The Business of Government Magazine Spr 2014

BUSINESSOFGOVERNMENT.ORG SPRING 2014

David BowenDefense Health Agency

Nani ColorettiU.S. Department of the Treasury

Curtis L. CoyU.S. Department of Veterans Affairs

VADM Mark HarnitchekDefense Logistics Agency

Anthony Fauci, M.D.National Institute of Allergy and Infectious Diseases

Mary DavieU.S General Services Administration

David LebrykBureau of the Fiscal Service

Dr. Simon SzykmanU.S. Department of Commerce

J. Christopher MihmU.S. Government Accountability Office

Kathy StackOffice of Management and Budget

The Business of Government 3 From the Executive Director

5 From the Managing Editors Desk

8 Conversations with LeadersAnthony Fauci, M.D.

J. Christopher Mihm

Vice Admiral Mark Harnitchek

Curtis L. Coy

32 InsightsDave Bowen

Nani Coloretti

Mary Davie

Dave Lebryk

Kathy Stack

Dr. Simon Szykman

56 ForumSix Trends Driving Change in Government

68 ViewpointsIs Moneyball Government the Next Big Thing?

Modernizing the Budget Process to Reflect Modern Technology Realities

Learning to Trust Open Data

79 PerspectivesPerspectives on Federal Acquisition and Complex Contracting with Professors Trevor Brown and David Van Slyke

86 ManagementPredictive Policing: Preventing Crime with Data and Analytics

Using Crowdsourcing In Government

Coordinating for Results: Lessons from a Case Study of Interagency Coordination in Afghanistan

98 Research Abstracts

The Business of G

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Conversations with government executives Sharing management insights, advice, and best practices Changing the way government does business

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Table of Contents

From the Executive DirectorBy Daniel Chenok ....................................................................................3

From the Managing Editors DeskBy Michael J. Keegan ................................................................................5

Conversations with LeadersAnthony Fauci, M.D.Director, National Institute of Allergy and Infectious Diseases ................ 8

J. Christopher MihmManaging Director, Strategic Issues Government Accountability Office ....................................................... 14

Vice Admiral Mark HarnitchekDirector, Defense Logistics Agency ....................................................... 20

Curtis L. CoyDeputy Under Secretary for Economic Opportunity, Veterans Benefits Administration, U.S. Department of Veterans Affairs ................. 26

InsightsPursuing IT Standardization and Consolidation: Insights from Dave Bowen, Director of Health Information Technology and Chief Information Officer, Defense Health Agency U.S. Department of Defense ......................................................................... 32

Managing Resources in an Era of Fiscal Constraint and Reform: Insights from Nani Coloretti, Assistant Secretary of the Treasury for Management, U.S. Department of the Treasury ........................................... 36

Maximizing the Value of Government IT: Insights from Mary Davie Assistant Commissioner, Office of Integrated Technology Services Federal Acquisition Service, U.S General Services Administration ..............40

Promoting the Financial Integrity of the U.S. Government: Insights from Dave Lebryk, Commissioner, Bureau of the Fiscal Service U.S. Department of the Treasury .................................................................. 44

Harnessing Evidence and Evaluation: Insights from Kathy Stack Advisor, Evidence-Based Innovation, Office of Management and Budget ......48

Data and Information as Strategic Assets: Insights from Dr. Simon Szykman, Chief Information Officer U.S. Department of Commerce .................................................................... 52

ForumSix Trends Driving Change in Government ............................................. 56

The Business of Governmentwww.businessofgovernment.org2

ViewpointsIs Moneyball Government the Next Big Thing?By John M. Kamensky ............................................................................68

Modernizing the Budget Process to Reflect Modern Technology RealitiesBy Daniel Chenok ..................................................................................73

Learning to Trust Open DataBy Gadi Ben-Yehuda ..............................................................................76

PerspectivesIntroduction: Perspectives on Federal Acquisition and Complex ContractingBy Michael J. Keegan ..............................................................................79

Perspectives on Federal Acquisition and Complex Contracting with Professors Trevor Brown and David Van SlykeBy Michael J. Keegan ..............................................................................80

ManagementPredictive Policing: Preventing Crime with Data and AnalyticsBy Jennifer Bachner ................................................................................86

Using Crowdsourcing In GovernmentBy Daren C. Brabham ............................................................................91

Coordinating for Results: Lessons from a Case Study of Interagency Coordination in AfghanistanBy Andrea Strimling Yodsampa ...............................................................95

Research AbstractsRealizing the Promise of Big Data ......................................................... 98

Engaging Citizens in Co-Creation in Public Services ................................ 98

Eight Actions to Improve Defense Acquisition ....................................... 98

Incident Reporting Systems: Lessons from the Federal Aviation Administrations Air Traffic Organization ............................................... 99

Cloudy with a Chance of Success: Contracting for the Cloud in Government .......................................................................................... 99

Using Crowdsourcing In Government ................................................... 99

Federal Ideation Programs: Challenges and Best Practices ................... 100

Six Trends Driving Change in Government .......................................... 100

Coordinating for Results: Lessons from a Case Study of Interagency Coordination in Afghanistan ............................................. 100

Predictive Policing: Preventing Crime with Data and Analytics ........... 101

Collaboration Between Government and Outreach Organizations: A Case Study of the Department of Veterans Affairs ............................. 101

A Guide for Agency Leaders on Federal Acquisition .............................. 101

How to Order Recent Publications ......................................................102

The Business of GovernmentA Publication of the IBM Center for The Business of Government

Daniel Chenok Executive Director

John M. Kamensky Senior Fellow

Michael J. Keegan Managing Editor

The Business of Government magazine and Host/Producer, The Business of Government Hour

Ruth Gordon Business and Web Manager

Gadi Ben-Yehuda Innovation and Social Media Director

IBM Center for The Business of Government 600 14th Street, NW, Second Floor

Washington, DC 20005

For subscription information, call (202) 551-9342. Web page: www.businessofgovernment.org. Copyright 2014 IBM Global Business Services. All rights reserved. No part of this publication may be reproduced in any form, by microfilm, xerography, or otherwise, without the written permission of the copyright owner. This publication is designed to provide accurate information about its subject matter, but is distributed with the understanding that the articles do not constitute legal, accounting, or other professional advice.

Table of Contents (continued)


From the Executive Director

Daniel Chenok is Executive Director of the IBM Center for The Business of Government. His e-mail: [email protected].

Six Trends Driving Change in Government: Examples of Agencies Leveraging Change

Since the creation of the IBM Center for The Business of Government over 15 years ago, it has been our goal to help public sector leaders and managers address real-world prob-lems by sponsoring independent, third-party research from top minds in academe and the nonprofit sector.

We aim to produce research and analysis that help government leaders respond more effectively to their mission and management challenges. The IBM Center is named The Business of Government because we focus on the management and operation of govern-ment, not the policies of government. Public sector leaders and managers need the best, most practical advice available when it comes to delivering the business of government. We seek to bridge the gap between research and practice by helping to stimulate and accelerate the production of research that points to actionable recommendations.

Over the past several months, the Center for the Business of Government has been exam-ining trends in six different areas that are driving government to approach mission and business challenges differently, pointing to the need for further analysis and recommen-dations on how to effect change across these six areas. The Center reviewed these trends and released a special report, Six Trends Driving Change in Government. The Forum in this edition offers a primer on each of the six trends and the insights that can help gov ernment executives respond more effectively to their mission and management chal lenges. The Centers research agenda is informed by these trends, but some federal agencies have already started down a positive path of change in each trend area, and their ideas can serve as models for others to adapt as appropriate.

Such examples include:

Performance. The Department of Education has created a What Works Clearinghouse of successful policies, programs, and practices that provide educators in the field with the best information available so they can make evidence-based decisions regarding curriculum and other education-based initiatives.

Risk. The Internal Revenue Service established a new Chief Risk Officer to help agency leaders understand risks in advance, and develop strategies that support the delivery of taxpayer services that account for, communicate, and mitigate risks.

