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+
+ - SERVICE ORIENTED STREAMLINING: RETHINKING THE WAY GSA DOES BUSINESS
+
+[House Hearing, 109 Congress]
+[From the U.S. Government Publishing Office]
+
+
+
+
+
+ SERVICE ORIENTED STREAMLINING: RETHINKING THE WAY GSA DOES BUSINESS
+
+=======================================================================
+
+ HEARING
+
+ before the
+
+ COMMITTEE ON
+ GOVERNMENT REFORM
+
+ HOUSE OF REPRESENTATIVES
+
+ ONE HUNDRED NINTH CONGRESS
+
+ FIRST SESSION
+
+ __________
+
+ MARCH 16, 2005
+
+ __________
+
+ Serial No. 109-11
+
+ __________
+
+ Printed for the use of the Committee on Government Reform
+
+
+ Available via the World Wide Web: http://www.gpo.gov/congress/house
+ http://www.house.gov/reform
+
+ ______
+
+ U.S. GOVERNMENT PRINTING OFFICE
+20-379 WASHINGTON : 2005
+_____________________________________________________________________________
+For Sale by the Superintendent of Documents, U.S. Government Printing Office
+Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
+Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001
+
+ COMMITTEE ON GOVERNMENT REFORM
+
+ TOM DAVIS, Virginia, Chairman
+CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California
+DAN BURTON, Indiana TOM LANTOS, California
+ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
+JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
+JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
+GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York
+MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland
+STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
+TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois
+CHRIS CANNON, Utah WM. LACY CLAY, Missouri
+JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California
+CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts
+MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland
+DARRELL E. ISSA, California LINDA T. SANCHEZ, California
+GINNY BROWN-WAITE, Florida C.A. DUTCH RUPPERSBERGER, Maryland
+JON C. PORTER, Nevada BRIAN HIGGINS, New York
+KENNY MARCHANT, Texas ELEANOR HOLMES NORTON, District of
+LYNN A. WESTMORELAND, Georgia Columbia
+PATRICK T. McHENRY, North Carolina ------
+CHARLES W. DENT, Pennsylvania BERNARD SANDERS, Vermont
+VIRGINIA FOXX, North Carolina (Independent)
+------ ------
+
+ Melissa Wojciak, Staff Director
+ David Marin, Deputy Staff Director/Communications Director
+ Rob Borden, Parliamentarian
+ Teresa Austin, Chief Clerk
+ Phil Barnett, Minority Chief of Staff/Chief Counsel
+
+
+ C O N T E N T S
+
+ ----------
+ Page
+Hearing held on March 16, 2005................................... 1
+Statement of:
+ Hewitt, Thomas, CEO, Global Government, on behalf of the
+ Information Technology Association of America; Vic
+ Avetissian, Corporate Director, Northrop Grumman Corp., on
+ behalf of the Contract Services Association; Mike Davison,
+ director & general manager, Canon Government Marketing
+ Division, Coalition for Government Procurement; Elaine
+ Dauphin, vice president, GSA programs, Computer Sciences
+ Corp., on behalf of the Professional Service Council; and
+ Richard Brown, president, National Federation of Federal
+ Employees.................................................. 51
+ Avetissian, Vic.......................................... 60
+ Brown, Richard........................................... 90
+ Dauphin, Elaine.......................................... 84
+ Davison, Mike............................................ 68
+ Hewitt, Thomas........................................... 51
+ Perry, Stephen, Administrator, U.S. General Services
+ Administration, accompanied by Donna Bennett, Commissioner,
+ Federal Supply Service; and Barbara Shelton, Acting
+ Commissioner, Federal Technology Service; Deidre Lee,
+ Director of Defense Procurement and Acquisition Policy,
+ U.S. Department of Defense; and Eugene Waszily, Assistant
+ Inspector General for Auditing, U.S. General Services
+ Administration............................................. 12
+ Lee, Deidre.............................................. 31
+ Perry, Stephen........................................... 12
+ Waszily, Eugene.......................................... 31
+Letters, statements, etc., submitted for the record by:
+ Avetissian, Vic, Corporate Director, Northrop Grumman Corp.,
+ on behalf of the Contract Services Association, prepared
+ statement of............................................... 62
+ Brown, Richard, president, National Federation of Federal
+ Employees, prepared statement of........................... 93
+ Cummings, Hon. Elijah E., a Representative in Congress from
+ the State of Maryland, prepared statement of............... 108
+ Dauphin, Elaine, vice president, GSA programs, Computer
+ Sciences Corp., on behalf of the Professional Service
+ Council, prepared statement of............................. 86
+ Davis, Chairman Tom, a Representative in Congress from the
+ State of Virginia, prepared statement of................... 3
+ Davison, Mike, director & general manager, Canon Government
+ Marketing Division, Coalition for Government Procurement,
+ prepared statement of...................................... 71
+ Hewitt, Thomas, CEO, Global Government, on behalf of the
+ Information Technology Association of America, prepared
+ statement of............................................... 53
+ Perry, Stephen, Administrator, U.S. General Services
+ Administration, prepared statement of...................... 14
+ Waszily, Eugene, Assistant Inspector General for Auditing,
+ U.S. General Services Administration, prepared statement of 33
+ Waxman, Hon. Henry A., a Representative in Congress from the
+ State of California, prepared statement of................. 7
+
+
+ SERVICE ORIENTED STREAMLINING: RETHINKING THE WAY GSA DOES BUSINESS
+
+ ----------
+
+
+ WEDNESDAY, MARCH 16, 2005
+
+ House of Representatives,
+ Committee on Government Reform,
+ Washington, DC.
+ The committee met, pursuant to notice, at 10:21 a.m., in
+room 2154, Rayburn House Office Building, Hon. Tom Davis
+(chairman of the committee) presiding.
+ Present: Representatives Davis of Virginia, Shays,
+Gutknecht, Souder, Platts, Westmoreland, Foxx, Waxman,
+Cummings, Kucinich, Davis of Illinois, Watson, Lynch,
+Ruppersberger, Higgins, and Norton.
+ Staff present: Ellen Brown, legislative director and senior
+policy counsel; Rob White, press secretary; Drew Crockett,
+deputy director of communications; Edward Kidd, professional
+staff member; John Brosnan, GAO detailee; Teresa Austin, chief
+clerk; Sarah D'Orsie, deputy clerk; Mark Stephenson, minority
+professional staff member; Earley Green, minority chief clerk;
+and Jean Gosa, minority assistant clerk.
+ Chairman Tom Davis. The committee will come to order. Good
+morning, and welcome to the Government Reform Committee's
+oversight hearing on restructuring the General Services
+Administration's operations, particularly its Federal Supply
+Service [FSS], and the Federal Technology Service [FTS], in
+order to meet the demands of the modern government market and
+to address GSA's management challenges.
+ GSA each year buys products and services from the private
+sector worth well over $30 billion and resells them to Federal
+agencies using the FTS and the FSS revolving funds. Under FSS,
+Federal agencies, and in some cases State and local
+governments, can deal directly with private sector vendors who
+make their products available on the FSS Schedule, which is
+managed by GSA. Under FTS, GSA plays a more active role by
+acting as a third party advisor for the Federal agency in
+acquiring telecommunications and information technology goods
+and services. Fees collected from customer agencies are the
+main source of funds for both programs.
+ While the bifurcated system may have made sense two decades
+ago when IT investments were a relatively new phenomena,
+technologies such as laptop computers, cell phones, and e-mails
+are now as ubiquitous with office supplies as are desks and
+phones. Two separate buying organizations operating out of
+different funds has become a barrier to coordinate acquisition
+of services and the technology needed to support the total
+solutions agency customers demand. As a result, GSA's
+leadership, the Office of Management and Budget, and I have
+been looking into legislative and administrative options to
+consolidate FSS and FTS into a single entity operating out of a
+unified fund, providing Federal agencies with a one-stop shop
+to acquire all of their goods and services.
+ Today's hearing will build on evidence developed in prior
+hearings held by the committee on structural and management
+changes facing GSA operations in today's market. Also key are
+recent revelations of contract management challenges in FTS
+exposed by GSA's Inspector General reports. Those reports
+reveal weaknesses in the GSA's management control over its far-
+flung regional offices.
+ As the Government entity charged with providing best value
+solutions for customer agencies and taxpayers, I expect GSA to
+be compliant with applicable law, fiscally responsible, and
+responsive to concerns from both the private and public
+sectors. We expect GSA to lead the Government in the
+acquisition of solutions that capture the most current
+technology available in today's market. Along those lines, I
+want to commend GSA's recent efforts to generate in-house
+discussion about the most effective way to streamline its
+operations. I also want to commend GSA for proactively getting
+in front of some of the challenges facing the agencies that are
+identified in IG reports.
+ I hope that through this hearing we will be able to get a
+clearer picture of how GSA is addressing its management
+challenges in the evolving technology marketplace. I intend to
+use the information we gather today along with some ideas of my
+own to craft a bill that will ensure that the structural
+reforms that we create are memorialized in GSA's organic
+legislation. I envision legislation that will amend title 40 of
+the U.S. Code to: meld the current General Supply and
+Information Technology Funds into a single Acquisition Services
+Fund that will combine the positive attributes of both of the
+current funds; create within GSA a single Federal Acquisition
+Service; provide for appointment and direct control by the
+Administrator of Regional Administrators; and establish
+Government-wide policies aimed at recruiting and retaining
+experienced acquisition staff in all Federal agencies whose
+mission will be to ensure that Federal acquisitions are as
+cost-effective as possible.
+ In addition to our GSA witnesses, we will be hearing from
+Ms. Deidre Lee, representing the Department of Defense, GSA's
+largest agency customer. GSA's IG is also with us today to
+provide an update on their work in the regions. We will hear
+from a union representative. Finally, we will hear from private
+sector witnesses who work with GSA's FTS and FSS on a regular
+basis. We also invited Professor Steve Kelman of Harvard's
+Kennedy School of Government to appear, but he is unable to
+attend because of teaching obligations, but we have his
+statement available at the table.
+ [The prepared statement of Chairman Tom Davis follows:]
+
+ [GRAPHIC] [TIFF OMITTED] T0379.001
+
+ [GRAPHIC] [TIFF OMITTED] T0379.002
+
+ Chairman Tom Davis. I would now recognize the distinguished
+ranking member, Mr. Waxman, for his opening statement.
+ Mr. Waxman. Thank you, Mr. Chairman.
+ Today's hearing on the Federal Technology Service and the
+Federal Supply Service will examine the proposed merger of
+these two components of the General Services Administration.
+One of the principal functions of the Government Reform
+Committee is to ensure that the Federal Government operates as
+effectively and efficiently as possible. The members of our
+committee take that responsibility very seriously, and this
+hearing will hopefully help us further that goal.
+ I also want to thank the chairman for agreeing to include a
+number of witnesses suggested by the minority.
+ The Federal Supply Service was created in 1949 to provide
+an economic and efficient system for the procurement and supply
+of goods and services to Federal agencies. One way it does this
+is through the Schedules Program which set up long-term
+Government-wide contracts with commercial firms for commercial
+goods and services that can be ordered directly from the
+contractor or through FSS. The Schedules Program provides
+customer agencies with benefits of volume discount pricing,
+lower administrative costs, and reduced inventories. It is a
+largely Washington-based self-service type of operation for
+Federal agencies.
+ The Federal Telecommunications Service offers agencies a
+range of information technology and telecommunications products
+and services on a number of contract vehicles, including the
+Schedules run by FSS. Its focus is more oriented toward
+providing full-service solutions for IT telecommunication and
+professional services. FTS is also more regionally based, with
+offices dispersed throughout the country.
+ Given the differing structure and goals of these two
+services, they don't necessarily seem like a natural fit to me.
+Other observers have cautioned that merging the two services
+could hurt the procurement of information technology because
+without a service exclusively dedicated to technology, there
+will be less emphasis on it.
+ While I have kept an open mind on the question of
+restructuring GSA, I am somewhat troubled by the process by
+which it has been proposed. The President's budget includes
+language to merge the two services and the revolving funds
+under which they operate. Yet, I am unaware of any considered
+analysis having been done to demonstrate whether these two
+units should be merged in the first place. All of the
+discussion and now considerable effort going on at GSA is
+currently focused on how to merge the two services, and not
+whether they should be joined.
+ Three years ago, GSA commissioned a study by an outside
+expert to look at duplication and overlap between FSS and FTS.
+The recommendations of that study led to a realignment of
+certain functions and duties between the two services. GSA has
+maintained that all of the recommendations of that study have
+in fact been addressed, so it is not even clear that
+duplication continues to exist.
+ As I said, I will keep an open mind on the proposed merger,
+but I expect more detail and a much clearer explanation of the
+benefits of this proposed merger before I can wholeheartedly
+support it.
+ Thank you, Mr. Chairman. I look forward to hearing from our
+witnesses.
+ [The prepared statement of Hon. Henry A. Waxman follows:]
+
+ [GRAPHIC] [TIFF OMITTED] T0379.003
+
+ [GRAPHIC] [TIFF OMITTED] T0379.004
+
+ [GRAPHIC] [TIFF OMITTED] T0379.005
+
+ [GRAPHIC] [TIFF OMITTED] T0379.006
+
+ Chairman Tom Davis. Thank you very much.
