Hearing Of The Senate Homeland Security And Governmental Affairs Committee - Nominations

Statement

Copyright ©2009 by Federal News Service, Inc., Ste. 500, 1000 Vermont Ave, Washington, DC 20005 USA. Federal News Service is a private firm not affiliated with the federal government. No portion of this transcript may be copied, sold or retransmitted without the written authority of Federal News Service, Inc. Copyright is not claimed as to any part of the original work prepared by a United States government officer or employee as a part of that person's official duties. For information on subscribing to the FNS Internet Service at www.fednews.com, please email Carina Nyberg at cnyberg@fednews.com or call 1-202-216-2706.

SEN. LIEBERMAN: This hearing will come to order. We've just been having a debate about -- we know you're an honorable person, but why -- the title honorable is in front of your name -- (laughs) -- doctor, and we have -- I know it's not your choice, and I've been told -- am I right that you were confirmed for a position during the Clinton Administration?

MS. O'TOOLE: (That's correct ?).

SEN. LIEBERMAN: So perhaps that's why you're not only honorable, but officially honorable. (Laughter.) Welcome to the hearing.

Senator Levin has to leave urgently to go on to a meeting that he has, and he wanted to make a brief statement before we proceed, so I'll call him at this time.

SEN. CARL LEVIN (D-MI): Mr. Chairman, I very much appreciate it. There's been a number of critics who have raised questions about Dr. O'Toole's writings in the past, and with the permission of the chairman, what I'd like to do is submit promptly for prompt response questions to those critics, and then give Dr. O'Toole, of course, a opportunity to comment on any comment that they might make.

SEN. LIEBERMAN: Thanks, Senator Levin. Without objection.

SEN. LEVIN: (Inaudible.)

SEN. LIEBERMAN: We will do that.

SEN. LEVIN: I appreciate that. Thank you, sir.

MS. O'TOOLE: Happy to.

SEN. LEVIN: Today we're going to consider the nominations of Dr. Tara O'Toole to be under secretary of science and technology at the Department of Homeland Security and Jeffrey Zients to be the director for management at the Office of Management and Budget. We're going to begin with Dr. O'Toole, who has appeared previously before our committee as a very constructive and helpful witness in various matters that we've been following and who I'm delighted to welcome back as the nominee for this important position.

The Science and Technology Directorate at DHS is charged with managing our nation's investments in Homeland Security research and development projects. The fact is that Senator Collins and I -- when this committee was working on the legislation to create the Department of Homeland Security after 9-11-01 -- were very impressed by the work that the DARPA has done over the years at the Department of Defense and wanted very much to create a similar center for public investments in research in science and technology that could enable our country to take much more effective and rapid leaps ahead in protecting homeland security.

And the truth is it's hard to think of a threat to our homeland security that is not already being better defended against, or could not even yet be better defended than now with the innovative and sensible application of science and technology. So this is a very important part of our overall homeland security effort.

The fact is that the Science and Technology Directorate had what I will diplomatically call a difficult launch in its early years, and it struggled to clarify and, in fact, at times execute its primary mission. As a result, unfortunately, the fiscal year 2007 Appropriations Act cut the directorate's then $1.4 billion budget by 40 percent.

In the wake of that jolt, former Under Secretary Cohen, who held the position that you've been nominated for now, resolved to build a leaner and more tightly managed organization that focused on serving its primary customers, the various agencies within DHS, and also, on being fully transparent with Congress.

Under Secretary Cohen I think did very effective work implementing internal controls to monitor S&T finances and track the progress of S&T investments. He established a structured, strategic planning process that is designed to produce specific objectives and annual performance measures. And the good news is that there have been recent increases in the directorate's budget, which are about the most tangible way Congress can express its growing confidence in the work that the directorate has done, though I will say it's not yet back to where it was before that cut.

But obviously, a number of complex challenges remain in the threat to our homeland in various ways from Islamist terrorists, particularly willing to strike at human targets and undefended targets, which present you, of course, if confirmed, Dr. O'Toole, with challenges, and we'll call upon your leadership to continue to build and improve this agency that is so vital to the department's overall mission.

Among the challenges that I think you'll face are expanding investments in innovative R&D for Homeland Security and ensuring the reliability of the testing and evaluation that is done for large acquisition programs. Second -- strengthening relationships between the Science and Technology Directorate and agencies within DHS.

To these and the other challenges you face, Dr. O'Toole, you bring a wealth of experience that will serve you well in this job if you're confirmed. For the record, I will simply say that after practicing medicine in Baltimore for several years -- and probably as an act of humility by my staff on my behalf, they've left out -- and I know Senator Collins always likes to note this -- my pleasure that you spent time in your medical education at Yale University --

MS. O'TOOLE: (Laughs.)

SEN. LIEBERMAN: -- in New Haven, Connecticut. But after practicing medicine -- this reminds me of former President Bush. I was always troubled when -- in his biography in Texas it would say raised in Texas -- George W. Bush -- leaving out the fact that he was born in New Haven, Connecticut.

MS. O'TOOLE: (Laughs.

)

SEN. LIEBERMAN: Okay. After practicing medicine in Baltimore for several years, Dr. O'Toole earned a Masters of public health from Johns Hopkins, spent five years as a senior analyst and project director with the Congressional Office of Technology Assessment, and from 1993 to 1997 served as the assistant secretary for environment, safety and health in a most honorable fashion, I might add, at the Department of Energy. From 1999 to 2003, she managed the Johns Hopkins Center for Civilian Bio-defense Strategies. For the last six years Dr. O'Toole has served as director and chief executive officer at the Center for Bio-security at the University of Pittsburgh.

Dr. O'Toole is known as a really nationally recognized expert on bio-defense and the actions that we must take to deter, detect, and react to either a biological terrorist attack or a pandemic event. She is former chair of the Board of the American Federation of American Scientists and has participated in major studies or advisory panels at the National Science Foundation, Department of Defense, Department of Health and Human Services, and the Department of Homeland Security.

This is a most impressive background that you bring as nominee, and I welcome your selection. Of course, all this does not say that you are beyond question, and therefore, I look forward to the question and answer period.

MS. O'TOOLE: Thank you.

SEN. LIEBERMAN: Senator Collins.

SEN. COLLINS: Thank you, Mr. Chairman. I join the chairman in welcoming Tara O'Toole to the committee today. As the chairman has pointed out, Dr. O'Toole has testified before us previously and has also lent her expertise to us when we've called her informally for advice. This chairman has already illustrated that Dr. O'Toole has an extensive medical, public health and bio-defense career. I would point out that she was one of the original members of the Johns Hopkins Center for Civilian Bio-defense Strategies and served as its director from 2001 to 2003.

When the Department of Homeland Security was established, Congress recognized the important role that technology must play in securing our nation. Therefore, we created a Science and Technology Directorate to undertake research and development activities. As the chairman has indicated, the directorate got off to a rough start, but in recent years has made some real progress. Today the department is developing technologies on a variety of fronts, including biological, chemical, and explosives detection, communications interoperability, and passenger and cargo screening.

Technological advances at the ports of entry are already helping to identify individuals who are using fraudulent travel documents. This technology allows the department to better perform its mission of protecting the American people while still facilitating the legitimate flow of people and commerce. Our goal is always to let our friends in while keeping our enemies out.

The department's relationship with the University of Maine and other research universities is helping to improve our homeland security. An example of the great promise of advanced technology is the composite material cargo container prototype under development at the University of Maine. A composite shipping container with embedded sensors could improve the security and integrity of the supply chain while offering shippers a lighter and longer lasting alternative to traditional steel containers. I mention this as an example of the promise of technology.

Research and development of new technologies at the department carry an annual multi-billion dollar price tag. To ensure that these dollars are well spent, the Science and Technology Directorate must rigorously test and evaluate technologies before procurement decisions are made. Better engagement by the directorate's Testing and Evaluation Office in the department's acquisition programs could help avoid problems, such as those that have been experienced in the SBInet program.

