The Business of Government Magazine SPR 2014

SPRING 2014
BUSINESSOFGOVERNMENT.ORG
The Business of Government

3 F rom the Executive Director
5 From the Managing Editors Desk
8 C onversations with Leaders

Anthony Fauci, M.D.
J. Christopher Mihm
Vice Admiral Mark Harnitchek
Curtis L. Coy
32 Insights
David Bowen
Nani Coloretti
Curtis L. Coy
Mary Davie
Anthony Fauci, M.D.
VADM Mark Harnitchek
David Lebryk
J. Christopher Mihm
Kathy Stack
Defense Health Agency
U.S. Department of the Treasury
U.S. Department of Veterans Affairs
Dave Bowen
Nani Coloretti
Mary Davie
Dave Lebryk
Kathy Stack
Dr. Simon Szykman
56 Forum
Six Trends Driving Change in Government
68 Viewpoints
U.S General Services Administration
National Institute of Allergy and Infectious Diseases
Defense Logistics Agency
Is Moneyball Government the Next

Big Thing?
Modernizing the Budget Process to
Reflect Modern Technology Realities
Learning to Trust Open Data
79 Perspectives
Perspectives on Federal Acquisition and
Complex Contracting with Professors
Trevor Brown and David Van Slyke
86 Management
Bureau of the Fiscal Service
Predictive 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
Dr. Simon Szykman
U.S. Department of Commerce
U.S. Government Accountability Office
Office of Management and Budget
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Table of Contents
From the Executive Director

By Daniel Chenok.....................................................................................3
From the Managing Editors Desk

By Michael J. Keegan.................................................................................5
Conversations with Leaders

Anthony Fauci, M.D.
Director, National Institute of Allergy and Infectious Diseases ................. 8
J. Christopher Mihm
Managing Director, Strategic Issues
Government Accountability Office ........................................................ 14
Vice Admiral Mark Harnitchek
Director, Defense Logistics Agency ........................................................ 20
Curtis L. Coy
Deputy Under Secretary for Economic Opportunity, Veterans
Benefits Administration, U.S. Department of Veterans Affairs .................. 26
Insights
Pursuing 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
Forum
Six Trends Driving Change in Government.............................................. 56
SPRING 2014
IBMCenter for The Business of Government
Table of Contents (continued)
Viewpoints
Is Moneyball Government the Next Big Thing?
By John M. Kamensky.............................................................................68
Modernizing the Budget Process to Reflect Modern Technology
Realities
By Daniel Chenok...................................................................................73
By Gadi Ben-Yehuda...............................................................................76
Perspectives
Introduction: Perspectives on Federal Acquisition and Complex
Contracting
By Michael J. Keegan...............................................................................79
Perspectives on Federal Acquisition and Complex Contracting
with Professors Trevor Brown and David Van Slyke
By Michael J. Keegan...............................................................................80
Management
Predictive Policing: Preventing Crimewith Data and Analytics
By Jennifer Bachner.................................................................................86

A 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

By Daren C. Brabham.............................................................................91
Coordinating for Results: Lessons from a Case Study of Interagency
Coordination in Afghanistan
By Andrea Strimling Yodsampa................................................................95
Research Abstracts
Realizing 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
IBM Center for The Business of Government

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Washington, DC 20005
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Business Services. All rights reserved. No part of this
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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.
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
www.businessofgovernment.org
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 problems by sponsoring independent, third-party research from top minds in academe and the
nonprofit sector.
Daniel Chenok is Executive

Director of the IBM Center for
The Business of Government.
His e-mail: chenokd@us.ibm.com.
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 government, 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 examining trends in six different areas that are driving government to approach mission and
business challenges differently, pointing to the need for further analysis and recommendations 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 government
executives respond more effectively to their mission and management challenges. 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 newChief Risk Officerto 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.
SPRING 2014
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
animproved buying experience.
Missionand 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 collaborating with multiple mission-support organizations in order to be successful.
This issue highlights successful actions being taken throughout government to meet challenges of ever-increasing complexity, and sparks thinking among government leaders and
stakeholders about how best to forge new paths forward.
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 government do more with less. Leaders need to change the way government does business to
make smarter use of increasingly limited resourcesleveraging technology and innovation to be more efficient, effective, anticipatory, adaptive, and evidence-based in delivering
missions and securing the public trust.
Michael J. Keegan is Managing

Editor of The Business of
Government magazine and
Host/Producer of The Business
of Government Hour. His
e-mail: michael.j.keegan@
us.ibm.com.
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 Government

Fiscal 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 anticipating 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.

Throughout 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.
SPRING 2014
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, identifying 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 implications 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 logistics 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 transition to civilian life.
Insights from Leaders

Over 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 executives 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, integrated 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 evaluation 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 Contracting

In 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 michael.j.keegan@us.ibm.com. I look forward to hearing
from you.
SPRING 2014
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, microbiology, 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
oflives 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 questions and more. The following provides an edited excerpt
from our interview. Michael J. Keegan
On the Strategic Priorities for NIAID

The four major areas of emphasis are:
HIV/AIDS
Infectious diseases other than HIV/AIDS, which include
the standard established infections, emerging and reemerging infections, and even bio-defense such as having
defense against anthrax or other attacks
Basic and clinical research into the immune system
understanding 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 function to properly understand how we might suppress aberrant
mechanisms and enhance deficient mechanisms.
Its becoming quite evident that we live in a global community [with] certain consequences. The idea that we worry
about certain diseases and there are diseases other people
worry about is antiquated.
On Challenges Facing NIAID

We live in an era of constrained resources [and unprecedented] 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 infectious diseases and immunology. In addition to that predictable translation from a basic concept to an applied clinical
concept, NIAID must also always be ready for the unexpected. 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 replication 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
SPRING 2014
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 capability 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
HIV
In the mid-80s and early 90s, the median survival of my
patients with HIV/AIDS was six to eight months, meaning
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 antiretroviral 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 lowtech 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
Tuberculosis is one of these enduring global health issues.
It has been neglected because of a good dose of complacencythat 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 tuberculosis 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
10
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 understand 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 technologies, investing in the basic science underlying point-of-care
diagnostics, supporting research to develop vaccine candidates, and engaging in public-private partnerships for drug
development.
On the Development of a Universal Influenza

Vaccine
Influenza
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 influenza 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
MRSA
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,
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.
In an outbreak of a disease, using sequencing and computational 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 identify it and sequence it, you can actually create it and then
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 Technology
From 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 transformation, 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 breathtaking 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, transmissibility, 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 determinants of its functions. You arrive at a genotype and a phenotype. 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 instantaneously, as opposed to waiting, is phenomenal. From an
applied research standpoint, the progress is breathtaking.
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11
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.
12
manipulate it. This enables you to target drugs against it.

These are activities that can be done today almost instantaneously, 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 multiuse 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 deliberately 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 civilizations 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 component of what we do.
SPRING 2014
To learn more about the National Institute of Allergy and

Infectious Diseases, go to www.niaid.nih.gov/Pages/default.aspx.
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.
13
A Conversation with J. Christopher Mihm

Managing Director, Strategic Issues
Government Accountability Office
Governments today face serious public management challenges that go to the core of effective governance and leadership, 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 challenges, 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, management 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 GAO

The 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 performance audits with probably 90% performed at the request of
Congress or written into legislation.
14
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 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.
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 functional issues that span across government and programs.
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. 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 performance, 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 understand 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 traditional logic model approach. We would assess a programs
inputs (e.g., resources expended) and outputs (e.g., products 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.
SPRING 2014
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 organization 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 Series

In 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 designation: management of interagency contracting and IRS business systems modernization. Two areas were added: limiting
15
LOGIC MODELS
OUTCOMES
OUTPUTS
ACTIVITIES
INPUTS
Long term|Intermediate|Short
The direct
products of
program
activities
What the
program does
with inputs
to fulfill its
mission
Resources
dedicated to
or consumed
by the
program
Benefits or changes for

participants during or
after program activities
INPUTS
OUTPUTS
ACTIVITIES
OUTCOMES
Resources
dedicated to
or consumed
by the
program
The direct
products of
program
activities
What the
program does
with inputs
to fulfill its
mission
Short|Intermediate|Long term
Benefits or changes for
participants during or
after program activities
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 contribute 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 outcomes have been achieved as well as the sources of data required to support the measurement of those outcomes.
the federal governments fiscal exposure by better managing

climate change risks and mitigating gaps in weather satellite 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.
16
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 infrastructure 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
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 performance 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 progress, 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.
SPRING 2014
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 housing to national and homeland security.
17
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.
18
On Opportunities to Reduce Fragmentation,

Overlap, and Duplication
GAO issues an annual report on overlap, duplication, and
fragmentation in government programs. We have identified 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 effectiveness; 17 involve fragmentation, overlap, or duplication.
The number of program areas where theres pure overlap
same 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 fragmentation, 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 enhancement 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 productivity out of any individual agency.
SPRING 2014
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, performance, 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 realities, this may require GAO to perform fewer jobs, but the
quality of our work will never be sacrificed; that is nonnegotiable. 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 beautiful, well-crafted report that comes in one day after the decision 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 learn more about the Government Accountability Office,

go to www.gao.gov.
To hear The Business of Government Hours interview with J. Christopher

Mihm, go to the Centers website at www.businessofgovernment.org.

interview with J. Christopher Mihm, visit the Centers website at
19
A Conversation with Vice Admiral Mark Harnitchek

Director, Defense Logistics Agency
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 readiness 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 logistics 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 practices. 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
ourinterview. Michael J. Keegan
On the Mission and Operations of the Defense

Logistics Agency
DLA 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, construction 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
20
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 organization. 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 reimburse us and those funds go into our working capital fund
basically, 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, infrastructure, and transportation.
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
U.S. Navy photo by Mass Communication Specialist 3rd Class Lacordrick Wilson
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 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. DLA will deliver improved performance 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
SPRING 2014
21
vendor contracts, and significantly reduced lead times. We

are reducing operating costs through a combination of eliminating, consolidating, and co-locating infrastructure, optimizing 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 organization achieves audit readiness, demonstrating our commitment 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 difficult 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 opportunities, 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 negotiate 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.
22
Typically, the bidding process lasts about an hour and

auctions are held almost daily by DLA units.
On Right-Sizing Infrastructure and Achieving

Optimization
We 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 material storage. In FY12, by vacating 34 buildings, one partial
facility, and four temporary structures, we reduced infrastructure by 2.6 million gross square feet. An even larger reduction 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.
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 anomalous buying patterns and warns the buyer.
We also made it a requirement that all electronic microcircuits 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 hightechnology 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
The Air Force has decided to [switch] from JP8 fuel to standard 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, belowground storage tanks that, frankly, are an environmental accident 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
SPRING 2014
23
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, rightsize 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.
To learn more about the Office of Management and Budget,

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

interview with Danny Werfel, visit the Centers website at
24
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 equipment. 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
interview with Vice Admiral Mark Harnitchek, visit the Centers
website at www.businessofgovernment.org.
SPRING 2014
25
A Conversation with Curtis L. Coy, Deputy Under

Secretary for Economic Opportunity, Veterans Benefits
Administration, U.S. Department of Veterans Affairs
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 transition 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 education 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 independent 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.
26
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 Post9/11 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.
On the Strategic Priorities of VAs Office of

Economic Opportunity
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. 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 education and ultimately graduate [and] gain meaningful employment. 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 Bill

It 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 Post9/11 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.
SPRING 2014
On the Principles of Excellence

In 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 educational 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
27
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:
educational benefits for a certificate program or an associates 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 occupations. 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 occupation 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
GI Bill Comparison ToolThe GI Bill Comparison Tool

provides key information about college affordability
and value so beneficiaries can choose the best education program for their needs.
GI Bill Feedback SystemSubmit a complaint if your

school or employer is failing to follow the Principles of
Excellence.
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 experienced 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 evolutions. 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 institutionalizing the programs processes, and weve seen a great
deal of success, no pun intended, for this program.
On VAs Vocational Rehabilitation and Employment

Benefits
CareerScope Interest & Aptitude AssessmentHelping

Veterans Focus on Success.
28
The Vocational Rehabilitation and Employment program

helps veterans with service-connected disabilities and
employment handicaps prepare for, find, and keep suitable 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 independently as possible.
The VR&E has five tracks: reemployment, rapid access
to employment, self-employment, employment through
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 requirements. 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 vocational 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 meaningful 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.
SPRING 2014
29
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.
To learn more about the Office of Management and Budget,

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

interview with Danny Werfel, visit the Centers website at
30
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 grow to about 300,000 to 310,000 annually. With
more veterans coming into the workforce, we need to be
ready to process all the applications and claims for program
benefits. Its an incredibly busy time, not only keeping up
with the workload that we have, but projecting forward what
we anticipate it will be.
On the Benefits of Hiring Veterans

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.
Billions of dollars have been invested in the training of the
specifically Post-9/11 generation of veterans; its also the
most tech-savvy military force in the world. Think about
all of these veterans and the amount of tools that theyve
used in the military and theyre now coming into the workforce. I underscore that our veterans are a good investment.
Employers who have established hiring practices that seek

veterans are not disappointed.
Our veterans have unmatched skills in team-building, organizational commitment, decision-making, working in diverse
cross-cultural work settings, and advanced technical settings.
Theyre driven. Theyre mission-focused. They have proven
leadership skills. Think about the young combat infantry man
thats over in Afghanistan negotiating with tribal chieftains
that are 80 years old. Think about that young squad leader
in charge of the lives of those 10 or 15 squad mates. This is
the kind of person you want to have in your company. Our
veterans bring DoD state-of-the-art training with them.
On Leadership
I often tell people leaders lead people and managers
manage things. We often forget that theres a difference
between leadership and management. If you dont know
where youre going, it doesnt matter which way you go.
Having a vision is key.
As a leader, youre responsible for the organization, so take
the blame and hand out the praise. You always need to be
ready to make those tough decisions. Governor Tommy
Thompson, when he was Secretary of Health and Human
Services, wrote: God gave you two ears and one mouth.
Use them in that proportion.
To learn more about the Veterans Benefits Administration,

go to www.benefits.va.gov.
To hear The Business of Government Hours interview with Curtis L.
Coy, go to the Centers website at www.businessofgovernment.org.
interview with Curtis L. Coy, visit the Centers website at
SPRING 2014
31
Insights
Pursuing 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
The provision of health services is a
critical and significant mission within
each branch of the U.S. Military, as
well as an integral part of the U.S.
Department of Defenses Military
Health System, MHS.
MHS relies on information and technology to carry out its mission and
meet DODs quadruple aim: to
achieve medical readiness, improve
the health of its people, enhance the
experience of care, and lower its health care costs. To do
this, it depends on access to high-quality, timely, and reliable information and the technology that makes that possible
advances in technology that are clinically relevant, technically feasible, and financially viable.
What is the information technology strategy for DODs
Defense Health Agency (DHA)? How does the creation of
the Defense Health Agency enhance IT efforts to deliver care
anytime, anywhere? How is DHA modernizing its technology
infrastructure and working toward a robust, integrated electronic health record? Dave Bowen, chief information officer
at the Defense Health Agency, shares his insights on these
topics and more. The following is an edited excerpt of our
discussion on The Business of Government Hour.
Would you provide an overview of the continuing evolution
of the mission of DoDs Military Health System?
Dave Bowen: We are a global health care systemdirect
care providers in over 400 military treatment facilities, hospitals, and clinics, [and] purchased care through civilian
providers and institutions. We strive to provide optimal
health care services in support of our nations military
missions anytime, anywhere. We also provide premier care
for military service members, their family, retirees, and their
families. Our personnel are ready to go into harms way to
deliver care.
32
We build bridges to peace through humanitarian support

whenever and wherever needed, notably [on] hospital
ships. In FY13, MHS budget was $50 billion. Its the unified
medical program that supports the physical and mental
health care of over 9.6 million patients worldwide. Today,
approximately 230,000 MHS users depend on information
technology services delivered through civil defense organizations. These include the Tricare Management Activity and
each of the armed services medical departments.
How does the creation of the Defense Health Agency
enhance your IT efforts?
Dave Bowen: It has been challenging for our health IT
customers to determine who was accountable for health IT
performance. Reforming the management of the IT infrastructure will give us the ability to manage health IT delivery all
the way to the desktop. There will no longer be any confusion about who is accountable for health IT. It will be us,
within the DHA IT directorate.
[In 2011, an internal DoD task force reviewed the structure
of the military health system. It provided options to improve
the system, which in March 2013 called for the establishment of the Defense Health Agency. DHA incorporated the
TRICARE Management Activity (TMA) as well as the Joint
Task Force National Capital Region Medical, and back-office
mission support functions.]
DHA began in October 2013. We consolidated a number of
back office services into shared servicesfacility services,
health plan operational services, logistic services, and IT.
Under the IT directorate, each health IT business process will
be aligned to a leader, reflecting our commitment to ownership and accountability. Were basically consolidating the
health IT component of all the military services. To support the
transition, the chief information officers and their associated
service IT management functions have transitioned into the
Defense Health Agency and [are] actively involved in all the
planning for providing health IT on a shared-services basis.
We face a significant challengethe

high cost to support and maintain our
current systemsand yet, our need to
transition from the legacy system to new,
more modern systems that will reduce
costs. Today, sustainment costs eat about
90% of our budgetit is this push-pull
challenge around the high current costs
and the need to fund the future.
SPRING 2014
33
Under the DHA governance structure within the new information technology
directorate, were going to ensure that the right service leadership is involved
in the health IT requirements generation process, and that we deliver the right
application in the right way at the right time.
The military services CIOs actually have a dual role. They

will continue to advise each departments surgeons general
on IT matters and guide IT delivery within the services until
all IT functions transition under the Defense Health Agency.
We anticipate thats going to be about a two-year process.
The service CIOs will retain direct authority over their
service-specific resources until we reach full operational
capability around October 2015. In the end, we seek an
enterprise-wide, integrated IT environment with standardized
infrastructure and applications down to the desktop.
Would you give us a brief overview of the mission of the
Office of the Chief Information Officer (OCIO) within DHA?
How is it organized, the size of its overall budget, and the
number of full-time employees?
Dave Bowen: In October 2013, we transitioned 744
people into the office of the CIO. We developed an organization that has six vertical divisions, essentially using best of
breed, best practices from industry. [These] are innovation
and modern technology, governance, customer relations,
infrastructure solution delivery, information delivery and
analytics, and security and privacy. Our budget for this year
is around $2.2 billion across those six verticals. When we
reach full operating capability, we expect to be between
8,000 and 9,000 employees and contractors. Certainly the
2.2 billion-dollar number will be at least that, maybe more.
What can you tell us about MHS quadruple aim? How do
your efforts support the departments overall mission?
Dave Bowen: We support the overall mission of the
Military Health System that we call the quadruple aim. There
are four pillars to the mission. In FY13, senior MHS leadership
agreed to explicitly emphasize the quadruple aim as the key
strategic direction for the organization. The four pillars of the
quadruple aim include readiness, which means being able to
field a medically ready force and deliver health care anytime,
anywhere in support of the full range of military operations.
The second component is promoting better health among
service members promoting better health choices and
reducing the number of clinical visits. Were moving from
simply delivering health care to focusing on prevention.
34
The third aim is better care the finest in the world, safe,
timely, effective, efficient, equitable, and patient- and
family-centered.
The final aim [is to do] this more effectively and at lower
cost. We need to create value by focusing on quality, eliminating waste, and reducing unwanted variation. Were going
to consider the total cost of care over time, not just the cost
of an individual health care activity. We have both nearand long-term objectives to become more agile in our decision-making and maximize longer-term opportunities to
change the trajectory of our cost growth through a healthier
population.
What are your top management challenges?
Dave Bowen: The MHS health budget is almost 10
percent of the total budget of the Department of Defense.
This includes the total defense health program and all the
care that we provide. Given budget realities, we have a
strong focus on cost control and reduction, coupled with a
need to take MHS into the 21st century.
We face a significant challengethe high cost to support and
maintain our current systemsand yet, our need to transition
from the legacy system to new, more modern systems that
will reduce costs. Today, sustainment costs eat about 90% of
our budgetit is this push-pull challenge around the high
current costs and the need to fund the future.
The second challenge involves properly collecting health
care data of our members who receive care from external
service providers. We need to get the data generated from
external health care activities back into our members military record trying to get data back from them continues
to be a challenge because of privacy regulations and lack of
interoperability of systems.
The third challenge is identifying and selecting a replacement
for current systems. How do we make a selection? How do
we deploy a new system across 400 care sites in our direct
care system alone, as well as properly equipping our ships
and submarines?
Insights
Under the DHA governance structure within the new

information technology directorate, were going to ensure
that the right service leadership is involved in the health IT
requirements generation process, and that we deliver the
right application in the right way at the right time.
Would you tell us about your efforts in supporting the development of the integrated Electronic Health Record?
Dave Bowen: Much of the activity in this area predates
my arrival. There was an initial agreement that DOD and VA
would jointly acquire an electronic health record or jointly
develop an electronic health record. The plan was to acquire
a best of breed solutionthe best pharmacy system, best lab
system, best radiology system. The Interagency Program
Office manage[s] this activity, and they were doing great
things and moving forward. I joined the agency in September
2012, and towards the end of 2012 it became clear to
department leadership that this was going to be a long and
expensive process.
Upon this realization and reflection, the strategy shifted to
adopt a best-of-suite core application strategy. VA chose to
pursue such a strategy, but instead of buying a new core,
VA would modify its current core. Now without a partner,
DoD leadership consulting with Congress decided to buy a
commercial product. We are moving down this road focusing
on acquiring a commercial product. The acquisition testing
and logistics area has been assigned the responsibility for
overseeing this acquisition.
My office is going to be involved with implementing what
is acquired. What are my interface requirements? How do I
interface to my current legacy systems that will remain and
not be replaced? What kind of infrastructure footprint do we
have to lay down for running this on basically a worldwide
basis? My experience in the commercial world will assist our
efforts and help identify whats going to be our training methodology, deployment methodology, how were going to run
the new systems at the same time we run the old systems. Its
a very important project.
What are some of the major opportunities your organization
will encounter in the future; and, how do you envision your
office will evolve to meet those challenges and seize those
opportunities?
Dave Bowen: We have to reduce the cost of our direct
care system proactively promote health [and] proactively
connect with our commercial providers to get our
SPRING 2014
members health data into our system for as complete a

record as possible.
We also have an opportunity to take an enterprise-wide view
of our system. This will permit us to pose strategic questions
as we move to realizing our future state. For example, prior
to buying an application to address a certain need, lets be
sure that were buying a solution that we can leverage across
the enterprise for all services and military treatment facilities.
We must be cost-effective with our investments, taking an
enterprise view, and making sure that investments are in the
interest of the overall organization.
We also have an opportunity to focus on accountability and
results in the IT arena, results in terms of clinical performance in our military treatment facilities, in our hospitals,
and better results coming from our private care providers.
We are actively encouraging our business leadership to standardize the clinical processes we have in place. We have to
adopt best practices, reduce the variability of outcomes, and
drive down the costs of care.
In an era of fiscal constraint, its critical that agency leaders
act with strategic intent and keep the workforce motivated
to meet mission. How do you keep your employees focused
and motivated in the face of dramatic and sometimes
painful changes?
Dave Bowen: I would respond to that with three words:
communicate, communicate, communicate! You cant
communicate enough these days. We have a far-flung operation and getting information out and feedback from the far
reaches of our organization is critical. If we can do that well,
we will continue to have a motivated workforce, despite the
fact that were facing seriously challenging budget
constraints.
To learn more about Defense Health Agency, go to www.health.mil/
About-MHS/Defense-Health-Agency
To hear The Business of Government Hours interview with Dave