+ Members can have 7 days to submit opening statements for
+the record.
+ Anyone else feel they need to make a statement now? Ms.
+Norton.
+ Ms. Norton. Thank you very much, Mr. Chairman. And I
+applaud you for looking closely at this proposed merger.
+ I will be interested in looking at this merger in the way I
+think all moving blocks around ought to be viewed: first, in
+light of function and then whether structure fits function. I
+am interested in whether or not the merger follows a business
+model that plainly improves the functioning of both FTS and FSS
+as we now know it. I certainly buy the notion that purchasing
+personal technologies like laptops and cell phones has become
+more and more like purchasing personal services and products.
+But there is a big difference between purchasing technology and
+purchasing paper, and no consolidation will erase that. Indeed,
+if anything, purchasing various kinds of technologies become
+more and more highly specialized. Each year I know less about
+how to deal with new offerings.
+ GSA, therefore, has to be understood for what it does, not
+only as a kind of third party that helps agencies to purchase.
+It has an important role in enabling agencies, particularly
+smaller agencies, to take advantage of somebody's advice before
+they go out into the market. I will be very interested to know
+how that function is going to continue. And, frankly, I could
+see a situation where we blog these things together, maybe for
+budget reasons--I am not sure that function has driven this--we
+blog them together and then after they were together, they
+essentially just aggregated anyway, based on the need for more
+and more expertise, especially in the technology sector.
+ As always, if somebody is going to move parts of an agency
+around, the question for me is will the taxpayer benefit? Is
+there a functional benefit for the agency; will they do it
+better and will they do it cheaper?
+ Thank you very much, Mr. Chairman.
+ Chairman Tom Davis. Thank you very much.
+ We will now recognize our first panel. We have the
+Honorable Steve Perry, the Administrator of the U.S. General
+Services Administration, accompanied by Ms. Donna Bennett, the
+Commissioner from the Federal Supply Service, and Barbara
+Shelton, the Acting Commissioner of the Federal Technology
+Service. Welcome.
+ We have Ms. Deidre Lee, the Director of Defense Procurement
+and Acquisition Policy at the U.S. Department of Defense.
+Welcome back Dee.
+ And Mr. Eugene Waszily, the Assistant Inspector General for
+Auditing, U.S. General Services Administration.
+ It is our policy, as you know, that we swear you in before
+you testify, so if you would rise and raise your right hands.
+ [Witnesses sworn.]
+ Chairman Tom Davis. Mr. Perry, we will start with you, and
+then move to Ms. Lee and Mr. Waszily. And if Ms. Bennett or
+Shelton, if you want to make a statement, fine, but I think you
+are here as much for questions as anything else. But feel free.
+ Steve, we will start with you. Thanks for being here.
+Thanks for your leadership at GSA, as well.
+
+ STATEMENTS OF STEPHEN PERRY, ADMINISTRATOR, U.S. GENERAL
+ SERVICES ADMINISTRATION, ACCOMPANIED BY DONNA BENNETT,
+ COMMISSIONER, FEDERAL SUPPLY SERVICE; AND BARBARA SHELTON,
+ ACTING COMMISSIONER, FEDERAL TECHNOLOGY SERVICE; DEIDRE LEE,
+ DIRECTOR OF DEFENSE PROCUREMENT AND ACQUISITION POLICY, U.S.
+DEPARTMENT OF DEFENSE; AND EUGENE WASZILY, ASSISTANT INSPECTOR
+ GENERAL FOR AUDITING, U.S. GENERAL SERVICES ADMINISTRATION
+
+ STATEMENT OF STEPHEN PERRY
+
+ Mr. Perry. Thank you, Mr. Chairman. Mr. Chairman, members
+of the committee, we appreciate this invitation to discuss with
+you the subject of improving performance at GSA by reorganizing
+and consolidating our Federal Technology Service and our
+Federal Supply Service.
+ We agree with the view that organizations like GSA, who
+desire to achieve high performance and continuous improvement
+should periodically review their operations and review their
+operational or organizational structures in order to identify
+and implement improvements where possible. We believe that
+there are in fact operations in FTS and FSS that can be
+accomplished more effectively, and that the current structures
+of those two organizations can be streamlined to improve our
+performance in meeting the needs of our customer agencies in
+terms of their requirements for excellent acquisition services
+and best value for the American taxpayer.
+ Consequently, GSA is in the process, as you know, of
+developing a detailed action plan to accomplish the operational
+and structural changes necessary to reorganize and consolidate
+FTS and FSS. This action I think is in line with GSA's mission
+to provide best value services to Federal agencies; it is in
+line with principles outlined in the President's budget or
+management agenda to improve performance of all Federal
+agencies; and it is in line with this committee's commitment
+for efficiency and effectiveness in Federal Government
+operations.
+ I would like to emphasize just a few points about our work.
+First, this initiative to reorganize and consolidate FSS and
+FTS is designed to strengthen GSA's capability to meet
+increasing Federal agency requirements for excellence in
+acquisition of information technology, telecommunications, and
+other products and services. As we all know, Federal agency
+procurements are increasing every year. Agencies must be able
+to continue to rely upon GSA to meet their increasing
+requirements for acquisition services in order to avoid the
+need for each of them to place more and more of their budgets
+into resources that duplicate the acquisition activities at
+each Federal agency throughout the Federal Government.
+ Second, this initiative will make it easier for Federal
+agencies and for industry contracts to use GSA's acquisition
+processes. Our work will include extensive outreach efforts to
+obtain the input and collaboration of customer agencies and
+industry contractors.
+ Third, we will enhance the efficiency of GSA's
+administrative support functions by consolidating certain
+accounting and operational systems activities that are now
+performed separately in both FSS and FTS. Reorganizing and
+consolidating these two services into one will break down
+artificial barriers to economies of scale.
+ Another point is that the reorganization and consolidation
+work that we are discussing here today is now underway. A
+steering team and several task force teams of GSA managers and
+subject matter experts have begun their fact-based analysis to
+identify areas of opportunity and to develop specific proposed
+changes and solutions. These teams are scheduled to complete
+the first draft of their detailed reorganization/consolidation/
+implementation plan by May 31, and complete the final plan by
+July. This will enable the implementation to begin in the very
+near future.
+ As you pointed out, Mr. Chairman, there will be one
+legislative change needed to enable GSA to significantly
+streamline the administrative and financial management aspects
+of FTS and FSS operations by combining what is now two separate
+funds, one the General Supply Fund and two the Information
+Technology Fund into a single fund. A separate Information
+Technology Fund which was established about 20 years ago for
+the acquisition of technology, telecommunications, and related
+products and services, which is separate from the General
+Supply Fund, which is used for the acquisition of other
+products and services. The technology IT fund is no longer
+useful, and having two funds are administratively burdensome.
+ Separate funds are no longer useful primarily because the
+acquisition and the use of information technology and
+telecommunication products and services have evolved into the
+acquisition of a total solution, that is, a mix of information
+technology hardware and software combined with telecom and
+other professional services that may be outside of IT. To
+enable our recordkeeping systems to be consistent with this
+evolution and the marketplace, the President's budget for
+fiscal year 2006 calls on Congress to provide GSA with the
+authority necessary to combine the two funds into a single
+revolving fund.
+ Last, it is important that while GSA associates implement
+the changes necessary to accomplish the reorganization and
+consolidation of FSS and FTS, we must not lose momentum in
+other important initiatives, including Networx, which, as you
+know, is the Government-wide telecommunications procurement;
+and our ``Get It Right'' plan, where GSA and DOD and other
+agencies are working together to achieve excellence in Federal
+acquisition while achieving full compliance with Federal
+acquisition regulations and best practices.
+ Again, I would like to thank the committee for its support
+of GSA's performance improvement initiatives, and all of us
+look forward to working with you.
+ [The prepared statement of Mr. Perry follows:]
+
+ [GRAPHIC] [TIFF OMITTED] T0379.007
+
+ [GRAPHIC] [TIFF OMITTED] T0379.008
+
+ [GRAPHIC] [TIFF OMITTED] T0379.009
+
+ [GRAPHIC] [TIFF OMITTED] T0379.010
+
+ [GRAPHIC] [TIFF OMITTED] T0379.011
+
+ [GRAPHIC] [TIFF OMITTED] T0379.012
+
+ [GRAPHIC] [TIFF OMITTED] T0379.013
+
+ [GRAPHIC] [TIFF OMITTED] T0379.014
+
+ [GRAPHIC] [TIFF OMITTED] T0379.015
+
+ [GRAPHIC] [TIFF OMITTED] T0379.016
+
+ [GRAPHIC] [TIFF OMITTED] T0379.017
+
+ [GRAPHIC] [TIFF OMITTED] T0379.018
+
+ [GRAPHIC] [TIFF OMITTED] T0379.019
+
+ [GRAPHIC] [TIFF OMITTED] T0379.020
+
+ [GRAPHIC] [TIFF OMITTED] T0379.021
+
+ [GRAPHIC] [TIFF OMITTED] T0379.022
+
+ [GRAPHIC] [TIFF OMITTED] T0379.023
+
+ Chairman Tom Davis. Thank you very much.
+ Dee, thanks for being with us.
+
+ STATEMENT OF DEIDRE LEE
+
+ Ms. Lee. Mr. Chairman and members of the committee, thank
+you very much for having me here today as GSA's largest
+customer, I believe.
+ As you know, the Department of Defense is the largest user
+of GSA Schedules and contracting service within both the
+Federal Supply Services and the Federal Technology Services. In
+fiscal year 2004 alone, FTS awarded over $6 billion on behalf
+of the Department of Defense for telecommunications,
+professional services, and information technology. DOD's use of
+FSS, Federal Supply Schedules, is even greater, with DOD
+spending approximately $7 billion on the Federal Supply
+Schedules last year.
+ DOD receives quality support from GSA, and we expect that
+we will continue to receive that quality support however the
+reorganization is accomplished. And we will continue our mutual
+efforts toward improving acquisition.
+ I would like to reaffirm DOD's commitment to working
+closely with Administrator Perry and the GSA team to improve
+our use of the Schedule contracts and to ensure that contracts
+awarded by GSA on behalf of DOD are proper and represent the
+best interest of the Government.
+ And I would be happy to answer any questions.
+ Chairman Tom Davis. Thank you very much.
+ Mr. Waszily.
+
+ STATEMENT OF EUGENE WASZILY
+
+ Mr. Waszily. Good morning, Mr. Chairman, members of the
+committee. I just have a few brief remarks to begin.
+ We are firm supporters of merging the Federal Technology
+Fund with the General Supply Fund from a financial aspect. As
+Mr. Davis pointed out in his opening comments, there are far
+too many discussions about whether something is IT or non-IT,
+and it is ubiquitous throughout all of our operations, so we
+would like to eliminate that legislative barrier to the
+procurement activities. At the same time, we also see the
+possibility in the merger of the two services to provide some
+economies in the support activities underneath, although we are
+not strongly in favor of or opposed to the merger of the two
+organizations.
+ But we are very strong in our belief that there are certain
+kinds of service and varying service offerings that are
+provided to the GSA customers to meet their specific needs, and
+that is what we would like to preserve. We do not particularly
+see that the service offerings of the Federal Technology
+Service are in direct competition with the Federal Supply
+Service. For the most part, we see the Federal Supply Service
+available for those clients who can define their requirement,
+it is well known and the contract is readily available to meet
+their procurement need. Those who need acquisition assistance
+or technical support, particularly in the technology area, we
+see that as the role of the Federal Technology Service.
+ That said, there are really two points that I would like to
+make. One is that, as Mr. Davis raised, we have raised in our
+prior audit reports over the past few years some difficulties
+and some procurements that were not executed the way that we
+would like to see them occur. When I look at the program, I see
+three elements to it: customer service, helping the customer
+meet its mission, and then compliance with the rules,
+regulations, and economies in doing a sound procurement. It is
+only that last leg that we need to improve, and I particularly
+commend Administrator Perry and Ms. Lee for the ``Get It
+Right'' initiative. Our audits on a continuing basis have shown
+marked improvement over the last 2 years. We are heading in the
+right direction.
+ That concludes my opening comments. Thank you.
+ [The prepared statement of Mr. Waszily follows:]
+
+ [GRAPHIC] [TIFF OMITTED] T0379.024
+
+ [GRAPHIC] [TIFF OMITTED] T0379.025
+
+ [GRAPHIC] [TIFF OMITTED] T0379.026
+
+ [GRAPHIC] [TIFF OMITTED] T0379.027
+
+ [GRAPHIC] [TIFF OMITTED] T0379.028
+
+ [GRAPHIC] [TIFF OMITTED] T0379.029
+
+ Chairman Tom Davis. Thank you very much.
+ Let me start the questioning.
+ Ms. Lee, let me just ask. I know that there is growing
+pressure, not from DOD, but particularly from the Senate, that
+DOD avoid using GSA contract vehicles in favor of internally
+awarded managed contracts. That policy not only I think could
+be harmful to GSA, but also to the Department, in that the
+contracts would have fewer vehicles on hand to meet their best
+needs. A, does that pressure also apply to like NASA SOUP, NIH,
+Interior, or is it aimed at just GSA? How much does the
+Department currently rely on GSA contract vehicles? And B,
+could the Department handle its critical mission without GSA's
+help?
