[House Hearing, 113 Congress]
[From the U.S. Government Printing Office]



 
  TIME TO REFORM IT ACQUISITION: THE FEDERAL IT ACQUISITION REFORM ACT

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT

                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 27, 2013

                               __________

                           Serial No. 113-42

                               __________

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


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




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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              MARK POCAN, Wisconsin
DOC HASTINGS, Washington             TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming           ROBIN L. KELLY, Illinois
ROB WOODALL, Georgia                 DANNY K. DAVIS, Illinois
THOMAS MASSIE, Kentucky              PETER WELCH, Vermont
DOUG COLLINS, Georgia                TONY CARDENAS, California
MARK MEADOWS, North Carolina         STEVEN A. HORSFORD, Nevada
KERRY L. BENTIVOLIO, Michigan        MICHELLE LUJAN GRISHAM, New Mexico
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                    Stephen Castor, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 27, 2013................................     1

                               WITNESSES

Mr. Richard A. Spires, Chief Infomation Officer, U.S. Department 
  of Home Security
    Oral Statement...............................................     7
    Written Statement............................................     9
Ms. Cristina Chaplain, Director of Acquisitions and Sourcing 
  Management, Government Accountability Office
    Oral Statement...............................................    16
    Written Statement............................................    18
Mr. Daniel L. Gordon, Associate Dean for Government Procurement 
  Law Studies, George Washington University
    Oral Statement...............................................    34
    Written Statement............................................    36
Mr. Stan Soloway, President and CEO, Professional Services 
  Council
    Oral Statement...............................................    42
    Written Statement............................................    45
Mr. Paul Misener, Vice President, Global Public Policy, Amazon
    Oral Statement...............................................    54
    Written Statement............................................    56

                                APPENDIX

The Hon. Elijah E. Cummings, a Member of Congress from the State 
  of Maryland, Opening Statement.................................    90
The Hon. Gerald E. Connolly, a Member of Congress from the State 
  of Virginia, Opening Statement.................................    92
IT-AAC Assessment of Draft Federal IT Acquisition Reform Act 
  (FITARA).......................................................    94
The Perenial IT Acquisition Challenge............................    95


  TIME TO REFORM IT ACQUISITION: THE FEDERAL IT ACQUISITION REFORM ACT

                              ----------                              


                     Wednesday, February 27, 2013.

                  House of Representatives,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 9:30 a.m. in room 
2154, Rayburn House Office Building, the Honorable Darrell E. 
Issa [chairman of the committee], presiding.
    Present: Representatives Issa, Cummings, Mica, Farenthold, 
McHenry, DesJarlais, Lankford, Walberg, Turner, Lummis, 
Connolly, Cardenas, Horsford, Davis, Tierney, Duckworth, Pocan, 
Grisham, Duncan and Amash.
    Staff Present: Ali Ahmad, Majority Communications Advisor; 
Richard A. Beutel, Majority Senior Counsel; Robert Borden, 
Majority General Counsel; Molly Boyl, Majority Parliamentarian; 
Lawrence J. Brady, Majority Staff Director; Sharon Casey, 
Majority Senior Assistant Clerk; John Cuaderes, Majority Deputy 
Staff Director; Gwen D'Luzansky, Majority Research Analyst; 
Linda Good, Majority Chief Clerk; Mark D. Marin, Majority 
Director of Oversight; Peter Warren, Majority Legislative 
Policy Director; Rebecca Watkins, Majority Deputy Director of 
Communications; Meghan Berroya, Minority Counsel; Krista Boyd, 
Minority Deputy Director of Legislation/Counsel; Jennifer 
Hoffman, Minority Press Secretary; Carla Hultberg, Minority 
Chief Clerk; Elisa LaNier, Minority Deputy Clerk; Dave Rapallo, 
Minority Staff Director; Rory Sheehan, Minority New Media Press 
Secretary; Mark Stephenson, Minority Director of Legislation; 
and Thomas Cecelia, Minority Counsel.
    Chairman Issa. The committee will come to order.
    I will read the Oversight Committee's mission statement. We 
exist to secure two fundamental principles. First, Americans 
have a right to know the money Washington takes from them is 
well spent. And second, Americans deserve an efficient, 
effective Government that works for them.
    Our duty on the Oversight and Government Reform Committee 
is to protect these rights. Our solemn responsibility is to 
hold Government accountable to taxpayers because taxpayers have 
a right to know what they get from their Government. We will 
work tirelessly in partnership with citizen watchdogs to 
deliver the facts to the American people and bring genuine 
reform to the Federal bureaucracy.
    Today, in order to move that purpose forward, we hold the 
second Full Committee hearing this year concerning Federal 
Government's approximately $80 billion Information Technology 
Budget. We are all well aware that the Government 
Accountability Office and others have repeatedly identified 
problems and challenges in the area and this hearing is 
continuation toward a grand solution.
    One solution at the center of our discussion today is the 
draft IT Acquisition Reform legislation I posted on the 
Committee's website last fall. In recent months, we have 
received generous feedback on the draft bill from more than a 
dozen parties, actually more than 20 parties, some of them here 
today.
    We are going to continue with that feedback and continue 
having the public know what the feedback is. Ultimately, 
getting the whole system right requires not just that people 
tell us how to improve it, but that the rest of the public sees 
what we are being told and can further comment. We believe that 
this open dialogue is the best way, once and for all, to prove 
to the public that in the light of day, in clear transparency, 
we can, in fact, find the best of all suggestions, evaluate 
them, have our evaluations public and then, ultimately, produce 
better legislation.
    A number of things that we have come, or this Chairman has 
come to believe, every agency needs one Chief Information 
Officer who is clearly in charge. There are 243 CIOs in 24 
major agencies. The Department of Transportation alone has 35 
CIOs. That does not mean that the job is to layoff 34 CIOs. But 
there has to be a structure including a chain of command and 
including real authority to spend the money better, to be held 
accountable for that money and ultimately what budget authority 
needs and a CIO needs is to stop quickly when that money 
clearly is not being as well spent as was anticipated. The 
nature of why we have administration is not simply to spend the 
money that Congress allocates, but rather to spend it better 
than could be possibly considered at the beginning of the 
project.
    The third point that we have come to believe is that 
consolidated resources and expertise make smarter purchases. 
That does not mean that it needs to be consolidated in one 
place. But for any given area of expertise there needs to be a 
best of that you go to. Accomplishing these major reforms will 
not be easy. It will not be done on a partisan basis. It will 
not be done only in the House of Representatives. At the heart 
of the effort is, in fact, the open dialogue about how we 
produce effective spending but not so we buy IT for a few 
dollars less, but, in fact, so that we can protect taxpayer 
dollars from further waste, fraud, and abuse and mismanagement.
    Ultimately, IT is the tool to save and to better spend $3.5 
trillion, not about the $80 billion that we spend on IT.
    And with that, I am please to recognize the Ranking Member 
for his opening statement.
    Mr. Cummings. Thank you very much, Mr. Chairman, and I want 
to thank you for holding this hearing today and picking up 
where you left off.
    What you are talking about, Mr. Chairman, is effectiveness 
and efficiency. And I think that is a good, those are good 
words to capsulize what we are trying to do here. Holding this 
hearing today on the need to reform Government's information 
technology and acquisition policy is so very important. And I 
certainly commend you on your bipartisan approach to developing 
the legislation we are considering today, the Federal IT 
Acquisition Reform Act, and I appreciate that you made a draft 
of the bill publicly available for comment.
    I also want to recognize Representative Gerry Connolly, the 
Ranking Member of the Government Operations Subcommittee, for 
his critical work on these technology issues. Back in May of 
2012, we held a forum in his district. It was well attended and 
it was one that yielded a lot of very valuable information and 
I know that he was very pleased, and I was very pleased, to be 
a part of that.
    A significant portion of the Federal IT Acquisition Reform 
Act is based on Ranking Member Connolly's legislation on 
consolidating Federal data centers and I appreciate you making 
sure that, again, this is a bipartisan effort. I agree with 
both you, Mr. Chairman, and Ranking Member Connolly that 
reforms are needed to ensure that the Federal Government is 
making wise and efficient investments in information 
technology. Every full Committee hearing so far in this 
Congress has focused on wasteful spending, including some in IT 
investments.
    Two weeks ago, the Government Accountability Office issued 
its newest high risk report which includes several IT 
investments. For example, the Department of Defense has 
contracts for a number of enterprise resource planning systems 
to modernize the management of logistics, finances and business 
operations. GAO and the Pentagon's Inspector General have found 
that many of these contracts are behind schedule and 
significantly over budget. For instance, a contract to 
streamline the Army's Inventory of Weapons System is 
unbelievably 12.5 years behind schedule. That is simply 
incredible. And, almost $4 billion over budget.
    Effective oversight is one of the best weapons against this 
kind of wasteful spending. Congress has a duty to conduct 
oversight as well as an obligation to give agencies the tools 
they need to conduct their own oversight. Agencies need more 
well-trained acquisition personnel to effectively oversee 
complex systems and to ensure that the Government is a smart 
and diligent consumer. The Federal IT Acquisition Reform Act 
recognizes this need.
    Congress must also ensure that agencies have the resources 
to hire and retain acquisition professionals. Almost every 
witness we hear from today will testify that the acquisition 
workforce is critical to ensuring that the Government is 
spending its money wisely.
    However, just two weeks ago the House voted to extend the 
freeze on Federal employee pay for a third consecutive year. 
And even worse, at the end of this week, hundreds of thousands 
of employees, including critical acquisition workforce 
personnel across every agency, will face furloughs as a result 
of the indiscriminate across-the-board cuts to agency budgets 
imposed by this sequester.
    We need these employees. Instead of repeatedly attacking 
these key Federal workers, Congress should be pursuing ways to 
retain their expertise, train them in the most cutting edge 
techniques, and support their critical work. If we do that, it 
will pay for itself over and over and over again.
    So, I want to thank each of our witnesses for testifying 
today. I look forward to hearing your thoughts on how Congress 
can most effectively and efficiently modernize the way the 
Government does business and save taxpayers money.
    And again, Mr. Chairman, I want to thank you. And I yield 
back.
    Chairman Issa. I thank the gentleman.
    We now recognize the Chairman of the Subcommittee, the 
gentleman from Florida, Mr. Mica.
    Mr. Mica. Thank you, Mr. Chairman, and thank you, Mr. 
Cummings, for holding this hearing. And it is extremely 
important, especially as we face in the next matter of hours, 
almost now, a very difficult time with our Nation's finances, 
looking for ways to cut spending, to eliminate waste, fraud and 
abuse, that we focus on the dysfunctional manner in which 
Government agencies acquire essential resources such as the 
very basic tools that we have in our operations today, our 
Government operations, of computers, software, business systems 
which are absolutely essential to efficiently run Government.
    It does not appear that just throwing money at these 
problems or spending is, or lack of spending, that is the 
issue. In fact, between Fiscal Years 2002 and 2012, we grew 
from about one-quarter of a trillion to half a trillion 
dollars. The spending went from $264 billion to $514 billion. 
So, half a trillion dollars is a significant amount of money.
    But I think what we will hear today, too, and I hope with 
Mr. Connolly, working with him, to drill down and look at some 
of the instances where we can and we must do a better job, but 
there are instances of again, wasteful approaches. And we will 
hear today from GAO, they found that in almost all cases in 
which IT investments are underperforming, the lack of overall 
skills and experience of the government-led program management 
team is the underlying issue. And I think that it is something 
that we are going to focus on.
    Another area that interests me, coming from the private 
sector, you could never operate a business the way we do 
Government and these Government agencies. But I would like to 
look in depth with Mr. Connolly and the Committee on 
duplicative IT operations. In fact, we will hear today that GAO 
reports in Fiscal Year 2011, our Government funded the 
acquisition of 622 separate human resources systems at a cost 
of $2.4 billion, 580 financial management systems at a cost of 
$2.7 billion, 777 supply chain management systems at a cost of 
$3.3 billion, and the list continues. Most of these back office 
systems perform the same function.
    And I think it is important, the Chairman has worked on 
this, the Committee has worked on this, he has proposed 
legislation that has lagged in adoption and it can solve some 
of these problems. We will hear more details from some of our 
witnesses today, work with them, and hopefully we can get this 
legislation moving and adopt the reforms that are necessary to 
correct the problems that will be exposed here again today in 
this hearing.
    Thank you again. I yield back the balance of my time.
    Chairman Issa. I thank the gentleman.
    We now recognize the gentleman from Northern Virginia, Mr. 
Connolly.
    Mr. Connolly. Thank you, Mr. Chairman, and I want to thank 
you, and I particularly want to thank the Ranking Member, Mr. 
Cummings, for his very gracious remarks.
    I find myself in full agreement with everything you have 
said this morning, Mr. Chairman, Mr. Mica has just said and Mr. 
Cummings has said. When it comes to Federal management of IT, I 
am reminded of John Kennedy's slogan in his first race for the 
Senate, the United States Senate in my home State of 
Massachusetts. His slogan was we can do better. And when it 
comes to the management of Federal IT, we can and must do 
better, whether it is commercial, off-the-shelf IT product 
management or major mission critical custom IT programs.
    Today, Federal IT acquisition is a cumbersome, bureaucratic 
and wasteful, often wasteful, exercise. In recent decades, 
taxpayers have watched tax dollars evaporate into massive IT 
program failures that pair staggeringly high costs with 
astonishingly poor performance. The Air Force, for example, 
invested six years in a modernization effort that cost over $1 
billion but failed to deliver a usable product, prompting the 
Assistant Secretary of the Air Force to state, I am personally 
appalled at the limited capabilities that that program has 
produced relative to the amount of investment.
    The bottom line is all of us should be appalled at that 
kind of performance and it is sadly not limited to the U.S. Air 
Force. Massive IT program failures have real consequences for 
the safety, security and financial health of our Nation. From 
census handheld computers that jeopardized a critical 
Constitutional responsibility to promised electronic fences 
that never materialized, costs of IT failures cripple an 
agency's ability to implement long-term strategic goals.
    For instance, the Office of Personnel Management 
dramatically reduced its claims processing staff in 
anticipation of completing its retirement systems modernization 
program, promising enhanced automated capabilities. 
Unfortunately, when OPM was finally forced to kill this IT 
program, the agency was left flat footed, without the resources 
or manpower to process retirement claims, forcing thousands of 
Federal retirees to experience outrageously long waits to 
receive their benefits.
    Nearly 17 years after enactment of the seminal Clinger-
Cohen Act, it is clear that agency Chief Information Officers 
often lack the necessary authority and resources to effectively 
analyze, track and evaluate the risks and results of major IT 
programs. And here I echo what the Chairman has indicated. We 
have to have somebody who has the authority and responsibility 
centrally in each agency to manage these IT programs and 
investments.
    The GAO has found that many agencies struggle to maintain 
accurate costs and schedule data from Federal IT investments, 
undermining transparency and accountability while rating a 
questionably low percentage of IT programs as high or 
moderately high risk. Yet, the Department of Defense actually 
does not rate a single DOD IT investment as either high or 
moderately high risk. Not passing the giggle test. Meanwhile, 
independent research conducted by the nonprofit institute 
Defense Analyses found that DOD struggled to manage major IT 
modernization programs for nearly 15 years.
    With respect to commercial off-the-shelf IT products, I am 
talking about email and other commercial business systems 
software that could purchase on Amazon.com, far too many 
agencies have spent precious dollars and time creating 
duplicative, wasteful contracts for products and licenses the 
departments already own.
    The status quo is unacceptable and unsustainable, 
especially in light of what Mr. Mica referred to as the pending 
sequestration cliff here. That is why I am glad to be working 
with Chairman Issa and his staff to develop the Federal 
Information Technology Acquisition Reform Act, along with 
Ranking Member Mr. Cummings, to enhance IT procurement policy.
    Addressing Federal IT acquisition policy in a bipartisan 
manner is precisely the type of important substantive work this 
Committee should be conducting and I very much appreciate the 
outreach and the willingness on both sides of the aisle to 
listen and to refine this legislation to try to make sure we 
get it right. When we are investing $81 billion every year in 
Federal IT procurement, we have got to get it right, especially 
as we look at fewer resources overall in the coming decade.
    Mr. Chairman, I look forward to continuing to work with you 
and your staff and I thank you very much for holding this 
hearing.
    Chairman Issa. I thank the gentleman.
    Members will have seven days to submit opening statements 
for the record.
    We now welcome our panel of witnesses.
    Mr. Richard Spires is Chief Information Officer at the 
Department of Homeland Security and Chairman of the DHS Chief 
Information Officer Council and Enterprise Architecture Board. 
Now, that is a long title, but we welcome you back.
    Ms. Cristina Chaplain is the Director of Acquisitions and 
Sourcing Management at the General Accountability Office. Mr. 
Daniel Gordon is the Associate Dean for Government Procurement 
Law Studies at George Washington University. Mr. Stan Soloway 
is President and CEO of Professional Services Council.
    And Mr. Paul Misener is Vice President of Global Public 
Policy for Amazon, previously mentioned as a place that we 
could buy software off the shelf.
    And with that, consistent with the rules of the Committee, 
I would ask that you all rise to take the oath. And raise your 
right arms.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth and nothing 
but the trust?
    [Witnesses respond in the affirmative.]
    Chairman Issa. Let the record reflect that all witnesses 
answered in the affirmative.
    This is a fairly large panel. Some of you are returning 
veterans, so you know the drill. Green light, yellow light, red 
light. By the time it gets to red light, I hope you are saying 
for the final time, and my final point is.
    [Laughter.]
    Chairman Issa. Mr. Spires?

