Information Technology: Status and Challenges of Employee Exchange Program
Published: 2006-12-15T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Recognizing the importance of human capital to information technology (IT) and the need to improve the skills of federal IT workers, Congress created the Information Technology Exchange Program (ITEP) as part of the E-Government Act of 2002. ITEP aims to improve federal IT skills through exchanges of staff between the government and the private sector. The Office of Personnel Management (OPM) was required to issue implementing regulations, which it did in September 2005, and to report semiannually to the Congress. OPM's regulations require that each participating agency develop an ITEP plan before proceeding with exchanges. Agencies' opportunity to begin exchanges ends in December 2007. GAO is required to evaluate the program by December 2006. As agreed, GAO's objectives were to determine (1) the status of the program and (2) challenges facing agencies. To address these objectives, GAO analyzed key documents and interviewed OPM, participating agencies, and others.
section_title: What GAO Found
paragraphs: With only 1 year remaining to begin exchanges under the ITEP program, the seven agencies that volunteered to participate are still initiating their programs, and no exchanges have taken place. All participating agencies have drafted plans, but only three--Department of Homeland Security, Department of Defense, and Department of Commerce--have finalized them. Further, only Homeland Security has attempted to negotiate an exchange, but it was unsuccessful. In its last two semiannual reports, OPM has reported on the status of agency plans, but has not reported that no exchanges have taken place to date. OPM, agencies, and others have identified key challenges that will confront agencies as they finish their plans and begin to implement ITEP programs. First, employees with desired skills are in short supply in both the federal government and the private sector, particularly in enterprise architecture, project management, and information security, according to industry representatives. Second, companies are concerned that employee exchanges could hinder future business, since a company with an employee at an agency might be seen as having an unfair advantage in bidding on agency procurements. Third, federal ethics requirements, especially financial disclosure, could discourage private-sector employees from participating. And lastly, Federal agencies' current marketing through a Web site has not been productive, according to participating agencies; suggested improvements include using the media and making personal contacts with companies. OPM and the participating agencies are aware of the challenges and acknowledge that they need to be addressed. However, given the short time remaining before authority to begin new exchanges ends (see figure), it will be essential to expeditiously address the challenges to enable a significant number of successful exchanges.

section_title: Letter
paragraphs: Recently, assessments of the federal information technology (IT)  workforce, as called for in the Clinger Cohen Act, have resulted in the  identification of skills gaps in key areas such as project management.  Recognizing the importance of human capital to IT and the need to improve  the skills of the federal IT workforce, the Congress created the Information  Technology Exchange Program (ITEP) as part of the E-Government Act of  2002 (E-Gov Act). The program is envisioned as a vehicle to promote the  interchange of IT employees between federal executive agencies and the  private sector and to develop, supplement, and modernize IT skills while  improving overall competencies in the federal IT workforce.
The Office of Personnel Management (OPM) is required under the act to  issue implementing regulations for the program and to report semiannually  to the Congress on the operation of the program. OPM issued the required  implementing regulations in September 2005. OPM’s regulations require  that each participating agency develop an ITEP plan, approved by the  agency head, before proceeding with exchanges. Agencies’ opportunity to  begin exchanges ends in December 2007.
The act required GAO to provide an evaluation of the program by  December 17, 2006. As agreed with your offices, we determined (1) the  status of the ITEP program and (2) challenges facing agencies in  implementing ITEP. To conduct our work, we analyzed ITEP regulations  and guidance, agencies’ ITEP plans, and OPM status reports. We also  conducted interviews with ITEP officials at the seven participating  agencies—Department of Commerce, Department of Defense (DOD),  Department of Homeland Security (DHS), Department of the Treasury,  Federal Bureau of Investigation (FBI), Department of Health and Human  Services, and OPM—and with the Industry Advisory Council (IAC), which  includes about 500 companies as members. We performed our work from  July 2006 to November 2006 in accordance with generally accepted  government auditing standards. Details of our objectives, scope, and  methodology are included in appendix I.
subsections: section_title: Background
paragraphs: The E-Gov Act created ITEP to improve the skills of the federal workforce  in using information technology. The act authorizes federal executive  agencies that volunteer to participate to temporarily detail IT staff to  private-sector companies and to accept individuals from the private sector.  Assignments can last up to a year and are extendable for another year.  Federal employees could be exposed to private industry best management  practices, while private-sector employees could gain a greater  understanding of federal information management practices and of how  the government does its work. The opportunity to begin exchanges is due  to end in December 2007.