+ I don't want to put you on the spot, but----
+ Ms. Lee. Mr. Davis, as you know, we are the largest
+customer and GSA does provide us good support. I do not think
+we could execute the Department's mission sharply without them.
+ Now, it is not that we haven't had our issues. One of the
+things we are doing at the ``Get It Right'' campaign is making
+sure that our people, as DOD people--and that is technical
+folks as well as our contracting people, because some of the
+money goes directly to GSA--that we make sure they understand
+the proper use of these vehicles; and GSA has been a wonderful
+partner in making sure that they help us reinforce those
+requirements.
+ At the same time, it is not only GSA that DOD spends
+money--we call them assisting agencies. So I do have a program
+in place where DOD representatives will be going around and
+visiting the other assisting agencies. That does include NASA
+SOUP, it includes the Department of Interior and some other
+agencies that provide assistance to Department of Defense. And
+we will be asking for the same staunch support that we have
+gotten from GSA in making sure we use these vehicles properly.
+But we will continue to use them.
+ Chairman Tom Davis. And as you take a look at all of these
+different Schedules that are out there, is there any concern
+there may be a proliferation of Schedules and that maybe some
+of the agencies involved don't have the kind of background and
+oversight that GSA does in administering them? Have you run
+into that?
+ Ms. Lee. There are a good number of Schedules. My biggest
+concern is that our people know what is out there, what is
+available, and how to use them properly. And I do think that in
+many cases obviously the best structured business arrangements
+or the ones that people are aware of are the ones that are
+getting a lot of use. So we are going to go around and visit
+with these assisting agencies and try to make sure we
+rationalize those and have a good understanding of what is
+available.
+ Chairman Tom Davis. OK.
+ Mr. Perry, your statement I think sets forth in some detail
+GSA's plans to accomplish the operational and structural
+changes needed to transform GSA's FTS and FSS, but I didn't
+hear anything about the regional structure. Now, as I
+understand it, GSA has 11 regional offices today. The
+acquisition management exercise by the various regional offices
+was what was really called into question in the IG reports. Are
+you considering any changes in the number of regional offices
+or their functions or their control exercised by the
+headquarters at this point? Is that part of your thinking?
+ Mr. Perry. Well, obviously in a comprehensive study of this
+type everything is on the table. At the same time, I think it
+is important to remember that one of the functions that GSA
+carries out, separate from its technology and supply
+acquisition, is the management of facilities, some 8,300
+facilities around the country, either Government-owned
+buildings or leased facilities. The physical facilities in the
+field really require GSA to have a presence at those locations
+where our customers are, and I would say primarily to provide
+them with physical workspace and lease those spaces, as well as
+maintain them. As an adjunct to that, in some instances it
+makes it convenient, if you will, to be able to place FTS or
+FSS people at those same locations.
+ I would also point out that while we have 11 regional
+offices, and we do have 11 client support centers that service
+technology acquisitions, in some of our FSS areas we provide
+those customer services in a zone, and that is we don't have an
+FSS operation in every single region. So as we look at this, we
+will view that with a particular eye toward how we can best
+deliver the services that customers need.
+ Chairman Tom Davis. As you know, you have almost 4,000 GSA
+associates working both FTS and FSS. Are you involving them in
+your thoughts and in the process?
+ Mr. Perry. Yes. At this stage, we are at an early stage,
+but we have established a steering team of GSA managers and
+subject matter experts. We are in the process of establishing a
+number of special task forces which will involve many, many
+more GSA associates; and we will continue to involve GSA
+associates. Our outreach will also extend outside of GSA to
+customer agencies and industry contractors. But all of those
+entities will be involved in the discussions.
+ Chairman Tom Davis. I have additional questions, but my 5
+minutes are up. I am going to recognize Mr. Waxman.
+ Mr. Waxman. Thank you, Mr. Chairman.
+ Mr. Perry, approximately 18 months ago this committee held
+a hearing on the realignment of certain duties between FTS and
+FSS. That hearing focused in part on a report done by Accenture
+for GSA on overlap and duplication between the two services,
+and recommendations for addressing that overlap. At that
+hearing you testified that you were pleased to announce that
+``each of those changes had been implemented and are fully
+operational.''
+ Now, 18 months later, OMB and GSA have announced yet
+another major restructuring of FTS and FSS, so I am trying to
+gain an understanding of what prompted this push for a merger,
+Mr. Perry. Is there a senior level management review, a new
+business case scenario or other analysis or report that has not
+yet been made public that is driving this move toward a merger?
+ Mr. Perry. Mr. Waxman, let me first comment on the report
+that was done some time ago. You are quite correct that what we
+looked at in that case was to see whether there were areas of
+what we called non-value-adding duplication that was occurring
+between the two that we could somehow eliminate by
+consolidating. And you are correct to point out that there were
+several areas that we found non-value-adding duplication that
+we have now combined, and I think quite successfully.
+ The review that we have done more recently really looks at
+what are the various things that we might do to in fact expand
+our capability to meet the needs of our customer agencies.
+ Mr. Waxman. So there has been another review?
+ Mr. Perry. This was an internal management review, yes,
+just looking at the fact that many times we are not able to
+meet the needs of our customer agencies on a cycle time that
+they would require. I would even submit that some of our
+difficulties with respect to complying with Federal acquisition
+regulations was a result of workload and a result of not being
+able to focus to the extent we needed to on processing customer
+requests.
+ Mr. Waxman. Let me ask you this. The senior level
+management review that you are referring to, may we have a copy
+of that?
+ Mr. Perry. It is not a document, it is a series of
+discussions, starting with brainstorming, managerial
+discussions about what we might do, what options we might take
+into account. We are continuing that now under the auspices of
+a more formalized steering team and task force.
+ Mr. Waxman. Thank you. The proposed merger was announced in
+the President's proposed budget for fiscal year 2006. Mr.
+Perry, who made the decision to press for a merger? Chairman
+Davis seems to be a proponent of the idea, but did this idea
+develop internally at GSA from FTS and FSS, or is it being
+driven from above?
+ Mr. Perry. Mr. Waxman, I think I would have to answer the
+question all of the above. Certainly, we have heard from this
+committee and its chairman that this would be an area of
+interest, and there was a review that was done by the people at
+OMB, taking a close look at our budget, looking at some of our
+offices that appeared to them to be duplicative, and they
+brought that to our attention at the same time that we were
+looking at it to see whether we would drive toward a
+resolution.
+ Mr. Waxman. I want to ask Ms. Lee and Mr. Waszily do either
+of you have any additional insight or information regarding
+what is driving the merger proposal?
+ Ms. Lee. I am aware that there was some language in GSA's
+bill, but I don't know the origin of that.
+ Mr. Waxman. Thank you.
+ Mr. Waszily.
+ Mr. Waszily. No, sir, I am not.
+ Mr. Waxman. Thank you very much for your testimony.
+ Thank you, Mr. Chairman.
+ Chairman Tom Davis. Mr. Gutknecht.
+ Mr. Gutknecht. Mr. Chairman, I would just say, if it is a
+good idea, I would be happy to take credit for it. You can
+share it with the administration. If it is a good idea, it is a
+good idea.
+ I don't have any other questions, Mr. Chairman, though, so
+I would yield my 5 minutes back to you.
+ Chairman Tom Davis. Thank you.
+ Mr. Perry, the trend in government acquisition is toward
+more complex services and fewer products. How will the new
+combined Acquisition Services Fund help GSA better manage this
+trend?
+ Mr. Perry. Well, let me just emphasize that this
+consolidation, reorganization, merger, whatever term we apply
+to it, is not a homogenization; it is not taking all of the
+acquisition activities we do today and spreading them paper
+thin in a homogenization sort of way so that we are not
+specialized to any extent. We will continue to have our
+business lines; we will continue to have areas of
+specialization. There will be part of the GSA organization with
+people who have the skills and competencies to particularly
+address very complex information technology or telecom
+acquisitions. Other areas will address the less complicated
+areas such as the acquisition of general supplies.
+ But while those business lines would be separate so that
+there would be a proper focus on the customers and on the
+products and services involved, the overall management of it
+could be the same. That is the difference that we are making
+here.
+ The other area of difference is that the support services
+that are provided to these business lines--today, for example,
+we have accounting happening in each of the services
+separately. We have the administration of the computer systems
+happening separately in two different organizations.
+Oftentimes, they come up with similar proposals. For example,
+some years ago both FSS and FTS had invested in developing a
+customer relationship management software. They were actually
+purchased from the same company, but they were two separate
+systems that did not work together.
+ Now, one would argue that shouldn't happen, whether you are
+a separate organization or a combined organization. But in this
+case of having a combined management, we will be able to do a
+much better job of taking those kinds of opportunities and
+addressing them GSA-wide, as opposed to each service having to
+do its own. With the consolidation of the two funds, there will
+be even more opportunities for the financial operations and the
+systems operations to be combined or operated in a more
+efficient way.
+ Chairman Tom Davis. Thank you.
+ Let me just ask Mr. Waszily do you think that the
+reorganization efforts will impact ongoing GSA operations like
+Networx?
+ Mr. Waszily. Networx I really don't know that much about,
+sir, so I can't comment on that.
+ Chairman Tom Davis. OK.
+ Mr. Waszily. As I was talking earlier, our particular
+concern going forward, as Mr. Perry was highlighting, our
+concern is the key functions and the key capabilities of GSA be
+retained. The structure, our sense of it the structure should
+be driven by the customer requirements. Certain activities need
+to be very close to the customer and there is constant contact;
+there are other activities that I think, once they are looked
+at, could probably be consolidated and perhaps be operated out
+of one specific point to cover worldwide. I think that customer
+requirements formulate the strategy and then the structure
+should fall from those two elements.
+ Chairman Tom Davis. You note that you strongly favor the
+merger of the technology and supply funds.
+ Mr. Waszily. Certainly the funds itself. We ran into, when
+we were conducting our audits, a lot of these issues; was this
+an IT purchase or wasn't it, and we started calling it the
+hanging chad issue. And we don't think that is really a good
+debate. The debate is whether or not we are making a sound
+procurement and it is getting to satisfy the mission in the
+most cost-effective and timely manner.
+ Chairman Tom Davis. Now, you also indicate that it is
+important for the GSA to have a regional structure because you
+need to be close to the customers, the same thing that Mr.
+Perry said. Audit reports from your office showed acquisition
+mismanagement in most of these regions. What do you attribute
+that to and how do we solve that?
+ Mr. Waszily. Yes, sir. That is a very good point. I think
+the one thing we are talking about here as far as structure and
+design of the agency, we are really talking the strategic. Most
+of the issues that we were reporting on regarding the
+deficiencies in procurement I would label as the tactical. To
+use sort of the football coach's vernacular, we need to go back
+to the basics, and we really need to do solid procurements.
+There were some lapses. A lot of the buildup, particularly in
+the FTS service programs, began in the 1998-1999 period. I
+think a little bit of that fever of the ``new economy'' sort of
+spilled into the program, and in many ways the program was so
+successful that it got ahead of itself. And I think it grew so
+large that it just didn't have the chance to catch up with the
+controls.
+ As I mentioned, we have been doing a review of the program
+about every 6 months, and each successive review is showing
+continuing improvement.
+ Chairman Tom Davis. Thank you very much.
+ Mr. Lynch, did you want to say anything? I think Ms. Watson
+was next.
+ Mr. Lynch. Oh, all right.
+ Chairman Tom Davis. And what I was going to do, we are
+going to have a series of votes that is going to take about a
+half hour.
+ Ms. Watson. This comment and question goes to----
+ Chairman Tom Davis. Just a minute. Just a minute, Ms.
+Watson.
+ What I was going to suggest is I will let Ms. Watson move
+ahead with her questions. If we have time for Mr. Lynch to get
+a question or two in, then I will turn it over to Ms. Norton,
+who can ask her questions. And at the end of that you can
+dismiss this group.
+ Rarely do I turn this chair over to Ms. Norton. I hope she
+won't abuse it, but we have a pretty good relationship. But I
+think that way we will try to dismiss you and not keep you
+around.
+ Go ahead.
+ Ms. Watson. Mr. Chairman, thank you very much. And I will
+take my answer in writing.
+ Chairman Tom Davis. OK.
+ Ms. Watson. And then we can move ahead quicker.
+ But this Committee on Government Reform examines the
+financial and performance management practice at Federal
+departments and Defense, and we plan to review the financial
+management at the Department of Defense, Homeland Security, and
+it goes on.
+ This question is directed toward Ms. Lee. I would like to
+know, in seeking services and seeking contracts, do you always
+go out to bid, or do you make these decisions within the
+Department of Defense, and do you make them transparent? What I
+am seeking, do you always go out to bid or do you make a
+decision; and, if so, what is it based on? The bidding process
+gives a chance for several different businesses to have their
+services compared.
+ And then I wanted to ask what is the relationship, then, to
+GSA, since you seem to operate independently at times. I just
+want to know what the practices are.
+ You can put that in writing to me, since we have a call to
+the floor. And then you might want to consult with Mr. Perry
+and combine the response.
+ Thank you so very much.
+ Chairman Tom Davis. That will be fine. Thank you very much.
+ Mr. Lynch.