                       WITNESS STATEMENTS

                 STATEMENT OF RICHARD A. SPIRES

    Mr. Spires. Good morning. Chairman Issa, Ranking Member 
Cummings and Members of the committee, thank you for the 
opportunity to discuss how the Federal Government invests in 
information technology to increase the efficiency and 
effectiveness of our Government.
    As a CIO of Homeland Security and the Vice Chair of the 
Federal CIO Council, I speak from real world experience on the 
challenge of delivering highly-effective IT across the Federal 
Government. At DHS, we have made significant strides in IT in 
four key areas.
    First, we are rationalizing our IT infrastructure. So far, 
we have closed 16 data centers as part of our data center 
consolidation initiative, resulting in an average savings of 14 
percent. We are aggressively expanding the use of cloud 
computing across DHS by rolling out 11 cloud service offerings. 
In addition, we have significantly improved our cyber security 
posture through the established of inherited security controls 
in our data centers.
    Second, we are improving program management by instituting 
a rigorous review process of our IT portfolio and implementing 
a number of initiatives to improve oversight, more effectively 
engage key stakeholders and ensure best practices are used in 
running our programs.
    Third, we are leveraging IT across DHS to support more 
effective mission outcomes. Through the use of the DHS 
enterprise architecture and the implementation of portfolio 
governance, we are working to draw synergies from amongst DHS 
components that improve efficiency and effectiveness, eliminate 
system duplication and streamline processes.
    And fourth, we are focusing on IT staff and talent 
development. By establishing IT specific career paths, DHS can 
more formally address how new workers can progress along a 
technical or managerial career track. We are currently working 
to leverage DHS developmental, mentoring and rotational 
programs into this strategy.
    Even with the successes outlined above, there are also 
evolving and increasing expectations from mission customers and 
external stakeholders. We need to, and we can, manage IT more 
effectively.
    I see three root causes that are barriers to having Federal 
IT be on a par with leading private sector firms.
    First, we must standardize our IT infrastructure. An agency 
with a modern, homogenous infrastructure could save as much as 
30 percent on its infrastructure costs, field applications more 
quickly and less costly, and provide improved IT security. 
Given the structure of agency budgets in organizations, it is 
very difficult for an agency CIO to have the tools needed to 
drive such standardization.
    To address this root cause, I recommend we review the model 
used by the Department of Veteran Affairs where the IT 
organizations have been consolidated and consider its 
applicability on a broader basis within the Federal Government. 
Further, I recommend we implement an IT acquisition review 
process in which all IT procurements must be reviewed by the 
agency CIO. This will help ensure that IT procurements meet 
architecture guidelines, are not duplicative and are properly 
staffed.
    As a second root cause, we must do more to develop and 
retain the skills it takes to run and manage IT programs. The 
common denominator for successful program execution is a solid 
program management office. To support this, I recommend we 
establish a program management center of excellence staffed by 
detailees from agencies which would harness best practices, 
tools, templates and training courses and drive the development 
of Federal-wide capabilities that programs can leverage.
    Third and finally, we must find ways to institutionalize 
flexibility to implement IT best practices. Agencies 
leaderships' need for speed and agility has far outstripped the 
procurement and finance models in place in the Federal 
Government today.
    I recommend that we establish a Federal IT strategic 
sourcing organization. This organization, again supported by 
detailees from agencies, would be dedicated to IT's strategic 
sourcing opportunities for Government-wide buying of IT 
hardware, software and services. We can bolster that 
organization through oversight provided by the newly-formed 
Strategic Sourcing Leadership Council.
    Finally, we need to reduce impediments to innovation by 
more fully leveraging existing initiatives to include a digital 
Government strategy and the use of such prize competitions to 
reward vendor innovation in helping us solve Government 
problems.
    Mr. Chairman, I am serving as a CIO today because IT can so 
meaningfully and measurably improve the mission and business 
effectiveness of our Government.
    Thank you for the opportunity to speak to you today and I 
look forward to your questions.
    [Prepared statement of Mr. Spires follows:]
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    Mr. Farenthold. [Presiding] Thank you, Mr. Spires. Right on 
time.
    We now go to the Director of Acquisition and Sourcing 
Management of the GAO, Ms. Cristina Chaplain.
    Ms. Chaplain.

                 STATEMENT OF CRISTINA CHAPLAIN

    Ms. Chaplain. Thank you Mr. Chairman, Ranking Member 
Cummings and Members of the Committee. Thank you for inviting 
me today to discuss the proposed FITARA Act and how our best 
practice work reflects that act.
    Our best practice work provides a roadmap for overcoming 
acquisition problems experienced by IT and any other 
technology-intensive acquisitions such as weapons and space 
programs. At the tactical level, we have identified the basic 
ingredients for success on individual programs, such things as 
defining requirements early on, providing realistic cost 
estimates, and using prototypes to reduce risks.
    At the strategic level, we have identified protocol 
enablers for success such as having the right training and 
support for program mangers and having the right visibility 
over an investment portfolio and strategies that make tough 
trade-off decisions based on cost benefits and risks.
    FITARA emphasizes several of the enablers I have just 
mentioned. It also emphasizes the use of strategic sourcing, 
which is another enabler for generating procurement savings. I 
want to discuss this just a little bit because it is important. 
The Government is very far behind the private sector in this 
regard.
    As you know, strategic sourcing seeks to move an 
organization away from numerous individual procurements to a 
broader aggregate approach. Currently, Federal agencies act 
more like unrelated medium-sized businesses and often rely on 
hundreds of separate contracts for many commonly used items 
with prices that widely vary, including IT.
    Our work has shown that strategic sourcing has a potential 
to generate 10 to 20 percent savings for procurement spending 
and the companies that we studied strategically sourced the 
vast majority of their procurement dollars. By contrast, four 
large agencies we studied strategically sourced just 5 percent 
of their procurement dollars taken together.
    In addition, Federal agencies have been focused on 
strategically sourcing less complex acquisitions, such things 
as office supplies, telecommunications and delivery services. 
They generally do not believe more complex services and goods 
can be strategically sourced because of unique requirements, 
among other reasons. However, the companies we have studied 
have found ways to strategically source these types of items 
and services.
    Also, while some believe we have picked the low hanging 
fruit for strategic sourcing and cannot go further in the 
Federal arena, we have found pockets of success, notably with 
DHS and the Defense Logistics Agencies. For example, in Fiscal 
Year 2011, DHS had reported that it implemented 42 department-
wide initiatives that covered 270 products and services ranging 
from software to professional and program management support 
services. These efforts led to reported savings of $324 
million.
    My written statement does focus mostly on strategic 
sourcing but I would like to emphasize that many of the other 
leading practices we have identified over the years have not 
taken root in the Federal arena. Short tenure of acquisition 
leaders, for instance, still seems to be an issue as well as 
the authority for program managers and, in this case the CIOs. 
There are also those basic ingredients for success we do not 
see fully taking hold yet, such things as defining requirements 
before you start programs, realistically meeting costs and 
providing good oversight.
    In conclusion, best practices can be introduced into the 
Government setting, but we know they do not always take hold. 
What threatens tactics like strategic sourcing the most is a 
lack of leadership, a lack of data and metrics, a desire to 
maintain control, a lack of incentives and weak enforcement. 
Reform sometimes end up adding new layers of oversight and 
bureaucracy rather than streamlining and simplifying and for 
this reason it is important that implementation be closely 
monitored, that early successful adopters be recognized, that 
incentives and disincentives be continually assessed and that 
leaders be held accountable for success.
    This concludes my statement. I am happy to answer any 
questions you have.
    [Prepared statement of Ms. Chaplain follows:]
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    Mr. Farenthold. Thank you very much, Ms. Chaplain. We will 
get to the questions after all of the witnesses.
    Our next testimony will be from the Honorable Daniel 
Gordon. He is the Associate Dean for Government Procurement Law 
Studies at the George Washington University School of Law and 
the former Administrator, the Office of Federal Procurement 
Policy with the OMB. Mr. Gordon?

