the delivery against those Federal projects and priorities. 

I think that is part of the equation. I also think we need to 

change the way we do business inside government. The way we 

build solutions is a very mid-20th-century, mid- to late 20th-century kind of view, where in the 21st century we have a much different model of building solutions. 

When I was building products at Microsoft, I wouldn’t have 

thought to take a government-like approach to anything. It was all 

about speed and modularity and the ability to build in a very fast 

way high-quality outcomes. And in the government, that hasn’t 

been the norm, to your comments. And I think we have the ability 

to change that through good policy, which we are implementing 

now. 

Mr. DUNCAN. All right. Mr. Powner? You see my point? I mean, 

I own two cars; one is a 2003 and one is a 2006. But if somebody 

else was paying for it, I might be out there trying to get one that 

has got better, newer equipment. And I think that is the problem. 

Mr. POWNER. I do agree with Steve’s comments about the Dashboard. I think the accountability through the Dashboard, where 

you have someone who is responsible for those investments and if 

they are not being delivered appropriately, there needs to be acVerDate Aug 31 2005 09:28 Mar 15, 2013 Jkt 000000 PO 00000 Frm 00074 Fmt 6633 Sfmt 6633 C:\DOCS\79790.TXT APRIL
71 

countability. Someone needs to be able for answer to that. Because 

there is a lot of dollars. We are talking about $80 billion we spend 

here. 

To give you an example, in the report, my written statement, we 

did a report looking at successful IT acquisitions. So we went to the 

top 10 spenders and we said, give us one example of a success story 

where something was delivered, it is in operations, users are using 

it, and it was somewhere in the ballpark of cost and schedule. And 

there are seven examples, seven agencies gave us one. And that includes DOD. And you can read about those projects in there. 

But there were three agencies couldn’t give us 

one. Three agencies could not give us one success story of a mission-critical system that was delivered recently. That is sad and 

someone should be held accountable for that, if we are spending $4 

billion, $5 billion, $6 billion at these agencies and they can’t give 

you one success story. 

Mr. DUNCAN. Maybe we should come up with some bonus programs for Federal employees who save us money in this area in 

some way. 

Thank you very much. 

Chairman ISSA. I thank the gentleman. 

For the record, would you mind doing some quick research on the 

three agencies that couldn’t give you any examples and find out 

whether they had contracts that paid bonuses and whether or not 

employees received bonuses for overseeing those contracts that they 

couldn’t give you, to the extent that you can? 

As we close, this committee has taken note in the past of 

FedRAMP, something your predecessor began. We thought and still 

believe that it shows great promise. My understanding is, to date, 

we don’t have, out of the five tests, if you will, up-and-running sites 

that can be sold, that are FISMA compliant, that can be sold across 

the government. If you would answer for the record your vision of 

how you get from zero to five or more and any other information 

you’d like to give us, that will probably be a follow-up hearing. 

Mr. VANROEKEL. Yes, sir. We are actually at one right now, as 

of the last couple of—— 

Chairman ISSA. Conditional or provisional. 

Mr. VANROEKEL. Authority to operate, yes. 

Chairman ISSA. I understood they were provisional in some way. 

Is that just a term? 

Mr. VANROEKEL. No, we have one vendor that does have an official authority to operate. 

Chairman ISSA. Okay. So there is one to sell. 

Mr. VANROEKEL. That is right. And we have 78 in the pipeline 

behind them. And we are processing through the pipeline right now 

those 78. So you will start to see more and more coming online in 

short order. 

Chairman ISSA. Excellent. 

Mr. VANROEKEL. And we expect 2013 will be a big year for getting vendors online with FedRAMP. 

Chairman ISSA. Okay. Well I appreciate that. That is a why 

where we’d like to have a good news story. 

I would like thank our panel. You have been very patient 

through the votes. 

72 

And with that, we will set up for the next panel. 

We now welcome our third panel, beginning with Mr. Douglas 

Bourgeois. He is vice president and chief cloud executive at 

VMware, spoken about earlier as an entity that allows us to leverage multiple operating activities on a single piece of hardware. 

Mr. Michael Klayko is the former CEO and current advisor to 

Brocade Communication Systems, Inc. 

And Mr. Chris Niehaus is the director of Microsoft U.S. Office of 

Civic Innovations, meaning, you are bringing us what is good and 

modern, something we were talking about wanting in the last 

panel. 

Again, you saw this earlier. Pursuant to the committee rules, 

would you please rise to take the oath and raise your right hands. 

Do you solemnly swear or affirm the testimony you are about to 

give will be the truth, the whole truth, and nothing but the truth? 

Let the record indicate that all three witnesses answered in the 

affirmative. 

Again, as the previous panel, we would ask you to please do your 

best to limit to 5 minutes, and we will do the same. 

Mr. Bourgeois? 

STATEMENT OF DOUGLAS BOURGEOIS 

Mr. BOURGEOIS. Thank you. Chairman Issa, Ranking Member 

Cummings, and members of the committee, thank you for this opportunity to discuss how the Federal government can reform its information technology investment strategy. Technology has always 

evolved rapidly, and that rate has accelerated to a pace that we 

have never seen before. Unfortunately, the government’s methods 

for the acquisition and utilization of IT have not evolved in a manner that keeps pace with this innovation. 

We believe that there are three fundamental challenges that 

should be addressed for the government to effectively leverage advancements in technology. These are complexity, expertise, and culture. 

The IT acquisition environment is too complex. Advances in technology, such as virtualization and cloud computing, have rapidly 

accelerated the delivery of IT resources and made organizations 

more agile. Technology resources that once would have taken 

weeks, if not months to deploy can be carried out in a matter of 

minutes. By leveraging such dynamic capabilities, organizations 

are able to respond very rapidly to changing market conditions 

without making substantial capital investments in technology. But 

the IT acquisition process in the Federal government still moves at 

glacial speed. 

In addition, these innovative technologies have turned a significant amount of IT products and services into commodities. The government should acquire these commodity technologies using performance-based contracting methods that address the longstanding 

tendency of the government to over- specify their requirements. 

Furthermore, the use of performance-based contracting methods, 

such as share and savings contracts, would also lower the risk of 

underperforming IT acquisitions and increase accountability for 

vendors. 

