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United States General Accounting Office:
GAO:
Expected at 10 a.m. EDT on Tuesday September 23, 2003:
ELECTRONIC GOVERNMENT:
Progress and Challenges in Implementing the Office of Personnel
Management’s Initiatives:
Statement of Linda D. Koontz:
Director, Information Management Issues:
GAO-03-1169T:
GAO Highlights:
Highlights of GAO-03-1169T, a testimony before the Subcommittee on
Technology, Information Policy, Intergovernmental Relations and the
Census, Committee on Government Reform, House of Representatives
Why GAO Did This Study:
Electronic government (e-government) refers to the use of information
technology (IT), including Web-based Internet applications, to enhance
access to and delivery of government information and services, as well
as to improve the internal efficiency and effectiveness of the federal
government. The Office of Personnel Management (OPM) is managing five
e-government initiatives whose goal is to transform the way OPM
oversees the government’s human capital functions. These 5 initiatives
are among 25 identified by the Office of Management and Budget (OMB)
as foremost in the drive toward e-government transformation. The 25
initiatives have ambitious goals, including eliminating redundant,
nonintegrated business operations and systems and improving service to
citizens by an order of magnitude. Achieving these results, according
to OMB, could produce billions of dollars in savings from improved
operational efficiency.
In today’s testimony, among other things, GAO identifies the
challenges facing OPM as it moves forward in implementing the five
human capital initiatives.
What GAO Found:
OPM’s five e-government initiatives (summarized in the table) are an
ambitious attempt to transform the way human capital functions and
services are carried out in the federal government. OPM faces several
challenges that, if not fully met, could prevent it from meeting its
objectives and realizing projected improvements and dollar savings.
For instance, in order to meet a perceived need for quick results,
alterations have been made to the acquisition plans for several of the
25 OMB-sponsored e-government initiatives, including OPM’s Recruitment
One-Stop initiative. In OPM’s recent decision to continue with its
awarded contract for Recruitment One-Stop, despite a successful bid
protest by Symplicity Corporation, agency officials perceived the need
for quick results to be one factor outweighing the importance of
issues raised by GAO concerning the conduct of the procurement.
However, by taking this course, OPM risks alienating potential
supporters of its initiative.
Further, managing the migration from agency-specific systems to
consolidated systems will be a challenge, because agencies may be
required to take positive action to shut down existing systems and
invest in additional or updated technology to use the new,
consolidated systems resulting from OPM’s five initiatives.
Consequently, it will be crucial for OPM to implement effective change
management and communication policies. In addition, technical
integration across agencies to support consolidation, including the
development of standards, is a formidable task.
Finally, OPM also faces a significant challenge in realistically
estimating the cost savings to be derived from these initiatives. In
many cases, estimates of cost savings are only loosely based on
measures that are difficult to quantify, such as the average cost of
performing a certain function across the government. To be truly
effective in meeting its goals, OPM needs to establish complete,
meaningful, and quantitative measures of cost savings.
www.gao.gov/cgi-bin/getrpt?GAO-03-1169T.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact Linda Koontz at (202)
512-6240 or koontzl@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
I appreciate the opportunity to participate in the Subcommittee's
hearing on the progress of, and challenges to, implementing the
electronic government (e-government) initiatives that are being led by
the Office of Personnel Management (OPM). Generally speaking,
e-government refers to the use of information technology (IT),
including Web-based Internet applications, to enhance the access to and
delivery of government information and service to citizens, business
partners, and employees, and to improve the internal efficiency and
effectiveness of the federal government. A variety of actions have been
taken in recent years to enhance the government's ability to realize
the potential of e-government, culminating in the enactment of the E-
Government Act of 2002,[Footnote 1] which includes provisions to
promote the use of the Internet to provide government services
electronically, strengthen agency information security, and manage the
federal government's growing IT human capital needs.
The President has embraced e-government as one of five priorities in
his management agenda for making the federal government more focused on
citizens and results. Under the leadership of the Office of Management
and Budget (OMB), a set of high-profile initiatives was identified to
lead the drive toward e-government transformation. These initiatives--
now numbering 25[Footnote 2]--have ambitious goals, including
eliminating redundant, nonintegrated business operations and systems
and improving service to citizens by an order of magnitude. Achieving
these results, according to OMB, could produce billions of dollars in
savings from improved operational efficiency. However, to realize such
savings, it will be critically important that these initiatives are
well managed as the government undertakes the challenging task of
turning good ideas into real-world results.
OPM, the President's agent and advisor for human capital matters, is
charged with overseeing the management of the federal government's most
important asset--its people. OPM is in the process of transformation--
from less of a rulemaker, enforcer, and independent agent to more of a
consultant, toolmaker, and strategic partner in leading and supporting
executive agencies' human capital management systems. As part of that
transformation, OPM has taken on the role of managing partner for 5 of
the 25 OMB-sponsored e-government initiatives. As requested, in my
remarks today, I will provide an overview of OPM's initiatives and
identify the challenges facing OPM as it moves forward in implementing
these initiatives. I have also included an attachment that lists other
pertinent GAO publications on e-government issues.[Footnote 3]
Background:
Expansion of e-government was one of five top priorities in the
President's fiscal year 2002 management agenda for improving government
performance.[Footnote 4] To support that priority, a task force, led by
OMB, was established in 2001 and charged with identifying electronic
government projects that could deliver significant productivity and
performance gains across government. The task force analyzed the
federal bureaucracy and identified areas of significant overlap and
redundancy in how federal agencies provided services to the public. The
task force found that multiple agencies were conducting redundant
operations within 30 major functions and business lines in the
executive branch. To address these redundancies, the task force
evaluated potential projects, focusing on collaborative opportunities
to integrate IT operations and simplify processes within lines of
business across agencies and around citizen needs. As a result of this
assessment, the task force identified a set of high-profile
e-government initiatives for accelerated near-term implementation.
These are now the 25 OMB-sponsored initiatives.[Footnote 5]
The President's management agenda outlined the following results
expected as a result of e-government:
* provide high-quality customer services regardless of whether the
citizen contacts the agency by phone, in person, or on the Web;
* reduce the expense and difficulty of doing business with the
government;
* cut government operating costs;
* provide citizens with readier access to government services;
* increase access for persons with disabilities to agency Web sites and
e-government applications; and:
* make government more transparent and accountable.