The next under secretary for science and technology will also need to align DHS research and development priorities with the greatest security vulnerabilities that our nation faces and ensure close coordination with DHS's operational components and other federal, state, and local partners. So I look forward to hearing how Dr. O'Toole would address these challenges if confirmed.

Thank you, Mr. Chairman.

SEN. LIEBERMAN: Thank you, Senator Collins. Let me now say for the record that Dr. O'Toole has filed responses to a biographical and financial questionnaire, answered pre-hearing questions submitted by the committee, and had her financial statements reviewed by the Office of Government Ethics. Without objection, this information will be part of the hearing record with the exception of the financial data, which are on file and available for public inspection in the committee offices.

Dr. O'Toole, as I think you know, our committee rules require that all witnesses at nomination hearings give their testimony under oath, so I'd ask you now to please stand and raise your right hand. Do you swear that the testimony that you are about to give this committee is the truth, the whole truth, and nothing but the truth, so help you god?

MS. O'TOOLE: I do.

SEN. LIEBERMAN: Thank you very much. Please be seated. We would now welcome the opening statement and introduction if you choose of any family and friends that are with you today.

MS. O'TOOLE: Thank you. Thank you, Mr. Chairman, Senator Collins, distinguished members of the committee. It is a great honor to appear before you today as President Obama's nominee for the position of under secretary of Homeland Security. I'm greatly humbled by this privilege of being chosen by the President and by Secretary Napolitano to be nominated for this important post. I am also very honored to appear before this committee, which has done so much for so long to provide distinguished leadership in the complicated ongoing efforts to address the nation's many Homeland Security challenges.

At this point I would like to recognize my partner, Dr. Liza Solomon, for her unstinting support, and my niece, Sarah Palenquist (ph), who's just beginning her government career. I would also like to thank the many friends and colleagues who are here today, for all they have done to enrich my life.

Mr. Chairman, as you noted in your opening remarks, when this committee wrote the Homeland Security Act of 2002, you recognized that the application of science and technology would be fundamental to the success of the department. The history of the committee since then shows that you have repeatedly returned to this topic of how science and technology might be used to advance the goals of the department, as well as national homeland security priorities.

Similarly, Secretary Napolitano has identified the pursuit of science and technology in service to the Department of Homeland Security missions as being among her top priorities. She noted in congressional testimony -- perhaps echoing you, Mr. Chairman, or you she -- "It is difficult -- " this is a quote -- "It is difficult to think of an area of DHS operations where greater use of cutting edge technologies would not improve capabilities."

And indeed, mobilizing science and invention to solve practical problems has been an American hallmark since Ben Franklin flew his kite in a lightning storm. And I am very excited and grateful for the opportunity to continue this tradition.

As you noted, I am trained as a physician. I have practiced medicine, served in government in the Office of Technology Assessment, and as an assistant secretary of Energy for environment, safety and health. And for the past decade I have help found and led two university-based think tanks devoted to bio-security.

Over the course of my career in universities, government, and non-governmental organizations, my work has encompassed the study and management of a broad range of threats and focused particularly on risks associated with nuclear and biological weapons, radiation and toxic chemicals and on what could go wrong in complex human-built systems.

As this committee knows well, the responsibilities of the DHS Directorate of Science and Technology cover a broad spectrum of technical and operational problems.

While I do not claim to have deep expertise in all of these areas, I am confident that my background and experience equip me to lead the directorate and to serve the research and development needs of the department and of the country.

Through my own work on bio-defense and nuclear safety, I am convinced that the skills, expertise, and willing collaboration of state, local and tribal governments, first responders and the private sector are essential for the federal government's capacity to execute a coordinated, fully functioning homeland security strategy. This is, I realize, a view which this committee has long championed. And if confirmed, I commit to working closely with the committee to identify, answer and manage the science and technology needs of the department and to serve the strategic homeland security R&D priorities of the country as a whole.

Should I have the privilege of being confirmed for this position, I would pursue four priorities: first, I will continue to strengthen the relationships between the Science and Technology Directorate and the department's operational components, including first responders. It has been said actually by DARPA that transitioning technology that is moving technology from research into use is a contact sport. It's done by personal contacts between people.

As you noted, under the leadership of the former under secretary, Admiral J. Cohen, S&T established the integrated project team process to create these essential connections. If confirmed, I will work to expand and deepen the contacts and the working relationships between the actual users of technology and the operation components of DHS and the R&D professionals and to integrate a disciplined process of technology development into the department's acquisition process.

Secondly, if confirmed, I would modestly increase the portion of the S&T budget devoted to longer-term, highly innovative projects, which, if successful, could change the playing field or provide solutions to particularly difficult high priority problems.

While I believe that DHS's immediate operational needs continue to demand significant investments in near-term technology development, I believe that some of the problems confronting the department may require fundamental discoveries and technical achievements.

Third, if confirmed, I will work with this committee and with my colleagues in DHS to forge a strategic five-year approach to homeland security R&D, both within the directorate and across the department. I believe the ongoing Quadrennial Homeland Security Review, which the secretary has underway, will provide an essential foundation for such a strategy, and I hope to become actively engaged in the QHSR if confirmed.

Fourthly, should I be confirmed, I would seek to focus more resources on how we might make the American people and our communities more resilient to disasters, whether natural or manmade. I believe we can use science and technology to assist the American people as individuals, as employers, or as employees, as volunteers or community members, to help prevent and better prepare for the unexpected and to construct more robust public/private sector collaborations and foster more rapid recoveries from calamities.

The consequences of path breaking science and of new technologies are famously unpredictable. I am here today in part because of the surprise launch of the Soviet satellite Sputnik in 1957. The shock of Sputnik spurred U.S. investments in science education, which brought teachers, science fairs, and advanced placement science courses to my small public high school in Massachusetts, New England -- (laughter) -- and essentially launched me into college and medical school.

In the end, Sputnik catalyzed the U.S. triumphs in space and a new era of achievement in American science and technology. It is and has long been my conviction that science, technology, wedded to American ingenuity can be applied to help us better understand, prevent, and if necessary, respond to terrorist attacks and natural disasters. I would be honored to be part of such an effort as under secretary for science and technology.

If confirmed, I am committed to working with this committee to help create a strong and successful Department of Homeland Security and to serve the interests of the United States and its people. I am, of course, happy to answer any questions you might have.

SEN. LIEBERMAN: Thanks very much, Dr. O'Toole. That was really an excellent, very thoughtful opening statement, and I'll come back and begin my questioning by asking you about a few of the things you said, which are thought-provoking. But let me begin with the standard questions we ask of all nominees. Is there anything you're aware of in your background that might present a conflict of interest with the duties of the office to which you've been nominated?

MS. O'TOOLE: No, sir.

SEN. LIEBERMAN: Do you know of anything personal or otherwise that would in any way prevent you from fully and honorably discharging the responsibilities of the office to which you've been nominated?

MS. O'TOOLE: No, I do not.

SEN. LIEBERMAN: And finally, do you agree without reservation to respond to any reasonable summons to appear and testify before any duly constituted committee of Congress if you are confirmed?

MS. O'TOOLE: Yes, I do.

SEN. LIEBERMAN: Appreciate that. Let's proceed now with the first line of questions that are limited to seven minutes each. I'm going to depart from what I was going to begin to ask you because your opening statement sort of led me to refine it a little bit. I'm very interested in drawing you out on two of your four priorities. The second one was to consider investments in long-term, innovative projects that may assist in our efforts to defend against, prevent, or respond to high priority problems. Talk a little more about what you have in mind, and what kinds of models there are that you have in mind for previous governmental involvement of this kind.