Innovation. The Consumer Financial Protection Bureau (CFPB) has introduced a portal called the Project Catalyst, through which they achieve three of the goals laid out in this section. The CFPB allows visitors to the site to (1) Pitch a Pilot, (2) Run a Disclosure Trial, and (3) Use Our Data. They are doing so in order to engage with the innovator community; participate in initiatives that inform our policy work; and stay on top of emerging trends to remain a forward-looking organization.


Efficiency. The General Services Administration has saved over $1 billion through actions taken by its Information Technology Service to create a marketplace that will provide agencies with buying options, access to data and information, access to expertise, and an improved buying experience.

Mission and Leadership. Mission support chiefs within the Departments of Veterans Affairs and Agriculture convene on a regular basis to share their progress on various initiatives and to identify ways to work together, for example on telework strategies and reducing their real estate footprints. Success in any of these initiatives often involves leaders collab-orating with multiple mission-support organizations in order to be successful.

This issue highlights successful actions being taken throughout government to meet chal-lenges of ever-increasing complexity, and sparks thinking among government leaders and stakeholders about how best to forge new paths forward.

From the Executive Director


By Michael J. Keegan

In meeting varied missions, government executives confront significant challenges. Responding properly to them must be guided and informed by the harsh fiscal and budgetary realities of the day. It can no longer be simply a wishful platitude that govern-ment do more with less. Leaders need to change the way government does business to make smarter use of increasingly limited resourcesleveraging technology and innova-tion to be more efficient, effective, anticipatory, adaptive, and evidence-based in delivering missions and securing the public trust.

Government executives, however, must also avoid the tyranny of the present or the next budget cycle, and recognize that the challenges of today often morph into the hazards of tomorrow. So anticipating the futuregetting ahead of events rather than being subsumed by thembecomes integral to positioning, resourcing, and preparing an agency for what may come, while always keeping focused on primary responsibilities.

This edition of The Business of Government magazine underscores the importance of correlating short-term decision-making with long-range consequences. We highlight the latest trends and best practices for improving government effectiveness by introducing you to key government executives, detailing the work of public management practitioners, and offering insights from leading academics.

Forum on Six Trends Driving Change in GovernmentFiscal austerity, citizen expectations, the pace of technology and innovation, and a new role for governance make for trying times. These challenges influence how government executives lead today, and more important, how they can prepare for the future. It is antic-ipating the futureusing foresight in governmentthat can deepen our understanding of the forces driving change.

In a special report, Six Trends Driving Change in Government, the IBM Center for The Business of Government has identified trends that correspond to these challenges and drive government change. Separately and in combination, they paint a path forward in responding to the ever-increasing complexity government faces.

The areas covered by Six Trends are performance, risk, innovation, mission, efficiency, and leadership. Focusing on these has the potential to change the way government does business. This forum reflects our sense of what lies ahead, providing an excerpt of the Six Trends special report. We hope these insights are instructive and ultimately helpful to todays government leaders and managers. For a more in-depth exploration of each trend, download or order a free copy of the full report at businessofgovernment.org.

Conversations with LeadersThroughout the year, I have the pleasure of speaking with key government executives and public sector leaders about their agencies, accomplishments, and vision of government in the 21st Century. The four profiled manifest the leadership and strategic foresight needed to meet their varied missions.

From the Managing Editors Desk

Michael J. Keegan is Managing Editor of The Business of Government magazine and Host/Producer of The Business of Government Hour. His e-mail: [email protected].



Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, leads an agency that has for 60 years been at the forefront of research in infectious and immune mediated diseases, microbiology, and immunology. Dr. Fauci outlines his agencys strategic priorities, how NIAID accelerates basic research into health care practice, and the lessons learned from studying emerging and reemerging infectious diseases.

Chris Mihm, managing director for strategic issues at the U.S. Government Accountability Office, describes his groups work in three broad areasoversight, insight, and foresight. His oversight mission focuses on making sure that funds are expended for their intended purposes. Mihm also offers insights into what works, iden-tifying best practices that can be leveraged and adopted, where appropriate, across government. Finally, what he calls foresight involves pinpointing emerging trends, making Congress aware of them, and informing them of the trends possible implica-tions for public policy and governance.

Vice Admiral Mark Harnitchek, director of the Defense Logistics Agency, is charged with providing full-spectrum logistical support to the armed services and civilians around the world every day and for every major conflict over the past five decades. Logistics is a cost driver that must be managed with deliberate precision. Admiral Harnitchek recognizes that the very nature of envisioned threats and conflicts over the next decade, combined with increased fiscal challenges, demand an agile, joint logis-tics response marked by innovation and best practices.

Curtis Coy, deputy under secretary for economic opportunity within the U.S. Department of Veterans Affairs, manages a portfolio of educational and job training services for eligible veterans to enhance their economic opportunity and successful transition. With some one million veterans likely to separate or retire in the next five years and many young veterans unemployed, Coy discusses how VA promotes employment and educational opportunities for veterans and what VA is doing to enhance opportunities for veterans to obtain knowledge and skills to properly transi-tion to civilian life.

Insights from LeadersOver the past six months, I also had an opportunity to speak with public servants pursuing innovative approaches to mission achievement and citizen services. Six government exec-utives provide insights into how they are changing the ways government does business.

Dave Bowen, chief information officer at the Defense Health Agency, shares his insights into the information technology strategy for DODs Defense Health Agency, how the DHA will enhance IT efforts to deliver care anytime, anywhere, and how DHA is modernizing its technology infrastructure and working toward a robust, inte-grated electronic health record.

Nani Coloretti, assistant secretary of the Treasury for management, offers her insights on Treasurys management performance agenda, what her department is doing to consolidate its office space and right-size its operational footprint, and how it is working to transform the way it does business.

Mary Davie, assistant commissioner, U.S. General Services Administrations Office of Integrated Technology Services, describes how ITS is increasing government ITs value while lowering its cost. She identifies her offices strategic priorities and how she is improving its operations, becoming more efficient and agile.



Dave Lebryk, commissioner, Bureau of the Fiscal Service, U.S. Department of the Treasury, outlines his insights on how the Fiscal Service transforms the way the federal government manages its financial services, what Fiscal Service does to promote the financial integrity and operational efficiency of the federal government, and how Lebryk is seeking to realize efficiency, better transparency, and dependable accountability.

Kathy Stack, advisor for evidence-based innovation at the Office of Management and Budget (OMB), describes program evaluation and how evidence and rigorous evalua-tion can be integrated into decision-making. She details her insights on the importance of using evidence to inform program delivery and how agencies conduct rigorous program evaluations on a tight budget.

Dr. Simon Szykman, chief information officer at the U.S. Department of Commerce, highlights the departments information technology strategy, how it has changed the way it does IT, the challenge of cybersecurity, and much more.

Perspectives on Federal Acquisition and Complex ContractingIn fiscal year 2012, the federal government contracted for $517 billion in products. Complex products require more sophisticated contracting approaches. Why do federal agencies need to acquire and procure goods and services? What are the basic phases of the federal acquisition lifecycle? What are the challenges of acquiring complex products? What lessons can be learned from the Coast Guards Deepwater program? How can government executives most effectively manage complex acquisitions? We explore these questions and more with Professor Trevor Brown of the John Glenn School of Public Affairs at The Ohio State University, and Professor David Van Slyke of the Maxwell School of Citizenship and Public Affairs at Syracuse University.

Viewpoints John Kamensky ponders whether moneyball government is the next big thing. Dan Chenok explores the need to modernize the budget process to reflect modern technology, and Gadi Ben-Yehuda provides his viewpoint on learning to trust open data.

I close this edition with overviews of several recent Center reports. If you have not read these reports, we encourage you to do so by going to businessofgovernment.org. We hope you enjoy this edition of The Business of Government magazine. Please let us know what you think by contacting me at [email protected]. I look forward to hearing from you.