73 

Another way to simplify IT acquisitions is to simplify the overall 

IT environment within which IT products and services operate. 

Thus, the Federal government should continue with the efforts to 

consolidate and reduce the number of data centers governmentwide. But the consolidation effort should not stop there. Other simplification tactics, such as virtualization of the networks and 

desktops, as well as the elimination of duplication of applications 

would drive further savings across the government. 

The high degree of complexity in both the acquisition environment and the data centers throughout the government puts a tremendous strain on the workforce. In addition, studies have shown 

how the shear volume of Federal acquisitions has grown in recent 

years. At the same time, the staffing level of acquisition professionals has not kept pace with the growth. 

Let me be clear in saying that while the growth itself is an issue, 

it is not the only issue. Existing efforts to increase the expertise 

of the IT acquisition workforce, such as the use of cadres and certification programs, should be expanded. The increased use of intern programs, perhaps in partnership with universities, and IT 

specializations should be established. 

However, the IT acquisition workforce isn’t the only area where 

additional expertise is required. Certain technical resources within 

IT organizations should also be trained and certified to develop the 

necessary level of expertise in critical technologies. As we have 

heard in the testimony previous hearing, that if the government 

staff that don’t have the level of expertise as the contractors do, 

then there are going to be problems that occur as a result. 

The third and final area in need of change is the culture. The 

decentralized approach to IT acquisition across the government has 

created a culture that is detrimental to performance and efficiency. 

The highly distributed approach also makes it difficult to gather 

data for analysis and transparency. This overall culture needs to 

become more centralized with areas of IT specialization to improve 

efficiency. Acquisition centers need to become more services-based 

with built-in incentives for performance and accountability. For example, IT acquisition centers should publish commitments to customers that clearly specify the timeliness and other performance 

criteria in advance. 

Contracting tools are also duplicated and inefficient. A collaborative tool should be developed to foster more efficient handling of 

complex acquisition material, to track the responsiveness of program and acquisition professionals, and to increase transparency. 

But the acquisition culture isn’t the only one that needs to 

change. As the transition to cloud computing continues, IT organizations also need to transform to an IT-as-a-service model as well. 

Government CIOs must be in position to effectively carry out the 

responsibilities as the role of the IT organization changes to be 

more of a broker of service options. 

For this reason, I strongly support strengthening the role and 

authority of agency-level CIOs to reflect the intent and requirements of the Clinger-Cohen Act. I also suggest that the structure 

of the IT budget needs to evolve to be more compatible with the 

industry trend away from capital investments and towards operating expenses. 

74 

In closing, we commend the leadership of the current and previous Federal CIOs to set the right course for Federal government. 

The journey to IT as a service has already begun through the consolidation of data centers and cloud first policy. In order to continue making progress, the methods for the acquisition and management of IT resources needs to evolve. Specifically, changes need 

to be made to address the changes of complexity, expertise, and 

culture. 

We thank you for the opportunity to participate in this hearing 

today on this very important matter. 

Chairman ISSA. Thank you. 

[The statement of Mr. Bourgeois follows:] 

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Chairman ISSA. Mr. Klayko, I understand that you have a flight 

to catch? 

Mr. KLAYKO. There will be another one. 

Chairman ISSA. There will be another one. 

Mr. KLAYKO. There will be another flight. This is too important. 

Chairman ISSA. Thank you. I certainly appreciate it. You are recognized. 

STATEMENT OF MICHAEL KLAYKO 

Mr. KLAYKO. Good afternoon. I, too, would like to thank you, 

Chairman Issa and Ranking Member Cummings, for this opportunity to present testimony in today’s hearing, for your great work 

you are doing to reduce waste in Federal information technology 

spending. I say this as a business leader and an American taxpayer. It is a privilege to be here, so I want to thank you for that. 

I served as the CEO of Brocade Communications from 2005 until 

last week, where the company announced a new CEO. I announced 

my intention to resign as CEO in August of 2012. And I have been 

an employee and advisor to the company during this transition period. 

I have also had the opportunity to visit Washington, D.C., many 

times a year as the CEO of Brocade, a well as the former chairman 

of Silicon Valley Leadership Group, which is an organization of 395 

member companies representing Silicon Valley’s largest companies. 

As the chairman of that group, collectively we employ 1.6 million 

Americans and have a market cap of about $2 trillion. So I am honored to speak with you today not just representing my company but 

the people also in the valley. I hope with my experience that I have 

had in the past since being in technology since 1975, I can share 

some of the things that have been of interest to us that should be 

of interest to you. 

I would also like to share Brocade’s experience with the way Federal government acquires IT equipment and services. My perspective is that of the CEO chartered with managing the growth of a 

company. Brocade is a true Silicon Valley startup: Four guys, a keg 

of beer, and an idea, and a dog in 1995. And now 2-plus billion dollars, we compete on a world stage. I truly believe we are an American treasure as we face fierce competition everywhere we go and 

we win. We sell about $250 million a year annually of network 

technology to the Federal government, and they are the backbone 

of the Nation’s critical infrastructure. 

Some of the challenges we see today are outlined, obviously. But 

when Federal agencies rely on a single OEM, or original equipment 

manufacturer for IT solutions like networking, server, storage technology, and the like, it creates situations where the majority of the 

spending goes to supporting legacy environments. Those legacy environments in equipment, operations and maintenance. This is 

wasteful, denies Federal agencies the benefits that come from more 

competitive and innovative environments. 

One common practice that we have observed in Federal IT procurement is the use of brand name or equivalent requirements. I 

want to be clear. There are many situations where you need to 

specify a particular product or brand. In those case, sole-source jusVerDate Aug 31 2005 09:28 Mar 15, 2013 Jkt 000000 PO 00000 Frm 00092 Fmt 6633 Sfmt 6633 C:\DOCS\79790.TXT APRIL
89 

tification can be made when no other technology is available to 

meet the requirements. 

But I am not talking about those cases. Instead, I will focus on 

the cases where Federal procurement purchasing organizations use 

brand name requirements in requests for proposals, request for 

quote, technical reference models. An example, device is listed by 

name and part number, example, ABC Router 2000, to signal the 

type of technology being sought in the bid and it is followed by the 

phrase ‘‘or equivalent.’’ 