+ Mr. Lynch. Thank you, Mr. Chairman.
+ I want to thank the panel as well for helping the committee
+with its work.
+ Just from a customer standpoint, I am a firm believer that
+GSA needs to reform, so I might be out of step with some of my
+Democratic colleagues in that respect. But I definitely believe
+GSA is in need of reform. And that is just from me as a
+customer of GSA.
+ What I would like to just ask of any of the panelists, and
+especially of Mr. Waszily, the statement here in your testimony
+regarding the organizational structure of GSA with respect to
+the proposed merger, it says what we would caution against is a
+structure popular among some conglomerate corporations in the
+1970's and shown over time to be ineffective. By this we mean a
+unified structure centrally controlled, rigidly imposing the
+same structure upon each of its business units and measuring
+them by the same set of metrics. That is what we want to
+caution against.
+ But isn't that what we have right now? Isn't that what we
+have with GSA, a bureaucracy that largely reflects organization
+of times past and not necessarily reflective of modern
+technology and the needs of the customer?
+ Mr. Waszily. Well, sir, I think we can certainly streamline
+what we have right now. What we were suggesting to guard
+against, we look at three major supply and acquisition
+structures that we have within GSA right now. We have the
+Multiple Award Schedules, one of our largest programs that is
+pretty much the customers can come in, tap into the program,
+and place their own orders. FSS is willing to help them and has
+come up with some innovative solutions, but they can also use
+it as a self-service vehicle. We also have the Global Supply
+system, which is a ready supply to move anywhere in the world
+on critical items. That type of system is different, it has a
+different set of metrics than does the Schedules program. And
+then we have the FTS programs, which are sort of, if you will,
+cradle-to-grave type of acquisition services, particularly in
+the technology area.
+ And what we were suggesting was that we believe that we
+need to preserve those three types of programs, and they should
+be evaluated as standalone programs, because one set of metrics
+for all three of them would probably lead to misleading
+results. For example, the supply operation, dollar for dollar,
+costs more to maintain than say the General Supply Schedule and
+the Multiple Awards.
+ Mr. Lynch. I know we are short on time here. Again in your
+testimony, sir, you reflect the fact that the dollar amount of
+sales has increased dramatically over the last few years, and
+that is some sign of success. I am not sure I buy into that
+rather simple reasoning.
+ More to my point, has there been any diagnostic conducted
+by GSA to see what the attitudes and what the perceptions of
+your customers are regarding the services that they receive
+from GSA? Is there something really that goes out to your
+customer that says how do you think we are doing?
+ Mr. Perry. Yes. If I may answer that question, sir.
+ Mr. Lynch. Sure.
+ Mr. Perry. We definitely do that. We do that on an annual
+basis in all of our service areas. We do a number of things.
+First of all----
+ Mr. Lynch. I have never received one, and I would love to
+give my opinion of what I think GSA is doing for their
+customers, and I am just completely unaware of that.
+ Mr. Perry. Then we will definitely do that.
+ We ask very specific questions of people who are in GSA
+facilities or people who order GSA supplies or services what is
+the level of satisfaction they have with our service levels and
+suggestions that they have for our improvement, and we followup
+with each of those customers to make sure that is happening.
+Our customer satisfaction levels are not where we want them to
+be, but they are increasing annually. We do that.
+ In addition, we have a number of structured reports--we
+just completed one recently--where we use a third-party. We use
+various third parties, but a different entity did this review
+for us, having more interviews. Instead of a paper survey, we
+used an interview situation with customers to understand where
+we are meeting their expectations and where we are not.
+ Aside from those kinds of assessments, we also conduct what
+we call customer service visits, where either people from our
+national office or people from our regional offices meet with
+customers, their management teams, and we go through the
+spectrum of services we are providing for them today, have them
+identify for us where, again, we are meeting their
+expectations, where we are not. Most importantly, in those kind
+of discussions we talk about items that are on the horizon,
+strategic directions in which they are moving where they will
+need our assistance to acquire technology, what have you.
+ And based on those customer service visits, we develop
+individual customer account management plans or actions plans
+that talk about what services we are going to deliver and who
+is responsible to do what by when. So that gives us a much
+better opportunity to focus in on individual customer needs and
+have customers hold us accountable for meeting them.
+ Mr. Lynch. Well, I appreciate that. I just wish that the
+Members of Congress were part of that survey group that you
+reach out to, because we are actually elected by the taxpayers.
+We have a special status and a different perspective in
+representing taxpayers, so we might have some useful input into
+how you are doing your job, how efficient and how responsive
+GSA is operating, not only with respect to us, but also to your
+customer base as well, your other customer base.
+ I am going to yield back to Ms. Norton, if that is all
+right. Thank you.
+ Thank you, I appreciate it.
+ Ms. Norton [presiding]. Thank you, Mr. Lynch.
+ The chairman has generously allowed as how I might want to
+sit in his chair, but I decided not to do it, because if I got
+used to it, I might do a sit-in.
+ This hearing is able to go forward for a reason that none
+of us should be proud of: we are not just saving time; I get to
+vote in this committee, I don't get to vote on the House floor,
+so I get to save the committee some time. Anyway, I am glad
+that I am useful at least in that respect.
+ Before I ask a few questions to you, Mr. Perry, I would
+like to get on the record the Southeast Federal Center Plan. As
+you know, one of the most important things that another
+committee on which I serve where you report has been the
+breakthrough that the Southeast Federal Center Plan offers as a
+way to use Government profit to the greater benefit of the
+Government and return to the Federal Government. For months now
+we have been waiting for that plan, and it has been like
+waiting for Goudeau. It is coming, it is coming. Then we were
+told it is on the Administrator's desk. Yesterday we were told
+it was actually in the mail. So I said, well, fine, ask the
+Administrator to bring me a copy, and he can hand-deliver it.
+ Since the plan has to be sent back to Congress before it is
+signed and finalized, could you tell me exactly where the
+Southeast Federal Center Plan is now as we speak, and could you
+give me a date? I won't ask you for a time, but I do want a
+date when it will be to the committee.
+ Mr. Perry. Let me first say, madam, that the work that you
+did in sponsoring that legislation is notable, and we support
+it wholeheartedly. I saw the work that our National Capital
+Region folks and our outside developers did with respect to
+that plan some weeks ago, to be quite candid. I would have
+guessed that it had been delivered to you by now. I know that I
+signed off on it because I felt that it was very quality work.
+I have to admit to you I don't know what final checking had to
+be done----
+ Ms. Norton. Who is above you, Mr. Perry? I thought you
+were--the legislation says after the Administrator has signed
+it, it shall be delivered to the Congress of the United States.
+ Mr. Perry. Right. And we should be doing just that. I don't
+know. I can't sit here and tell you that I have the answer as
+to why it didn't happen as expected in that case, but I already
+talked to my chief of staff after you brought it to my
+attention this morning, and we are working on getting it to you
+as quickly as that can be done.
+ Ms. Norton. Well, will you remind your chief of staff, or
+the OMB, or whoever has a hold of it, that the legislation says
+that after you sign off on the plan, and you now have, that it
+shall be delivered to the Congress, and not to anybody else?
+ Mr. Perry. I certainly will.
+ Ms. Norton. Thank you very much.
+ As I noted, because of my own experiences in the Federal
+Government, I approach with some skepticism structure driving
+change. I think change ought to drive structure. And I say that
+because it was my burden to run an agency that had to be
+completely overhauled, the Equal Employment Opportunity
+Commission under President Carter. It was completely collapsed.
+And the first thing to think about, of course, is since
+obviously a new structure was needed, let us build this
+structure. We were very much afraid to do it that way because
+it had a backlog. So we wanted to do things like look at what
+is the cause of the backlog; what kind of system will keep a
+new backlog from forming.
+ Out of that did come some structural changes. For example,
+the lawyers and the investigators were not in the same office.
+But only after we did that kind of analysis. This is going to
+be the import of my questions.
+ Mr. Waszily talked about some duplication, duplication of
+administrative services. One wonders why, after so many years,
+that continued. Certainly the duplication, all kinds of
+duplication that you begin with in trying to bring change,
+whether or not through wholesale consolidation.
+ I must conclude that the Getting it Right project didn't
+get it right enough. But I would have thought that is exactly
+what it did, it would take things that were duplicative--and
+administrative services is the most service--put them together,
+and then see whether or not the underlying services needed also
+to be changed. Is that what Getting it Right did, or what in
+the world did ``Get It Right'' that wasn't right enough do?
+ Mr. Perry. Well, I think your description of how this
+should happen is a good description of how it is happening or
+has happened, that is, that structure isn't driving change,
+change is driving the structure. As we have done some of our
+work, even prior to what is called the ``Get It Right''
+initiative, we could see that we were not, as I said earlier,
+meeting the requirements of our customer agencies. While our
+customer satisfaction rates are relatively high and increasing,
+they will tell you, including DOD will tell you, that we don't
+meet their expectations with respect to cycle time; we
+certainly did not meet their expectations with respect to
+compliance with acquisition regulations and documenting our
+files. Much of what we did----
+ Ms. Norton. And that had to do with the fact that FSS and
+FTS were separate?
+ Mr. Perry. It had to do with the fact that we had a method
+of operation which was not ultimately efficient. So what we are
+trying to do now is to say if you step back from that and say
+we are not meeting our expectations of our customers or our own
+expectations that we have for ourselves, what are some of the
+things that we might do in order to build our organizational
+capability to do a bigger, better job, to meet this oncoming
+need of increasing acquisition requirements? Among those
+things, one is to ask ourselves why do we have these two
+separate operations? What is the value that they are deriving?
+If we exploit the synergies that exist in those two separate
+operations and operate them as one, will we be able to
+accomplish more?
+ So the reason I hesitate to use the term merger, which the
+chairman and others have used, is that typically the
+connotation in a merger situation is one where you have two
+organizations and the demand for services of those two
+organizations exceed their total capability, so you merge them
+and shed your excess capacity to match up capacity with demand.
+Our situation is different. We actually have more demand than
+we can handle at GSA as a whole. As a result, some agencies
+have to go elsewhere or do it themselves in terms of
+acquisition activities. We think that is wasteful from a total
+Government point of view.
+ Our effort is to try to bring things together so that we
+actually increase our capacity or our capability to do more,
+and the reason for doing this is primarily driven by that
+reason.
+ Ms. Norton. Well, increasing your capacity means that
+somehow the agency will have greater capacity simply by
+structure?
+ Mr. Perry. Well, by the assignment of people, as opposed to
+having, as we do today, certain people in the global supply
+business calling on customers with respect to providing them
+with certain products and services, certain other people in
+commercial acquisition, to some extent, doing the same thing.
+We are saying aren't there ways in which we can exploit those
+synergies and find a way to do things on time and do it better,
+without any diminution of services, in fact, with an
+improvement in services?
+ Ms. Norton. You have made something of a business case,
+which is of course what I was looking for. And perhaps you
+could provide this for the record, examples of improvements
+from agencies' point of view would be just very useful for me
+to have. I don't know if Ms. Lee has examples of how going
+somehow to a consolidated GSA, FSS, FTS would help or not, but
+that is what I am lacking now.
+ Do you have examples?
+ Ms. Lee. No, ma'am. Specific examples. One of the things
+that we hear, and it is very anecdotal, is that people get good
+service from FTS, so in some cases where they could have gone
+directly to the Federal Supply Schedule, which is a different
+rate of cost to the agency to use, they go to FTS because that
+is the people they know. So perhaps if Administrator Perry
+finds that is a good solution, then you could still go to the
+same service and they could direct the customer a little bit
+more clearly as to where they should attain their acquisition
+support. That is the kind of example that I have heard.
+ Ms. Norton. Ms. Shelton, did you have an example you wanted
+to give?
+ Ms. Shelton. I was just thinking that a couple of years ago
+I was a customer. Although I was a regional administrator in
+Philadelphia, I was a customer for both FTS and FSS. I was
+having a conference room redone; I needed furniture and I
+needed video teleconferencing equipment. I had to have a number
+of what I thought were extraneous meetings because the
+furniture is handled by FSS and the video conference equipment
+is handled by FTS. Because of the two different funding
+streams, I had to have accounting people who understood the FSS
+accounting and people who understood the FTS accounting. So
+just for me----
+ Ms. Norton. And there is going to be one accounting stream
+now.
+ Ms. Shelton. There will be only one accounting stream once
+we get done. And I think that will help our customers, because
+they won't have to spend as much of their time trying to
+understand how GSA operates.
+ Ms. Norton. What would be the impact on small businesses
+who are perhaps more reliant on GSA's advice and counsel?
+ Mr. Perry. I don't think the reorganization would have any
+adverse impact or any direct impact. We will still have to meet
+our obligations in those areas, and we will continue to do that
+no matter how we are organized.
+ Ms. Norton. How does consolidation advance the Government's
+interest in having many choices? Won't there be fewer choices
+of products, of services if there is consolidation?
+ Mr. Perry. No, I would suggest there won't be any change in
+the number of sources. For example, the type of thing comes up,
+as you are very familiar with, the Networx contract. Agencies
+could buy certain IT products through Networx if they chose to,
+because those companies could provide that, although Networx is
+primarily a telecommunications contract. We have another
+contract that is called Alliant, where agencies could buy and
+should buy their IT through that one.
