Testimony of Mark Forman
ASSOCIATE DIRECTOR FOR E-GOVERNMENT AND INFORMATION TECHNOLOGY
OFFICE OF MANAGEMENT AND BUDGET
SUBCOMMITTEE ON TECHNOLOGY, INFORMATION POLICY, INTERGOVERNMENTAL RELATIONS, AND THE CENSUS
COMMITTEE ON GOVERNMENT REFORM
UNITED STATES HOUSE OF REPRESENTATIVES
MARCH 13, 2003
Mr. Chairman and Members of the Subcommittee,
Thank you for the opportunity to appear before the Subcommittee to discuss the Administration's views on e-government. To answer the question posed in the title of this hearing, yes we are headed in the right direction. We welcome your interest and the continued opportunity to work with you to strengthen IT and e-government.
E-government is increasingly becoming the principal means by which citizens engage with their government. A September 2002 report from the Pew Foundation found that 71 million Americans have used government web sites up from 40 million in March 2000. And based on a poll commissioned by the Council for Excellence in Government, citizens overwhelmingly believe that e-government leads to better government. The President sees e-government as part of a larger vision for reforming government.
Electronic Government, also known as e-government, is one of the key elements in the President's Management Agenda. The Expanding E-Government initiative is bringing more services to the American citizen over the Internet and is using IT to improve management throughout the Executive Branch. Federal investments in IT, through the Presidents e-government initiatives, can free-up billions of dollars in unnecessary federal IT spending, reduce governments burden on citizens and businesses, and improve government operations to accelerate government response times, often from weeks to minutes. This Administration continues to integrate and align e-government with the Presidents other management initiatives: budget and performance integration, strategic management of human capital, competitive sourcing, and improved financial performance. The potential for substantial improvement is greater if all these initiatives are pursued concurrently.
The Administration is pleased to have worked with this Committee to pass the E-government Act of 2002, which establishes an Office of E-government in OMB, and codifies several important activities and efforts to further e-government. We will discuss our implementation of the Act later.
E-government and the Presidents Management Agenda
The President's vision for reforming government emphasizes that government needs to reform its operationshow it goes about its business and how it treats the people it serves. The vision is guided by three principles:
For the e-government initiative, the strategic question that we face is how to maximize results from the more than $50 billion we invest annually in IT.
Electronic commerce and Internet technology have made daily tasks easier and quicker; the U.S. government is now working to do the same for U.S. citizens. E-Government will enable agencies to work together to improve services significantly and reduce operating costs.
The e-government initiative requires agencies to use modern, secure technologies to increase productivity, while responding faster and better to the needs of American citizens. E-government promotes the use of e-business tools by agencies in lessening paperwork burdens. The e-government initiative provides tools for all levels of government local, state, and federal to work together. As a result of e-government, conducting business with the government becomes easier, more private, and secure.
When using the Internet, it should not take a citizen more than three clicks of a mouse to access the government services and information needed. That is our goal. Achieving this vision requires agencies to integrate and to simplify their operations.
The Administrations e-government efforts address the six chronic problems that limit results from Federal IT spending. These chronic problems are:
Implementing the Strategy
The Administrations E-government Strategy is a two pronged approach to IT reform: modernizing within agencies around the tenets of e-business, and consolidating and integrating IT investments across agencies around groups of citizens. The Federal Government has made significant progress toward becoming a transformed and more productive E-Enterprise, focusing on how IT is managed at an enterprise level within and across agencies. Since the President proposed 24 E-government initiatives in the 2003 Budget, 19 have already delivered significant capabilities and are showing results.
The E-Government initiatives consolidate dozens of redundant agency centered efforts. The 24 projects were selected on the basis of the value they would bring to citizens, while generating cost savings or improving effectiveness of government. The initiatives reflect the Administrations E-Government Strategy, which focuses on four citizen-centered groups.
The 24 projects achieve results by simplifying and unifying redundant work processes and IT. Agencies have since identified additional opportunities for using e-government to work across boundaries to improve performance and reduce costs.
Significant progress has been made on the projects in the last year, including the launch of numerous government portals, initiative websites and consolidations. Our recent achievements include:
We are continuing to focus on improving government responsiveness and reducing the governments burden. Here are some of the initiatives that will have deployments over the next few months:
We have attached Table 22-2 from Chapter 22 from the Analytical Perspective of the FY 2004 Presidents Budget, which summarizes the 24 E-government initiatives, recent accomplishments, performance metrics and coming milestones for the Committees information.
