New marching orders

As a new president takes the Oval Office, federal agencies prepare for policy and priority shifts

Everything you know is about to be outdated.

For eight years, the federal government has operated under a now-familiar set of policy initiatives and priorities. President George W. Bush established a businesslike approach to government early with the President’s Management Agenda and elevated the status of contractors with pushes for competitive sourcing and the creation of small-business set-aside categories.

Now a new president with a very different mind-set is about to take charge. Barack Obama has little in common with Bush — though any president has an imperative to make the government operate effectively and efficiently. That means that Obama is likely to leave many of Bush’s successful initiatives in place, possibly with name changes or revisions.

Not all of the Bush-era efforts will survive, however. Some will undergo radical changes as the Obama team evaluates them in light of the new president’s priorities.

Obama and his agency leaders must contend with external issues, too. A sluggish economy and federal bailouts of many businesses will affect the budgets that agencies have to work with. Global threats remain and could compel sudden, significant priority shifts, as the 2001 terrorist attacks did for President Bush. The federal workforce continues to shrink, while the work to be done expands. All of this means that Obama’s agenda, like that of any president, is tempered by outside forces.

Still, it is possible to do some forecasting. In the pages that follow, the staff of Federal Computer Week looks at several key issues and their likely fate as the Obama administration takes command and issues its new marching orders.

As bailouts suck up federal funds, IT budgets become vulnerable
The unprecedented scope of the government spending on bailouts in recent months has created great uncertainty for the upcoming federal budget.

Policy-makers are examining cost-saving options to help offset the U.S. Treasury-backed $700 billion Troubled Assets Relief Program, the first bailout to be enacted. As a result, analysts who previously had predicted only modest growth in federal information-technology budgets now say those figures are likely to soften further. The actual effect on the federal budget will be measured in trillions of dollars, not billions.

“Most forecasts now are that federal IT spending will be flat,” said Trey Hodgkins, vice president of federal government programs at the Information Technology Association of America.

The outlook might become more optimistic if President-elect Barack Obama puts IT expenditures in the forefront of his economic stimulus and recovery plans. “There might be a few increases related to cybersecurity,” Hodgkins said.

“It looks like the federal IT budget will continue to grow, but just not as quickly,” agreed Deniece Peterson, principal analyst at research firm Input. The firm previously had predicted 4 percent growth in federal IT through 2013 but might lower the projection slightly, she said. Despite those indicators, Peterson noted that in previous recessions, federal IT expenditures tended to increase, though she described the current bailout situation as off the charts.

“The good thing about technology is when we have this tight fiscal environment, technology plays a role to save money. We have to spend money to save money,” she said.

Meanwhile, the budget outlook for agencies is problematic, to say the least. “There will be a squeeze on spending programs,” said Alan Chvotkin, senior vice president of the Professional Services Council. “There will be cutting of some programs, and I would not expect a significant ramp up of IT infrastructures.”

On the other hand, Obama views IT as an enabler, and that bodes well in the longer term, especially in high-priority areas such
as health IT. During the campaign, Obama said he wants to spend $50 billion over five years to invest in health IT. There also are media reports of health IT items in the stimulus package.

“I could see Obama moving forward fairly aggressively on a health IT infrastructure,” Chvotkin said.
— Alice Lipowicz

Economic downturn: a boon for federal recruiters
In the Silver Lining Department, the federal government’s critical shortage of skilled employees might get a needed booster shot from the nation’s economic downturn, giving the incoming Obama administration an opportunity to attract talent.

The new administration needs to develop and implement a strategic approach across agencies to attract a skilled workforce, but it can also take advantage of the fact that rising unemployment and economic uncertainty make the government look better as an employer, said John Palguta, vice president of policy at the Partnership for Public Service.

There is also a renewed interest in and enthusiasm for what government can do for the country and a realization that the government plays a vital role in solving the country’s problems, he said.

“From the people part, that means that it is a great opportunity to reach out and grab some really great talent into government,” Palguta said. “It’s not just the job security, which is important, but it’s the fact that we’ve got a new team. Every transition carries its own sense of possibility.”

As president, Obama should demonstrate that an effective government workforce is a top priority, human resource managers and chief human capital officers said in a recent survey by the partnership and Grant Thornton.

One specific action they advise Obama to take is to meet with members of the Senior Executive Service shortly after his inauguration and actively promote cross-agency collaboration on workforce-management issues. That would set an example for how politically appointed leaders should cooperate with career managers.

