Summaries for July 15, 2010

CIO OF CMS HELPS READY AGENCY FOR HEALTH CARE REFORM
Not all federal managers oversee a vast empire, but Julie Boughn is one of them. As CIO of the Centers for Medicare and Medicaid Services, she is responsible for systems that support medical payments, in one program or another, to approximately 100 million Americans, or nearly a third of the country. The dollars paid out through CMS are proportionally large: $700 billion annually, more than the Pentagon.   -> Read More

FINANCE, FINANCIAL SYSTEMS AND TRANSPARENCY ARE FRONT AND CENTER
The administration’s emphasis on financial management promises not only to improve the basic financial performance of the federal government -- the stated goal -- but also to further reduce stovepipes both between agencies and within them among functions. This emphasis is taking place on two fronts. Front One is an attempt to rein in spending on financial systems themselves. Front Two is a fresh run at the improper payment phenomenon.   -> Read More

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IRMCO Celebrates 50 Years of Service to Senior Government Managers

For the past 49 years GSA has delivered management insight to senior government executives and managers at the annual IRMCO conference. This year IRMCO celebrates its 50th anniversary! After half a century, IRMCO is still the annual forum where the most significant and timely issues impacting the government management communities are addressed, so don’t miss this opportunity to gain insight on vital policies and connections.

Plan now to attend IRMCO 2011 from April 10-13 at the same fabulous location as last year, the Hyatt Regency Chesapeake Bay in Cambridge, Maryland. For details visit www.irmco.gov. Registration will be available September 1, so register early to receive a discounted rate.

NEW GSA WEB SITE IS A WINNER
One of my favorite all-time web sites is the Million Dollar Home Page, the ultimate in, well, I’m not sure. As a civilization, we’re not that far into the web age, so there is little consensus about what makes a great web site. Web developments in the federal government got me to thinking about the million bucker, and a recent visit shows that it remains unique.  -> Read More

CONTRACTING MEMO A SLIP BY A NORMALLY DEFT OMB TEAM
Was it a swan song for outgoing Office of Management and Budget director Peter Orszag? Was it an indirect way of getting agencies to move faster? Or was it a reminder that George Bush is no longer president? Those are not the questions I think OMB really wanted people to be asking about its out-of-the-blue memo last week, “Cutting Waste and Saving Money Through Contracting Reform.”  -> Read More

• CIO Of CMS Helps Ready Agency For Health Care Reform

  Julie Boughn

  Not all federal managers oversee a vast empire, but Julie Boughn is one of them. As CIO of the Centers for Medicare and Medicaid Services, she is responsible for systems that support medical payments, in program or another, to something like 100 million Americans, or nearly a third of the country. The dollars paid out through CMS are proportionally large: $700 billion annually, more than the Pentagon even while conducting two conflicts.

  The specific programs supported are Medicare, Medicaid and the State Children's Health Insurance Program, or SCHIP. Although sharing similar functions, these are separate programs. SCHIP and Medicaid are largely administered by the states, so CMS's IT needs for these programs are dwarfed by Medicare, Boughn said. Over the years, CMS has developed an elaborate network of government and contracted data facilities to handle eligibility and enrollment, payments, research and management information systems.

  CMS's Research, Statistics, Data and Systems page gives visitors an idea of the range of information-related activities going on at the agency.

  In the case of Medicare, Boughn rarely sees the machines that run the millions of lines of code. "We're only there when we visit or take someone on a tour," she said. Why? It's because in the case of Medicare, CMS operates out of two centers that are contractor owned-contractor operated (COCO).

  That doesn't means CMS runs Medicare in a set-and-forget mode.

  "We oversee that directly," Boughn said. "From an IT perspective, we directly manage the centers where benefits claims are processed. "

  It's almost cloud computing, but not quite. One reason it's not quite the classic cloud arrangement is that CMS has its own, dedicated hardware within the commercial data centers, so its applications and data aren't virtualized with anyone else's.

  Boughn outlined a go-slow approach to cloud computing. "To me, the value of the cloud is the easy interaction with development tools," she said, citing as an example Intuit QuickBase, a web database and application tool set. But cloud is not a total solution, Boughn said: "An IT shop can become irrelevant. But you still need to know your organization's business processes and security. A cloud is still running software on a server somewhere."

  But it is cloud in a couple of senses. For one, CMS has financial relationships with the two vendors (a Hewlett-Packard facility in Tulsa, Okla. and a Blue Cross-Blue Shield center in Columbia S.C.) that should be the envy of any data center services buyer. Said Boughn, "The elegant thing in our relationship is that it is about paying Medicare claims. We have a well-understood workload, over many years. We pay a fixed price per claim, essentially a fixed price contract."