Bowen, go to the Centers website at www.businessofgovernment.org.
interview with Dave Bowen, visit the Centers website at
35
Insights
Managing Resources in an Era of Fiscal Constraint

and Reform: Insights from Nani Coloretti,
Assistant Secretary of the Treasury for Management,
Clear strategic focus and sound
management are essential to the
effective stewardship of taxpayer
dollars, enabling federal agency
decision makers to make tough
choices on day-to-day and long-term
management challenges.
The U.S. Department of the Treasury
seeks to improve performance
and operations while managing
its resources more effectively and
efficiently. In an era of fiscal austerity, this is even more
pressing. What is Treasurys management performance
agenda? What is Treasury doing to consolidate its office
space and right-size its operational footprint? How is
Treasury working to transform the way it does business? Nani
Coloretti, Assistant Secretary of the Treasury for Management,
shares her insights on these topics and more. The following
is an edited excerpt of our discussion on The Business of
Government Hour.
Would you tell us about the mission of your office and share
insights on your duties and areas under your purview?
Nani Coloretti: I am principal policy advisor to the
secretary and deputy secretary on development and execution of the [departments] budget, [its] internal management,
and its bureaus. My area is responsible for budget, planning,
human resources, information and technology management,
financial management and accounting, procurement,
privacy, records, and administrative services to departmental
(headquarters) offices.
Given your responsibilities and duties, what are the top challenges youre facing and how have you sought to address
those challenges?
resources. It is a time of uncertainty. We have sort of a

tagline in my office called delivering more mission for the
money. We merged a couple of bureaus, which has reduced
our footprint while maintaining a constant level of service.
Weve pursued a paperless Treasury initiative projected to
save about $500 million over five years. This is truly changing
the way we interact with people. We also are pursuing
shared services strategies to achieve our mission in the most
cost-effective manner.
Another challenge is employee turnover and retirement. At
Treasury, about 70% of the senior executives are eligible to
retire in the next five years; thats a pretty significant reality. The
department is focusing on succession planning and creating
leadership networks as a way to prepare for this over time.
When you come to work in government there are many rules
to follow that you didnt issue. The third challenge involves
pay[ing] attention to these rules and be[ing] keyed in to the
various government-wide initiatives. To that end, it is very
important to pay attention to what the Office of Management
and Budget and the Office of Personnel Management are
doing. There are communities of practice moving to the next
thing and the next thing and you really need to keep up with
government-wide efforts.
The Treasury Departments mission is focused on promoting
economic prosperity and ensuring financial security. I want
to explore some of Treasurys key strategic priorities as well
as its current agency performance goals.
Nani Coloretti: As you know, the GPRA Modernization
Act governs how we do strategic planning at the executive
agency level. It calls for a new plan every four years. [Since
this interview, Treasury has released its 2014-2017 Strategic
Plan, which will provide more updated information.]
Generally, we remain focused on our core mission.
Nani Coloretti: The top challenge right now across

the government is managing with reduced or constrained
36
The top challenge right now across the

government is managing with reduced
or constrained resources. It is a time of
uncertainty. We have sort of a tagline
in my office called delivering more
mission for the money.
At Treasury, about 70% of the senior executives are eligible to retire in the
next five years; thats a pretty significant reality. The department is focusing
on succession planning and creating leadership networks as a way to
prepare for this over time.
We are set to repair and reform the financial system. We are

supporting the recovery of the housing market.
Another goal is to enhance U.S. competitiveness and
promote international financial stability. We are protecting
national security through targeted financial actions by the
Office of Terrorism and Financial Intelligence. Were pursuing
comprehensive tax and fiscal reform. We are also focusing on
managing government finances [responsibly].
We had two agency priority goals. Increasing electronic
transactions is [one]. Another goal focuses on increasing
voluntary tax compliance. [Today these goals are increasing
self-service options for the taxpayers and focus enforcement
on high-priority threats using pro-active analysis]
In response to the need for financial reform, Congress
passed the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank) in July 2010. Dodd-Frank
established new responsibilities for Treasury and created
new offices tasked to fulfill those responsibilities. What
are some of the challenges associated with setting up new
offices?
Nani Coloretti: Ill start with the office I helped set up,
the Consumer Financial Protection Bureau, which has as its
mission helping consumer finance markets work by making
rules more effective, by consistently and fairly enforcing
those rules, and by empowering consumers to take more
control over their economic lives. I left Treasury for about
nine months to help establish the bureau, which is no longer
part of Treasury. We were doing everything from scratch. We
were merging staff from six bureaus into one.
I used to joke that I went from one of the oldest agencies in
the federal government to the newest with just 10 employees.
We did a lot of the initial work by detailing folks to the new
bureau. It was a massive management project with only
a year to complete. I actually didnt stay the first year, but
I learned much from the ground up. Similar efforts were
done to set up Treasurys Office of Financial Stability, which
manages the Troubled Assets Relief Program (TARP). It was a
massive management project with only a year to complete. I
actually didnt stay the full first year, but I learned much from
the ground up.
38
There are several other entities weve stood up as a result of

Dodd-Frankthe Office of Financial Research, which serves
the Financial Stability Oversight Council, its member agencies,
and the public by improving the quality, transparency, and
accessibility of financial data and information; by conducting
and sponsoring research related to financial stability; and by
promoting best practices in risk management.
The department also had to set up the Financial Stability
Oversight Council (FSOC). The council provides, for the
first time, comprehensive monitoring of the stability of
our nations financial system. The council, headed by the
Secretary of the Treasury, is charged with identifying risks to
the financial stability of the country, promoting market discipline, and responding to emerging risks to the stability of the
United States financial system.
The council consists of 10 voting members and five
nonvoting members and brings together the expertise of
federal financial regulators, state regulators, and an independent insurance expert appointed by the president. A fairly
small staff supports the council. As part of Dodd-Frank, the
department also established a couple of other offices: the
Federal Insurance Office (FIO) vestedwith the authority to
monitor all aspects of the insurance sector, and the Office of
Minority and Women Inclusion (OMWI). Each has its own
creation story facing similar challenges to starting anew in
the federal government.
Treasury conducts quarterly performance reviews of each
bureau. What can you tell us more about the quarterly
performance reviews?
Nani Coloretti: The department started the quarterly
performance reviews in March 2010. These reviews are now
required as part of the GPRA Modernization Act of 2010.
We have used the sessions to gain visibility into the activities
and performance of the bureaus and policy offices within
Treasury. Its described as a meeting with a framework and an
agenda that allows for a data-driven discussion. We review
how we are doing. Are we meeting milestones and metrics
on certain strategic priorities?
We use these sessions to identify what we need to do
better to achieve results. For example, we had a set of
Insights
goals from the Small Business Administration that we were

not achieving. We have a federated procurement model.
Procurement policy is under me at headquarters, but actual
procurement activity is delegated to the bureaus. During
these reviews, we assessed whether goals were being met
using a dashboard. Every quarter the deputy secretary would
speak with the bureaus about their performance.
The very first year, we not only achieved our SBA goals, we
exceeded them. It becomes clear that what gets measured
and talked about gets done. The success involved the leadership of former Deputy Secretary Wolin, who took a
keen interest in the operational and managerial aspects of
Treasury. His leadership helped drive bureaus and policy
offices to engage in the process and achieve their goals.
Would you tell us more about the green initiatives to reduce
Treasurys environmental footprint and save taxpayer
dollars?
Nani Coloretti: Were pursuing green and environmentally
sound initiatives across Treasury. Integral to our efforts is
reducing the departments physical footprint. The IRS, our
largest bureau, has done a fantastic job using office space
more productively. IRS is basically pulling down walls,
turning offices into shared spaces or bullpens, or hoteling
space. From these changes, IRS saved $40 million, which is
significant in a time of budget constraint.
Treasury is the third oldest department, but it has the oldest
office building, which received the Leadership in Energy and
Environmental Design (LEED) Gold certification from the U.S.
Green Building Council (USGBC). LEED is a leading international standard for the design, construction, and operation
of high-performance green buildings. The Treasury Building
received its LEED Gold certification based on a number of
green construction and operation features, from developing
and implementing advanced control and management of the
heating, ventilation, and air conditioning systems to simply
changing light bulbs. Doing these things enables us to reduce
the environmental impact of this centuries-old building.
Addressing improper payments is a central component of the
administrations efforts to eliminate waste, fraud, and abuse.
Would you define an improper payment and tell us more
about Treasurys Do Not Pay Business Center?
Nani Coloretti: An improper payment is when funds go to
the wrong recipient, the right recipient in the wrong amount,
or lacking the proper documentation to support payment.
It can be an overpayment or underpayment. Error rates of
SPRING 2014
agencies are generally low, but the estimate for FY 2012 is

about $108 billion of improper payments. The president has
focused on this issue since 2009 and has issued a series of
executive orders and memos to guide agencies in reducing
improper payments.
One effort has been the Do Not Pay Business Center, which
Treasury runs. Do Not Pay is a one-stop shop that allows
agencies to check various databases before making payments
or awards in order to identify ineligible recipients and
prevent fraud or errors from being made.
All our bureaus are active participants in Do Not Pay. We
were first movers. As were asking everybody else to do it,
were setting the example. Were focusing on the front end,
catching payments before they go out. We also have efforts
to reduce improper payments in the tax refund area. Theres
a whole host of efforts in that arena, including identity theft,
fraud, and data analysis, that helps us understand how [to]
get out in front of these risks.
Given your experience, what makes an effective leader?
Nani Coloretti: An effective leader knows him or herself
really well. What Ive noticed over time as Ive come up
through the ranks is that people who have a high degree of
emotional intelligence make effective leaders. These leaders
are actually able to navigate uncertainty better. These leaders
are also authentic in their dealings; they can inspire and
motivate people to be their very best. People want to work
for them [and] be as productive as possible when theyre
working for them. Effective leaders are also knowledgeable,
incredibly smart, and quick on their feet. Finally, I would say
an effective leader is a great coach, encouraging staff to
probe and ask questions.
To learn more about the U.S. Department of the Treasury, go to

www.treasury.gov.
To hear The Business of Government Hours interview with Nani
Coloretti, go to the Centers website at www.businessofgovernment.org.
interview with Nani Coloretti, visit the Centers website at
39
Insights
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
Today, government executives
confront serious challenges to mission
effectiveness. The Office of Integrated
Technology Services (ITS) in GSAs
Federal Acquisition Service (FAS) positions itself as a facilitator and enabler
of government IT savings. By reducing
federal agency customer costs, ITS
can assist them in focusing on their
core missions with smarter, more efficient IT purchases. At the same time,
ITS looks for innovative approaches to
maximize value while lowering cost.
What are the strategic priorities for GSAs Office of Integrated
Technology Services? How does ITS maximize the value of
government IT while lowering cost? What is ITS doing to
improve its operations and become more efficient and agile?
Mary Davie, Assistant Commissioner, Office of Integrated
Technology Services, shares her insights on these topics and
more. The following is an edited excerpt of our discussion on
The Business of Government Hour.
Id like to understand more about FAS Office of Integrated

Technology Services. What services does it provide and how
is its portfolio organized?
Mary Davie: About a quarter of all federal IT spend
comes through ITS. We stand up acquisition solutions for our
agency customers that allow access to mission-enhancing IT
products and services.
Were currently organized into three groups: Schedule 70 is
the largest and most comprehensive IT acquisition vehicle in
the federal government, spending about $15 billion last year.
The Office of Strategic Programs contains our strategic
blanket purchase agreements (BPAs)E-mail as a Service,
SmartBUY, our USAccess program that provides identify verification services, our GWAC program, and a portfolio of
network services solutions like Networx, Connections II, the
mobility program, and the Commercial Satellite program.
Would you describe the mission and continued evolution of the U.S. General Services Administrations Federal
Acquisition Service?
We have about 550 people across the country and we do

everything from making contracts accessible to providing
people with training on how best to use those contracts.
Weve moved away from simply contract build focus to a
solutions-based approach to administration priorities such as
cloud and data center consolidation.
Mary Davie: It is GSAs mission to deliver the best value

in real estate, acquisition, and technology service to government and the American people. We focus on the values of
integrity, teamwork, and transparency to deliver better value
and savings, serve our partners, make a more sustainable
government, and lead with innovation. FAS is vital to GSAs
mission. Given the needs of government are constantly
shifting, we are continuously looking at ways to improve.
My biggest duty is to support the folks that carry out the

functions of ITS. Information technology is recognized as a
critical mission enabler for federal agencies. It helps agencies
deliver services and improve citizen accessibility to government services. I facilitate and manage relationships while
working to forge collaborative solutions. I strongly believe in
IT and GSAs mission as that central buying arm, providing
central services and support, which is exactly what ITS does.
40
Weve been focused on sharing information across

government and across the buying space. Today
federal buying is so fragmented. We ask ourselves
what can we provide to agencies to improve their
buying power and buying decisions?
SPRING 2014
41
We have three main strategic goals: deliver efficient operations, drive worldclass value, and be agile and innovative. For years, we were focused on
contracts. Now its more about what our customers need and how we can best
use common solutions across agencies. Were moving from a contracts-focused
model to a solution-oriented model.
What are your top challenges and how have you sought to
address them?
Mary Davie: The first challenge is keeping up with the
pace of technological innovation. Technology is evolving so
rapidly that it is difficult for government to keep up, especially when technology challenges someone to change a
business model like cloud, and make it available quickly and
safely for government. Given government takes extra precautions, we realize were never going to be right at the innovation curve, but we want to be as close as possible. As my
deputy Mark Day likes to say, we need to anticipate skating
to where the puck is going. For instance, we have created
innovative technology Special Item Numbers (SINs), so new
technologies that do not fit our current structure on Schedule
70 have a landing pad so agencies can access them quickly.
We also have flexible contracts like our GWACs that allow
for companies to make new technologies available.
A second challenge is how technology evolves. Technology
no longer means you have new software that you install.
IT solutions like cloud, cybersecurity, and network services
require a collaborative effort between chief financial officers, chief acquisition officers, and chief information officers. Were also sharing lessons learned, whether for cloud
implementation, when we switched to E-mail as a Service,
launched our Mobility program, or made the Networx transition. You need that coordinated effort to succeed.
The third challenge is that for a long time, we were solely
an acquisition organization. ITS has undergone a major
recruiting and training effort to ensure our program representatives are experts not only in acquisition, but in technology.
We cannot drive value or create solutions for innovative technologies without understanding them.
What are your strategic priorities?
Mary Davie: We have three main strategic goals: deliver
efficient operations, drive world-class value, and be agile and
innovative. For years, we were focused on contracts; were
moving from a contracts-focused model to a solutionoriented model. Were also looking to increase the amount of
42
information available for agencies to make informed decisions. Were looking at making prices paid available for our
acquisition vehicles so agencies can conduct better research
and better negotiate prices with vendors.
Our second priority is delivering world-class value. Today
federal buying is so fragmented. What can we provide to
agencies to improve their buying power and buying decisions? Part of driving world-class value is sharing best practices. Another part is speed to value.
We know cloud has the potential to save government
millions, but if you cant access innovative technologies like
cloud quickly and efficiently, that is lost opportunity. Were
working to provide greater visibility on the prices paid by
government agencies for commonly purchased goods and
services and related purchasing behaviors to the acquisition community, in order to support efforts to reduce total
cost of ownership for these goods and services. Weve also
introduced the solutions navigator tool on our website. We
have an 800 number and an online chat so people can ask
questions.
My third priority is being agile and innovativebeing ahead
of the market. We talk about skating to where the puck is
going and anticipating if we see a shift toward a specific
trend. How do we need to start revamping our contracts and
our solutions to help meet these needs? Our infrastructure
as a service and e-mail as a service blanket purchase agreements really did anticipate that future. We offer choices for
where we are today, but also give them the ability through
contract solutions to get them where they need to be.
Your Network Services Program has undergone some major
initiatives with Networx Transition being complete, Network
Services 2020 (NS2020) underway. Could you go over some
of the things youre doing and how theyre helping the
government?
Mary Davie: It has been a year since we transitioned to
Networx. This was a heavy lift for the agencies the
contract was actually awarded six years ago and the technology landscape was changing. It is important to remember
Insights
that Networx saved the American taxpayers more than $678

million in 2013. We can expect that to increase as agencies
fully use the capabilities of Networx. We are talking to agencies to share the lessons learned from the transition and will
continue to do so.
NS2020 is not a single contract but rather a strategy recommending a portfolio of contracts that address a broad range
of infrastructure, IT and telecommunications needs. GSA is
working with industry and our customers to be as forwardthinking as possibleputting in place the most robust and
service-rich contracts possible. The key to meeting the need
for future technologies will be flexibility. We have to have
the systems and processes that can support the ordering,
billing, and inventory management for new services that may
emerge over the next 10 years. We are working with the GSA
CIO, agencies, and suppliers to ensure our systems efforts are
headed in the right direction. One of my priorities is to be
better buyers of telecommunications and make the transition
less lengthy, costly, or complex.
Many agencies actually face reduced or flat IT spending,
yet missions continue to grow and demands continue to
expand. What is a winning formula for smarter IT spending?
Mary Davie: Its really about continuing to innovate and
invest while reducing our IT spend.
While these seem contradictory, I think they actually go hand
in hand. Feedback from customers shows us that most of the
time and money is actually spent on operations and maintenance of legacy systems. When we talk about things like
cloud, were not talking about it because it is just a new
technology, but because it is a proven way to save on infrastructure costs and free up funding to allow CIOs to invest in
mission-enhancing technologies.
Governance and program management are also critical.
We need to make sure that some of the more highly visible
projects are being executed on time and within budget.
Collaboration is also important because agencies can learn
from the experiences of other agencies. Given the changing
acquisition environment and process, we need to be more
agile and flexible pursuing modular development. We may
SPRING 2014
need to do things in smaller chunks; either its successful in

four to six months and we move on to the next phase or its
not and we change course.
Tactically, other pursuits can make a difference. GSA
manages the Presidential Innovation Fellows, deployed
across government in six to nine-month increments and
charged with solving a specific problem through technology.
There is also strategic sourcing. GSA has been helping run
Federal Strategic Sourcing contracts for some time. ITS has
the lead for FSSI Wireless and the upcoming large publisher
BPA. Both of these allow agencies to pool their dollars and
buy as a federal government rather than individuals. Then
there is the move to shared services where agencies dont
need to invest in their own systems and services, but can
access mission support functions from recognized shared
services providers. Lastly, there is also the speed to savings.
Agencies dont have to use GSA to acquire their IT needs,
but besides saving in dollars, we save them time. If an
agency goes open market for a $100 million acquisition and
it takes on average a year, that time it takes acquiring the
technology is time that agencies are missing out on savings
and they cant get back. Instead, when agencies use us, an
average of one year on the open market for a $100 million
project gets shortened to three months. That is nine months
of savings realization agencies lose by not coming to us.
To learn more about the U.S General Services Administration,

go to www.gsa.gov/portal/category/21383.
To hear The Business of Government Hours interview with Mary
Davie, go to the Centers website at www.businessofgovernment.org.
interview with Mary Davie, visit the Centers website at
43
Insights
Promoting the Financial Integrity of the U.S.