Brand name or equivalent requirements incorporates all the features and function of a particular brand product, however, all these 

specific features and functions may not actually be needed by the 

agency to meet the mission, therefore putting the agency in a position for paying for features and functionality that are not necessary. 

Systems integrators see brand name or equivalent requirements 

and they don’t want to use non-ABC products in their bids. First, 

they are concerned that the technical committee will reject the proposal if the package does not include the specific ABC product, 

therefore eliminating them from the opportunity to secure a bid. 

They are also concerned with the extra time and effort needed on 

their part of the technical committee evaluation. 

And second, many Federal contracts have specific delivery dates 

and they fear that testing an alternative solution may cause a 

delay in the project, thus eliminating them as a possible provider 

of an alternative solution. 

In the purchase of information technology, this creates a perception of bias and limits the technology that integrators and valueadded resellers can provide and will provide. The combination of 

these proprietary features of the brand, the bias created, and the 

fear of losing dramatically limits the available alternatives and 

hampers the ability of government contracting officials to fairly 

evaluate solutions. 

Ultimately, depending on a single OEM for a majority of any IT 

solution increases the cost in two important ways: Limiting competition, missing out on innovation. 

So there are options that can be considered, such as open industry standards. When acquiring IT equipment and services, Federal 

agencies should seek out features, functions, and capabilities relying on open industry standards to maximize competition and innovation. We hope that you will continue to support that. 

I have many examples that I would like to share in a questionand-answer session. But I would like to thank you for this testimony today. Look forward to questions and continued discussion. 

Chairman ISSA. Thank you. 

[The statement of Mr. Klayko follows:] 

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Chairman ISSA. Mr. Niehaus? 

STATEMENT OF CHRIS NIEHAUS 

Mr. NIEHAUS. Chairman Issa, Ranking Member Cummings, and 

distinguished members of the committee, good afternoon. My name 

is Chris Niehaus, and I appreciate the opportunity to discuss the 

government’s IT investment strategy. 

I am the director of Microsoft’s U.S. Office of Civic Innovation, 

and my team focuses on delivering innovative solutions to government customers. I hope Microsoft’s extensive experience helping 

public and private sector customers around the world will help this 

committee. 

Microsoft supports the committee’s goals of reducing the cost of 

legacy systems, decreasing duplication, utilizing cost-effective commercial technologies, and maximizing best value. Our experience 

has taught us three lessons that support these goals. Number one, 

agencies can reduce IT costs by not only reforming how they buy 

IT, but also by more effectively assessing and management existing 

assets. Number two, successful IT solutions result when the private 

sector collaborates with government to provide commercial devices 

and services to meet agency missions. And number three, the government gets the best value when it uses full and open competition 

and clear, mission-focused requirements. 

As to the first lesson, to reduce IT costs, GAO reports confirm 

that better management of existing assets is just as important as 

reforming the acquisition process. A great way to improve IT asset 

management is making the OMB-recommended operational assessments and inventories mandatory for CIOs and requiring them to 

analyze existing assets, needs, and new technologies when starting 

major IT acquisitions. 

An instructive lesson from the private sector is that problems are 

best solved closest to the mission, which is the case would mean 

keeping reform efforts at the agency CIO level. 

We in industry can help with IT asset management. Gartner 

studies show that agencies can lower total costs of ownership, up 

to $2,500 per year, per desktop, simply by better managing technologies they already own. They can further lower costs up to an 

additional 30 percent by using virtualization technologies to move 

certain applications and desktop functions, like Microsoft Office, to 

the cloud. Agency CIOs tell us that they favor the flexibility of 

cloud-based delivery because it helps them move their IT investments from rigid capital budgets to operating expenses. And industry can also agencies consolidate resources where appropriate. For 

example, the Microsoft Joint Enterprise Licensing Agreement, or 

JELA, recently signed with the Army, Air Force, and DISA addresses common needs of each licensee while still addressing 

unique DOD security requirements. 

As to the second lesson, agencies can buy more cost effectively 

by making smarter use of commercial IT, which costs less and often 

performs better than custom IT. The key is close and early collaboration among agency CIOs, procurement officers, and industry beginning when the government first starts developing requirements 

so that it can better understand commercial market capabilities 

97 

and avoid the familiar problem of drafting requirements behind 

closed doors and hoping that the market will deliver. 

As an example of strong collaboration, we are working with the 

Air Force to determine how Microsoft’s Xbox Kinect, a motion-sensing game controller that costs about $110, can be used to serve as 

a rehabilitation tool for wounded warriors. Such creative and agile 

collaboration would be less possible if the government went back to 

centralized government-wide IT acquisition models. 

Similarly, it would make it harder for the government to get the 

best that the commercial marketplace has to offer by adopting new 

acquisition structures focused on so-called commodity IT. In my experience, the term commodity IT is not used in the commercial 

market. Not even something as ubiquitous as email is treated as 

a commodity. The recent GSA email-as-a-service blanket purchase 

agreements, or BPAs, distinguish seven different types of cloud 

email, depending on security and other requirements. Moreover, 

unlike pencils, paper, and other true commodities, agency missions 

and information technologies never stop evolving. 

And as to the third lesson, best value means more than simply 

lowest initial cost. Rather, agency CIOs should be required to make 

best-value determinations in a technology-neutral fashion, avoiding 

preferences for any particular license model and using a set of core 

factors, including total cost of ownership, security, privacy, accessibility, record integrity, data portability, and openness of standards. 

Agency CIOs should also be empowered to prioritize among these 

factors based upon the mission being supported. When agencies are 

clear about which factors will be prioritized and what requirements 

must be met, industry can and must be equally transparent about 

how our devices and services satisfy the government’s requirements. 

In conclusion, Microsoft looks forward to working with Congress 

in this critically important area. Together, I am confident we can 

provide IT solutions that will maximize best value and decrease 

total cost of IT ownership across agencies. 

I thank you and look forward to answering your questions. 

Chairman ISSA. Thank you. 

[The statement of Mr. Niehaus follows:] 

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Chairman ISSA. I will recognize myself. 