MS. O'TOOLE: Well, the model I have in mind is DARPA's, quite frankly. They have been extremely successful in taking on very formidable challenges and working away at them over a period of years long before their customers, who would be the military services, have identified a particular technology, such as stealth aircraft, as something they need to fight the wars of today or tomorrow. I think there are many such challenges in the Department of Homeland Security, and indeed, the problem may be selecting one or two that we could afford to pursue.

Let me give you one example. I was visiting with Mr. Hearn, the head of Customs and Border Patrol, and we were talking about the threat of these unmanned submersibles, bringing large quantities of drugs into the shores of Mexico. If we could detect and interdict those vehicles, which are getting increasingly sophisticated and numerous, we could turn off the drug trade before these drugs are distributed to many people who are a lot harder to track down and before it gets to the Mexican shores, so we could actually aid in the stability of Mexico in addition to getting rid of a big problem and securing our own borders.

I think that's a huge technological challenge, but it's a challenge which, if met, would take that problem off the table. So if you can take the problem off the table, as opposed to getting better and better at incrementally diminishing the problem, that would be very attractive to me.

SEN. LIEBERMAN: Good example. Very hopeful. And the fourth one was more resources to assist the American people and our government to achieve resiliency. What brought to mind -- I recently met with John Brennan, assistant to the President for Counterterrorism, et cetera, and Homeland Security, and on the chart of the National Security Council there's now a box among several boxes, and that's called resiliency. So what are you thinking of?

MS. O'TOOLE: Well, I think social science has actually been very useful in helping us to design strategies and technologies that could, for example, help human agents detect wrongdoers or people who are acting suspiciously. I think we can also use social science to help us better understand how to improve resilience. I think there are endless examples in the context of past disasters, including 9-11, including Katrina, of individuals and groups of individuals and of organizations, including businesses, doing great things, sometimes spontaneously, sometimes with prior planning.

And I think that truly protecting homeland security is going to require that we take a much more strategic, thoughtful, and purposeful approach to organizing that kind of ingenuity and collaboration and enabling it in new ways.

So, for example, how could we form more robust public/private partnerships between businesses and state or city government to get better prepared?

SEN. LIEBERMAN: So here you're thinking really primarily of social science research.

MS. O'TOOLE: Mm-hmm.

SEN. LIEBERMAN: Very interesting, and again, hopeful. Let me give you an opportunity to respond on the record to the matter that I believe Senator Levin was referring to. I've heard and seen some of the criticism, which to me seems -- I will indicate a bias here -- like an academic debate. (Laughs.) I say that with respect.

MS. O'TOOLE: (Laughs.)

SEN. LIEBERMAN: But in other words, you've had some pretty aggressive critics, particularly of the two exercises you played an important role in organizing, Dark Winter and Atlantic Storm, which explored generally speaking our country's preparedness to respond to a biological attack, specifically a smallpox attack, as I recall. And there have been some criticism here that -- I'm going to do it generally, and maybe not do it justice -- that you are offering too severe a portrayal of the disease outcome and spread and in some sense that your science was not sound. And if I can really express what I think is the sort of policy approach behind it -- that you were drawing the country through these exercises into too strong a response to the threat of biological attack, and therefore, money was being allocated to those purposes, as opposed to other public health purposes where it was more needed. Give us a response to that in general if you would.

MS. O'TOOLE: Well, first of all, thank you for the opportunity to do so, senator. As you say, Dark Winter and Atlantic Storm were both scenarios positing a smallpox attack on the American people, a covert attack. I believe the question that Senator Levin is concerned with, and indeed the question that the critics -- it was actually one critic -- very persistent -- has fastened on -- is the secondary transmission rate that we assumed in the scenario.

SEN. LEIBERMAN: And just define it for us. What's a secondary --

MS. O'TOOLE: Okay. That's the number -- once you have an attack and you have infected a certain number of victims, how many subsequent infections will those initial unfortunates cause? And we chose the number ten. Now, the transmission rate of a disease is very contextual. It's not a biological factor. It has a lot to do with the context in which the disease occurs, the number of people exposed, the number of people in the population who are susceptible, the number of contacts the exposed have with other people, the time of the year, et cetera, et cetera.

What we did in Dark Winter is we looked at the available empirical data of the number of people who got secondary smallpox in the context of those importations of smallpox that occurred in Europe in the 1960s just before smallpox was eradicated. Even though it was mostly gone from Europe, you would still have occasions where people would come back from other countries and bring smallpox into the country. We looked at instances where, first of all, there was some transmission, because at that point in time doctors were pretty good at recognizing smallpox, isolating people, and it never went anywhere.

We looked only at winter events because we thought a thinking enemy would pick the season in which smallpox is most contagious. That virus lives longer and more robustly in cool, dry weather. And that left us -- (clears throat) -- excuse me. That left us with six instances of transmission of smallpox after importation. And the data -- these are not assumptions -- these are empirical data from those cases -- showed that the secondary transmission rate was between 9.3 and 17.3 with a confidence interval of 95 percent.

Now, in the Dark Winter story, it was happening in 2001, June of 2001 actually, at a time when 42 percent of the American population had never been vaccinated and at a time when most doctors had never seen a case of smallpox, and, of course, prior to 9-11 we're not thinking about smallpox in their differential diagnosis.

So we chose what we thought was a very reasonable and conservative transmission rate of ten. And we were not alone in this. There was another article in Nature, another peer reviewed magazine in 2001, which thought that the secondary transmission rate would be somewhere between four to 12 because of the difficulty of recognizing these cases before they had gone on to contact and infect others.

So I do stand by the assumptions. They are assumptions, but as I said, they are based on empirical data. And as you say, this is something of an academic debate. The transmission rate one way or another does not change the scenario in any way. And furthermore, I make no apologies for my advocacy of the need for a stronger bio- defense. I do not agree that that we have done too much in bio- defense. As you know, I think there is much left to be done.

SEN. LIEBERMAN: Thanks. That was an excellent response. Of course, I agree with you, and I'd just say parenthetically 'cause I'm a little over my time -- the Graham-Talent Commission on Weapons of Mass Destruction actually focused -- this is last fall, last year -- focused on the threat of biological attack -- as the one that we need to urgently raise our defenses against because it is more likely for various reasons than the other forms of a potential WMD attack.

Thank you.

Senator Collins.

SEN. COLLINS: Thank you, Mr. Chairman. Let me pick up where you left off.

Dr. O'Toole, as you know, this committee has done a great deal of work on bio-terrorism holding several hearings, and you've contributed greatly to those. Last year, we did look at the safety of bio-labs, and we heard testimony from the Commission on Prevention of WMD Terrorism, which specifically recommended that we take action to improve the security of biological labs. In addition, the GAO testified that in response to the global spread of emerging infectious diseases and the threat of bio-terrorism that high containment bio- safety laboratories have been proliferating in the United States and that more needs to be done to ensure their safety.

Given your expertise, I'm alarmed, then, at a statement that you wrote last year in a scientific journal in which you said, quote, "The notion that we can somehow prevent a bio-attack by locking up pathogens in research laboratories is ridiculous," end quote. Could you explain what you meant and if you disagree with the commission and the GAO's assessment that we do need to tighten security at the labs?

MS. O'TOOLE: Mm-hmm. Well, first of all, senator, thank you for the opportunity to clarify the record and explain my rather in-artful single sentence quote in what was a long conversation with that reporter. And thank you too for your support and pursuit of the WMD Commission recommendations, which I regard as very important. I'm actually very proud to have letters of support from both of the senators of that commission.

I strongly support improved and more formal bio-safety and bio- security approaches, particularly for high containment labs, and indeed, for those BSL-4 labs, the highest level of containment. I think it would make sense to have a certification and training program in addition to a stronger regime.

I have advocated stronger bio-safety since the early '90s when I was overseeing safety at the Department of Energy laboratories. The journal which I co-edit was one of the very first to require a security review from all reviewers of the authors to make sure that there wasn't dual use information in the articles that we published. And we also at the center held what I think was the first workshop on safety and security, and we called in most of the directors from the BSL-4 labs in the United States to that workshop.