Government: Insights from Dave Lebryk,
Commissioner, Bureau of the Fiscal Service,
The Bureau of the Fiscal Service
(BFS) was formed by combining
the Financial Management Service
(FMS) and the Bureau of the Public
Debt (BPD). BPD financed government operations, accounted for the
resulting public debt, and provided
financial and administrative services
to federal agencies. FMS provided
payment services, revenue collection
and centralized debt collection for
the federal government, and prepared
the financial statements of the federal government.
How has the Fiscal Service transformed the way the federal
government manages its financial services? What is the
Fiscal Service doing to promote the financial integrity and
operational efficiency of the federal government? How is it
strengthening its financial management processes to realize
efficiency, better transparency, and dependable accountability? Dave Lebryk, Commissioner, Bureau of the Fiscal
Service, U.S. Department of the Treasury, shares his insights
on these topics and more. The following is an edited excerpt
of our discussion on The Business of Government Hour.
What is the mission of Treasurys Bureau of the Fiscal
Service? What activities does BFS engage in to achieve this
mission?
Dave Lebryk: On October 7th, 2012, the Bureau of the
Public Debt and the Financial Management Service came
together to form the Bureau of the Fiscal Service. The Bureau
of the Fiscal Service has a very important mission. We make
most federal government payments. We collect most of the
money for the government; we account for the public debt as
well as report on the financial activity of the federal
government.
appropriated budget of around $360 million; 3300 employees

at six locations located across the country. We have payment
centers in Kansas City and Philadelphia. We have two
debt collection centers, one in Austin, Texas, and one in
Birmingham, Alabama. The bulk of our operations are done in
the Washington, D.C., area and Parkersburg, West Virginia.
Id like to focus more on your specific responsibilities as the
commissioner of the Bureau of the Fiscal Service. Would
you describe your duties and areas under your purview?
How do your efforts support the overall mission of the
Department of the Treasury?
Dave Lebryk: My main responsibility is to set strategic
direction for the organization. At the same time, any good
leader needs to focus on the operational as well as the
people aspect of an organization. I probably spend a fair
amount of my time on the strategic, setting the direction for
the organization, establishing the priorities, but also making
sure that were delivering on them through out daily functions. Every month we make payments to roughly 80 million
people who rely on their Social Security payments or their
veterans benefits. We call these lifeline payments, so its very
important that we deliver these payments every month on
time, every time. We take great pride in doing just that.
We also finance federal operations. Last year we conducted
over 268 auctions raising $8.1 trillion. The number of
Treasury securities that have been issued, payments that have
been made, or financial statements of the federal governmentall this information comes from the Bureau of the
Fiscal Service. It was apparent during the government shutdown how critical we are to the functioning of the government. If were not raising money to finance government
operations, collecting money, or making payments, it has a
significant impact on not only the operation of the government but on the economy as a whole.
In addition, we collect debt on behalf of federal agencies

and provide shared services to 78 customers. We have an
44
The Bureau of the Fiscal Service has a

very important mission. We make most
of the federal government payments.
We collect most of the money for the
government; we account for the public
debt as well as report on the financial
activity of the federal government. In
addition, we collect debt on behalf of
federal agencies and provide shared
services to 78 customers.
SPRING 2014
45
Were probably the only bureau or agency that has shared service as part
of its mission. We provide shared services in a number of areas: travel,
procurement, accounting, HR, and IT. Using a shared services model can save
agencies money and time, so they can focus more resources on meeting their
missions. It is a very powerful model and there are lots of opportunities across
government to do more.
Regarding your responsibilities and duties, what are the top

three challenges that you face in your position and how are
you addressing these challenges?
experiencing the same budget pressures that we did, requiring

them to focus more on their core missions. The back office
operations we perform are not core to those missions.
Dave Lebryk: Its fair to say that budgets are going to

remain tight for the foreseeable future. Demographics are
changing significantly with the aging of the workforce.
Technology is evolving very rapidly and our bureau is at the
forefront of many of these issues. Ill give an example.
Agency leaders must find new ways to deliver their missions

less expensively. There is much receptivity to the kind of
things that were doingcentralizing services or pursuing
shared services as options for agencies. We were able to
function well in the budget environment because we went
from five data centers to two. We went from four payment
centers to two. We reduced our facilities footprint and
reduced costs in these areas. There are lessons for government agencies that are opportunities to reduce costs.
About three years ago, we started an initiative called the All

Electronic Treasury Initiative. At that time, roughly 80 percent
of all payments were being made electronically. Today, close
to 98 percent of benefit payments are made electronically,
which is safer and more secure than paper checks. Three
years ago, we were producing close to 200 million checks
a year. Were estimating were going to produce 80 million
checks this year. This has a significant operational impact.
This change in process enabled by advances in technology
required that we close payment facilities, illustrating an intersection of technology and change.
Secondly, workforce demographics have changed, so when
you make these kinds of fundamental changes, you have a
different dynamic than you would have had 20 years ago
when fewer workers were retirement eligible.
Lastly, these changes were driven in large measure to reduce
budgets; it costs over a dollar to produce a paper check [and]
less than 10 cents to issue an electronic payment. This initiative [will] save close to one billion dollars over the next 10
years. By going in this direction, we operate more efficiently
as a government agency. This is one example of how we
think strategically and carefully about the significant changes
happening and challenges faced.
Would you tell us about your strategic vision for the bureau?
Dave Lebryk: We talk about lead, transform, and deliver
when we think about the things were doing. We are now
focused on making government operate better and what we
can do to remain sustainable for the long term. Weve positioned the bureau very well. Many government agencies are
46
What prompted the creation of this newly established

bureau? How has the consolidation process gone to date?
Dave Lebryk: In September 2011, we began discussing
the need to consolidate the two bureaus given long-term
budget cuts. We asked whether these two bureaus could
continue to function in the face of budget realities. We recognized that wed have a difficult time continuing to fulfill our
mission-critical functions. We initially looked at this as a
budget exercise. Through this and other efforts, we identified
close to $100 million of savingsabout 20 percent of our
appropriated annual budget from our 2010 level. We have
significantly reduced our costs.
By February 2012, we announced it publicly in our budget,
and by October of 2012, we had actually executed the consolidation. All of our employees were given a card that highlights
our mission and vision, and to remind us all why were doing
what were doing. I carry mine with me all the time.
Weve also used the opportunity to re-imagine what the
combined organization could do. The legacy missions of FMS
and BFD both [were to] provide services. We existed to
provide payment services, financing services, or debt collection services. Today, our mission is about transforming government changing the way the government does back office
operations while also improving financial management.
Insights
In bringing these two agencies together, we did six major

reorganizations. We set up a special site called One Fiscal
where employees could ask questions. I do what we call a
Whats Up email, every several weeks in which I talk about
things going on in the organization. This became increasingly
important during the consolidation period.
Weve had to become pretty good at managing change. It has
become a fundamental part. Sometimes youre going to do
things that arent popular, but are necessary to strategically
position the organization for success. It always helps that
you have a clear sense of where youre going and engage
your team accordingly. The first phase was consolidation.
The second phase involves integration, and the next phase is
optimization. We are in that integration phase. We have an
effort underway to reexamine our values. The most important
thing we can do during this integration phase is ensure our
people feel valued and that we invest in their training.
What are some of the recent initiatives you have been
pursuing?
Dave Lebryk: Late January [2014], it was an exciting
period at the bureau when the president introduced the myRA
in his State of the Union Address. It is a new way for working
Americans to start their own retirement savings. [myRA is a
savings bond that encourages building a nest egg]. We think it
is going to be an appealing way to encourage people to save,
as well as benefit employers large and small who currently
might not offer a retirement account to their employees.
MyRA has some income restrictions similar to Roth IRAs.
I believe those numbers are somewhere around $129,000
per individual and $191,000 for a couple. This is part of the
presidents effort to really encourage savings in the country.
At the bureau, we have the opportunity to actually build the
infrastructure that supports the myRA. This is not new for us
as we run the savings bonds programs and TreasuryDirect,
which have over 50 million savings bond owners.
During that same week, and for the first time in 16 years,
we issued a new securitya floating rate note, successfully
auctioning around $15 billion in its debutit has been very
popular with the investment community. The larger investors
usually buy these notes, but individuals can buy them as well.
Finally, we implemented a new governmentwide financial
reporting system, Governmentwide Treasury Account Symbol
Adjusted Trial Balance System (GTAS) as the primary means
of reporting agency trial balance data. A single data collection
system will pave the way for more consistent and complete
SPRING 2014
financial data and will allow for better analytical reporting.

This enables agencies to report their financial information.
We can use that to compile a report for Congress, as well as
make information more readily available and usable.
In an era of fiscal constraint, federal agencies are always
trying to find new ways of doing business that can lead
to cost savings and realize efficiencies. Would you tell us
more about the push towards shared services in the federal
government?
Dave Lebryk: Were probably the only bureau or agency
that has shared service as part of its mission. We provide
shared services in a number of areas: travel, procurement,
accounting, HR, and IT. We have 78 shared services
customer agencies. This is where government needs to be
going. We work closely with the other shared service
providers in trying to understand the demand for shared
services, and then how we can collectively meet that
demand. Were talking about what agencies are doing, what
they need to be doing over the course of the next 10 years.
For example, agencies should consider federal shared
services providers as viable options prior to investing in new
systems. In fact, the bureau is working with the U.S.
Department of Housing and Urban Development right now,
looking at their core financial system and how we may be
able to assist them.
I talked to a federal agency CFO who said he spends 25
percent of his time on systems issues because he is dealing
with his agencys ERP and core financial system. The CFO in
my organization spends none of her time on systems issues.
She has time to spend on strategic issues such as internal
controls and management. Using a shared services model
can save agencies money and time, so they can focus more
resources on meeting their missions. It is a very powerful
model and there are lots of opportunities across government
to do more.
To learn more about the Bureau of the Fiscal Service, go to
www.fiscal.treasury.gov.
To hear The Business of Government Hours interview with Dave
Lebryk, go to the Centers website at www.businessofgovernment.org.
interview with Dave Lebryk, visit the Centers website at
47
Insights
Harnessing Evidence and Evaluation: Insights from

Kathy Stack, Advisor, Evidence-Based Innovation,
Office of Management and Budget
The federal government spends tens of
billions annually on social programs
with modest or poor results. In other
cases, billions have been spent on
programs and funding streams while
little rigorous evidence exists about
program outcomes. In a climate of
fiscal austerity, it is far better to cut
programs with minimal impact and
improve existing programs, based on
evidence from high-quality program
evaluations.
What is program evaluation? How can evidence and rigorous
evaluation be best integrated into decision-making? How can
agencies conduct rigorous program evaluations on a tight
budget? Kathy Stack, Advisor for Evidence-Based Innovation,
Office of Management and Budget (OMB) shares her insights
on these topics and more. The following is an edited excerpt
of our discussion on The Business of Government Hour.
What is the mission of the Office of Management and
Budget and how is it organized?
Kathy Stack: We develop the presidents annual budget,
taking agency recommendations and figuring how they fit.
We issue government-wide management policies on how to
promote efficiency. We coordinate review of all legislative
proposals. We review all the regulations and information
collection that put potential burdens and constraints on the
public, trying to make sure that we dont impose undue
burden and everything has a clear purpose.
The budget side of OMB is a vertical structure. Each major
Cabinet department or agency has an OMB counterpart
on the budget side that oversees their policies and budget,
reviews regulations, and thinks about their management.
48
The management side is set up horizontally. Were focused

on mission support functions such as financial management,
procurement, information technology, and performance
management, working with agencies to implement policies,
guidance, and in some instances best practices. The management side is much more focused on how to get the mission
support offices the capacity and the infrastructure they need
to support policies and programs.
What are you doing now at OMB?
Kathy Stack: OMB is pursuing an aggressive management
agenda that delivers a smarter, more innovative, and more
accountable government for citizens. An important component of this is strengthening agencies abilities to continually
improve program performance by applying existing evidence
about what works, generating new knowledge, and using
experimentation and innovation to test new approaches to
program delivery.
Im advisor for evidence-based innovation within OMB, a
new role created in July 2013. I have a staff of three and our
mission is to help federal agencies use evidence and data to
inform decision-making. Its all about creating partnerships
and coalitions of the willing who can try to make things
happen together.
What are your top challenges and how have you sought to
address those challenges?
Kathy Stack: I am rediscovering how important it is to
build trust with agencies. Many are not used to sharing
information. Making progress on my agenda requires encouraging people to be candid about the challenges they face or
their lack of expertise.
The second challenge has to do with available resources.
Much of what we do is statutorily mandated, but no statutory mandate specifically requires agencies to use evidence,
[Performance Partnership Pilots are] one of the most

exciting examples of bottom-up policy making. Its
genesis comes from a February 2011 presidential
memorandum to agencies calling for administrative
flexibility for states, localities, and tribes. It charged
federal agencies to work closely with state, local, and
tribal governments to identify administrative, regulatory,
and legislative barriers in federally funded programs that
currently prevent them from efficiently using tax dollars
to achieve the best results for their constituents.
SPRING 2014
49
OMB is pursuing an aggressive management agenda that delivers a smarter,

more innovative, and more accountable government for citizens. An important
component of this is strengthening agencies abilities to continually improve
program performance by applying existing evidence about what works,
generating new knowledge, and using experimentation and innovation to test
new approaches to program delivery.
evaluation, and data to make better decisions. I am doing

my best to find allies and partners inside agencies and also
external partners think tanks and nonprofits.
The third challenge is maintaining momentum in the face
of leadership transitions. Fortunately I had a great transition
from the Bush administration into the Obama administration.
Along with the challenges you encounter, most governmentwide efforts can be fraught with unanticipated or unexpected
surprises. What surprised you most?
Kathy Stack: I have been struck by how similar decisionmaking is for OMB leadership regardless of a Republican or
Democratic administration. When OMB leaders are
presented with very compelling data and evidence theyre
going to reach similar if not identical conclusions. When you
dont have data and evidence, ideology tends to fill that gap.
Its [also] amazing, the ability that OMB or the White House
has, when they can bring agencies in and help them become
part of creating that vision they get excited about it and
then some great things can happen.
The federal fiscal situation necessitates improvements in efficiency and doing more with less. Programs can use a broad
range of analytical and management tools, i.e., an evidence
infrastructure, to learn what works and what doesnt. Would
you briefly describe performance measurement and program
evaluation?
Kathy Stack: Performance measurement is the ongoing
monitoring and reporting of program accomplishments and
progress toward established goals. It looks at inputs, process
measures, outputs, outcomes, in order to manage programs,
set goals, and continually improve performance. Its well
suited to dashboards [which show] performance over time on
different indicators. It can provide valuable information that
enables you to view your performance and if necessary figure
out how to course correct. Every organization needs to use
performance measurement as a management tool.
50
Program evaluation answers different questions. They are

typically systematic studies conducted periodically to assess
how well a program is working. There are many grant
programs that address various issues while using a wide
range of different strategies. We need to identify those that
have the greatest impact. For example, in the 90s there was
a battle between phonics and whole language. Fortunately,
we had a strong child development center at NIH that was
able to do controlled experiments and discover that phonicsbased approaches result in better impacts. It just makes
sense to drive dollars to where there is evidence of impact.
It is also essential to bridge these tools, but unfortunately
there arent many places where this is happening. New
York City established the Center for Economic Opportunity
to design a portfolio of strategies to reduce poverty. They
are using data all the time to see which providers are doing
better, and th[ose not] doing well, they get let go. New York
City is working with some strong research firms to perform
rigorous analysis demonstrating whether the intervention is
getting results before investing more money.
Federal dollars flow to states and localities through competitive and formula grants. Grant reforms can strengthen the
use of evidence in government. Among the most exciting
advancements are so-called tiered-evidence or innovation
fund grant designs. Would you tell us more about these
designs?
Kathy Stack: These grant designs focus resources on practices with the strongest evidence, but still allow for innovation. In a three-tiered grant model, for example, grantees can
qualify for:
The scale up tier and receive the most funding
The validation tier and receive less funding but evaluation support
The proof of concept tier and receive the least funding,
but also support for evaluation
Insights
With a tiered-evidence approach, potential grantees know

they must provide evidence behind their approach or be
ready to subject their models to evaluation. The Education
Departments Investing in Innovation Fund (i3) is a favorite of
mine. These grants are expected to expand the implementation of and investment in innovative and evidence-based
practices, programs and strategies that significantly:
Improve K-12 achievement and close achievement gaps
Decrease dropout rates
Increase high school graduation rates
Grants are awarded to support scale-up, validation, or development activities, depending on the level of evidence.
Ultimately, it is about letting states and localities know what
works, so they can replicate these strategies in their own
funding streams.
Right now, five agencies have tiered program designs. The
Labor Department runs two programs, the workforce innovation fund and a community college initiative, using this structure. At HHS we have teen pregnancy prevention and home
visiting. The Corporation for National Community Service has
a social innovation fund. USAID has a development innovation ventures program. All have shown that the tiered structure can be an overlay to a fairly traditional grant program.
Would you tell us about the new authority for Performance
Partnership Pilots for disconnected youth that was recently
included in the 2014 omnibus appropriations bill? What was
the impetus for this initiative, and how will it work?
Kathy Stack: This is one of the most exciting examples of
bottom-up policy making. Its genesis comes from a February
2011 presidential memorandum to agencies calling for
administrative flexibility for states, localities, and tribes. It
charged federal agencies to work closely with state, local,
and tribal governments to identify administrative, regulatory,
and legislative barriers in federally funded programs that
currently prevent them from efficiently using tax dollars to
achieve the best results for their constituents.
One of the most compelling examples was a coalition of
states focusing on disconnected youth 14 to early 20s,
school dropouts who dont have jobs. We have dozens of
federal youth programs, but the way they are structured,
its incredibly difficult for a locality to make the[m] work
together. This coalition identified challenges they faced
trying to weave these programs together to support the
SPRING 2014
needs of these high-risk kids. The paper they presented led

to a meeting with senior officials from a number of agencies. It convinced them that things had to change.
As a result, the 2014 budget would authorize up to 13 state
or local performance partnership pilots to improve outcomes
for disconnected youth. Pilots would use blended funds
from separate youth-serving programs in the Departments
of Education, Labor, HHS, HUD, Justice and other agencies,
and the strategies would be subjected to evaluations to determine which efforts work best so they could be expanded.
Interestingly, this authority was given in the 2014 appropriations bill. Frankly, it was the states who presented this ineffective and onerous situation to the attention of key members
in Congress.
So-called Pay for Success approaches are another way
to strengthen the use of evidence in government. Would
you tell us more about the PFS model (also know as social
impact bonds)?
Kathy Stack: At a time when government resources are
constrained, an innovative approach is the Pay for Success
funding model. This is where investors provide upfront
capital for social services with a strong evidence base that,
when successful, achieve measurable outcomes that reduce
the need for future services. Efforts underway in New York
City and Massachusetts look at the cost of recidivism. Many
of the projects have [gotten] working capital from the private
sector to run these prevention services. Rigorous measurement and evaluation methodologies assure that these new
projects achieve results. If [investors] get a return, its
because the government has realized savings and they are
sharing it while the individuals served are realizing improvements in their lives.
To learn more about the Office of Management and Budget, go to

www.whitehouse.gov/omb.
To hear The Business of Government Hours interview with Kathy
Stack, go to the Centers website at www.businessofgovernment.org.
interview with Kathy Stack, visit the Centers website at
51
Insights
Data and Information as Strategic Assets: Insights

from Dr. Simon Szykman, Chief Information Officer,
U.S. Department of Commerce
The federal government invests

billions on information technology
each year to help agencies accomplish their missions. IT enables federal
agencies to do this more effectively
and efficiently. Yet fully exploiting the
potential has presented long-standing
challenges. Many federal agency
CIOs are responding to these challenges by focusing on the enterprise
and coordinating across boundaries.
The U.S. Department of Commerce is one example.
Commerces leadership has successfully tackled one of the
most significant challenges facing senior IT leadershipthe
requirement for greater empowerment of decision-making to
drive efficiencies and improve effectiveness of IT.
What is the information technology strategy of the U.S.
Department of Commerce? How has Commerce changed the
way it does IT? Dr. Simon Szykman, Chief Information Officer
at the U.S. Department of Commerce, shares his insights on
these topics and more. The following is an edited excerpt of
our discussion on The Business of Government Hour.
What are the responsibilities and duties of the chief
information officer at the U.S. Department of Commerce?
Dr. Simon Szykman: The Department of Commerce has a
dozen bureaus pursuing missions relating to commerce. In
this federated IT model, my role is principally to provide strategic direction and leadership on a variety of initiatives
(including cost savings and shared services) that have department-wide relevance. I develop policy guidance and conduct
oversight for IT investments within the department. Unlike
some CIOs, I do not manage the operational IT infrastructure
across the entire department. Those activities are typically
done at the bureau level. I have two deputy chief information
officers. One is focused on management and business operations, while the other serves as our chief technology officer.
52
We also have a chief information security officer, who is

responsible for cybersecurity policy, compliance, strategy,
and providing direction for cybersecurity across the
department.
Given the departments federated IT business model, what
are the top challenges you face and how have you sought to
address them?
Dr. Simon Szykman: My number one challenge is
cybersecurity; it has been a weakness for the department for
some time. However, weve made significant improvements.
We still have work to do. The second challenge is working
within this fiscal climate and the budgetary pressures we
face. We have to identify opportunities for cost savings while
maintaining the quality and effectiveness of our services. The
third challenge is focused on improving the quality of
services we deliver.
Commerce views information and technology as strategic
assets critical to accomplishing its mission. Would you tell
us about your strategic IT vision for the department?
Dr. Simon Szykman: Information technology is definitely
a strategic asset for the department. This is because many of
the departments missions rely heavily on information and
datafrom climate modeling and weather prediction, to
supporting innovation through the Patent and Trademark
Office, to the research that goes on at the National Institute of
Standards and Technology. We rely heavily on IT to support
our mission components, but IT is the enabler. Our real asset
is the information and the data we use in our products.
The department has been developing a strategic plan and
were working to align our IT priorities to support [it]. For
example, we have a greater focus on data. As a result, we
see the unpublished data we have as an untapped asset.
What can we make available that can be used to create new
products, new businesses, which can ultimately lead to job
creation and help foster economic growth?
An effective technology leader has the

ability to think strategically, articulate
a vision, and be a good communicator
and consensus builder. Todays
government IT leader needs to be
agile, more adaptive in following and
anticipating commercial IT trends, and
much more customer-focused.
SPRING 2014
53
Insights
The strategic vision for the department as a whole, and the

importance of data within that strategic vision, is one of our
key IT priorities. We do have a variety of other strategic drivers
that follow general technology trendswhats happening in
the commercial and consumer markets and how these technologies can be used to support our mission, the technologies that people in the department want to use, and the kinds
of technologies that our external customers and stakeholders
expect to see when theyre interacting with Commerce.
What have you done to strengthen the departments IT

capital investment process to ensure that investment decisions are mission-aligned and cost-justified?
There is also value in distinguishing commodity IT from

mission IT. Commodity IT encompasses technology and
services that are common across the department and not
mission-specific. For example, e-mail is a department-wide
technology representative of commodity IT. It can be consolidated and operated more cost-effectively.
For example, weve changed the composition of the board.