                 STATEMENT OF DANIEL L. GORDON

    Mr. Gordon. Mr. Chairman, Ranking Member Cummings, Members 
of the Committee, good morning. I am grateful for the 
opportunity to testify before you today regarding the reform of 
Federal IT acquisition.
    This is the first time that I am testifying before this 
Committee not as a Federal employee but as the Associate Dean 
for Government Procurement Law Studies at The George Washington 
University Law School. As you know, GW Law's Government 
Procurement Law Program has, for more than 50 years, been the 
premiere venue for the studying and teaching of procurement law 
in this Country. And I am pleased that we have both students 
and alumns of our program in the room this morning.
    Let me begin by commending you for focusing on improving 
the way the Federal Government buys IT goods and services. 
Despite the criticism and the obstacles you may face down the 
road, I am confident that we can improve the way the Government 
buys IT.
    You are particularly to be commended for your willingness 
to get input, what I think the Chairman referred to as generous 
feedback, from the many and varied stakeholders in this complex 
area.
    We at GW Law School hosted a symposium about this very 
draft bill last October 18th and we heard at that symposium the 
range of views that you have heard in your hearings and your 
other outreach. I hope as the bill moves forward you will 
continue to listen to the stakeholders and I hope this will be 
a genuinely bipartisan effort.
    With respect to the bill, my written statement includes 
comments on various provisions. I am happy to address them in 
question time. Let me highlight a couple of points here.
    First, strengthening the acquisition workforce of the 
Federal Government. I applaud the draft bill for drawing 
attention to the continuing need to strengthen and invest in 
our Federal acquisition workforce such as the provisions on the 
IT acquisition cadres and a more secure source of funding for 
them.
    It was striking to me that in last month's hearing before 
this Committee, private sector witnesses talked about the 
importance that they attach to demonstrating to their employees 
how much they are valued. No successful company would treat its 
employees the way Federal employees have been treated recently, 
repeated pay freezes, threats of unpaid furlough days and 
general disrespect, as if our employees were causing our 
Nation's fiscal imbalances.
    Second, reducing wasteful duplication in IT investment and 
contracts. During my service as Administrator for Federal 
Procurement Policy, I saw example after example of multiple 
agencies, and sometimes multiple components within a single 
agency, spending time and resources creating duplicative 
contracts for the same goods or services.
    It is for that reason that I am particularly supportive of 
the draft bill's effort to support strategic sourcing and to 
require that agencies establish a business case before they 
issue a solicitation that would create a new contract for goods 
or services already available under existing interagency 
contracts. And for the same reason, I support the draft bill's 
effort to increase the transparency of blanket purchase 
agreements.
    Apart from these comments on the draft bill's provisions, 
allow me to briefly mention a couple of additional factors that 
I think that you will want to keep in mind as you move forward.
    First, there are limits to what legislation can do in this 
area. The problems that plague large Federal IT projects, in 
particular, are often the result of management weaknesses in 
both acquisition planning and contract management. And they may 
not lend themselves to improvement through legislation.
    Second, the Federal Government should learn from 
industries' practices but it cannot always copy them. We all 
agree the Federal Government should be focused on low prices 
and high quality, just like private companies. Unlike private 
companies though, Federal agencies have to ensure competition, 
transparency and small business participation that our laws 
require and that our citizens expect from the Government.
    In addition, Federal agencies face some unique obstacles. 
As members of this Committee well know, we generally insist on 
agencies using one year appropriations in their IT 
acquisitions, a constraint that no private company has to deal 
with. I will not go on and talk about the impact of continuing 
resolutions and sequestration that is certainly an obstacle 
private companies do not face.
    In conclusion, and the final point, many of the challenges 
before this Committee are genuinely difficult and it is best to 
proceed with caution. Legislation can be a blunt instrument and 
there is a risk that even the best intentioned legislation will 
lead to unintended and undesirable consequences.
    But in conclusion, let me again commend you for your work 
in this important but challenging area and thank you for the 
opportunity to appear before you today. I look forward to 
questions.
    Thank you.
    [Prepared statement of Mr. Gordon follows:]
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    Mr. Farenthold. Mr. Gordon, thank you very much.
    We will now go to our next witness, Mr. Stan Soloway. He is 
the President and CEO of the Professional Services Council. Mr. 
Soloway?

                   STATEMENT OF STAN SOLOWAY

    Mr. Soloway. Mr. Chairman, Mr. Cummings, on behalf of the 
360 member companies of the Professional Services Council and 
their hundreds and thousands of employees across the Nation, we 
want to thank you for the opportunity to share our thoughts 
with you this morning.
    The legislation before us is both timely and important. And 
while we do have some concerns with the current draft, we 
strongly support its focus and intent and look forward to 
working with the Committee on further refinements.
    Clearly, the time is right for a thorough review of the 
progress that has been made, or not, and of the ways in which 
we can rapidly and effectively ensure even greater progress in 
the future to foster an environment that enables the Government 
to access the best and most innovative solutions at the best 
possible price while also enabling this critical industry to 
continue to invest, innovate and improve its service to the 
Government.
    In today's environment of constrained resources, budget 
instability and dynamic workforce changes, that challenge has 
never been more difficult nor more important. This fact was 
highlighted in our biennial Acquisition Policy Survey of dozens 
of Federal Government acquisition officials who made eminently 
clear their concern that the state of acquisition and the 
acquisition workforce has not noticeably improved over the last 
decade or more despite enormous investments of time and money. 
And it is the foundation of the CEO Commission PSC formed 
earlier this year which will be reporting in April its 
perspectives on how to drive efficiency and innovation in a 
time of resource constraints.
    Hence, we are deeply committed in working with you and the 
Committee on this important bill. As difficult as the 
challenges before us might be, we also have a unique 
opportunity to fundamentally transform how Government utilizes 
technology and in so doing to dramatically improve Government 
performance and efficiency.
    With regard to the legislation, we strongly support the 
direction to bolster the role and effectiveness of Federal CIOs 
by providing them with greater budgetary and personnel 
authorities. Similarly, we are very supportive of the data 
center consolidation provisions and the creation of Assisted 
Acquisition Centers of Excellence provided that the 
requirements include adequate flexibility with regard to the 
actual nature and structure of those centers. Of greatest 
importance is ensuring that they each share the qualities and 
capabilities that are the hallmarks of excellence and best 
practices.
    There are also several aspects of the bill we believe merit 
additional attention in order to ensure the achievement of the 
bill's stated objectives. Key among them is the treatment of 
so-called commodity IT and the creation of a Commodity IT 
Acquisition Center.
    First and foremost, the very term commodity IT is fraught 
with risk and must be used with great care. Contemporary 
information technology offerings often involve myriad hardware, 
software and services solutions, some of which are highly 
complex, others of which are far simpler, more routine and more 
static. It is essential that any discussion of commodity IT 
include clear definitions and context so that this critical 
distinction is adequately and fully accounted for in both 
policy and strategy.
    And while the legislation does mandate that such 
definitions be developed by OMB, we believe that the 
legislation itself should address these distinctions and make 
clear the importance of avoiding a one-size-fits-all approach.
    We are also concerned with the tendency of some to equate 
commodity IT with commercial IT. While most commodity IT is 
commercial, a great deal of commercial IT is anything but a 
commodity. This distinction must also be very clear in the bill 
and reflected in any strategy associated with strategic 
sourcing or other approaches.
    This is also where the issue of buying for value versus 
price is so critical, which was alluded to by the Chairman in 
his opening remarks. Today, across Government, we witness the 
dominance of low-priced, technically-acceptable acquisition 
strategies both in name and in practice. For commodities, this 
might be appropriate.
    For more complex requirements, clearly it is not. 
Especially in a resource-constrained environment, it is more 
incumbent than ever on the buyer to ensure that their 
strategies are truly appropriate to their requirements and that 
where real complexity and risk is involved, where continuous 
improvement and innovation is called for, the best of the best 
are selected and incentivized for long-term success.
    We also believe that additional attention needs to be paid 
to the issue of competition, the single most effective means by 
which to drive costs down and performance up. One goal of the 
legislation must be to expand the competitive ecosystem and to 
preserve robust competition where it exists. This involves 
carefully assessing unique practices and policies that serve as 
barriers to entry as well as resisting efforts to significantly 
roll back current statute in ways that could cause current 
market participants to exit.
    So, it also means that we need to avoid overly limiting 
contract options. While the proliferation of multiple award 
vehicles has certainly created overlap and may have gone too 
far, it is also important to not allow that pendulum to swing 
back too far in the other direction. It is to the advantage of 
the Government to have multiple competitive contract vehicles 
that can be tapped for its IT and other requirements.
    This is the core of our concern with the creation of a 
single Commodity IT Center. That concern is exacerbated by the 
proposal to give the center both policy-making and purchase 
authority. Doing so, we believe, could create a conflict of 
interest that is actually at odds with the Government's best 
interests.
    Finally, we greatly appreciate the attention paid to the 
human capital dimension but believe more could be done to 
bolster the ranks of the acquisition and technology workforces 
through this legislation. We face a series of very distinct but 
connected human capital challenges and skills gaps that must be 
addressed holistically to include new strategies for workforce 
recruitment, development and training. Long-term success will 
simply not be possible without a well-resourced creatively and 
effectively developed and supported Federal acquisition and 
technology workforce.
    Whatever we have been doing for the last decade has clearly 
not been enough and this is a challenge we can no longer 
ignore.
    Mr. Chairman, Mr. Cummings, that concludes my oral 
statement and I look forward to your questions.
    [Prepared statement of Mr. Soloway follows:]
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    Chairman Issa. [Presiding] Mr. Misener.