OPM was required to issue implementing regulations for ITEP and to report  semiannually to the Congress on the number of individuals assigned to and  from each agency, including a brief description of each assignment and  other information as appropriate.
Between 2003 and 2005, OPM developed implementing regulations for the  program, including soliciting public comments. OMB reviewed and  approved OPM’s draft regulations as part of its normal regulatory process.
The final ITEP regulations were not issued until August 2005, and became  effective in September 2005, almost 3 years into the program. OPM  reported to the Congress that the delay in the issuance of the regulations  was due to the complexity of the issues involved, including various ethics  and standard of conduct issues that could complicate exchanges,  especially from private industry to the federal government. In addition to  OMB, OPM worked with the Department of Justice and the Office of  Government Ethics to finalize the regulations.
In the ITEP regulations, OPM established a requirement that each  participating agency develop an ITEP plan. These plans are to be approved  by the head of each agency before beginning exchanges. Agencies,  companies, and individual participants are also required to sign a written  agreement before any exchanges can begin. Each participating agency has  primary responsibility for planning and directing its own ITEP program but  must adhere to the act and OPM regulations in implementing exchanges.
In December 2005, 3 months after the ITEP regulations went into effect,  OPM issued additional guidance to assist agencies in implementing their  programs and in drafting plans. The guidance included an overview of the  program, templates for ITEP plans and written agreements, and answers to  frequently asked questions and is available to agencies through the  OPM.gov Web site.
To help promote the program, OPM partnered with the Federal Chief  Information Officers Council and with the Industry Advisory Council and  conducted outreach with several other IT professional organizations to  reach private-sector companies. OPM assists the agencies in marketing  their ITEP programs through its USAJOBS Web site. To facilitate the  exchange of information, OPM has been conducting weekly  teleconferences with participating agencies and the IAC. Additionally, the  CIO of OPM co-chairs the CIO Council’s Information Technology  Workforce Committee, which helps to promote the program and shares  status updates during monthly meetings.
The E-Gov Act specifically addresses ethics and reimbursement issues. The  law states that private-sector employees assigned to a federal agency under  ITEP are deemed to be employees of the federal agency in terms of Title 5,  U.S.C., Chapter 73 (Suitability, Security, and Conduct) as well as various  other laws. For example, federal employees detailed to the private sector  would remain subject to all federal ethics rules and would continue to be  paid by their agencies. Private-sector employees detailed to a federal  agency would become subject to federal ethics rules, such as those  involving conflict of interest and financial disclosure, and would continue  to be paid by their companies. The act permits the federal government to  reimburse some expenses, such as travel and per diem and leaves open the  possibility that agencies might reimburse the company for some of its  employees’ salaries, but it specifically prohibits companies from charging  the government for an employee’s salary or benefits as a direct or indirect  cost under a federal contract.
section_title: Seven Agencies Are Initiating Programs, but No Exchanges Have Taken Place
paragraphs: With only 1 year to go before the opportunity to begin exchanges ends, the  seven agencies participating are still initiating their programs, and no  exchanges have taken place. All seven agencies have drafted plans, but  only three—DHS, DOD, and Commerce—have finalized them. Only one  agency, DHS’s Federal Law Enforcement Training Center, has attempted to  negotiate an exchange, but it was not able to reach an agreement with a  potential private-sector partner.
subsections: section_title: Agencies Are Establishing ITEP Plans
paragraphs: When the CIO Council called for agencies to volunteer for ITEP, nine  agencies volunteered to participate; seven agencies—the Department of  Commerce, DOD, DHS, Department of the Treasury, Federal Bureau of  Investigation, Health and Human Services, and OPM—committed to  implementing programs. Participating agencies began developing their  ITEP plans after OPM issued regulations in August 2005. Agency officials  told us that the OPM guidance was useful and that they worked closely  with their agencies’ human resources and general counsel staffs to develop  their plans.
Of those seven, DHS, DOD, and Commerce have approved plans as  required by OPM regulations, and the other four agencies have draft plans  that are awaiting agency head approval. DHS’s plan was approved in March  2006; DOD’s plan was approved in August 2006; and Commerce’s plan was  approved in October 2006 (see fig. 1). Officials from the agencies with draft  plans estimated that additional time required for review and approval of  these draft plans could range from a few days to an indefinite amount of  time.