The board is co-chaired by the department CIO and CFO
with core representation of bureau CIOs. Today, weve
expanded the board to also include representation from the
departments acquisition and budget organizations, respectively. We have a new Office of Program Evaluation and Risk
Management, which is also represented at these meetings.
This is key as it helps us understand as part of our review the
risks associated with these major investments. Weve also
expanded the board to include more regular participation
from the program management community.
In 2012, you were charged by the departments senior leadership to develop, in consultation with the bureaus, an IT
Portfolio Management Policy. What were the reasons for
pursuing such a policy? Would you tell us more about the
actual process?
Dr. Simon Szykman: The development of the IT Portfolio
Management policy was led by me with participation from
the bureau CIOs at Commerce. We did this to get buy-in in
advance. Everybody [had] a voice in the development of the
policy, and in fact, the effort was strengthened by the feedback provided and recommendations and suggestions made
from the broader community.
We pursued a collaborative approach because it was about
strengthening the department CIO, the CIOs at the bureaus,
and the way we manage IT. Giving more control over some
IT decision-making at the bureau level was also a key
cornerstone.
Bureau CIOs may not have had the level of visibility or
control over decision-making and funding that they prefer.
A good sum of the IT spending actually takes place within
the programs; 100% of every IT dollar is not under the direct
control of the bureau CIO. From a governance perspective, the
delegations in this policy did enable CIOs to have more visibility within their organizations, but also to drive change more
effectively. We now have consolidation of IT staffing under a
bureau CIO as a result of the policies and the provisions in
this portfolio management policy. This gives bureau CIOs more
influence on the performance of staff and gives them more
control over whats going on within their bureaus.
54
Dr. Simon Szykman: Weve been significantly improving

the processes, how the Commerce IT Review Board operates, its structure, activities, and the mechanisms that we use
to improve the overall oversight that were providing for
capital planning and capital investments.
Our oversight capabilities have improved significantly. In

addition to our oversight processes, we implemented the
Office of Management and Budgets IT dashboard [which]
inventories all the departments major IT investments. We
report on these monthly, including CIO ratings for all these
major investments. This improves transparency for the general
public, but has also required us to develop a new set of
assessment criteria and functions that should lead to a reduction in risk and better performance for all of these projects.
Would you elaborate on your efforts at Commerce to pursue
cost savings and efficiency initiatives?
Dr. Simon Szykman: We are seeing documented savings
with infrastructure consolidation as part of the governmentwide data center consolidation initiative. We are also doing
strategic sourcing, consolidating the acquisition and
purchasing of technology, hardware, software services to buy
in larger quantity and drive cost down.
Commerce had over 100 contracts for buying PCs; today,
we have a single strategic sourcing vehicle across the entire
department. Were realizing 30% to 35% savings on the
order of $8.6 million just on PC purchasing solely by going
to a single contract.
Weve [replaced] desktop printers with more efficient work
group printers. Were looking to consolidate our mobile
phones to a single vehicle for better pricing. Were also
In this federated IT model, my role is principally to provide strategic direction

and leadership on a variety of initiatives (including cost savings and shared
services) that have department-wide relevance.
doing this with our software purchases. We are pursuing

shared services initiatives (such as help desk consolidation &
network consolidation within the headquarters building.)
Mobile computing is a versatile and potentially strategic technology that improves information quality and accessibility.
Would you tell us about the department-wide strategy for
mobility and the mobile device management program?
Dr. Simon Szykman: Our department-wide mobility
strategy is lean. Every bureau can still manage their own
mobile devices and create their own enterprise services, but
we have a single department-wide contract for acquiring
mobile device management technology. The single standardized contract gives us better pricing and makes it easier if we
choose to consolidate and go with one service provider to
support the whole department.
There are bureau-level strategies for mobility as well. For
example, the Census Bureau for the 2010 decennial census
issued government-purchased laptops to every temporary
employee. The bureau would like to reduce the cost of the
2020 decennial census. Theyre talking about a variety of
options; one might be to allow a Bring Your Own Device
(BYOD) approach or a virtual desktop infrastructure. This is
an example of how bureau-level strategies must sometimes go
beyond department-level strategies to achieve mission delivery.
Id like to discuss open data and big data. What do these
terms mean? How are they at the forefront of government
tech policy, and to what extent do they represent the next
phase of technological revolution in the federal government?
Dr. Simon Szykman: Open data and big data are distinct
trends. In my view, open data focuses on how the government can more effectively use the data it has, but more
importantly, share it to increase transparency or provide more
information to stakeholders so they understand what the
government is doing and hold it accountable.
The department has a new strategic focus on data. Right now,
we publish only a small portion of the data we collect. If
youre looking at weather data were talking literally petabytes
per day that we acquire, analyze, and disseminate. The idea is
SPRING 2014
that, by increasing the amount of available data, industry, citizens, or companies might identify new and innovative ways of
using that data, which could lead to new jobs, new markets,
and new products providing economic benefit to the country.
Big data focuses on scale and complexity. At Commerce, the
big data issue is linked more directly to the mission delivery
of our bureaus. The Census Bureau collects data on over 320
million households across the United States. NOAA and the
National Weather Service deal with petabytes of data per day.
NIST deals with large data sets to support different aspects of
their research mission. The Patent and Trademark Office has
documented patents going back to the 1800s. The way big
data is emerging from mission delivery varies from bureau to
bureau. As a result, we dont have a single big data strategy
or big data initiative for the entire department.
What are the characteristics of an effective leader, and does
the concept of leadership need to shift because were living
in an increasingly networked world?
Dr. Simon Szykman: An effective technology leader has
the ability to think strategically, articulate a vision, and be a
good communicator and consensus builder. Todays government IT leader needs to be agile, more adaptive in following
and anticipating commercial IT trends, and much more
customer-focused.
To learn more about the U.S. Department of Commerce, go to
www.commerce.gov.
To hear The Business of Government Hours interview with Dr. Simon
Szykman, go to the Centers website at www.businessofgovernment.org.
interview with Dr. Simon Szykman, visit the Centers website at
Editors Note: Since this interview, Dr. Szykman announced he would be

leaving federal service.
55
Forum: Six Trends Driving Change

in Government

Edited by Michael J. Keegan
Government leaders face serious challengesfiscal austerity,

citizen expectations, the pace of technology and innovation,
and a new role for governance. These challenges influence
how government executives lead today, and, more impor
tantly, how they can prepare for the future.
By sharing knowledge and expertise gained from this

research, we hope to spark the imagination of government
executives beyond day-to-day urgencies and toward solutions
to the serious problems and critical challenges that government faces now and into the future.
Government is in the midst of significant changes that have

both near-term consequences and lasting impact. Such
changes have the potential to become more complex in
nature and more uncertain in effect. At the same time, the
demands on government continue to grow, while the collective resources available to meet such demands are increasingly constrained.
This forum introduces each trend based on insights offered

in Six Trends Driving Change in Government. It reflects our
sense of what lies ahead. In the end, we hope that 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.

In a special report, Six Trends Driving Change in Government,
the Center has identified a set of trends that correspond to
these challenges and drive government change. These
trendsboth separately and in combinationpaint a path
forward in responding to the ever-increasing complexity that
government faces. The areas covered by Six Trends are:
Trend 1: Performance
Trend 2: Risk
Trend 3: Innovation
Trend 4: Mission
Trend 5: Efficiency
Trend 6: Leadership
Focusing on these six trends has the potential to change the
way government does business. The Center will fund research
into each, exploring in depth their transformative potential. Each of the six trends will be addressed in greater depth
by our upcoming research and by highlighting cutting-edge
agency actions. Together, they can help federal executives
across the government understand the art of the possible
when developing approaches that address the administrations management agenda.
56
Forum: Six Trends Driving Change in Government
Trend One: Performance

Moving from Measurement to Action
Results Act of 1993 (GPRA)which requires agencies to

develop strategic plans, measures, and annual reports. The
new law formalizes a performance leadership and governance structure that had evolved over the last two decades. It
also requires the development of targeted agency and crossagency priority goals, regular reviews by senior leaders of
progress toward those goals, and government-wide reporting
of performance via a single web portal.
The key challenge that implementers of this new law will
face: the need to ensure that the many procedural requirements in the new law do not overwhelm federal agencies in
such a way that agency leaders focus on compliance rather
than on improving performance.
Administration Policies Open the Gates to

Accountability
The federal governments efforts to improve the performance
and results of its programs have evolved over the last two
decades. The goal has remained constantto change the
culture of government agencies to be more results-oriented
and performance-focused in their work and decision-making.
It has been a long road.The Government Accountability
Offices periodic reviews of federal managers use of performance information shows recent increases in the use of such
information to:
Identify program problems to be addressed (55 percent)
Take corrective action to solve program problems
(54 percent)
In addition to GPRAMA, the Obama administration has

placed a great deal of emphasis on ensuring greater transparency and more open access to government data.
Government-wide, the administration has created a one-stop
website, Data.gov, for agency data sets, and has set forth a
series of policies and initiatives to foster greater transparency
and openness. Agencies have responded. Congress has also
supported this policy initiative with legislation; for example,
the Recovery Act required greater transparency in government spending data.
This new openness has also precipitated several new
forms of accountability, according to professors Dorothea
Greiling and Arie Halachmi. Traditional accountability
Develop program strategy (49 percent)

These are processnot outcome-relatedimprovements.
Yet, progress and hope abound. The federal governments
past performance focus was on developing annual performance reports based on a supply of information. Todays
focus is on achieving a handful of strategic goals through the
effective use of data to inform real-time decision-making.
New laws, policies, technologies, and techniques have made
this shift in focus possible, but more can be done in the area
of government performance management to drive change.
Government executives seem to be finding ways to more
effectively integrate performance management into the decision-making processes and culture of government, within
and increasingly acrossagencies and programs.
New Law Serves As Catalyst for Action

The GPRA Modernization Act of 2010 (GPRAMA) reinvigorates a 20-year-old lawthe Government Performance and
SPRING 2014
57
Linking Data to Decision-Making

Data and evidence are increasingly being used in agency
decision-making, in part because of greater leadership
interest, but also because there are new techniques and
capacities available. For example, the new GPRA law
requires agencies to hold regular data-driven decision
meetings and this new forum has created a demand for
useful information.
In addition, the Office of Management and Budget (OMB)
is supporting a series of initiatives to build an evidence and
evaluation-based decision-making capacity in agencies. It
has issued several directives to agencies encouraging their
adoption of evaluation and analytic approaches and is
encouraging the development of such capacities as well.
Conclusion
arrangements are mostly vertically oriented and so follow

hierarchical lines of control, explain Greiling and Halachmi.
They go on to observe that innovative forms of accountability break with this pattern, and are more horizontal and
bottom-up in nature. New forms of accountabilitysuch as
PerformanceStat reviewsare possible. They reflect the new
interplay between open data, social media technologies, and
the increasing availability of real-time data.
Making Real-Time Analytics Possible

In parallel with the catalyzing effect of the GPRA
Modernization Act and the greater availability of government data, a series of new technological advances offer
sense-making techniques and access previously unavailable for large amounts of structured and unstructured data.
Sukumar Ganapati, author of the IBM Center report, Use
of Dashboards in Government, describes the use of dashboards as one approach to help busy decision-makers
synthesize and understand a wide array of data in ways that
make sense. In his report, he describes how the Obama
administration has created dashboards on the progress of its
information technology investments and its efforts to reduce
the governments real property holdings.
58
Studies over the past decade show some progress among

mid-level managers in becoming more results-oriented and
performance-focused. Recent statutory changes and technological advances have led more senior government leaders
in federal agencies to integrate performance information
into their decision-making processes. This has contributed
to better choices that are rooted in facts and evidence.
For example, the Department of Housing and Urban
Development set a goal of increasing the number of families housed rather than focusing on reducing the number of
vacant public housing units. This led to improved housing
outcomes.
However, increasing evidence-based decision-making among
senior leaders will likely not be enough to change agency
cultures. Agency leaders will need to create and embed both
individual as well as organizational incentives to be more
results-oriented and performance-focused. Employees on
the front line need to see how what they do on a day-today basis makes a difference for their agencys mission. For
example, increasing their access to real-time performance
information may be one approach. When this has been done
in some pioneering agencies, this has allowed data-driven
problem-solving to occur on the front line, in the field.
Finding these kinds of levers for culture changewhich will
likely vary from agency to agencywill be a challenge to
both policy makers and agency leaders, but when done well,
they can have a lasting effect.
Trend Two: Risk

Managing and Communicating Risk
disruption. Further complicating the picture is a different

kind of risk calculus that faces the national security community every day. Long-range, precision threats are now achievable via cyberattack to a wide range of people and groups,
well outside the bounds of nation-state controls.
Turning from Risk Avoidance to Risk Management

and Acceptance
Given the rapid pace of change that government faces, it is
imperative that agencies turn from a culture of risk avoidance
to one of risk management. A thought-provoking approach
to how this change can occur appears in a Harvard Business
Review article, Managing Risks: A New Framework, by
Robert Kaplan and Anette Mikes. Kaplan and Mikes note that
risk management is too often treated as a compliance issue
that can be solved by drawing up lots of rules and making
sure that all employees follow them. In addition, many
Managing risk in the public sector has taken on new significance. Government leaders lack an accepted culture and
framework in which to properly understand, manage,
and communicate risk. Risks take many forms, including
national security risks via cyberattacks, economic risks
from natural disasters, budget and program risks, or privacy
risks.Recognizing the spectrum of risks and developing
strategies and tools to incorporate risk into decision-making
and action can help government drive change and ensure
successful management of programs and missions.
Accepting Risk as a Condition of Action

Risk is inherent in every facet of society. In our personal lives,
there are risks to life, health, and property. People understand
that such risks are inherent, and in most instances find ways
to reduce the impact of those riskssuch as standards for
food inspections, building safer cars and homes, and securing
insurance coverage in the event risk leads to loss.
Risk is Inherent in Achieving Government Missions

In government, risks have been primarily seen as constraints
to minimize, avoid, or hide in a corner. Most federal agencies tend to pursue risk reduction rather than risk management. As a result, when something goes wrongwhich,
given the world in which we live, will inevitably occur
agencies, their constituents, and overseers often react to the
immediate problem, rather than understanding in advance
how to develop strategies to respond to issues that will arise.
Few agencies think in advance about how to understand
what may happen in these and other domains, how to
communicate that potential in advance to their employees
and stakeholders, and how to be resilient in the face of
SPRING 2014
59
Kaplan and Mikes observe that each approach requires

quite different structures and roles for a risk-management
function. One way to integrate these approaches is to
anchor risk discussions into strategic planning, which already
brings together organizational goals and objectives and
points to positive action rather than constraintsturning
the conversation to a risk strategy that aligns with the can
do culture most leadership teams try to foster when implementing strategy.
Getting the Word Out About Risk

A key element of addressing risks facing federal agencies
involves effective communication: understanding what risks
might affect an agencys constituents and proactively getting
the word out about those risks.FEMA, for example, already
exercises this strategy, advising individuals living in hurricane
zones about potential outcomes, so that the public and the
agency are better prepared if and when a storm arrives. If
other agencies were to identify risks that could occur and
similarly communicate them in advance, this would bring
numerous benefits:
organizations compartmentalize their risk management functions along business lines (credit risk, operational risk, financial risk) and this inhibits discussion of how different risks
interact. Such categorizations can miss many kinds of risks
that organizations face.
Agencies would go through an exercise of more completely

understanding risks to their constituents.
Kaplan and Mikes developed a three-part framework that

allows executives to tell which risks can be managed
through a rules-based model and which require alternative
approaches.
If the risks become realities, the acceptance and public

discourse is framed as one that builds around a sound
response to a problem that has been forecast, rather than
reaction to an unanticipated event.
Preventable risks. These are internal and include illegal,

unethical, or inappropriate actions (such as the recent GSA
conference scandal), as well as breakdowns in operational
processes. In the federal government, these are typically
covered by internal control schemes, and can be controlled
or avoided.
Conclusion
Strategic risks. These differ from preventable risks because

they are not necessarily undesirable. For example, developing a satellite-based air traffic control system may be
seen as taking a strategic risk over the proven, ground-based
radar-controlled air traffic control system.
External risks. Organizations cannot prevent external risks
from happening. So managers need to forecast what these
risks might be and develop ways to lessen their impact. They
cannot be avoided, only managed.
60
The public would have advance word on what might

occur, helping to increase preparedness in the general
population.
Operating in a world of increasing complexity, with citizens who expect better, faster, and more cost-effective
results, it is critical that government executives tackle
risks that can interfere with normal operations head-on.
Partnering with industry, nonprofits, researchers, and citizens can enable government to incorporate more effective
risk response frameworks into how it does business. By
doing so, agencies can avoid potential risk traps; they can
identify risks in advance, communicate their impacts, and
be resilient in response. Pursuing a serious risk management approach can go a long way toward driving change
in government.
Trend Three: Innovation

Leveraging Innovation to Drive Transformation
citizen participation, shares its information more easily, and

delivers services more effectively and efficiently than in the
past. Given such expectations, citizens arent interested in
paying more for a more responsive government. In fact, most
want to pay less. To accomplish this kind of government
involves changing some of the fundamental assumptions
and methods of government operation through innovation.
The first task for government executives is to articulate how
pursuing innovation can form a government that meets the
demands and expectations of the 21st century.
The present day differs from the past in two critical ways.
First, todays citizens have accesstopowerful mobile
computing, so individual citizens can create, access, and
analyze data at any time. Each individual is able to request
and consume government services at any time and from any
place, and governments need to meet that need.
Innovationtouches every facet of our lives, from transportationtocommunication, from personnel managementtooffice automation. This is especially evident in the
public sector inhowagencies provide services and meet
their missions. As it happens, technology has enabled much
of this innovation, but it also requires smart leaders who
apply these technologies and drive change within their
agencies.
Weaving Innovation into the Fabric of

Government Agencies
Second, one result of that access is that citizens are part of

a culture of participation. The social applications that run
on phones, tablets, and now wearable technology impart
the value of participation with every shared picture, every
request for signers of online petitions, and every opportunitytofund a new prospective product or service before it
hits the market. Governments must therefore make not only
their services, but their very operations open to participation
at any time and place.
Many government leaders have found a way to weave innovation into the fabric of their agencies. At the federal level,
the Department of Health and Human Services (HHS) has
hired an entrepreneur-in-chief while the Department of
State has an Office of Innovation that reports directly to the
secretary. Maryland is just one state with a chief innovation
officer who reports directly to the governor and ensures that
the state government keeps pace with technology and citizens emerging needs while using innovative tools to effectively manage government programs and services.
The single constant in these examples is that senior government executives are leveraging innovation to drive change
within government, and leading the charge to incorporate
innovation into government. They are doing so by articulating the value of innovation, fostering a culture of innova
tion, aligning it to mission, defining and measuring success,
and harnessing the benefits of innovation.
Articulating the Value ofInnovation

Survey findings and poll results indicate that citizens expect
a government that works differentlyone that encourages
SPRING 2014
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Defining and Measuring Success

The final piece is to define and then measure success. Unlike
in the private sector, success in the public sector cannot
be defined solely through financial data. Even if costs rise
slightly, a program could be successful if it advances other
measurable goals such as reaching identified audiences,
enhancing transparency, or developing new programs to
address emerging mission components, among many others.
For each of these goals, agencies will have to identify
specific metrics at the beginning of any innovation programs.
Metrics may include web analytics, volume and relevance
of online participation, or metrics that pertain specifically to
the agencys mission: the health of specific populations, for
example, or compliance with new regulations.
Distributing Innovation
For government leaders to harness the power of innovation,
they must ultimately unleash the creativity and expertise of
the employees in their charge.
Government leaders must harness citizens desiretoparticipate and demonstratehowopening governmenttothat
participation can help deliver better services at lower
cost. This is already being done, of course, at many levels
by involving citizens in co-creation, co-production, and
co-delivery of services and by tapping into the knowledge of
crowds through programs like the Securing Americans Value
and Efficiency (SAVE) Awards.
Fostering a Culture ofInnovation

Government leaders must also foster a culture that is not
only opentoinnovation, but actively encourages it.They can
develop and invigorate such a culture in a number of ways,
including:
Ideally, the mantle of innovation should be taken up

by as many people within the organization as possible.
Innovation can be championed by individuals at any
level, but it is most often effective when it is embraced by
employees at all levels.
Trend Four: Mission

Aligning Mission Support with Mission
Delivery
Appeal both to internal and external stakeholders for

innovation
Create mechanisms for innovation
Allow people to fail
Offer incentives for trying, and even more for succeeding
Institutionalize successful innovations
AligningInnovationtoMission
Though it is important to encourage out-of-the-box thinking,
it is equally important to ensure that innovations do not
distract from an agencys day-to-day mission. With new digital
tools coming into existence every day, the allure of shiny,
new engagement channels never dims. It is incumbent upon
government leaders to act as filters, applying tests for relevance on proposed innovations before even piloting them.
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Agency and program leaders depend on a range of mission

support functions, such as finance, technology, acquisition, or workforce management, to get their jobs done. The
delivery of these functions, however, has changed significantly over the past quarter-century.
Twenty-five years ago, federal agencies typically did not

have key executives leading mission support functions.
These functions were largely seen as administrative transaction services. However, ineffective mission support operations can be quite costly.
Congress Created Chiefs to Improve Management

As a consequence of such persistent failures and a lack of
clear leadership in mission support functions, Congress has
intervened in the management of the executive branch over
the past two decades by raising the profile, formalizing leadership roles, and defining more authority for many of these
functions. Formalizing these roles mirrored similar trends
in the private sector to create chief financial officers, chief
information officers, chief acquisition officers, and chief
human capital officers. Collectively, these chiefs have been
referred to as the C-Suite and most recently, Congress
formalized the role of chief operating officers and performance improvement officers as well.
Three Core Functions

These various chiefs reflect different disciplines that have
their own professional communities and ways of defining
success. Generally, most of these chiefs report to the heads of
their agencies and have at least three core functions:
Providing services to internal agency customers (such as
hiring or installing computers or providing office space)
Ensuring compliance with government-wide requirements
(such as merit principles or capital investment guidelines)
For example, a 2009 study by the National Academy of

Public Administration (NAPA) of several mission-support
functions at the Department of Energy (DOE) observed that
these centralized functions in the department are seen as
dysfunctional by line managers, largely because the various
functions do not coordinate with each other. The lack of
coordination within and among these functions results
in an inwardly focused, regulation-based, transactional
organization.
The NAPA study concluded that DOE needs to better integrate and manage the mission-support offices efforts in order
to develop a coordinated approach to providing essential
support services. In addition, it found the mission support
offices needed to develop a stronger mission focus: DOE
does not have formal systems to assess how well the missionsupport offices are meeting the needs of the department and
to hold them accountable for doing so. Anecdotal evidence
suggests similar perceptions by mission leaders in other
federal departments as well.
Creating Governance Structures That Support

Mission Leaders
In addition to encouraging mission-support chiefs to focus
greater attention on mission delivery, the NAPA study also
recommended that the U.S. Department of Energy create
cross-bureau governance structures. This new structure
would better coordinate mission-support activities by integrating them more effectively into mission delivery priorities.
These include creating:
Providing strategic advice to agency leaders (such as strategic workforce planning or financial risk management)
An under secretary for management
These functions are not mutually exclusive. In fact, one of

the challenges for federal government chiefs is balancing
these distinct functions.
An enterprise-wide mission-support council
Developing a Stronger Mission Focus

The increased prominence of internally focused missionsupport functions has raised concerns among externally
focused mission-oriented line managers in agencies. Mission
managers deliver services to the public, such as air traffic
control, environmental cleanup, export assistance, disability
benefits, or immigration enforcement at the border. These
mission managers rely on, but more importantly can capitalize on, centrally directed mission-support functions, which
is a trend found in the business sector. Having common
services provided centrally is not only less expensive, but
often results in higher quality. However, one former mission
manager recently noted that in his experience, the [C-Suite]
community is the biggest obstacle to success.
SPRING 2014
An operations management council
These recommended structures and new roles alone will

not change tendencies found in mission support areas to
act independently. Chiefs have to connect with one another
through formal and informal means, and balance their three
functional roles.
Moreover, Congress recently established another chiefthe
chief operating officer (or under secretary for management).
With this role now enshrined in law and possessing statutory
authority, the COO serves as a nexus between policy and
management. Depending on the agency, this role may be
held by the deputy secretary or filled by an under secretary
for management.
Opportunities for Cross-Functional Collaboration