                   STATEMENT OF PAUL MISENER

    Mr. Misener. Good morning, Mr. Chairman, Mr. Cummings and 
Members of the Committee. Thank you very much for inviting me 
to testify today on behalf of Amazon.com and our customers on 
the reforms proposed to the draft FITARA legislation.
    Amazon opened on the worldwide web in July, 1995 and after 
a decade of building and running a highly-scalable web 
application known as Amazon.com, we embarked on a mission of 
serving a new customer segment, including businesses and 
Government agencies with a cloud computing business called 
Amazon Web Services or AWS.
    Today, AWS provides a highly-scalable, reliable, secure and 
low-cost infrastructure platform in the cloud that powers 
hundreds of thousands of enterprise, Government, education and 
start-up organizations. Customers include over 300 Government 
agencies. Notably, Amazon.com, the largest on-line retailer in 
the world, has itself adopted cloud computing services provided 
by AWS to enable rapid innovation and growth, to transform how 
we deliver our services to customers and to lower our IT costs 
substantially.
    One way to think about cloud computing is that, instead of 
buying, owning and maintaining data centers or servers, 
Government agencies, business and developers can acquire 
technology resources such as compute power and storage on an 
as-needed basis and dispose of it when it no longer is needed.
    The benefits of cloud computing to its users are first, 
users pay only for what IT they actually consume and only when 
they consume it. Second, expensive are lower than if the user 
self-provided the IT. Third, users do not need to guess their 
capacity needs. Fourth, virtually unlimited capacity is 
available to users within minutes. And fifth, cloud computing 
allows the users scarce technical talent without focus on its 
core mission, not on maintaining infrastructure to support it.
    Cloud users who enjoy these benefits include Federal 
Government users. Amazon supports Federal IT acquisition 
reform. Given the benefits I have just described, Amazon 
believes the principle aim of Federal IT acquisition reform 
legislation should be to facilitate Federal Government 
acquisition of cloud computing services.
    Amazon also generally supports the aims of the FITARA draft 
released last fall. Although we are not experts in several of 
the areas covered by the FITARA draft, we do know about cloud 
computing and serving public sector customers. So, here we 
offer our views on where the draft excels with respect to cloud 
computing and where we believe it could be improved.
    Title I of the FITARA draft would give Federal agency CIOs 
more authority and budget flexibility. Amazon supports this 
idea and believes it would lead to the adoption of more 
efficient solutions including cloud computing by Federal 
agencies. One area where CIOs should be given more authority 
and flexibility is with respect to spending models, 
specifically capital expenditures or CAPEX versus operating 
expenditures, OPEX.
    Title II of the draft already is strong but it should be 
strengthened to help Federal agencies provide Government 
services more efficiently. In Section 203, we recommend 
including a direct link between the required plan for 
implementation of the Federal Data Center Optimization 
Initiative and OMB's Cloud First policy.
    In Section 204, FITARA should explicitly clarify that using 
commercial cloud services is an equally valid is not preferred 
way to comply with the data center consolidation mandates 
because commercial service providers can make available more 
compute power and storage for a fraction of the cost based on 
what agencies actually use.
    Section 214 recognizes as a Sense of Congress the overall 
importance of cloud to Federal IT acquisition reform. However, 
without changes to the budget and acquisition process, the 
benefits of cloud computing may not be fully recognized by the 
Federal Government as soon as they could be.
    We support the development of Assisted Acquisition Centers 
of Excellence under Section 302. We believe that these centers 
could be well-positioned to examine and incorporate innovative 
approaches including pay as you go utility price models to 
acquire and deploy cloud computing services.
    In closing, Mr. Chairman, I would like to thank this 
Committee for working with the IT industry and other 
stakeholders as this legislation is developed and formally 
introduced. Amazon believes that the Federal Government, on 
behalf of the people it serves, would benefit greatly from 
expanded use if cloud computing. With FITARA, our Nation has an 
opportunity to eliminate duplication and waste but also, with 
the changes we have suggested today, to accelerate the adoption 
of technologies and practices that transfer how the Government 
performs its functions.
    We look forward to continuing to work with you and your 
Committee and thank you again for inviting me to testify. I 
look forward to your questions.
    [Prepared statement of Mr. Misener follows:]
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    Chairman Issa. I hope you do. I will now recognize myself 
with some short questions.
    Mr. Spires, how many CIOs are there in the network of CIOs 
of the Federal Government?
    Mr. Spires. I think you recognized earlier, you said 
hundreds of CIOs in the Federal Government.
    Chairman Issa. Well, the reason I did was because when we 
asked the Office of Management and Budget how many there were, 
although we have estimates and we have used numbers, OMB said 
OMB does not have a role in nor does it manage the direct 
hiring or titling of positions for specific agencies. In other 
words, you can make as many as you want. It is an agency 
decision and they can have a lot.
    Now, you had a council of people with the CIO title. How 
many do you have within your council?
    Mr. Spires. There are 13 of us, sir.
    Chairman Issa. And, as the chief, how do you feel about 
having 13 titles none of whom have budget authority? Is that 
really, is that manageable to have to create a council of 
chiefs and none of you in the room have direct and absolute 
budget authority?
    Mr. Spires. It is a true statement that none of us have 
absolute and direct budget authority. If I could frame what I 
see as the issue around this, we find ourselves in a position, 
and it really is a structure of the way Government is funded, 
right, so that budgets, like at Department of Homeland 
Security, are appropriated at the component level, like to FEMA 
and to CBP. And so they control those budgets.
    Chairman Issa. Well, let me stop you for a second.
    Mr. Spires. Sure.
    Chairman Issa. I completely concur that the dysfunctional 
way we do things down the hall at Appropriations and have done 
it, which is a chicken or the egg, Government formed this way, 
appropriators formed to match Government, Government then 
continued to conform to a system that had been established. So, 
as we have gone from two or three secretaries that George 
Washington had to a plethora of them and more being asked for, 
and then sub agencies, we have created, everybody gets a little 
pot of money. That is pretty much from George Washington until 
now how we got here, right?
    The question for you is, should money be allocated to IT 
and be reprogrammable and spendable in a way that although you 
anticipate an awful lot, there is accountability to a major 
block for that money being spent, not spent, converged into a 
common pool of money to do a job better, or, in fact, request 
reprogramming to use an appropriator term, but have a single 
point of accountability that ultimately has plenty of little 
chiefs but somebody in a major agency can say I have got $6 
billion and I will be darned if I will waste it.
    Mr. Spires. Well, by the way, that is the way I feel every 
day when I get up, sir. I have got $6 billion and I do not want 
to waste a penny of it.
    Now, that being said, I concur with the concept that I need 
to, as the CIO as Homeland Security, drive real efficiencies. 
My first thing I talked about as what we need to fix is this 
issue of standardizing IT infrastructure through things like 
cloud computing. We need to do that to drive the efficiencies, 
okay? So, the model I am espousing, however that is done, all 
right, does that need to be full budget authority? That is one 
model and I think you should look at that model. There may be 
other ways to do it. But I need to be able to drive that set of 
efficiencies one way or another.
    Chairman Issa. I appreciate that and we will get back to 
you on that.
    Ms. Chaplain, not to take the absolute of my explanation, 
but if we continue the way we are with pockets of money spread 
into hundreds or perhaps thousands of little fundings, don't we 
almost guaranty that the big picture, the big solutions, the 
big let us converge on the cloud and save money, just simply 
will not happen?
    Ms. Chaplain. Yes, and I think many, many studies point to 
the issue of diffuse authority, most recently in DOD, and I 
think if you do not have a single point of accountability, 
someone who actually can stop projects and has good visibility 
over the portfolio that can act on that, you do have a problem 
that is going to remain.
    Chairman Issa. Any other weigh-ins from the other 
stakeholders here? Let me follow up with another question. I am 
going to go to Amazon. And thank you for saying you look 
forward to my questions.
    If there are five Federal entities and they decide that 
they want to all be on a, and let us just assume they are on 
Microsoft Exchange, and they want to all be together in one 
cloud and have all the bandwidth necessary or all the DADS and 
other resources necessary that they had, but be on one 
convergence, how long does that take at Amazon? Do you have an 
idea?
    Mr. Misener. Well, thank you, Mr. Chairman, and I do look 
forward to the questions like this.
    Our experience has been that we can move very quickly. That 
is part of the beauty of cloud. You can ramp up and ramp down 
as quickly as you need. And so, it can be, we had an experience 
with a Federal agency who had a mission and knew that they 
could accomplish it in the cloud about 18 months faster than 
doing it on their own and yet they were not able to make 
anything but a capital expenditure.
    So, they ended up having to wait over a year, they spent $1 
million on it, when it could have cost them about $120,000 a 
year instead.
    Chairman Issa. Well, let me ask two questions that I know 
the answer to so I can yield time to the other side now. One 
is, is it not true you sell time essentially and processing by 
the minute?
    Mr. Misener. Yes.
    Chairman Issa. That you buy everything incrementally so 
that you buy, you pay for only what you buy?
    Ms. Misener. That is correct.
    Chairman Issa. And is it not true that a typical company, 
if 10 of us had our own exchanges that we could all be in the 
cloud in hours at the minimum and days at the longest for a 
standard off-the-shelf product like Microsoft Exchange?
    Mr. Misener. Well, it is minutes if you are a small 
enterprise. So, you can get on the cloud very quickly. It 
really is measured in that. And obviously more complex needs 
from enterprises or Government agencies, we want to be able to 
work directly if necessary with those customers to ensure that 
they get what they want.
    But again, certainly it depends on the scale, but we are 
faster.
    Chairman Issa. Okay. And then I have an exit question, I 
have got to go to the gentleman from, I think Massachusetts, 
next. Is it not true that there are many other companies 
somewhat like Amazon, that we did not bring you here as the 
only one that could do it but that, in fact, whether it is 
Rackspace or lots of other companies, there are companies who 
provide similar services and there are no barriers to entry so 
you could have 100 bids of people who could do various 
Government cloud transfers?
    Mr. Misener. Correct. And we are enthusiastic believers in 
the cloud, both as a provider and as a user of it.
    Chairman Issa. Thank you.
    We now go to the gentleman from Massachusetts.
    Mr. Tierney. Thank you. Let me just pick up from there. Are 
there any security concerns or risks that we ought to be 
considering in talking about encouraging people to use the 
cloud?
    Mr. Misener. Security is enabled by cloud. We are, because 
of our scale, we are able to dedicate more resources and invest 
more in policing and getting out ahead of threats in a way that 
smaller enterprises just cannot. And so, it actually is an 
enabler of security.
    Mr. Tierney. So, the Administration is already sort of 
heading in that direction and encouraging people on that. Do 
you think that putting incentives into this bill is a positive 
step or a necessary step?
    Mr. Misener. Well, I think it is more permissions. The CIOs 
need the permission to be able to get cloud services. They need 
the permission to be able to go to an operating expense model 
rather than a capital expenditure model. I cannot tell you how 
many times we have had circumstances where the CIO wants to do 
it, but cannot, or believes that he or she cannot. That is a 
real impediment.
    The theme that we see is that the CIOs get it. They 
understand what is going on. They understand what is needed. 
They understand that it can be as secure as they want it to be. 
But they are not allowed, because of procurement policies, to 
go and get it.
    Mr. Tierney. Do you think the bill goes far enough?
    Mr. Misener. No.
    Mr. Tierney. What would you do, in addition?
    Mr. Misener. I would specify in many places that cloud 
computing is something to be considered as an option, not 
forced upon CIOs, but at least give them the option to do it 
and make sure they have the flexibility to spend money as an 
operating expense, not just as a capital expense.
    Mr. Tierney. Can you give us an example of something that 
Amazon utilizes as a best practice that is not captured in this 
bill but you think it might be beneficial to the Federal 
Government?
    Mr. Misener. Well, we pride ourselves on doing our very 
best to serve our customers in whatever their needs are. So, 
for example, we are happy to work through integrators, large, 
our partners, to serve Federal Government agencies. We are also 
happy to work directly with the Federal Government agencies if 
they so choose.
    And so, we try to be as flexible as our customer needs 
demand. We have helped them get FISMA approvals, for example, 
when they need it. And these sorts of customer-centric 
approaches are ones that say that, you tell us what you need, 
and we will provide it.
    Mr. Tierney. I have no further questions, Mr. Chairman.
    Chairman Issa. Would the gentleman yield for a second?
    Mr. Tierney. I will yield. Certainly.
    Chairman Issa. Wouldn't you always also characterize that 
when you are in the cloud, by definition, if you are doing a 
hundred different agencies and there is a patch, an upgrade, a 
security change that typically the integrator of many, many 
stations is going to be able to do that for all the customers 
in real time much quicker than you would do at a typical 
offsite where they would have to learn about it and then they 
have to, the IT people have to go in and do it on servers 
locally?
    Mr. Misener. Yes, Mr. Chairman. The countermeasures that we 
can deploy we can deploy globally in an instant. That is why we 
are able to keep out in front of the threats just by virtue of 
scale. It is not because we are more virtuous but the scale 
that we have allows us to take care of those threats in 
advance.
    Chairman Issa. Thank you. I thank the gentleman.
    Mr. Tierney. May I reclaim my time for a second? I just 
want to yield it to Mr. Connolly who wants to make a statement.
    Mr. Connolly. I thank my colleague. Actually, I did not 
want to make a statement. I wanted to use a little bit of extra 
time to get some more feedback.
    Chairman Issa. The gentleman is recognized for a total of 
seven minutes. Let us just get it all done at once.
    Mr. Connolly. Thank you, Mr. Chairman. Thank you very much.
    Chairman Issa. Go ahead.
    Mr. Connolly. Mr. Gordon, the bill, the draft bill we are 
talking about addresses open source, open source software, and 
it requires OMB to issue guidelines on its use and 
collaborative development. Do you think that would be, would 
have been a useful provision, if it had been in law when you 
had your previous position?
    Mr. Gordon. Thank you, Mr. Connolly. It is very important 
for there to be technology neutrality in this area. And I 
think, I am not an IT expert and my colleagues on this panel 
may have more to add on this, but my sense is that we need to 
be very careful to keep competition open and to be 
technologically neutral. If that is the intent of the bill's 
language, I am very supportive of it and I think it would be 
helpful.
    Mr. Connolly. Could it save money, Mr. Spires?