So I very much support stronger bio-safety, and I agree completely with the commission's recommendation that the current regime of dealing with select agents and safety ought to be reviewed. I also agree with the statement of the commission that we need to proceed while taking care that we don't impede or otherwise unnecessarily burden legitimate research. You may know that during the H1N1 outbreak Mexico initially sent samples to Canada, not to CDC, because of the difficulty of transporting these legitimate research samples into the United States due to the select agent rule.

So I do worry about that. I think biology is going to be not only critical for bio-defense, but for economics, so I just -- that is my concern.

SEN. COLLINS: There are a considerable number of privately funded BSL level three labs in this country that are permitted to work on a number of dangerous pathogens that could result in a serious biological event, yet these labs are not required to inform any federal agency of their activities. What is your view of the need to at least require laboratories operating at the BSL three level to identify themselves through a federal registration process so that we at least know where these pathogens are?

MS. O'TOOLE: Well, I think that is something worth considering, and I would be pleased to work with you on that. There are many BSL three labs --

SEN. COLLINS: Right.

MS. O'TOOLE: -- not just in private hands, but at hospitals and universities and so on and so forth. So the practicality of doing that and the benefit of doing that would be worth examining. But it's not unreasonable.

SEN. COLLINS: You had a controversy in your previous confirmation that just for the record -- because it's likely to come up at some point again --

MS. O'TOOLE: Yes.

SEN. COLLINS: -- I would just like to give you an opportunity to respond to. At that time questions were raised regarding your involvement in an academic group that once had been called the Marxist Feminist Group One. Could you explain -- since that obviously is a very loaded title for this group.

MS. O'TOOLE: Yes.

SEN. COLLINS: Could you explain your involvement with this group?

MS. O'TOOLE: Thank you again for the opportunity, senator, to clarify the record. I belonged to this reading group, which was called Northeast Feminist Scholars in my time, which was a group of academics, again, many of whom were economists, and they met three times a year for a weekend, and we discussed topics such as aging parents, math phobia among women, books that we read, international events, and so forth. It did not do any political advocacy. It was not Marxist in any way, shape, or form. But that had been the title back in the -- this is actually a very long-standing -- had been the title back in the '60s and '70s.

And during my last nomination in 1993 when that came to light, some of the senators became concerned. There was a full FBI investigation. The White House took affidavits from members of the committee, and I was passed out of the committee with only two people voting no and confirmed, as you know.

SEN. COLLINS: Thank you.

Thank you, Mr. Chairman.

SEN. LIEBERMAN: Thank you. We haven't had mention of Carl Marx here -- (laughter) -- on this committee for quite a long -- (laughs) -- time.

SEN. COLLINS: Just trying to keep things interesting. (Laughter.)

SEN.: Mr. Chairman --

SEN. LIEBERMAN: (Laughs.) That was very -- just -- thank you.

Senator Tester.

SEN. JON TESTER (D-MT): Thank you, Mr. Chairman.

I want to thank you, Dr. O'Toole, for putting yourself up for public service again. I appreciate that very, very much. I'm going to talk a little less globally, more specifically, as I talked to you before the hearing. And I've got no quotes. I'll give you the opportunity to make one today. This deals with the Plum Island Animal Disease Research Facility located on Plum Island off Long Island, New York.

You're probably intimately familiar with it, but it does research with contagious diseases that are applicable to animals, including foot and mouth disease, which is a very contagious disease amongst animals. And I would state that there's a new facility that has to be built. There's no if, ands, or buts about that.

There is talk about building the new facility, not talk about the new facility, but actually, I believe the decision has been made to build a new facility at Kansas State University in Manhattan, Kansas, and I've got nothing against Kansas State. I'm sure it's a great university. But the Environmental Impact Statement on this national bio- and agri-defense facility that was done states this. And it was five sites chosen, and it applies to all five, except for Plum Island. This IS states this: "The Manhattan campus site provides a significant opportunity for the spread of viruses via vectors and infected wildlife." It also said, "For this site, as with all the other sites, except Plum Island, there is a potential for viral pathogens to be transported significant distances by the wind." It went on to say that the "location of Plum Island provides a barrier against the spread of these viruses."

Now, I understand that there are some advantages of being connected with the university. I think there's some advantages being in the center of the U.S. I think it's probably easier to get to in Manhattan, Kansas than it would be in Plum Island. My question is this. From a common sense perspective, if we're talking about transmission rate of highly contagious diseases as it applies to our animal industry, wouldn't it make better sense, wouldn't it make more common sense, just to rebuild that facility on Plum Island because it doesn't have the potential to spread as it would somewhere in the center of the U.S.?

MS. O'TOOLE: Thank you, senator. This is obviously a very important question, as you point out, and as is my understanding. The current facility is too old to continue, and we have to build a modern facility equipped with modern bio-engineering capabilities.

I believe, first of all, that we can build such a facility in a way that contains anything that the scientists work with with very high confidence. There should be no releases from these facilities. As Senator Collins has pointed out, there's many high containment labs already working, not just here, but around the world. So that's the first thing. Wherever it's built, it has to be secure.

Secondly, it is my understanding that the site selection criteria included very prominently the nearby location of veterinary and agricultural schools so that the research and indeed the people power available to the facility would be very robust and that -- Kansas State came out ahead on that score. I understand there's a GAO report looking into the very issue that you identified regarding the FMD problem. And I will be examining that very closely.

It is my understanding that according to the World Health Organization for Animals, the OIE, regardless of whether there was an FMD release, which I don't think should happen, from Plum Island, or from the mainland, all of the Untied States would lose its FMD status. So in terms of the economic implications, which is not what you're asking, I realize, it would be the same regardless of whether it was a release from Plum Island or from the mainland sites.

SEN. TESTER: Just a follow-up on that. I would say that I understand the loss if it was a release regardless where.

I'm talking about the actual spread of it. And I can tell you that, you know, there has -- and we may be living in a new age, but humans still can error. There was releases as recent as 2007 from the United Kingdom. I don't know if that facility was rated at the level this one's going to be or not. But I will tell you that -- and I think it's great to be affiliated with the university. That's where the action is, the agricultural school, the veterinary and medicine school, all that stuff. But this is 2009. Distances aren't that big of a deal, and we're dealing with petri dishes mainly, I would guess. We're not dealing with live animals walking around for the most part.

I would just say this. I understand, but it was (your own ?) AIS from your agency I believe that pointed out the problems with Manhattan or any other place versus Plum Island. Plum Island's been around forever. I just think that we need to look at it from not the best case scenario, but from a worst case scenario if this were to get out in the center of the United States. That's all. It could literally do some real bad things to our food supply, livestock industry, and the list goes on.

So with that, I ask you to take a hard look at it. Use the best common sense you have before we move forward. And like I said before, it's not that -- I know this is probably a lot of money for Kansas, but if this thing ever gets out, we got major problems and -- major, major problems.

MS. O'TOOLE: Senator, I will definitely take a hard look at that and get back to you.

SEN. LIEBERMAN: Thank you very much, Senator Tester.

Senator Carper.

SEN. THOMAS R. CARPER (D-DE): Thanks very much.

Dr. O'Toole, welcome. It's good to see you.

MS. O'TOOLE: Thank you.

SEN. CARPER: I'll add to the comments of my colleagues. Thank you for your service to our country and for your willingness to serve in this capacity as well.

I think like much of the rest of our country, Delaware, where I'm from, has many critical infrastructure sites that require a variety of security protocols to safeguard those facilities. It seems to me that resiliency plays a very important role in securing sensitive sites from harm and to assist in our ability to prepare for and to recover from a disaster really of any type or scale.

And what I'd like to ask you about here today are -- just to ask what your thoughts are with integrating resiliency, integrating resiliency into your directorate's -- I think it would be your directorate's -- critical infrastructure protection mission. And if you agree with its importance, how would you integrate it?