OPM requires that plans address how the program will be carried out (e.g.,  processes and procedures); how many exchanges the agency plans to have;  how employees are selected; which officials may approve exchanges; and  employee rights to return to the agency. Agencies are given the flexibility to  tailor their ITEP plans to meet their individual needs and the workforce  skills they want to reinforce.
In addition, agencies have identified key skills they would like to  strengthen through ITEP exchanges. The skills most frequently identified  by agency officials were enterprise architecture, project management, and  information security. Table 1 shows the status of agencies’ plans and the  specific skills agencies have identified.
section_title: No ITEP Exchanges Have Occurred
paragraphs: As of November 2006, no exchanges have occurred. Officials from the  participating agencies stated that they have had few inquiries and little  interest from private-sector companies regarding the ITEP program. DHS,  the first agency to have an approved plan, has attempted to implement an  exchange with a private-sector partner; however, the company did not go  ahead with the exchange because, as prohibited by the act, it could not  charge the government for its employee’s salary as an indirect cost on its  government contracts. DOD recently finalized its ITEP plan in August 2006  and is proceeding with program implementation, but has not begun  negotiating agreements.
OPM has reported to the Congress on the status of its development of the  regulations and activities to promote the program. In its last two  semiannual reports, in April and October 2006, OPM has reported on the  status of agency plans but has not reported that no exchanges have taken  place.
section_title: Agencies Face Implementation Challenges
paragraphs: OPM, agencies, and others have identified key challenges that will confront  agencies as they finish their plans and implement ITEP programs, including  limited availability of private-sector employees with the skills agencies  want, concern that sending employees to agencies may hinder companies’  ability to bid on future contracts, possible reluctance of private-sector  employees to be subject to federal ethics rules, and more effectively  marketing the program. These challenges will make it difficult to find  willing and qualified participants and negotiate agreements with  companies. OPM and participating agencies’ officials are aware of the  challenges and acknowledge that they need to be addressed, but these  challenges have not been reported to the Congress in the semiannual  reports.
subsections: section_title: Desired Skills Are in Short Supply in Both the Federal Government and the Private Sector
paragraphs: Federal agencies face a challenge in finding employees from the private  sector with the skills they are most interested in pursuing. Although  agencies have identified their target skills—enterprise architecture, project  management, and information security—these skills are also in short  supply in the private sector. According to the IAC, which represents about  500 companies, companies would be reluctant to give up the services of  staff members with these valuable skills. The IAC believes the federal  government is more likely to attract staff from private-sector companies if  the agencies focus on other skill areas where the government is a leader,  such as electronic learning.
section_title: Companies Are Concerned That Employee Exchanges Could Hinder Future Business
paragraphs: Both the IAC, representing its member companies, and agencies told us of  their reluctance to undertake exchanges because of a risk that an exchange  could interfere with future federal contracting opportunities. Although the  act specifically prohibits private-sector employees from having access to  any nonpublic information of commercial value to their company, they  might still obtain or appear to obtain information that would give them an  unfair competitive advantage, and their companies might then be  disqualified from bidding on future contracts. According to the IAC, this is  a major issue with the program, because it is not easy to determine what  information is appropriate for private-sector employees. FBI program  officials also told us that this issue was a particular concern to them. The  Human Resource Manager for DHS’s Office of the CIO told us that DHS  components were not interested in accepting an employee from a DHS  contractor, because they did not want to risk damaging their relationship  with the company.
section_title: Federal Ethics Requirements Could Discourage Private-Sector Employees from Participating
paragraphs: Another challenge identified by federal agencies and IAC is that private- sector employees considering an assignment to a government agency could  be discouraged by the numerous federal ethics rules they would need to  comply with to participate in the program. The regulations specified by the  act, such as those governing claims against the government, political  contributions, post-employment activities, disclosure of confidential  information, and, especially, financial disclosure could make a detail to a  federal agency unattractive. For example, although this has not yet  occurred, agencies and IAC agreed that the need to file a financial  disclosure statement could discourage some potential private company  participants.
section_title: Effectively Marketing the Program
paragraphs: Federal agencies face a challenge in determining how to effectively  promote ITEP to the private sector. IAC has actively marketed ITEP to its  member companies and other federal IT associations; however, marketing  efforts through OPM’s USAJOBS Web site, have not been productive,  according to federal agencies. OPM has reported 23,000 hits on USAJOBS,  but participating agencies told us that contacts they received from the Web  site were almost all looking for permanent federal positions and were  unrelated to ITEP.