Agency IT investments continue to make the federal government the largest buyer of IT in the world and agencies are deriving better value from IT. Indeed, effective use of IT will improve the governments overall performance. This improvement is occurring within agencies by modernizing to support their mission and improve their infrastructure and across agencies by simplifying and unifying activities around the needs of citizens.
Some improvements have been attained through better IT management within agencies. Additionally, specific initiatives in the federal IT portfolio have started to deliver real successes in citizen services and government operations. For example:
Use of the E-Government Scorecard
We have been tracking each agencys efforts on modernizing their Departments collaborating in the cross-agency e-government initiatives. Each quarter, the e-government score for the Presidents Management Agenda Scorecard is adjusted for an agencys progress and status. OMB has been working with Department and agency e-government leaders, as well as their CIOs, to provide for success.
Agencies that improved their status score from red to yellow since the baseline evaluations of September 2001: The Department of Education, the Department of Energy, and the Department of Veterans Affairs. The National Science Foundation upgraded their status from "yellow" to "green" and continues to serve as a model for how small agencies can successfully implement e-government.
Agencies that received green for their progress rating in the first quarter of 2003: The Department of Education, the Department of Housing and Urban Development, Department of Interior, Department of Energy, Department of Defense, Department of Justice, Department of Agriculture, Department of Labor, Department of Transportation, Department of Veterans Affairs, the Environmental Protection Agency, National Aeronautics and Space Administration, National Science Foundation, Office of Personnel Management, Social Security Administration, the Small Business Administration and the Smithsonian.
Specific Actions to Address Chronic Problems
Agencies must continue to address these longstanding challenges in order to deliver measurable improvements in the key areas of program performance. Over the past year, the Administration made significant progress in addressing the six chronic problems that were identified in the 2003 Budget as limiting IT effectiveness.
1. Automation of existing outdated processes, instead of fixing underlying management problems or simplifying agency procedures to take advantage of new E-Business and E-Government capabilities.
For years IT Investments in the federal government focused on agency hardware and software needs, without addressing underlying management issues in the overall design and scope of the project. Consequently, government agencies traditionally used IT to automate existing processes rather than create more efficient and effective solutions now possible because of IT. This approach, commonly referred to as paving the cowpath, has been documented as a cause of failure in major IT investments. Systems are often evaluated by the percentage of time they are working rather than the results delivered to the programs and citizen they support.
OMBs guidance for the 2004 IT budget process required that agencies take a comprehensive reform approach in identifying people, processes, and technology required to deliver significantly better results. As a result, 771 projects, representing approximately $21 billion, are on the At Risk List for failing to address people and process transformation needed to ensure success, or do not adequately address IT security. These projects will be monitored throughout FY 2003; OMB will allow investments on the list to move forward only after agencies present successful business cases.
2. Duplicative IT investments
OMB policy calls for agencies to make maximum use of shared IT solutions and to stop redundant IT purchases. Best practices in private industry identify several opportunities for savings within an IT portfolio of investments. Three consolidation practices in the private sector also are applicable to the federal government:
To identify potential opportunities in these areas, OMB analyzed the agency IT investment portfolios and provided feedback and suggestions to the agencies. This consolidation analysis not only identified savings for the agencies, but also served to strengthen the governance processes for IT management by identifying and continually pursuing opportunities in this area. For example, use of enterprise licenses for software can generate hundreds of millions of dollars in reduced costs.
Over the past year, OMB:
In key examples of cross agency consolidations, payroll operations will be standardized and consolidated from approximately 22 separate providers to a few federal payroll providers by September 2004. The current systems employ a variety of paper and electronic processing; records are not easily shared between agencies as federal employees change jobs in the federal system; and records are manually retired upon employees' retirement and resignation. Numerous agencies had targeted their payroll operations for costly modernization efforts. Millions of dollars will be saved through shared resources and processes and by modernizing on a cross-agency, government-wide basis rather than agency-by-agency.
The Administration continues work to ensure that IT investments reflect consolidation around citizen groups and along lines of business; reduce duplicative collection of data from citizens, businesses, and state and local government; purchase enterprise licensees for the federal government where appropriate; and reduce surplus infrastructure capacity.
3. Few IT investments have significantly improved mission performance.
IT investment results have been limited by significant redundancy in federal business operations. As I will discuss later in my testimony, OMB issued guidance requiring that agency IT investments synchronize with the Federal Enterprise Architecture, which is a tool that enables the government to identify opportunities that leverage technology and alleviate redundancy. This effort identified opportunities to simplify processes and unify IT investments across the federal government.