MS. O'TOOLE: I agree with you, senator. I think resiliency is extremely important, and I noted in my opening remarks that one of the four priorities that I would pursue would be more of a focus on how can we build resiliency amongst individuals, communities, and between the public and the private sector? It may be that one place to start would be to begin with critical infrastructures and to take them as a model and to study how you could take a critical infrastructure and make it more resilient so that if it went down, it could recover very quickly. I can think of a couple of infrastructures in your state where that might make a lot of sense.

And I do think that a more intense focus on recovery and on preparedness so that we are, you know, further along when catastrophe hits is warranted at this point.

SEN. CARPER: All right. Let me ask you a question I should have asked you right at the top. Why would you like to have the opportunity to serve in this position? You may have said that already in your statement, but I missed it.

MS. O'TOOLE: I believe in public service. I think it is both a privilege and a duty. I think I have the background and the experience that at least gives me a good chance of being able to perform these duties adequately. And frankly, I think it sounds like an enormously fascinating set of tasks that I eagerly look forward to. And I am very impressed with Senator Napolitano and the President, and very much appreciate the honor of having the opportunity to work for the country.

SEN. CARPER: All right. Good. Speaking of the President, the President recently announced the consolidation of the National Security Council and the Homeland Security Council into one organizational structure. Some of the critics of the Homeland Security Council said that its functions were duplicative and suggested that it contributed to a significant round of bureaucracy within the interagency process, especially when it came to policymaking. And some of those critics said that combining these two entities will dilute the homeland mission.

And I just wanted to -- you may not be familiar with this, but if you are -- appreciate your response. But if you have any thoughts, what are your thoughts on these critiques? And while it might be too early to tell, what benefits might you see coming from this new streamlining? Even if that's not one that you're prepared to answer here today, if you could answer on the record, I'd appreciate it.

MS. O'TOOLE: Okay. Well, senator, I've been concentrating on Homeland Security and the S&T Directorate for the past two weeks, and I'm not familiar with what Mr. Brennan has in mind. I believe that the President is very committed to Homeland Security, and that Mr. Brennan is too, but I'd be happy to comment further for the record. I just don't have much more to say.

SEN. CARPER: If you do, that would be great. Thanks so much.

MS. O'TOOLE: Thank you.

SEN. LIEBERMAN: Thanks very much, Senator Carper, and thank you, Dr. O'Toole. I think we're actually going to go on to the next nominee because a vote has been called for later this morning and we want to complete this hearing, and I think we've covered the important questions. You've survived the exhaustive pre-hearing inquiries of this committee, and if there are any additional questions, including the ones that Senator Levin mentioned, we're going to ask that they be submitted by the close of business tomorrow, and then we will proceed to consider your nomination in the committee as soon as you're able to answer those questions.

But with that, we thank you very much. Do you have anything you'd like to say in conclusion?

MS. O'TOOLE: Just thank you very much.

SEN. LIEBERMAN: Thank you. All the best.

MS. O'TOOLE: Thank you.

SEN. LIEBERMAN: This part of the hearing is concluded, and now we'll call on Dr. Zients, Mr. Zients.

(Recess.)

SEN. LIEBERMAN: Why don't we begin this second part of the hearing as soon as Senator Carper gets through extending the greetings of the committee? (Laughs.)

SEN. COLLINS: (Laughs.) He's hoping there's some Delaware voters there.

SEN. LIEBERMAN: I know that Senator Bennet is coming to introduce you, which we appreciate, but to expedite we'll go ahead with our opening statements and we'll call on him.

We're going to consider now President Obama's nomination of Jeffrey Zients to be deputy director for the Office of Management and Budget. Since its creation, a common criticism of -- ah, you know what? I know you're a new senator, but you're a busy senator, and your response time in getting here was so rapid that I'm going to honor it by allowing you to introduce the nominee and then proceed back to your normal business.

SEN. MICHAEL BENNET (D-CO): Thank you, Mr. Chairman. I apologize for being late. I thought I was going to be early because I was so excited to have the chance to introduce Jeff Zients to you and to the ranking member.

Mr. Chairman and Senator Collins, thank you for giving me the opportunity to introduce Jeff Zients to serve as the deputy director for management at OMB. He will also serve as our nation's first ever chief performance officer. I would like to take this opportunity to welcome Jeff and his family to the hearing.

If confirmed, Jeff will coordinate the President's efforts to make our government more efficient and accountable by identifying wasteful spending and eliminating initiatives that do not provide sufficient benefit to the American taxpayer for the amount we are investing in them. He'll also work to improve how we measure the effectiveness of government programs. It won't be easy. Just the sheer size and complexity of the federal government and the entrenched interests that often fight to protect certain programs make this kind of work treacherous and too often thankless. But I commend the President for prioritizing better governance, and I fully agree that somebody needs to be tasked with performing this role.

Given the enormity of this task, the President could not have found someone better suited for the job than Jeff Zients. As an expert in financial management and business strategy, Jeff has the intellect, creativity and tenacity to examine complex problems, implement solutions, and produce real results for the American people. As my friend for nearly 30 years, I know he has the ability to exercise sound judgment and the character and integrity to do what's right.

In his mid '20s, Jeff joined the Advisory Board where he worked closely with America's top companies to become more innovative and efficient. Within three years he became a partner in the company. He also helped create the Corporate Executive Board which assists companies across various industries and financial management and business reengineering. He played an instrumental role in taking both of these companies public, all the while creating hundreds of jobs in the Washington D.C. area.

Jeff currently serves as the managing partner of Portfolio Logic, an investment firm that he founded several years ago. He's also the chairman of Pediatric Services of America, the nation's largest provider of pediatric nurse care.

Outside of the corporate world, Jeff has worked to create better opportunities for young adults throughout Washington D.C. and Baltimore. He established and currently overseas a nonprofit organization that works with local companies to provide paid internships, mentoring opportunities, and job training initiatives.

As we all know, Jeff will be joining the President's team during the worst economic crisis in generations. At the same time our deficits and long-term debt are on an unsustainable course. If we want to lay the framework for long-term economic growth, we need to ensure that every penny of federal spending is necessary and targeted. Jeff's years of experience in financial management and his ability to think way outside the box will be instrumental to the President's efforts to make our government more accountable and efficient.

His private sector business savvy will provide the perfect lens through which to examine the effectiveness of many public sector initiatives. By making our federal agencies more efficient and accountable, Jeff will play an important role in helping restore the American people's faith in our government.

I look forward to working with my old friend as he begins this important job.

Mr. Chairman, I gladly introduce and recommend with the strongest recommendation I can Jeff Zients to the committee for this new and important role. Thank you very much for allowing me to introduce my friend, Jeff.

SEN. LIEBERMAN: Thanks, Senator Bennet. That was an excellent statement and obviously heartfelt. That means a lot to the committee, so we thank you for coming over, and you're excused --

SEN. BENNET: Thank you.

SEN. LIEBERMAN: -- if you'd like to be excused.

SEN. BENNET: (Laughs.) Thank you.

SEN. LIEBERMAN: Good luck. Thank you.

Senator Bennet's introduction was so strong it enables me to abbreviate my opening statements, but I will say this. Since its creation, a common criticism of the Office of Management and Budget is that its leadership, no matter what party is in charge of the White House, too often is focused on the "B" at the expense of the "M" -- on the budget as opposed to management. And that should not be the case. The two obviously go hand in a hand. If a program is not doing well with the "M," it's likely to have problems with the "B" as well. And that means the taxpayers are not getting their money's worth.

I'm very pleased that President Obama has made the drive toward management excellence a priority across the government. And as Senator Bennet just indicated, has stated that the Deputy Director for Management at OMB, that is the position for which Jeffrey Zients has been nominated, will also serve as the first Chief Performance Officer of the Government of the United States. Mr. Zients will have oversight of four statutory offices with far reaching and very important mandates. The Office of Information and Regulatory Affairs; which will give you the enviable task of overseeing Cass Sunstein -- (laughs) -- the Office of Federal Procurement Policy; the Office of E- Government and Information Technology; and the Office of Federal Financial Management.