OMB also established a portfolio management structure to help oversee
and guide the initiatives and facilitate a collaborative working
environment for each of them. This structure includes five portfolios:
"government to citizen," "government to business," "government to
government," "internal efficiency and effectiveness," and "cross-
cutting." Each of the 25 initiatives is assigned to one of these
portfolios, according to the type of results the initiative is intended
to provide. Further, for each initiative, OMB designated a specific
agency to be the initiative's "managing partner," responsible for
leading the initiative, and assigned other federal agencies as
"partners" in carrying out the initiative. OPM was designated the
managing partner for five initiatives--Recruitment One-Stop, which is
to provide a consolidated Web site for federal job applicants;
e-Clearance, which seeks to improve the process of granting security
clearances; Enterprise Human Resources Integration, which is to replace
paper personnel files with electronic records; e-Training, which is to
provide Internet-based training for federal employees; and e-Payroll,
which seeks to consolidate federal payroll systems. The five
initiatives are all part of the internal efficiency and effectiveness
portfolio.
In developing this testimony, our objectives were to describe the
progress of the five e-government initiatives being managed by OPM and
identify key challenges associated with implementing them successfully.
To address these objectives, we analyzed relevant documentation from
OPM and interviewed project officials from each of the initiatives. To
assess progress to date and identify major challenges to implementing
the initiatives, we analyzed the reported accomplishments and planned
activities of the projects and compared them with information provided
in the initiatives' original business cases. We also held discussions
with agency officials to obtain additional information. We performed
our work in September 2003 in accordance with generally accepted
government auditing standards.
OPM's e-Government Initiatives Are Designed to Support a Range of Human
Capital Functions:
OPM's e-government initiatives are intended to serve as a complete set
of electronic support tools for the federal government's human capital
functions, including recruitment, security clearances, personnel
records, training, and payroll. OPM's retirement systems modernization
project--not an OMB-sponsored initiative--rounds out this set of tools.
OPM's vision is for these initiatives to streamline and improve the
process for moving employees through the entire life cycle of their
employment with the federal government and to do so consistently with
the evolving Federal Enterprise Architecture[Footnote 6] as well as
with security and privacy standards. According to the agency, the
success of the initiatives will depend on leveraging of existing IT
coupled with standardization and consolidation practices that are
beneficial to end users.
If successful, these initiatives are likely to accrue savings to the
federal government by reducing redundancy among agency systems and
streamlining the various processes involved in tracking and managing
federal employment. Although we have not evaluated its claim, OPM
asserts that its e-government projects will save approximately $2.6
billion over the life of the initiatives. These savings are expected to
derive not only from eliminating duplicative personnel systems, such as
payroll systems, but also from such process improvements as reducing
the amount of time it takes to obtain a security clearance and
streamlining the way in which training is administered. Table 1
provides an overview of OPM's e-government projects and key milestones,
and table 2 provides a summary of changes in cost estimates for the
initiatives.
Table 1: Overview of OPM's Five e-Government Initiatives:
[See PDF for image]
Source: GAO analysis of OPM and OMB documents.
[End of table]
Table 2: Changes in Cost Estimates for OPM's Five e-Government
Initiatives:
[See PDF for image]
Source: OPM.
[End of table]
Recruitment One-Stop:
Recruitment One-Stop is a collaborative effort between OPM and its
federal agency partners to develop a comprehensive Web site
(www.usajobs.opm.gov) to assist applicants in finding employment with
the federal government. Full implementation of Recruitment One-Stop is
expected to benefit citizens by providing a more efficient process for
locating and applying for federal jobs, and to assist federal agencies
in hiring top talent in a competitive marketplace. As we have
previously reported, automation has the potential to provide a variety
of benefits in streamlining the hiring of new employees.[Footnote 7]
The specific objectives of Recruitment One-Stop that will benefit
federal job applicants include:
* a single portal advertising federal job opportunities that supports
searching for jobs by type, location, salary, or level of experience; a
standard method for applying for federal positions that provides
immediate feedback on basic eligibility; and basic eligibility
screening that addresses issues such as citizenship, age, and special
occupational requirements, such as the need to carry firearms;
* standardized vacancy announcements with additional detailed
information available via electronic "hyperlinks";
* tools to build and store an on-line resume, including a resume
template covering all information normally needed to make basic
qualifications and eligibility determinations; and:
* the ability to check on the status of federal job applications by
accessing basic information such as closing and/or cancellation dates,
dates of candidate referral, and points of selection.
In addition, agencies are expected to be able to search and review the
resumes of consenting applicants in the USAJOBS database, a process
called applicant database mining. This feature will assist agencies in
locating candidates for hard-to-fill positions by capturing "passive"
job seekers who have resumes on file, but who may not have thought of
looking for opportunities within a particular agency, job field, or
location.
To date, the Recruitment One-Stop initiative has met several planned
milestones, including implementing enhancements to the previously
existing www.usajobs.opm.gov Web site in August 2003, such as a resume
builder to assist job applicants in developing up to five versions of
their resume with which to apply for federal jobs, and a basic
application status tracking tool to assist applicants in finding the
status of their federal applications. By the end of this month, OPM
plans to have all executive branch agencies using the Web site to
advertise their jobs. By December 2003, it intends to begin working
with agencies to shut down agency-unique job search engines and resume
builders.
OPM has continued development of the enhanced USAJOBS Web site despite
a successful bid protest against its contract award for implementing
the enhancements. On January 16, 2003, OPM awarded a contract to TMP
Worldwide, Inc., to support enhancements to the Web site. However, on
January 24, 2003, a competing vendor, Symplicity Corporation, protested
the award. We sustained Symplicity's protest on April 29, 2003, based
on a determination that OPM did not exercise certain necessary
evaluative controls in its review of the bids before awarding the
contract, resulting in errors in the bidding process that created an
unfair competitive environment. For example, we found that OPM did not
perform an analysis of whether the quoted services, labor categories,
and other direct costs included in TMP's quotation were within the
scope of TMP's approved GSA contract schedule. Based on this finding,
we recommended that OPM reopen discussions with all vendors whose
quotations were competitive and request and reevaluate revised
quotations. However, on July 21, 2003, OPM informed us that it would
not reopen discussions with vendors, citing as one of its reasons the
need to complete the system "within the government's required time
frame." On August 5, 2003, we submitted a report to Congress
summarizing the protest decisions and the circumstances of the failure
of OPM to implement our recommendation.