Mr. Niehaus, your statement, I got a little confused on, so let me 

see if we can straighten it out. I understand that government always starts off asking for COTS when they are told to and then 

distorts and mangles it to where no one would recognize it as commercial off-the-shelf. Is that what you are sort of saying? 

Mr. NIEHAUS. Mr. Chairman, we fully embrace and support the 

term COTS, commercial off-the-shelf software. 

Chairman ISSA. But I guess my questions is, are you saying 

there no such thing as COTS—— 

Mr. NIEHAUS. No. 

Chairman ISSA. —because there shouldn’t be or there is no such 

thing as COTS because the—particularly DOD as an example—is 

used to abusing the process of starting with COTS and then demanding changes that make it unique such that in your opening 

statement you even mention that DOD when using highly commercial software had to de-conflict within DOD with different security 

requirements? 

MR. NIEHAUS. MR. CHAIRMAN, THE TERM COTS WE FULLY SUP- PORT IN INDUSTRY. THE TERM COMMODITY IT WE DO NOT SEE AS AN

INTERCHANGEABLE DEFINITION FOR COTS. WE BELIEVE THAT THAT

TERM IS—WE DO NOT SEE THAT IN THE PRIVATE SECTOR TODAY—— Chairman ISSA. Okay. But let me follow up, because this is really 

the essence of what you said, and then I want to get to the other 

witnesses. Email is a commodity, isn’t it? 

Mr. NIEHAUS. I don’t believe that, Mr. Chairman. 

Chairman ISSA. Okay. 

Mr. NIEHAUS. I believe email, for example, under the GSA BPA, 

there were seven different lots awarded for that based off of different requirements. And there were very few vendors that were 

able to satisfy all of those lots under that agreement. A true commodity would be able to support all of them equally. 

Chairman ISSA. I think what makes me snicker just a little bit 

is, in the private sector, to the business world, and one time a few 

years ago I was over in the committee next door and I dispassionately implied that Lotus Notes didn’t exist anymore and I was 

quickly told that the White House was still using it, basically, and 

spending a lot of money on it. And IBM made it very clear that 

they still had a thriving business in legacy software, because some 

lawyers hadn’t given up on it and, therefore, we were spending millions to maintain it. 

Let’s go back again. At any given time, things like email, Microsoft being a market leader in it, Google, obviously, having a market 

share and a few others, in the private sector, to the gentleman sitting next to you, if I asked him if that was a commodity in his business, would he say yes or no? 

Mr. NIEHAUS. The question is directed to me? 

Chairman ISSA. I am asking you. I will get to Mr. Klayko. 

Mr. NIEHAUS. I would say that by definition it is not a commodity. 

Chairman ISSA. I am not trying to mistreat you, but I want to 

represent the time. Mr. Klayko, I am taking a big risk here. In the 

private sector, to CEOs at businesses, do you view it as a commodity that you buy what meets your needs, or that you feel you 

109 

have to design your own email system around your company’s culture? 

Mr. KLAYKO. We buy what is available. 

Chairman ISSA. Now, I am going to chance that the VMware 

model is you don’t make up your own email, is that right? 

Mr. BOURGEOIS. That is correct. And you, Mr. Chairman, demonstrated an understanding of our core technology and how it fits 

into the scheme of consolidation. But on the matter I would say two 

quick things. One, call it what you want, but an x-86 server with 

a certain amount of memory and a certain amount of CPU is exactly the same as another one that has the same capability and capacity. And so whether you would call it commodity or not, there 

is a certain degree, and because technology is evolving rapidly 

more and more every day of capabilities that are essentially not important to the overall solution and could be automated and carried 

out in a very rapid fashion. 

Chairman ISSA. And doesn’t your company basically process that 

processing power and say, if I am going to have a bigger machine, 

I am going to have 12 different operating systems on it, or four, 

because I want to leverage the maximum efficiency of both the 

CPU and the DASD. 

Mr. BOURGEOIS. And that is the second point I was going to go 

to. So the first point is that the technology exists to be able to pool 

the resources together and share them among many different applications, which, as the previous panel described, that there is a 

tendency of legacy in the industry to keep things vertical and 

siloed, which drives up the cost structure. And the second shift is 

away from an operating system-centric approach to applications 

and solutions to a more cloud or virtual data center-centric approach, and that in itself lends itself to an increasing uniformity 

of the solution, so that the overall underlying components don’t 

matter as much. 

Chairman ISSA. And, Mr. Niehaus, I just want you to understand, I am not disagreeing with you that government finds a way 

to make nothing COTS and nothing commercial, but when the GSA 

went out for emails, every email system that they found acceptable 

happened to be commercial off-the-shelf. So the commodities were 

in fact different flavors of branded product. 

Mr. NIEHAUS. Correct. I want to be clear, Mr. Chairman, that I 

am not disputing commercial off-the-shelf software is valuable and 

ideal for government. The term commodity is not a phrase that I 

experience in the private sector. And so without more clear definition, and if commodity means commercial off-the-shelf software, 

then that certainly is a discussion we should have. 

Chairman ISSA. I appreciate that, and if I could have an additional minute. 

Mr. Klayko, I want to follow up with you and finally. I am very 

sensitive of the fact that before I came here I had the honor of 

serving as chairman of the Consumer Electronics Association and 

I was on the board of EIA. Should the government make a concerted effort to reach out to standards organizations and leverage 

them instead of saying, I want to D–Link 24-port switch or equivalent. Is that really where we need to get out of this lazy tendency 

to say this would work or equivalent and say, what is the standard 

110 

and can we leverage organizations in which maybe all these companies belong to have a common statement? 

Mr. KLAYKO. I think it would go a long way with simplifying the 

procurement process, the deployment process, the manageability. If 

you deploy to open standards you can take advantage of the innovation as it comes along over time. I have heard lots of facts and 

figures today, and as a taxpayer, I have to be honest, my hands 

were sweating. Some of the statements were appalling. I will just 

go on record. And we know that these are issues. We ought to try 

to address them. 

Open standards will not fix all of them, but it goes a long way, 

because you put a baseline and it actually encourages competition 

and innovation. Competition and innovation, as you know, encourages better price performance. 

Chairman ISSA. Thank you. 