I'm going to put the rest of my statement in the record, because I'm going to raise some questions along the lines of the matters that I was next going to reference in my opening statement. Bottom line, as Senator Bennet has indicated, Mr. Zients has 20 years of business experience as a CEO, management consultant, and entrepreneur. He has spent most of his career devising ways to improve governance organization, management efficiencies, financial systems of companies, while all of which we will now look to him, if confirmed, to bring to the government of the United States of America. So again, I welcome you, Mr. Zients, and I look forward to your statement and to the question and answer period. Senator Collins.

SEN. COLLINS: Thank you, Mr. Chairman. I'm going to follow your lead an insert my statement for the record as well, since we have only a short time before the vote begins. But let me, however, just highlight one issue that I think is extremely important. A major OMB responsibility is the oversight of approximately $71 billion in spending on the information technology investments. It is simply unacceptable that the federal agencies have identified approximately 450 IT projects totaling more than $26 billion as poorly planned, poorly performing, or both.

Senator Carper and I have introduced a bill, which this committee has favorably reported, that would improve the agency performance and oversight of federal IT projects. And that is going to be a key responsibility for Mr. Zients, if he's confirmed, to work to prevent these kinds of enormous costs, overruns, schedule problems and performance difficulties that have plagued IT projects all across the government. And this is an area where I think that the OMB has not been aggressive enough.

Finally, I just want to reinforce the chairman's point that OMB has a two-pronged mission. It isn't just budget; it's management as well, and that's equally important. Thank you, Mr. Chairman.

SEN. LIEBERMAN: Thank you, Senator Collins. Good points. I will say, for the record, that Jeff Zients has filed the responses to the questionnaires, answered prehearing questions and had his financial statements reviewed by the Office of Government Ethics. Without objection, this information will be made part of the record with the exception of the financial data which are available for public inspection at the committee offices.

Mr. Zients, I'd ask you now, as the committee rules require, to please stand and raise your right hand. Do you swear that the testimony you are about to give is the truth, the whole truth, and nothing but the truth, so help you God?

JEFFREY ZIENTS: I do.

SEN. LIEBERMAN: Thank you, and please be seated. We would welcome your opening statement.

And if it doesn't take too long, an introduction of the many family members -- (laughs) -- you're welcome to introduce anyone you want.

SEN.THOMAS CARPER (D-DE): Mr. Chairman, before Mr. Zients proceeds, I must leave.

SEN. LIEBERMAN: Okay.

SEN. CARPER: And normally, I just don't make statements. Could I just make a statement for maybe a minute?

SEN. LIEBERMAN: Well, go right ahead, please.

SEN. CARPER: And just to say how much I appreciated the opportunity to meet with Mr. Zients this last week and have an opportunity to discuss a number of our priorities, some that Senator Collins has already mentioned that the three of us share. We also are very much interested in continuing to work. The foundation has been made on improper payments; a lot of money, tens of billions of dollars of moneys are actually each year being inappropriately spent and in many cases overspent. And I welcomed the opportunity to talk with you about that. And also to figure out how we -- when we've overpaid money how we can then get that money back.

MR. ZIENTS: Absolutely.

SEN. CARPER: And we're interested in surplus property and what to do about it so we don't end up carrying all this property on our books and have to pay the maintenance costs, the utility costs, the security costs with billions in land we're never going to use again. There's a whole lot of opportunities here for us to go out. And I think it's important for us to show that we can help transform our economy to more of a green energy economy. It's important that we get health care reform done. It's important that we raise student achievement in our schools across this country.

It's also important to show that we can spend money responsibly. And facing the budget debits, it's a $1.8 trillion issue and red ink for as far as the eye can see. We have our work cut out for us. And we see you and the folks that will be working with you very much as partners to those of us who serve on this committee.

I was pleased to have a chance to meet your wife, Mary, and to meet your four children and to meet your dad. And I would just say to, especially your farther, thank you for having raised this guy, and (housed ? him and led him to this table here today. And a special thanks to your wife and to your children for their willingness to share you with all of us. Thanks, Mr. Chairman.

SEN. LIEBERMAN: Thank you very much, Senator Carper, for that statement. Mr. Zients.

MR. ZIENTS: Thank you, Mr. Chairman, Ranking Member Collins and Senator Carper for the very kind comments. I'm honored and humbled to be here today as President Obama's nominee for the Deputy Director of Management at OMB. I'm grateful to my family who is here with me today, my wife Mary of 17 years; my four children, in descending order of age, Sasha, Matthew, Josh, and Johnny; and my mom and dad, Debbie and Alan, are here today. I thank all of them for their love and their support.

SEN. CARPER: If I can interrupt, I did not realize your mom was here. Would you raise your hand? Nice work, mom.

(Laughter.)

SEN. CARPER: Nice work.

MR. ZIENTS: Mom and dad actually raised me here in Washington, so I've been here for many years and have had the opportunity to watch many people who have worked in government and always hoped that at some point I'd have the opportunity to serve and give back. I want to thank the president and OMB Director Orszag for their confidence in me. And I hope to help them achieve and all of you achieve one of the administration's top priorities, improving the efficiency and effectiveness of government.

I believe my background helps prepare me for this role. I spent 20 years in the private sector as a CEO, a management consultant, and as an investor. For 15 of those years, I helped lead the Advisory Board Company, the Corporate Executive Board Company. Both firms are leading providers of best practices and benchmarking to over 5,000 organizations including 400 of the Fortune 500. They work closely with the senior management teams at these organizations to measure performance, increase productivity, and improve service quality.

I very much recognize and appreciate that government is different from the private sector. I have much to learn from the people who have dedicated their lives to public service and much to learn from the many programs that operate efficiently and effectively and deliver good results. If confirmed, I hope to help spread these government best practices across the agency while at the same time drawing upon my private sector experience, bringing forward models and approaches that may benefit government performance. I very much agree with both of your comments about the need to integrate management and budget rather than separate divisions, if you will, everyone wearing both hats, both a management hat and a budget hat at OMB.

As a CEO, I've always focused on three areas, leadership, measurement, and a motivated workforce. I believe leadership starts with putting the right team together and articulating the right goals for the organization. Measurement means translating these goals into operating plans with clear metrics. A motivated workforce requires creating a culture to attract, retain, and develop the best talent. Together, I believe these three areas are the key to strong performance.

I've very much enjoyed my early interactions with the staff and with you, and I look forward to working closely with members of this committee, others in Congress, and leaders across government to improve the efficiency and effectiveness of our government. Mr. Chairman, and ranking member, I would welcome any comments or questions.

SEN. LIEBERMAN: Thank you very much. Let me start with the standard questions. First, is there anything you are aware of in your background that might present a conflict of interest with the duties of the office to which you've been nominated?

MR. ZIENTS: No.

SEN. LIEBERMAN: Second, do you know of anything personal or otherwise that would in any way prevent you from fully and honorably discharging the responsibilities of the office to which you've been nominated?

MR. ZIENTS: No.

SEN. LIEBERMAN: And third, do you agree without reservation to respond to any reasonable summons to appear and testify before any duly constituted committee of Congress if you are confirmed?

MR. ZIENTS: Yes.

SEN. LIEBERMAN: You're doing very well so far.

(Laughter.)

SEN. LIEBERMAN: Okay, let me pick up on something you said. Perhaps the question seems to have an obvious answer, but I'd be interested, which is two things we often hear. One, government ought to operate more like a business; and two, government is different from business. As you come into this position, if confirmed, according to present experience in the private sector, what do you mean when you say that government is different from business?