+ So we will still have those multiple contracts. We will
+obviously try to rationalize them so they are not overly
+duplicative and wasteful and provide a degree of choice that is
+not even what customers want. But this change does not impact
+the breath of offerings that we would provide to our customer
+agencies.
+ Ms. Norton. We have had a hearing on the Networx contract,
+and you face a great challenge with respect to that contract
+alone. Does consolidation enhance or at this time complicate
+what you have to do with Networx alone? And now Networx is part
+of a merged or consolidated organization.
+ Mr. Perry. Well, that is a very fair point, and one of the
+points I refer to in my remarks is those kinds of initiatives
+that we have underway, like Networx, we just absolutely have to
+make sure that we continue to devote the management time and
+other resources to that so that we don't have any missteps. And
+we believe that we can do that, we can in fact accomplish this
+initiative while at the same time continuing a successful
+Networx procurement.
+ Ms. Norton. One final question. I am trying to figure out
+what ``Get It Right'' tried to do and failed to do that led to
+your testimony today that consolidation should take place.
+ Mr. Perry. Well, not surprisingly, I wouldn't characterize
+it as ``Get It Right'' failed to do. I would say this is a
+``Get It Right'' initiative. This is an outgrowth of the ``Get
+It Right'' direction. The ``Get It Right'' direction was----
+ Ms. Norton. Well, wasn't the ``Get It Right'' direction
+supposed to, in fact, get it right so that nothing more was
+needed, or did you always contemplate that there would be
+consolidation?
+ Mr. Perry. Well, the ``Get It Right'' was a drive to make
+sure that we were complying with Federal acquisition
+regulations, primarily. That was the first thing. The second
+part of it was that we were also using best practices with
+respect to any acquisition. But at the same time, or another
+element of ``Get It Right'' is to make sure that we were
+providing customer agencies with the products and services they
+need on a cycle time that they found to be acceptable. So this
+is an effort to improve in that area.
+ I think as the audit reports are showing, that in terms of
+documenting our price evaluations and documenting sole source
+or have documenting competition, all of those steps with
+respect to our ``Get It Right'' efforts, those are happening,
+and they are happening better and better each time they are
+assessed.
+ On the issue of are we improving our cycle times, are we
+putting agencies in lease space within X number of days of
+their requests, are we completing an information technology
+acquisition within X number of days of the customer's request,
+those kinds of things are a part of what we are addressing by
+improving our organizational capability. So, in my mind, it is
+really an extension or another step in the overall ``Get It
+Right'' process.
+ Ms. Norton. Mr. Perry and the other witnesses, I am
+certainly not opposed to consolidation. In fact, efficiencies
+of scale I find very appealing. I do think that they are
+difficult, and that there is a burden in a consolidation to be
+driven by not only cost, but by improved customer service and
+greater efficiency. When all is said and done, that is what you
+have to look at. You have to look to see if all of these things
+got improved. You may find that you saved a lot of money and
+the customers aren't faring as well, or you may find it costs
+you more money now that you have a consolidated operation, even
+though you have less duplication.
+ The efficiency, or shall I say the inefficiency of running
+a larger organization is often underestimated, and I hope that
+as you look through these task forces at what should occur
+next, you bear all of that in mind.
+ I very much appreciate what was very helpful testimony, and
+we are recessed until the full committee returns. Thank you
+very much.
+ [Recess.]
+ Chairman Tom Davis [presiding]. Thank you for everybody's
+forbearance here.
+ We have our second panel. We have Mr. Tom Hewitt--welcome,
+Tom--the CEO of Global Government, on behalf of the Information
+Technology Association of America; Vic Avetissian, the
+Corporate Director of Northrop Grumman, on behalf of the
+Contract Services Association; Mr. Mike Davison, Director and
+General Manager, Canon Government Marketing Division, on behalf
+of the Coalition for Government Procurement; we have Elaine
+Dauphin, who is the vice president of GSA Programs, Computer
+Science Corp., on behalf of the Professional Service Council;
+and we have Richard Brown, the National Federation of Federal
+Employees [NFFE] accompanied by Jack Hanly, who is the council
+president of NFFE.
+ And we very much appreciate everybody being here.
+ As you know, it is our policy we swear everybody in before
+you testify, so if you would raise your right hands and rise
+with me.
+ [Witnesses sworn.]
+ Chairman Tom Davis. Mr. Hewitt, we will start with you.
+Thank you.
+
+STATEMENTS OF THOMAS HEWITT, CEO, GLOBAL GOVERNMENT, ON BEHALF
+ OF THE INFORMATION TECHNOLOGY ASSOCIATION OF AMERICA; VIC
+ AVETISSIAN, CORPORATE DIRECTOR, NORTHROP GRUMMAN CORP., ON
+ BEHALF OF THE CONTRACT SERVICES ASSOCIATION; MIKE DAVISON,
+ DIRECTOR & GENERAL MANAGER, CANON GOVERNMENT MARKETING
+DIVISION, COALITION FOR GOVERNMENT PROCUREMENT; ELAINE DAUPHIN,
+ VICE PRESIDENT, GSA PROGRAMS, COMPUTER SCIENCES CORP., ON
+BEHALF OF THE PROFESSIONAL SERVICE COUNCIL; AND RICHARD BROWN,
+ PRESIDENT, NATIONAL FEDERATION OF FEDERAL EMPLOYEES
+
+ STATEMENT OF THOMAS HEWITT
+
+ Mr. Hewitt. Mr. Chairman and members of the committee, I am
+pleased to be here today to testify regarding the potential
+reorganization of GSA.
+ Mr. Hewitt. I am here today representing members of ITAA,
+the Information Technology Association, as Chairman of its
+newly created Government Advisory Board. ITAA is particularly
+interested in the restructuring of GSA since the ITAA member
+companies are heavily involved in FTS and FSS programs.
+ My comments today are based on my 40 years of experience in
+the Federal procurement business. In addition, I am
+representing the members of the ITAA Government Advisory Board,
+which is composed of retired ITAA executives who had senior
+level responsibilities in major IT firms or the Government.
+This Board was created to serve as an industry advisory group
+to both industry and government.
+ Earlier this year, in an interview with Federal Computer
+Week, Chairman Davis was quoted as saying, ``GSA is not that
+badly run when you compare it with other agencies. But GSA
+needs to be setting the example and leading the way.'' ITAA
+could not agree more. In fact, ITAA commends GSA on the role it
+has played in modernizing the Federal Government's procurement
+vehicles, the techniques, and the leadership it has provided
+Government-wide in the management of IT contracts,
+telecommunications, and many products and services used by the
+Federal agencies. ITAA encourages the GSA and the committee to
+adopt three principles as it embarks on this important effort
+of restructuring GSA.
+ First, although ITAA recognizes that GSA is a Government
+organization operating in a political environment, ITAA
+recommends that GSA take a step back and revalidate its
+customer-focused business model. This effort should be
+undertaken by a representative body comprised of customers,
+industry, and the experienced GSA staff who represent the
+totality of the current and the to-be-defined organization.
+ Second, GSA's reorganization approach should establish
+business metrics or goals for measuring accomplishments
+appropriate to the business model and the customers, consistent
+with best practices outcomes.
+ Third, finally, ITAA believes that the restructuring should
+focus on establishing direct lines of authority and
+responsibility, complementing the business model that assigns
+accountability for the execution and the success of the
+business model.
+ GSA consists of numerous organizations that together act as
+a catalyst for nearly $66 billion in Federal spending, an
+annual budget of over $16 billion, 13,000 employees.
+Organizations of this size and scope must approach any
+reorganization carefully and with an open mind. Private sector
+companies of similar size would generally approach a
+reorganization effort as a performance-based exercise. That is,
+the company would first examine its business model, ensure that
+it is accurately defining its customers' needs, and then design
+processes and reporting channels to fit around that model.
+ ITAA recommends the restructuring of GSA be based on a
+similar performance-based approach, beginning with a thorough
+review of its customers' needs. This approach would allow GSA
+to examine the way in which the procurement world has changed
+and develop a business model to better fit the Federal
+Government's needs.
+ ITAA therefore believes that the committee should ensure
+that GSA is devoting the right type and amount of resources to
+that effort. For instance, Administrator Perry recently
+announced the members of a steering committee that will oversee
+three task forces to develop recommendations for merging two of
+GSA's three service units. At this point in time, there is no
+indication that those task forces will be broadened to include
+any representatives from outside of GSA.
+ While ITAA applauds the creation of the steering committee
+and the accompanying task forces, it is concerned that these
+bodies will not provide diverse points of view that are
+imperative for a successful reorganization effort. Thus, ITAA
+recommends that the steering committee and accompanying task
+forces be expanded to include members of other Government
+agencies, the GSA customer base, members of the private sector,
+and GSA's vendor base. These additional participants should be
+invited to contribute to the steering committee's deliberations
+from the beginning, rather than simply comment post hoc on the
+recommendations developed by an internal steering committee.
+ ITAA believes that the important functions performed by FTS
+should be well represented in the organization discussions. If
+this is not possible, ITAA alternatively recommends that GSA
+establish a customer and industry advisory group to assist
+Administrator Perry and the steering committee as they develop
+approaches to the reorganization of GSA.
+ In conclusion, ITAA supports the committee's desire to
+restructure the management and operations functions of GSA.
+ITAA would be pleased to provide resources and industry
+expertise to this important undertaking.
+ I would be pleased to respond to any questions.
+ [The prepared statement of Mr. Hewitt follows:]
+
+ [GRAPHIC] [TIFF OMITTED] T0379.030
+
+ [GRAPHIC] [TIFF OMITTED] T0379.031
+
+ [GRAPHIC] [TIFF OMITTED] T0379.032
+
+ [GRAPHIC] [TIFF OMITTED] T0379.033
+
+ [GRAPHIC] [TIFF OMITTED] T0379.034
+
+ [GRAPHIC] [TIFF OMITTED] T0379.035
+
+ [GRAPHIC] [TIFF OMITTED] T0379.036
+
+ Ms. Norton [presiding]. Thank you very much, Mr. Hewitt.
+ Yes, Mr. Avetissian.
+
+ STATEMENT OF VIC AVETISSIAN
+
+ Mr. Avetissian. Mr. Chairman and members of the committee,
+thank you for this opportunity to testify on the ways to
+improve GSA's operation. My name is Vic Avetissian of Northrop
+Grumman Corp., and I am here today on behalf of Contract
+Services Association of America, but I serve as Chair of the
+Association's Public Policy Council.
+ Now in its 40th year, CSA is the Nation's oldest and
+largest association of Federal services contractors,
+representing a wide diversity of more than 200 firms that do
+over $40 billion annually in Government contracts and employ
+nearly 500,000 workers with nearly two-thirds of them being
+private sector union labor.
+ Let me start by stressing, Mr. Chairman and members of the
+committee, that what we must first and foremost ask ourselves
+today is what is good for America and for U.S. taxpayers. In my
+view, what is good for America is the opportunity to capitalize
+on the agility and innovation that the private sector offers to
+the Government. The private sector brings the best value to the
+table, which in some cases may be more expensive initially, but
+always is less costly in the long run.
+ What we should be focused on is allying industry and
+Government to work as a partner, bringing continued improvement
+to the procurement process to support our warfighters and the
+U.S. taxpayers. A few missteps along the way should not cause
+us to dismantle the gains we have made to date. We should not
+throw out the baby with the bath water.
+ With that said, let me suggest that any review of GSA
+operation should not be about simply moving organizational
+boxes or chairs. Instead, GSA should need to consider the
+following steps, in my opinion.
+ First, GSA should determine what is the customer services
+needs and the business model that will be needed to support it?
+To achieve this, GSA should ask for and rely upon the input and
+insight from their customers and private industry. Such a
+performance-based review would facilitate GSA's acting more as
+a commercial business rather than typical Government entity.
+ Second, GSA should establish the business processes,
+business systems, policies and procedures, internal control and
+oversight that must be put in place to make the agreed upon
+business model work.
+ These steps are critical to success of GSA becoming the
+preferred provider for commercial services to all Federal
+agencies.
+ Now I would like to speak to the use of Schedules. I have
+detailed several specific areas of concern in my written
+statement, let me just speak to a few of those.
+ We should consider whether the services on the Schedules
+are truly commercial in nature, as they are supposed to be. If
+they are not, then perhaps those services should be subject to
+separate contract vehicles involving specific capabilities and
+technical requirements.
+ This leads me to suggest that we should consider the
+feasibility of consolidating all individual agency Schedules
+under the jurisdiction of GSA. This could provide uniform
+internal control and oversight of Schedule use. Perhaps the
+recent problems could have been avoided if there were uniform
+internal management control and oversight.
+ The only stumbling block I see to such a consolidation is
+that, even with the GSA, some of the regional offices appear
+not to be in sync with the overall GSA policy and guidance,
+especially as it relates to common practices in awarding and
+managing Schedule contracts.
+ I would recommend that it would be more effective if all
+the regional offices were coordinated under the auspices of a
+headquarter office, which currently it is not. This would
+ensure that the regional offices operate under the consistent
+rule and guidance, and not as a lone ranger.
+ However, let me stress that I do not advocate abolishing
+the regional offices. These offices are truly the face of
+Federal Government into the regions of the country, and as such
+provide needed access for those outside of the Beltway.