  It also resembles software as a service, except that CMS provides the software. The eligibility determination for Medicare is more complex than that of Social Security, Boughn said. CMS has developed algorithms that automate eligibility determination, and provides quarterly updates to the processing centers. Like it does with IRS and the tax code, Congress fiddles with Medicare, as does Health and Human Services, CMS's parent department. And so CMS staff must constantly embed new tweaks into code.

  There's more to the network, though, than headquarters CMS and the two COCO processing centers. CMS also maintains contracts with a group of 15 regional Medicare Administrative Contractors, each of which operates a data center. The MACs replaced state-by-state centers in 2008. The MACs have the responsibility to make sure claims are verified and eventually paid, and so they interact with the main data centers for the processing and fulfillment of claims.

  A third piece of the Medicare complex is a data center in Baltimore that CMS itself owns and is operated under a contract with Lockheed-Martin. The data warehouse is a giant instance of IBM DB/2 and Teradata warehouse tools. The warehouse supports a number of applications.

  "We bring in claims data and our policy analysts look at it for planning," Boughn said. The analysts, whom Boughn described as "some of the smartest people you'll find anywhere," use the data warehouse to develop models of how different possible variables will affect the Medicare system. Today, she said, it also supports the basic management reporting about the functioning and statistics of CMS and Medicare. But as health reform takes hold, it will also support the Obama administration's push for comparative effectiveness research by supplying the researchers' with data. And it will aid the transparency push by powering dashboards for health care providers, the government oversight community and the public.

  Perhaps not surprisingly, much of the Medicare processing occurs in the Cobol programming language, some of the code dating back nearly to the founding of Medicare via the Social Security Act of 1965. Much of it dates from the 1970s and 1980s, Boughn said. Of these code sets, she said, "They work. They pay the claims."

  Full impact of The Patient Protection and Affordable Care Act on CMS is not fully known at this point, Boughn said, although the agency is aware that things will certainly change as millions more people become eligible for government health care programs. But, she pointed out, "Five hundred provisions in the law are implemented by CMS alone." Plus there are interactions between CMS and the IRS and Social Security Administration to be worked out from provisions in the law, such as mandatory purchase of health insurance by American citizens. The provision granting appeal rights to Medicare Advantage beneficiaries means a major programming effort.

  Boughn herself has a finance education. She started her federal career at the Social Security Administration. "I grew up there as an IT person. I moved around, and landed in the data center for operations analysis." She later earned a masters degree in information systems at Johns Hopkins University. Boughn joined CMS in 2000, becoming CIO four years ago. She cites the legendary SSA CIO, Renny DiPentima, as an inspiration.

  The finance comes in handy now, Boughn said. "I focus on management and finance of IT and how we can apply more capital management thinking to IT investment."

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• Finance, Financial Systems and Transparency Are Front and Center

  The administration's emphasis on financial management promises not only to improve the basic financial performance of the federal government -- the stated goal -- but also to further reduce stovepipes both between agencies and within them among functions.

  This emphasis is taking place on two fronts. Front One is an attempt to rein in spending on financial systems themselves, projects that seem to be perennially late and over budget. Front Two is a fresh run at the improper payment phenomenon.

  A quick review of what's going on:

  Financial management systems. Just last Friday, the Office of Management and Budget said it would meet with agencies to let them begin proceeding with financial systems. OMB estimates agencies collectively spend $3 billion a year on financial systems, either building new ones or modernizing existing ones. A few days earlier, OMB put out a memo listing 20 projects under review, from the Agriculture Department's Financial Management Modernization Initiative to the Small Business Administration's deployment of Oracle Administrative Accounting. A long list. OMB promises it will get longer. The memo built on an earlier one in which OMB reviewed the new policies while imposing a moratorium on spending for the systems.

  Recall that OMB recently established a Financial Systems Advisory Board. It will be central to carrying out the policy, which puts further investments in financial management systems under tight control. CIO Vivek Kundra, in one of his periodic conference calls with reporters, basically said agencies were building Mercedes Benz systems to solve Chevrolet problems.

  Explicitly (and curiously) the memo reverses Bush-era policy of mandating shared services providers for financial management under the Financial Management Line of Business, saying that OMB "supports shared services arrangements but will not longer mandate them in all cases..." That leaves a lot of wiggle room. The current OMB team says attempts at combining under shared services have been inconsistent and just as costly as agencies building their own systems. You would be confused by the memo if you didn't keep reading. After all, it was only in December 2009 that OMB issued deadlines for joining with a line of business, or LOB, service provider. And in April Controller Danny Werfel seemed to hint at greater consolidation when he said that an agreement between OMB and Treasury would initiate "common, simpler and lower-cost solutions for basic financial management activities, such as accounts payable and reporting."