Conversations with Leaders

A Conversation with Anthony Fauci, M.D. Director, National Institute of Allergy and Infectious Diseases

For more than six decades, the National Institute of Allergy and Infectious Diseases (NIAID) has been at the forefront of research in infectious and immune mediated diseases, micro-biology, immunology, and related disciplines. It conducts and supports basic and applied research to better understand, diagnose, prevent, and treat infectious diseases including HIV/AIDS, tuberculosis, and malaria, as well as immune mediated disorders such as lupus and asthma. This work has led to new vaccines, therapeutics, diagnostics, and other technologies that have improved health and saved millions of lives in the United States and around the world.

What are the strategic priorities of NIAID? How is NIAID accelerating findings from basic research into health care practice? What have we learned from the study of emerging and reemerging infectious diseases? Whats on the horizon for NIAID? Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases, joined me on The Business of Government Hour to explore these ques-tions and more. The following provides an edited excerpt from our interview. Michael J. Keegan

On the Strategic Priorities for NIAIDThe four major areas of emphasis are:

HIV/AIDS

Infectious diseases other than HIV/AIDS, which include the standard established infections, emerging and reemerg-ing infections, and even bio-defense such as having defense against anthrax or other attacks

Basic and clinical research into the immune systemunderstanding how it works, diseases of aberrant function of the immune system, or deficiency of the immune system

Global health, focusing on a vision of where we want to go

Regarding HIV/AIDS, three-plus decades since the [recorded manifestation] of this devastating pandemic, we have the scientific basis for development of prevention modalities and

treatment thats highly effective. We are also on a quest for a vaccine. We feel we can turn around the trajectory of the pandemic, and within a reasonable period of time, well see an AIDS-free generation, where the number of new infections is less than the number of people who are put on therapy.

The strategic vision for tackling emerging and reemerging infectious diseases involves developing platforms of vaccines and drugs that would have universal applicability, rather than trying to chase everything that might emerge. With regard to immunology, its just fundamentally good, sound basic research to understand the mechanisms of immune func-tion to properly understand how we might suppress aberrant mechanisms and enhance deficient mechanisms.



Its becoming quite evident that we live in a global commu-nity [with] certain consequences. The idea that we worry about certain diseases and there are diseases other people worry about is antiquated.

On Challenges Facing NIAIDWe live in an era of constrained resources [and unprec-edented] scientific opportunities. This is a real challenge: how do you get the best bang for the buck? How do we pursue groundbreaking research that will ultimately benefit public health under tight budgets? We meet this challenge by prioritization, which is essential because there are a lot of good ideas, but in an era of fiscal constraint you cant pursue them all.

The next significant challenge we face is particular to NIAIDs unique missionanticipating the unexpected! Most institutes at NIH, including NIAID, are responsible for the basic and clinical research in a particular area, whether its focusing on heart, lung, blood, kidney, etc. For us, its infec-tious diseases and immunology. In addition to that predict-able translation from a basic concept to an applied clinical concept, NIAID must also always be ready for the unex-pected. At a moments notice we may need to respond to a completely new infection.

This is exactly what we faced in the summer of 1981. At that time, the CDCs Morbidity and Mortality Weekly Report reported the first five cases of pneumocystis pneumonia in gay men from Los Angeles. One month later, an additional 26 young gay men from New York, San Francisco, and LA presented with this strange disease. Immediately, it was our task to figure what it was and what can be done. This need to deal with the unexpected and unpredictable presents a unique challenge for NIAID. It isnt every week that a new cancer is discovered or a new form of heart disease, but at any given time we could face a brand new infectious disease.

On the Characteristics of Infectious Diseases Infectious diseases have a number of unique characteristics. Microbes have the capability, through mutations, of changing characteristics in minutes to days because of their replica-tion capability. Microbes like HIV replicate thousands of times per day. When youre talking about infectious diseases, its a constant evolution. You have a disease. It spreads. You develop a drug. You treat a person, and then all of a sudden after a period of years, the virus or the bacteria develops resistance and you have to come in with another drug. Its a constant, dynamic, emerging world of microbes that well never completely wipe out; microbes constantly adapt for

their own survival. We need to stay a step ahead of it all with our intervention, therapies, vaccines, or diagnostics.

Its a constant state of surprise given the extraordinary capa-bility of microbes, viruses, bacteria, and parasites to evolve, emerge newly, or reemerge in a different setting and under different circumstances. I gave the example of HIV/AIDS emerging in 1981 as a truly new infection. In addition, we also face reemerging infections; these are infections that have historically existed that may be dominant, but reemerge either in a different form or a different location. For example, we have drug-resistant malaria. For years, we were able to treat malaria easily, and then drug-resistant forms emerged. We have diseases that have been around a long time, but not in our backyard. A classic example of that is West Nile Virus, which was in the Middle East and in Africa for centuries, but only within the last couple of decades has come to the U.S. Its not so much a state of surprise, but [a] constant state of the unexpected.

On the Pursuit of Progress: HIV/AIDS

In the mid-80s and early 90s, the median survival of my patients with HIV/AIDS was six to eight months, meaning

HIV

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that 50 percent of the patients would be dead in six to eight months, which is horrible. By applying fundamental basic research that involves understanding the replication cycle, targeting the vulnerable components of that replication cycle, and designing a drug therapy fast-forward 30 years [to] today, we now have more than 30 FDA-approved anti-retroviral drugs. When we use these drugs in combination, a recently infected person could [possibly] live an additional 50 years. Thats a dramatic turnaround over a 30-year period. Along with these anti-retroviral drugs, we have effective low-tech forms of prevention.

In addition, were actively pursuing the development of an HIV vaccine. The question is, can we cure people? Can we get to the point where you suppress the virus enough that you could stop the drug and the virus wont rebound? I dont know but its certainly worth trying . Over the last three years, the advance toward a vaccine is much more than what we had seen in the previous 15 to 20 years.

On Bringing Tuberculosis (TB) Research into the

21st Century

Tuberculosis is one of these enduring global health issues. It has been neglected because of a good dose of compla-cencythat its somebody elses problem, not a problem for the developed world. One-third of the worlds population is infected with latent tuberculosis. Thats over two billion people. Though theyre not sick, they have latent TB, with about eight million new cases a year and about 1.3 million deaths per year.

Our goal is to bring the science of tuberculosis into the 21st century. Until recently, we havent had a new drug for tuber-culosis in over 40 years. Just this past year, we had the first drug that was specifically approved only for TB.

We have a very ineffective tuberculosis vaccine. We have diagnostics that are antiquated. We dont have enough drugs and the drugs we do have require six months to a year to suppress the disease. We need to play serious catch-up. Were doing that by aggressively applying modern techniques such as the ability to rapidly sequence strains of TB, identify vulnerable parts of the microbacteria susceptible to drugs, and code for antigens that might be used for a vaccine. We

have ways of not only diagnosing TB, but also determining at the point of care whether were dealing with a resistant tuberculosis.

About 10 percent of the two billion-plus who are latently infected with TB will, during their lifetime, manifest active TB. We dont understand this mechanism. We dont under-stand the fundamental pathogenesis of tuberculosis or the systems biology of the immune system. Why doesnt the immune system completely eradicate tuberculosis? Why do you always have a little bit that remains and is latent? What is the proper immune response to protect you? We are applying microbial genomic sequencing technolo-gies, investing in the basic science underlying point-of-care diagnostics, supporting research to develop vaccine candi-dates, and engaging in public-private partnerships for drug development.

On the Development of a Universal Influenza Vaccine

We have made significant progress toward the production of vaccines, but for me and my colleagues in the field, the real goal is to develop what we call a universal influenza vaccine. This would obviate the need for annual influenza vaccination and enhance our ability to respond to influ-enza pandemics. A universal flu vaccine induces a response against that component of the influenza virus that doesnt change or changes very little from season to season. We are getting closer to this goal, so the exciting thing in influenza research is to develop a truly effective influenza vaccine that you may need to give once or two or three times throughout the lifetime to protect you against all strains.

