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OMB Directions To Homeland Security Agencies To Consolidate Redundant IT Spending

STATEMENT OF SANDRA N. BATES
COMMISSIONER

FEDERAL TECHNOLOGY SERVICE
GENERAL SERVICES ADMINISTRATION
BEFORE THE
SUBCOMMITTEE ON TECHNOLOGY AND PROCUREMENT POLICY
COMMITTEE ON GOVERNMENT REFORM
AND THE
UNITED STATES HOUSE OF REPRESENTATIVES

OCTOBER 1, 2002

Chairman Davis, Representative Turner, thank you for this opportunity to appear before you this morning. Let me extend my compliments to you, Members of the Subcommittee and your staff on your efforts to assure a managed approach to the information technology and telecommunications investments of the proposed Department of Homeland Security. In my brief statement before the Subcommittee, I will discuss two main topics. First, I will address the impact of the July 19, 2002, Office of Management and Budget's (OMB) memorandum regarding system development and modernization for Homeland Security components on FTS business. Second, I will briefly review the capabilities of GSA's Federal Technology Service to support this new mission of securing the American Homeland.

Impact of OMB's July 19, 2002 Memorandum on FTS

Mr. Chairman, as you know, the Federal Technology Service is a channel to the market, connecting government with private sector IT and telecommunications providers. FTS works with federal agencies, our customers, to help them choose the best solution, acquire it, implement it and manage the financing for it. We have fulfilled this role for many years and have developed important business relationships with nearly all federal agencies in supporting their needs for identifying, acquiring and implementing technology. The agencies and departments currently designated for the new Homeland Security organization are no exception. Mr. Chairman, of the 22 organizations designated for the new Department, FTS currently provides services and support to at least 20 of them, either directly, or through their parent agency or department.


In FY 2001, we provided more than $150 million in technology services and support directly to Homeland Security components and we expect to exceed that amount for FY2002.

The range of support FTS provides is broad and varied. For example, Figure 1 depicts selected domestic Homeland Security locations that receive telecommunications services through the FTS2001 contracts. As you can see, Mr. Chairman, FTS support for Homeland Security touches literally every state across the country.


Figure 1


Figure 1. Homeland Security Locations on FTS2001

You may know that GSA is involved in an extensive project with the newly formed Transportation Security Administration (TSA) to meet space, furniture, supplies, as well as technology needs at 422 airports, 150 federal security director offices and 21 air marshal offices by November 19, 2002

Mr. Chairman, in preparation for this hearing, we have evaluated the FTS business impact of OMB's memo. What we found is that much of the business we do with federal agencies falls outside the parameters of OMB's direction to the designated Homeland Security agencies. One reason for this is that the largest segment of our customer base, particularly in the area of complex national system integration projects over $500K, is with the Department of Defense and its component Services and subcommands. These customers are not among the agencies proposed for the new Homeland Security organization. Another factor affecting the impact of OMB's memo on FTS business is that two-thirds of our IT Solutions business is done through our Regional IT Solutions organizations. The average dollar amount of task orders in our Regions is $250K, and the work is generally performed for regional, field office, or other customer agency subcomponents.

I should also mention that one designated Homeland Security component, the Federal Computer Incident Response Center (FedCIRC), is currently located within the FTS organization. FedCIRC has complied with the OMB memorandum and since July 19 has not made any IT purchases. We have also coordinated with OMB for approval regarding a $5 million dollar system development project planned for FY2003 and 2004. The FedCIRC Cyber Connector Portal is intended to provide a secure environment for CIOs and Information Security professionals to share information about computer security threats, vulnerabilities and other related issues.

FTS Capabilities
The Federal Technology Service offers a wide array of technical and acquisition expertise and access to contract vehicles that are designed to support any federal agency.


I can report to you, Mr. Chairman, that we have initiated contacts with the Office of Homeland Security to open general discussions about FTS capabilities to support the technology infrastructure needs for the new Department. Last month I met with Mr. Steven Cooper, Special Assistant to the President and Director of Information Integration for the Office of Homeland Security. We reviewed overall support FTS was already providing to Homeland Security components. In addition, we discussed some of the potential technology management challenges they will face in combining and consolidating the operations, infrastructures, and missions of 22 separate components under the proposed Department of Homeland Security structure.

As you know Mr. Chairman, FTS provides technical, acquisition, project management and financial expertise, to meet government needs for telecommunications and information technology solutions. For Homeland Security, I believe very strongly that FTS can apply this expertise effectively to help them acquire solutions that will offer the variety of choices and flexibility of design they want and need, as they move forward to architect their future. I also believe that the excellent pricing available through our contracts can contribute to the savings goals that OMB has identified.

One area of particular significance to the Homeland Security organization clearly will be security. FTS is a recognized leader in defining, developing, and implementing secure solutions for enterprise architecture. From our Smart Card program, to our digital signature initiatives, to our current role leading the e-Authentication initiative for OMB, FTS has pioneered and continues to seek and make available the best enabling technologies and services for e-government.

Mr. Chairman, I am proud to say that the collective expertise and capabilities of the Federal Technology Service and our dozens of business partners stand ready to support the critical mission of Homeland Security. I look forward to building on our already existing trusted intra-governmental relationships to help Homeland Security acquire and deploy the 21st century technology infrastructure they need to meet the challenges of their very serious, but essential, mission.

Thank you again for inviting me to this hearing, Mr. Chairman. I will be pleased to respond to any questions you or the Committee members may have at this time.