And I now recognize the ranking member, and thank you for 

your indulgence. 

Mr. CUMMINGS. Oh, no problem. 

You all heard the testimony earlier with regard to personnel in 

government, people being sophisticated, that kind of thing, problems that you heard about earlier in the second panel. I am just 

wondering, did you have any comments on those, such as it seems 

to be a—you know, I sat here and I said to myself they sounds like 

it is too big to be successful. And I am just curious, do you have 

any comments? That is, our whole government IT situation. Any 

comments? 

Mr. KLAYKO. I will take a swing at it. 

Mr. CUMMINGS. Yes, take a swing. 

Mr. KLAYKO. It is a pretty big question, pretty broad. I think you 

have to continue and invest in people at the end of the day. There 

are various aspects of technology deployment. I am a very big believer in people. I think there is a myth that all the private sector 

gets all the smart people. I think that is a myth. The fact of the 

matter, I think there is equally number of smart, intelligent, as 

well as highly trained people in the government. 

I compete very rigorously for people in the technology world. In 

Silicon Valley is vicious. It got to a certain point where I couldn’t 

find enough people, so what I ended up doing, I created my own 

university where I had to get people in and I had to train them 

because you can’t continue to steal from each other so you have to 

go ahead and change that formula. 

I think we can do that in the government also. I think the quality of the people are fine. The people that want to be here are here. 

The issue is you have to give them the tools and you have to retool 

them like any other. You don’t drive a car 100,000 miles without 

changing the oil a few times and putting a few other maintenance 

items in. I think that is no different than the people. 

Mr. BOURGEOIS. Thank you. Obviously, you heard in my opening 

statement that I believe that a continued investment in people, 

both on the acquisition side and on the IT side, is an absolute necessity. But make no mistake, as you point out, the problem is larger than the people. The culture needs to evolve as well, and that 

includes the culture in the programs that tend to have a lot of IT 

money that is made in many cases outside of the purview of the 

111 

CIO, and then the culture in the CIO organization themselves, in 

particular with how the organization is empowered to carry out the 

full IT mission and responsibilities of the agency. 

So your point is well taken. But if the culture can evolve and the 

additional investment in the training of the workforce continues, 

and some other techniques which I consider under the culture of 

modularization, as we heard Mr. VanRoekel testify, and much 

smaller deliverables happening much faster but working in succession towards an overall goal, which, by the way, is a mission goal, 

not an IT goal, then I do believe that the problem can be—there 

can be success in spite of the challenge. 

Mr. CUMMINGS. You can imagine when taxpayers hear the kind 

of figures we have heard here today and to hear the failures, they 

got to get upset. And then what happens is that they then say, you 

know, government can’t do things right. And some kind of way we 

have to rightsize—I mean, we have to figure out ways to make 

sure. That is why I was asking the panel earlier about when you 

get people who are doing things the right way, how do you encourage that and how do you spread it around? Because people have 

to have faith in their government. And that is so important. And 

when you hear these kind of figures like Mr. Duncan was saying, 

it gets to be I am sure for some very discouraging. That is why I 

was wondering if this thing is so big that we can’t control it? 

Mr. NIEHAUS. Well, the prior witnesses really hit on a point that 

resonates with my experience across public sector and even in private sector that an empowered CIO that is given a clear swim lane, 

a set of responsibilities, authority and accountability can make 

great things happen. 

The examples that were cited about the VA, for example, we recently renewed a very ambitious and creative agreement with them 

and have won the opportunity to take them to the cloud for their 

email. That was done by an empowered CIO. Also we commend 

when CIOs across agencies like the Army and the Air Force and 

DISA can come together and agree on shared requirements and 

have the authority to make those decisions, they can do great 

things. 

Mr. CUMMINGS. Were you all surprised when Mr. Powner said 

that he asked for operations that were functioning properly, seven 

agencies, and I think he said three of them couldn’t name any. I 

mean, did that surprise any of you all? Hello? 

Mr. KLAYKO. I would say I don’t know what the metrics are, and 

so I think part of that comes back, there is probably an expectation 

that comes back. I believe you can’t manage anything if you don’t 

have metrics associated with it, so I don’t know what the metrics 

they were going. Because I can actually hear the same people say 

they are perfect. So it depends on what the metrics they are looking at. 

Mr. CUMMINGS. So your university, I mean, I assume you invest 

quite a bit in that university. And what does ‘‘university’’ mean? 

Mr. KLAYKO. We teach kids what they don’t learn in college. 

They get book smart in college but they don’t understand business 

and how to get things done. And we tell them, let me make sure 

you understand one thing when you come to work here, that you 

are entitled to nothing. You compete. So it is a life lesson, and that 

112 

is what this is about. So we put them through a short quarterly 

program and then we have a mentor actually take them through 

how do you operate and get things done. So there is a lot of other 

people that are doing it very effectively. Ours is one that we need 

to do it to instill change in our culture. 

Mr. CUMMINGS. How many employees do you have? 

Mr. KLAYKO. We have about 5,000 employees. 

Mr. CUMMINGS. Thank you. 

Chairman ISSA. Thank you. 

With that, we recognize the gentleman from Virginia, Mr. 

Connolly. 

Mr. CONNOLLY. Thank you, Mr. Chairman. 

Chairman ISSA. I am sorry. If you wouldn’t mind, the other gentleman. 

Mr. CONNOLLY. Of course not. I would be honored. 

Chairman ISSA. I apologize. You snuck up on me, John. We recognize the gentleman from Florida, Mr. Mica. 

Mr. MICA. Thank you. And we will get to Mr. Connolly in just 

a second. 

Mr. CONNOLLY. I am only too happy to have you go first, Mr. 

Mica. 

Mr. MICA. Thank you. Thank you. 

We heard the OMB CIO say that he didn’t see any impediments 

as far as the law. Are any of you aware of any changes that we 

need to make in the law that would help us in this whole process? 

Anything? 

Mr. BOURGEOIS. I don’t know if I would specifically say there are 

changes in the law, and I am definitely not an expert on the laws 

themselves. What I would say is that in how those existing laws 

have been operationalized is just a mess. So if it can be simplified 

quite a bit. 