    Mr. Spires. Oh, absolutely, sir. In fact, we are using open 
source in numerous ways now within DHS and we look to use more 
of it into the future.
    Mr. Connolly. Is there a differentiation of pricing in 
various contracts within the Federal family on off-the-shelf 
and open source?
    Mr. Spires. I mean, back to what Mr. Gordon was referring 
to. We want flexibility. We want to do what is in the best 
interests of the taxpayer in this regard. And we will be 
assessing all solutions and more and more we are looking at 
open source solutions to meet our needs.
    Mr. Connolly. Do you think that the Government could and 
should rely more often on open source software when it buys new 
products?
    Mr. Spires. I will go back to we need to do that 
assessment. I am not suggesting that we have an open source 
first policy. I think we have to look at both open source and 
standard products and what best meets the need for the Federal 
Government. But with the maturity of where open source is 
today, we can use it in mission operations spaces in a secure 
manner.
    Mr. Connolly. Mr. Soloway, industry's point of view about 
that?
    Mr. Soloway. I think we are all in alignment on the basic 
question of open source and the needed flexibility. If I might 
just go back to a point that was made a moment ago, the 
discussion of cloud computing and the role of cloud, I would 
offer a couple of contextual comments.
    Number one, I do not think there is any disagreement about 
the cloud. I think there is still inconsistency in the agencies 
as to what they define as the kind of cloud they want to go 
into, whether it is their own, whether it is a broader 
commercial offering, and I think that issue is one that has not 
yet sunk in in the National security environment. There is 
still a lot of discussion and debate. So, there is a cultural 
issue that needs to be addressed there.
    The second point I would make is, and, Mr. Chairman, you 
made this comment earlier about the access to the commercial 
base and commercial best practices, even as we talk about that 
in this hearing, we are seeing a stark pulling back by many 
agencies of Government from commercial business practices on 
the acquisition side.
    The Department of Defense has tried for two years in a row 
to dramatically change the definition of a commercial item or 
service which, in fact, would have taken Amazon pretty much out 
of the Federal space because I discussed it with them and 
others who came in as a result of some of the reforms put in 
place by Clinger-Cohen and earlier legislation.
    So, we need to align the goals of our technology and IT 
policy with the acquisition policies and practices we expect 
and demand. One can have tremendous transparency and 
accountability and still use commercial best practices. But, 
unfortunately, we see a disconnect there between the 
acquisition and technology communities that I think we need to 
overcome.
    Mr. Connolly. I guess by implication in terms of what you 
just said, you do not feel that the language in the draft bill 
goes far enough in that respect?
    Mr. Soloway. No, I do not think, I think the language in 
the draft bill addresses the basic question. As I said in our 
testimony, I think there is more definitional context that is 
needed. I think there are some risks to the term commodity IT 
because it tends to be overused when it is, something is or is 
not a commodity. We are seeing buying practices across 
Government that assume everything is a commodity, which is not 
the case. So, some more context and definitional support, I 
think, would be important.
    But also going back to Mr. Spires' comment, maybe the most 
important thing would be substantially enhancing the focus on 
the workforce that the bill addresses. As I said, our 
Acquisition Policy Survey was stunning this year in that we had 
more than four dozen Federal acquisition leaders say to us, 
things are just not any better than they were a decade ago.
    We have a huge, huge problem. We do not support and empower 
the workforce. And, frankly, I think we could make an argument 
that we probably do not develop, train and advance them in the 
proper way. And so perhaps a fundamental rethinking to the 
point Mr. Spires talked about with the Program Management 
Center of Excellence gives you an opportunity on the civilian 
side to do something that has never been done before.
    What does program management mean? What kind of workforce 
of the future do we want and need and how do we best develop 
them? If you go to best commercial practices, they do not look 
anything like the way we develop our acquisition community in 
the Federal Government.
    Mr. Connolly. Yes. I think maybe we do need to beef up the 
people part, the personnel part, of the draft legislation. I 
take your point very much. I know when I was in the private 
sector we were always experiencing the good, the bad and the 
ugly in terms of skill level in managing large, complex IT 
contracts.
    Mr. Soloway. One of the stunning statistics that is 
relevant to this bill, and it is in the written testimony, is 
as much as we talk about the graying of the Federal workforce 
and having four times as many people over 50 as under 30, in 
the IT workforce in Government it is dramatically worse. 
According to the Office of Personnel Management, we have seven 
times as many people over 50 as under 30 in the IT workforce.
    Mr. Connolly. Careful about that.
    [Laughter.]
    Mr. Soloway. Well, I am of that same age, sir.
    Mr. Connolly. Those are Renaissance men and women.
    [Laughter.]
    Mr. Soloway. The point being, of course, that it is the 
diametric opposite of what you see in the commercial space.
    Mr. Connolly. Yes. In my last one minute and 28 seconds, 
Mr. Gordon, Mr. Spires talked about, and the Chairman laid out, 
sort of the multiplicity of CIOs and respective areas of 
responsibility. It is so diffuse as to mean there is no really 
one locus of responsibility.
    Do you think the bill as currently drafted adequately 
addresses that and gives the proper authority to a person, a 
point person, in each Federal agency and if not, how can we 
improve on it?
    Mr. Gordon. I think the bill is commendable in trying to 
focus on having a person on the CIO side of the house. The only 
points of caution I would add for consideration as you go 
forward, and this may be more report language than statutory 
language, is that you do not want the CIO to be a bottleneck. 
You want a high level person to make high level decisions. You 
do not want every small IT decision to be sitting on her or his 
desk to get decided. That is one thing.
    And a second thing, something that I have been worrying a 
lot about over the last 10 years, there is a risk of imbalance 
between the contracting workforce and the IT workforce. If you 
give too much power to the IT workforce and exclude the 
contracting workforce, you are going to lose the advocates for 
small businesses, the advocates for competition, following the 
FAR. That is why I have always been in favor of integrated 
teams with clear leadership. Thank you.
    Mr. Connolly. Mr. Chairman, my time is up. Would you 
indulge Mr. Spires to be able to answer that question?
    Chairman Issa. Absolutely.
    Mr. Connolly. I thank the Chair.
    Chairman Issa. Thank you, sir.
    Mr. Spires. A couple of points regarding this. Under the 
structure that I think would be best for larger departments and 
agencies, the central CIO, the individual in my role, does have 
that high level view but is also driving those enterprise 
capabilities that are leverageable then by all. And we talked a 
lot about cloud computing. I am a huge believer in it. We have 
11 cloud-based services. I serve on the JAB at FedRAMP. That, I 
think, can be transformational to deal with some of the 
security issues that were raised.
    So, the notion then is once we have that infrastructure 
layer at an enterprise level standardized and modern, then the 
individuals within my components, like FEMA, they can focus on 
that value add, what is the functionality, how do we help the 
mission deliver more effectively. What we have right now is too 
many people out on the edge worried about infrastructure, 
worried about things they should not be worrying about. I 
yield.
    Chairman Issa. Thank you. And now we go to the very young 
but prematurely gentleman from Michigan, Mr. Walberg.
    Mr. Walberg. That is probably the most unusual introduction 
I have had.
    [Laughter.]
    Chairman Issa. And I want you to live up to that youth, 
young, you now, you are not over 50 yet, so it is a lie on your 
birth certificate.
    Mr. Walberg. Just keep feeding me good chocolates and nuts. 
That will work fine.
    Mr. Spires, I hesitate in a sense talking about a 
congressional budget cycle because I am not sure if one of the 
Houses understands there is a budget cycle.
    [Laughter.]
    Mr. Walberg. But in any case, what impact does the 
Congressional budget cycle have on IT redundancies and wasteful 
spending?
    Mr. Spires. Well, it certainly makes it difficult at a 
program level, this notion, and Mr. Gordon alluded to it, of 
having one year funding, it really does make it very difficult 
to do good planning. And then when you get into things like 
continuing resolutions, and we are jammed up trying to actually 
issue procurements and complete procurements in a very short 
time frame near the end of a fiscal year, those things are just 
not best practice management or IT best practice. So I would 
look for more flexibility.
    Mr. Walberg. What are those flexibilities?
    Mr. Spires. Well, I mean, multi-year funding helps us and 
we do have some of that in certain instances so that we can, I 
mean, even though we move to more agile programs and we are 
getting releases out in four to six months on many of our 
programs, that does not mean we are going to complete the whole 
thing within one year. I mean, many of these are complex 
systems that take multiple releases. And so we need the kind of 
time frame to do the right kind of planning.
    And I also think more portfolio types of budgeting so that 
we have more flexibility. If we are in a cloud-based 
environment like we have development and test as a service and 
we can turn out product sometimes, I am saying simpler 
applications, within a matter of a couple of months, that does 
not fit with any Government budget cycle. But we need to have 
that kind of flexibility.
    So, if you will, funding us by a portfolio, an area. And 
then on the flip side what we owe you back is real 
transparency. What are we doing, how are we oversighting that, 
how is the progression going, what decisions did we make and 
how we made those decisions to allocate those funds, we owe you 
that transparency.
    Mr. Walberg. And an end zone that you ultimately get to as 
well.
    Mr. Spires. That is true, sir. I agree. What is our 
objective, why do we need that portfolio money and what are we 
trying to achieve with it? That is fair. Very fair.
    Mr. Walberg. Let me follow up. Our legislation provides 
CIOs with both a broader budget authority as well as more 
flexible use of revolving and capital working funds. Is that 
the right approach?
    Mr. Spires. I think it goes back to the Chairman's 
discussion around the budget authorities. One way to do this is 
through those types of revolving funds, working capital funds. 
We have such a fund within DHS that we use to fund enterprise 
IT. I will say it is somewhat cumbersome but it does work. And 
so, if you are not going to, it is way at least to get the 
funds together.
    Although I will tell you, even in that kind of model, one 
of the problems that I have in trying to drive enterprise 
services is that it might be good for all of DHS, but if it is 
not good for a particular component, they are not going to play 
ball with you well. They are not going to want to do that. And 
this is a discussion I have many times with the CIO. I am 
talking to the CFO of that component. I am even talking to the 
head of that component because I am trying to optimize and 
provide, if you will, enterprise capabilities across the 
enterprise. So, that is an issue that we deal with by not 
having that consolidated funding for IT.
    Mr. Walberg. Thank you. Mr. Gordon, in your testimony, you 
raised the concerns that there are limits to what legislation 
can accomplish. What are those limits?
    Mr. Gordon. Thank you, sir. I would, it may be worth 
thinking of IT acquisition as divided into two different types, 
very big projects and then purchases of small things, hardware, 
software, software licenses. The very big projects in many ways 
are more like DOD's major weapons systems. The challenges we 
face are acquisition planning, very tough to legislate 
acquisition planning, contract management, a tough area to 
legislate. The idea of a CIO and strengthening the CIO does go 
to large projects and may be helpful. But much of what I see as 
positive in the bill is actually relevant to those smaller 
purchases, the strategic sourcing and the other areas.
    Mr. Walberg. Does our bill run afoul of those concerns?
    Mr. Gordon. No, not at all, sir. It is just that the bill 
does not, and it does not need to, distinguish between big 
projects and the small purchases or relatively small purchases. 
They are just different issues and the bill actually includes 
some positive things with respect to both. I do not see 
problems with respect to either one on a large scale in any 
event.
    Mr. Walberg. Okay. You mentioned in your testimony that 
Government can learn from industries best practices but cannot 
copy them. Can you elaborate on that in five seconds?
    [Laughter.]
    Mr. Walberg. Take a little time.
    Mr. Gordon. Sure. There are all sorts of things that 
industry can do that we cannot do in the Federal Government. 
You have heard about the appropriations problem, the 
competition issue. I will say, though, that I think that the 
Government has more flexibility in its procurement system 
today. In fact, I did not quite understand Mr. Misener's 
reference to procurement policy getting in the way of shifting 
to the cloud. I think we already have a lot of flexibility 
under our procurement system.
    We do have to worry about things like small business 
participation, like transparency, that the private sector does 
not need to worry about. But overall, I think our procurement 
system can succeed and this bill is pushing us, I think, in a 
helpful direction.
    Mr. Walberg. Thank you. And thank you, Mr. Chairman.
    Chairman Issa. Thank you. As I go to the Ranking Member, 
Mr. Gordon, if I could summarize what you said? We cannot 
legislate out stupidity.
    [Laugher.]
    Mr. Gordon. I do not think I actually used those words.
    [Laughter.]
    Mr. Gordon. But good management, as you know from your 
experience before you came to Congress, sir, good management is 
something that you just cannot do by legislation.
    Chairman Issa. And as we go to the Ranking Member, that is 
the point and the reason that we have to invest in our Federal 
workforce every single day.
    I recognize the Ranking Member.
    Mr. Cummings. Mr. Soloway, you said in your written 
testimony, and I quote, long-term success is simply not 
possible without a well-resourced, creatively and effectively 
developed and strongly supported Federal acquisition and 
technology workforce.
    Do you believe that making investments in the acquisition 
workforce now will pay off with cost savings in the long term?
    Mr. Soloway. Absolutely, if the investments are properly 
targeted and made. I think we have spent, over the last decade 
or more, a tremendous amount of money trying to develop the 
acquisition workforce. When I was in the Defense Department in 
the 1990s, the Defense Acquisition University was part of my 
portfolio. I had a $100 million budget for acquisition 
training.
    The question I think that needs to be asked is similar to 
the question the Chairman has asked with regard to the 
foundation for this bill. It has been 17 years since Clinger-
Cohen. Why are things not better? It has been 20 years since 
the Federal Acquisition Reform Act. Why is our acquisition 
workforce still so beat down, under resourced and, frankly, 
under empowered. What we see on the acquisition side, this may 
be the dichotomy between what Mr. Gordon and Mr. Misener are 
seeing, it is not a matter of policy, it is workforce that is 
not incentivized to use critical thinking skills, to take some 
reasonable element of risk to know that their leadership will 
support them if they make a mistake or things go south which 
they inevitably do for reasons having nothing to do with what 
they did.
    Mr. Cummings. Wait, wait, wait. So it is not about being 
properly trained? Is that what you are saying?
    Mr. Soloway. No, I think that we have not necessarily done 
the right kind of training. I think there are gaps in the 
training. I think there are gaps in the degree to which we 
empower that workforce and support them.