Both mission-support and mission-delivery executives say
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there are opportunities to improve results if they work

together more effectively as a team, both within and across
agencies. One way to do this is have agency executives serve
in both mission-support and mission-delivery roles as a part
of their career development, much like the commercial sector does. Government executives can develop a better understanding of enterprise-wide priorities that goes beyond just
mission-level priorities:
The U.S. Department of Veterans Affairs is doing just this
within its executive development program.
USDAs Departmental Management Operations Council
and the PerformanceStat meetings at the U.S. Department
of the Treasury and the U.S. Department of Housing and
Urban Development use cross-departmental councils that
regularly convene to tackle issues of integration.
Conclusion
This cross-functional mission-support collaboration could
also extend to cross-agency mission-delivery initiatives. For
example, agencies now work across boundaries to solve
major public challenges such as climate change and food
safety. Mission-support services for these initiatives have
previously been ad hoc. The cross-agency mission-support
councils could support these initiatives in innovative ways
that increase efficiency and accountability.
Government executives can harness major technological
shifts and adapt proven public-sector and commercial best
practices to make their agencies more efficient and effective.
Trend Five: Efficiency

Pursuing Cost-Savings Strategies in a
Resource-Constrained Era
Fiscal austerity will be an enduring challenge for public

managers. It can present opportunities to rethink traditional
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approaches to mission support and service delivery. In this

environment, identifying innovative ways to reduce costs
across multiple categories of government spending (e.g.,
appropriations, user fees) while maintaining and improving
performance will be critical.
New Strategies for Achieving Cost Savings

In 2010, the IBM Center published Strategies to Cut Costs
and Improve Performance. Since its release, the fiscal challenges facing government executives have become even
more pressing, with an impetus to reduce costs and allocate
savings to mission priorities. Constraints imposed by sequestration, continuing resolutions, and debt ceilings have made
doing more with less and operating smarter with less
an ongoing reality. Even if a larger agreement is reached
regarding long-term spending, that agreement is likely to
maintain a tight hold on current discretionary budgets for
agencies.
Across government, new strategies for achieving cost savings
are in high demand. This goes beyond simple cost-cutting
to helping the public sector redirect cost savings into investments in key priorities, including through gain sharing and
other savings retention approaches. The imperative to do
more with less has never been stronger; government executives can learn from each other and from the private sector
how to survive and possibly thrive in this environment.
Emerging Opportunities to Save Costs

There are emerging opportunities to save costs through
improvements in how agencies manage technology, process,
organization, and data:
Technology. When used appropriately, technology can
streamline operations and allow employees to shift from
transactional processes to strategic insight and customer
service. Cloud computing allows agencies to spend less
money. Leveraging the cloud can allow agencies to focus
internal resources on making mission and program operations more efficient and effective even in an environment
where funding is tight.
Process. There are great examples of the power of streamlining processes such as claims and payment processing,
supply chain management, and emergency/disaster response.
Best practices provide clear lessons in how to increase
mission effectiveness at a lower price. For example, applying
shared services to a broader range of government activities
can allow agencies to reduce duplicative back-office opera
tions across multiple bureaus; this allows for enterprise-wide
management of finance, HR, acquisition, and other mission

support functions.
Organization. The model of an effective organization is
changing as technology and process enable new management approaches to drive effectiveness. Rather than following
a hierarchical structure where collaboration across boundaries is difficult, government executives can capitalize on
lessons from entrepreneurial firms and move toward a collaborative, virtual team model of program management and
service delivery.
Data. Information can also be used strategically to analyze
service patterns to identify wasteful processes that can be
streamlined to reduce time and costs (e.g., grant application processes). Increasingly, agencies are using analytics to
predict and prevent problems that drain time and resources,
such as identifying improper payments in advance rather
than stopping them after the fact. Applying analytics to
administrative data sets can also help determine the costeffectiveness of alternative interventions.
In addition, another IBM Center report, Fast Government:
Accelerating Service Quality While Reducing Cost and Time,
brings fresh insights and illuminating examples on how
government executives, by focusing on time and speed, can
deliver real and lasting benefits through increased mission
effectiveness and lower costs. It outlines strategies and tools
that government executives can leverage to fundamentally
change the way they do business through a focus on cycle
time reduction and elimination of non-value-added activities. Fast Government examines the role of time in bringing
value to the public sector, and focuses on innovation, disruptive technologies, predictive analytics, and other ways that
leaders can make government more efficient.
Measuring and Capturing Cost Savings

It is important that government executives establish baselines from which to measure savings. This involves understanding total cost of ownership, which is different from and
often more complex in federal agencies than in the private
sector. Most government programs run off a cost baseline
that includes a subset of appropriations for the larger department. Piecing this together to understand current costs is not
a trivial exercise.
Once the baseline is understood, a second challenge
involves developing financial models and methods that
can capture savings off the baseline accurately. The federal
government has experimented occasionally with share
SPRING 2014
in savings contracting. Even if clear savings opportunities emerge, barriers such as federal budget requirements
impede savings capture and reinvestment. Overcoming
such barriers will require the use of prototypes and pilots to
demonstrate the art of the possible, with agencies working
in partnership with their congressional authorization and
appropriation partners to build support for pilots and understanding how success can scale more broadly.
Government can also collaborate with industry to draw out
ideas for savings, perhaps using challenges and prizes as
a way to promote innovation. Contracts can be written to
create incentives for industry partners to dedicate a portion
of their activities to innovative, rapid experimentation,
finding better ways to achieve results while lowering costs.
Conclusion
Given the budget realities of today, it is critical to identify
opportunities for efficiency, measure and capture savings,
and reward those who deliver cost savings. It is essential that
government executives ensure that federal employees are
provided the skills and capabilities to succeed in becoming
more efficient. This can also help identify further ways to
save money and record those savings, and fuel a continuous
drive for cost-effective improvements that benefit all citizens.
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Trend Six: Leadership

Leading Across Boundaries in an Era of
Complex Challenges
Professor Joseph Nye stresses in Leadership, Power and

Contextual Intelligence, Understanding context is crucial
for effective leadership. Some situations [may] call for autocratic decisions and some require the [exact] opposite. There
is an infinite variety of contexts in which leaders have to
operate, but it is particularly important for leaders to understand culture, distribution of resources, followers needs and
demands, time urgency, and information flows.
Leading through Complex, Non-Routine

Challenges
Complex challenges, or so-called wicked problems, tend
to have innumerable causes and are hard to define, making
their mitigation resistant to predetermined solutions or traditional problem-solving approaches. In certain instances, the
scope, nature, and extent of these challenges eliminate the
notion of quick fixes or one-size-fits-all solutions.
From budget reductions to a struggling economy, disasters
to pandemics, the seemingly intractable challenges facing
government leaders extend far beyond the ability of any
one agency or leader to respond. These are complex, often
non-routine, challenges that are increasingly cross-cutting,
interagency in nature, and go to the core of effective governance and leadershiptesting the very form, structure, and
capacity required to meet them head-on. Many are difficult
to anticipate, get out in front of, and handle. In most manifestations, they do not follow orderly and linear processes.
The right kind of leadership approach and style can drive
change in government.
Given todays context, a specific kind of leadership approach

seems most effective. It is an approach that recognizes the
importance of:
Reaching across agencies
Connecting networks of critical organizational and
individual actors
Mobilizing the whole of governments capabilities
Achieving a result greater than the sum of the agencies
involved
As Roger Martin, dean of the Rotman School of Management

at the University of Toronto, observes, There was a time
when leaders shared a sense that the problems they faced
could be managed through the application of well-known
rules and linear logic. Those days are gone.Most of todays
important problems have a significant wicked component,
making progress impossible if we persist in applying inappropriate methods and tools to them.
Understanding Context is Crucial for Effective

Leadership
There are different types of leadership approaches, from transactional to transformative and beyond. A survey of leadership
experts and government leaders interviewed on the IBM Center
for The Business of Governments radio program makes one
thing clearthere is no one-size-fits-all approach to leadership.
What does seem evident is the importance of context in
honing a leadership approach. Effective leaders must possess
and exercise a certain level of contextual intelligence. As
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Exemplifying the importance of contextual intelligence, Dr.

Collins recognized that it took a certain leadership to launch
HGP, and another kind to make the changes that took it to a
successful conclusion.
Depending on the challenge faced, government leaders may
need to fundamentally transform how their organizations
operate to meet mission. For example, when facing the challenge of budget cuts and significant resource reallocation,
transformational change that can deliver mission value more
efficiently will be increasingly important.
Collaborative Leadership in Action

Managed Networks. Ed DeSeve puts a finer point on this
leadership approach in his IBM Center report, Managing
Recovery: An Insiders View. DeSeve led the implementation
of the $840 billion American Recovery and Reinvestment
Act in 2009, a perfect example of a complex, non-routine
government challengethe doling out and tracking of significant amounts of federal dollars. For DeSeve, his success
relied on forging an integrated system of relationships among
federal agencies, state and local entities, and other stakeholders that reached across both formal and informal organizational boundarieswhat DeSeve calls a managed network,
which is a key tool of collaborative leadership.
Managing Big Science: A Case Study of the Human
Genome Project. Dr. Francis Collins represents a new type of
leader in government. Before becoming NIH director, Collins
led an international coalition consisting of government organizations, the private sector, and the academic community as
part of the Human Genome Project (HGP).
In Managing Big Science: A Case Study of the Human
Genome Project, Professor Harry Lambright highlights that
Collins faced the challenge of reorienting HGP from a
loose consortium into a tight alliance with a small circle of
performers and decision-makers. Instead of relying on the
traditional command-and-control leadership style, Collins
relied on a more collegial, collaborative style. However, as
the project began to evolve, mature, and face direct competition from an external party, Collins recognized that the
leadership approach of old would no longer be effective.
SPRING 2014
Establishing the National Center for Advancing Translational

Science. Collins now director of NIH, recognized the need
to more effectively translate NIHs basic research into actual
medical applications. This was driven by his desire to focus
on outcomes. His vision to establish the National Center for
Advancing Translational Sciences (NCATS) clashed with the
status quo at NIH. Collins hit the ground running, setting
goals at the outset, having clarity as to means, using the
power of his office effectively, and most importantly forging
collaborative networks and support inside and outside NIH.
He was once again successful.
Conclusion
We are in the midst of an exciting, engaging, yet trying
period marked by uncertainty, significant challenges, undeniable opportunities, and indelible aspirations. Todays
most effective government leaders can spark the imagination to look beyond day-to-day urgencies and reflect on the
serious problems and critical challenges they face today into
tomorrow. Leaders are responsible for envisioning, shaping,
and safeguarding the future, creating clarity amidst uncertainty. This is no small feat and it is made increasingly difficult in the 21st century, where rapid, unforeseen change
seems to be the only constant.
TO LEARN MORE
Six Trends Driving Change in Government by Dan Chenok
John M. Kamensky, Michael J. Keegan, and Gadi Ben-Yehuda
The report can be obtained:
In .pdf (Acrobat) format at the Center website,
By e-mailing the Center at businessofgovernment@us.ibm.com
By calling the Center at (202) 551-9342.
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Viewpoints
Is Moneyball Government the Next Big Thing?

By John M. Kamensky
In early December 2013, I attended a sold-out conference

on performance measurement. It wasnt the typical government crowd. The conference was filled with attendees from
nonprofits and foundations, all dedicated to figuring out what
works and putting their money toward programs with the
most promise. In a ballroom abuzz with enthusiasm, I was
particularly impressed with the sophisticated conversations
on advancing evidence-based program decisions.
This enthusiasm goes beyond the nonprofit and public
sector. The private sector uses the term business analytics
to describe the use of statistics to inform business decisions.
Over the last few years, a critical mass of stakeholders has
quietly worked to build evidence-based decision-making
into government as well. The media is calling this moneyball government, after the 2003 best-selling book by Michael
Lewis on creating a winning baseball team through the astute
use of statistics. The common goal is to use performance
data, evidence, and program evaluation to reframe budget
and program decisions in ways that reflect the value being
created, not just the dollars being spent.
For example, a recent Washington Post article highlights the
Department of Educations Even Start program, created in
1988 to help youths from disadvantaged families do better
in school. By 2004 the program was spending $248 million.
Program evaluation studies from more than a decade ago
found no evidence that Even Start succeeded, so President
Bush, and then President Obama, recommended abolishing
it. The program currently is unfunded.
At the local level, the New York City school system set out
in 2010 to reduce chronic absenteeism, creating a task force
that brought together a dozen city agencies and over 20
community-based and nonprofit organizations to identify and
expand strategies for keeping students in school. According
to a study by the nonprofit America Achieves, the task force
pioneered a new approach to collecting and analyzing realtime attendance data and evaluating different intervention
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Moneyball Government
techniques in 100 schools. The task force identified

successful approaches such as providing in-school mentors.
Students with these mentors spent more than 80,000 additional days in school compared to students without a mentor.
Whats Driving the Push to Use Evidence?

A number of forces drive advocacy, political, and program
leaders to use performance information, evidence, and
program evaluation in government programs.
Viewpoints
John M. Kamensky is Senior Fellow at the IBM Center for

The Business of Government.
What does a Moneyball Government Do?

Governments that use the Moneyball approach:
Focus on outcomes and lives changed, rather than
simply compliance and numbers served;
Drive limited taxpayer dollars to solutions that use
evidence and data to get better results;
Use data and evidence to continuously improve
quality and impact, while also reducing duplication
and cutting red tape that can strangle new ideas;
Invest in and scale innovations that will make greater,
faster progress on challenges facing young people,
families and their communities;
Direct public dollars away from policies, practices
and programs that dont work; and
Invest in communities that are collaborating and
using data and evidence to achieve significant
community-wide impact.
Source: Moneyball for Government,
http://moneyballforgov.com/the-solution
More data. There is more administrative and other data

available for analysis within and across agencies. Greater
access to data, and greater ability to make sense of both
structured and unstructured data, are raising interest among
decision-makers.
More analytics. There are more sophisticated approaches to
analysis (e.g., not just focusing on the average, but on granular data interpretation). Stories in the popular media (for
example, Michael Lewis book and movie, Moneyball, and
Nate Silvers book, The Signal and the Noise) and increased
use of analytics and rapid experimentation in the private
sector (for example, Jim Manzis book, Uncontrolled), have
raised the attention of public sector decision-makers.
SPRING 2014
More interest. Congress and local political leaders are more

open to supporting investments in program evaluation and
data analytics, even in an era of tight budgets. Significantly,
there is corresponding increased interest among federal agencies, which are seeing greater value in performance and evaluation processes.
More incentives. Encouraging pilots at the state and local
levels, and in Britain, are attracting the interest of policymakers facing tough austerity tradeoffs and looking for ways
to creatively invest in programs that make a difference, while
identifying programs that do not work.
More leadership. At the federal level, various OMB leaders
over the past decade have consistently championed using
evidence and evaluation in budget decision-making. For
example, then-OMB Director Peter Orszag, a major proponent, issued directives to agencies to promote the use of
evidence and evaluation. Current OMB Director Sylvia
Burwell has led several large philanthropic foundations that
used evidence and results as key criteria for distributing their
funds, so she too is an advocate. At the local level, mayors
across the country have provided leadership, including New
York Citys Michael Bloomberg, San Antonios Julian Castro,
and Baltimores Stephanie Rawlings-Blake, among others.
Building an Evidence-Based Culture in

Government
Steps are underway to build a foundation for evidence-based
thinking in the federal government as well as state and local
governments.
Step 1: Build Agency-Level Capacity for Evaluation and
Data Analytics. Agencies are building the infrastructure
necessary to conduct evaluations and analyze data and
evidence. For example, they are creating learning networks
of evaluators from across the government to share best
practices, including developing common evidence standards and spreading effective procurement practices. There
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Viewpoints
Examples of Evidence-Based Initiatives

So, what are federal agencies, states, and localities actually doing?
An increasing variety of activitiesoften called what works initiativesare underway
or planned, with the common denominator being decisions based on evidence.
FEDERAL EXAMPLE
Tiered-Evidence Grants
A number of federal agencies are
piloting the use of tiered evidence
grants in a dozen different policy arenas, including social services, transportation, workforce development,
education, and foreign aid. Under
this approach, the distribution of
more than $2 billion in grants is prioritized into three categories:
Scale-up grants fund expansion of
practices for which there is already
strong evidence. These grants
receive the most funding.
Validation grants provide funding
to support promising strategies
for which there is currently only
moderate supporting evidence.
These grants receive more limited
funding and support for program
evaluations.
Development grants provide funding to support high-potential
and relatively untested practices.
These receive the least funding and
support for program evaluations.
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STATE EXAMPLE
Washington State Institute
for Public Policy
The Washington State Institute for
Public Policy has developed a system
for calculating the return on investment from alternative public policy
tools. The system is used by the state
legislature to help make policy decisions based on performance rather
than anecdote. According to the Pew
Center for the States, the Institute has
developed a unique approach to supporting the policy decisions by the
state legislature, which includes:
Analyzing all available research to
systematically identify which programs work and which do not
Predicting the impact of policy
options for Washington State by
applying the combined evidence
of all sufficiently rigorous national
studies to the states own data
Calculating various policy options
potential return on investment,
taking into account both the short
and long term and the effect on
taxpayers, program participants,
and residents
LOCAL EXAMPLE
Social Impact Bonds
According to a report by the Center
for American Progress, New York
City is now piloting the use of social
impact bonds, a new financing
tool for social programs in which
government agencies contract
external organizations to achieve
measurable, positive social outcomes
on key issues, such as homelessness
or juvenile delinquency. Service
providers receive payment from the
government upon achievement of
agreed-upon results. In August 2012,
then-Mayor Michael Bloomberg
announced the citys first impact
bond agreement. According to the
Centers report: The city of New York
contracted with MDRC, a nonprofit,
nonpartisan social research organization, to reduce the rate of recidivism by at least 10 percent over
four years among annual cohorts
of about 3,000 young men exiting
Rikers Island. The working capital
for the intervention$9.6 million
over four yearsis being provided by
Goldman Sachs, structured as a loan
to MDRC.
Viewpoints
are also multi-agency collaborations around enforcement

programs, economic development activities, and financial literacy efforts. In addition, some agencies are creating
departmental-level evaluation posts, such as the Department
of Labors Chief Evaluation Office, or empowering existing
evaluation offices.
Step 2: Invest in Increasing the Amount of Evidence and Data.
Set-asides of existing program funding are being proposed
to support program evaluations. For example, a reserve fund
of up to 0.5 percent would be created at the Department of
Education, and the Department of Labors reserve fund, overseen by the departments Chief Evaluation Office, continues
to be permitted to use up to 0.5 percent of the departments
appropriations for evaluation. In addition, the 2014 budget
proposes $2 million for a new Data-Driven Innovation initiative within OMB to help agencies expand the use of innovation and evidence to support outcome-focused government.
Step 3: Make Greater Use of Existing Administrative Data.
Efforts are underway to take administrative data already being
collected and link it across agencies to help them better
understand cross-agency outcomes. For example, states and
localities could link data from early childhood programs
to data from juvenile justice systems and K-16 education
systems to produce statistical snapshots that previously might
The Role of Nonprofits and Philanthropy

Nonprofits and foundations are enthused by governments growing interest in the use of evidence and
evaluation. They are chiming in either to support
government initiatives or to undertake their own.
Some nonprofits and foundations advocate evidencebased decision-making in different policy arenas,
while others advocate different tools or techniques
for program evaluation. Other nonprofits are actually
applying evidence-based approaches in their delivery
of services. Significantly, as government at all levels
adopts these approaches, the nonprofit and foundation
communities are enthusiastically chipping in to help.
America Achieves
With some political savvy and bipartisan firepower,
this new nonprofit is an advocate for evidencebased policy. It is sponsoring an initiative to improve
outcomes for young people, their families, and
communities by driving public resources toward
evidence-based, results-driven solutions. It has developed a scorecard that assesses individual agencies
capacity and use of evidence and program evaluation. It has piloted the scorecard on several agencies,
with more on the way, to highlight progress. It is also
conducting advocacy and sponsoring research at the
local level. A recent study of initiatives in six cities
focused on the importance of building and using
evidence of what works in making smart decisions
about investing public resources.
Pew Center for the States
The Pew Charitable Trusts is cosponsoring a Results
First Initiative with the MacArthur Foundation. One
element of this effort emphasizes the use of cost-benefit
analyses and evidence-based budgeting approaches.
For example, one of the initiatives projects features
work with about a dozen states to replicate Washington
States successful approach to introduce cost-benefit
analyses into state legislative decision-making through
its policy institute.
SPRING 2014
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Viewpoints
only have been available through costly long-term tracking

surveys. States and localities are leading by example in this
area by participating in a foundation-funded initiative called
actionable intelligence for social policy that links data
from across multiple systems so that researchers and government decision-makers can work together to analyze problems in ways that safeguard privacy.
Step 4: Create Incentives to Use Evidence. In addition to
building technical capabilities, OMB seeks to create incentives for agencies to actually use evidence when making
program and funding decisions. One approach is to streamline access to waivers of administrative requirements in
exchange for grantee commitments to collect data and
conduct analyses. A second approach is to create performance incentives for states and localities to use money from
existing formula grants to support evidence-based practices.
For example, the mental health block grant program would
require states to target at least five percent of their funding to
the most effective evidence-based prevention and treatment
approaches, according to OMB. A third approach is to make
matching grants to grant-making intermediaries based on
evidence of the effectiveness of the programs to be funded.
For example, the $70 million Social Innovation Fund in the
Corporation for National and Community Service makes
matching grants to grant-making intermediaries, leveraging as
much as $150 million in non-federal cash grants.
Step 5: Create Agency-Level What Works Repositories.
According to OMB, agencies are also expanding their what
works repositories, such as:
Department of Educations What Works Clearinghouse
Department of Justices CrimeSolutions.gov
Substance Abuse and Mental Health Services
Administrations National Registry of Evidence-Based
Programs and Practices
Conclusion
Jeffrey Liebman, Harvard professor and an early architect
of the evidence-based approach in the Obama administrations OMB, illustrates the essence of the moneyball government movement. He reflects on his efforts: fiscal pressures
make the need for more-effective government more acute.
He goes on to say the goal is to produce more value with
each dollar the government spends by reallocating funds
from less-effective programs to more-effective programs.
He closes by saying We need to improve performance by
setting outcome-focused goals, then using leadership strategies to make the changes to systems necessary to achieve
those goals. Liebman is not alone in his assessment, as any
number of governors or mayors might have made the same
observations.
Department of Labors Clearinghouse of Labor Evaluation

and Research
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Viewpoints
Modernizing the Budget Process to Reflect Modern