  The new policy goes on to say that the re-scoping of the financial systems modernization projects will eventually "enable greater adoption of shared services arrangements." What OMB wants is for agencies to move to shared transaction processing, for which pilots will take place within the Treasury Department's Office of Financial Innovation.

  Improper payments. OMB spent much of last month launching plans to reduce the estimated $110 billion in annual improper payments issued by the federal government. Three fourths of the money comes back, and most of it is related to entitlement programs operated by Health and Human Services, Labor and the Social Security Administration. The figures are available at paymentaccuracy.gov, which OMB launched as part of its improper payment drive.

  Thus the improper payment initiative should fall unevenly across the government, but it requires all agencies to check with a long list of databases to verify eligibility of payees before issuing them a check. Sometime this fall, OMB wants to consolidate the databases so checking them is less of a chore.

  Although separate, the financial systems and improper payments projects will cause agencies to do a fair amount of navel contemplation. They will also, I believe, spur agencies to look for common solutions. Complexity of the improper payment problem is compounded in the agencies and programs that have the most improper payments. That's because for entitlements, state, county and municipal governments are included in steps money takes before landing with the ultimate payees. Eligibility requirements change from program to program, but functionally they are similar, so there's a good case to be made for not having everyone invent their own wheel.

  More integration between CIOs, chief financial officers and program managers could also result from these initiatives. It is the programs that lose money, the CIOs that can deploy the tools to analyze transactional systems, and the CFOs that OMB is holding accountable.

  Beyond the two initiatives outlined above, there is more cause for internal cooperation. Earlier this month, the Government Accountability Office released an exhaustive, 400+ page report (this link is only to the summary!) on whether and how agency reporting of stimulus spending contributes to likely public understanding of it. If past is prologue, the requirements for reporting how American Recovery and Reinvestment Act dollars are spent will spread to all federal spending. The recommendations for greater clarity coming from GAO are likely to result in further policy changes that won't only apply to ARRA. How would this spur cooperation? Simply by the fact that for full public understanding, GAO finds that narratives describing projects on which money is spent is needed, and not simply the dollars and the project names, make things clearer. And that makes financial reporting more than a CFO function.

  In the watchdog's own words: "GAO's results [for transparency] were somewhat more positive for programs in which the federal agencies provided program-specific materials that supplemented OMB's guidance with detailed information on what recipients should include in the narrative fields."

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• New GSA Web Site Is A Winner

  One of my favorite all-time web sites is the Million Dollar Home Page, the ultimate in, well, I'm not sure. But it is compelling, and you can find yourself losing hours in it moving among the pixels, which sell for a dollar each. I once stumbled across free musical score downloads there, a rarity.

  As a civilization, we're not that far into the web age, so there is little consensus about what makes a great web site. (That doesn't stop pricey consultants from thinking they do know.) Web developments in the federal government got me to thinking about the million bucker, and a recent visit shows it hasn't changed much in several years.

  USA.gov inaugurated a radically new design in July, changing from the "how many links can we squeeze on the home page" approach to the more-or-less minimalist approach pioneered by Google.com. There's new search functionality; GSA licensed Bing technology from Microsoft. The General Services Administration, which maintains USA.gov, has shown it is not afraid to try new approaches. Since its inception as FirstGov, the site has undergone several visual and technology revisions. The latest one shows about as much daring as you'll find in such a risk-averse environment as the federal government.

  Implicit in the new USA.gov look is the recognition that search has primacy in how people interact with deep sites. A few years ago, site designers tried hard to make everything obvious and findable via the design of a site, saying that if users reverted to the search box, it meant the site designers had failed. No more.

  Perhaps ironically, GSA.gov remains in a state similar to so many government sites, with home pages characterized by a cat's breakfast array of links, rotating pictures, drop down menus, icon lists, news stories, and tabs running horizontally and vertically. (See the hilarious Infoweek gallery of what it terms the worst government web sites.) Some sites, like dhs.gov, fall somewhere in between the minimalist approach and the Million Dollar Homepage.

  The administration, with the laudable intention of increasing transparency of government and citizen understanding of what is going on, has sparked the launch of a set of sites separate from any of the established departments and agencies, starting with recovery.gov with the latest being the paymentaccuracy.gov (described in Story 2, above). Note to GSA's Dave McClure: The new USA home page would be a perfect place to gather these links, perhaps under a fifth blue-lettered tab just below the search box. Right now, they are found under the Get Services/Dashboards, and the list of available links is incomplete.