On Combating Drug Resistance

It is a fact of life that microbes, given their replicative and mutational capability, adapt to whatever you throw at them. When you treat a patient with an antibiotic or an antiviral,

TuberculosisInfluenza

MRSA

S P R I N G 2 0 1 4 IBM Center for The Business of Government 1 1

Its a constant state of surprise given the extraordinary capability of microbes,

virus, bacteria, and parasites to evolve, emerge newly, or reemerge in a

different setting and under different circumstances.

unless you completely eliminate that bacteria or that virus, it will naturally select for the mutation that is resistant to getting killed. When you are infected with a virus or bacteria it isnt a single homogenous microbe. Mutations occur that can make a microbe resistant. If you inadequately treat the sensitive microbes, resistant ones might emerge and dominate.

Therefore if you use antibiotics when you dont need them or use them at the incorrect dose, you will inadvertently select for resistant microbes. The overuse and inappropriate use of antibiotics is a surefire way to help the microbe select for resistance, leading to drug-resistant forms.

On Technological Advancement and the Use of Scientific TechnologyFrom the standpoint of infectious diseases, there are a number of technologies, but let me pick out one that is really transformative. It is the ability to rapidly sequence the genome of the microbes. To give you a sense of the transfor-mation, when the first microbe was sequenced decades ago it took about a year and about $40 million. Today, we can do it in a few hours for a couple of dollars. Its just breath-taking what you can do. We refer to it as next generation sequencing, NGS, or deep sequencing where you could take a quasi-species of viruses and sequence every single one of them and know the signatures of resistance, transmissi-bility, and pathogenesis. This is the application of genomics, proteomics, and informatics. These are technically the most transforming advances that weve been able to make.

From a basic research perspective, we are able to better understand how the microbe worksall the genetic determi-nants of its functions. You arrive at a genotype and a pheno-type. Genotype is what the genes are and the phenotype is how the microbe acts, what it does. To be able to make that correlation between genotype and phenotype instan-taneously, as opposed to waiting, is phenomenal. From an applied research standpoint, the progress is breathtaking.

In an outbreak of a disease, using sequencing and compu-tational biology, we can very rapidly know whether we are dealing with a microbe, for example a virus. We can then identify the class of virus: checking databases, we assess whether there is a virus that absolutely matches it. If this virus doesnt match anything weve seen before, then wow, were dealing with a brand-new virus. Once you iden-tify it and sequence it, you can actually create it and then



The strategic vision for tackling

emerging and reemerging

infectious diseases involves

developing platforms of vaccines

and drugs that would have

universal applicability, rather than

trying to chase after everything

that might emerge.



manipulate it. This enables you to target drugs against it. These are activities that can be done today almost instan-taneously, which years ago took months, if not a year or longer.

On the Evolving Strategies in Biodefense Our biodefense strategy has evolved since the mid-2000s, [when] we were developing vaccines and drugs for threats we knew. It became clear that it was futile to try and make an intervention against each and every single potential microbe. We started to focus on what we call broad multi-use platforms for vaccines, antibiotics, and antivirals. We could have an antiviral that would be effective against multiple different classes of viruses.

This shift in strategies has been transformative for the entire field of microbiology. It allows us to develop sustainable interventions against microbes that someone might deliber-ately release, namely bioterrorism. It also helps us prepare against the more likely scenario and that is nature itself. The evolutions of microbes that have devastated civiliza-tions are naturally occurring events. In the quest to protect and develop interventions against deliberately released microbes, weve come a long way to enhance our capability of responding to naturally occurring events.

On the Future We can expect extraordinary, breathtaking opportunities in science. From the standpoint of infectious diseases and immunology, it is being able to unlock the intricacies and the secrets of the immune system. How might we control it when its aberrant and supplement it when its deficient? With regard to microbes, we remain ever vigilant for any emerging infectious disease. We also seek, beyond just an aspiration, to send HIV/AIDS, malaria, and tuberculosis the way of smallpox. We pursue these goals, and our mission, in an era of constrained resources at a time when some view scientific research as a discretionary component of the federal budget. Personally, I dont think science should be a discretionary component. It should be a mandatory compo-nent of what we do.

To hear The Business of Government Hours interview with Dr. Anthony Fauci, go to the Centers website at www.businessofgovernment.org.

To download the show as a podcast on your computer or MP3 player, from the Centers website at www.businessofgovernment.org, right click on an audio segment, select Save Target As, and save the file.

To read the full transcript of The Business of Government Hours interview with Dr. Anthony Fauci, visit the Centers website at www.businessofgovernment.org.

To learn more about the National Institute of Allergy and Infectious Diseases, go to www.niaid.nih.gov/Pages/default.aspx.



Governments today face serious public management chal-lenges that go to the core of effective governance and leader-ship, testing the very form, structure, and capacity required to meet these challenges head on. These challenges run the gamutnational security, the aging population, mounting fiscal pressures, and a host of others. Given these chal-lenges, government leaders need to reassess and reprioritize how they do business. For these leaders it is ultimately about delivering meaningful results and being solid stewards of the public trust.

In many ways the U.S. Government Accountability Office (GAO) provides the oversight, the insight and the foresight that can assist todays government leaders to better manage resources, enhance program performance, and forge a path to a more sustainable future. What are the fiscal, manage-ment and performance challenges facing todays government executive? What is the goal of GAOs High Risk Series? How are performance data being used to drive decisions in the federal government? How can agencies change the way they do business to respond effectively to 21st century governance challenges?

Chris Mihm, GAOs Managing Director for Strategic Issues, joined me on The Business of Government Hour to explore these questions and more. The following provides an edited excerpt from our interview. Michael J. Keegan

On the History and Mission of GAOThe General Accounting Office was formed in 1921. In 2004, it was renamed the Government Accountability Office to more accurately reflect the work we do today. Our mission is to support the U.S. Congress in meeting its constitutional responsibilities. We are a congressional agency that focuses on helping to improve the performance and ensure the accountability of the American government for the benefit of the American people. In recent years, we have done between 800 and 900 products a year. Most of those are perfor-mance audits with probably 90% performed at the request of Congress or written into legislation.

Our audit work falls into three broad areasoversight, insight, and foresight. Our oversight mission focuses on compliance and making sure that funds are properly expended for their intended purposes. Our work also offers insights into what works, identifying best practices that can be leveraged and adopted, where appropriate, across govern-ment. Finally, what we call foresight involves pinpointing emerging trends, making Congress aware of them, and informing them of the possible implications of these trends for public policy and governance.

We pursue our mission with an approximate budget of $546 million a year. Like most other federal agencies, we have had a decline during the [recent] period of austerity. Our staffing is at about 2,900 today, which is among the lowest since the 1930s. Were organized here in Washington, D.C., with 11 field offices across the country. About 70% of the GAO staff is located in D.C.

A Conversation with J. Christopher Mihm Managing Director, Strategic Issues Government Accountability Office



On Leading GAOs Strategic Issues Portfolio There are 14 teams within GAO. For the most part, these teams are programmatically organized. For example, we have a team that focuses on defense issues, another on natural resources, and still another that concerns itself with the physical infrastructure of the U.S. However, some of the teams are crosscutting in nature. The team that I lead, Strategic Issues, is one of the crosscutting teams. Our focus is more functional and less programmatic. We look at func-tional issues that span across government and programs.

GAOs Strategic Issues team supports the agencys third stra-tegic goal, which is to help transform the federal govern-ment to address national challenges. We have responsibility for a broad set of crosscutting governance issues encom-passing performance planning, strategic planning, regula-tory policy, and strategic human capital management. Were also concerned with how the government funds itself, which entails looking at the tax system in terms of tax policy, administration, as well as budgeting. We perform our own engagementsaudits that typically culminate in reports. Just as importantly, we work with and support our colleagues from other teams within GAO. For example, if the GAO Defense Group perhaps identifies a human capital issue, then we are there to provide them the latest thinking and best practices to address this issue.

On Challenges and Changes We work in a very challenging environment. We face what I refer to as a supply-demand imbalance. Congress need for independent, objective, and timely information, as well as assessments on how to improve government perfor-mance, has grown markedly and continues to grow. At the same time, our budget has been going down. This situation requires us to work very closely with our clients to under-stand their needs and set clear expectations. The only thing worse than bad news is bad news that comes late or bad news that is unexpected.