Technology Realities
By Daniel Chenok
Fiscal constraints will challenge government for the foreseeable future. While this might seem daunting, budget pressures can foster opportunities to innovate, offering powerful
incentives to rethink traditional approaches to mission
support and service delivery. Within this context, it is critical
to identify innovative ways to reduce costs while maintaining
and improving performance. In addition, rethinking how to
finance information technology (IT) and other investments
can help agencies leverage rapidly evolving offerings in areas
ranging from cloud and as a service computing models
to real-time review and response to cybersecurity threats.
Finally, government can reap the benefits of innovation and
efficiency through a more refined approach to measuring and
capturing cost savings.
Innovation in Cost Reduction: Lessons from

the States
Federal leaders can learn much from state experiences.
Earlier this year, the IBM Center released Managing Budgets
During Fiscal Stress: Lessons for Local Government Officials
by Jeremy M. Goldberg, University of San Francisco, and
Max Neiman, University of California at Berkeley. This
report describes how Californias budget experiences over
the past several years can provide lessons learned and roadmaps for other federal, state, and local governments, who
face fiscal constraints. Like many local governments across
the nation, cities and counties in California have been
impacted heavily by the economy in recent years. The
report makes recommendations for local governments
across the nation. These include:
Identify and address structural deficits in a finely grained
manner, leaving no major budget category unexamined.
For federal budgets, this includes programmatic areas as
well as functional categoriesappropriated dollars, working capital and franchise funds, and even user fees.
Foster citizen engagement to encourage widespread dissemination of fiscal information, thus enhancing the legitimacy
of public policy choices. Significantly, this recommendation
complements findings that innovation can be a key lever
SPRING 2014
to thrive in a cost-constrained environment. It encourages

employees and citizens to identify new ways of doing business that do not require spending on outdated processes
without questioning whether they are still needed.
Budgeting For the Fast Pace of

Technological Change
The traditional federal budget process takes up to 30
months. Agencies start to plan their request in spring before
presenting a budget. The president presents a budget the
next winter, then Congress begins enactment the following
October: almost 18 months after the initial planning or later
given the many continuing resolutions as outlined in the IBM
Center report The Costs of Budget Uncertainty: Analyzing the
Impact of Late Appropriations by Professor Phil Joyce at the
School of Public Policy within the University of Maryland.
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Viewpoints
Daniel Chenok is Executive Director of the IBM Center for The Business of
Government. His e-mail: chenokd@us.ibm.com.
Finally, after all this the agency often spends much of their
budget toward the end of the next fiscal year (30 months
after initial planning).
In an Internet age, when technological advances are made in
months rather than years, the traditional budget process lacks
the flexibility agencies need to capture the benefits of innovation. Fortunately, there are established ways that agencies
can work with Congress to enhance their ability to leverage
new commercial technologies. Agencies can use working
capital funds or franchise funds. These approaches often
allow dollars to be carried over, across years, enabling more
flexibility in spending.
Today, a number of agencies use these techniques to provide
shared services to other federal agencies. The agencies
that provide shared services retain a constant capital flow
to support continued delivery of quality shared services;
also, agency buyers use working funds to make an investment that could not have been foreseen during long-term
budget planning and/or where the timing of the investment
requires a flow across fiscal years that is known in advance.
Technologies offered through as a service models, such as
cloud-based services purchased at regular intervals based on
buyer demand, can be tailored to an agencys current needs.
Of course, pursuing such a step requires early and ongoing
transparency with agency stakeholders (including OMB,
Congress, GAO, and inspectors general) as to the means,
risks, and benefits of using such an approach.
Agencies can apply these techniques in a variety of
settingsthrough pilots on projects funded by annual
appropriations or greater use of flexible spending accounts.
Agencies can also collaborate with industry to identify ideas
for savings, perhaps using challenges and prizes to promote
innovation. Contracts can be written to create incentives
Franchise Funds
Franchise funds are government-run, self-supporting, businesslike enterprises managed by federal employees. Franchise
funds provide a variety of common administrative services, such as payroll processing, information technology support,
employee assistance programs, public relations, and contracting.
Franchise fund enterprises are a type of intragovernmental revolving fund. Such funds all have similar legal authority and
operations and generally provide common administrative services. An intragovernmental revolving fund is established
to conduct continuing cycles of businesslike activity within and between government agencies. An intergovernmental
revolving fund charges for the sale of goods or services and uses the proceeds to finance its spending, usually without the
need for annual appropriations.
The original operating principles for franchise funds included offering services on a fully competitive basis, using a
comprehensive set of performance measures to assess the quality of franchise fund services, and establishing cost and
performance benchmarks against their competitorsother government organizations providing the same types of services.
The Government Management Reform Act of 1994 authorized the Office of Management and Budget to designate six
federal agencies to establish the franchise fund pilot program.
Source: GAO documents
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Viewpoints
for industry partners to pursue innovative activities that may

involve rapid experimentation, and ultimately are focused on
finding better ways to achieve results while lowering costs.
Measuring and Capturing Cost Savings

For any steps government takes to improve efficiency and
value, it is important that executives establish baselines to
measure the cost savings of those steps. To understand how
much can be saved, it is important to understand the full
baseline costs, which in government are different and often
more complex than in the private sector. Most government
programs run off a cost baseline that includes a subset of
appropriations for the larger department, salary and expense
accounts not associated with the program, and sometimes
working capital or franchise funds. Piecing these sources
together to understand current costs is not a trivial exercise.
Once the baseline is understood, a second challenge involves
developing financial models and methods that can capture
savings off the baseline accurately. The federal government
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has experimented occasionally with share in savings

contracting as a way to operationalize this measurement. This
is a framework that incentivizes companies to achieve the
measured savings over time, from which contract payments
are made.
Even if clear savings opportunities emerge and there is financial transparency for the opportunity, barriers to savings
capture and reinvestment exist. Federal budget law requires
that agencies have sufficient funds on hand to cover the
costs of a contract upfront (including termination costs).
This requirement makes the use of a gain-sharing approach
less attractive. In addition, federal agencies must generally
spend all of their money in a given fiscal year, while savings
often take months or years to materialize. Overcoming such
barriers will likely require the use of prototypes and pilots to
demonstrate the art of the possible, building support for pilots
and understanding how success can scale more broadly.
Editors Note: An expanded version of this article will appear
in The Public Manager.
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Viewpoints

By Gadi Ben-Yehuda
Joel Gurin recently released a book enthusiastically titled

Open Data Now. Gurin, the former chief of consumer
and governmental affairs for the Federal Communications
Commission, joins a growing chorus calling on the federal
government to live up to the spirit of President Obamas 2009
Memorandum on Transparency and Open Government.
Champions of open data exist both within governmentMr.
Gurin and the Department of the Treasurys Marcel Jemio, for
exampleand within industry, including organizations like
Socrata, 1776, and XBRL.US. They note that opening government data directly spurs economic activity, enables services
Americans depend on every day, and increases the efficiency
of and trust in government.
But when vast stores of data are already openaccessible
to the public, machine-readable, and in a non-proprietary
formatwhat are the next big steps for open data advocates?
One obvious step is opening ever-greater troves of data and
switching government datas default setting from closed to
open. Another is improving the quality of data already available, most notably by ensuring the availability and quality of
metadata.
Why Open Data?

Perhaps the biggest success of open data was achieved by
accident, and scarcely a panel can be convened or article
written without referencing it. In the 1980s, the United States
launched satellites into space so the military could have
precise location data for training, monitoring, and missions.
Nearly two decades later, ordinary citizens were given access
to that data stream. The $26.67 billion GPS market is possible
only because of that open location-data stream.
There are other examples of open data spurring economic
activity. Health data released from the Department of Health
and Human Services (HHS) is already powering apps, and HHS
regularly participates in Health Datapaloozas to bring its data
to private-sector developers. Data from the National Oceanic
and Atmospheric Administration undergirds almost all weather
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apps on the market. The Department of Labor publishes data

enabling an app that helps with financial decisions.
Economics, important as they are, represent only one part
of the story. Another part is the trust in government essential to a democracy. Opening the governments data means
everyone benefits from their government. Everyone becomes
a stakeholder and sees the value they personally derive from
their governments activities. And opening the data about
how government operates allows everyone to understand
how public money is spent and see the alignment between
public priorities and public expenditures.
Numbers Dont Lie

The popular saying is that numbers dont lie, but it can be
countered with the equally popular lies, damned lies, and
statistics. When it comes to big numbers, this is even more
true, as humans are famously bad at grasping the meaning of
large numbers.
Viewpoints
Gadi Ben-Yehuda is the Innovation and Social Media Director for the IBM
Center for The Business of Government.
Few likely know that better than Earl Devaney, a former
inspector general for the Department of the Interior and
chairman of the Recovery Accountability and Transparency
Board. Mr. Devaney was asked by a congressional oversight
panel to estimate how much Recovery Act money would
be lost to fraud, waste, and abuse. A 2009 study found that
those losses typically consumed between five and seven
percent of a government programs budget. While that may
not sound like much, the Recovery Act had a budget of $787
billion, which grew to $831 billion through subsequent legislation. So the raw number for waste? Between $40 and $55
billion projected to be lost. Both numbers are accurate, but
each tells a different story.
What makes the Recovery Act such a good example is
not the amount of money it was projected to lose, but the
amount of money it did lose. Mr. Devaney writes in Fast
Government, The remarkable success the [operations
center] has had in minimizing fraud and waste is evidenced
by the numbers: Less than one-half of one percent of the
nearly 277,000 contracts, grants, and loans awarded under
the Recovery Act are under investigation. This pales in
comparison to the five-to-seven percent figure normally associated with losses for any large government program.
And the important difference between this program and most

others was that the financial data for the Recovery Act was
designed to be open from the start. The GPS industry and the
Recovery Board examples speak to the first goal of open data
advocates: opening more stores of data. How many industries are simply waiting for businesses large and small? How
much more effective will current industries and markets be
when they have access to data that is currently inaccessible
to them? Further, open data advocates point to the increased
efficiencies that could be realized if more people had access
to more data.
And more data is where the proponents of metadata find
common cause with their data-set-oriented comrades.
The Importance of Metadata

Marcel Jemio, the chief data architect in the Department
of the Treasurys Bureau of the Fiscal Service, is a cheerleader for metadata. He uses the metaphor of apple varieties
(discussed below) to illustrate the value of metadata. He
says that from metadata, people can derive context, understanding, quality, security, analytics, worth, trust, and ultimately, innovation.
To understand the importance of metadata, think of a digital
photograph with the caption Sun Rising over Miami Beach.
The metadata for digital photographs is called EXIF and
it has certain attributes: the kind of camera that captured
the image, the time it was taken, the f-stop and aperture,
whether a flash was used, sometimes even the geolocation.
If, looking at the EXIF metadata, one saw that the picture
was taken at 8:00 PM with a camera located 20 miles east of
Miami (that is: from a boat), one would know that it was not
sunrise at all, but sunset. The photographers veracity would
be called into question, and their other work would be
subjected to further scrutiny. This is why Mr. Jemio is right to
say that metadata can give context (it is sunset, not sunrise),
and trust (in the form of verifiability).
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Viewpoints
within those are regional differences and other distinguishing

qualities that describe a specific fruit. These metadata give
context, allow for analysis, instill trust, provide specificity,
and most important, make it more likely that people can use
the data in ways that add value both for themselves and for
the larger economy.
Why the Future Is Open

Two developments point to a bright future for open data
advocates. The first is the proliferation of tracking devices
and software in every facet of American society. The
complementary development is the growing sophistication
in understanding both raw data and the visualizations built
on that data.
There are other examples of metadata adding value to data

sets. One company that puts EXIF metadata to fascinating
and meaningfuluse is OKCupid. In a 2010 blog post
titled Dont Be Ugly By Accident!, the sites data analysts
aggregate[d]11.4 million opinions on what makes a great
photo. They then analyzed the responses and determined
which brands of cameras took the best pictures, what time
of day was optimal, what f-stop made people look more
attractive, and how the use of flash was likely to return a
better picture. This analysis was performed not using the
datathe imagebut using metadata. And with that analysis, people could create better data; that is, they could take
better pictures!
It is easy to extrapolate meaningful government uses from
this. Metadata can accompany any data. Take produce,
specifically apples. While famously not comparable to
oranges, apples seem like they should be comparable to
one another, yet there are many varieties of apples and even
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Data trackers are quietly moving into every part of our lives:
Automatic is a device that plugs into a cars computer and
relays real-time data about fuel efficiency, engine operations,
and vehicle location. Body trackers have gone mainstream,
and more people are counting their steps, monitoring their
heartbeats, and using WiFi scales to see not only weight, but
body composition. Even school report cards are using data
visualization, not simply reporting raw data in the form of
letter grades or percentages. And as people grow accustomed
to seeing data in all parts of their lives and appreciate how
it is helping them make better decisions, they will press for
open data from their government.
Appropriately, the public is also learning how to interpret
data with more nuance and sophistication. One concern
about examining and releasing data is what it will reveal.
People and organizations dont always accomplish their
goals, and when they do, it may be with some degree of
waste or inefficiency. But performance is increasingly seen
through the lens of data visualizations and dashboards, and
people can see that sometimes they do not meet all their
targets. They also see that success is often a sliding scale, not
a threshold to be crossed.
All this points to a future in which more people will clamor
for data and there will be less concern about releasing it.
And as the government accedes to the requests for more and
better data, both the government and the citizens it serves
will be better off.
Perspectives: Federal Acquisition and

Complex Contracting
Introduction: Perspectives on Federal

Acquisition and Complex Contracting
Contract expenditures represent 16 percent of total federal spending. In fiscal year 2012,
the federal government acquired $517 billion worth of products (products includes goods
and services) through contracts. Purchases range from simple products like office supplies
or landscaping to advanced weapon systems and program management services.
Given whats at stake, it is critical for government executives to understand one of the
most complex bureaucratic processes in governmentthe federal procurement system.
Understanding how this system works is a key ingredient to success in government, and
improving it is crucial in this era of tight budgets.
As the challenges confronting the federal government become more
complicated, so will the types of services and goods needed to address
them. Increasingly, products or services cannot be clearly or easily
defined in advance and their quality is difficult to verify after delivery.
These are called complex products, and their acquisition requires
sophisticated contracting approaches.

Why do federal agencies need to 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?
ow can government executives most effectively manage comH

plex acquisitions?
We explore these questions and so much more through the work of the research team
composed of Professors Trevor Brown, Matt Potoski, and David Van Slyke, authors of
several IBM Center reports and the recent book, Complex Contracting: Government
Purchasing in the Wake of the US Coast Guards Deepwater Program.
Deepwater was a major system of systems acquisition to upgrade and integrate the Coast
Guards sea and air assets. Brown, Potoski, and Van Slyke discuss the promise and perils of
government contracting while providing wide-ranging, practical advice on federal acquisition, with a specific emphasis on complex acquisition.
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, joined me on The Business of Government Hour to share
their perspectives on federal acquisition and complex contracting. The following is an
edited excerpt of our conversation.
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79
Perspectives: Federal Acquisition and

Complex Contracting
Perspectives on Federal Acquisition and Complex

Contracting with Professors Trevor Brown and
David Van Slyke
Federal Agencies Contract for Goods and

Services
Federal agencies need critical goods and services to perform
their core missions. A recent IBM Center report, A Guide for
Agency Leaders on Federal Acquisition, highlights the Black
Hawk helicopter in the interdiction of Osama Bin Laden.
Without the Black Hawk, the mission doesnt succeed. In the
absence of th[e Healthcare.gov] website working successfully,
the Affordable Care Act doesnt work successfully. Even more
narrowly, with the website youre trying to target a specific
group of people. In the case of the Affordable Care Act, its
healthy young people. You need [healthy young people] to
enter the insurance pool, and a slick, fancy, user-friendly
websitean access pointis one way to attract them. If this
cohort doesnt sign up in significant numbers, a critical component of that insurance pool is lost; then prices are going to rise.
Within this context, [you are] not simply purchasing a website.
Youre buying an integral part of your program. This example
illustrates perfectly what acquisition is now for federal agencies; it enables mission success and program performance.
Its important to get these purchases right and that requires
strategic decision-making. Acquisition is not just buying
stuff; its about thinking through the purpose and end of what
you are buying and why. Are you buying only products, or
buying the ability to do something that the government itself
lacks the expertise, capability, or capacity to execute?
Basic Phases of the Federal Acquisition

Lifecycle
Though an expert may tell you there are hundreds of steps in
this process, Ill break it down simply into three phasespreaward, award, and post-award.
The pre-award phase includes identifying the products
characteristics, assessing the market for the product, and
consulting the regulatory guidance on how to solicit the
product. The first step in any acquisition is to define whats
80
Trevor Brown, Ph.D.
David M. Van Slyke, Ph.D.
needed and determine whether a product procured from the

market can fulfill that need.
The award phase includes tasks associated with actually
purchasing the product: running the solicitation, evaluating
proposals, and negotiating the terms of the purchase with
whatever vendor is selected.
The post-award phase includes all tasks associated with
executing the contract, notably monitoring vendor performance, evaluating and testing the product upon delivery,
implementing any relevant incentives, providing compensation, renegotiating contract terms, and terminating or
renewing the contract.
During post-award, things become a little less clear, and
theres much more discretion. During this phase, government
managers decide how to engage the awardee and how often,
how to set and negotiate the rules of the relationship and the
exchange, and how to work together.
Perspectives: Federal Acquisition and Complex Contracting
Library of Acquisition Research from Brown, Potoski, and Van Slyke

The following highlights the IBM Center research on federal acquisition performed by Professors Brown, Potoski, Van Slyke,
either individually or as a group.
A Guide for Agency Leaders on

Federal Acquisition
Contracted Versus Internal Assembly

for Complex Products: From
Deepwater to the Acquisition
Directorate in the U.S. Coast Guard
The Challenge of Contracting for Large

Complex Projects: A Case Study of the
Coast Guards Deepwater Program
Much of this research contributed to the work culminating in the publication of their Complex Contracting: Government
Purchasing in the Wake of the US Coast Guards Deepwater Program, published by Cambridge University Press.
Of the three phases, the award phase gets most of the attention. We hear about the RFP, the bid, the award decision,
and how the contract is structured. We tend to hear less
about the pre-award or the post-award phase. Yet in both,
management is critical. Buying is managing. The whole
procurement process is about managing relationships
within established rules (e.g., Federal Acquisition Regulation)
toward an ultimate end.
Evaluating an Acquisition
The FAR sets the rules on whats permissible in contracting. It
specifies the goals of federal acquisition. Buried in there are
two approaches to setting the criteria by which we would
evaluate an acquisition. One is whats called best value. It
typically involves three criteria, the sort of trinity of contractingcost, performance, and schedule or delivery:
Cost: how much does it cost? Did it come in at the price
we expected?
Performance: does it do the things we want it to do?
Schedule: did it come in on time?
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In a best value acquisition, a procurement official is allowed

to balance each proposal along the three criteria and make
tradeoffs.
The FAR also specifies lowest price technically acceptable
(LPTA). All three criteriacost, quality and scheduleare
still in play, but here, the argument is, if we can precisely
define the product, we can say, as specifically as possible,
here are the performance criteria. Its technically acceptable.
Well, then, were going to focus on price. So were going to
minimize our selection to: does it cost the lowest amount
to produce? So there, its a narrower set of criteria that
define why we select one bid over another. Depending on
what were purchasing, it may make more sense to use one
or the other. If were buying copy paper, we use the LPTA
approach, as directed in the FAR just focusing on cost. When
buying information technology, given various factors, you are
to pursue the best value approach.
Often, what seems to be missing in the process is: does the
product ultimately fulfill the mission requirements of the
agency thats purchasing it? Its important to follow the rules
while also delivering what is needed when its needed, and
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ultimately ensuring that the purchase enables an agency to

meet its mission more effectively.
Procuring Complex Products

Complex exchanges are characterized by two conditions:
uncertainty about the products cost and how it will perform,
and specialized investments that lock in the buyer and seller.
The purpose of a contract is to promote a win-win exchange
by preventing the buyer and seller from doing things that
would lead to win-lose or lose-lose outcomes.
Contracts for complex products transform a market exchange
into an interdependent relationship. The combination of an
incomplete contract, uncertainty about the product and its
costs, and the need for specialized investments sets up a
potentially precarious relationship. Focusing on rules that
structure and relationships that define can ameliorate the
conditions that mark these complex exchanges.
Overview of U.S. Coast Guards

Deepwater Program
The U.S. Coast Guard has a complicated set of missions. By
many accounts, the Coast Guard is the standard-bearer for
do more with less. It is resourceful, mission-driven, actionoriented, and inventive. The combination of limited fleet
resources, mission focus, and a bias for action compels the
Coast Guard to ride its assets hard. By the 1990s, its fleet
and assets showed that wear. Admiral Jim Loy, the commandant in the mid-90s, began thinking strategically about how
to upgrade, modernize, and integrate a system of assets.
The Coast Guards Deepwater program is a story of how
a federal agency responded to an opportunity to upgrade
its decaying capital stockits fleet of air and sea assets
by leveraging political interest in harnessing private-sector
approaches to public problems. It embraced a system-ofsystems contracting strategy in which a single lead systems
integrator (LSI) would design the fleet as a whole (e.g., how
many of the different types of ships and aircraft would be
in it), detail the performance specifications of each (e.g.,
how fast and far they would go), supply the communications structure to tie them all together, and then manage the
contract process for buying them.
Part of the reason the Coast Guard opted for an LSI to
perform contract management was because it lacked the
capacity itself. The Deepwater program involved a high
degree of uncertainty about the systems components, specifications, and costs. Specialized investments were required to
produce and deliver the system. Given these characteristics,
it is an excellent illustration of a complex acquisition.
We wanted to understand the Deepwater case better,
draw out lessons. It was a great journey of inquisitiveness
into something that on its face looked simply like a failed
procurement, but was much more. There were innovations
in contract design, procurement processes, and supplier
relations. Some aspects did not work the reasons for
that are discussed in detail in our reports and our book. To
that end, we owe the IBM Center nothing but thanks for its
support of our original research in this area. Our two reports
for the Center set the foundation for our book, Complex
Contracting: Government Purchasing in the Wake of the US
Coast Guards Deepwater Program.
The Three Phases of the ICGSDeepwater