Stan Soloway, president of the Professional Services Council, said the Obama administration should enact polices designed to improve the skills of agency employees, particularly those in the acquisition workforce. “That’s the place that’s going to deliver the greatest payback,” he said.

During the campaign, Obama indicated that he was going to pull work back into the government, reducing dependence on contractors, said Robert Burton, former deputy administrator at the Office of Federal Procurement Policy and now a partner at the Venable law firm. However, Burton also said the blended workforce of contractors and federal employees working side by side is here to stay.

Still, the new administration needs to work with the human resources managers to locate performance gaps, he said.

“The government relies on the private sector more than ever because our workforce shortages are so serious and the capabilities of the government have changed over the years,” Burton said. “We really do rely on the private sector more to accomplish agency mission.”

The shortfall in the number of skilled workers is especially sharp in positions associated with technology. In a recent survey by the Association for Federal Information Resources Management, chief information officers listed hiring and retaining skilled professionals as their top challenge, repeating the findings from 2007.

Chief human capital officers said in AFFIRM’s survey that the president should modernize the federal civil service system, making it more sensitive to market and performance results, and update the federal job classification system and grade levels.

The intelligence community might provide a snapshot of the future federal workforce. It is multiagency and has been on a hiring surge since the 2001 terrorist attacks, said Ron Sanders, chief human capital officer at the Office of the Director of National Intelligence. Half of the employees in the intelligence community have been government employees for five years or less, he said. “And surveys show they want to be paid and promoted on the basis of performance, like their private-sector counterparts. And if we’re not responsive to that, they will go elsewhere,” Sanders said.
— Mary Mosquera

Easier said than done: Getting agencies to share information
Although the Information Sharing Environment has a lower profile than enhanced airport screening and virtual border fences, the effort to exchange terrorism-related data between authorities might be one of the lasting legacies of the Bush administration’s homeland security programs.

Congress prescribed the establishment of the ISE in a sweeping 2004 intelligence reform law. The Bush administration laid the foundation, but now the Obama team must build the structure to make it work.

Views differ on how the incoming president should approach many of the ISE’s principal information technology-focused programs, which involve the Office of the Director of National Intelligence, the FBI, the Homeland Security Department, the military, and state and local officials. In particular, policies related to privacy and ownership of information have proven difficult to establish without provoking worries from one interest group or another.

Debates over which federal agency should be responsible for sharing what and with whom, the role non-federal authorities play in counterterrorism efforts, and how privacy and civil liberties should be protected in the ISE all will continue well past Obama’s inauguration. Current and former federal officials who have been involved in the effort to build the ISE say that although work remains, groundwork has been laid and shouldn’t be discarded.

“I would hope that the [Obama] administration won’t throw out everything that’s been done,” said John Cohen, a senior adviser to the Program Manager for the Information Sharing Environment (PM-ISE).

Cohen pointed to efforts such as creating state and local intelligence fusion centers and standardizing how suspicious activity is reported as initiatives he hopes the Obama administration will continue. Cohen plans to remain in office during the next administration.

Dale Meyerrose, who served as the chief information officer of the Office of the Director of National Intelligence until September 2008, said he thinks the ISE has done a good job in moving the ball forward with the available tools, but the problems require more aggressive action and some remaining ambiguities still need definition.

One problem Meyerrose identified is an artificial line between domestic and international matters. Terrorism occupies a seam between the two, and policies need to better reflect that reality, he said.

James Carafano, a senior research fellow with the conservative Heritage Foundation think tank, agreed that the next administration should not start over. Conservatives worry that the new administration and the new Congress could move to roll back some of the things that they believe have worked during the course of the Bush administration.

However, Michael German, a former FBI agent who now is policy counsel at the American Civil Liberties Union, said he sees agencies often operating at cross-purposes in their information-sharing efforts. Agencies now have more authority and less oversight than they did before the 2001 terrorist attacks, he said, creating greater risks of abuse. 

German gave the PM-ISE credit for its efforts to engage with privacy and civil liberties activists but said he wasn’t sure how much difference the dialogue made in setting policies. The Obama administration, he said, should evaluate the Bush-era policies related to information sharing, which he said have amounted to the establishment of an “intelligence surveillance complex.”

“If the federal government is setting up these networks, if they are encouraging intelligence gathering at the state and local level, then they have to take responsibility,” he said.

“A lot of it is just holding these agencies accountable.”