I also want our auditing techniques to be top-tier, and that the questions were asking are suited to the problems were addressing. For example, when we do a performance audit of a government program, these audits have followed a tradi-tional logic model approach. We would assess a programs inputs (e.g., resources expended) and outputs (e.g., prod-ucts produced) and determine its effectiveness. Increasingly, the focus is shifting away from program outputs and more towards outcomes. This approach changes the unit analysis, given we are now concerned with an outcome and working back, which is a distinctly different approach than the typical logical model that starts with a program and works through its specific inputs, activities, and outputs.

Given that government is confronting increasingly complex, wicked challenges, this shift in focus toward outcomes and results may present a more suitable approach to effective governance. It also rests on the recognition that the outcomes being sought today are not going to be possible by one orga-nization using one program strategy, operating on its own. They are going to be achieved by a variety of programs working together in a coordinated way to achieve results. This notion of complexity and network management is certainly a big change requiring a new way of doing business.

The pace at which decision-makers need and must have information has changed significantly. Where we used to have time to pilot-test something or shake out the bugs, today the impetus has changed. Technology and social media have really pushed this change.

On the Importance of GAOs High Risk SeriesIn 1990, GAO began a program to report on government operations that it identified as high risk. The High Risk Series was designed to highlight major program areas that are most vulnerable to waste, fraud, abuse, mismanagement or in need of broad-based transformation. Since then, GAO has reported on the progress to address high-risk areas. In our last report, two areas were removed from the high-risk desig-nation: management of interagency contracting and IRS busi-ness systems modernization. Two areas were added: limiting



the federal governments fiscal exposure by better managing climate change risks and mitigating gaps in weather satel-lite data. These changes bring GAOs 2013 High Risk List to a total of 30 areas. Overall, GAOs high risk program has served to identify and help resolve serious weaknesses in areas that involve substantial resources and provide critical services to the public.

Our next report is scheduled for release in February 2015 inclusive of updates, additional [high risk areas], and hopefully removals. We do that because it helps shape the congressional oversight agenda. As Justice Brandeis said, sunshine is the best disinfectant. Since the high-risk program began, the government has taken high-risk problems seriously and has made long-needed progress toward correcting them.

On the Promises of the GPRA Modernization Act of 2010 One of the greatest accomplishments of the original GPRA Act of 1993 was putting in place a performance infrastruc-ture that required agencies to do strategic plans, annual performance plans, performance reporting with focus outcomes, and performance measures. It was lacking in two very important areas. The original GPRA was unsuccessful in getting agencies to work effectively on specific issues across organizational boundaries. It also generated volumes of performance information that was available but rarely being used to inform decision-making.

The GPRA Modernization Act of 2010 was designed to address these two limitations and more. It sought to craft a

INPUTS

Resources dedicated to or consumed

by the program

OUTPUTS

The direct products of

program activities

ACTIVITIES

What the program does with inputs to fulfill its

mission

OUTCOMES

Short|Intermediate|Long term

Benefits or changes for participants during or

after program activities

OUTPUTS

The direct products of

program activities

ACTIVITIES

What the program does with inputs to fulfill its

mission

INPUTS

Resources dedicated to or consumed

by the program

OUTCOMES

Long term|Intermediate|Short

Benefits or changes for participants during or

after program activitiesPLANNINGEVALUATION

LOGIC MODELS

Logic models can strengthen the development of program outcomes, validate underlying program logic, and explain the purpose and operation of the program to others. Logic model is one among a number of planning and evaluation tools that provide a structured approach to clarifying activities and intended outcomes.

When used as planning tool, the logic model starts with the end in mind by focusing on desired outcomes. It then requires the identification of outputs that con-tribute to those outcomes, activities that produce those outputs, and the inputs necessary to achieve these outcomes.

When used as an evaluative tool, it starts with inputs working through desired outcomes; it identifies measures that will be used to determine whether desired out-comes have been achieved as well as the sources of data required to support the measurement of those outcomes.

Our audit work falls into three broad areasoversight, insight, and foresight. Our oversight mission focuses on compliance and making sure that funds are properly expended for their intended purposes. Our work also offers insights into what works, identifying best practices that can be leveraged and adopted, where appropriate, across government. Finally, what we call foresight involves pinpointing emerging trends, making Congress aware of them, and informing them of the possible implications of those trends for public policy and governance.

more integrated and crosscutting approach to federal perfor-mance and push for the expanded use of performance information. This law established a variety of requirements and mechanisms to make this happen (i.e., the establishment of agency priority goals and cross-agency priority goals).

Under the GPRA Modernization Act, we have a statutory responsibility to do periodic reviews of its implementation among federal agencies. GAO issued its latest report in June 2013 and found that agencies had been pretty successful designating the number two in the agency or the deputies to be the chief operating officers. There are chief performance officers within agencies and goal leaders that have been

designated as well. Putting this infrastructure in place is a positive and important development.

The report did identify weaknesses: agencies need to ensure that performance information is useful and being used by federal managers to improve results, they need to pursue additional opportunities to address crosscutting issues, present performance information that could better meet users needs, and provide performance information that is useful to congressional decision-making. Weve made prog-ress, but we need to keep pushing this crosscutting issue with agencies and OMB. Its key in realizing greater effectiveness and cost savings.

GAO Featured Reports

Duplication & Cost Savings:GAOs yearly report on areas where the federal government could reduce duplication and achieve cost savings.

High Risk Series:GAOs list of programs that need continued attention due to high risk factors.

Managing for Results in Government:Effective performance management helps the federal government to improve outcomes in areas that affect nearly every aspect of Americans lives, from education, health care, and hous-ing to national and homeland security.




GAOs Strategic Issues team

supports the agencys third

strategic goal, which is to help

transform the federal government

to address national challenges.

We have responsibility for a broad

set of crosscutting governance

issues encompassing performance

planning, strategic planning,

regulatory policy, and strategic

human capital management across

the federal government.



On Opportunities to Reduce Fragmentation, Overlap, and DuplicationGAO issues an annual report on overlap, duplication, and fragmentation in government programs. We have identi-fied over 380 actions that the administration and Congress can take to address fragmentation, overlap, and duplication. GAOs 2013 annual report identifies 31 new areas where agencies may be able to achieve greater efficiency or effec-tiveness; 17 involve fragmentation, overlap, or duplication.

The number of program areas where theres pure overlapsame programs, same tools, going to the same beneficiary or target populationis relatively infrequent. Far more frequent is overlap, which is the same population, but use of different tools or program strategies. Even more frequent is fragmenta-tion, which is a variety of different programs using different strategies that are all trying to achieve a common outcome. On duplication and overlap, well find success when we eliminate low-performing or ineffective programs and move money to better-performing programs that will net better outcomes. Regarding fragmentation, the solution is very often getting agencies to work better together; this is absolutely essential.

We also found other cost savings or revenue enhance-ment opportunities. For example, we should do a better job reducing the net tax gap of $385 billion. The tax gap is the annual difference between what is legally owed and what is actually collected by IRS. Over the last few years, my group has focused on how the IRS can pursue the right mix of enforcement strategies and citizen service strategies to reduce that tax gap.

Addressing fragmentation, overlap, and duplication will require continued attention by the executive branch agencies and targeted oversight by Congress.

On the Future The country faces long-term fiscal issues requiring some fundamental decisions. We support the Congress as it ponders reprioritization and rethinking to address these fiscal issues. Since were fundamentally interested in improving performance of government, the way were going to do it is by improving the connections across organizations more than simply eking out another one or two percent of produc-tivity out of any individual agency.

I think the Centers special report, Six Trends Driving Change in Government, contributes to a better understanding. I was very pleased to have participated in some of the initial brainstorming associated with its development. When were looking at drivers such as risk, innovation, mission, perfor-mance, efficiency, and leadership, there are certainly things individual organizations need to do in each of those areas.