Relationship
The Coast Guard envisioned the multi-decade, multi-billion
dollar Deepwater program as the solution to its decaying
fleet of air and sea assets and inadequate command and
communications systems. By pitching a novel procurement
approachthe use of a private LSI to design, purchase, build,
and integrate a system-of-systemsthe Coast Guard secured
authorization and funding. In selecting the Integrated
Coast Guard Systems, a partnership of two leading defense
82
contractors, to serve as the LSI, the Coast Guard hoped to tap

the expertise and experience of two of the worlds preeminent defense contractors. The result would be sparkling new
boats, planes, helicopters, and information technology that
would dramatically enhance the Coast Guards ability to
perform their wide-ranging missions.
In reality, the ICGSDeepwater relationship moved through
three phases. In the first phase, the honeymoon, the Coast
Guard and ICGS embraced each other as partners. Each
party took meaningful steps to make the partnership work,
sometimes at a sacrifice to their own, immediate interest.
In the second phase, as the volume of contract and production activity accelerated, things became foggier. The Coast
Guard and ICGS each did things during this period that
appeared consummate, but at other times did things that the
other party could interpret as perfunctory.
Finally, in the third phasethe divorcethe fog cleared for
both sides. The challenges of trying to determine if the other
party was behaving consummately or perfunctorily were too
great, and the likelihood of receiving consummate behavior
in return was diminishing. Both the Coast Guard and ICGS
decided to cut their losses and look out for their own interests, both short and long term. This proved insufficient to
cement the partnership and change the relationship from a
tragedy of failed collective action to a cooperative success.
A Series of Missteps: the Unraveling of the

Deepwater Program
Success hinged on the Coast Guard and ICGS managing
Deepwaters complexity: crafting rules to incentivize
consummate behavior in numerous areas where the contract
could not detail product specifications, and structuring a
relationship so the shadow of the future created incentives
for win-win cooperation. Success would require the Coast
Guard to communicate its needs, ICGS to present product
options to meet those needs, and both to jointly make decisions and shoulder costs in the contracts cooperative spirit.
If all went well, a win-win outcome would result: the Coast
Guard would receive an affordable product that enhanced its
ability to perform its mission. ICGS would receive compensation above its costs and the prospect of future business.
A series of early missteps had cascading consequences that
brought down the once promising partnership. Two central
governance rules were improperly designed and implemented and failed to establish the incentives to contribute to
SPRING 2014
the contracts goals. The IPTs (integrated project teams) got

underway without clear rules for decision authority and cost
responsibility.
The performance incentive system was likewise ambiguous since Deepwaters assetsthe desired outputs of the
programwould not be completed until years later. Absent
the guidance of clear rules, each side struggled to determine if
the others behavior was in the partnerships cooperative spirit.
Lessons Learned from the Deepwater

Program
There have historically been two approaches to acquiring
complex products: rule-driven and relationship-driven. The
former focuses almost exclusively on following the rules
while the latter relaxes the rules while building trust among
the parties.
Some look at Deepwater as an example of too much focus
on the relationship. Our view is, we have to have rules that
promote cooperation. You cant write everything down at
the outset, but you can put in certain governance rules that
promote cooperation of all parties in gray areas.
83
Second, you need to structure a relationship that creates opportunities for trust and cooperation building over time. When
faced with a choice, youre going to preserve the relationship
rather than choose a short-term, personal benefit. We lay out in
our book a series of criteria for good rules that promote cooperation and good relationships that enhance that cooperation.
The third part is creating the conditions under which both
parties build a mutual understanding of what it means
to be cooperative. If I receive something that doesnt meet
expectations, there are agreed-upon, established processes
and mechanisms that allow us to remedy the situation.
Our book guides the reader through this general framework
of crafting the right rules, setting up the right relationships,
and building that mutual understanding that can only be
born over time.
There was much discussion about banning the use of lead
system integrating in the wake of Deepwater. Thats foolish.
You need a general contractor. A great example of this is the
Healthcare.gov website. A principal failure is the absence
of an LSI. Not one of those 55 vendors was specified as the
one who was going to have to put all of that stuff together.
The presumption of all the vendors was thats the Department
of Health and Human Services job but they dont have
the capacity to perform the integration functions. Maybe in
the future well live in a world where the federal government will build that capacity, the systems integrators and the
program managers [until then], agencies are going to have
to buy it.
Complex Contracting: Government Purchasing in the Wake

of the US Coast Guards Deepwater Program.
System-of-systems acquisitions are not doomed to fail

The Deepwater contract did not fail to achieve the win-win
because the Coast Guard sought to buy its assets through
a system-of-systems program. Federal government agencies
regularly purchase products made up of integrated and technically sophisticated components. The challenges of complex
contracting arise when either the finished product or its
component parts are difficult to write down contractually
and require specialized investments. System-of-systems and
complex products are not necessarily synonymous.
Lead systems integrators do not doom complex

contracts
The Deepwater program did not fail because it relied on
an LSI. Just as government agencies buy system-of-systems
products all the time, they also use LSIs to do the work of
acquiring and integrating system components. The challenge in working with an LSI to procure a complex product
is to find ways to facilitate cooperation where the contracts
terms fail to fully define and incentivize the parameters of a
win-win outcome. For Deepwater, the root of the problem
was not the reliance on an LSI, but a contract that was
ill-suited to the complexity of what the Coast Guard was
buying. The Coast Guard and ICGS struggled to quickly
establish governance rules like the integrated project teams.
We highlight the Nimitz-class aircraft carriers as a successful

procurement of a complex product. Here you have a
very challenging market situation in which there is only
one purchaser and a single provider. This has been a very
successful long-term relationship between the buyer and
the vendor. A tremendous effort has gone into identifying
the rules right, setting up contractual vehicles that promote
cooperative relationships, entering into a relationship, and
building that relationship.
Prospects for Successful Complex

Contracting
Complex contracts can be successful (Nimitz) or they can fail
(Deepwater). Our aim is to offer a theory for how to improve
the prospects for successful complex contracting. Our analysis of what worked and what did not in Deepwater suggests
some guidance for the practice of complex contracting. You
can find a fuller description of these insights in our book,
84
Contracts for complex products require internal contract management capacity

Just as successful procurements for complex products require
the active participation of users and manufacturers, they
also require enough highly trained contract professionals
to fully manage the process. Contract managers have principal responsibility for translating what the buyer wants into
contract terms to convey to the seller, and then ensuring the
seller delivers. Contract management capacity stems in part
from the contract managers experience and expertisetheir
knowledge of the product and the steps they can take within
the boundaries framed by public laws like the FAR. Capacity
is also in part a result of the sheer number and continuity of
contract managers on a particular procurement.
The Deepwater program was plagued by insufficient contract
management capacity within the Coast Guard and ICGS.
Contract managers on both sides rotated in and out of assignments, exacerbating the lack of clarity about decision-making
processes within the IPTs and undermining the relationship building needed to foster a virtuous cycle of reciprocal
cooperation. For example, in 2004 the GAO estimated that
one-fifth of the acquisition positions needed to staff the
Deepwater program were unfilled.
Well-functioning IPTs, with clear distributions of decision

authority and cost responsibility, would have helped avoid
much of the confusion about which side was responsible for
making decisions.
The building acquisition workforce has to be a priority.

Insourcing (or the use of government personnel to perform
functions that contractors have performed on behalf of federal
agencies) may be a priority with the current administration, but
even there resources need to be made available for training,
development, and capacity building. You need to have the
people in house who are competent and able to do it.
Successful procurements for complex products require

user and producer input
Buyers and sellers of complex products need information.
Two types of information are particularly critical in complex
contracting: what will product users do with the product,
and what steps do product manufacturers need to take to
construct the product. One of the principal goals of an IPT is
to bring together the two groups of people (users or buyers;
makers or sellers) to produce this information. Deepwaters
IPTs suffered from insufficient involvement of both Coast
Guard users and manufacturers from IPTs in the decisionmaking process for many complex contracts components.
SPRING 2014
Trevor L. Brown is Associate Professor at the John Glenn

School of Public Affairs at The Ohio State University in
Columbus.
David M. Van Slyke is Professor in the Department of
Public Administration and International Affairs at the
Maxwell School of Citizenship and Public Affairs at
Syracuse University.
85

Management
in Government
This article is adapted from Jennifer Bachner, Predictive Policing: Preventing Crime
with Data and Analytics, (Washington, DC: IBM Center for The Business of
Government, 2013).
Predictive Policing: Preventing Crime

By Jennifer Bachner
The history of quantitative crime analysis spans centuries.

Crime mapping first appeared in the 19th century. In 1829,
an Italian geographer and French statistician designed the first
maps that visualized crime data. The maps included three
years of property crime data as well as education information
obtained from Frances census. The maps revealed a positive
correlation between these two layers of information; areas
with higher levels of education experienced a higher incidence of property crimes.
The discipline of crime analysis emerged following the
formation of Londons Metropolitan Police, the first organized
law enforcement service. The services detective branch,
formed in 1842, was tasked with using pattern recognition to
prevent and solve crimes. Formal police departments were
established throughout the U.S. in the 1850s, though their
use of analytical techniques lagged behind Londons.
In 1900, the U.S. federal government began collecting
national data that aided the development of crime statistics. Mortality statistics, which indicate the cause of death,
were used to calculate homicide rates. Additional measures,
such as prison rates and arrest data, were collected by cities
and states during the 1920s. In 1930, the Federal Bureau
of Investigation (FBI) was given the authority to collect and
disseminate crime data. The FBI continues to publish Crime
in the United States annually, and this comprehensive publication served as the chief data input for crime analysis
models in the latter half of the 20th century.
With the advent of affordable computers, both police organizations and scholars began to explore automated crime
mapping. Academic researchers investigated the relationship
between environmental characteristics and the incidence for
crime. Sociologists, for example, used mapping to uncover
a quantifiable, causal relationship between the presence of
taverns and the incidence of violent and property crimes.
Police forces initially hoped crime mapping would serve as
a means of improving resource allocations efficiency. The
technical and personnel demands of mapping, however,
86
prevented police departments from integrating this tool into

everyday police work until recently.
Today, the availability of massive data sets, data storage,
sophisticated software, and personnel that can both perform
analyses and communicate actionable recommendations
to officers in the field has rendered crime analysis a central
component of modern policing. Further, collaborative efforts
between police officers, scholars, and businesses have led
to the development of analytical techniques that have strong
theoretical foundations; accompanying tools, such as software programs, enable their widespread use.
The Role of Predictive Analytics in Crime

Prevention
Crime prevention, defined as efforts to restrict crime from
occurring, is generally considered to encompass three pillars:
Primary prevention strategies attempt to minimize the risk
factors associated with criminal behavior. These programs,
often housed in schools and community centers, are
intended to improve the health and well-being of children
and young adults.
Criminal justice strategies address known offenders; juvenile correctional facilities and prison rehabilitation aim to
prevent convicted criminals from offending again.
Law enforcement strategies focus on decreasing the
probability that crime occurs in a particular area. This is
achieved by reducing the opportunity for criminal acts
and increasing the risk of arrest. Predictive analytics is one
law enforcement strategy to accomplish this form of prevention. By compiling and analyzing data from multiple
sources, predictive methods identify patterns and generate
recommendations about where crimes are likely tooccur.
The reliance on statistics and automated mapping, termed
CompStat, has been widespread since 1995, when it was
first implemented by the New York City Police Department.
This philosophy has since been adopted by nearly every
Management
Jennifer Bachner is the Program Coordinator and Lecturer in Governmental

Studies for the M.A. in Government in the Johns Hopkins University
Center for Advanced Governmental Studies. Her current work examines
the implications of data and analytics on governance, the use of emerging
technologies in online education, and partisanship metrics in Congress.
Her dissertation work, which she has presented at national conferences
and research universities, analyzes youth political engagement.
law enforcement agency in the country. Under the original framework of CompStat, crime data are collected and
analyzedprimarily using geographic information systems
(GIS)to improve accountability and resource allocation. By
mapping the distribution of criminal activity across low-level
geographic units (e.g., city blocks and individual buildings),
police can deploy officers to high-crime areas and track
changes over time.
Whereas traditional uses of CompStat are fundamentally
reactive, the goal of predictive policing is proactiveto
prevent crime from occurring in the first place. Predictive
policing is therefore a component of intelligence-led policing
that is focused on what is likely to occur rather than what has
already happened. It is the frontier of crime prevention, and
the data and methods required for this approach have only
recently been developed and employed.
Predictive Methodologies
There are three categories of analysis techniques that police
departments use to predict crime:
Analysis of space
Analysis of time and space
Analysis of social networks
These categories are not intended to be all-inclusive, as the
number of methodologies available to analysts is large and
increasing. Instead, the following provides an overview of
the different types of analysis commonly undertaken and the
advantages and disadvantages of each.
Predictive Methodology One:

Analysis of Space
One of the original uses of crime mapping is the identification of criminal hot spots, namely areas in which there is a
greater likelihood of crime than in the surrounding areas. In
a retrospective context, hot spot detection has increased our
SPRING 2014
understanding of the characteristics associated with highcrime areas, such as transportation routes, entertainment
establishments, and a high population density. In terms of
predictive policing, hot spot detection can inform short-term
decision-making about resource allocation and long-term
policies related to crime reduction.
It is important to keep in mind that a hot spot is a perceptual
construct. Because geographical space is inherently continuous, the placement of a boundary to delineate a hot spot is
somewhat arbitrary. The final location, size, and shape of a
hot spot are influenced by judgments made by the analysts,
such as:
Which criminal incidents are included in the analysis
Whether the hot spots are determined by the concentrationor clusteringof past criminal incidents, environmental characteristics associated with crime, or both
The amount of time captured by the analysis (e.g., one
year of crime data vs. five years of crime data)
The weighting scheme applied to past criminal incidents
Predictive Methodology Two:

Analysis of Time and Space
Various statistical methods to analyze clustering are all aimed
at identifying areas with high crime levels. In a forecasting
context, clustering methods detect locations or areas where
crime is likely to occur based on where crime has occurred
in the past and, in the case of risk-terrain modeling, environmental characteristics. These methods, however, do not
take advantage of temporal patterns in crime. Although some
clustering algorithms weight recent events more heavily in
generating forecasts, they do not illustrate how the incidence
of crime changes over time. Clustering does not illuminate
movement in criminal activity.
In practice, clustering without much regard to the temporal
dimension of criminal activity is often sufficient. Hot-spot
87
Management
maps are easy to read and can help officers make quick,
informed decisions about how to allocate their time during
a shift. Some tasks, however, demand attention to temporal
patterns. If a police department has observed a rash of
robberies and is attempting to predict the next incident in the
string, it is critical to identify both the spatial and temporal
path taken by the suspected offender.
CrimeStat III, a software program developed by sociologist Ned Levine and the National Institute of Justice, allows
users to analyze both the spatial and temporal components
of crime patterns. If the analyst is interested in a descriptive summary of a sequence of events, they can compute a
spatial-temporal moving average (STMA). An STMA permits
examination of the path a criminal has taken. It is calculated
using the average time and location for a subset of incidents.
For each incident, the averages are calculated using the incidents that occurred just before and just after. A subset generally includes three, five, or seven incidents. The resulting
map includes a line through the incidents, which marks that
average path taken by the offender.
To forecast when and where the next crime in a sequence
will occur, an analyst can perform a correlated walk analysis
(CWA). A CWA examines the temporal and spatial relationships between incidents in a given sequence to predict the
next incident. The first step in performing a CWA is to determine if there is a systematic pattern in an observed sequence
of criminal incidents. This is accomplished by computing the
correlation between intervals.
Predictive Methodology Three:

Analysis of Social Networks
The chief purpose of the previous two categories of methods
discussed is the targeting of geographic locations in which
to focus time and resources. Social network analysis (SNA)
is a third category of methods on the cutting edge of crime
analysis, but it is primarily used to detect persons of interest,
as opposed to locations of interest. Through SNA, police can
identify individuals that are central to criminal organizations,
such as gangs and drug networks, and develop effective interdiction strategies.
The relevance of social networks to criminological analysis is
well-established. Organized crime, such as drug trafficking,
gang violence, and serial robbery, requires the creation and
maintenance of various relationships. A drug-dealing network,
for example, may include suppliers, distributors, smugglers,
buyers, and money-launderers. Further, criminal networks are
embedded in the social context in which they operate; they
88
are nourished by, and victimize, members of the community, including family, friends, and retailers. SNA is a tool
police agencies can use to map these numerous interpersonal
connections and mine them for actionable information.
The building blocks of a social network are relationships
between two actors (either individuals or entities). Actors are
referred to as nodes and the relationships between them are
termed links or edges.
In crime-fighting applications, social network analysis is
frequently used to identify central nodesindividuals who
have a high level of connectivity within the network.
Using centrality measures, an analyst can identify individuals of interest in the context of a given problem. If a police
agency seeks to acquire information about a network without
dismantling it, contacting an actor with a high level of closeness might be effective. Alternatively, a goal of inserting
information into a network might best be achieved using
an actor with a high betweenness measure. If an agencys
mission is to take custody of a networks leaders or central
actors, the measure of degree may be most useful.
Places on the Frontier of Predictive

Policing
Santa Cruz, California
The Santa Cruz Police Department (SCPD) was one of the
first in the nation to employ predictive policing in its daily
operations. The software in use was developed by researchers
at the University of California, Los Angeles, and Santa Clara
University, with input from crime analysts from SCPD. The
program was first implemented in July 2011. In July 2012,
the program moved from its experimental phase into full
operational use.
The core of the SCPD program is the continuous identification of areas that are expected to experience increased levels
of crime in a specified time frame. A computer algorithm
draws upon a database of past criminal incidents to assign
probabilities of crime occurring to 150x150 meter squares
on a grid on a map of Santa Cruz. The database includes
the time, location, and type of each crime committed. In the
calculation of probabilities, more recent crimes are given
greater weight. The program then generates a map that highlights the 15 squares with the highest probabilities. Prior to
their shifts, officers are briefed on the locations of these 15
squares and encouraged to devote extra time to monitoring
these areas. During their shifts, officers can log into the webbased system to obtain updated, real-time, hot-spot maps.
Management
The department opted to use 15 squares after experimenting

with different numbers; analysts observed a dropoff in probability after 15. Further, the department has the resources
to devote extra personnel time to 15 squares. Larger departments identify a far greater number of high-risk squares. The
Los Angeles Police Department, for example, generates 20
high-risk squares for each of its 19 divisions.
The developers of the software took great care to ensure
its accessibility by officers with minimal technical training.
The program is relatively simple to use and its output (maps
with square hot spots) can be tailored to specific crime types
and times of day. Moreover, the department has adopted
the perspective that predictive policing tools are intended to
empower officers, not replace them. Officers are not required
to base their decision-making solely on the hot-spot maps.
Instead, officers are encouraged to view the maps as additions to their existing toolkits.
SCPD has achieved a high level of officer buy-in with respect
to predictive policing. Zach Friend, a crime analyst with
SCPD, emphasizes that for predictive policing to take root

in a department, there cannot be top-down implementation;
it cannot be imposed on unwilling officers and treated as a
replacement for experience and intuition. Friend draws an
analogy to fishing, explaining that predictive methods can tell
officers where the best fishing holes are located but not how
to cast a line or bait a hook. And once officers begin using
the predictive tools, they usually observe positive results.
Officers who use the tools see reductions in crime on their
beats, and these success stories motivate other officers to do
so as well.
It is critical that SCPD find efficient ways to reduce crime,
as their current staff level is 20 percent lower than in 2000.
Further, the department is not expected to increase the size
of its staff in the foreseeable future. As a result, the department must take steps to ensure its officers are each achieving
the most benefit possible. The software itself is affordable and
requires minimal training. Further, predictive methods supplement experience, thereby standardizing the talent level in a
police department between seasoned officers and novices. By
Santa Cruz PredPols Crime Probability Predictions
SPRING 2014
89
Management
simply being in the right place at the right time, as dictated

by a hot-spot map, novice officers can make a valuable
contribution to reducing crime.
The department currently assesses changes in crime rates
to determine whether or not the program is working.
Preliminary evidence indicates that the program has been
successful, particularly with respect to burglaries. A comparison of burglaries in July 2011 (when the program was first
implemented) to July 2010 indicates a 27 percent decline
(down to 51 from 70). Aggregating over the six months
prior to implementation (January 2011 to June 2011) and
comparing this number to the amount of burglaries in the
same time period in 2012 (January 2012 to June 2012)
reveals a 14 percent decline (down to 263 from 305). It is
not surprising that SCPD has experienced the most success
with preventing burglaries, as this type of crime lends itself
to prediction. Potential burglars carefully design their plan
of attack, often taking into consideration the environmental
characteristics of the geographical area.
In contrast to Santa Cruz, other departments instead measure
success using arrest rates. The concern with this measure is
that predictive policing is intended to reduce the incidence
of crime through deterrence. When potential criminals see
police officers monitoring an area, they are less inclined to
commit an offense. It is, of course, quite difficult to measure
deterrence, as we cannot calculate how many crimes would
have occurred if not for the increased police presence.
90
TO LEARN MORE
Predictive Policing:
Preventing Crime
by Jennifer Bachner

In .pdf (Acrobat) format
at the Center website,
By e-mailing the Center at
businessofgovernment@us.ibm.com
By calling the Center at (202) 551-9342

in Government
Management
This article is adapted from Daren C. Brabham, Using Crowdsourcing In Government,

(Washington, DC: IBM Center for The Business of Government, 2013).