Several sources told us that a more proactive approach in reaching out to  private companies was needed to get companies to participate. For  example, IAC said that OPM and the participating agencies should promote  the program repeatedly through the media. The director of a similar  employee exchange program at the Department of Energy told us that  personal contact with companies was essential to recruiting companies  into the program. To attract companies, agencies will need to convince  them of the value of exchanges. However, only two of the seven  participating agencies had initiated direct contacts with private-sector  companies.
section_title: Conclusions
paragraphs: Four years into ITEP, agencies are still initiating and planning their  programs and, accordingly, no exchanges have taken place. Agencies will  face several challenges in making exchanges, including shortages of  employees with key skills and concerns that exchanges could hinder  companies’ ability to do future business with the government. OPM and the  participating agencies are aware of the challenges and acknowledge that  they need to be addressed. However, given the short time remaining for  beginning exchanges, it will be essential to expeditiously address the  challenges to enable a significant number of successful exchanges.  Reporting to the Congress on these challenges and the number of  exchanges that have occurred is key to determining the viability of the  program and whether it should continue beyond 2007.
section_title: Recommendations for Executive Action
paragraphs: We recommend that, as part of OPM’s responsibilities under the E-Gov Act,  the Director of OPM include in its semiannual reports to the Congress (1)  the number of exchanges that have occurred, as required by law, and (2)  the status of efforts to address challenges facing agencies in implementing  ITEP exchanges and whether these efforts are leading to exchanges.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments on a draft of this report, OPM’s Director said that  OPM supports the ITEP and will continue to promote it as a tool available  to agencies in the training and development of the Federal IT workforce.  OPM agreed with our recommendation that future semiannual reports to  Congress include the number of exchanges that have occurred or a  statement that no exchanges have occurred. However, it disagreed with our  recommendation that it include in the semiannual reports the status of  efforts to address challenges facing agencies in implementing the program  and whether these efforts are leading to exchanges. Further, OPM said that  current reporting to Congress fully meets its statutory obligation to report  on the operations of the ITEP. However, we continue to believe that it  should include in the semiannual reports the status of efforts to address  challenges facing agencies in implementing the program. Confronting these  challenges is key to determining whether the program will be successful  and whether it should continue beyond 2007. OPM also provided technical  comments that we have incorporated as appropriate. OPM’s comments are  reprinted in appendix II.
We are sending copies of this report to interested congressional  committees. We also will make copies available to others on request. In  addition, this report will be available at no charge on the GAO Web site at  http://www.gao.gov.
If you have any questions on matters discussed in this report, please  contact me at (202) 512-9286 or at pownerd@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made major contributions to this  report are listed in appendix III.
section_title: Objectives, Scope, and Methodology
paragraphs: Our objectives were to determine the (1) status of the Information  Technology Exchange Program and (2) challenges facing the program.
To address our first objective, we reviewed the E-Government Act of 2002,  regulations, and guidance to understand program requirements. We  analyzed approved plans for the Departments of Homeland Security,  Defense, and Commerce and draft plans for the Departments of Treasury  and Health and Human Services. The Federal Bureau of Investigation and  Office of Personnel Management (OPM) did not provide us with copies of  their draft plans. We reviewed these plans to determine details about  administering the exchanges and assessed whether agencies followed OPM  guidance in developing them. We reviewed OPM’s semiannual reports to  the Congress to assess progress reported on the status of federal agencies’  exchanges with the private sector. We interviewed program staff at the  seven participating federal agencies, including federal Chief Information  Officers (CIO) and human resource officials, OPM, and Office of  Management and Budget officials on program activities. We also met with  members of the Federal CIO Council Workforce Committee and the  Industry Advisory Council (IAC) to discuss their roles in promoting the  program to federal agencies and private-sector companies.
To address our second objective, we interviewed program staff at OPM and  the seven participating federal agencies and analyzed their responses to  identify future challenges they face in administering the program. We  contacted IAC officials—representing 500 member companies—to  determine challenges to participating in the program identified by  companies. We also conducted research on the Department of Energy’s  Acquisition Career Development Program.
We conducted our work from July through November 2006 in the  Washington, D.C., area in accordance with generally accepted government  auditing standards.
section_title: Comments from the Office of Personnel Management
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Neil Doherty, Nancy Glover,  Cynthia Scott, Teresa Smith, and Glenn Spiegel made key contributions to  this report.