MR. ZIENTS: In business, there is one, very clear, most important metric, and that's profitability. There are lots of other metrics that matter, including service, quality, and other metrics around performance. But at the end of the day, I think that business -- business is complex, but there's a bottom line. Here, in the public service when it's balancing in government, different metrics, depending on programs -- and some of those metrics actually aren't even program specific; they really need to run across programs.

SEN. LIEBERMAN: Give us an example.

I don't mean a particular program, but what are the metrics that government should measure itself by?

MR. ZIENTS: I think delivering the services that individual programs or agencies are set out to deliver in a cost effective and meaningful way. So metrics in the Department of Education are very different than metrics in DOD. And there are issues, homelessness being an example, where the issue doesn't reside in a single program but instead goes across programs and even across the agency. So I think it's very important when we think about metrics in government that it's not one size fits all.

SEN. LIEBERMAN: Right.

MR. ZIENTS: There's no single, bottom line profit equivalent like we have in the private sector. And instead, we have a flexible system that really looks at the unique purpose of a program and develops the outcomes bases metrics, where appropriate to measure against. Some programs probably aren't conducive to metric-based tracking across time or as conducive and also therefore require longer term studies around effectiveness and efficiency.

SEN. LIEBERMAN: That was well said, thoughtfully said. Let me go on to a question about the federal workforce. In your prehearing discussions with the committee staff, you noted, as you've repeated here, that advising companies on best practices, in particular improving strategies for human resource management, was a major focus of the two consulting firms that you led. Because this committee has oversight responsibilities and legislative responsibilities for the federal civil service, recruiting, training, retaining a skilled federal workforce are priority concerns of ours. So I wanted to ask you what your initial sort of coming through the door or approaching the door thoughts are about ways in which you can help us strengthen the federal workforce.

MR. ZIENTS: Here it's a similarity, I believe, with the private sector. Human capital is the most important component of improving performance. So in my private sector days, I did spent a lot of time on human capital strategies as a result of how important it was to the clients of the firm. My initial reaction is that there is a recruiting issue in that we have a large retirement bubble in the system. And at the same time, we have remarkably long lead times in order to bring a new individual into the workforce. So I've been struck by how long those lead times are and the need to decrease those.

I think it's an important time to be doing so and then I think we have an opportunity, somewhat related to the economy and also to a, I think, renewed or even heightened interest, if you will, in public service to take advantage of an opportunity. But we need to make sure that we streamline the hiring process in order to take advantage of that opportunity and start doing the right kind of planning for this retirement bubble.

Succession planning becomes very important, understanding overall the workforce needs by agency, when people are likely to be retiring and how we ensure that we have the right succession plans in place. I think, furthermore, we do need to look at training programs. Training programs often times, in both the private sector and now I understand the public sector, come under pressure as one of the first things to go in budget. That can tend to be very short-sighted, and enhancing our training programs at all levels throughout government, I believe, is an important priority -- all of this in the context of taking a step back and making sure that we have a proposition, an employment proposition that works to attract and retain and to develop talent across the federal government.

SEN. LIEBERMAN: Let me follow with another question related to personnel. There's been a trend, as you know -- a very significant trend -- toward contracting out government services. And a lot of us are concerned that it's gone too far, though obviously there are cases in which it makes a lot of sense. In your prehearing responses to the questions, you've emphasized that inherently governmental functions should be performed by employees. And then agencies must have the internal capability to maintain control over their operations. So I agree wholeheartedly that those are fundamental considerations.

So I wanted to ask you this question, going back again to your private sector experience. In the private sector, what approach did you recommend to your clients for deciding what skills they should retain in house? And what, if any, different considerations do you think a government agency should make in deciding what work is appropriate for contractors and what should be kept inside?

MR. ZIENTS: In the private sector, I would say two primary considerations. One is, is it a core competency of the organization. Does the organization, the for-profit company, need that competency in-house in order to differentiate in the marketplace and win against the competition? The other consideration is, is the function something that's conducive to scale? So certain things, certain activities, as you build scale and do more and more of it, you become much better at it and more efficient. Other things are less conducive to scale.

And so if something is a scale activity, in that organization you're not going to achieve that scale. But an outsourcer by collecting or a contractor by creating their own scale could do that much more efficiently, that would be the other consideration. So two considerations, is it a core competency to differentiate in the marketplace; and secondly, is it something that if you were bundling your activities with someone else's would you achieve higher quality and lower costs.

I think those same principles do apply in government, once we decide that something should be completed. I think, however, this test is inherently governmental, i.e. that all inherently governmental work -- hiring personnel, managing contractors, setting policy -- should all be done by federal workers. That is different from the government -- sorry, from the private sector, if you will, this inherently governmental and linked to serve the larger purpose of government.

SEN. LIEBERMAN: Thank you. Senator Collins.

SEN. COLLINS: Thank you, Mr. Chairman. I mentioned, in my opening statement, my concern about the federal government's failures when it comes to IT projects. This year alone, the federal government will spend more than $70 billion on IT projects. And yet, OMB every year, through its tracking system, identifies billions of dollars of wasted spending on IT. What do you think OMB should do to get troubled IT investments back on track and to ensure that they're on track -- (laughs) -- in the first place?

MR. ZIENTS: Thank you for that question. I believe that this is a management issue more than a technology issue. It comes down to good management, having the right people accountable, sharing best practices, and ensuring that the processes, and particularly the program management processes, are robust and experienced people are in charge. There are a few efforts underway, which I think are a good start, led by the new federal CIO, Vivek Kundra. One is to make sure that the CIO is act the senior management table. I think too often we approach IT projects as a silo, when in fact a large IT project has to have the senior team, starting with the head of the agency, at the table understanding the resources that are required and making the commitment necessary. So ensuring that that CIO is at the table as a senior executive is, I think, very important.

Second, I think too often we find out about problems too late, when things are off track sort of on an annual cycle, if you will, whereas, an IT project needs to be managed daily, weekly, monthly, not annually. And there's an effort underway to create a dashboard which will allow us, with transparency, to see where projects are, spot problems early, and get them back on track. Last, I think we need to make sure that someone's accountable here. And here it's certainly the CIO, and I believe the head of the agency has to be held accountable in a transparent way for the success of these projects.

SEN. COLLINS: OMB has developed a system known as PART, and it's a performance results system that is intended to evaluate the effectiveness of federal programs. Are you familiar with PART?

MR. ZIENTS: Yes, I am.

SEN. COLLINS: What we've found, however, and GAO has determined also is despite the existence of the PART ratings, that managers across the federal government do not use the assessments when it comes to allocating resources. So all this energy goes into this complex evaluation system, and then, frankly, no one uses it. The individual agencies don't use it in deciding what their budget requests should be, for the most part, and Congress doesn't use it either. The Appropriations Committees tend to discount the PART ratings.

In the previous administration, OMB tried to use low PART ratings as a justification for terminating or reducing funding for various programs. And I'm at a loss to think of even one where they were successful. What can we do to develop a performance assessment program that is going to guide resource allocations and budget decisions in an effective way?

MR. ZIENTS: Thank you. I think you hit the nail on the head. The test of a performance management system is, is it being used to make important resources allocation, budgeting, capital decisions by the stakeholders, by all stakeholders. And I think the way that you achieve that goal or go down the path of achieving that goal is with a collaborative approach, working with the stakeholders at the senior most level to understand what matters, what are the overall goals, how are they being translated to operating plans. And then what are the best handful of outcomes-based metrics to track across time, to track progress across time and that you have the flexibility in the system -- going back a little bit earlier in the conversation -- to look at problems not just by program or issues or opportunities, not just by program, but across the agency.

So I'm wary of anything that's one size fits all. And at the same time, I think the ultimate test is right where you started which is, is the system being used by senior managers, senior leaders, senior stakeholders to make decisions. But if confirmed, I look forward to working with the committee and others in Congress and across agencies to collaboratively develop a system that is used to make important decisions.