Fundamentally, at the end of the day, to improve the way organizations work across boundaries, we must recognize that risk management is more than how I manage my risk in my four walls. It also includes how my partners, whom I am absolutely dependent upon, manage their risk; how do we foster innovation across a network? What does leadership look like across a network? What does performance look like across a network? Individual agency improvement efforts are paying real dividends, but huge improvements are going to come in working better across organizations.

Were working on very difficult issues. Given budget reali-ties, this may require GAO to perform fewer jobs, but the quality of our work will never be sacrificed; that is nonne-gotiable. Given the speed of the decision-making, we need to make sure the work were doing is sufficient to answer the questions posed, so that we get the information to the decision-makers in the time and format they need. A beau-tiful, well-crafted report that comes in one day after the deci-sion was made is essentially an historical document. With the speed of decision-making, social media, and all the rest, we need to find ways to radically streamline how we get our information out. We have an initiative underway in GAO thats designed to do just this.

To hear The Business of Government Hours interview with J. Christopher Mihm, go to the Centers website at www.businessofgovernment.org.


To read the full transcript of The Business of Government Hours interview with J. Christopher Mihm, visit the Centers website at www.businessofgovernment.org.

To learn more about the Government Accountability Office, go to www.gao.gov.



The Defense Logistics Agency (DLA) provides full-spectrum logistical support to soldiers, sailors, airmen, Marines, and civilians around the world every day and for every major conflict over the past five decades. Logistics is a cost driver that must be managed with deliberate precision. DLAs readi-ness to respond to warfighter needs is built on an integrated supply chain that must be efficient and effective. As stewards of the Department of Defenses resources, the agency must go beyond simply responding to demands to more effectively anticipating them.

Over the next decade, DLA will find its comprehensive logis-tics services needed more than ever in new and challenging ways. The very nature of envisioned threats and conflicts, combined with increased fiscal challenges, demands an agile, joint logistics response marked by innovation and best prac-tices. What are DLAs strategic priorities? How is DLA working to reduce cost while improving support of the warfighter? What about DLAs role in providing humanitarian assistance and disaster relief support? Vice Admiral Mark Harnitchek, Director of the Defense Logistics Agency, joined me on The Business of Government Hour to explore these questions and more. The following provides an edited excerpt from our interview. Michael J. Keegan

On the Mission and Operations of the Defense Logistics AgencyDLA was established on October 1, 1961, and was known as the Defense Supply Agency before officially changing to its present name in 1977. It was conceived in the 1960s as a more efficient way to provide armed services with supplies. The agency has evolved over time to provide a full spectrum of logistics, acquisition and technical services sourcing and providing almost every consumable item used by our military forces worldwidefood, medicines, medical surgical equipment, fuel, construction equipment, construc-tion supplies, uniforms, and all the things used in the field. DLA also supplies more than 84 percent of the militarys spare parts. In addition, we manage reutilization of military

equipment, provide catalogs and other logistics information products, and offer document automation and production.

DLA has 27,000 people working across 30 countries and 48 states to meet its mission. We are indeed a global organiza-tion. The primary source of financing is our revolving fund, the Defense Working Capital Fund. We sell to our service customers the products and services they need. They reim-burse us and those funds go into our working capital fundbasically, our activity is financed with the funded orders placed by our customers.

We are required to keep a certain amount of cash on hand to pay our bills. We are right around $40 billion in sales and about $5 billion to $6 billion in cost of operations. Our two biggest financial lines of operation are the things that we buy and the cost of our operations, which includes staff, infra-structure, and transportation.

A Conversation with Vice Admiral Mark Harnitchek Director, Defense Logistics Agency



Fuel is our largest commodity purchase, equaling about half of that $40 billion. Were in the same league as Delta and Northwest in the amount of fuel we buy. Its about 130 million barrels a year. Food is another big ticket item, at around $4 billion to $5 billion. Pharmaceuticals are in the $4 billion to $5 billion range as well, with uniforms, repair parts, construction equipment, etc., rounding out the last $10 billion of our purchases.

On the Importance of Understanding our Customers I am very focused on understanding my customers needs, requirements, and operational outcomes. We take that as understanding the array of required products and services while responding to the needs of our customers and assisting them to achieve mission outcomes. For example, our support in Afghanistan is to have the requisite amount of food and fuel on hand to meet the operational commanders needs, whatever those are, and then have all those other supply chains positioned to do that.

From a 50,000-foot perspective, its not all that difficult. Its understanding what it is your customers want, the outcome youre trying to achieve, and then figuring out on the back end how to achieve it in the most efficient and cost-effective manner. Given our service customers pay us for these goods

and services, were very focused on getting the best value for our money and passing that on to our customers. So if I can sell something for 10 percent less this year than I did the year before while getting the same operational outcome, then thats exactly what we want to do. This is, in a nutshell, my responsibility and that of the 27,000 military and civilian folks who work for DLA.

On DLAs Strategic Vision: 13 in 6 Since I arrived at DLA, [I have] focused on significantly improving our performance while dramatically reducing cost. It is all about putting our customers first, and being a warfighter-focused, globally responsive, fiscally responsible supply chain leader.

To make this strategic vision a reality, I introduced my 10-in-5 strategy, which means saving $10 billion over the next five years by focusing on five core priorities: decrease direct material costs, decrease operating costs, right-size inventory, improve customer service, and achieve audit read-iness. But the targets get more aggressive as we go forward. Weve upped 10-in-5 to create even more savings; our new goal [is to] slash $13 billion in operating and material costs over the next six years. DLA will deliver improved perfor-mance for $13 billion less.

On decreasing direct material costs, we are to be smart buyers of the right stuff through a combination of reverse auctions, commercial-type contract terms, substantial industry partnerships, performance-based logistics and prime

U.S. Navy photo by Mass Communication Specialist 3rd Class Lacordrick Wilson



vendor contracts, and significantly reduced lead times. We are reducing operating costs through a combination of elimi-nating, consolidating, and co-locating infrastructure, opti-mizing the global distribution network, enhancing retail industrial support, incorporating process improvements, and going green at DLA operating locations.

An integral aspect of achieving the 13-in-6 strategy centers on cleaning out the attic. This involves right-sizing both war reserves and operational inventory by reviewing and adjusting strategic requirements, leveraging commercial supply chains without redundancy, and improving planning and forecasting accuracy. Our short-term goal is to reduce excess inventory by $6 billion by the end of 2014 without sacrificing military readiness.

In the end, our customers must be front and center, so improving customer service is a key strategic objective. As with all DoD components, we need to make sure our organi-zation achieves audit readiness, demonstrating our commit-ment to transparency and accountability through our culture of judiciousness.

On improving performance, you have to give everybody a target and then you have to fully empower them to start improving performance and dramatically reducing cost. This is not something we define; its something our service customers define. Improving performance is not all that diffi-cult if you stick to the basics. We are an acquisition machine. You have to buy enough. You have to buy it on time, and then you have to make sure it gets where it needs to go.

On Reducing Costs Using Reverse Auctions DLA has substantially increased its reverse auction opportu-nities, which has led to savings of more than $1.6 billion. To put a fine point on it, our energy area achieved $400 million in savings in fiscal year 2013 by using reverse auctions to get better prices and increase competition in awarding fuel contracts. We had another contract that we ran as an auction for a medical prime vendor for medical supplies. Its a 10-year contract worth about $10 billion. We saved five percent. Five percent of $10 billion is a big number leading to significant savings. So how do they work?

Instead of a sealed bid or a best and final that we nego-tiate with each of the suppliers, reverse auctions run online and the reverse auction pricing tool should be used for all competitive purchases over $150,000. Reverse auctions involve contractors placing a bid lower than an earlier bid, which fosters intense competition and drives down prices.

Typically, the bidding process lasts about an hour and auctions are held almost daily by DLA units.

On Right-Sizing Infrastructure and Achieving OptimizationWe manage 26 distribution centers worldwide. To achieve our 13-in-6 vision, it is important to optimize warehouse operations and reduce distribution infrastructure. Since we need to decrease operating costs, were going to keep the inventory we need and store it in our most cost-effective, advantageously located distribution centers.