    Mr. Cummings. Yes, I tell the story that when I was 
Chairman of the Coast Guard Subcommittee of the Transportation 
Committee, we saw where because the acquisition people were not 
properly trained, I mean we literally, literally, were buying 
boats that did not float. I mean, we lost hundreds of millions 
of dollars under this Deepwater Program. And they just 
testified yesterday in Transportation that, because of the 
changes we made, they now are on sound footing.
    But they literally had to bring in a force, they had to 
work with the Navy, to upgrade their people, to teach their 
people how to do acquisition. And I do not think a lot of 
people realize how important acquisition personnel can be.
    Mr. Soloway. If I could just share with you? First of all, 
Deepwater is a great example.
    Mr. Cummings. You are familiar with it?
    Mr. Soloway. Very much so. And when I was in the Defense 
Department, I got a call from the GAO wanting to know what we 
thought of Deepwater and my response was it depends on the 
nature and quality and skills of the people that are there to 
manage it. It is not necessarily the strategy that was wrong or 
correct, it is a people issue.
    But I think that it is worth rethinking how we develop our 
workforce, not just how much money, but what we are trying to 
train them to. We are talking here about commercial best 
practices. We are talking about asking them to make tough, 
complex business decisions. Yet, if you really look at the 
training that we do, there is a stark lack of business training 
involved in it. It is more about the rules of the Federal 
Acquisition Regulation, which are important, but that does not 
necessarily translate into then really thinking in a critical 
sense how do I apply those rules in different circumstances to 
come up with smart business decisions.
    Mr. Cummings. And I guess that goes to your point a little 
bit earlier, when you talked about, I cannot remember your 
exact words, but you said something about, sometimes folks are 
looking at best price but not necessarily looking at quality. 
And sometimes the price is nice but, in the long run, you are 
not really saving because you are not purchasing wisely and 
looking at the long run. Would that be part of the kind of 
training you are talking about?
    Mr. Soloway. Absolutely. And part of what the workforce is 
encouraged to do, and this is where I differ a little bit with 
Mr. Gordon, I think that where the bill can help that issue is 
in the definitions of commodities versus more complex solutions 
because the way you approach the business relationship is very 
different. I am not sure there is enough explicit distinction 
there. But we are seeing that trend, Mr. Cummings, across the 
Government. Very complex requirements.
    And there is in the acquisition requirements a term called 
low price technically acceptable and what that says is anybody 
who is minimally acceptable submits a bid and the lowest price 
automatically has to win. That does not give you any 
flexibility to say well, if I spent 3 percent more over here, I 
got a little bit better performance or a better history or what 
have you.
    So, a low price approach to complex solutions does not make 
sense. But, unfortunately, that is now what the workforce sort 
of thinks that they are expected to do. And that all comes back 
to training and, in a big way, comes back to leadership.
    Mr. Cummings. Mr. Spires, these upcoming furloughs, does 
that affect you? Are you concerned about that? I have heard the 
Secretary talk about the Department overall.
    Mr. Spires. I do not want to talk for the Secretary. But of 
course we are concerned about that, sir.
    Mr. Cummings. I am talking with regard to this particular 
issue.
    Mr. Spires. For ourselves, here, and we are in a position 
to keep our mission critical systems operational.
    Can I go back and just comment, please, on this whole issue 
of acquisition workforce and the like?
    I would rather use the term for large, complex development 
programs or IT programs, I use the term program management 
because one, I come from the private sector and that is what we 
used, but two, I want to make that distinction. I have reviewed 
hundreds of programs in the Federal Government over my eight 
years of service in this Government, and many in the private 
sector, and I have always found that it is the competency of 
those that are running the program and how they are doing it is 
the determining factor for success.
    And so, I will take exception a little bit to Mr. Gordon 
that focus on contract is important, but you have got to be 
able to run a program and a contract vehicle or contract 
vehicles is a part of the program. And if you focus on the 
program, what is important there first, that is where you have 
got to start. That is how, when I evaluate programs I am always 
talking about that first. Do we have the right skill sets to be 
able to effectively run this program?
    Mr. Cummings. Thank you, Mr. Chairman.
    Chairman Issa. Thank you.
    We now go to the gentleman from Florida, Mr. Mica.
    Mr. Mica. Thank you. An interesting discussion. A couple of 
comments.
    Mr. Cummings was talking about the Coast Guard and 
Deepwater and, having followed that pretty closely, some of 
the, I guess the issues that we have to deal with is do we have 
the authority and part of this bill is trying to make certain 
that we have the authority. Some of you have said we do have 
the authority. Then the next thing would be the skill sets or 
the management, the administration of the program.
    I noticed, just to reminisce a second on Deepwater, I 
looked at that, and the Coast Guard is a relatively small 
agency and they got into building these they call them National 
Security-sized Cutters which they did not have the in-house 
expertise to do. There was a whole host of issues there, I 
found. They could not first retain the personnel to do that, 
they pay so low. The Coast Guard are paid just a fraction of 
what some of the Federal bureaucrats are.
    And then, did you want to create an agency which was going 
to build a half a dozen of these ships with this massive thing 
that they, that the United States Navy was having difficulty 
acquiring the skills sets and personnel.
    So, do you all think there is enough authority in the bill 
as revised? You had some good, well, you gave some specifics. 
Rarely do we have any anybody who actually comes up with 
specific legislative remedies. So, we have yours. Does anyone 
else have any specifics?
    Mr. Soloway. Mr. Mica, I would like to suggest, and this 
has occurred to me as we have listened to the testimony this 
morning, that Mr. Spires' comment around program management, I, 
along with some Federal CIOs and others several years ago 
looked at this issue, three or four years ago. And I am 
wondering if the bill, if Mr. Spires' objectives, which I think 
are correct in terms of the program management function and 
capability, could not be strengthened in terms of identifying 
and defining a true program management career field on the 
civilian side.
    We have people in the civilian agencies who have some 
program management skills but it is a very roughly defined, and 
not clearly defined.
    Mr. Mica. Well, yes. Are you talking about for CIOs and 
other officials?
    Mr. Soloway. I am talking, I am sorry, sir, I did not mean 
to interrupt. If you look at the Defense Department, not that 
all the Defense Department programs are successful, but they do 
have a very clearly defined program management skill workforce 
with very clear training and development requirements. That it 
still relatively nascent in the civilian sector and I think to 
Mr. Spires point, perhaps one of the things in the bill is to 
help define that and advance that objective. Because that is 
where it all comes together at the end of the day, is through 
program management and the leadership of the team.
    Mr. Spires. Picking up on that, sir, I recommended this 
idea of the Center of Excellence. We are never going to be able 
to go out and hire all of the talent we need into the 
Government to really use commercial best practices for running 
our programs. But we have real pockets of excellence. We have 
excellent people. If we can leverage those people in a way that 
can be leveraged across agencies, I think we would do ourselves 
good. So, I gave some, in my written testimony, some ideas on 
how to do that.
    Mr. Mica. Okay. Well, the first thing, again, is authority, 
then the skill sets and the personnel are important. It is 
interesting, the aging workforce is a fascinating factor 
because, you know, if I want anything IT done in my office I 
have the geriatric ward, having been here 20 years that I 
employ, but I do not go to any of them, I go to sort of the new 
kids on the block and they are wired, they know how to do it 
and get it done. But it looks like we are headed in the wrong 
direction.
    And it is not that we do not pay people enough or there is 
instability in the Federal Government, Mr. Gordon, it is 
probably one of the most stable employers. I was Chairman of 
Civil Service. Nobody gets fired in the Federal Government, 
period. And we do pay above scale. The question is, who we are 
paying and how much and getting those skills.
    When I was chairman of a subcommittee here, we did IRS and 
one of the things we found is we were not paying people to pay 
these systems the wages they could get on the outside. We had 
to change that. We may have to do that. And also a campaign to 
attract the young talent.
    You have to have people who really know how to, and not me, 
but GAO said that in most cases IT investments are 
underperforming, overall lack of skills experience of 
Government-led management teams. So, authority and then 
somebody who knows what the hell they are doing and how the 
hell to do it.
    [Laughter.]
    Mr. Mica. So, again, as we craft the bill, the Chairman has 
done a great job in putting this together, you want something 
that gives us the tools and then the personnel to do it. So, I 
only have 11, well, I am already over time, so yield back my 
over time.
    Chairman Issa. Okay, that is 18 seconds of negative yield 
back.
    [Laughter.]
    Chairman Issa. Thank you.
    We now go to the gentleman from Illinois, Mr. Davis.
    Mr. Davis. Thank you very much, Mr. Chairman. And let me 
thank you for calling this hearing.
    I was thinking that the people in my district would really 
appreciate listening to this discussion, especially given the 
fact that we are talking about how do we get the most mileage, 
or the most effective results, from the monies that we spend, 
the money that we allocate, the resources that we use, and how 
do we create the systems and the workforce that will give us 
results.
    OMB estimates that consolidating Federal data centers could 
save us between $3 and $5 billion. So, I am thinking about that 
and I guess my first question to the panel is do you believe 
that the consolidation of data centers is actually helping to 
modernize the Federal Government's IT investments and do we 
save from this process?
    Mr. Spires, why don't I begin with you?
    Mr. Spires. Sure, because we are in the middle of this, 
sir, and I think the proper consolidation of data centers. So, 
as you consolidate you need to not just set up the same servers 
that you had in your old data center in a new data center, but 
you need to look at virtualization technologies and now cloud 
technologies and leverage those appropriately.
    I am very heartened by what we are doing around the Data 
Center Consolidation Initiative, together with the cloud first 
policy, because it is, I believe, the right formula to move us 
forward. And we are seeing very significant savings. We at DHS, 
we are looking at a 10 percent cut in an overall infrastructure 
budget.
    So, I am pushing very, very hard to get this done because 
we can realize that level of savings by doing these things with 
the Data Center Consolidation and the cloud first.
    Mr. Davis. Mr. Gordon, let me just ask you, the workforce, 
we have had some discussion, the kind of training that people 
receive, can we create, or do we create, training modules that 
will produce the kind of results that you talked about, 
perhaps, and how do we do that?
    Mr. Gordon. Thank you, Congressman Davis. It is very 
important that we have enough people and that we give them good 
training. And I can tell you that there are efforts both at DOD 
through the Defense Acquisition University and the civilian 
agency SOD through the Federal Acquisition Institute to get 
good training, including online training which is an area we 
are working on.
    I am honored to be a Director of the Procurement Roundtable 
which has had sessions devoted to training of the acquisition 
workforce. We actually have a couple of sessions with junior 
people in the acquisition workforce tomorrow at GW Law School.
    What we often hear is that the acquisition workforce is 
simply traumatized. They are traumatized by continuing 
resolutions, by disrespect that they get. When they go to low 
price technically acceptable, Mr. Soloway pointed out, it is 
not because they think it is the best path but they are scared, 
they are scared of getting in trouble for picking something 
that costs more even though it is higher quality. They are 
worried about, perhaps, being dragged in front of this 
Committee. They are worried about IT reports.
    Chairman Issa. I want to state that we welcome people, we 
invite them. They have never actually been dragged in here.
    [Laughter.]
    Mr. Gordon. And I am honored to be here, Mr. Chairman.
    We need to change from an atmosphere of fear, a poisoned 
atmosphere where people don't feel appreciated, don't feel 
empowered, to one where they believe that they can be trusted. 
There is cognitive dissonance when we say on the one hand, oh 
sure, we are going to support the acquisition workforce but on 
the other hand we bash them all the time.
    You cannot expect to get positive results when you do not 
show respect and support for your workforce.
    Mr. Davis. Thank you. Mr. Chairman, I know that my time is 
about to expire, but could we allow Mr. Soloway to respond to 
that? And Mr. Misener?
    Mr. Soloway. Very briefly, I agree with almost everything 
that Mr. Gordon said. I just offer a couple of observations.
    We do a biennial survey of Federal acquisition leaders. It 
is the Government talking to us about what is on their plate, 
what is bothering them. I think the findings this year, as I 
mentioned earlier, were very stunning and that they clearly 
concluded that things are not getting any better for many of 
the reasons that Mr. Gordon cited.
    But two other things that jumped out of this. By a margin 
of almost seven to one, they said they do not feel that their 
workforce has adequate skills to acquire complex IT. And by a 
margin of nine to one, they felt that their workforce did not 
have adequate negotiating skills.
    What that led them and us to conclude is that while we are 
investing in and constantly trying to reevaluate the training 
and development, we do not have it right yet. And perhaps it is 
time to break out of the mold, to really open the aperture to 
much more, and I will use the term loosely, commercial training 
and commercial development tools.
    We do not take our workforce and rotate them throughout the 
organization as the best companies do when they hire new people 
so that, as they move up the chain, they have experience and 
knowledge of very different aspects of company operations, for 
example.
    And as I said earlier, there are, I think, some huge gaps 
in just basic business training and how that aligns or doesn't 
with the specific and unique policies of Federal acquisition.
    Mr. Davis. Mr. Misener, if you have anything, briefly.
    Mr. Misener. Thank you, thank you both, Mr. Davis. A lot of 
discussion has been around the nature of the procurement 
workforce and our experience has been that they are extremely 
talented and they know what they are doing. But they also feel 
inhibited by vague or counterproductive rules from above. They 
know what they need to buy. They know the best solutions. But 
they just are not empowered to choose those solutions.
    And so I think the FITARA could go a long way to giving 
them that confidence they have to choose the correct solution 
for the Government and the taxpayer.
    Mr. Davis. Thank you, Mr. Chairman.
    Chairman Issa. Of course.
    We now go to a man who is a young entrepreneur in the IT 
area, Mr. Farenthold.
    Mr. Farenthold. Thank you, Mr. Chairman, and I am happy 
that you guys all chose to testify. I think there is a whole 
lot of savings to be had and I appreciate your input.
    When I was back in the computer consulting business in the 
ancient history in computer days, one of the things that I 
liked to tell my clients was that you need to change your 
mindset about IT. Admittedly, I was primarily dealing with 