Mr. MICA. The other thing is he cited himself that he would give 

an agency the authority to move ahead and they would take the 

paper and wave it around, but there is some problems in getting 

the authority transmitted to the agency, so there is some disconnect. He says he has the law and the authority to do that, but 

it is not happening. So that is some of what you are referring to? 

Mr. BOURGEOIS. I am not sure I am familiar—— 

Mr. MICA. First of all, thank you all. I come from the private sector. I have been on this committee a long time and others, and for 

the private sector to come forward and testify like you are doing, 

I appreciate it very much. Sometimes they are very reticent for retribution or anything you say may be held against you and all of 

that. But this is important, and our purpose isn’t to bash them, it 

is to try to see how we move this forward. 

Mr. BOURGEOIS. Let me give my best example from my experience when I was an executive CIO at the U.S. Patent and Trademark Office. So in terms of empowerment, yes, and I mentioned 

specifically in my opening statement that I had the full authority 

that the Clinger-Cohen Act defines. And that was in some ways 

given to me by the Under Secretary at the agency, but also in 

terms of how we carried out our planning for IT investments, it 

was part of the budget process for the agency. 

113 

There were five executives that ran the agency: The Commissioner for Patents, the Commissioner for Trademarks, the CFO, the 

Deputy Under Secretary and myself, the CIO. And everything 

started with what the agency wanted to accomplish—reducing 

pendency, improving quality of patents, transparency and dissemination of information, and so on. Every dollar of IT investments 

was tied to one of those objectives. Whether it was a maintenance 

of an existing legacy application or it was a brand new thing like 

that new system that we implemented, you know, new 10 years 

ago, to take the Patent Office completely electronic, it was all tied 

to a mission objective and by virtue of that planning and how we 

executed it, we carried out the Clinger-Cohen responsibilities in 

concert with each other for the good of the mission. I don’t see that 

happening in many other agencies today. 

Mr. MICA. Well, I talked about having the law in place and then 

the policy to execute that and someone executing it, then the personnel. And I think you also mentioned the staffing level and we 

have talked a little bit about that. I was concerned that they may 

not be able to attract the best personnel or retain them. Sometimes 

you can get them and you teach them and the next thing you know 

they are out the door and they are earning big bucks somewhere 

else. I am not sure exactly how we legislate that, but I think we 

can look at the incentives and the packages and things that we can 

offer that might make a difference. Do you think that would be—— 

Mr. BOURGEOIS. Again, from my experience as a CIO in the Federal government, there are existing tools that can be used to address this challenge of expertise and attracting and retaining the 

right workforce. But also, make no mistake, it is a moving target. 

So as technology evolves now, those systems and capabilities that 

are in place today have to evolve with it. And there are things that 

I utilized as a CIO that are not very well known, like the SL designation to hire high-end technical experts on par with private sector expertise and then challenge them with metrics and reward 

them through performance capabilities when they delivered the results. This can happen today, but it does require the buy-in of the 

head of the agency. 

Mr. MICA. There are lots of specifics, and I don’t have much time, 

but I was fascinated by your just sort of quick analysis of the consolidation of the data centers. They are trying to consolidate 1,200 

out of 3,000. What do you think the real number could be and what 

we could achieve there? Just one little example. 

Mr. BOURGEOIS. The consolidation effort to date has been a critical first step, but there is really just the tip of the iceberg in what 

it has been able to accomplish. The reason is, as Mr. VanRoekel described, the legacy is applications that have infrastructure dedicated to them. The first step has somewhat consolidated them. For 

example, if you include back office applications, the GAO estimates 

more than 2,200 investments at $9.1 billion in back office applications. There is no question that there is billions of dollars of potential through consolidation of those applications. 

Mr. MICA. I love your phrase I will conclude with elimination of 

duplication of applications. Has a certain ring to it. Thank you. I 

yield back. 

Chairman ISSA. I thank the gentleman. 

114 

And we now go to probably the most dedicated consolidator of 

these stations, the author of the legislation, Mr. Connolly. 

Mr. CONNOLLY. Thank you, Mr. Chairman, and welcome to our 

panel. 

You know, picking up on the concern Mr. Mica and others and 

the chairman have mentioned about personnel, Mr. Klayko, you 

have been a CEO, and I served 20 years in the private sector in 

Federal contracting in IT. Might it be a fair statement that the way 

we are treating Federal employees is going to make it more difficult moving forward to recruit and retain, especially highly skilled 

sets; freezing salaries for 3 years, raiding their benefits to help finance other unrelated things, public disparagement of their public 

service and their worth. Is that how you would manage your workforce? 

Mr. KLAYKO. No. I mean, you have to go ahead and create a culture that you want people to come to work every day. And there 

is a lot of other ways to go ahead and do that. So I think you have 

to create a culture in the government that people want to come to 

work, make a difference, and then put performance metrics in 

place, they go ahead and they get rewarded for their performance. 

Mr. CONNOLLY. Thank you. 

And Mr. Bourgeois, I saw you shaking your head. I assume as 

a former Federal employee, a CIO, you concur with Mr. Klayko? 

Mr. BOURGEOIS. I will be very brief. I absolutely concur with 

that. You want to create an environment that folks want to come 

to work every day, and the scenario that you described that is happening doesn’t exactly do that. 

Mr. CONNOLLY. I agree. 

Mr. Niehaus, you talked about best value. Could you explain a 

little bit more, when you talk about best value, what are you referring to? 

Mr. NIEHAUS. The main concept from our perspective is the total 

cost of ownership. This is an industry accepted. I mentioned 

Gartner, for example, as one of the main reference points. In industry for a lot of years there was a focus on just lowering acquisition 

price. I think I heard it earlier today where throwing more IT 

made things more productive, you know, more better. And there 

wasn’t enough looking backwards on how are we managing the legacy systems that we are building and how are we monitoring their 

success. 

So the concept now is really focused on looking at total cost of 

ownership and holding CIOs accountable for delivering on that 

total cost of ownership, measuring it, so it is not just acquisition, 

but it is how much does that system cost to maintain, and what 

is the roadmap for that system after it is 5 years old, 3 years old; 

can you move it to the cloud, is it open data systems, et cetera? 