OPM is planning to measure the performance of the enhanced Web site and
features with metrics such as cost per hire, time to fill vacancies,
and the percentage of federal job applicants using Recruitment One-
Stop. OPM expects that once Recruitment One-Stop is fully implemented,
it will generate a total of $365 million in savings through fiscal year
2012. According to project officials, the expected cost savings were
extrapolated from projected average annual decreases in the cost of
hiring each new federal employee. By fiscal year 2005, OPM's goal is to
reduce the cost per hire from $2,790 to $2,678, reduce the time to fill
job vacancies from 102 days to 97, and increase the percentage of job
applicants using Recruitment One-Stop from 80 to 84 percent.
e-Clearance:
The e-Clearance project is designed to improve processing of security
clearances for federal employees. It focuses on consolidating and
increasing access to information to improve the efficiency of granting
or locating previous clearances or investigations. OPM intends the
e-Clearance project to help streamline data collection and case
scheduling by making it easier to locate existing investigations and
clearances, providing for almost immediate retrieval of archived
records as they are needed. The expected benefits include quicker
granting of clearances, elimination of redundant investigations, and
financial savings from a reduction in the overall costs of clearances.
The initiative consists of three modules:
* Electronic Questionnaires for Investigations Processing involves the
automation of the Questionnaire for National Security Positions
(Standard Form 86). This paper-based form requires at least 2 hours to
complete, and some federal employees are required to fill it out as
often as every few months to maintain their security clearances. Since
the current form is processed manually, it must be completed each time
from scratch. In contrast, the electronic version of the form will be
populated with previously submitted data, thereby streamlining the
application process. In addition, a new form has been deployed that
allows federal employees to indicate that there have been no changes in
the data provided on the most recently filed Standard Form 86, or,
where there are changes, to provide only the newly changed information.
* Clearance Verification System consists of the development and
implementation of a cross-agency system to enable a single search to
locate investigative and clearance information from any agency. This
module requires civilian agencies to load their existing clearance
information into OPM's Security/Suitability Investigations Index so
that new clearance applications can be checked against existing
information. The module also includes developing a link to the
Department of Defense's Joint Personnel Adjudication System to access
comparable DOD information.
* Imaging includes the creation, storage, and retrieval of digital
images of investigative reports and other documents. Often, the longest
delay in an investigation can be the retrieval, copying, and mailing of
previous reports. The use of imaging is intended to ease retrieval and
dissemination of investigative information for authorized users.
Currently, OPM states that all major milestones for this initiative
have been met, including:
* activating Electronic Questionnaires for Investigations Processing in
June 2003;
* completing the Clearance Verification System connection between OPM
and DOD at the end of 2002, and having 80 percent of agencies load
their existing clearance information into the Clearance Verification
System at the end of January 2003; and:
* beginning the process of creating digital images of existing
investigative records by May 2003.
The requirements for Imaging were developed between the fall of 2002
and the summer of 2003, and some agencies have begun imaging while
others will phase in this capability. Additionally, OPM plans to
implement a secure network for exchanging imaged files by early 2004.
OPM plans several performance improvements for fiscal year 2005,
including reducing the average time to process clearance forms
electronically from 28 to 21 days, adding three additional forms to the
one now available in the Electronic Questionnaires for Investigations
Processing application, keeping unscheduled application downtime at no
more than 2 percent, and providing training to all e-Clearance staff.
OPM estimates that e-Clearance will realize savings of $258 million
through fiscal year 2012. These savings are to be realized through
avoiding agency-unique systems procurements and through a $50 reduction
in the average cost of each clearance investigation.
Enterprise Human Resources Integration:
The purpose of the Enterprise Human Resources Integration (EHRI)
initiative is to facilitate human capital management activities by
providing storage, access, and exchange of standard electronic
information, through development of a data repository of standardized
core human capital data for all 1.8 million executive branch employees.
These data will be in the form of an Official Electronic Record, which
is intended to replace the current paper-based Official Personnel File.
An Official Electronic Record for each employee is to be maintained
through electronic exchange of information among agencies throughout an
employee's government career. Because all EHRI information exchanges
will be electronic, OPM expects to reduce process cycle times, and
improve the accuracy of transactions.
The three primary goals of EHRI are to:
* provide for comprehensive knowledge management and workforce
analysis, forecasting, and reporting to further strategic management of
human capital across the executive branch;
* enable expanded electronic exchange of standardized human resources
data within and across agencies and systems and the attainment of
associated benefits and cost savings; and:
* provide unification and consistency in human capital data across the
executive branch.
OPM plans to implement EHRI in three releases. Release 1 will be a
prototype of the data repository system and is scheduled to be ready by
September 30, 2003. Release 2, scheduled for the second quarter of
fiscal year 2004, is intended to allow biweekly employee data to be
provided electronically. Release 3 is planned to incorporate interfaces
between OPM's Retirement System Modernization system and e-Training and
to allow two-way electronic transfer of personnel data between
agencies. The system functionality is to be incrementally available
between March and September 2004.
OPM plans to improve performance for fiscal year 2004 in areas such as
personnel management, savings and cost avoidance, and data reliability
and quality. For example, it intends to alter regulations, executive
orders, and laws to enable the conversion of records to an electronic
format. Another planned measure involves eliminating the need for
agencies to develop new human capital management capabilities. Other
measures include a reduction in the baseline data error rate and
participation by 9 of the 18 partner agencies in electronic workforce
forecasting. OPM reported that EHRI would save taxpayers around $235
million through fiscal year 2012.
e-Training:
The purpose of the e-Training initiative is to create a governmentwide
e-Training environment--the Gov On-line Learning Center
(www.golearn.gov)--which is to support the development of the federal
workforce and provide a single source for on-line training and
strategic human capital development for all federal employees. The Gov
On-line Learning Center is designed to provide users access to a broad
range of products and services, including mandatory government-wide
training on topics such as computer security, ethics, and preventing
sexual harassment, as well as agency-specific training and high-
interest topics, such as homeland security. Some of the courses are to
be free, while others are to be available on a fee-for-service basis.