SEN. COLLINS: I think you identified the key issue. If it is a collaborative system that agencies buy into and if you establish performance metrics that are cross cutting, I think there will be more support for using the results of the assessments. And I know this is an area where you've had a great deal of experience, and I'm really pleased that you're going to be brining that experience as the first chief performance officer.

The president has committed to making this administration more transparent. And that is something that I completely support. And one of the best ways to do that is to expand, update, and improve the use of government websites. But if you look at the federal websites versus the private sector, and in some cases, state and local websites, you'll find that there are a lot of frustrations and that they're not as good as they could be. And a great example that this committee has been focusing on are the websites for the stimulus spending.

People are very interested in tracking that spending, of making sure that it's achieving the results that all of us hope that it will. And yet, the recovery.gov website is not nearly as good as the website developed by the private sector that I believe is recovery.org or recovery.com. I can't remember which. It's a very similar name. In the private sector website, you're able to track money down to the contractor level. With the federal website, we're not able to do that -- (crosstalk.)

MR. ZIENTS: Right.

SEN.COLLINS: Why can't we get our act together when it comes to websites for tracking spending?

MR. ZIENTS: Good question, and I totally agree with you that it's a high priority for this administration, one of the highest priorities to increase the transparency and thereby the accountability of government. My understanding is that there is a lot of effort right now being put into recovery.gov with focus at OMB and obviously the leadership of the oversight board, the two working collaboratively. And we're headed toward, in October, the launch of a lot more information on the website. I think we will see very good things in October, and I think as we get that out there we have to have a continual process to improve and add more and more data, as you said, all the way through the sub recipient level, both on the grant side and the contract side.

I think the new cause (ph) problem is the legacy systems that we have and the fact that we haven't been able to, going back to IT management, update a lot of our IT systems. So we have outdated systems. We saw this in the pressure that was on grants.gov through the Recovery Act. We added dollars in the Recovery Act. So I think updating these systems, going back to IT management and making sure that we have robust systems that we can draw data out of is very important. Recovery.gov, I think, will offer unprecedented transparency, and I think we'll set a standard that we will then help to move the USAspending.gov and grants.gov to across time. I agree with your premise, though, that we're not where we should be in terms of the base foundation to pull the data off of.

SEN.COLLINS: In a way -- just one final comment if the chairman will indulge me -- in a way you've identified my frustration though. You're saying by October there should be a significant upgrade. And yet, here we have this private sector website that's tracking the money more effectively right now. And presumably, it was a lot harder for the private company to identify the funding streams and track them. They don't have these companies, these state and local governments, reporting the way the federal government does.

So it's frustrating to me to hear that it's going to take that many more months for us to try to catch up with what the private sector has already done. That indicates a problem.

MR. ZIENTS: Hopefully --

SEN. COLLINS: (Crosstalk) -- your watch.

MR. ZIENTS: We will hopefully leap frog in October, but I share your concern.

SEN. COLLINS: Thank you. Thank you, Mr. Chairman.

SEN. LIEBERMAN: Thank you, Senator Collins. Senator Akaka, welcome.

SEN. DANIEL AKAKA (D-HI): Thank you very much, Mr. Chairman. I too want to add my welcome to Mrs. Zients and of course, to your lovely family and your children and friends and your many supporters here to this hearing. As you know, the amount of acquisition spending by the federal government has grown dramatically over the past decade. While the size and expertise of the federal acquisition workforce has not kept pace, that has been a huge problem.

This has affected agencies' ability to acquire and oversee mission critical contracts and have caused taxpayers to increase waste, fraud, and abuse. If confirmed, what role will you play in identifying and addressing the needs of the federal acquisition workforce?

MR. ZIENTS: Thank you. In the doubling, as you said, across the last years in contracting, and at the same I believe the total size of the federal acquisition workforce has actually stayed the same size or even decreased a little bit. So there's clearly a need to do comprehensive workforce planning around the acquisition workforce. They also are subject to something we talked about earlier Senator, which is a pending retirement wave. It'll hit that workforce also. So we have the need to hire up a lot of new people and the need to train and ensure that we are increasing the size and the capability of that workforce as we ask for them to take on more and more complex contracts.

So I think it's an area that needs a lot of attention, working closely with GSA, with DOD, the Federal Acquisition Institute, the Defense Acquisition University. And we need to coordinate those efforts and work with you and others on the committee to make ensure that we -- I want to say get ahead of the problem. I think we're behind it right now, so catch up and then get ahead of the problem and have an acquisition workforce that is the right size and has the right set of capabilities to oversee our contracting.

SEN. AKAKA: Mr. Zients, you have mentioned a desire to put the right mix of federal and private contractor employees that are performing government services. What steps will you take, and when do you expect to coordinate or achieve this?

MR. ZIENTS: President Obama and his March 4th memo on contracting talked about a blurring of the line around inherently governmental. And I think it's very important that we clarify what is inherently governmental and ensure that only federal workers are performing these functions. Secondly, I think it's important that we have the critical capabilities at each agency to do their work, to maintain control of their operations. There are some areas, technical areas, professional service areas, where it might be right to have a mix of federal workers and contractors. But at all times the agency has to maintain core set of capabilities to maintain control over their operations.

So once we clear through, if you will, those two standards, there could be work, or there is work, that is eligible for a competitive process. I think it's very important that we have the workforce, per your earlier question, the acquisition workforce in place to oversee that type of contracting, if indeed we decide to do it, and that we have a fair and transparent and economically based decision making process where federal employees are given a fair, competitive ground to compete.

SEN. AKAKA: There are concerns also from employees as well and in particular, I would mention the unions. Like you, I believe government transparency and accountability are essential in all levels of management. However, in recent initiatives that intended to hold federal employees more accountable for their performance. There has been significant concern over fairness and consistency in evaluations. My question is, what are your views on crafting performance management systems that can be implemented fairly consistently and transparently enough that federal employees and managers alike will embrace them?

MR. ZIENTS: I think that performance appraisal systems are critical. They're the basis for a lot of the performance efforts that we've been discussing at large. I think that we need to make sure that anything we do respects and is consistent with the merit based system and protects employees from any prohibited personnel practices. So I believe that we all are supportive of transparency. At the same time, we need to balance that with other considerations when we're talking about our federal employees.

SEN. AKAKA: One concern that we have had over a period of time is that of clearance. And this committee has held hearings on that area. Since 2004, Mr. Zients, our Subcommittee on Government Management under both the leadership of myself and Senator Voinovich has worked closely with the Office of Management and Budget in reforming the current security clearance process, which remains on the Government Accountability Office's high risk list.

Until recently, the backlog for obtaining a security clearance was unacceptably long. While some progress has been made, I'm concerned that the new administration may not yet be focused on moving forward with security clearance reforms. Will you commit to have your team work with our subcommittee on this important issue?

MR. ZIENTS: I agree very much with the issue. There's been some progress, as you've noted, under your leadership and others. At the same time, we're not where we need to be, and OMB plays a role here with OPM, DOD, and DNI. And I very much commit that, if confirmed, it'll be a very important priority for me to continue to -- to review the work to date and to make sure we make continued progress, work closely with you.

SEN. AKAKA: Well, thank you very much. I want to wish you -- all of your family well and you also as well. Thank you very much, Mr. Chairman.

SEN. LIEBERMAN: Thanks, Senator Akaka. Mr. Zients, thanks very much. Your answers have been excellent. You're obviously well prepared for this position. The administration, all of us need you there as quickly as possible. So without objection, we're going to keep the record of the hearing open until noon tomorrow for the submission of additional questions or statements. And then we will move as quickly as we can, assuming nothing unexpected occurs -- (laughs) -- to confirm you by the committee and send you out to the full Senate. Do you have anything else you'd like to say?

MR. ZIENTS: No, thank you. I really appreciate it.

SEN. LIEBERMAN: Thank you very much. The hearing is adjourned.

Source