Mr. CONNOLLY. And that is my next question to you, you have 

anticipated it. Why is it that often maintaining a system costs 

more than the original acquisition? 

Mr. NIEHAUS. Because the way that requirements were built may 

not have been in as much collaboration with the private sector 

around best standards, open standards, commercial off-the-shelf 

software. What can the industry that is building the software do 

and deliver on a long-term that all of industry accepts. And when 

115 

you have that, and there is inherently a roadmap that allows you 

to start planning towards the future. Mr. VanRoekel talked about 

the depreciation of assets and how that in the private sector is 

something that you plan toward so that you can use your P&L to 

actually unlock investments for modernization instead of using it 

as a defense of existing spending. 

Mr. CONNOLLY. And the chairman has talked about some very 

antique systems, legacy systems. 

Mr. NIEHAUS. Absolutely. 

Mr. CONNOLLY. The chairman and I are working together along 

with the ranking member, Mr. Cummings, on some legislation, and 

one of the things we are working toward is empowering CIOs. 

Would you and your colleagues at Microsoft welcome that as obviously a vendor and provider to the government, I mean? And presuming that we consolidate 243, which is way too many, but what 

is left, what kind of empowerment ought they to have from your 

point of view? 

Mr. NIEHAUS. From our perspective the most successful projects 

are the ones that are closest to the mission and mission focus, and 

that means also the CIO that is empowered closest to the mission. 

As Congressman Davis stated, I don’t know if we know that a certain number is too many or too little per agency. It is about the 

right swim lanes and the accountability so that you can measure 

the success of that CIO. 

The missions that the DOD performs are myriad. The U.S. Department of Agriculture has food inspectors and various others. It 

is not necessarily right to think that one CIO would be able to have 

expertise in designing mission systems for each one of those. So the 

goal would be to know that you are working with an accountable 

and empowered CIO focused and close to that mission to make 

them successful. 

Mr. CONNOLLY. Final word, Mr. Bourgeois, I want to give you an 

opportunity to expand. When you were at Patent and Trade, you 

gave us an example that worked and you said then that is how we 

got to Clinger-Cohen, but then you said, but I don’t know many 

other examples of that in the Federal family. Could you elaborate 

on that. Why not? What were the unique attributes of Patent and 

Trade that apparently weren’t transferable to other agencies? 

Mr. BOURGEOIS. I am glad you couched the question that way because it does give me the opportunity to point out that in one way 

it was, you know, full authority over the IT budget, and that was 

all IT expenditures across the agency, and that included the business applications used by all of the examiners and all the other 

staff. Most CIOs in the Federal government are called CIOs, but 

they are really chiefs of infrastructure, because the business applications are funded and implemented, managed by some program 

somewhere else. So that is a key capability. 

Also the full authority and responsibility of hiring and firing and 

incentivizing and managing all of the IT people and IT classifications throughout the entire agency. So there were these other control factors in place through HR, through contracting and other 

means throughout the office, that if things were happening in the 

rogue IT organization in the business units, they would come back 

116 

to me as the CIO and I could go talk to my peer, we could correct 

it and get it back on track. 

Mr. CONNOLLY. I thank the chair. 

Chairman ISSA. Thank you. I would like to do just one short additional round. 

Mr. Klayko, since you are the only person that currently is not 

working for a company, I am going to take advantage of your temporary lack of conflict potentially, although pride is the greatest 

conflict sometimes in an answer. But in your years of selling products and services, didn’t you try to decommoditize what you sold 

while the buyer tried to commoditize. Today you have in a sense 

told us in your opening statement that in fact the worst thing to 

do is to buy into the decommoditization. In other words, when I ask 

for a Cisco router or equivalent or a D–Link router or whichever 

brand, I am buying into somebody’s decommoditization by definition. Isn’t that pretty much what you said? 

Mr. KLAYKO. As a vendor? 

Chairman ISSA. As a vendor you want to decommoditize. You 

want to have your brand matter and have it spec’d by name if possible. As a buyer I want everything to be pounds of wheat. I want 

everything to be as commoditized as possible. Isn’t that essentially 

the relationship that is optimally the first thing that each of you 

is working toward? 

Mr. KLAYKO. I mean, if you start at the opposite ends and work 

towards the middle, I think that is probably true. I looked at in 

many of the reviews I have done in the past why someone was chosen over another. You do loss reviews all the time. You have done 

it in private sector and so forth. 

One of the things I find is in an IT environment, in any environment, the most feared word is delete. So nobody deletes anything. 

No one deletes data. They keep it forever. So you just get more and 

more and more and more and more and it becomes unmanageable 

and more difficult. 

Chairman ISSA. That is why we need VM’s Image Backup, is because it has gotten to be so much data we are backing up we don’t 

have time to back it up as data. 

Mr. KLAYKO. Yeah, but there is still that. And then the other 

thing what I found is there is a lot of fear. There is fear of making 

a change. Because right now, to your point, sir, where you said, you 

know, we are laying off people, there are no raises and so forth, so 

why do I want to put myself on the edge to make a recommendation to make a change if all of a sudden it doesn’t work and it fails 

so I become the guy they shoot. So there is no incentive. We have 

the exact opposite incentive program that should be in place. 

So we are starting at different points, but the membrane to get 

together, I am not sure we can if we can never align on that. It 

is very, very difficult. We have to eliminate the fear. 

Chairman ISSA. Okay. I am going to do two last questions. Mr. 

Niehaus, I give you a little grief on this subject deliberately. Microsoft and a number of other well-known brand names in software 

deliver more than a commodity because they deliver the history, 

the predictability. Look, 1.0, everything fails, and 2.0 exists for the 

purpose of fixing everything that was wrong with 1.0 and 1.1 and 

1.2. We get it, that you can’t deal with people on a purely comVerDate Aug 31 2005 09:28 Mar 15, 2013 Jkt 000000 PO 00000 Frm 00120 Fmt 6633 Sfmt 6633 C:\DOCS\79790.TXT APRIL
117 

modity basis. But from a government procurement standpoint, 

shouldn’t our procurement reform be similar to Mr. Klayko’s statement, which is quit spec’ing by definition what we need almost by 

brand name and spec it to the greatest extent by the minimum 

needs required, and then companies can come in and sell their ups 

and adds or additional features which often make the difference between two otherwise identical commodities. 