By Daren C. Brabham
There is growing interest in engaging the crowd to identify or develop innovative solutions to public problems. This
trend has been inspired by similar efforts in the commercial world to design innovative consumer products or solve
complex scientific problems, ranging from custom-designing
T-shirts to mapping genetic DNA strands. The Obama administration, as well as many state and local governments, have
adapted these crowdsourcing techniques with some success.
Crowdsourcing is an online, distributed problem-solving
and production model that has grown in use in the past
decade. While many of the exemplar cases of crowdsourcing
highlighted in the scholarly research have been for-profit
companies or ventures managed by for-profit companies,
crowdsourcing has been gaining traction as a public participation tool for governance and planning, as well as a method
for building common resources or processing large batches of
data to streamline government functions.
It is important to distinguish crowdsourcing as a process,

rather than a tool. Crowdsourcing is an online process for
connecting online communities and organizations in pursuit
of a product or solution to a problem. Crowdsourcing can
be accomplished through any number of new media tools,
including wikis, blogs, websites, social networking sites (e.g.,
Facebook, Twitter), mobile apps, mapping software, and so
on. Many tools enable communication, and so many tools
can make crowdsourcing possible.
When an organization embarks on a crowdsourcing venture,
it is important to consider first the kind of problem it wants to
solve and the kinds of solutions it wants to receive.
The author has developed a problem-based, four-part
typology for crowdsourcing. This typology is problem-based
in the sense that a practitioner can use it to assess what
kind of problem he or she needs solved, identify whether
crowdsourcing may help solve the problem, and decide
Simply put, crowdsourcing happens when:

An organization has a task it needs performed
A top-down,
hierarchical process
Locus of control is
in the organization
Examples:
In-house product
development
Simple voting
marketing campaigns
(e.g., DEWmocracy)
NG
CI
USE
RP
R
A shared top-down
and bottom-up process
A bottom-up,
grassroots process
Locus of control is
between organization
and online community
Locus of control is in
the online community
Examples:
Peer to Patent
Amazon Mechanical
Turk
InnoCentive
Threadless
ON
SPRING 2014
ION
UCT
OD
R
LP
TI
UC
OD
An important distinction between crowdsourcing and other,

similar forms of online participatory culture and user-generated content activities is that crowdsourcing entails a mix of
top-down, traditional, hierarchical management process and
a bottom-up, open process involving an online community.
In crowdsourcing arrangements, the locus of control must
reside between organization and online community rather
than primarily in one or the other (see figure). An example of
a high degree of organizational control that made insufficient
use of the online communitys input is the vote for your
favorite flavor marketing contest, such as Mountain Dews
DEWmocracy campaign. And examples of a high degree of
online community control with insufficient organizational
directive are Wikipedia or open-source software projects
such as Mozilla Firefox.
Crowdsourcing as a Blend of Traditional Top-Down

Production and Bottom-Up User Production.
CROW
DSO
UR
The result is mutual benefit for the organization and the

online community.
TRAD
I TI O
NA
An online community voluntarily performs the task
Examples:
Wikipedia
YouTube
Open Source
Software
Source: Brabham et al., 2013
91
Management
Daren C. Brabham is an assistant professor in the Annenberg School for

Communication & Journalism at the University of Southern California, as
well as the founding editor of Case Studies in Strategic Communication.
He was the first to publish scholarly research using the term crowdsourcing
in 2008 in an article in Convergence.
which type of crowdsourcing approach is most useful. You
first need to determine whether a problem at hand is (a) an
information management problem, where the challenge is to
locate or analyze existing knowledge; or whether it is (b) an
ideation problem, where the challenge is to develop entirely
novel ideas or solutions.
These four problem-based crowdsourcing approaches

the Knowledge Discovery and Management approach,
the Distributed Human Intelligence Tasking approach, the
Broadcast Search approach, and the Peer-Vetted Creative
Production approachcover the range of problem-solving
activities suitable for government to crowdsource (see Table 1).
Table 1: A Typology of Crowdsourcing Problem Types for Governance

Type
How it Works
Kinds of Problems
Examples of Uses in Government
Type One:
Knowledge
Discovery and
Management
Organization tasks crowd

with finding and collecting
information into a common
location and format
Ideal for information gathering,

organization, and reporting
problems, such as the creation of
collective resources
Example: SeeClickFix; USGSs Did You

Feel It?; USPTOs Peer to Patent
Possible Uses: Reporting conditions and
use of public parks and hiking trails;
tracking use of public transit; cataloguing
public art projects and murals for
historical boards
Type Two:
Distributed
Human
Intelligence
Tasking

with analyzing large
amounts of information
Ideal for large-scale data analysis

where human intelligence is
more efficient or effective than
computer analysis
Example: Transcribing digital scans of old

handwritten census records
Possible Uses: Language translation for
documents and websites; data entry;
behavioral modeling
Type Three:
Broadcast
Search

with solving empirical
problems
Ideal for ideation problems with

empirically provable solutions,
such as scientific problems
Example: White House SAVE Award;

NASAs use of InnoCentive for a solar
flare prediction formula
Possible Uses: Finding better algorithms
for timing traffic signals; improving
actuarial formulas for Social Security
Type Four:
Peer-Vetted
Creative
Production

with creating and selecting
creative ideas
Ideal for ideation problems where

solutions are matters of taste or
market support, such as design or
aesthetic problems
Example: Next Stop Design bus

stop shelter design competition; ITS
Congestion Challenge for alleviating
traffic congestion
Possible Uses: Designs for public
structures and art projects; urban plans;
transit plans; policy proposals; school
redistricting plans
Source: Adapted from Brabham, 2012a
92
Management
Type One: Knowledge Discovery and

Management
In type one crowdsourcing, government agencies can use
online communities as a way to extend their abilities, relying
on communities to bring new information into play in efficient ways that lead to better decisions and resource allocation. In this arrangement, an organization issues a clear
information management task to an online community with
clear instructions for how that task is to be performed, and
the online community responds by finding and reporting that
information in the specified format.
An example of the type one approach is the U.S. Geological
Surveys (USGS) Community Internet Intensity Map, known
more fondly as the Did You Feel It? map. Did You Feel It? is
a website that automatically maps reports of user-submitted
seismic activity. When the first tremors of an earthquake are
felt, citizens visit the site and report their locations and an
estimate of the intensity of the tremors. In combination with
a network of sensors around the world, these user-submitted
reports allow USGS to assemble a more nuanced map of the
intensity of an earthquakes activity, deepening the agencys
understanding of how earthquakes work and informing emergency response planning and modeling budgets for disaster
relief. Where SeeClickFix allows citizens to fill information
gaps for city maintenance departments and improve government efficiency, USGSs Did You Feel It? project allows citizens to fill information gaps about the impact of earthquakes
that sensors cannot fully capture.
Type Two: Distributed Human Intelligence

Tasking
Type two crowdsourcing extends the data-analytic capabilities of government, decomposing and distributing large
batches of information to an online community that performs
small tasks, often for small financial rewards. Similar to type
one crowdsourcing, type two crowdsourcing deals with
information management problems, except with type two
the challenge lies in how to process a batch of data that is
already in hand. Type one crowdsourcing is for finding and
assembling information, while type two crowdsourcing is for
efficiently processing information.
For example, the U.S. Census Bureau released raw digital
image files from 1940 Census records and made them available to the public for the first time. The handwriting from
seven-decades-old scanned documents required manual transcribing, since computerized optical character recognition
SPRING 2014
(OCR) was not feasible. Taking a cue from Luis von Ahn et
al.s (2008) human computation reCAPTCHA system, which
revolutionized the digital transcription of books by weaving
transcription micro-tasks into security tests on several social
network sites and blog comment functions, McHenry,
Marini, Kejriwal, Kooper, and Bajcsy (2011) proposed that
the government use a crowdsourcing approach to employ
an online community in the rapid, accurate, inexpensive
transcription of the Census records. The way such a system
works is by decomposing the massive data setthe entire
corpus of scanned recordsinto smaller tasks and distributing them online to people willing to transcribe a few words
or sentences for small monetary rewards, say, transcribing a
dozen words for a few pennies.
Type Three: Broadcast Search

Broadcast search crowdsourcing applications help government agencies find the needle in the haystack, the one
scientific mind that can see a solution in a difficult ideation
problem, by broadcasting a challenge widely on the Internet.
Scientifically oriented government agencies like the National
Aeronautics and Space Administration (NASA) and the U.S.
Geological Survey, agencies that deal with actuarial formulas,
and other engineering agencies could take the most advantage of broadcast search crowdsourcing ventures, opening
the problem-solving process to an online community often
motivated by their enjoyment in solving difficult problems.
In broadcast search, an organization poses a challenge to an
online community, often with detailed scientific parameters in
the form of a problem brief, and the online community offers
up complete, original solutions to address the problem.
Many broadcast search crowdsourcing initiatives, as well
as type four crowdsourcing (peer-vetted creative production) initiatives, take the form of contests or competitions,
and prizes are common for winning ideas. The America
COMPETES Reauthorization Act of 2010 added a provision for prize competitions to an existing technology innovation act, giving federal agencies the authority to offer
prizes as incentives to spur innovation (Executive Office of
the President, 2012). At the same time, Challenge.gov was
launched as a flexible platform for a wide variety of government-sponsored innovation competitions and challenges,
even using the language of seekers and solvers used by broadcast search crowdsourcing companies like InnoCentive. This
legal and technological infrastructure has been responsible
for a number of U.S. government-sponsored broadcast search
and type four competitions from agencies as diverse as the
Department of Health and Human Services and NASA.
93
Management
Type Four: Peer-Vetted Creative Production

Not all ideation problems have empirically right answers.
Policy, aesthetic, and design problems are matters of subjective taste or public support. For these ideation problems,
this approach to crowdsourcing is most appropriate. In type
four crowdsourcing, an organization issues a challenge to
an online community, the community replies with possible
solutions, and the community is also empowered to choose
among the submitted solutions, often through a commenting
and voting mechanism.
The most prominent, classic business case of this form of
crowdsourcing is Threadless, a clothing company whose
members submit graphic T-shirt designs and vote on the
designs of peers. Threadless prints the top-rated designs and
sells them back to the online community.
With support from the U.S. Federal Transit Administration
and in cooperation with the Utah Transit Authority (UTA),
the Next Stop Design project ran in 20092010 as an
attempt to replicate the business case of Threadless in a
transit planning context. At Next Stop Design, participants
were asked to respond to the challenge of designing an ideal
bus stop shelter for a real transit hub in the UTA system.
In just a few months and with no tangible reward offered,
nearly 3,200 participants registered on the site, submitting 260 high-quality architectural renderings for bus stop
shelter designs and casting more than 10,000 votes in the
competition.
Conclusion
For a term that did not exist seven years ago, crowdsourcing
has enjoyed quite an enthusiastic embrace by government
agencies in the U.S. and abroad. In the U.S., there have
been high-dollar calls for proposals from the Departments
of the Army, Navy, and Air Force; the Defense Advanced
94
Research Projects Agency (DARPA); the National Science

Foundation; NASA; the Broadcasting Board of Governors;
the Department of the Interior; the Department of Veterans
Affairs; and other agencies that specifically use the word
crowdsourcing, demonstrating a level of commitment to
continue funding these innovative processes. Around the
world, other governments have invested in crowdsourcing,
too, and so has the United Nations, which held a meeting
in 2012 to explore crowdsourced crisis mapping for disaster
relief. Considering the common criticism that government
moves slowly and is notoriously unwilling to take risks, the
rate at which crowdsourcing has taken hold in government,
in spite of its many risks, is perhaps a signal that there is a
sea change happening in the business practices of government and the way citizens engage with elected officials and
public administrators. In the spirit of participatory democracy, this is no doubt a good sign.
TO LEARN MORE
Using Crowdsourcing In
Government
by Daren C. Brabham


in Government
Management
This article is adapted from Andrea Strimling Yodsampa, Coordinating for Results:
Lessons from a Case Study of Interagency Coordination in Afghanistan, (Washington,
DC: IBM Center for The Business of Government, 2013).
Coordinating for Results: Lessons from a Case Study

of Interagency Coordination in Afghanistan
By Andrea Strimling Yodsampa
Interagency coordination is an essential element of effective

public leadership. Few agencies have the funding, expertise, or influence to achieve their goals single-handedly.
Moreover, complex problems require interdisciplinaryand
hence interagencysolutions. To succeed, public executives and managers must leverage the financial, human, and
organizational resources of multiple agencies. This requires
coordination.
Coordination, however, is easier said than done. Agencies
differ in their goals, priorities, and cultures. They compete
for resources and turf. And they have different interests and
concerns relative to coordination itself. Coordination also
takes time and money; coordination processes must compete
for resources with other mission needs and priorities.
Compounding these challenges, executives and managers
rarely have line authority over agencies and individuals with
whom they must coordinate.
In the face of these challenges, how can executives and
managers deliver consistent coordinated results? Those
who have led or served on interagency teams often argue
that coordination is driven by personalities and relationships. Personalities and relationships do matter, of course.
Public executives and managers must pay careful attention
to the composition of interagency teams. But they must not
stop there. Attitudes and relationships are deeply affected
by organizational factors. Therefore, public executives and
managers must institutionalize systems and processes that
foster the attitudes, relationships, and behaviors conducive to
coordination.
A case study of U.S. stabilization and reconstruction efforts in
Afghanistan from 2001 to 2009 illuminates concrete examples of successful coordination amidst extensive coordination failures. It then identifies the organizational systems and
processes that made those successes possible.
SPRING 2014
While the Afghan context was unique in many respects, the

agencies on the ground faced many of the same challenges
domestic agencies face in attempting to coordinate. The
lessons about interagency coordination therefore are broadly
relevant.
Background
The U.S. experience in Afghanistan demonstrates that coordination is possible even in the most challenging of contexts.
Civil-military coordination in Afghanistan was immensely
difficult. The Department of Defense, Department of State,
and USAID differed not only in their priorities and timelines,
but also in their organizational cultures, lexicons, and operating norms.
Power disparities, reflected in DoDs overwhelming financial
and human resources on the ground, contributed to longstanding mistrust and tension between civilians and military. Add to this the fact that they were working seven days a
week in complex, volatile, and often dangerous conditions,
and a perfect storm for interagency conflict and competition
ensued. In such a context, it is not surprising that coordination often floundered.
What is significant is that civilians and military on the ground
delivered some important coordinated results. These coordinated results, in turn, advanced agency missions, saved
resources, and contributed to the achievement of U.S. and
multinational goals in Afghanistan.
The case study shows that when coordinated results were
achieved, it was because civilians and military put in place
organizational systems and processes conducive to coordination. When coordination failed, it was because critical factors
necessary for consistent coordinated results were lacking.
While these lessons emerged in a unique context, they
are relevant to public executives and managers seeking to
enhance coordination in any issue area or context.
95
Management
Andrea Strimling Yodsampa is Senior Researcher/Program Manager, The

Fletcher School, Tufts University. She is a social scientist, practitioner, and
consultant specializing in interagency, civil-military, and public-private
cooperation. In addition to her work at Tufts University, she serves as
a consultant and senior social scientist on DoD-sponsored innovative
research efforts on interagency assessment and planning.
Findings: Systems and Processes to

Enhance Coordination
Finding One: Co-location and convening provide opportunities for face-to-face interaction that facilitate joint analysis and planning and foster relationship development and
mutual learning.
Co-location of civilians and military at the U.S. embassy in
Kabul and at various levels of the military structure in the
field, including the provincial reconstruction teams, facilitated information sharing and joint analysis and planning
and enabled civilians and military to learn from one another
and develop a greater appreciation of each agencys comparative advantages. Co-location of the senior civilian and military leaders at the embassy in the second phase also served
as a powerful symbol of high-level commitment to coordination, reverberating to lower levels of their respective chains
of command.
When co-location was not possible, convening of civilians
and military provided opportunities for regular, in-person interaction and thus facilitated information sharing, joint analysis
and planning, relationship development, and mutual learning.
The benefits of regular convening were evident in the
Bagram process, where civil and military leaders met
monthly for a full day. As one military officer puts it: The
process worked very well because it put the embassy,
USAID, [and the military] in the same room, at the same
lunch table, working the same things. The synergy from
doing that, versus talking with someone you dont know on
the other end of the phone, paid huge dividends. Another
official agrees: Before you can collaborate, you must coordinate. Before that, you must know the names of people.
Before that, you must break down some barriers so that
youre not separate vessels.
96
Finding Two: Regular information sharing and joint analysis

and planning enable participants to develop a shared assessment of the situation, identify common goals, and agree on a
division of labor.
The experience in Afghanistan shows that regular, structured
opportunities for information sharing and joint analysis and
planning are necessary to develop a shared assessment of the
situation, identify common goals, and agree on a division of
labor that leverages complementary resources and capabilities in support of shared goals.
In the early stages of U.S. reconstruction efforts in
Afghanistan, the lack of a joint interagency plan and associated lack of information sharing caused numerous coordination failures, including situations in which civilians and
military inadvertently worked at cross-purposes, wasting
resources and undermining effectiveness.
As time went on, civilians and military instituted systems and
processes for joint analysis and planning. Examples include
the Joint Interagency Task Force established at the embassy,
the focused planning for priority sectors that contributed
to coordination in road construction, the Bagram process,
and the Civil-Military Action Group. These systems and
processes made possible concrete coordinated results. They
also fostered mutual learning and the development of strong
working relationships, creating foundations for enhanced
coordination moving forward.
Finding Three: Facilitative leadership is necessary to convene
and lead effective joint analysis and planning processes.
One of the most significant challenges public executives and
managers face in coordinating across agency lines is lack of
line authority over many of the stakeholders involved. To be
successful, executives and managers must exercise facilitative
leadership, or leadership without authority.
Management
In Afghanistan, civilians and military reported up different

chains of command. Facilitative leadership was the glue
that held the joint analysis and planning processes together
and enabled them to succeed. In some cases, it was people
in formal leadership roles who exercised facilitative leadership. General David Rodriguez, for example, had direct
authority over military officers who served under him, but not
over the many civilians involved in the Bagram process. To
be effective convening and leading that process, in concert
with his civilian counterparts, he had to exercise facilitative
leadership.
authorized to allocate significant amounts of money to development projects in the provinces under the Commanders
Emergency Response Program. However, incentives emphasized spending money quickly, rather than taking the time to
coordinate with civilians, and military officers were rarely held
accountable for the downstream effects of their spending.
The high level of decision-making authority, combined with
perverse incentives and insufficient accountability, led to a
go-it-alone attitude at many provincial reconstruction teams
that resulted in wasteful duplication of efforts and working at
cross-purposes with civilians.
The military is an intensely hierarchical system, and directive leadership is the norm. Thus, it is telling that a number of
senior military officers who served in Afghanistan emphasize
their learning about the importance of facilitative leadership.
The military was not alone in struggling with perverse incentives and insufficient accountability. USAID officers in the
field also faced pressure to spend money quickly. And, civilians, like their military counterparts, were not held sufficiently accountable for the downstream effects of their
decisions. The vast flow of resources to civilian and military
efforts in Afghanistan, the incentive to spend money quickly,
and the lack of accountability for downstream results led to
ongoing coordination failures, wasting resources and undermining the effectiveness of U.S. and multinational reconstruction efforts.
Facilitative leadership need not be limited to people in formal

leadership positions. Interagency processes are complex, and
facilitation of joint analysis and planning processes is necessary to keep the dialogues focused and on track. During
the technical working group breakout sessions at Bagram,
civilian participants selected to serve as ad hoc facilitators
were credited with contributing to the effectiveness and efficiency of the process.
Finding Four: Delegation of decision-making is essential, but
it must be paired with professional incentives to coordinate
and accountability for results.
The case study shows that delegation of decision-making
authority to the field, combined with incentives to coordinate
and accountability for downstream results, is necessary for
consistent coordinated results.
In Afghanistan, the lack of decision-making authority on the
part of many USAID officers in the field undermined coordination. Without the ability to make decisions and allocate
resources, USAID officers were unable to respond quickly
and in concert with their military counterparts to emerging
challenges and opportunities.
Delegation of decision-making authority without the requisite
incentives and accountability systems, however, was counterproductive. In Afghanistan, military officers in the field were
SPRING 2014
TO LEARN MORE
Coordinating for Results:
Lessons from a Case Study of
Interagency Coordination in
Afghanistan
by Andrea Strimling
Yodsampa

97
Research Abstracts
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Kevin C. Desouza
Big data is receiving increasing attention as a term, but lacks a commonly understood definition. Kevin Desouza provides a clear, useful introduction to the concept. He writes, Big data
is an evolving concept that refers to the growth of data and how it is used to optimize business processes, create customer value, and mitigate risks. Over the last year, Professor Desouza
conducted extensive interviews with chief information officers (CIOs) across the United States
at the federal, state, and local level. The goal was to better understand the implementation challenges facing CIOs and their organizations as they undertake big data projects. Desouza presents 10 key findings from his interviews along with detailed descriptions of the three key stages in
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The growing interest in engaging the crowd to identify or develop innovative solutions to public
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some success. By understanding the different types of crowdsourcing and the different approaches
they require, public managers will have a better chance of success. The author provides a strategic
view of crowdsourcing and identifies four specific types: knowledge discovery and management,
distributed human intelligence tasking, broadcast search, and peer-vetted creative production. He
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SPRING 2014
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fulfill their mission. In addition to the four case studies, Professor Lee presents strategies and
tactics that can help agencies develop and implement successful ideation programs.

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drive government change. These trendsboth separately and in combinationpaint a path
forward in responding to the ever-increasing complexity that government faces. These trends
include: performance, risk, innovation, mission, efficiency, and leadership.
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in Afghanistan
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This report discusses interagency coordination through vivid examples of coordinated initiatives between U.S. civilian and military efforts in Afghanistan from 2001 to 2009. These initiatives
succeeded when the civilian and military institutions leveraged their joint funding sources and
networks to achieve common goals. When agencies collaborate, they still maintain their organizational autonomy and independence of action, but they deliberately align resources, capabilities,
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The Business of Government

3 F rom the Executive Director

5 From the Managing Editors Desk

8 C onversations with Leaders

Anthony Fauci, M.D.

VADM Mark Harnitchek

Defense Health Agency

U.S. Department of the Treasury

U.S. Department of Veterans Affairs

U.S General Services Administration

National Institute of Allergy and Infectious Diseases

Defense Logistics Agency

Is Moneyball Government the Next

Bureau of the Fiscal Service

Predictive Policing: Preventing Crime

U.S. Department of Commerce

U.S. Government Accountability Office

Office of Management and Budget

Conversations with government executives

Sharing management insights, advice, and best practices

From the Executive Director

From the Managing Editors Desk

Conversations with Leaders

IBMCenter for The Business of Government

Table of Contents (continued)

The Business of Government

Using Crowdsourcing In Government

IBM Center for The Business of Government

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

The Business of Government

From the Executive Director

Six Trends Driving Change in Government: Examples of

Daniel Chenok is Executive

IBMCenter for The Business of Government

From the Executive Director

The Business of Government

From the Managing Editors Desk

In meeting varied missions, government executives confront significant challenges.

Michael J. Keegan is Managing

Forum on Six Trends Driving Change in Government

Conversations with Leaders

IBMCenter for The Business of Government

From the Managing Editors Desk

Insights from Leaders

The Business of Government

From the Managing Editors Desk

Perspectives on Federal Acquisition and Complex Contracting

IBMCenter for The Business of Government

Conversations with Leaders

A Conversation with Anthony Fauci, M.D.

On the Strategic Priorities for NIAID

treatment thats highly effective. We are also on a quest for

The Business of Government

Conversations with Leaders

On Challenges Facing NIAID

On the Characteristics of Infectious Diseases

their own survival. We need to stay a step ahead of it all with

On the Pursuit of Progress: HIV/AIDS

IBMCenter for The Business of Government

Conversations with Leaders

that 50 percent of the patients would be dead in six to eight

On Bringing Tuberculosis (TB) Research into the

3 F rom the Executive Director

5 From the Managing Editors Desk

8 C onversations with Leaders