+ Another area of consideration is a cultural diversity among
+GSA offices, customer community, and should be taken into
+account when reviewing any proposal for consolidation or
+merging Schedules. Within industry, this often has been the
+most difficult and time-consuming aspect of the process for any
+mergers and acquisitions. As they go through this process, GSA
+should consider using the best practices from multiple offices,
+agencies, and locations to adopt a GSA standard. That would
+provide buy-in by various offices. This has proven to be very
+helpful with industry mergers and consolidations.
+ Finally, let me just throw out a few key points to consider
+for improving GSA Schedules, which are more fully outlined in
+my written statement. No. 1: training on proper use of
+Schedules for all parties involved, that includes GSA
+contracting community, GSA customers, and industry;
+establishing or identifying best practices; improving
+transparency in placement of GSA task orders; establishing
+Schedule ombudsman to receive and correct complaints; and,
+finally, conducting a cost-benefit analysis on Schedule use
+versus normal FAR contract process to determine which benefits
+agency mission and to the U.S. taxpayers.
+ In closing, let me stress that we are all partners in this
+endeavor. Sometimes we might disagree, as often happens in
+partnership. But that does not mean the partnership should be
+dissolved; rather, that we must try harder to find common
+ground. In the end, our main objective in this undertaking
+should be based on what will allow Federal agencies to get best
+value for the taxpayers and in support of our warfighters.
+ Thank you very much for your time, and I would be happy to
+answer any questions.
+ [The prepared statement of Mr. Avetissian follows:]
+
+ [GRAPHIC] [TIFF OMITTED] T0379.037
+
+ [GRAPHIC] [TIFF OMITTED] T0379.038
+
+ [GRAPHIC] [TIFF OMITTED] T0379.039
+
+ [GRAPHIC] [TIFF OMITTED] T0379.040
+
+ [GRAPHIC] [TIFF OMITTED] T0379.041
+
+ [GRAPHIC] [TIFF OMITTED] T0379.042
+
+ Mr. Souder [presiding]. Thank you very much for your
+testimony.
+ We will now go to Mr. Mike Davison, director and general
+manager of the Canon Government Marketing Division.
+ Thank you for coming.
+
+ STATEMENT OF MIKE DAVISON
+
+ Mr. Davison. Thank you. Good morning, Mr. Chairman and
+members of the committee. I am Mike Davison of the Canon
+Government Marketing Division. Canon is the leading GSA
+Schedule contractor, with more than $76 million in Schedule
+sales in fiscal year 2004.
+ Today I represent the Coalition of Government Procurement.
+The Coalition is particularly well suited to testify today on
+the reorganization of GSA's Federal Supply Service and Federal
+Technology Service. No outside organization has the depth and
+breadth of experience in working with FSS and FTS as does the
+Coalition.
+ The Coalition supports GSA's mission. The agency's current
+contracts and services play a vital role in supporting our
+troops in Iraq and Afghanistan, and in meeting critical
+domestic needs. We believe the agency must take the most of
+this opportunity to reorganize and move forward so that it can
+continue its important work.
+ GSA is in a critical position today. The actions of a few
+have allowed to set a chilling tenor for the entire agency.
+Routine business has dramatically slowed. Continued reliance on
+``Get It Right'' now means that some parts of GSA simply
+``won't get it.'' The climate must be moderated to allow the
+business of government to proceed.
+ The Coalition believes that the GSA reorganization process
+can be an opportunity to create a positive and stimulating
+model acquisition environment. It can be the catalyst to put
+last year's problems behind us and focus on empowering
+associates. What was lost in last year's headlines was that GSA
+overall does a fantastic job of meeting customer needs
+efficiently and properly.
+ Approximately $40 billion flowed through GSA Schedules and
+GWAC's in the fiscal year 2004. This is testimony to the fact
+that the agency has built a solid, popular program and gets
+customers what they need, when they need it, at great values.
+ The Coalition urges, however, that the mere process of
+reorganization not become an end to itself. We are concerned
+that there has been too much emphasis on the process, at the
+expense of customer service. As one of the members put it, not
+even the best flower grows if you pull it up every 10 minutes
+to see how it is doing.
+ The Coalition again calls on GSA to work with its committee
+and other interested parties to realign its organization. As we
+have voted in previous testimony, there is inherent
+inefficiency in maintaining both a central office and regional
+reporting system. The Coalition strongly supports a realignment
+that changes the managerial organization so that all GSA
+acquisition professionals in FSS and FTS report up through
+their central office organizations for policy and operational
+guidelines. Today, this means that GSA acquisition associates
+would be overseen by the commissioners of their respective
+services for all aspects of job performance. The Coalition
+believes that centralization is mandatory if associates are to
+receive clear guidance and be held in consistent standard.
+ We continue to believe that creating an office to oversee
+the integrated operations of a combined service is important.
+Our previous testimony called for the creation of an associate
+administrator of acquisition. This position would be and have
+full authority to make the best use of resources for each
+service and provide oversight for all associates involved. The
+Coalition again recommends creating such a position, and would
+be pleased to work with Administrator Perry and this committee
+to make it happen.
+ The Coalition supports recommendations to consolidate GSA's
+Informational Technology and General Funds. Today's complex
+Federal projects cannot easily be classified as all IT or all
+not IT. GSA and its customer agencies today must jump through
+Government-only hoops to ensure that these projects are
+conducted properly. This slows the business of Government.
+Merging IT and General Funds will allow GSA to better continue
+its tradition of helping agencies.
+ Another issue that must be addressed is the financial
+soundness of each service. Any integrated service must ensure
+that all of the rooms of its financial house are in order if it
+is to function properly. No one operation should consistently
+be relied upon to support the others. The Coalition believes
+that the existing Schedule Industrial Funding Fee should not be
+lowered. We strongly recommend that the agency use IFF funds to
+hire and maintain and train needed contracting officers, and
+educate customers so that we get the most out of the Multiple
+Award Schedule program.
+ The Coalition believes that the Government saves time,
+reduces overall overhead, and gets great solutions when it
+makes maximum use of Schedule contracts. These benefits are
+enhanced when Schedules are negotiated in as timely a manner as
+possible. We recommend that GSA use existing funds to provide
+training, internally and externally, on these issues. The
+Coalition believes that steps already taken by GSA to
+consolidate all Schedule and GWAC contracts inside the Federal
+Supply Service has begun to achieve its desired results. The
+Coalition now recommends that GSA give serious consideration to
+moving the project management services conducted by the
+Schedule focused FSS acquisition centers to FTS, as FSS
+specializes in contract implementation and management. A large
+part of FTS specializes in project management. We believe this
+move is consistent with steps already taken to have each
+service focus on the core mission.
+ We are ready to work with the committee and GSA to examine
+how consolidation could be in the best interest for all
+involved. The Coalition believes that while GSA faces
+substantial challenges as it reorganizes, it also has
+tremendous opportunity. By moving now to integrate FSS and FTS,
+the agency still controls most of its own destiny. GSA must
+move assertively to develop organizations and programs that
+continue to meet the needs of an evolving Federal Government.
+ We want to be an important partner in this process. We
+believe the agency has a lot to offer its customers and we
+stand ready to
+work with Administrator Perry and this committee and others to
+see that GSA retains and enhances its important work.
+ We appreciate again the opportunity to testify, and look
+forward to answering any questions.
+ [The prepared statement of Mr. Davison follows:]
+
+ [GRAPHIC] [TIFF OMITTED] T0379.043
+
+ [GRAPHIC] [TIFF OMITTED] T0379.044
+
+ [GRAPHIC] [TIFF OMITTED] T0379.045
+
+ [GRAPHIC] [TIFF OMITTED] T0379.046
+
+ [GRAPHIC] [TIFF OMITTED] T0379.047
+
+ [GRAPHIC] [TIFF OMITTED] T0379.048
+
+ [GRAPHIC] [TIFF OMITTED] T0379.049
+
+ [GRAPHIC] [TIFF OMITTED] T0379.050
+
+ [GRAPHIC] [TIFF OMITTED] T0379.051
+
+ [GRAPHIC] [TIFF OMITTED] T0379.052
+
+ [GRAPHIC] [TIFF OMITTED] T0379.053
+
+ [GRAPHIC] [TIFF OMITTED] T0379.054
+
+ [GRAPHIC] [TIFF OMITTED] T0379.055
+
+ Mr. Souder. Thank you very much.
+ Our next witness is Ms. Elaine Dauphin, vice president of
+GSA Programs Computer Sciences Division, on behalf of the
+Professional Service Council. Thank you for coming.
+
+ STATEMENT OF ELAINE DAUPHIN
+
+ Ms. Dauphin. Thank you, Mr. Souder.
+ Members of the committee, thank you for inviting the
+Professional Services Council to be represented here today. PSC
+is the principal national trade association of companies large,
+medium, and small that provide services to virtually every
+Government agency. Like my company, Computer Sciences Corp.,
+member companies hold various GSA Schedule contracts, as well
+as Government-wide acquisition contracts [GWACs], and other GSA
+contracts through which these services are many times
+delivered. Therefore, the future structure of GSA, and in
+particular its role in Government acquisition, is vitally
+important to PSC and its members.
+ While PSC takes no formal position on any specific
+organizational structure, PSC applauds your interest in the GSA
+reorganization and the actions Administrator Perry and his team
+are taking to merge FTS and FSS. However, as others have
+mentioned here today, PSC believes that the necessary precursor
+steps to reorganization, that of assuring that the business
+models through which the agency operates are in place, is that
+it is far more important to the continued success of GSA. A
+review to ensure that the agency is properly aligned with
+today's needs of its clients and can continue to deliver the
+value-added services that we have all come to expect; and that
+its work force can uniformly execute performance-based
+acquisitions and other innovative acquisition strategies, such
+as share and savings, that drive value and enhance contract
+performance for its clients.
+ We believe that this review and analysis must occur early
+in the planning process and be open to and involve all
+stakeholders to include external Federal agency users and
+industry. PSC strongly encourages GSA to implement the
+stakeholder involvement soon, as their draft is apparently
+coming out in May and, to our knowledge, these stakeholders are
+not currently involved. As we are rethinking the organization
+of GSA, it is imperative that we keep in mind that through the
+FSS and FTS contract vehicles and the client support centers,
+GSA has provided and continues to provide vital acquisition
+support and assistance to agencies across Government.
+ In the past decade, their buying roles have increased
+significantly, driven largely by the quality of support the
+services provide and a significantly streamlined procurement
+environment. In an effort to satisfy clients' requirements
+quickly, we have seen in IG reports that some administrative
+shortcuts have taken place. GSA's response has been
+appropriate. Yet, there is a growing pressure within the DOD,
+as the chairman mentioned, to avoid using GSA contracts in
+favor of internal contracts. Part of this pressure stems from a
+concern over the fees being transferred from DOD to GSA.
+However, to our knowledge, no DOD component has looked at or
+evaluated the cost or timeline of replicating inside DOD the
+infrastructure that is currently in place in GSA, and whether
+these costs are less, equal to, or greater than the fees being
+paid to GSA.
+ We are certainly not against DOD contracts. We strongly
+believe that the Government benefits greatly from a competitive
+marketplace of contracts. It is advantageous, for example, for
+program and contract offices to choose the vehicle that best
+suits their needs from a wide array of vehicles. But current
+DOD efforts to arbitrarily limit access to non-DOD contract
+vehicles could have a deleterious effect both on GSA, and more
+importantly, DOD meeting its mission needs. These are critical
+issues that drive to the heart of DOD's mission efficiency, as
+well as the role and mission of GSA. We cannot ignore these
+facts as we focus attention on GSA's organizational structure.
+ Chairman Davis, in summary, GSA plays a singular role in
+Government as its legislatively designated buyer of goods and
+services. It is important, as this reorganization moves
+forward, that the resulting organization reflect the needs and
+realities not only of GSA, but also of its customers and its
+vendor partners. We believe it is necessary to engage all three
+components fully in the discussions. The billions of dollars
+that flow through the GSA Schedules and GWACs representing a
+significant portion of PSA's member companies' revenue and,
+therefore, the economic health of our industry.
+ Thank you for this opportunity to provide the Professional
+Services Council's views on this important matter. I look
+forward to questions.
+ [The prepared statement of Ms. Dauphin follows:]
+
+ [GRAPHIC] [TIFF OMITTED] T0379.056
+
+ [GRAPHIC] [TIFF OMITTED] T0379.057
+
+ [GRAPHIC] [TIFF OMITTED] T0379.058
+
+ [GRAPHIC] [TIFF OMITTED] T0379.059
+
+ Chairman Tom Davis [presiding]. Thank you very much.
+ Mr. Brown, last but not least. We are happy to have NFFE
+here.
+
+ STATEMENT OF RICHARD BROWN
+
+ Mr. Brown. I was going to say considering what is going to
+go on here tomorrow, I guess it is only befitting that the
+union should back cleanup.
+ Chairman Tom Davis. Well, we hope you will touch all the
+bases in your comment, OK?
+ Mr. Brown. I knew this was going to start something.
+ Mr. Chairman, distinguished members, I am here today
+certainly representing the thousands of members that the
+National Federation of Federal Employees represents throughout
+the GSA.