As a result, OMB now can ensure that IT resources are being allocated optimally across common functions that the government performs. Functions that are performed by multiple agencies are now clearly delineated, and the opportunities for cross-agency collaboration to improve performance are readily apparent. OMB is accomplishing this through the Business Reference Model (BRM), which is the foundational layer of the Federal Enterprise Architecture (FEA). Over the past year, OMB used the BRM to:
4. Few agencies have plans demonstrating and documenting the linkage between IT capabilities and business needs.
The most important element of enterprise architecture is the identification of how IT can be leveraged best to improve agency performance of core missions. Many agency Enterprise Architectures lack focus on business results. As a result, many agencies, bureaus and operating divisions cannot share information or systems; this shortfall increases operating costs as well as burden on citizens and businesses. Additionally, agencies cannot easily analyze IT security risks and determine investment needs; and agencies make redundant investments in IT because programs cannot predict whether IT requirements will be met without buying their own version of a system. These issues can be addressed through better use of enterprise architectures that comprise a modernization blueprint.
Although some improvements have been made in recent years, agencies still often base IT investments on business cases that fail to link IT investments to performance improvement. Progress in this area includes:
5. Many major IT projects do not meet cost, schedule, and performance goals.
Under the Federal Acquisition Streamlining Act (FASA) and the Clinger Cohen Act, agencies must report and track progress against cost, schedule and performance goals for IT. Under OMB Circular A-11, agencies are expected to achieve on average 90 percent of the cost and schedule goals without reducing the performance capabilities. The greatest problem for the agencies is identifying how a project is performing against planned costs, schedule, and mission improvement goals. Until agencies begin to establish and document baselines, the Administrations ability to assess whether agencies are meeting such goals will be limited.
A comparison of agency investment requests for 2003, versus what is reported as actual costs, provides specific demonstration that too many IT projects have cost and schedule overruns. A sample comparison of projects identified cost growth ranging from 10 percent to 225 percent! Not surprising, these same projects failed to successfully make the business case for the 2004 budget and have either been rejected or placed on the At Risk List.
There are several strategies to improve the governments capacity to manage its IT portfolio. In response to the Presidents Management Agenda, and emerging needs such as homeland security, the federal IT workforce needs to become flexible to meet these new cross-agency needs. To address this issue, over the past year, OMB:
6. Major gaps exist in agency and government-wide computer-related security.
The Government Information Security Reform Act (GISRA) requires federal agencies and Inspector General (IGs) to conduct annual IT security reviews of programs and systems and report the results of those reviews to OMB and the Congress. GISRA was recently revised under the E-Government Act of 2002 and renamed the Federal Information Security Management Act.
Under the first year of GISRA reporting in 2001, the Administration was able to establish a baseline of agencies' IT security performance. While some agencies have demonstrated clear progress over the last year, significant challenges remain for other agencies.
To ensure that IT security weaknesses are appropriately addressed, OMB requires agencies to develop, implement, and maintain plans of action and milestones for every program and system where an IT security weakness was found. These plans are tied directly to the budget request for a system. Agency progress in executing their plans is used in determining the quarterly E-Government score for the Presidents Management Agenda Scorecard. OMB is also reinforcing longstanding policy that agencies address serious IT security weaknesses in their legacy systems prior to proceeding with new IT investments.
For the first time, the federal governments IT security program now has a basic set of IT security performance measures, a comprehensive and uniform process for collecting data against those measures, and a set of tasks and milestones that enable tracking of federal IT security progress. Additionally, agency reports reveal that further progress has been made against the six common government-wide IT security weaknesses identified in last years budget:
As agencies conduct more reviews, the number of security weaknesses they will find is likely to increase. Based on agency and IG IT security reports, agencies' plans of action and milestones, and IT budget materials, both progress and weaknesses have been identified. OMB set targeted milestones for improvement for some of the critical IT security weaknesses. These targets include:
Federal Enterprise Architecture
The need for a Federal government enterprise architecture was one of the most significant findings to emerge from the e-government strategy efforts. An enterprise architecture (EA) describes how an organization performs its work using people, business processes, data, and technology. EAs provide modernization blueprints to reform agency operations by aligning business, information, and technology systems to improve efficiency and effectiveness of an organization.
