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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. In addition to the contact named above, Neil Doherty, Nancy Glover, Cynthia Scott, Teresa Smith, and Glenn Spiegel made key contributions to this report.

Summary:
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. 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.