OPM also plans for the GoLearn Web site to provide tools that will
allow human capital specialists and employees to match an employee's
professional and individual development to available courses and
services. OPM expects that its initiative will allow agencies to focus
their own training efforts on unique needs, thus maximizing the
effectiveness of their expenditures on workforce performance. Providing
agencies with on-demand e-learning services is expected to enable the
government to better attract, retain, manage, and continuously educate
the highly skilled professionals needed for a flexible and high-
performing government workforce.
The e-Training initiative is intended to benefit the government and
federal workforce by:
* encouraging e-training investments as part of a systematic and
continuous development of federal government human capital;
* reducing redundancies in the development and purchase of e-training
content;
* achieving economies of scale through consolidated purchasing;
* offering easy, one-stop access to a robust, high quality e-training
environment; and:
* leveraging components of existing e-training systems.
The e-Training Initiative is composed of three developmental modules.
Module 1, launched in July 2002, included 37 free commercial off-the-
shelf training courses (on topics such as project management,
prevention of sexual harassment, using Microsoft Excel spreadsheet
software, and change management); "Search and Select," a set of quick 5
to 7 minute learning segments; and "E-Books," a collection of over 100
professional journals and books. Module 2, launched in January 2003,
added access to additional free commercial and government courses, fee-
for-service options for e-training products and services, enhanced
registration and reporting, and blended learning options for law
enforcement training and executive and management training. Finally,
Module 3, originally scheduled for June 2003, recently became
operational. OPM states that this module will include a Merit Systems
Principles e-course, as well as competency-based workforce development
roadmaps specifically for IT workforce occupations. According to OPM,
future releases of the Gov Online Learning Center will move from
providing content to facilitation of learning. The agency also plans to
introduce knowledge domains, user communities of practice, and virtual
collaboration tools.
OPM estimated that e-Training would save taxpayers about $784 million
through 2012. These savings are expected from the lower cost associated
with providing on-line training, such as savings resulting from less
travel. OPM expects to have 30 customized Web sites in operation for
fiscal year 2004. Its goal is to have 77,000 courses completed and 48
sites developed. It is planning to measure performance of the
e-Training initiative through indicators such as the number of eligible
GoLearn users, the number of participating entities, the number of
GoLearn courses completed and the number of custom sites. For example,
OPM plans to increase the number of individuals registered on the
GoLearn site from 142,000 to 193,000.
e-Payroll:
The goal of the e-Payroll initiative is to substantially improve
federal payroll operations by standardizing them across all agencies,
integrating them with other human resource functions, and making them
easy to use and cost-effective. To achieve this goal, plans are to
consolidate the operations of 22 existing federal payroll system
providers, simplify and standardize federal payroll policies and
procedures, and better integrate payroll with other human capital and
finance functions across federal agencies.
Major objectives of the initiative include (1) defining governance for
the initiative, (2) standardizing payroll policies, (3) establishing
an e-Payroll enterprise architecture, and (4) overseeing consolidation
of agency payroll operations. The first major project deliverable--
establishing governance--was completed in April 2002 as scheduled. OPM
chose four agencies to be providers of payroll services to all 116
executive branch agencies. The four selected providers are the General
Services Administration (GSA) and the Departments of Defense, Interior,
and Agriculture. The initiative is divided into two major phases:
* migrating each of the 18 nonselected payroll system providers to one
of the four selected providers by September 2004, and:
* merging the functions of the four selected payroll providers into
just two, while working to develop a single, integrated payroll system
for all executive branch agencies.
Although providers have been selected and a migration schedule
established for nonselected agencies, other actions have been delayed.
Standardization of policies, originally scheduled for completion in
July 2002, is currently ongoing. The enterprise architecture planning
task and the initial phase of agency consolidations were both scheduled
to begin in October 2002 but were not initiated until January 2003.
According to the project manager, these schedule deviations have not
led to a significant delay in the overall progress of the initiative
toward the original goal of consolidating the 22 payroll providers to 4
by September 2004.
OPM reported that e-Payroll should save $1.1 billion through fiscal
year 2012. These savings would result from reducing operating costs,
eliminating duplicative systems investments, and simplifying payroll
processing. OPM plans to use several indicators to measure performance
and improvements regarding e-Payroll for fiscal year 2005, including
reductions in payroll costs per W-2 per employee, improvements in the
accuracy of Treasury disbursements, and reductions in response time.
Currently, the cost of payroll services per W-2 per employee can vary
from $125 to $225. OPM's plan is to lower these costs to $97. Other
planned improvements include increasing the accuracy of Treasury's
disbursements from 98 percent to 100 percent and reducing the cycle
time involved in delivering payroll services.
OPM Faces Significant Challenges in Implementing Its e-Government
Initiatives:
OPM's portfolio of e-gov initiatives represents an ambitious attempt to
transform the way human capital functions and services are carried out
in the federal government. In implementing the initiatives, OPM faces a
number of challenges that, if not fully met, could erode support for
the initiatives or prevent OPM from meeting its objectives and
realizing the improvements and dollar savings that the agency has
projected. We have commented in the past on the many challenges facing
e-government projects in general.[Footnote 8] Today, I'd like to
concentrate on three challenges that are especially pressing for OPM's
efforts. These include (1) managing accelerated acquisitions,
(2) achieving governmentwide consolidation of common electronic
functions, and (3) estimating and measuring cost savings.
Managing Accelerated Acquisitions:
Program managers for many of the 25 OMB-sponsored e-government
initiatives have been under pressure, both from OMB and within managing
partner agencies, to achieve results quickly. One of the criteria for
OMB's selection of its e-government initiatives was the potential for
the project to be completed "within 18-24 months." In order to meet the
demand for quick results, significant alterations have been made to the
acquisition plans for several initiatives.
For example, in the case of the e-Authentication initiative, which is
focused on developing a centralized gateway for electronic
authentication in support of the other OMB-sponsored initiatives, a
decision was made to compress to approximately 3 months the competitive
contracting process, which had originally been planned to take place
over a full year. The major factor in this decision was the perceived
need to make the planned gateway fully operational as soon as possible.
However, this accelerated schedule may be difficult to achieve because
it is based on an extremely short time frame, in which the selected
contractor must develop, test, and deploy a fully operational gateway.