OMB is leading the development of a Federal Enterprise Architecture (FEA) with the support of the CIO Council. The FEA is a business-focused framework that provides the Office of Management and Budget (OMB) and Federal agencies with a mechanism to monitor, analyze, and control Federal investments in information technology (IT). The FEA will govern and guide IT investment decisions within agencies, and facilitate the identification of opportunities to collaborate on, consolidate, and integrate current and planned initiatives. The FEA will facilitate horizontal (cross Federal) and vertical (Federal, State, and Local governments) collaboration and communication. The FEA framework consists of a set of five interrelated reference models:
Funding IT and E-GovernmentThe President's Budget is clear about our plans to use capital planning to improve performance, achieve outcomes from investments that match agency strategic priorities, and provide real benefits to the public. As major corporations have adapted to the digital economy, business cases, enterprise architectures, and IT capital planning have become recognized as highly effective practices. In constructing the Presidents 2004 IT Budget, OMB employed a cross agency approach in the Federal IT capital planning process for leveraging existing IT investments and cross agency partnering. This Committee has strongly supported effective IT management practices, and OMB pledges the Administrations full support to employing these practices throughout the government. Many have expressed specific concerns about the funding required to meet the goals and changes of e-government. The Administration has sufficient funding for cross agency e-government projects if we simply stop funding what is redundant or not working. The FY 2003 Federal IT Budget portfolio totals approximately $58.2 billion; in FY 2004, we estimate that almost $59 billion will be spent on IT. As mentioned above, this year we identified opportunities for cross-agency projects and have worked to leverage investments from a number of partnering agencies for specific projects. For FY 2004, we developed a governance process for line of business consolidation, identified through design of the Federal business architecture. OMB gave priority to agencies that have worked collectively to present and support activities in an integrated fashion and used agency budget submissions to identify cross-agency investments. Agency activities should be aligned with those of other agencies where such cooperation can better serve citizens, businesses, governments, and internal Federal operations. In some cases, agency cultures and government organizational structures make it difficult to finance and manage cross-agency projects. To help overcome this barrier, the President included in his FY 2004 Budget, a proposal for a $45 million E-Government Fund for consolidations and innovative interagency e-government projects. The E-Government Act of codifies the E-government Fund, which will allow for the financing of cross-agency initiatives to improve service to the citizen and reduce operating costs. The Fund leverages cross-agency work in e government that serves citizens and businesses, and could drastically improve citizens' ability to access federal services and federal information online. The Fund provides for collaborative e government activities, seed monies for new and innovative projects and consolidating redundant information technology investments. The $5 million appropriated in FY 2002 was invested in tools to integrate agency investments. These tools were new and not redundant with other existing agency expenditures and were integrated into such as GovBenefits, Regulations.gov, E-Authentication and GoLearn. Congress provided $5 million of the $45 million requested for the E-Gov fund in FY 2003 and we will continue to leverage these funds to strengthen E-Gov initiatives. Our intent for FY 2004 is to fund similar integrations and achieve consolidation of redundant IT investments, under a fund that leverages other investments in a way that is not feasible through other funding sources. Indeed, as we are successful in using the e-government fund to integrate redundant systems, we can free up those same agency resources to be spent on more productive ways to achieve the missions that appropriated dollars are intended to serve. Thus it remains a key priority for the success of the E-Government agenda to fully fund the Presidents $45 million request for FY 2004. We look forward to working with this Committee and the Congress in ensuring that this funding is provided.
Implementation of the E-government Act of 2002The Administration is pleased that Congress passed the E-government Act of 2002. This Act, signed by the President on December 17, 2002, codifies a cross agency, citizen-centered approach to e-government and authorizes new initiatives across the government. The goals of the E-government Act are similar to those of the Presidents Management Agenda efficient government operations and effective decision making. The activities and initiatives of the Act align with several of the initiatives to further e-government, along with authorizing activities proposed in the Presidents Budget. These provisions include the sections authorizing our work on the governments web portal, FirstGov.gov; the development of a framework to provide for interoperability in using digital signatures for agency programs; authorization for electronic access to agency regulatory dockets; the promotion of open geospatial information standards; strengthening of privacy measures; and access for persons with disabilities. In implementing the E-government Act, OMB will oversee work to manage cross agency transformation of business processes through e-government in ways that utilize performance measures. OMB will integrate the requirements and provisions of the Act into the Presidents Management Agenda and the Expanding E-government initiatives. OMB will provide for strong privacy and security measures, as well as setting strategic direction for information policy in general.
ConclusionThe Administration has made major advances in e-government over the last two years. The passage of the E-government Act of 2002 has strengthened the mandate for governmentwide IT reform and e-government. The Acts cross-agency approach to e-government mirrors our intent to improve the delivery of services and access to information for the American people. Mr. Chairman, we look forward to working with you, and your legislative colleagues, to achieve these important goals.