HEADLINE: JOINT HEARING OF THE GOVERNMENT EFFICIENCY AND FINANCIAL MANAGEMENT SUBCOMMITTEE AND THE NATIONAL SECURITY, EMERGING THREATS AND INTERNATIONAL SECURITY SUBCOMMITTEE OF THE HOUSE GOVERNMENT REFORM COMMITTEE SUBJECT: BUSINESS PROCESS MODERNIZATION AT THE DEPARTMENT OF DEFENSE
CHAIRED BY: REPRESENTATIVE TODD RUSSELL PLATTS (R-PA)
WITNESSES: LAWRENCE LANZILLOTTA, UNDER SECRETARY OF DEFENSE COMPTROLLER (ACTING), DEPARTMENT OF DEFENSE; GREG KUTZ, DIRECTOR OF FINANCIAL MANAGEMENT AND ASSURANCE, GENERAL ACCOUNTING OFFICE
LOCATION: 2247 RAYBURN HOUSE OFFICE BUILDING, WASHINGTON, D.C.
REP. TODD RUSSELL PLATTS (R-PA): This joint hearing of the Subcommittees on Government Efficiency and Financial Management, and National Security, Emerging Threats and International Relations will come to order. I'd first like to thank our witnesses here today, as well as your staff, for your written testimony you've prepared and we look forward to your oral testimony and a chance to have Q&A with you.
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REP. MARSHA BLACKBURN (R-TN): Thank you, Mr. Chairman, and thank you to all of you for being here. I will say, you know, we had a hearing last year pertaining to some of these issues, and I think it's disappointing to see there's not a lot of progress or energy that has gone forward in correcting some of this. Let's continue to talk for just a moment about this leadership structure and the type of leadership structure that would be necessary to implement in order to go through the business process modernization, because I think that's really important.
And the accountability, Mr. Kutz, as you just said, somebody has got to be the one who is responsible and held responsible and accountable, not only to us but to the American people and the taxpayers, for actually putting something in place. So let's talk about that for a moment. Mr. Kutz, I'd like to hear from you, and Mr. Lanzilotta, from you also, as to what you see the leadership structure looking like to carry this forward.
And you're talking about a decade or seven years, preferably, but, you know, how would that-how would that go through an evolution?
MR. KUTZ: With respect to the structure, I mean, again, I think that this would be the point person, they would report directly or be part of the box that says secretary of Defense. They would have responsibility over the business side versus the mission and the weapons side of the Department of Defense. And again, as Mr. Lanzilotta said, it would require certain legislative drafting and organizational responsibilities to be clarified, but they would be someone who, again, would have a set term for sustained leadership purposes, and they would be brought in with a certain type of background.
You're looking for someone that Secretary Rumsfeld himself or whoever the secretary is is going to have to make a call and get someone with certain special qualifications who's going to want to come to the government, and money's not going to be the issue for them, they're going to want to make an impact on the government, and this is certainly one of the biggest challenges you could possibly envision for someone from the private sector to come in and actually try to do.
REP. BLACKBURN: So you envision it being a team that is brought in from the outside and not utilizing talent that exists within?
MR. KUTZ: Well, I think the leader would be someone brought from the outside, but I think that they would be a combination, they may bring some of their own people in to serve certain functions, but there are a lot of talented people within the Department of Defense. And I've looked across the government, they have some of the very best people in the federal government and in the private sector I've dealt with. So there are a lot of good people in the Department of Defense.
There aren't a lot of people that have experience at this in the Department of Defense, there are probably better people outside that have experience leading these kinds of transformational efforts.
REP. BLACKBURN: Okay.
MR. LANZILOTTA: Actually, Mr. Towns brought up some of the concerns or some of the issues that I think that need to be wrestled with. It is a colossal effort, and it may be too big for one guy. And I'm just going to give you observations from working on this for the last three-plus years.
I found that the CIO has to be a strong player in this effort. And if we don't have a strong CIO with a marriage with the comptroller, because what that allows us to do, it allows us to get the technical expertise from somebody who was familiar with the IT business, familiar with building IT systems and brought that expertise in along with the-I don't want to say the threat of money, but the ability of somebody to sit down there and say, look, sometimes you just have to be unreasonable with people to get a point across, to make a go.
This is what we are going to do. And if you don't do this, we are going to take your money. But you don't find that-what I have a hard time with, you don't find that one individual that brings the total package together. It's got to be a marriage of certain skills.
When I was looking for a program manager to head this program, I advertised for two years to try to find a guy that brought the skills that's necessary that I thought to manage a program like this. I finally had to settle on somebody-not settle. The person I-let me edit the record and get it straight right from the very beginning. (Laughter.) You know, we found a very good individual. But I set my goals too high because there wasn't anybody in private industry that had the type of experience to deal with something of this magnitude.
And I talked to CIOs of private enterprise. I don't want to mention names, but, you know, I went around some of the largest corporations. I went to a large conglomerate looking for help, because I figured a large conglomerate was most similar to the department where they were trying to manage all the information systems from all the various sectors that this conglomerate had-and I think there was like 200 different sectors that this conglomerate had-to try to get some ideas of what the qualities of the person that we could try to do.
This individual that we're trying to get-government does have good people. Government has some of the very finest people. But this particular individual has to have a certain set of skills that are very difficult to find. And that's one of the concerns about trying to get one of these guys. It's colossal. Huge. I found that the only way I think you can attack this is to break it up in pieces. I think it's a marriage. I think it's a conglomeration of people that have to come together to make this work. And I don't think if you create another layer of bureaucracy in the Pentagon for operating versus operational versus the other staff that you're going to make any progress, because the staffs will just fight each other all the time. They just won't go anywhere.