Last year, 40 percent of DLAs inventory was in more than one place. If you talk to FedEx, theyll tell you they can have anything, big or small, moved anywhere in the United States in five days. How can we employ the same principle? It involves minimizing inventory and really leveraging our fabulous distribution and transportation system. Were going to put most of our wholesale inventory at one of four places: Susquehanna, San Joaquin, Warner Robins, and to a lesser extent Red River.


Since I arrived at DLA, my guidance has focused on significantly improving

our performance while dramatically reducing cost. It is all about putting our

customers first, and being a warfighter-focused, globally responsive, fiscally

responsible supply chain leader.

When we eliminate a facility, we reduce operating costs. Reducing operating costs also reduces the rates charged to customers and ultimately [the price they will] pay for mate-rial storage. In FY12, by vacating 34 buildings, one partial facility, and four temporary structures, we reduced infrastruc-ture by 2.6 million gross square feet. An even larger reduc-tion was achieved in FY13 when 4.1 million gross square feet were vacated. The plan is constantly modified to account for changes in mission, workload, material in storage and DOD and DLA initiative.

On Reducing Fuel Cost While Improving Distribution Fuel procurement, primarily jet fuel which accounts for approximately 75 to 80 percent of DLA Energys fuel purchases, represents the largest portion of expenditures. The U.S. Air Force is our biggest fuel customer, then the Navy, and then the Army. We sell largely JP8 fuel to them. JP8 is commercial jet fuel with a different flash point and a different freeze point. We have to store it separately from other types of fuel, resulting in about 600 sites where we store military-specification fuel.

The Air Force has decided to [switch] from JP8 fuel to stan-dard commercial jet fuel. This makes you more ready because that fuel is available all over the world. Everybody doesnt use military jet fuel. A second thing is if you dont have this unique requirement for military-specification fuel, you can rely on commercial industry to store it for you, so we can rid ourselves of legacy World War II vintage, below-ground storage tanks that, frankly, are an environmental acci-dent waiting to happen. This effort by the Air Force will save hundreds of millions of dollars in infrastructure cost over 20 years. Plus, standard jet fuel costs a little less.

On Combating Counterfeit Parts We are working to aggressively keep counterfeit parts out of the military supply system, and were doing this by working closely with manufacturers to find innovative ways of proving product authenticity. A commodity most at risk or

most susceptible to counterfeiting is microcircuits. We are attacking this situation on multiple fronts.

We are only buying from certified suppliers. Were instituting software that can identify anomalies in vendor addresses and buying patterns. If we have a supplier who only has a post office box or is fairly new to the system, then a flag should be raised, much like a credit card vendor recognizes anoma-lous buying patterns and warns the buyer.

We also made it a requirement that all electronic micro-circuits we buy must be marked with botanical DNA. This means that manufacturers and distributors that want to sell microcircuits to DLA have to mark those items with SigNature DNA, a product invented by the civilian high-technology firm for forensic authentication and counterfeit prevention. We spent some 18 months working to come up with this functionality and proving that these products could



To hear The Business of Government Hours interview with Danny Werfel, go to the Centers website at www.businessofgovernment.org.


To read the full transcript of The Business of Government Hours interview with Danny Werfel, visit the Centers website at www.businessofgovernment.org.

To learn more about the Office of Management and Budget, go to www.whitehouse.gov.

I introduced my 10 in 5 strategy,

which means saving $10 billion

over the next five years by

focusing on five core priorities:

decrease direct material costs,

decrease operating costs, right-

size inventory, improve customer

service, and achieve audit

readiness. But the targets get more

aggressive as we go forward.

Weve upped 10-in-5 to create

even more savings; our new

goal [is to] slash $13 billion in

operating and material costs over

the next six years.



be marked with botanical DNA during production and that those marks could later be read.

We buy about 80,000 different types of microcircuits, used in everything from aircraft and ships to medical equip-ment. Microcircuits are the first commodity DLA is targeting because they have a high risk of being counterfeited. As the guy thats responsible for good components in the supply chain, this is not a fail-safe method. Its been very successful and we plan to expand that to other commodities as well.

On Leadership I have been very fortunate and blessed to work [with] excellent leaders. I recall fondly what I have learned from mentors such as General Duncan McNabb, General Norton

Schwartz, Admiral Mike Mullen, and General Whitcomb. I probably have learned the most in the past 10 years given the pressures faced while the countrys been at war. My last boss before arriving at DLA, General Duncan McNabb, has shaped my Guiding Principles in my Directors Guidance, which in turn has shaped my leadership approach. We are living in historic times doing things weve never done before. Make some history yourself. Push for smart things to do dont wait for the requirement or for folks to ask. No one knows this stuff better than usact like it. I trust you; prioritize, do it your own way, but get it done or ensure it gets done. This is your time; do big things and make it better. If not you, who? If not now, when? Relationships are key; build them and use them. Take care of one another. Keep promises.

To learn more about the Defense Logistics Agency, go to www.dla.mil.

To hear The Business of Government Hours interview with Vice Admiral Mark Harnitchek, go to the Centers website at www.businessofgovernment.org.


To read the full transcript of The Business of Government Hours interview with Vice Admiral Mark Harnitchek, visit the Centers website at www.businessofgovernment.org.



As veterans separate or retire from the military, transitioning to civilian life can be hard. The federal government has the obligation to ensure that returning veterans have access to and use of hard-earned benefits that can ease this transition. With some one million veterans likely to separate or retire in the next five years and many young veterans unemployed, the U.S. Department of Veterans Affairs manages a portfolio of educational and job training services for eligible veterans to enhance their economic opportunity and successful transition.

How does the VA promote employment opportunities for veterans? What is the VA doing to enhance opportunities for veterans to obtain knowledge and skills to properly transi-tion to civilian life? What programs provide opportunities for veterans to obtain, retain, and adapt a home? Curtis Coy, Deputy Under Secretary for Economic Opportunity, Veterans Benefits Administration, joined me on The Business of Government Hour to explore these questions and more. Here are some insights from our discussion. Michael J. Keegan

On the Mission of VAs Office of Economic Opportunity The office was created in 2011 within VAs Veterans Benefits Administration to consolidate different economic opportunity programs for veterans under a single office. There are three business lines: education service administers VAs educa-tion programs that provide education and training to eligible service members, veterans, and dependents; loan guaranty service provides oversight of the VA Guaranteed Home Loan Program and ensures veterans rights are protected when purchasing a home under this program. We also have the vocational rehabilitation and employment (VR&E) service, which oversees programs that provide employment and inde-pendent living services including vocational counseling, job search assistance, and post-secondary training. Our portfolio of benefits and services is designed to enable both personal and economic success.

We do this with about 4,000 people located in about 56 VA regional offices across the country, as well as in the Philippines. Our budget for fiscal year 2014 is a bit over $600 million. To give you a sense of what we are doing, in the last four years weve paid about $35 billion in Post-9/11 GI Bill benefits to about a million beneficiaries. We have about 800 vocational rehabilitation and employment counselors throughout the country. We just guaranteed the 20 millionth home loan since the program was established in 1944, and those loans for the past 22 quarters have the lowest default rate of all cohorts across the country. You can see that our veterans take their home loans and financial responsibilities very seriously.

A Conversation with Curtis L. Coy, Deputy Under Secretary for Economic Opportunity, Veterans Benefits Administration, U.S. Department of Veterans Affairs



On the Strategic Priorities of VAs Office of Economic OpportunityWeve created three specific strategic goals. The first one is to promote employment opportunities for veterans. The second is to enhance opportunities for veterans to obtain knowl-edge and skills. Finally, we provide opportunities for veterans to obtain, retain, or adapt a home. Each goal has a host of [associated] programs. We want to build the foundation for veterans to succeed. For example, through our education and employment programsGI Bill, VetSuccess on Campus, VR&Ewe want to ensure that were empowering veterans with the knowledge, skills, and opportunities they need to succeed in the 21st century.

We want to make sure that veterans are equipped with the tools they need to succeed in school ... that were providing them the resources to ensure that they continue their educa-tion and ultimately graduate [and] gain meaningful employ-ment. Were working with many different schools, veteran service organizations, community organizations, and other partners to ensure that our beneficiaries have access to the right information to make informed decisions.