small businesses, but with the technological cycles you almost 
need to look at IT as an expense more than a capital item, 
specifically with respect to the day-to-day stuff, the desk top 
PCs and some of the things you go there. I know Mr. Misener and 
Amazon whose name appears way too often on my credit card bill, 
puts that as a, software, as a service.
    [Laughter.]
    Ms. Farenthold. But I wanted to visit with you, Mr. Spires. 
Obviously, the big massive technology projects do need to be 
handled in a different fashion. But how do we get to, or can we 
get to, or is it appropriate to get to, technology more as a 
day-to-day technology as an expense rather than a capital item?
    Mr. Spires. That is a great point. In fact, we are trying 
to get there. I mentioned 11 cloud-based services we are moving 
to. As an example, we have got 110,000 of our employees on our 
emails as a service offering now. And that is an expensed item. 
We are buying it as a cloud-based service, there was very 
little in the way of capital outlay, we had some migration 
costs to get to it, but not large, and we pay on a monthly 
basis.
    And by the way, I really want to move, as you say, our day-
to-day IT operations to that model.
    Mr. Farenthold. You have got a four-year lifespan, four to 
eight year lifespan on a PC depending on how techie you are.
    Mr. Spires. Well, we struggle, we have old gear because we 
do not have the capital to replace it. So, I want to move out 
of that model into a consumption-based model where it is then 
in the service agreement to replace that and keep that gear 
current where we are paying on a monthly basis.
    Mr. Farenthold. All right, and Ms. Chaplain, you talked 
about strategic sourcing. I see two issues there as we do these 
types of contracts. Do we not keep up enough with technology 
and do we cut out vendors. I mean, do we get, you know, Dell, 
HP or Apple, those are your choices, and do we cut out other 
folks?
    Ms. Chaplain. In the Strategic Sourcing Initiatives that 
have been done to date, we found that we can include small 
businesses and a wide variety of companies, not just the Dells 
and people like that. They had one on office supplies where 13 
of the 15, or a good majority of the contracts, went to small 
businesses.
    Mr. Farenthold. Okay, let me go back to Mr. Spires. I'm 
sorry I'm bouncing all over. I have a lot of questions.
    We talked about, I want to talk a second about open 
standards in API. I think one of our big problems is one 
Government computer does not talk to another Government 
computer. And we are seeing in the VA, even though they are 
doing a massive technology project right now, getting 
information from DOD and people coming out into the VA is 
resulting in year-long delays at times getting benefits.
    Do you think there is an opportunity there? It seems like, 
to me, like the internet, which was actually kind of developed 
at our expense through RFC open source, not so much open source 
but open standards, is that something we can replicate 
throughout the Government?
    Mr. Spires. We are in a number of ways. I mean, under the 
digital government strategy being driven by OMB, I mean, there 
is a whole area there about how do you build APIs to be able to 
access data. Another example of this is the National 
Information Exchange Model which is used for exchanging data 
for law enforcement, for first responders, for many other uses, 
between ourselves as a Federal Government and the State and 
local governments.
    Mr. Farenthold. Do you think it is reasonably doable to 
come up with some API standards for Federal Government websites 
so advocacy organizations can, and the public, can aggregate 
data? Do you think that is doable?
    Mr. Spires. That is part of the initiative under the 
digital Government strategy.
    Mr. Farenthold. All right. And let me go, you talk about 
bailing out of failed projects and I hate to pick on Homeland 
Security but we look no further than the back scanners that TSA 
has and TWIC cards. How do we encourage folks to fix those 
problems before we keep throwing good money after bad?
    Mr. Spires. Well, I come back, sir, to this whole notion of 
increasing the capability of our program management workforce, 
part of the acquisition workforce. We need to do that and we 
need to give programs help. One of the things we have done at 
DHS, I will just be quick, is we have instituted a more 
aggressive oversight model so that the right stakeholders are 
meeting with the program management team on a monthly, or every 
other month, basis to make sure that things are being dealt 
with.
    Mr. Farenthold. All right, great. My last comment is to Mr. 
Misener. Would you do me a favor and talk to GSA and see if you 
can use some of the Amazon technology to update their website. 
I try to buy stuff for my office off the GSA website and I 
finally just given up. You could certainly save the Government 
a lot of money. We would appreciate your helping them out.
    Mr. Misener. I would be happy to. Can they spend OPEX?
    [Laughter.]
    Mr. Farenthold. Yeah, right. Thank you very much. And I 
yield back.
    Chairman Issa. I believe Mr. Horsford is next for our side.
    Mr. Horsford. Thank you, Mr. Chairman, and having just 
visited Switch and Cobalt in Southern Nevada last week, this is 
a very opportune panel focusing on issues that really are 
important to streamlining our IT functions.
    I do find it interesting, though, that technology continues 
to change rapidly and no provision in any one bill is going to 
be able to keep up with those changes. And I think we all have 
to be cognizant and aware of that.
    My other committee, Mr. Chairman, is the Committee on 
Homeland Security so I do want to ask a question of Mr. Spires.
    Because Homeland Security is the third largest Federal 
agency in the Federal Government, the IT budget is also one of 
the largest. In Fiscal Year 2012, the Department of Homeland 
Security's IT budget was approximately $5.6 billion. You are 
responsible for over 360 IT programs, 83 of which have life 
cycles, cost estimates of over $50 million or more.
    So, obviously the size and complexity of what you are 
responsible for provides us, I think, a great opportunity to 
support a well planned governing structure that allows you to 
carry out those functions.
    Now, we received the GAO high risk report recently. We had 
a hearing on that in this Committee. And in that report it 
indicated that in July of 2012 that the governance structure 
currently covers less than 20 percent, 16 out of 80 of the 
departments major IT investment, and 3 of its 13 portfolios 
within the department had not yet finalized the policies and 
procedures that are necessary.
    So, I just wanted Mr. Spires, if you could, to comment on 
that, since that is an area that this Committee is specifically 
charged with from an oversight role.
    Mr. Spires. Yes, sir. And in fact this is near and dear to 
my heart to get this better. When I came on three and one half 
years ago it was one of the areas where I felt like the 
governance of our IT was very weak. And so, we have taken it on 
in two major ways.
    One, to your point, we are now up to 88 major IT programs 
from the 83 that you had cited and I, as I said, as I just was 
reflecting, we need a more active governance model, a better 
oversight model, on many of these.
    Now, to scale the 88 programs, many of which, by the way, 
are in operations and maintenance and we do not need perhaps 
that level of scrutiny on all programs at the same level, but 
those 16 programs you alluded to are the ones that I viewed as 
the highest risk programs in the department, the IT programs, 
and that is where we have added this additional layer of 
governance. So, these are Executive Steering Committees where 
the right executive stakeholders meet on a very regular basis 
with the program team to address issues, to set direction for 
them, to give them help. And it has made a meaningful 
difference in many of these 16 programs.
    On the portfolio level, we have 13 separate portfolios 
within the department that are functions. They are not 
components, they are the functions, they are screening, they 
are incident response, they are finance, the mission and 
business of DHS. And we are working feverishly to get, if you 
will, the right portfolio look and governance around each of 
those so we can eliminate duplication, and we can streamline 
processes and we can get the synergies of each of the 
components across those functional views. So that is what we 
are working on, sir.
    Mr. Horsford. And to that point, I would just encourage the 
department to just continue your effort in working with local 
and State stakeholders in that regard. I just met with our 
sheriff in Clark County and, you know, he indicated that in 
some respects it is very good, in other respects they are not 
at the table and there are some best practices happening at the 
local and State level that we should be adopting, not 
necessarily having a top down approach from the Federal 
Government.
    Where are you in the final development or your policies and 
procedures?
    Mr. Spires. Those will be finalized within the next month. 
There is a couple of documents that we still have to sign off 
that I am reviewing right now, sir. I could be happy to report 
back to this Committee on that when those are completed.
    Mr. Horsford. That would be great. Thank you very much for 
being here. Thank you to all the witnesses.
    Mr. Duncan. [Presiding] Well, thank you very much.
    A few weeks ago, at the earlier hearing on this subject, we 
got into this and our Committee memorandum says at that hearing 
it was established that despite spending more than $600 billion 
over the past decade, too often Federal IT budgets run over 
budget, behind schedule, never deliver on the promised solution 
or functionality.
    Now, it was mentioned at that hearing, and I was at that 
hearing, that we spent $81 billion over the last Fiscal Year 
and it is going to be a little bit more this Fiscal Year which, 
interestingly enough, is about identical to the amount of the 
sequester.
    I have read and heard that the computers and off shoot 
products are obsolete as soon as they are taken out of the box. 
Now, that may be an exaggeration, but apparently our technology 
is moving so fast that things become obsolete very fast.
    Now, my wife and I have three cars, two of them have well 
over 100,000 miles on them, the third one has, I think, 98,000 
miles on it, but they are still doing real well. And Mayor 
Rendell, former Governor of Pennsylvania now, but when he was 
mayor of Philadelphia, he testified in front of a Congressional 
Committee and said that one of the main problems in Government 
is there is no incentive to save money so much of it is 
squandered. Those were his words.
    And I noticed, Mr. Soloway that you said what to me, I 
think, is the key word when you said we have go incentivize 
people because it seems to all the IT people, since the Federal 
Government purchases, the money is not coming out of their 
pocket like it is when I have to buy a new car. They want the 
latest bells and whistles. They want the most advanced. The 
want the newest thing.
    How can we incentivize people to get more use out of the 
technology that they have and hold onto it and use it one year 
longer or two years longer, or not only incentivize individuals 
but incentivize departments and agencies? Because it seems to 
me that if we do not come up with a way to do that, the 
spending is going to continue to spiral out of control because 
I am sure they thought that they were taking care of this 
problem when the passed the Clinger-Cohen Bill that is 
mentioned here 16 years ago. Sixteen years from now, is another 
Congressional committee going to be here facing the same 
problem except just multiplied many times over?
    Mr. Soloway. It is a large issue and a large question, Mr. 
Duncan. Let me take it from the beginning and go back to the 
beginning of your comments.
    I think one of the things we have not talked a lot about 
here is the requirements generation process being so critical 
to ultimately what the Government buys. And so a lot of that, 
and I think the governance model that Mr. Spires is talking 
about will directly and aggressively deal with are the 
requirements the right requirements, are we structuring them in 
the right way, are there area in which we do not need to be on 
the leading edge or even the bleeding edge.
    We can continue to operate, I mean, we have some systems in 
Government that are still COBOL-based that might be worth 
taking a look at. But there is going to be a variety of need 
and, as you said, it is not automatic that I need to go for 
every bell and whistle.
    That said, I think again that it gets back to the 
development of the workforce and of the program management 
structure and teams. What is celebrated? We do not celebrate 
acquisition success. We hammer people for failure, we do not 
celebrate success. I think that there are a lot of things you 
could do to balance this out. But again, I think it ultimately 
comes back to how we develop and prepare our workforces and 
empower them because I think they are generally highly 
responsive and responsible and are not looking to spend money 
they do not have to.
    Mr. Duncan. All right. Anybody else want to say anything? 
Yes, madam.
    Ms. Chaplain. The bill does talk about having to have a 
business case to justify some of the larger purchases and that 
is a good place where you could be asking those questions, do 
we need to move to something new, what is the cost and benefit 
of that versus staying with the legacy.
    Mr. Duncan. Well, it seems to me the Chairman is trying to 
move in the right direction, trying to do something about this 
problem in his bill and giving the CIOs more flexibility or 
more power and along with that would hopefully have to come 
more accountability. So, maybe we can make some progress.
    Mr. Pocan?
    Mr. Pocan. Thank you, Mr. Chairman. I would like to yield 
my time to Mr. Connolly please.
    Mr. Connolly. I thank my colleague. I have two more 
questions, if I might, of first Mr. Gordon. There have been 
concerns raised by some of the industry groups with respect to 
the draft legislation on the provision calling for the 
transparency of blanket purchase agreements. Specifically, the 
concern is that the final negotiated price for a purchase 
agreement is often proprietary and exposing it would weaken a 
company's bargaining power. Your take on that?
    Mr. Gordon. Sir, I was raised to understand that public 
contracts were public documents and I find it baffling that a 
company would claim that the price it is charging a Federal 
agency for a good or service for that matter would be 
proprietary. In any event, we need transparency across BPAs. 
Again and again, when I worked at OMB, I discovered that one 
agency, when it was negotiating a blanket purchase agreement 
which is typically under the GSA Federal Supply Schedule, had 
no idea that another agency had already negotiated with the 
same vendor for the same product but, of course, at a different 
price.
    The vendors know how much they are charging different 
agencies. I do not understand why the Federal Government is not 
sharing that information. Today, it should be readily available 
for Federal purchasers. I think it is an excellent idea in this 
bill.
    Mr. Connolly. Mr. Soloway or Mr. Misener, any industry 
reaction to that?
    Mr. Soloway. I think the caution I would offer here is that 
there is a difference between price and cost and I think it is 
one thing to have public disclosure of a public contract, what 
the Government is paying, but the underlying elements and cost 
elements are highly proprietary and I think that that is an 
area where we would have to protect against the inappropriate 
sharing of information.
    The second piece is, if you are dealing with a commercial 
contract and it is fixed price, the only thing that matters is 
the ultimate price that you pay. You say I am paying X dollars 
for this per minute or per hour and I am done the hours. But 
divulging my labor rates, specifically how I characterize them, 
or my other costs I think would cross the line.
    Mr. Connolly. Okay. Final question. We have been talking 
about workforce development. And it has always bothered me as 
well that in addition to the reasons you gave rather 
passionately, Mr. Gordon, and I could not agree with you more, 
disparaging the workforce does not get you skilled workers, 
especially when we look to the next generation of skilled 
workers let alone retaining them.
    But what about training? I note a huge imbalance in terms 
of the resources, for example, put into the Defense Acquisition 
University and the resources put into the Federal Acquisition 
Institute. I mean, it is night and day. And I wonder if you 
would comment on that. Could the Federal Acquisition Institute, 
with some beefing up, help us? Because right now a lot of those 