I agree in concept. I just have questions or concerns on how it's implemented, because I guess maybe after three years in the beginning I became a little jaded at how things worked.
REP. BLACKBURN: I guess we'll have a chance-okay.
REP. PLATTS: Yeah. We'll come back around for more questions.
REP. BLACKBURN: Thank you, sir.
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REP. BLACKBURN: Okay. We will go ahead then and call our committee back to order, and then I will begin with the questions that I had, and then as the chairman returns, he will retake the chair. And I want to thank you all for being patient and waiting with us through this process.
One thing that I would like to go to is-and, Mr. Kutz, I'll come to you with this. The 94 percent of mobilized Army National Guard soldiers from the six units we reviewed had pay problems. That is on page two of your summary. And this is something that is important to me to figure out if we're addressing those pay problems with the National Guard, the per diem, et cetera. And the other part of this, this Defense Travel System that we've talked so much about. Is that equipped to cover or not cover the National Guard soldiers that are being mobilized?
MR. KUTZ: It's interesting you mention that, because we were just speaking of that as you were out. But our understanding is that the Defense Travel System will not deal with contingency travel for mobilized Army, National Guard or Reserve soldiers. And Mr. Lanzilotta said that there appears to be another potential solution to that, and I'll hand over to Larry to mention what that might be.
MR. LANZILOTTA: When we were looking at DTS, ETS was designed to do TDY, and the process was reengineered and then the system built to do TDY. When we looked at two other aspects of travel, one is mobilization and the other one is permanent change of station travel, DTS did not perform to the standard that we wanted it to perform to.
We are looking right now at the implementation of another system, it's called Reserve Travel System. It does a better job, and we are looking at a PCS travel system that does a better job of doing that. So instead of having the 42 systems I think that our solution is going to be that we're going to have three. And eventually we'll get down to one, but we need to fix these problems sooner versus later.
And one of the things is getting to a system that will do it. The overall solution is not going to be Defense travel. The overall solution is going to be DIMRS. What happens to us now is most of these pay problems aren't generated because they're pay problems, they're generated because there's personnel problems. There's something in the personnel records that keep the pay from being correct.
Case in point. A Reservist is mobilized, so the personnel tells us that he has mobilized. For some reason he doesn't come on Active duty, medical or some other problem that he has that he's later not activated. If the personnel system doesn't come back and say he's been demobilized, it is very hard for us to catch him, to catch that with our systems because we know who the Active is and we know who the Reserve is. And we do bumps to see if anybody's paid on both systems, both as a Reservist and an Active. But if somebody's paid on the Active system and the personnel systems doesn't catch up to us and tell us that he's not supposed to be there, if the commander doesn't do a review of his records and tell us that, if our procedures fail, then we develop this pay problem.
In most of these cases they really break down not in the systems but a breakdown in our procedures and our policies that have caused these problems to occur. We recently went through, and I've asked each of the services to verify as GAO has come through there, we started with the Army National Guard, Army Reserve, that we later weren't going to find the same problem in the Navy Reserve and the Air Force Guard and the Air Force Reserve that we have a handle on, because, you know, if GAO catches us and tells us, we should thank them and correct the problem.
And then we should look forward and make sure that we don't have the problems in other areas. And each of the service FMs came back to me and said that they went back and reviewed it, and they don't believe they have a problem. We are still looking and we are looking for ways to correct our procedures to see if there is a procedure that will allow us to see these people that are in between systems.
They are on the Active system but they should be on the Reserve, to make sure that we can-you know, make sure that they're paid the right amount for the service that they've done on the right system.
REP. BLACKBURN: Well, and we would hope that that could-that you can find a solution to that, because coming from a state that has thousands of guardsmen and reservists who are employed, right, this is something we hear from the families regularly, that there are irregularities, that they have to wait a long time to get the pay, that there is a backlog. The burden of proof, you know, there just seem to be innumerable problems with that.
There's one other question I want to go back to before I turn the time back over to the chairman, if I may. And Chairman Shays mentioned that he had been hearing that you're working on improving things for 17 years. And I've only been here a year, I've only had the last hearing and this one, and I must say he is a much more patient person than I guess I am.
But I still remain just a little bit baffled, I guess, Mr. Lanzilotta, at-you know, we sit here and we talk about this and we have a hearing and we thank you for being here, and then we touch base a couple of times, watching what's taken place during the year. And we've talked about the need for leadership in addressing the business modernization. We have talked about the need for a timeline.
And we consistently hear, well, money, we need more money, we need more money. And I know this is not something-I'm fully convinced this is not something you can sit here and answer today. But it is something that I think would be a good, productive exercise for your team, and the team that is supposedly going to oversee the modernization of the practices with DOD.
I would love to see a realistic timeline, a realistic leadership chart and a realistic cost of what this is going to be, whether you're talking about 10 years or you're talking about seven years. Because I think it is unfair to the American people and I think it is unfair to us to continually say, well, there are big problems out there, we can't get our hand around it, we need more money, we need a technological architecture that is going to work and a framework that is going to work.
And I'm not going to ask you to answer it today, my time has expired. But I am going to ask that you all submit in writing something that we can look at so that rather than talking-so that we don't have to talk in generalities next year, when whomever is your successor comes in here. We can look at some specifics and say, you thought this would be the way to go.
And writing things down is an excellent exercise, it is an excellent exercise. Making a budget is a tremendous exercise, rather than just our hearing we need more money, every year. And having a timeline and an expectation of when you think a goal can be realistically achieved, that is an excellent exercise. And it doesn't matter if it is your children with summer goals, if it is your family, if it is a business, if it is a governmental agency.
I think that that would be a most productive exercise. I would encourage you all to do that and I would love to see the finished product. Thank you.