  For a site organized around search, the search function had better be good. I spent some time playing with the search at USA.gov, and I found the quality of its search function darn impressive. Type in "apply for" and a list of choices pops up before you can type the next word. Ditto for "track." Even where there is no pop up choice, results are good. Typing "track stimulus" resulted in a list of returns with recovery.gov at the top, with a list of highly relevant "related searches" to the left of the page.

  I got equally good results with all the words I could reasonably think of for interacting with the government: Agency, buy, contact, how do, oil and oil spill, report, weather. Also who, what, when, where, and why. And Senate/senator, Representative, House, Congress.

  One result with "when" was "when pigs fly", which takes you to a surprising number of federal sites, civilian and military. Try it for fun.

  Given the increasingly confusing quality of so many federal sites, I think federal webmasters -- in fact, cabinet secretaries -- should examine this site for application of its virtues to their own sites. The key would be tuning the search to what people are likely looking for, and web logs should provide sufficient clues.

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• Contracting Memo A Slip By A Normally Deft OMB Team

  Was it a swan song for outgoing Office of Management and Budget director Peter Orszag? Was it an indirect way of getting agencies to move faster? Or was it a reminder that George Bush is no longer president?

  Those are not the questions I think OMB really wanted people to be asking about its out-of-the-blue memo last week, "Cutting Waste and Saving Money Through Contracting Reform." Referenced in Orszag's blog, the memo was intended to be a signal that the flurry of OMB procurement policy initiatives have worked. Unfortunately, because of the way some numbers are presented and the wording of the memo, OMB missed a good opportunity to parade some real progress. That's a shame, because a talented team has jelled its management approach via some solid initiatives and does, in fact, have some good results to tout.

  The memo describes the growth in non-competitive contracts awards between 2000 and 2008 and how, "through its reform efforts, the Obama Administration has stopped this growth -- and reversed it."

  But has it? The memo states that in the first two quarters of 2010 versus the same period in 2009, dollars obligated under non-competitive contracts fell 10 percent. Without specific figures, you can't tell whether the trend really changes eight years of growth, nor whether the number of awards fell. It's possible the drop in dollars was the result of a single contract.

  In discussing what the administration has termed risky contract types, the memo notes that between 2000 and 2008 spending on cost reimbursement contracts nearly doubled to $135 billion, and spending on time-and-materials and labor-hour contracts grew from $8 billion to $29 billion. And again, the stop-and-reduce language applied to the relatively short periods in 2009 and 2010, showing a 6 percent drop in dollars for cost reimbursement contracts and a 7 percent drop in dollars for T&M and LH contracts.

  Again, you can't tell if agencies are really using fewer of these contracts in favor of fixed price.

  The memo starts with this statement: "The Obama administration is changing the way Washington does business -- bringing a new sense of responsibility for taxpayer dollars by eliminating what doesn't work, improving oversight, and cracking down on waste." I found the wording disappointing. "Changing the way Washington does business" was a campaign slogan referring lobbying, regulation, the interplay of large business interests and politicians -- things that have always been political. Neither the Clinton administration's Reinventing Government initiatives nor the Bush administration's President's Management Agenda were particularly political. Who could argue that Al Gore's push for simplified acquisition, or Clay Johnson's Program Assessment Rating Tool were Democratic or Republican?

  The Obama administration's push for more use of fixed price contracting and for fewer non-competitive awards are basic good government. So why imply that the previous crew was somehow nefarious? The fact is, most of the increase in non-competitive contracting is attributable to efforts in Iraq. That doesn't excuse it, but simply says it's not fair to say that for eight years the acquisition workforce was indifferent to the idea of competition.

  As director of the Office of Federal Procurement Policy, Dan Gordon has done an admirable job of keeping the insourcing-outsourcing debate rational. This team may have a bias toward insourcing and helping out federal employee unions, while the previous team may have had a bias toward outsourcing and private business. That's the way the world works, and a given administration has the right to impose its policy ideas on the government, consistent with law.

  Career feds aren't naive--they know that they're working for administrations that come in with strong political biases. Nevertheless, an unwritten code has also kept the big political questions -- war and peace, taxation, foreign policy, social issues -- out of the creation and execution of policies and processes that govern the routine operation of government. That's in part because procurement is done by the career workforce and because the Federal Acquisition Regulations -- developed and refined over decades -- provide for every possible contingency. That code was poked just a bit by some of the wording in the memo. I attribute this to a momentary slip in an OMB team that has been otherwise deft in its communication skills.

  Despite these flaws, the memo is worth reading. It contains some good examples of improvement via use of competitive bids to replace non-competed contracts, reverse auctions and fixed-price contracts.

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