However, Cohen of the PM-ISE said that leading Democratic lawmakers have also supported federal information-sharing environment efforts. He added that many of the ISE’s efforts grew out of state-level ideas, including some championed by Arizona Gov. Janet Napolitano, Obama’s pick to head the Homeland Security Department.
— Ben Bain

Women, vets move up on small-business totem pole
Veterans and women who own small businesses will likely get a boost from President-elect Barack Obama’s small-business agenda.

Obama said during his campaign that he would strengthen federal small-business programs that focus on women, service-disabled veterans and minority business owners. Obama pledged to increase the Small Business Administration’s budget and strengthen its clout in the government. He nominated Karen Mills, a principal in the private equity and venture capital field since 1993, to be the agency’s new administrator.

In particular, the president-elect wants to boost contracting opportunities for women business owners. He has promised to finally enact a long-awaited contracting program for companies owned by women. SBA officials had been trying to launch the program for the past two years, but some members of Congress have resisted it because they object to the rule that defines the program’s extent. The set-aside program would be open to only four industries defined by the classification system SBA uses: furniture and cabinet-makers, auto dealers, engravers and national security. Lawmakers vehemently objected to the proposed rule when it was published early in 2008 and were ready to block it statutorily with a single provision in an appropriations bill. So far, SBA hasn’t implemented the rule.

Small-business observers also expect veterans to benefit more than some other set-aside groups. Service members returning from Iraq and Afghanistan will get a lot of attention from the government under Obama, said Guy Timberlake, chief visionary and chief executive officer at the American Small Business Coalition.

So far, efforts to encourage contracting with veteran-owned firms have been minimally effective, but Timberlake said he believes Obama’s priorities could lead to a significant expansion of opportunities for such firms.

Whatever the set-aside category, many small businesses teeter on the verge of collapse when the economy falters. Thom Rubel, practice director of government programs at Government Insights, and the government must develop ways to help businesses grow. Finding ways to send more contracting dollars to the successful businesses is good, he said, but incubation programs to allow the newest and smallest firms some support while they mature would create a more vibrant small-business community.

These days, though, technology enables small businesses to offer much more than similar-sized firms could 10 or 20 years ago, Timberlake said. It leads to greater capacity to handle more work on large, complex contracts, which in the past were geared for large companies.
Despite it all, some small-business executives are still skeptical about Obama’s promises.

“It’s an easy thing to say, ‘We support small businesses,’” said Daniel Carr, chief executive officer of Distributed Solutions, a small business. 
He said he’s heard that talk before while federal dollars have gone elsewhere.

“It’s in our nature to be optimistic,” he said. “The entrepreneurial hat worn by small businesses requires that we see opportunity and hope around every corner.”
— Matthew Weigelt

Contractors to get a watchful eye from ethics-minded administration
Government contractors are bracing for intense oversight from the Obama administration as the government checks contractors’ performance and even their internal operations.
The coming years will center on contractor “ethics and ethics and ethics,” said Alan Chvotkin, senior vice president and counsel at the Professional Services Council.
Although the Bush administration targeted agencies’ internal management and processes, the private sector will get the microscope this time around. President-elect Barack Obama promised during his campaign to enact measures aimed at improving contractor performance.
“We need to brace ourselves for more audits and investigations,” said Robert Burton, former deputy administrator at the Office of Federal Procurement Policy and now a partner at the Venable law firm.
Gregory Garrett, managing director of Navigant Consulting, said both Obama and the Democratic-led Congress believe Bush administration officials coddled large contractors, particularly in the defense industry. As a result, compliance programs will be more important for contractors.
In December, regulators instituted rules requiring contractors to report overpayments and crimes, disclosures that had previously been voluntary. Experts agree the new government leadership, including Congress, is about to become more invasive when dealing with contractors. The rules not only made it mandatory for companies to report crimes when there is credible evidence but also to enact internal procedures to reveal those crimes.
Obama promised to create a contracts and influence database. It would disclose how much contracting companies spend on lobbying, what contracts they’re getting and how well they complete the work.
The proposal aligns with another database required in the fiscal 2009 National Defense Authorization Act (S. 3001), which became law in October. Dubbed the bad-apple database by some, the legislation establishes a database regarding the integrity and performance of companies awarded federal contracts. Companies earn a spot in the database when they get a criminal conviction, civil penalty, suspension or debarment, or default on a contract.
Gathering such information can play a major role in keeping contractors in check. A report by the Center for American Progress Action Fund said a lack of contractor information weakens enforcement and accountability on companies.
“The database should be used by federal contracting officers when evaluating bids, as well as be available to the public because sunshine is a powerful force for exposing wasteful and abusive contracting,” according to the report, which was released in December.
Experts emphasized provisions in the defense authorization bill as a sign of what’s to come under Obama. The bill requires a one-year limit on sole-source contracts and tries to get a better handle on agencies’ use of cost-reimbursement contracts.
Obama has said he opposes no-bid contracts and intends to launch a program of acquisition reforms to stop them in the Defense Department, according to strategic plans. On a governmentwide scale, he wants to require agencies to competitively award all contract orders of more than $25,000, unless the contracting officer provides sufficient written justification for a sole-source award.
During his tenure in the U.S. Senate, Obama sponsored several bills that would open the government’s books on its spending. One of the bills, known as “Google for Government,” created the USASpending.gov Web site, which lays out where government money goes. The second bill, which failed to pass, would have toughened transparency requirements to, among other things, demand that agencies post contract documents online.
At the beginning of the Bush administration, few people would have believed Congress would seriously consider posting actual contract documents online for the public to read, Burton said.
“I would have snickered at the idea,” he said. “That would not surprise me now.”
— Matthew Weigelt