+ I would like to address a regretful situation that exists
+at GSA, a series of actions that the agency has recently taken
+which have been either ill advised or highly inappropriate,
+have left the agency a haven of wasteful spending. The actions
+have also disenfranchised and demoralized department employees
+to a great extent, making it increasingly more difficult for
+GSA workers to provide the high quality services they are
+capable of and that the taxpayers of this country deserve.
+ The most significant egregious action taken by the agency
+that I would like to address is the railroading of the proposed
+merger between Federal Technical Service [FTS] and the Federal
+Supply Service [FSS]. This merger, which stands to affect
+approximately 7,000 employees, is scheduled for implementation
+in July, and to this point there has been absolutely no direct
+communication with the employees through their exclusive
+representative on this issue.
+ Under the current schedule for implementation, the
+employees at the agency should have been consulted at least a
+year ago. This dismissive approach on the part of management
+toward the elected employee representatives is unacceptable. It
+is a shame that the employees at GSA should have to make use of
+this venue, at this late date, to communicate their position on
+the major overhaul of the department. Yet, I will take this
+opportunity to publicly state the position of the employees on
+this merger.
+ The rank and file employees at GSA vehemently oppose the
+merger between FTS and FSS. Although we have little information
+about the specifics of the proposed merger, we can speculate
+that the fusion of agencies with such vastly different missions
+would be problematic for the agency as the Government as a
+whole. Assuming the merger would result in whole or partial
+elimination of FTS, we envision that there will be widespread
+erosion of essential in-house expertise necessary to ensure
+cost-effective contracting for information technology products
+and services.
+ Alert reports from the GSA Inspector General's Office
+indicate numerous problems in contracting practices. Our
+conclusion is that those problems encountered in procurement
+resulted primarily from a lack of autonomy between the
+procurement office and the program office. This knee-jerk
+merger does nothing to address those problems. A plan to simply
+move the problem around is conceptually flawed. In the end, we
+believe that the merger will make the problem worse and will be
+more costly to the American taxpayer. A more appropriate
+solution would be to restore FTS office of acquisition as an
+autonomous organization free from the influence of FTS program
+offices.
+ The next issue I would like to address is the relocation of
+employees at two major headquarters buildings, the central
+office headquarters building in Washington, DC, and the Federal
+Supply Services building in Crystal City, VA. We believe that
+this unnecessary move will needlessly be disruptive to the
+department employees. Equally as important, this location has
+the potential to be extremely wasteful.
+ Uncertainty about staffing levels indicated in the fiscal
+year 2006 budget and the possibility of the FTS-FSS merger make
+brick and mortar facility needs impossible to predict at this
+time, and any relocation would be imprudent. A major move such
+as this should be delayed until staffing levels can be
+accurately forecasted. Any deviation could result in millions
+of dollars in wasteful spending.
+ The last major issue I want to address is the downsizing of
+the GSA Office of Government-wide Policy [OGP]. NFFE is the
+exclusive representative of all bargaining units in this
+organization, a total of about 130 people. GSA has announced it
+is currently implementing plans to eliminate 22 percent of the
+employees in the department by April of this year. They plan to
+reassign another 21 percent to the department in addition to
+that, for a 44 percent overall reduction. GSA has cited
+constraints in the 2006 budget as grounds for pursuing these
+reductions.
+ Given the fact that Congress has not yet approved the 2006
+budget, we believe it is premature and inappropriate to act on
+a speculation of what the budget might be. We ask this body to
+intervene and insist the administration follow due course on
+this issue. Any action to the contrary would circumvent the
+authority of Congress. If, and only if, Congress approves the
+cutbacks in the President's budget proposal, a proposal that we
+do not endorse, the agency would then follow the appropriate
+reduction in force [RIF] rules.
+ The agency is currently pursuing a career management
+profile [CMP] assessment, an unfair alternative to RIF
+procedures that allow managers to cherry-pick retention of
+personal favorites, to the detriment of others who would get
+preference based on legitimate discriminatory such as veteran's
+preference, seniority, and career status.
+ Finally, management is implementing the CMP without
+spending 1 minute with employee representatives at the
+bargaining table to date, in our opinion a clear violation of
+the Federal Service Labor Management Relation Statute.
+ Taken as a whole, agency actions on these three issues
+indicate that GSA leadership is not committed to a cohesive
+business plan based on execution of agency mission. Dismissive
+approach toward employee representatives and mandates of
+Congress is unacceptable. The simultaneous attempts to adjust
+staffing and relocate to new facilities leave the agency open
+to millions in wasteful spending. The apparent plan to
+eliminate hundreds of full-time employees leave the work force
+terrorized with uncertainty.
+ The GSA would stand to benefit from taking their
+initiatives one logical step at a time, while showing regard to
+due process and the needs for the department employees.
+Anything less should not be tolerated by this committee.
+ Mr. Chairman, that concludes my statement. I appreciate the
+opportunity, distinguished members, and I would be happy to
+answer questions.
+ [The prepared statement of Mr. Brown follows:]
+
+ [GRAPHIC] [TIFF OMITTED] T0379.060
+
+ [GRAPHIC] [TIFF OMITTED] T0379.061
+
+ [GRAPHIC] [TIFF OMITTED] T0379.062
+
+ [GRAPHIC] [TIFF OMITTED] T0379.063
+
+ [GRAPHIC] [TIFF OMITTED] T0379.064
+
+ [GRAPHIC] [TIFF OMITTED] T0379.065
+
+ Chairman Tom Davis. Thank you all very much.
+ Let me start, Mr. Hewitt, with you.
+ I am sorry I wasn't here for everybody's testimony--I had
+to go back for a couple minutes--but I have read it prior to
+being here.
+ Do you think that the proposed merger of FTS and FSS is
+going to make it easier for you to do business? Will that be
+easier for you to do business if they merge these two?
+ Mr. Hewitt. The question is do you think it will be easier
+to do business? Yes, sir. I think there is some uncertainty
+today, some duplication which is confusing, and ITAA does
+support the merger.
+ Chairman Tom Davis. Has GSA solicited any comments from
+your organization in terms of what a merger might entail?
+ Mr. Hewitt. No, Mr. Chairman, they haven't, and we would
+love to be involved at ITAA.
+ Chairman Tom Davis. How would you recommend GSA include
+industry and customer representatives as part of the process?
+It wouldn't have to be formal, just informally?
+ Mr. Hewitt. Any way they want to do it is fine with us. We
+would prefer to be involved earlier rather than later, and we
+do have that Government Advisory Board now that is retired
+executives around town--Dan Young, Ken Johnson, Mel Cooper,
+Bill Deronchec and others--that are prepared to help, and they
+are not working with any particular company right now, so they
+should be able to provide experience in an unbiased fashion.
+ Chairman Tom Davis. Do you have any thoughts on the
+regional offices?
+ Mr. Hewitt. Have I talked to the regional?
+ Chairman Tom Davis. Have you thought through that? Does
+your organization have any thoughts on consolidation of
+regional offices, or a different role at this point? Do you
+find it helpful to keep them or----
+ Mr. Hewitt. I haven't discussed that.
+ Chairman Tom Davis. You don't want to go off script on
+that.
+ Mr. Hewitt. I don't know the answer to that.
+ Chairman Tom Davis. OK. Thanks.
+ Vic, let me ask you. I think in your testimony you note
+that before GSA goes forward with plans to reorganize, it
+should get input and insight from both its customer agencies
+and industry partners. Do you think that reorganization plans
+provide for that as you see it right now?
+ Mr. Avetissian. I didn't hear that.
+ Chairman Tom Davis. Do you think that the GSA is providing
+for input from its customer agencies and its industry partners
+right now?
+ Mr. Avetissian. It has been done informally. We have been
+in a couple of meetings that this issue was discussed, most
+recently with them last week. But I think it should be more
+formal, because there are other people that should be involved
+in providing guidance, that have experience in different areas.
+We provided some guidance. We think that they are on the right
+track, but more information will be helpful.
+ Chairman Tom Davis. You state that the current management
+of the GSA regional office is broken. Do you favor the
+elimination of any of the regional offices? You said you don't
+favor the elimination of them, but you suggest that the
+management and reporting relationships between the GSA
+headquarters and the regions should probably be changed. Do you
+think it would be helpful to have GSA's management authority
+over the regional offices in the statute? Have you thought
+about how that should be done?
+ Mr. Avetissian. No, I don't think it should be statute. I
+think that the management headquarters, working with the
+regional offices, could develop appropriate reporting
+requirements that will make sure that they follow the same
+guidance and same policies in performing the contracts and
+awarding contracts and managing the contracts. I think that is
+where the differences are. There will be some areas, because
+the culture will be different, and they should follow that
+culture. But again, major policies should be the same.
+ Chairman Tom Davis. Are you concerned that the
+reorganization efforts at GSA will adversely impact GSA's
+ongoing operations?
+ Mr. Avetissian. No, I don't believe so. I think that the
+people in GSA are very well familiar with what they are doing.
+I think this reorganization will enhance their capability to
+provide their services to all the agencies. And I think that
+with this reorganization the committee should consider merging
+other civilian agencies schedule under GSA so there won't be
+schedules that are used by DOD through Interior schedule, that
+it will be managed in a formal manner under the same authority
+as GSA.
+ Chairman Tom Davis. Now, you advised that GSA should
+consider cultural diversity among its various offices and its
+customers and its plans to merge the services. Could you
+elaborate on that a little bit?
+ Mr. Avetissian. As an experienced industry, and I had that
+opportunity during our numerous mergers and acquisitions that
+Northrop Grumman had done, and the most difficult part was
+trying to get the cultures to merge. You can always get the
+offices to merge and things like that, and benefits merge and
+all that, but the culture----
+ Chairman Tom Davis. But agencies have their own cultures is
+what you are trying to say.
+ Mr. Avetissian. Yes, they sure do. And what I would
+suggest, and what we have done, and other companies have done,
+you don't impose--whoever the parent is going to be--their
+processes as the best; you go around and take a look at and
+pick the best processes and best policies. And by incorporating
+all that in one single policy, I think then the buy-in will be
+much easier from other agencies, and also regional offices,
+that they do have some good practices that can be adopted by
+the headquarters.
+ Chairman Tom Davis. Thank you.
+ Mr. Davison, you state that GSA needs to change its
+regional managerial organization so that control of acquisition
+associates in the regions come from GSA headquarters. Are you
+concerned that the regional management issues don't appear to
+be addressed in GSA's reorganization plan? Is that a concern of
+yours?
+ Mr. Davison. Am I concerned that the reorganization would
+have an adverse effect?
+ Chairman Tom Davis. No. Right now, in GSA's reorganization
+plans, they don't appear to be addressing the regional
+management issues.
+ Mr. Davison. Our representation of that is that there seems
+to be a different--you spoke about cultures. There is a
+different standard associated with each of the regions, and it
+seems like it would be improved to have a central
+responsibility for all policies and standards.
+ Chairman Tom Davis. Now, you recommend that creating the
+position of an associate administrator for acquisition to
+oversee the integrated operations of a combined FSS-FTS. Do you
+think that position ought to be in statute? Do you have any
+strong feelings about that?
+ Mr. Davison. I don't. I am not familiar enough about what
+the difference in the statutory regulation would be.
+ Chairman Tom Davis. Statute means that this is bound on the
+next GSA and the next and the next. If you do it from
+regulatory scheme, the next group can come in and decide to do
+it differently. It gives them more flexibility, but it also
+lets them slip back if you think that this should be a
+permanent position.
+ You don't have to address that, I am just trying to give
+you----
+ Mr. Davison. Thank you.
+ Chairman Tom Davis. I liked your suggestion that GSA
+consider using a portion of its Multiple Award Schedule
+Industrial Funding Fee to hire and train badly needed schedule
+contracting officers. It is a little similar to the training
+fund that we put into the Services Acquisition Reform Act. Have
+you suggested this to GSA?
+ Mr. Davison. Yes, we have.
+ Chairman Tom Davis. Have they had any response to it at
+this point?
+ Mr. Davison. Their response is not clear to me, it is clear
+to the Association. There has been some hesitation. At the last
+decrease we had suggested that they don't decrease it, but use
+those funds to improve the agency's response.
+ Chairman Tom Davis. OK, thanks.
+ Ms. Dauphin, do you think GSA has been forthcoming with
+industry stakeholders on the direction of its reorganization?
+ Ms. Dauphin. No, I think that there has been limited
+interaction. The PSC has had some meetings with Mr. Perry's
+office. We are meeting with the IG next week, where we will
+have additional discussions, but not to the level that we are
+recommending. We really believe that industry should be more
+engaged right now, prior to their even coming out with their
+draft reorganization, as well as other Government agencies end
+users.
+ Chairman Tom Davis. And I gather, Mr. Brown, that you don't
+think the GSA has been very forthcoming in dealing with the
+employees and the unions in this as well, sir?
+ Mr. Brown. That would be correct, Mr. Chairman. And I think
+you would have to agree when you don't have information before
+you, when you have no business plan, when you have no ``who is
+it going to affect,'' you are forced to speculate; and
+certainly speculation is not something that the union wants to
+do. We are getting questioned by various employees in different
+office buildings, etc., how is that going to affect them, what
+are their collective bargaining rights. You know, we are not
+here to manage GSA; that is not our position. But as you are
+elected by your constituency, so are we.