In the case of the Geospatial One-Stop initiative, which aims to
establish a Web portal for locating and disseminating geospatial
information, the initiative's board of directors decided in early 2003
to make an award based on an unsolicited proposal rather than continue
a competitive procurement, largely because of a perceived need to
implement the Web portal as quickly as possible. The change in
acquisition plans has caused concern among many in the geospatial
information systems community that the contractor's proprietary
approach to developing the Web portal could make it difficult for many
potential contributors to share data with the portal--which would
prevent the initiative from meeting its goal of providing one-stop
access to geospatial data.
OPM has likewise taken a controversial step with its recent Recruitment
One-Stop acquisition. In its decision to continue with its awarded
contract for Recruitment One-Stop, despite a successful bid protest by
Symplicity Corporation, OPM officials perceived the need to implement
an e-government initiative as quickly as possible to be one factor
outweighing the importance of issues that we raised concerning the
conduct of the procurement. In its letter to us explaining why it
intended to proceed without implementing our recommendation, OPM made
clear that it was concerned about implementing Recruitment One-Stop
quickly: "The [Recruitment One Stop] program is ready to become
operational. National security demands and critical domestic needs
underlie the Government's vital need for efficient recruitment and
hiring methods. No other contractor can complete the system within the
Government's required timeframe." However, in our report to Congress,
we noted that OPM did not provide any details to support this claim.
While it is important to adhere to agreed-upon schedules and
milestones, it is also important to follow established contracting
procedures, which are intended to ensure fair competition. A rapidly
chosen vendor may not represent the best value for the government's
investment.
By leaving questions about the fairness of the Recruitment One-Stop
competition unresolved, OPM risks alienating potential supporters of
its e-government initiative. In order to ensure the ultimate success of
its initiatives, it is important that OPM--as well as the other
managing partners of OMB-sponsored initiatives--carefully weigh the
risks and benefits of making significant changes to its planned
acquisitions solely based on the need to produce results quickly.
Achieving Governmentwide Consolidation of Common Electronic Functions:
Each of OPM's five initiatives aims to ultimately create a single
system or Web-based service to support a specific human capital
function across the federal government. In each case, agency-unique
systems and processes must be either replaced or integrated into the
planned single system. Clearly, one of OPM's biggest challenges is
managing the process of migrating agency-unique systems into
consolidated systems and services that are flexible enough to
effectively support the needs of virtually all federal agencies.
Many current federal human capital systems are based on proprietary
systems that were originally developed for the narrowly defined needs
of a single agency or bureau. These systems were not designed to be
interoperable[Footnote 9] with external systems, and generally were not
built to government standards (which have not yet been defined for many
human capital functions). The development of systems based on narrowly
defined needs, combined with traditional barriers to
interorganizational cooperation, have led to the current environment of
duplicative, inefficient, nonintegrated ("siloed") operations.
One way to encourage interagency cooperation on multiple systems
migrations is to develop a concerted strategy for managing change and
communicating effectively with all affected parties. In June 2002, OPM
submitted to OMB its change management and communication plan, which
specified steps that OPM planned to take in managing change and
communications. In implementing its plan, OPM established change
management councils and delivered presentations on its plans for
specific initiatives, as well as for governmentwide integration of
human capital functions, to a range of audiences, including high-level
officials (such as the e-Government committee of the President's
Management Council and the Chief Human Capital Officers Council) and
line managers (such as human resource managers).
Effective change management and communication will be critical, as
agencies may be required to take positive action to both to shut down
existing redundant systems and invest in new technology to connect with
OPM's standardized systems. OPM is planning for agencies to shut down a
number of agency-unique systems and applications. For example, the
e-Payroll initiative is set to reduce federal payroll providers from
the current 22 to just two partnerships of two providers each.
Nonselected payroll providers will be required to shut down operations.
Another example is the Recruitment One-Stop initiative, which envisions
that agency on-line resume building and job search engine capabilities
will be shut down in favor of OPM's centralized system. The e-Training
initiative also plans for agencies to shut down their unique systems in
favor of OPM's offering.
Consolidation may also mean that agencies must make new investments in
order to connect with a new, integrated system. The e-Clearance
initiative, for example, requires all agencies with archives of
clearance investigations to make those materials available
electronically, thus necessitating agency expenses for new imaging
equipment. Likewise, EHRI will require agencies to make modifications
to their systems allowing electronic personnel records to be
transmitted to OPM's central repository. Getting cooperation from all
affected agencies in making these investments will be challenging.
OMB's support is a critical factor in facilitating these
consolidations. For several e-government initiatives, OMB has used its
statutory authority under the Clinger-Cohen Act of 1996[Footnote 10] to
direct agencies to identify and halt funding of potentially redundant
IT investments. For example, OMB issued on January 10, 2003, a letter
to federal agencies directing them to halt spending on agency-specific
payroll modernization efforts not associated with migrating to the
e-Payroll initiative. A similar letter had been issued in April 2002
directing agencies to load their security clearance information into
e-Clearance's Clearance Verification System.
Beyond issues of organizational cooperation, technical integration can
also be very challenging. Developing a common set of standards that are
agreed to and used by all project partners is a key factor for
integrating disparate, noninteroperable systems and services. Ensuring
that processes are in place by which partners can select and agree upon
standards and that all partners are adopting them are key factors in
successfully establishing standards. Finally, standardization within
the framework of the emerging Federal Enterprise Architecture is key to
promoting compliant development and implementation across the
government. OPM officials said they plan to use the Federal Enterprise
Architecture to document specific data requirements for the human
capital functions supported by their e-government initiatives.
OPM has taken steps to involve its partners and other federal agencies
in the process of identifying opportunities for standardization on the
e-Payroll initiative. However, it still faces the challenging task of
getting federal agencies to reach agreement on a single payroll
standard that they all can use. As agencies migrate ultimately to this
single standard, changes may need to be made either to provider payroll
processes and standards--so that the various payroll mandates can be
accommodated--or to the mandated requirements themselves, so that
agencies can conform to the single-payroll standard. For example, the
Department of Veterans Affairs' Acting Deputy Assistant Secretary for
Finance expressed concern that administering payroll systems under
Title 38 of the United States Code[Footnote 11]--the legislation that
governs the agency's payroll processes--was very complex, and that
significant changes in payroll processing could be necessary as the
agency migrates to its new payroll provider. According to an OPM study,
in addition to Title 38, there are at least 13 other sets of legislated
federal payroll provisions that will need to be reviewed and addressed
before a single federal payroll system can be implemented.[Footnote 12]
Without agreement on standards, changes mandated by OPM may not fully
address agencies' individual payroll processing requirements,
increasing the risk that agencies will not be able to migrate as
planned to the chosen governmentwide standard.