The wisdom of the crowd moves inside the Beltway
Barack Obama signaled his embrace of Web 2.0 technologies early on when he began posting weekly addresses on YouTube. Now that he’s headed for the White House, it won’t be long before the rest of the federal government tries to catch his wave.

Agencies have been experimenting with Web 2.0 — a catch-all term for a variety of technologies geared to social interaction — for some time. But the government’s instinct to control the flow of information often hinders the entrepreneurial efforts of some agency officials to use them effectively.

For example, when Gen. James Cartwright — the current vice chairman of the Joint Chiefs of Staff — was commanding officer of the Strategic Command, he launched a blog in 2004 to communicate to the public and encouraged feedback and dialog. 

“That was pretty unusual. It caused a lot of stir there,” said Art Fritzson, a vice president of Booz Allen Hamilton. “People, especially his direct reports, were a little unnerved by the fact that anybody could be posting on the Web.”

Cartwright’s staff began setting rules and guidelines for people who wanted to post comments on the blog — before the general intervened. “He spoke directly to his staff and he warned them, ‘You will not interfere in any way, inclusively or exclusively, with anybody posting to [this] blog,’” Fritzson said.

Fritzson’s areas of expertise include both the military and emerging technologies, putting him on the front lines of the Defense Department’s use of Web 2.0.

Cartwright’s instinct was correct, Fritzson added: Too many restrictions on social interaction applications reduce the effectiveness of the tools.

Web 2.0 technology encompasses a host of things fostering interconnectedness, such as Web services to connect back-end systems and Really Simple Syndication (RSS) feeds to send content automatically to subscribed users. Applications — ways to use the technologies — include simple blogs, wikis for collaborative information development, social-networking systems such as Facebook and LinkedIn, and virtual-reality worlds such as Second Life.

For federal agencies, the new tools create new opportunities for interacting with the public and for improving internal operations, said Kevin Lawson, branch chief for applications development at the Transportation Security Administration.

Agency officials should consider their intentions for the technologies and applications: Who will use them and for what purposes?
Although blogs and wikis catch a lot of attention, not all Web 2.0 implementations target the public. TSA, for example, launched a Web 2.0 application in 2007 designed to elicit ideas from employees. The system, called the Idea Factory,  was inspired by Dell’s IdeaStorm Web site. The application lets anybody on TSA’s network post ideas and comment and rate other users’ ideas.

“This created a forum where our screeners can go every day and in a community style, add their ideas,” Lawson said. In its first 18 months, Idea Factory logged 7,300 ideas, 172,000 ratings and 64,000 comments.

For TSA, there is already evidence the technology works. One user on Idea Factory suggested that airport baggage screeners should not lose their seniority when they move from one location to another. That suggestion led to a policy change to enact the idea. “And we built a little Web application that lets people post the fact that they want to move, where they want to move to, and now these screeners can link up with each other,” Lawson said.

TSA’s model of borrowing a good idea is one every agency should follow, said Kevin Marks, a developer advocate at Google.

“Rather than starting out from scratch and doing something out of whole cloth, you can reuse bits and pieces and connect them together,” Marks said. “That is very much a part of how we approach the Web at Google, and it is how we encourage developers to do it, too.”
 — Doug Beizer


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