are in fact online courses but they are refresher courses. They 
do not solve the underlying problem of do we have the requisite 
skill set to manage large systems integration contracts.
    And it seems to me the Pentagon is doing a much better job 
of that because it puts serious resources into it. Maybe, Mr. 
Spires, you could begin commenting on that because you are on 
the civilian side.
    Mr. Spires. Sure, I am. Yes, I would agree that we need to 
beef up our training capabilities. But we also need to marry 
that with something that Mr. Soloway mentioned. We need to have 
a career track for these kinds of professionals on the program 
management side. And that is more than just training. That is 
mentoring, that it bringing th em along on smaller programs and 
then building until they are taking on these large programs. 
Because there is nothing that beats experience in actually 
delivering these kinds of large complex IT programs.
    Mr. Connolly. Mr. Soloway.
    Mr. Soloway. Yes, I would caution, I think your point it 
well taken. I would caution the linear connection. In the 
Defense Department, the acquisition workforce is much more 
broadly defined than it is in the civilian space. I had that 
responsibility when I was in the Pentagon.
    There are far more career categories and fields that are 
considered a part of the acquisition workforce. So, it is a 
much larger entity. It is about 175,000 or so people. Maybe 
150,000. In the civilian agency traditionally the acquisition 
community has been contracting officers and contracting 
officers' technical representatives and limited to that. So, 
you may only have one-quarter or maybe even one-fifth or even 
less numerically so that the numbers are not a linear 
connection.
    That said, to Mr. Spires' point, one is beefing up the 
definition and the skill sets around Acquisition with a capital 
A which involves all of the program management skills and so 
forth, marrying that with the technology requirements and 
really defining career categories and training and development 
opportunities that are contemporary and reflect the need of the 
Government in terms of what it is buying, not the need of the 
Government as to what it used to buy.
    Mr. Connolly. And if the Chair would just allow Mr. Gordon, 
who is seeking recognition, and I thank the Chair for its 
indulgence.
    Mr. Gordon. Thank you. Very briefly, I very much agree. As 
you know, Congressman Connolly, there has been strengthening on 
the civilian side at the Federal Acquisition Institute. There 
is more work to be done.
    One quick point may be worth mentioning. It is a nice 
example. One of the problems that we often see is poor 
requirements put in the solicitation initially which causes 
problems the whole length of the contract. When I used to ask 
contracting officers, what is causing this, the answer I often 
got was oh, well we were afraid to talk to industry when we 
were writing the solicitation initially.
    One of the things I always push for, and I am glad the 
Administration is continuing to push, is what we call the Myth 
Busters Campaign, to improve communication between industry and 
Government, it reinforces Government people's understanding 
that it is okay to talk to industry early on a solicitation. If 
there were a way to get that into the bill, it might actually 
be a helpful message.
    Chairman Issa. Excellent. And I would like to do a quick 
second round because I have heard a lot of things that were 
particularly of interest to me.
    Mr. Soloway, when you were asked about essentially making 
public costs/price, you made a good point which was that there 
is only so much information that is helpful and at some point 
it becomes proprietary. I am assuming you were only answering 
as the to the public that in a reform, if anybody who is part 
of us, the Federal Government, wants to know what us, the 
Federal Government is paying for something, they should have a 
level of transparency to get that, either online or through a 
briefing structure.
    In other words, you would not support any closure of Mr. 
Spires and six other counterparts in other agencies having full 
access so they could be the smartest buyer. In other words, if 
you bid higher at the next, or Mr. Misener's bids higher at the 
next contract bid, that would be known to Government that 
somehow your price had risen rather than fallen.
    Is that a fair statement?
    Mr. Soloway. I think that it is the top line price that I 
am buying. My contract with Amazon is for X dollars, that is 
going to be public, I do not have any problem with that.
    Chairman Issa. No, actually what I am saying more 
specifically, and I am going to go to Mr. Spires in a second 
and Mr. Misener, this bill envisions that the Federal 
Government is a single entity. We do not buy that way now. We 
buy as though we are different companies and we pay different 
prices and actually we redundantly end up buying excess 
licenses, which is another factor that we know is low-hanging 
fruit to save money, at least if the price of a pro license 
does not change.
    My question to you is, do you agree with one of the 
premises of the IT reform which is that the Federal Government 
is a single entity, therefore any piece of information, let us 
just call it the explanation of how a price was reached on a 
contract, should be available to that entity in any and all 
parts internally looking, the Federal Government has a right to 
know. Mr. Spires should never go out for a bid with a company 
and not know what they charge for a similar product at a 
previous quote.
    Mr. Soloway. With your permission, I would like to take 
part of that under advisement and come back with a written 
response for the record because I think there are several 
elements to this that I think we need to think through.
    Chairman Issa. Okay, because this is a value of the IT 
reform that we have had over 20 major entities, including 
yours, make comments on. I do not want it to be a secret that 
my view is some of the savings is by the Government considering 
itself a single entity for the first time.
    Mr. Soloway. Right, and I think to a significant extent we 
would agree with you. But I think there are going to be 
limitations that we would like to think through and how to 
define them best so I do not misstate anything here.
    I would make one comment, though, at this point on that 
question. We hear this question a lot with the issue of 
strategic sourcing. A lot of discussion about well, I brought 
this solution but I am paying x dollars an hour for this kind 
of engineer from a company but why for that same engineer in 
another contract and I think this is part and parcel of really 
defining the whole concept of what strategic sourcing is and 
what its objective is.
    In some cases, it strictly is an effort to use bulk buying 
to get costs down. In other cases, it is truly to be strategic 
in how I source things but recognizing the driving price is not 
the only issue. If I am dealing with cloud services, the kind 
of work that Amazon does, it is a little bit cleaner and 
clearer than if I am dealing with a complex integrated 
solution. So, if you do not mind, I would like to take that 
question over the record.
    Chairman Issa. And Mr. Gordon, you are, as Mr. Connolly 
noticed, is eager to answer also.
    Mr. Gordon. Yes, sir. Thank you, Mr. Chairman. I 
enthusiastically endorse the view that you are setting out. Let 
me give you a couple of points along those lines.
    The fact is, when the Government buys, if it is a big 
agency like the Department of Homeland Security, it is really 
important to do, to make those decisions across the entire 
department and, as much as possible, we should be making our 
decisions across the entire Federal Government. That is why I 
so much support the idea of BPA transparency.
    I want to point out that my former and wonderful colleagues 
at GAO, in the high risk report that came before this Committee 
recently, they did something very unusual. They took something 
off the high risk list and it is really relevant to this bill. 
They took interagency contracting management off the high risk 
list because the Executive Branch had worked to improve it and 
frankly leaving it on the high risk sent a message to agencies, 
oh, interagency contracting is bad. In my opinion, interagency 
contracting, when managed properly, is a very good thing, fully 
consistent with your draft bill.
    Chairman Issa. Ms. Chaplain, this goes right squarely into 
what you look at every day, that much of the savings is through 
interagency activities and finding the most qualified prime and 
then being able to tag onto that.
    Ms. Chaplain. Yes, and I completely agree with the notion 
that the Government should be acting, where possible, as a 
single buyer. Also, with regard to strategic sourcing, you 
cannot put everything in one bucket. Not everything is a 
commodity. There are more complex requirements and there are 
scenarios where there are fewer suppliers and you have a very 
specialized thing you are after.
    But in those cases, the best practice companies we have 
studied tailor their tactics, too. They look at cost drivers, 
they develop new suppliers, they prioritize with suppliers. So, 
there are different things you can do beyond just the basic 
strategic sourcing when you get to these more complex types of 
products.
    Chairman Issa. We are going to get to Mr. Misener, but Mr. 
Spires, I am going to give you a tangential question to what we 
have already been talking about. You are a sophisticated 
manager of these kinds of things and DHS, I am presuming 
routinely in your council, deals with, hey, we are buying 
something similar to just like, and therefore you begin to say 
why can we not buy just like for the same price. And you go 
out, in a sense, with that concept often, don't you?
    Mr. Spires. Yes, we do. And we have had a very aggressive 
strategic sourcing internal effort, working with our Chief 
Procurement Office. And I agree, we need to do more of this 
across the Federal Government in IT. There are many things that 
do not lend themselves to strategic sourcing. But there are 
many things that we buy that do, billions of dollars worth, 
within DHS alone that I think would be, we would offer up as to 
try to be a part of strategic sourcing for the whole Federal 
Government.
    Chairman Issa. Mr. Misener, I said I would get back to you.
    Mr. Misener. Thank you, Mr. Chairman. Just to add that we 
would greatly appreciate the clarity Government-wide that your 
bill would bring. And so, we focused on cloud computing, that 
it what we are expert in. I will note that we have dropped our 
prices two dozen times since we began in 2006.
    Chairman Issa. I might note that I am familiar somewhat 
with Amazon in the private sector. You dropped prices, for some 
reasons, even while you are under contract with somebody for a 
two-year period. That has befuddled people who have observed 
it. I do not believe that happens in a Government contract at 
this time, but if it does, I am pleased.
    Mr. Misener. Well, we have, and will continue to, drive our 
prices down, greater efficiencies and economy of skills. I 
think one thing that would be helpful, if I may, is to 
recognize that our cloud computing business, we report in our 
finances as part of a category we call other and that obviously 
includes other things.
    Chairman Issa. I was on the board of a public company. I 
understand why you throw things into other rather than letting 
people see what is growing and not growing if you can help it. 
There are a couple of CFOs behind you laughing right now.
    Mr. Misener. That other category had revenues of about $2.5 
billion.
    Chairman Issa. So it was peanuts really.
    Mr. Misener. Well, it was out of $60 billion for the whole 
company.
    Chairman Issa. I always wanted to say that about $2.5 
billion.
    [Laughter.]
    Mr. Misener. In a sense, if my math is right, that is less 
than 5 percent. Now, obviously we are very happy with the 
business and how it is going and how we are able to serve as 
customers, both private and in Government side, but something 
important to recognize is that $2.5 billion is an interesting 
calibration within our company.
    But the most important point that I want to make on that is 
that the other $57.5 billion is supported by the cloud. We have 
entrusted that business to the cloud. We have put our legacy 
and our core retail business on cloud because we really believe 
in it. So we are enthusiastic supporters, unabashedly so, but 
not just as providers of the service, we are also users of the 
service.
    Chairman Issa. Okay, I have one final question, with the 
ranking member's indulgence.
    GAO reports in 2011 the Government had funded 622 separate 
human resource systems and 580 financial management systems, 
and 777, lucky triple 7, supply chain management systems. Now, 
I have dollar figures and all that.
    But let me just ask a fundamental question and some of it 
will go to GAO but some of it maybe goes to Mr. Soloway and so 
on, when you have this many systems, even if you bought every 
one of them right, and even if every one of them did their job 
perfectly, you go to big picture because they were separate, 
what we use to call WYSIWYG, you know what you see is what you 
get kind of a term, if you go to train, if you go to have 
somebody go from Department of Homeland Security to Department 
of Defense, they are inherently going to a different system 
they have to learn over again.
    Is it not one of the goals that we should have in IT reform 
to make the portability of the employee, the expertise 
transferable to the broadest extent possible whether it is in 
payroll, in purchasing, or in fact, in any other system, so 
that the training cycle goes way down because more and more 
people can have on their resume I know how to use the Federal 
procurement system and it is one system even if the parts they 
are looking at are different for a different part.
    Is that not one of the biggest goals that IT should have, 
is to drive down the training costs by driving up the common 
interface, user interface, that people train? And I will start 
with Ms. Chaplain.
    Ms. Chaplain. Generally, the more that you can standardize 
your requirements and make things more alike, you are driving 
down the costs just by its nature. And then if you get to a 
point where they can be sort of in the same category or just 
the same, that is where you can bring in more strategic 
sourcing techniques. So, it should be done, not just from a 
workforce side but a cost side, too.
    Chairman Issa. Mr. Soloway.
    Mr. Soloway. Yes, I think that is absolutely true. That is 
clearly a goal of technology, it is an initiative that has, 
fits and starts if you will, across Government over the years, 
the lines of business initiatives and shared services 
initiatives and other work that is being done, but there is no 
question that should be an objective, to harmonize these 
systems to the maximum extent possible. We see this in other 
non-technology way with security clearances where they are 
different for every agency and I have a clearance at Justice 
but it is not even usable in the FBI. I mean, you see all kinds 
of disconnects, but I think you are absolutely correct.
    Chairman Issa. And Mr. Connolly, do you have any closing 
remarks?
    Mr. Connolly. No, Mr. Chairman, I just want to thank you 
for the hearing. I think this has been very, very thoughtful. I 
really appreciate all of the testimony and I think it is going 
to help us in the drafting of our bill. And again, I thank the 
Chair for reaching out and I want to commend his staff who have 
been wonderful to work with. We really appreciate the 
collaboration.
    Chairman Issa. Thank you. And with that, I would like to 
announce that our goal on the Committee is to bring to a 
published bill by the time we leave for the spring recess which 
is later in March. So, less than about three weeks until we 
expect to turn it into a published bill from which we will 
begin the process of further proposing mark-ups. And I do that 
because I would like both people on the outside and, quite 
frankly, all of staff and members to be aware that we think we 
have gone far enough that we should be able to put it into a 
bill that will not be perfect but at least will be modestly 
amendable with some help.
    I want to thank all of you for comments. I am going to 
leave this hearing's notes open for all of you for five 
business days, giving you an opportunity to come back, Mr. 
Soloway and others, with the ideas and answers that may not 
have been able to be done live here today.
    And with that, we stand adjourned.
    [Whereupon, at 11:40 a.m., the committee was adjourned.]


                                APPENDIX

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               Material Submitted for the Hearing Record


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