OPM may face similar challenges in establishing standards for official
electronic personnel records, as part of EHRI. OPM officials conducted
an exercise to identify all the various types of data captured by
federal personnel forms. OPM officials identified 89 major data
categories, with over 500 data elements. OPM officials recognize the
challenge they face in seeking agreement across federal agencies on
standardizing these data elements, a process which is still in its
early stages.
While it is relatively easy to develop and implement Web sites that
facilitate exchange of information--as some of OPM's initiatives do--
the agency can expect greater challenges in getting cooperation across
the government to consolidate functions by shutting down redundant
systems, investing in new technologies, and committing to new
governmentwide standards. For several of OPM's initiatives--including
e-Payroll and EHRI--much of this process still remains to be completed.
Estimating and Measuring Cost Savings:
One of the goals of OMB's e-government strategy includes achieving cost
savings as an outcome of implementing the 25 e-government initiatives.
For example, in its 2002 strategy OMB estimated that these initiatives
could generate several billion dollars in savings by reducing operating
inefficiencies, redundant spending, and excessive paperwork, and it
also estimated that the initiatives would make available over $1
billion in savings from realigning redundant investments. In addition,
OMB has stated that the initiatives were selected for inclusion in the
e-government strategy because they provided the most value to citizens
while generating cost savings or improving the effectiveness of the
government.
OPM has estimated substantial cost savings that officials believe can
be attributed to the e-government initiatives. Specifically, the agency
estimates that the total savings expected from all five of its
e-government initiatives will be more than $2.6 billion through fiscal
year 2012. Such savings would be realized through performance
enhancements that could reduce expenses such as costs per application
for security clearances, costs per transaction for payroll processing,
and costs associated with hiring new federal employees. Table 3
provides an overview of the cost savings estimated by OPM for its
initiatives.
Table 3: Estimated Cost Savings from Performance Enhancements:
[See PDF for image]
Source: GAO analysis of OPM documents.
[End of table]
OPM faces a significant challenge in realistically estimating the
financial savings to be derived from its e-government initiatives. In
many cases, estimated cost savings associated with process improvements
are only loosely based on measures that are inherently abstract, such
as the average cost of performing a certain function across the
government. For example, e-Training project officials estimate that
federal agencies can reduce training costs substantially by
substituting electronic courses taken through e-Training--which cost
approximately $10 to $15 per training instance--for traditional
courses, which cost on average $150 per training instance, including
travel. However, it is unclear the extent to which this kind of
substitution will actually take place, or how it could lead to savings
of $784 million through 2012, as forecast by OPM. The e-Training
project manager told us that the estimate was based on cost avoidance
for training tuition, travel, and economies of scale in acquiring
training software licenses.
Similarly, for the Recruitment One-Stop initiative, project officials
predict that implementation will lead to a reduction in the average
cost of hiring a new federal employee of $112 in fiscal year 2005--from
$2,790 to $2,678, or about 4 percent. With about 150,000 new federal
hires each year, the total savings through 2012 would amount to about
$168 million--significantly less than the total cost savings of $365
million over that period that OPM estimates. According to OPM
officials, the additional savings would be gained through other factors
contributing to future efficiencies, although specific performance
measures had not yet been established.
OPM's method for projecting cost savings due to process improvements
may overstate the savings that can be reasonably attributed to those
improvements. Specifically, officials stated that for at least one
initiative, Recruitment One-Stop, estimated savings included
continuing annual efficiency gains due to such things as expected
"policy improvements" that would not be a direct result of implementing
the Recruitment One-Stop initiative.
Further, OPM has not developed mechanisms to track actual training
expenditures at agencies to determine whether its estimated
governmentwide savings are being realized. With estimated savings based
on abstract, average governmentwide costs, it will likely be very
difficult to develop methods for documenting the savings associated
with process streamlining at each agency across the federal government.
In another example, e-Payroll is planned to reduce the number of
federal payroll service providers from 22 to 4, and then consolidate
those 4 to 2. Clearly, cost savings can be found by reducing the number
of payroll systems operated and maintained by the federal government
and avoiding the costs of updating or modernizing those systems.
However, OPM has not clearly identified all the factors that would
contribute to such savings, or what measures will be used to measure
them. Cost savings from eliminating redundant systems is also a factor-
-though a smaller one--in savings projected for Recruitment One-Stop
and e-Training.
Effectively measuring e-government cost savings is a challenge for all
agencies engaged in efforts to streamline or transform government
processes through e-government. To be truly effective in meeting the
goals set out in OMB's e-government strategy, agencies need to
establish complete, meaningful, and quantitative measures of cost
savings. Until such measures can be implemented, predicted cost savings
will be difficult to confirm.
In summary, OPM has made progress in moving forward with its five
e-government initiatives, which, if fully implemented, could have
significant benefits by providing more streamlined and seamless federal
personnel processes, and by saving the taxpayers millions through
eliminating redundant payroll and other systems. However, OPM continues
to face several challenges in implementing and carrying out its
e-government initiatives, including managing acquisitions while
working to meet accelerated e-government project schedules;
consolidating common, governmentwide human resource-related functions;
and realistically estimating and measuring the cost savings that can be
expected from these initiatives.
Mr. Chairman, this concludes my statement. I would be pleased to answer
any questions that you or other members of the subcommittee may have at
this time.
Contact and Acknowledgements:
If you should have any questions about this testimony, please contact
me at (202) 512-6240 or via E-mail at koontzl@gao.gov. Other major
contributors to this testimony included Barbara Collier, Felipe Colón,
Jr., Larry Crosland, John de Ferrari, and Elizabeth Roach.
Attachment I: Selected GAO Products Related to Electronic Commerce and
Electronic Government:
Electronic Commerce:
Internet Cigarette Sales: Limited Compliance and Enforcement of the
Jenkins Act Result in Loss of State Tax Revenue. GAO-03-714T.
Washington, D.C.: May 1, 2003.
