Mark Forman Testimony to House Technology and Procurement Policy Subcommittee, 10/04/2001

TESTIMONY OF MARK FORMAN
BEFORE THE SUBCOMMITTEE ON TECHNOLOGY AND PROCUREMENT POLICY
OF THE COMMITTEE ON GOVERNMENT REFORM

October 4, 2001

Mr. Chairman and members of the Subcommittee:

Thank you for the opportunity to testify today on the important issue of managing the Federal information technology (IT) and acquisition workforces.

Before I get to the substance of my testimony, I need to make sure the Subcommittee understands that I do not serve in a confirmed position within the Office of Management and Budget (OMB). As a general policy, OMB does not usually send officials in non-confirmed political positions to testify before Congress. However, in this case, because OMB does not yet have a Deputy Director for Management, the OMB Director decided it was in the best interest of the Administration to have me appear on his behalf as a witness for this hearing.

I have more than a passing interest in the issue of an effective Federal IT workforce. In June, I was appointed as the Associate Director of the Office of Management and Budget for E-government and information technology. My position was created to improve agency use of information technology and e-government practices. A critical element for success in that effort will be assuring that the Federal government has an effective IT workforce with the appropriate skills.

While Federal IT is critical to the way the Federal government operates, it is important to keep in mind that the Federal government is not in the IT industry. The Federal government is in the business of making policies, managing Federal programs, and ensuring enforcement of laws and regulations. IT is essential to government operations. Modern IT offers opportunities to improve policy making, service delivery, and enforcement of laws and regulations. As such, it is important to view the Federal IT workforce within the context of Federal government being the world's largest customer of the IT industry.

The President's management agenda contains five key elements: improving financial system performance, competitive sourcing, strategic management of human capital, performance-based budgeting, and expanding E-government. Each element of the management agenda is dependent on the others to assure maximum advantage. As such, management of human capital generally, and of the IT workforce specifically, must be addressed as a part of this broader management reform framework. Let me briefly describe the three elements of that agenda that are particularly germane to today's discussion of the Federal IT and acquisition workforces:

Strategic Management of Human Capital

As part of OMB's efforts to develop the President's FY 2003 budget, we have asked agencies for their plans on how they are going to strategically realign their workforce to better accomplish the Federal government's work. These are not plans for counting the number of individuals, but rather for a strategic re-thinking of the way agencies operate, and the skills and expertise they will need to perform effectively and efficiently in the future. The plans were due to OMB in September as part of the FY 2003 budget submissions and annual performance plans, and OMB resource management offices have been discussing these plans with the agencies in the context of FY 2003 budget preparation. I should note that we are asking specifically about IT workforce plans as part of the review of agency workforce strategies. The results of this review will be evident in the President's FY 2003 budget that will be proposed this coming January.

To help provide flexibility to re-orient the workforce, the Administration will shortly propose the Freedom to Manage Act, which will give Federal managers the ability to better manage their organizations. The Administration will seek enhanced authority to use recruitment and retention bonuses, permit agencies to easily develop demonstration projects and implement alternative personnel systems, authorize managers to use workforce restructuring tools including early retirement packages and buyouts, and recruit and treat senior executives more comparably with their private sector counterparts. Donald Winstead from the Office of Personnel Management (OPM) will be discussing these proposals further in his statement.

E-government

A second facet of the President's management reform is the E-government initiative, which I lead. It is our vision that E-government will result in an order of magnitude improvement in the Federal government's value to the citizen. We define E-government as the use of digital technologies to transform operations in a manner that drives significant improvement in efficiencies, effectiveness, and service delivery. To accomplish this vision we simplify business processes to maximize the benefit of technology, resulting in processes that will be faster, cheaper, and more efficient. We will also have to replace legacy islands of automation by unifying IT and operations across many silos. While this has rarely been done in Federal government, such business transformation has become almost routine in industry as well as State, local, and foreign governments. Catching-up will require new and different skills in our IT professionals. At the top of my list is the ability to communicate with line program professionals. Other important skills include knowledge of enterprise applications such as supply chain management, customer relationship management, and knowledge management. Like all information intensive industries, government has a shortage of architects, especially those that design ways that we can best leverage emerging information platforms for security, web services, and ubiquitous information. Finally, I believe we need more capability in preparing solid business cases and in managing projects to deliver on those business cases.

As I noted earlier, we are the world's largest customer of the IT industry. Therefore, we need to ensure that we can obtain the proper skills for our IT support both among Federal employees and contractors. For that reason we have a specific committee of the CIO Council, the Workforce Committee, to advise us on IT workforce issues and develop best practices. As an example of developing the kinds of skills we need in the Federal workplace, I would like to highlight the Workforce Committee's work in creating the CIO University curriculum. Both Federal and contractor employees have taken advantage of that training. I should note that it was also that committee that proposed and executed the contract with NAPA to perform their study of the Federal IT workforce.

Competitive Sourcing

Numerous IT tasks are commercial in nature. Federal workforce studies indicate that almost 80 per cent of IT jobs are currently performed by Federal contractors. Through our competitive sourcing initiative, we intend to identify and select sources -- public or private -- that are best able to perform and help the Government execute its mission most effectively.

Agencies are currently working with the Office of Federal Procurement Policy to examine, among other things, how they are providing IT services and will then determine the best source of those services. In many respects, competitive sourcing will offer an opportunity to use market forces to develop capabilities needed to meet the Federal government's IT needs.

NAPA Study

Your letter of invitation said that you would be assessing the workforce recommendations of the National Academy of Public Administration (NAPA) report titled "The Transforming Power of Information Technology: Making the Federal Government an Employer of Choice for IT Employees." Mr. Winstead will be addressing the report in more detail in his remarks, but let me provide some background on it.

The report was developed at the request, and with the funding of the Federal Chief Information Officers' Council, which I now direct. When the study was initially solicited, many Federal agencies were having great difficulty recruiting and retaining IT professionals. Federal salaries simply were not competitive, and the dot com boom was in full swing. Since then, OPM increased starting salaries for IT professionals through special pay rates. In addition, the dot com boom has waned, and commensurate with it the demand for IT professionals has lessened somewhat. For example, a recent national survey of both government and private sector CIOs by "CIO Magazine" indicates that only 15 percent of them are having difficulty filling IT positions this year, as opposed to 76 percent of them one year ago. That said, "Computerworld" reported on Monday this week that "the decline of [dot coms] doesn't signal the end of highly competitive compensation, say consultants and CIOs." Therefore it is timely for the Administration to address the problems that the NAPA report highlights and give serious consideration to NAPA's recommendations.

Conclusion

Today's workforce is making old technology work to operate Federal programs. But we can do better. Information technology offers the possibility to dramatically improve the Federal government -- interactions with citizens as well as our internal operations. To be able to take advantage of that possibility we will need a skilled, motivated workforce. The Administration is moving quickly to re-orient the Federal workforce to take advantage of this opportunity. Today's hearing, and the NAPA study and its recommendations, are important contributors to our objective of a better Federal government.

I would be happy to answer any questions.