TESTIMONY OF MR. JOHN GIOIA before the COMMITTEE ON GOVERNMENTAL AFFAIRS September 10, 1996 Mr. Chairman, Members of the Committee, thank you for the opportunity to testify before you today about Tax System Modernization (TSM) and the importance of program management to any successful systems acquisition by either federal or commercial markets. I have reviewed the Internal Revenue Service's (IRS) report to congress dated May 9, 1996, and the General Accounting Office (GAO) report on this subject dated June, 1996. The IRS appears to understand the importance of recovering from its current management dilemma to an environment that better controls risk, which better ensures that performance targets are met and costs are controlled. The IRS also seems to recognize that implementation of the current or any plan represents their greatest Filename: TEST_4.DOT Page 2 Version: 9/6/96 (9:48 AM) challenge. Critical to implementation is the agency's ability to improve its program management infrastructure to better focus its core competencies. There are some notable improvements to their plan that I think can be incorporated to increase the chances of program success. I have a background in major system program management, both in my former occupation as a Colonel in the United States Air Force, and today as Chief Executive of a company whose business is exactly this field. The suggestions I offer are ones that certainly can apply to TSM, but also to any major system acquisition initiative the government pursues, whether these be at the Patent and Trademark Office, the Bureau of the Census, or the Justice Department. You asked me to focus on three topics: Transfer of TSM Responsibilities To A Prime Contractor Mechanisms To Correct Management Deficiencies Establishment of An Independent "Board of Directors" To Filename: TEST_4.DOT Page 3 Version: 9/6/96 (9:48 AM) I will address all of these, although not in the order you outlined in your letter to me. I will address the establishment of an independent Board first and for a very important reason. If I could leave this committee with one message it would be that a management Board, with all stakeholders at the table, for purposes of program management and dispute resolution, can be the greatest contributor to the success of TSM or any large system acquisition. Such a Board is a management mechanism. It is a mechanism that has all the checks and balances essential for success. And it is precisely the absence of such a mechanism that causes the government so much difficulty and costs the taxpayer so many more billions of dollars than necessary, in fashioning the technology solutions it requires. To the government's credit, it is only in today's environment that such a structure can operate. Until February of this year, the procurement system has focused on the acquisition process, with the need of the government almost a secondary consideration. In February, President Clinton signed legislation authored by Senator Cohen, with Filename: TEST_4.DOT Page 4 Version: 9/6/96 (9:48 AM) significant influence from the chair and staff of the full committee, that finally subordinated the process to the government's need. Performance measures now are required. Capital planning is required. Business process reeingineering is required. Management is emphasized. And rightly so. So a program management Board now is possible and can be properly focused. The model I would propose for TSM, however, is significantly different from the current modernization management Board in place. The current Board consists only of, and is controlled by, agency and department officials, which fosters an unhealthy and costly climate where bad news is suppressed and the opportunity for control by a single individual is likely. If I were Commissioner of the Internal Revenue Service, I would relish a more independent, qualified Board as an objective balance to ensure smooth program development. Further, one of the most important, but rarely recognized functions of such a body, would be that its recognized oversight authority increases the ability of the program manager simply to say "no" to actions, processes or Filename: TEST_4.DOT Page 5 Version: 9/6/96 (9:48 AM) |