Electronic Procurement: Business Strategy Needed for GSA's Advantage
System. GAO-03-328. Washington, D.C.: February 19, 2002.
Internet Gambling: An Overview of the Issues. GAO-03-89. Washington,
D.C.: December 2, 2002.
International Electronic Commerce: Definitions and Policy
Implications. GAO-02-404. Washington, D.C.: March 1, 2002.
Electronic Commerce: Small Business Participation in Selected On-line
Procurement Programs. GAO-02-1. Washington, D.C.: October 29, 2001.
On-Line Trading: Investor Protections Have Improved but Continued
Attention Is Needed. GAO-01-858. Washington, D.C.: July 20, 2001.
Internet Pharmacies: Adding Disclosure Requirements Would Aid State and
Federal Oversight. GAO-01-69. Washington, D.C.: October 19, 2000.
Sales Taxes: Electronic Commerce Growth Presents Challenges; Revenue
Losses Are Uncertain. GGD/OCE-00-165. Washington, D.C.: June 30, 2000.
Commodity Exchange Act: Issues Related to the Regulation of Electronic
Trading Systems. GGD-00-99. Washington, D.C.: May 5, 2000.
Trade with the European Union: Recent Trends and Electronic Commerce
Issues. GAO/T-NSIAD-00-46. Washington, D.C.: October 13, 1999.
Electronic Banking: Enhancing Federal Oversight of Internet Banking
Activities. GAO/T-GGD-99-152. Washington, D.C.: August 3, 1999.
Electronic Banking: Enhancing Federal Oversight of Internet Banking
Activities. GAO/GGD-99-91. Washington, D.C.: July 6, 1999.
Securities Fraud: The Internet Poses Challenges to Regulators and
Investors. GAO/T-GGD-99-34. Washington, D.C.: March 22, 1999.
Retail Payments Issues: Experience with Electronic Check Presentment.
GAO/GGD-98-145. Washington, D.C.: July 14, 1998.
Identity Fraud: Information on Prevalence, Cost, and Internet Impact is
Limited. GAO/GGD-98-100BR. Washington, D.C.: May 1, 1998.
Electronic Banking: Experiences Reported by Banks in Implementing On-
line Banking. GAO/GGD-98-34. Washington, D.C.: January 15, 1998.
Electronic Government--Agency-Specific Initiatives:
IRS's 2002 Tax Filing Season: Returns and Refunds Processed Smoothly;
Quality of Assistance Improved. GAO-03-314. Washington, D.C.: December
20, 2002.
Tax Administration: Electronic Filing's Past and Future Impact on
Processing Costs Dependent on Several Factors. GAO-02-205. Washington,
D.C.: January 10, 2002.
GSA On-Line Procurement Programs Lack Documentation and Reliability
Testing. GAO-02-229R. Washington, D.C.: December 21, 2001.
U.S. Postal Service: Update on E-Commerce Activities and Privacy
Protections. GAO-02-79. Washington, D.C.: December 21, 2001.
Computer-Based Patient Records: Better Planning and Oversight By VA,
DOD, and IHS Would Enhance Health Data Sharing. GAO-01-459. Washington,
D.C.: April 30, 2001.
USDA Electronic Filing: Progress Made, But Central Leadership and
Comprehensive Implementation Plan Needed. GAO-01-324. Washington,
D.C.: February 28, 2001.
U.S. Postal Service: Postal Activities and Laws Related to Electronic
Commerce. GAO/GGD-00-188. Washington, D.C.: September 7, 2000.
U.S. Postal Service: Electronic Commerce Activities and Legal Matters.
GAO/T-GGD-00-195. Washington, D.C.: September 7, 2000.
Defense Management: Electronic Commerce Implementation Strategy Can Be
Improved. GAO/NSIAD-00-108. Washington, D.C.: July 18, 2000.
Food Stamp Program: Better Use of Electronic Data Could Result in
Disqualifying More Recipients Who Traffic Benefits. GAO/RCED-00-61.
Washington, D.C.: March 7, 2000.
National Archives: The Challenge of Electronic Records Management. GAO/
T-GGD-00-24. Washington, D.C.: October 20, 1999.
National Archives: Preserving Electronic Records in an Era of Rapidly
Changing Technology. GAO/GGD-99-94. Washington, D.C.: July 19, 1999.
Electronic Government--General:
Geographic Information Systems: Challenges to Effective Data Sharing.
GAO-03-874T. Washington, D.C.: June 10, 2003.
Electronic Government: Success of the Office of Management and Budget's
25 Initiatives Depends on Effective Management and Oversight. GAO-03-
495T. Washington, D.C.: March 13, 2003.
Electronic Government: Selection and Implementation of the Office of
Management and Budget's 24 Initiatives. GAO-03-229. Washington, D.C.:
November 22, 2002.
Electronic Government: Proposal Addresses Critical Challenges. GAO-02-
1083T. Washington, D.C.: September 18, 2002.
Information Management: Update on Implementation of the 1996 Electronic
Freedom of Information Act Amendments. GAO-02-493. Washington, D.C.:
August 30, 2002.
Information Technology: OMB Leadership Critical to Making Needed
Enterprise Architecture and E-government Progress. GAO-02-389T.
Washington, D.C.: March 21, 2002.
Electronic Government: Challenges to Effective Adoption of the
Extensible Markup Language. GAO-02-327. Washington, D.C.: April 5,
2002.
Information Resources Management: Comprehensive Strategic Plan Needed
to Address Mounting Challenges. GAO-02-292. Washington, D.C.: February
22, 2002.
Elections: Perspectives on Activities and Challenges Across the Nation.
GAO-02-3. Washington, D.C.: October 15, 2001.
Electronic Government: Better Information Needed on Agencies'
Implementation of the Government Paperwork Elimination Act. GAO-01-
1100. Washington, D.C.: September 28, 2001.
Electronic Government: Challenges Must Be Addressed With Effective
Leadership and Management. GAO-01-959T. Washington, D.C.: July 11,
2001.
Electronic Government: Selected Agency Plans for Implementing the
Government Paperwork Elimination Act. GAO-01-861T. Washington, D.C.:
June 21, 2001.
Information Management: Electronic Dissemination of Government
Publications. GAO-01-428. Washington, D.C.: March 30, 2001.