I gave a keynote address to the Student Veterans of America Conference and my message was, in World War II, the GI Bill served about eight million of the 16 million veterans that served. They were called the greatest generation. I called this group in the audience the next greatest generation. We believe that the veterans of today are the engine that will get the economy moving.

On the Benefits of the Post-9/11 GI BillIt is arguably the most extensive educational assistance authorization since the original Montgomery GI Bill in 1944. Its basically three pieces. One is tuition. Specifically, we pay for the veterans tuition at public schools. There are some limitations for private schools. We provide up to a $1,000 book stipend. Finally, we also provide a housing stipend for veterans. Combining these three benefitstuition, books, or housingveterans can focus on their schooling.

The Post-9/11 GI Bill provides 36 months of benefits; veterans have up to 15 years to use these benefits. The program increases accessibility to higher education for veterans and their dependents. A unique aspect of the Post-9/11 GI Bill is that veterans can provide some of those 36 months of benefits to their spouses and/or dependents. They have to make that election while still in the service. The GI Bill benefits have never been available to beneficiaries other than the veterans themselves, so thats key.

On the Principles of ExcellenceIn 2012 the president signed an executive order called the Principles of Excellence to ensure that federal military and veterans educational benefits programs are providing service members, veterans, spouses, and other family members with the information, support, and protections they deserve. It directs agencies to implement and promote compliance with the principles of excellence for educa-tional institutions that interact with veterans. The Principles of Excellence are a set of guidelines with which institutions that receive federal funding, including the GI Bill, agree to comply. To date, we have about 6,000 schools that have agreed to adhere to them. Described broadly, the principles require schools to provide meaningful information about the financial cost and quality of the school. It prevents abusive and deceptive recruiting practices. It calls for them to provide high-quality academic and student support services.

On the Veterans Retraining Assistance Program (VRAP)VRAP is a joint program between the Department of Veterans Affairs and the Department of Labor. This program provides 12 months of educational benefits to veterans between the ages of 35 and 60 who are unemployed and have no educational benefits. Today, 80% of unemployed veterans are over the age of 35. They may not be entitled to or may have exhausted benefits from either the Post-9/11 GI Bill and/or Montgomery GI Bill. VRAP provides 12 months of

The Business of Government


educational benefits for a certificate program or an asso-ciates degree program. Twelve months may not get you a complete associates degree, but itll get you on your way or help you finish it.

Weve identified over 200 high-demand occupations. A veteran has to sign up for one of these high-demand occu-pations. Its been overwhelmingly successful. In just the last couple years, weve had over 143,000 veterans apply. Weve approved 126,000 veterans for the benefit. The number one occupation is IT support specialist. The number two occupa-tion is substance abuse and behavioral disorder counselors. [The latter role] shows me that veterans want to continue to serve those in need of help. This is pretty true to form.

On Supporting Veteran Success on Campus The VetSuccess on Campus (VSOC) program provides supportive services to ensure veteran students are successful in their academic pursuits. We help them adjust to campus life and transition to civilian life. We have trained and expe-rienced vocational rehabilitation and employment counselors on campus full-time. They provide professional counseling on disabilities, vocational goals, and academic achievement and transitions. The counselors are familiar with all the VA benefits and can help veterans navigate them and find the [right] benefits [for] that veteran.

The program started as a pilot in 2009 at the University of South Florida. Since then, weve gone through multiple evolu-tions. We grew from one pilot site to eight campuses, then to 32 campuses, and today 94 campuses. Were also working with new partners. For example, were going to be placing AmeriCorps volunteers on several of our VSOC campuses to help us deal with some of the issues surrounding veterans and to give us more boots on the ground. Were very proud of it, very excited about the program. At 94 campuses, were insti-tutionalizing the programs processes, and weve seen a great deal of success, no pun intended, for this program.

On VAs Vocational Rehabilitation and Employment BenefitsThe Vocational Rehabilitation and Employment program helps veterans with service-connected disabilities and employment handicaps prepare for, find, and keep suit-able jobs. For veterans with service-connected disabilities so severe that they cannot immediately consider work, VR&E offers services to improve their ability to live as indepen-dently as possible.

The VR&E has five tracks: reemployment, rapid access to employment, self-employment, employment through

www.businessofgovernment.org2 8

GI Bill Comparison ToolThe GI Bill Comparison Tool provides key information about college affordability and value so beneficiaries can choose the best educa-tion program for their needs.

GI Bill Feedback SystemSubmit a complaint if your school or employer is failing to follow the Principles of Excellence.

CareerScope Interest & Aptitude AssessmentHelping Veterans Focus on Success.

Education and Training Tools

VAs Office of Economic Opportunity offers many tools to help veterans. Veterans can go to www.benefits.va.gov/gibill to access a rich library of information and tools. Here are a few examples:


Weve created three specific strategic goals. The first one is to promote

employment opportunities for veterans. The second is to enhance opportunities

for veterans to obtain knowledge and skills. Finally, we provide opportunities for

veterans to obtain, retain, or adapt a home. Each goal has a host of [associated]

programs. We want to build the foundation for veterans to succeed.

long-term services, and then independent living. Under this program, veterans who qualify receive the Post-9/11 GI Bill benefits with many additional benefits afforded under the VR&E program. VR&E counselors also help veterans with their resume, job-seeking, placement, mock interviews, networking with employers, and negotiating salary require-ments. We do an entire case management for that wounded warrior or disabled veteran.

One of the other things that weve started is the integrated disability evaluation system ... it places over 200 voca-tional rehabilitation and employment services counselors within DOD bases. Before a service member separates from the service, we have a counselor working with prospective veterans explaining benefits and services, developing that case file while theyre still in service.

On the Importance of Collaboration and Partnerships At the VA, collaboration is critically important. We cannot do all of this alone, nor would we want to. What we do rests on the success of our collaborative efforts with other government agencies and the private sector. The Veterans Retraining Assistance Program highlights our collaboration with the Department of Labor. We work with the Department of Education and the Department of Defense. Were also working on an interagency academic credentialing work group thats dedicated to identifying and sharing strategies for institutions of higher learning to award or evaluate military training and experience. You earn academic credits while in the military.

Were working with, for example, the National Student Clearinghouse and the Student Veterans of America. Were analyzing post-secondary education completion data for one million veterans, both Montgomery GI Bill and Post-9/11 beneficiaries. This will help us measure the outcome of these benefits. We also have a memorandum of understanding with the U.S. Chamber of Commerce Foundation. It hosts job fairs [and the] Hiring Our Heroes program. The Chamber has done over 600 job fairs around the country, having helped well over 10,000 veterans with their efforts to find mean-ingful employment. We just released a veterans hiring guide for employers. We work very closely with veterans service organizations (American Legion, Veterans of Foreign Wars, or the Disabled American Veterans). Our collaborative efforts have been incredible.

On the Future According to the Bureau of Labor Statistics, about 20 million veterans live in the U.S. Veterans unemployment for the month of December 2013 was 5.5%, the lowest since 2008. Though these results are encouraging, veterans still face many employment challenges. We can ensure that veterans have a better outlook by giving them the tools to get the best education and training experiences.



To hear The Business of Government Hours interview with Danny Werfel, go to the Centers website at www.businessofgovernment.org.


To read the full transcript of The Business of Government Hours interview with Danny Werfel, visit the Centers website at www.businessofgovernment.org.

To learn more about the Office of Management and Budget, go to www.whitehouse.gov.

I spend much of my time speaking

to constituent groups and

employers. Whenever I talk about

hiring veterans, the first thing I say

is hiring a veteran makes good

business sense. I then explain that

the military experience veterans

bring to the workforce makes them

resilient, motivated to succeed,

dependable, and reliable.



We want to make sure veterans know what their benefits are so they can leverage them in their life-planning goals. Every year, about 280,000 service members leave the services and become veterans. With the coming drawdown, we project that will

Documents

The Business of Government Magazine Spr 2014