Mr. NIEHAUS. Mr. Chairman, the way that we would look at it 

or the way that we see it is commercial off-the-shelf software is a 

great term and a great phrase and it means a lot and it is very 

accepted. The challenge is that where we are going today, or now 

and in the future, is cloud-based email systems, and we have agencies lining up to do that. That is not as simple as just taking the 

version of exchange server that is running that you already own 

and just putting it in the cloud and running it. It is actually new 

innovations. It is new capabilities. It is the ability to provide that 

warfighter a disconnected scenario downrange or a task worker in 

the field or a food inspector disconnected as well as an IRS worker 

fully connected. 

Chairman ISSA. Sure. Those are certainly ups and adds. And, oh, 

by the way, when you went from an exchange based to clouds, I 

lost a few things, too. I made that transition. The fact is that you 

sometimes find things are slightly different because you have been 

using, if you will, undocumented features, and that is common that 

we find ways to make things work that were not in the plan, mailboxes that are blank for some reason that people look at in a different environment. And I appreciate that, and hopefully that is 

what we are going to continue looking at how to get right in this 

act. 

Mr. Bourgeois, obviously I know a little bit about your product, 

probably enough to be dangerous. But earlier I think there was 

something that didn’t get said properly, which is, isn’t it true that 

one consistency within our movement, the government’s movement 

to cloud, is underutilization. We can do what Mr. Connolly so much 

wants us to do, which is consolidate. But if we consolidate rather 

than to 100 servers doing 1,000 tasks and instead what we have 

is 1,000 servers each doing one task, we haven’t really saved anything other than we have made the electric bill appear in one place. 

Isn’t that to a great extent the other part of consolidation that we 

have to find a way to do? 

Mr. BOURGEOIS. Mr. Chairman, that is very well said. I think 

that the consolidation effort includes multi-layers of the technology 

stack, and the majority of the efforts thus far have been focused 

on the core infrastructure layer when there is still—maybe the low 

hanging fruit has been picked and we have to reach up a little farther. There is still fruit to be picked there. But without a doubt 

there is an opportunity to actually rationalize the portfolio of IT investments, to take the 10 things that are doing the same thing and 

actually meld them into one and consolidate it at the same time. 

Chairman ISSA. Thank you. 

Any additional rounds? Mr. Cummings? 

Mr. CUMMINGS. I yield to Mr. Connolly. 

Mr. CONNOLLY. Thank you. Thank you, Mr. Cummings. 

118 

I actually just wanted to piggyback on your point, Mr. Issa, Mr. 

Chairman. I think we have to find sort of a happy medium. Take 

the chairman’s point about emails. All right, maybe emails 

shouldn’t be treated as a commodity, but you heard Mr. VanRoekel 

when he testified in my district in a field forum, he pointed out in 

an agency, he says 20, but I am pretty sure he said 36, but it was 

a lot of email systems. And you know how that happened. It didn’t 

happen because there are 20 or 36 unique sets of demands on an 

email system. It grew up because my division got an email system 

and yours got one later. And so as a result we have all this stovepipe duplication, they can’t talk to each other, and we are spending 

a fortune trying to fix it. Mr. VanRoekel pointed out he finally got 

one in place. Now, maybe that is too few. 

So I just think that to the chairman’s point, while we don’t want 

to have a mentality that says no, no, one size has to fit all, god, 

is that a problem in government. On the other hand, we can’t treat 

everything as unique or we will never save a dime and we will 

never get efficient. 

Mr. NIEHAUS. Congressman, I completely agree with that. And a 

perfect example, and I don’t know if Mr. VanRoekel is referring to 

this customer, but the USDA, for example, had that numerous 20- 

plus email systems. It was Microsoft that consolidated those into 

the cloud. So it is not that we are against this, by any means. The 

focus that we look at is making sure that we are continuing to 

meet the mission of government as it evolves. If the decision had 

been pick one of these, label it a commodity and everyone standardized on it, there wouldn’t have even been a conversation about, 

well, what can the cloud offer? Can the cloud actually offer you a 

better value, a faster return on your IT investment, a lower total 

cost of ownership over time. 

I think that is where we bring up the concern about the term 

commodity because we don’t see it in the private sector but we do 

see commercial off-the-shelf software in the private sector, and we 

do completely agree on the focus of what are the standards of service and the standards of mission requirement that we can all agree 

are the core fundamental, and let’s build around that and deliver 

solutions around that and fight to innovate among competitors. 

Mr. CONNOLLY. And I do not spend a lot of time on this dais defending the chairman, but in this case I think there has been somewhat of a reaction to some of the draft language, and I don’t think 

there is that much daylight frankly between how you just articulated it and how the chairman or I would articulate it. 

Mr. NIEHAUS. I think that is certainly a welcome conversation 

and discussion for us to continue to support and have. Absolutely. 

Mr. CONNOLLY. Thank you. 

Chairman ISSA. As we close, I will tell a very short story. I remember all too well being in the military where we were driving 

military vehicles with military tires designed for combat, and somebody somewhere at DOD back in the seventies got the bright idea 

that they ought to buy a whole bunch of pickup trucks, standard, 

I believe they were mostly Dodge pickup trucks, and paint them 

green and use those to run back and forth on streets, on regular 

roads, to go pick up parts. It was an innovative idea. It saved 

countless millions of dollars and, quite frankly, some lives because 

119 

military combat vehicles on slippery roads, on hard surfaces, do not 

perform nearly as well. 

Our goal with IT purchasing reform is in fact to recognize that 

Americans all buy automobiles which are commercial off-the-shelf. 

We are not claiming that a Cadillac—or I will use the now defunct 

Yugo—are in fact equal. But we do know that all of them are part 

of a commodity for transportation. We want to find a way to make 

sure that specific pieces of transportation are purchased that optimize the Federal need and that in every case possible we not ask 

somebody to set up a brand new auto company to produce a form 

of transportation. 

And with that, I thank all of you for kicking off this process, 

being our first hearing, and we stand adjourned. 

[Whereupon, at 4:40 p.m., the committee was adjourned.] 

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