Information Management: Progress in Implementing the 1996 Electronic
Freedom of Information Act Amendments. GAO-01-378. Washington, D.C.:
March 16, 2001.
Regulatory Management: Communication About Technology-Based
Innovations Can Be Improved. GAO-01-232. Washington, D.C.: February 12,
2001.
Electronic Government: Opportunities and Challenges Facing the FirstGov
Web Gateway. GAO-01-87T. Washington, D.C.: October 2, 2000.
Electronic Government: Government Paperwork Elimination Act Presents
Challenges for Agencies. GAO/AIMD-00-282. Washington, D.C.: September
15, 2000.
Internet: Federal Web-based Complaint Handling. GAO/AIMD-00-238R.
Washington, D.C.: July 7, 2000.
Federal Rulemaking: Agencies' Use of Information Technology to
Facilitate Public Participation. GAO/GGD-00-135R. Washington, D.C.:
June 30, 2000.
Electronic Government: Federal Initiatives Are Evolving Rapidly But
They Face Significant Challenges. GAO/T-AIMD/GGD-00-179. Washington,
D.C.: May 22, 2000.
Information Technology: Comments on Proposed OMB Guidance for
Implementing the Government Paperwork Elimination Act. GAO/AIMD-99-
228R. Washington, D.C.: July 2, 1999.
Electronic Signatures:
Bank Regulators' Evaluation of Electronic Signature Systems. GAO-01-
129R. Washington, D.C.: November 8, 2000.
Electronic Signature: Sanction of the Department of State's System.
GAO/AIMD-00-227R. Washington, D.C.: July 10, 2000.
Internet:
Internet Management: Limited Progress on Privatization Project Makes
Outcome Uncertain. GAO-02-805T. Washington, D.C.: June 12, 2002.
Telecommunications: Characteristics and Competitiveness of the
Internet Backbone Market. GAO-02-16. Washington, D.C.: October 16,
2001.
Telecommunications: Characteristics and Choices of Internet Users. GAO-
01-345. Washington, D.C.: February 16, 2001.
Telecommunications: Technological and Regulatory Factors Affecting
Consumer Choice of Internet Providers. GAO-01-93. Washington, D.C.:
October 12, 2000.
Department of Commerce: Relationship with the Internet Corporation for
Assigned Names and Numbers. GAO/OGC-00-33R. Washington, D.C.: July 7,
2000.
Privacy:
Internet Privacy: Implementation of Federal Guidance for Agency Use of
"Cookies." GAO-01-424. Washington, D.C.: April 27, 2001.
Record Linkage and Privacy: Issues in Creating New Federal Research and
Statistical Information. GAO-01-126SP. Washington, D.C.: April 2001.
Internet Privacy: Federal Agency Use of Cookies. GAO-01-147R.
Washington, D.C.: October 20, 2000.
Internet Privacy: Comparison of Federal Agency Practices with FTC's
Fair Information Principles. GAO-01-113T, Washington, D.C.: October 11,
2000.
Internet Privacy: Comparison of Federal Agency Practices with FTC's
Fair Information Principles. GAO/AIMD-00-296R. Washington, D.C.:
September 11, 2000.
Internet Privacy: Agencies' Efforts to Implement OMB's Privacy Policy.
GAO/GGD-00-191. Washington, D.C.: September 5, 2000.
Social Security Numbers: Subcommittee Questions Concerning the Use of
the Number for Purposes Not Related to Social Security. GAO/HEHS/AIMD-
00-253R. Washington, D.C.: July 7, 2000.
Security:
Electronic Government: Challenges to the Adoption of Smart Card
Technology. GAO-03-1108T. Washington, D.C.: September 9, 2003.
Electronic Government: Progress in Promoting Adoption of Smart Card
Technology. GAO-03-144. Washington, D.C.: January 3, 2003.
Computer Security: Weaknesses Continue to Place Critical Federal
Operations and Assets at Risk. GAO-01-600T. Washington, D.C.: April 5,
2001.
Information Security: Advances and Remaining Challenges to Adoption of
Public Key Infrastructure Technology. GAO-01-277. Washington, D.C.:
February 26, 2001.
Information Security: IRS Electronic Filing Systems. GAO-01-306.
Washington, D.C.: February 16, 2001.
(310389):
FOOTNOTES
[1] P. L. No. 107-347.
[2] Twenty-three initiatives were originally selected in September
2001. A 24th, e-Payroll, was then added by the President's Management
Council. In 2002, a decision was made to separate the e-Clearance
project from the Integrated Human Resources initiative, resulting in
the current count of 25 projects.
[3] These publications can be obtained through GAO's World Wide Web
page at www.gao.gov.
[4] Office of Management and Budget, The President's Management Agenda,
Fiscal Year 2002 (Washington, D.C.).
[5] For more on OMB's selection process, see U.S. General Accounting
Office, Electronic Government: Selection and Implementation of the
Office of Management and Budget's 24 Initiatives, GAO-03-229
(Washington, D.C.: Nov. 22, 2002).
[6] Enterprise architectures are blueprints for transforming how a
given entity operates, whether it be a federal agency or a federal
function that cuts across agencies. The Federal Enterprise Architecture
is intended to facilitate governmentwide improvements through cross-
agency analysis and the identification of duplicative investments,
gaps, and opportunities for collaboration, interoperability, and
integration within and across government agencies. For more
information, see U.S. General Accounting Office, Information
Technology: Enterprise Architecture Use across the Federal Government
Can Be Improved, GAO-02-6 (Washington, D.C.: Feb. 19, 2002).
[7] U.S. General Accounting Office, Human Capital: Opportunities to
Improve Executive Agencies' Hiring Processes, GAO-03-450 (Washington,
D.C.: May 30, 2003), p. 22.
[8] U.S. General Accounting Office, Electronic Government: Challenges
Must Be Addressed With Effective Leadership and Management, GAO-01-959T
(Washington, D.C.: July 11, 2001).
[9] Interoperability is the ability of two or more systems or
components to exchange information and to use the information
exchanged.
[10] P.L. No. 104-106.
[11] 38 U.S.C, Part V, Chapter 74--Veterans Health Administration--
Personnel.
[12] Office of Personnel Management, e-Payroll Initiative: Plan for
Standardization of Federal Payroll Policy, Revision 1 (Washington,
D.C.: Jan. 13, 2003).