+ Chairman Tom Davis. Well, it is not your position to
+manage, but, on the other hand, a lot of the knowledge in any
+organization is at the guy who is right there at the window.
+ Mr. Brown. Who knows better what is going on than the man
+and woman doing the job?
+ Chairman Tom Davis. Even if you may not know the big
+picture in every case, they have a story to tell that is
+important.
+ To go back to you, Ms. Dauphin, you note that the DOD has
+considered bypassing GSA contract vehicles for internally
+awarded managed contracts. How would that action affect
+businesses that routinely use these vehicles to sell to the
+Government? Do you have to change your marketing plans? Would
+they be less efficient?
+ Ms. Dauphin. It has already been impacting us in that we
+have had existing task orders that were in the middle of a
+period of performance under GSA vehicles that have been
+terminated and then re-competed on a DOD vehicle. It happens
+that we are on the DOD vehicle, but we are still spending money
+to re-compete. The Government is spending money to reacquire
+these same services and, as a taxpayer, that is offensive.
+ Chairman Tom Davis. It is just a waste, right?
+ Ms. Dauphin. It is.
+ Chairman Tom Davis. You also note that the fees that are
+charged by GSA for the different Government-wide contracting
+vehicles--and I will ask you and I will ask anybody else. Do
+you think the melding of the Technology and Supply Funds and
+the increased accountability will result in lower and more
+targeted fees from GSA? Is there that expectation?
+ Ms. Dauphin. Yes, I really do.
+ Chairman Tom Davis. Do you all agree with that?
+ Mr. Avetissian. Yes, I agree with that.
+ Chairman Tom Davis. Mr. Hewitt? That is certainly the hope,
+isn't it? OK.
+ Mr. Brown, I have a couple more questions.
+ Mr. Brown. Sure.
+ Chairman Tom Davis. You are nervous that the melding of the
+FSS and the FTS will result in widespread erosion of essential
+in-house expertise at FTS.
+ Mr. Brown. Yes.
+ Chairman Tom Davis. But the Administrator and the GSA IG,
+and most of the witnesses here, seem to think the merger would
+be beneficial in terms of overall productivity. Why do you
+think that?
+ Mr. Brown. Let me just state--and part of it goes back,
+again, to information that has been handed out. And I would
+even go back to some of the comments that Mr. Perry had made.
+It didn't seem--where this was really driven from. I didn't
+really hear today very specific problems that would cause this
+or drive this merger. Whether there is or not I do not know, as
+an employee representative. And what impact that will have is
+going to have various impacts.
+ What I was saying, getting back to just to paraphrase what
+I just said, it is going to have different impacts on different
+employees. And what that impact is going to be we are duty
+bound and certainly legally bound to advise the folks that we
+represent. How that is all going to shake out, we have been
+unable to either reassure or say, OK, you are going to get
+affected this way, this is going to affect more people in FTS
+than FSS, like I said in part of my testimony.
+ Again, I will give the fact that some of it is speculation,
+but also been advised through my council president and our
+other employees, which many of them are here today sitting in
+these chambers from the Greater D.C. area and Virginia and so
+forth, that these are going to affect. And I would have to say
+that I have yet to hear and I did not see that there was any
+documentation to that effect. Mr. Perry said there has been
+some discussion amongst managers and a few key individuals, but
+that was primarily it.
+ And would this merger be better? I don't really see, based
+on the testimony here. There are some people that say that it
+would, and everyone is entitled to their opinion, and I am not
+being disrespectful, but at least from the elected
+representatives side of the House, that the people in the
+trenches are going to be affected, I can't see where this would
+be good or bad. I would believe at this juncture it would be
+more bad because there is not enough information, there is no
+business plan, there is no long-range goal, there has been
+nothing documented.
+ Chairman Tom Davis. Right. Well, look, at the end of the
+day, everybody here plays a different role. I mean, your role
+is to protect your employees, make sure they are treated
+fairly; and the efficiency of the department, although it is
+not unimportant to you, at the end of the day that doesn't
+drive you if you are losing employees and those kind of issues.
+From the people that are selling to the Government, they have
+their own bent; they can give suggestions into what works most
+efficiently for them in being able to sell to the Government. I
+know there is a great frustration on the part of contractors
+sometimes of doing work and the Government not telling exactly
+what they want, not being able to articulate; a lot of waste
+goes in some of these areas. And I think all of you need to be
+a part of the reorganization process so that everybody is
+heard.
+ But at the end of the day, GSA's job, from my perspective,
+is to make sure that when they go off and buy something, they
+are getting the best deal for the American taxpayer. That may
+not be exactly what the contractors want or the employees want,
+but I think that is what the taxpayers expect. But they can't
+do it without talking to you and without consulting with you.
+ I think each of you have an important role to play in that,
+so we want to do everything we can to make sure that, as this
+moves forward you are at the table and that all of your views
+are considered in this. And for that, I appreciate everybody
+being here, sharing those concerns. We want to continue to work
+with GSA to make sure that even though it may be a contracted
+period that these decisions are made, that you are made full
+partners in terms of your input into this thing; and we want to
+hear from you if that is not the case.
+ Ms. Norton.
+ Ms. Norton. Thank you very much, Mr. Chairman. I came back
+because I have a couple of questions.
+ I just want to indicate how much I agree with your last
+comments. Nothing is more threatening to employees than a
+change in structure in an organization, whether it is
+consolidation, whether it is dealing only with one part of the
+organization. And when they hear about merger, even before you
+know exactly what you are going to do, you have to begin to
+talk with people. So I am very concerned. I was very concerned
+in reading, Mr. Brown, your testimony about how there has not
+been any consultation whatsoever. Again, these people are
+management; they have to do what they have to do. But the
+notion of not trying to reduce anxiety is very troubling to me.
+ You indicate that, for example, assuming that merger would
+result in whole or partial elimination of the FTS. See, you
+don't know that and I don't know that, and when he talked about
+how they, by bringing everybody together, because they have so
+much demand, they will be able to meet this demand. They left
+the impression that maybe they need all the folks they have but
+maybe they don't. Perhaps, for example, in consolidating the
+administrative part, parts of FTS and FSS there would be a
+redundancy, and there is no case to be made for redundancy. I
+am very concerned, though, that nothing is known.
+ You indicate, Mr. Brown, that you are against the
+consolidation. You offer a number of reasons. Obviously one of
+them has to be the anxiety that employees have about what is
+going to happen to them. But as I said in the beginning, if the
+consolidation is to occur, I believe the committee has to
+insist that, in fact, business reasons fitting the normal
+business model must be in fact used to justify such a
+consolidation and that the burden is on who wants to bring
+people together to move around the chairs on the Titanic to
+show that when the chairs are at a different place, something
+different is going to happen.
+ Would you oppose, for example, if there are duplicative
+operations at the administrative level, the consolidation of
+those operations so that at least at that level you don't have
+customers, agencies, contractors dealing with duplicating
+parties doing the same thing essentially?
+ Mr. Brown. First, let me state definitely the record the
+union, the National Federation of Federal Employees stands
+behind what is going to be most efficient for the American
+taxpayer. Don't misconstrue our message.
+ But if you also notice in some of my testimony, that if
+there are--and let me say for the record myself I was laid off
+from the Federal Government. I worked for the Department of
+Defense for 14 years. I know what it is like to lose my job in
+the Federal Government, and there are RIF rules and procedures
+that were followed. And if there are duplicative jobs or jobs
+that are no longer needed, I would go back to my testimony that
+those rules and regulations that are in place now be used. It
+affords everyone their proper rights and entitlements as an
+employee that may lose their job due to various circumstances
+within the Federal Government.
+ Again, I hate to beat a dead horse, but at least from a
+national level and/or local level--and like I said, there are
+many constituents not only from this area, but employees that
+are on the ground working at GSA here today--that don't know
+what is going on. And they are all professional people, and
+should something happen where they do lose their job, they
+should be treated with dignity and respect and afforded their
+rights and entitlements. That is our position on that.
+ Ms. Norton. Well, I appreciate that position, because
+obviously the committee can't make its decisions based only on
+employee concerns. But normally those concerns are not that far
+off from one another.
+ I believe that the notion of letting something as bold and
+big and unprecedented as a consolidation of two major parts of
+the GSA occur or be in the works without talking with employees
+is a major flaw in the process itself. I intend to write to
+Administrator Perry, whom I know and whose work I admire, to
+indicate that, and I will try to see if I can convince the
+chairman to join me in such a letter; not because we think
+bargaining should take place. There are different points in the
+procedure where employees have a right of course to be
+involved. Quite apart from that, given the magnitude of what is
+being undertaken here, the total absence of community starts
+the process off in the wrong way. And if I may say so, I served
+on the boards of three Fortune 500 companies. None of them
+would have ever attempted to begin a consolidation of major
+parts of their operation without beginning to talk to employees
+at some level. Talking about elementary communication now, not
+necessarily the kind of communication that you will have and be
+entitled to at some point in the process anyway.
+ I have one question for Mr. Hewitt, because, Mr. Hewitt,
+your testimony rang very true to me from my own experience in
+dealing in the private sector as a director of companies, when
+you talked about a performance-based approach that first you
+look to a business model, then you go on and do what you have
+to do. In your testimony on page 5, I was troubled that somehow
+the GSA, at least at this point, has not seen the value of what
+you recommend. You say that these first task forces essentially
+have all insiders on them. In other words, people who know the
+operation from the inside, who are indispensable to the
+operation are talking to one another.
+ At this hearing, over and over again the notion of what is
+first and foremost in our minds, serving the customer, making
+sure that the taxpayer benefits, doesn't seem to be a part of
+such task forces, particularly customer service, since that is
+essentially what the GSA does. And you recommend expanding the
+task force in ways that seem to me to be almost self-evident,
+because you talk about GSA's vendor base. You recommend
+expanding to include members of other Government agencies and
+the vendor base, and you indicate some concerns about the
+representations of FTS on the steering committee.
+ I just want to know if anybody thinks that--let me preface
+this question by saying such a task force is only that, it is a
+task force; it doesn't get to decide the issue. By definition,
+it is advisory. I just have to ask you if anybody knows of a
+situation where a major consolidation within a company would be
+attempted without going to some advice from those who use the
+customer services. If you think it is wise to proceed only with
+insiders. And perhaps to get Mr. Hewitt to elaborate on how a
+company, a private company would in fact would deal with this
+situation. You say by expanding the task force base, but I
+would just like you to give some rationale for why you think
+others should be brought into the process besides those inside
+GSA who, of course, know GSA and FTS and FSS best.
+ Mr. Hewitt. Well, first, we have a great deal of respect
+for the success of FSS and FTS, and we think over the last 20
+years they have done some tremendous things. And at this point
+what we are looking for is to simply re-evaluate to consider,
+can we improve the efficiencies of productivity, the
+responsiveness of the two organizations? And the success we
+think is based on the partnership that has existed between
+industry, which really relies on FTS and FSS, and the
+Government clients. And that is why the other agencies, we
+think, are vital to have them involved. And I can understand
+Administrator Perry's point of view and getting it started with
+internal people, but I would hope that he would soon buy into
+bringing some others in. We think that the other Government
+agencies, the people that are actually getting the services,
+and the vendors providing the products and services, have
+something to offer, and it will bring a better result.
+ Ms. Norton. Do the rest of you agree with that? Do you?
+ Mr. Hewitt. Pardon me?
+ Ms. Norton. I am asking if the other witnesses agree with
+the view that those who use the service would be helpful as
+part of the task force.
+ Ms. Dauphin. Absolutely. The industry and the Government
+end clients are all stakeholders in this process and should be
+included.
+ Mr. Avetissian. I agree. The more advice you get, it is
+better than none at all.
+ Mr. Davison. I agree as well, but I think there has been a
+great deal of cooperation and communication over the past
+years. The big changes in GSA structure from a Government-
+funded to an industrial-funded organization has brought a
+partnership between the Federal Government and GSA and the
+contractors that we haven't had before, both with a similar
+motive, to do what is best for the Government customer, open up
+a channel of dialog that we have enjoyed over the last several
+years. But certainly it shouldn't be minimized, we ought to
+continue to be a part.
+ Ms. Norton. Here, of course, we are not talking about
+anything that would be definitive; GSA can take the advice or
+not take the advice. But the notion of moving ahead without
+talking to the people who are going to use the service does
+seem to me to be elementary. Same way with employees. All we
+are talking about here is communication: hey, tell me what you
+know and let me see if what you know will help me do what I
+have to do. I think they have to do that with employees; I
+think they have to do that with the customer base, the vendors,
+the contractors, the Government agencies themselves. So I have
+been very much assisted by your testimony and very much
+appreciate it.
+ Thank you, Mr. Chairman.
+ Chairman Tom Davis. Anybody want to add anything?
+ [No response.]
+ Chairman Tom Davis. It has been very helpful to us. The
+committee appreciates it. Thank you very much.
+ I want to again thank our witnesses for appearing before us
+today.
+ [Whereupon, at 1 p.m., the committee was adjourned to
+reconvene at the call of the Chair.]
+ [The prepared statement of Hon. Elijah E. Cummings and
+additional information submitted for the hearing record
+follow:]
+
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+