The Business of Government Hour

 

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The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. The executives discuss their careers and the management challenges facing their organizations. Past government executives include Administrators, Chief Financial Officers, Chief Information Officers, Chief Operating Officers, Commissioners, Controllers, Directors, and Undersecretaries.

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Join the IBM Center for a weekly conversation about management with a government executive who is changing the way government does business.

John Ely interview

Friday, August 7th, 2009 - 20:00
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Mr. Ely's organization is a core component in supporting the CBP mission of ensuring the security of our nation's borders.
Radio show date: 
Sat, 08/08/2009
Guest: 
Intro text: 
Mr. Ely's organization is a core component in supporting the CBP mission of ensuring the security of our nation's borders.
Complete transcript: 

Originally Broadcast August 8, 2009

Washington, DC

Mr. Morales: Welcome to another edition of The Business of Government Hour. I'm Albert Morales, your host and managing partner of the IBM Center for the Business of Government. One of today's greatest challenges is protecting the country from terrorists and the instruments of terror, while at the same time, fostering the country's economic security through lawful travel and trade. U.S. Customs and Border Protection operates at the nexus of national security and American economic security. In meeting this challenge, CBP has unique challenges and requires a focused procurement and acquisition strategy. With us this morning to discuss his efforts in making this happen is our special guest, John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection. John, welcome to our show. It's a pleasure having you.

Mr. Ely: Thank you. It's great to be here.

Mr. Morales: Also joining our conversation is Solly Thomas, associate partner in IBM's public sector consulting practice. Solly, good to have you as always.

Mr. Thomas: Good morning Al and good to see you again John.

Mr. Morales: John, let's start by providing our listeners some context around your organization. Can you tell us a little about the mission and this history of the U.S. Customs and Border Protection, otherwise known as CBP?

Mr. Ely: Yeah, I'd be glad to. I think that the best way that I can articulate that is just to read the CBP mission statement because it's very well-crafted and I believe it says everything that CBP needs to say in a statement. The mission statements goes like this: "We are the guardians of our nation's borders. We are America's frontline. We safeguard the homeland at and beyond our borders. We protect the American public against terrorists and the instruments of terror. We steadfastly enforce the laws of the United States while fostering our nation's economic security through lawful international trade and travel. We serve the American public with vigilance, integrity and professionalism."

A little bit of history about Customs and Border Protection, I'm going to keep it really brief. The customs component of CBP was created in 1789. It is extremely old organization. The U.S. Border Patrol was created originally under the Department of Labor back in 1924 and then INS, Immigration and Naturalization Service was created in 1933. And customs, border patrol and some component of INS was pulled together in 2003 when CBP was created as a component of the Department of Homeland Security.

Mr. Morales: So John, obviously a very powerful mission and a very broad mission. Can you put a finer point on the scale of operations over at CBP? Perhaps you could tell us a little about, you mentioned border protection, how many miles of borders are covered? How many ports of entry might exist? And how many people and items pass in and out of these borders?

Mr. Ely: I've got some statistics and some information that I find fascinating. I look at this information quite regularly because it amazes me when I see the mission the CBP undertakes everyday. And I've got some statistics. We protect 1,900 miles of border with Mexico. We protect 5,000 miles of border with Canada. We have 327 official entry ports and we have 144 CBP border patrol stations. In terms of what we process daily, and this is a daily set of numbers, 1.09 million passengers daily. We process 70,451 truck, rail and sea containers. We execute 2,895 apprehensions between the ports for illegal entry and 73 arrests of criminals at ports of entry.

Our seizures, 7,621 pounds of narcotics and seizures of 4,125 agricultural items and 435 pests at ports of entry. And again, those are daily figures.

Mr. Morales: That's certainly a heck of a day. (Laughter--)

Mr. Ely: Sure is.

Mr. Thomas: John, would this description of the agency and its incredible responsibilities, perhaps you could tell our listeners a little bit more about the specific mission and scope of your office. I'm curious to hear what the size of your budget is and how many employees work in your organization to support the agency.

Mr. Ely: First of all, I'm absolutely thrilled to be part of this organization and the important mission that they have been entrusted with and I feel that our acquisition procurement organization is truly a big part of bringing success to that mission. We are in the acquisition business and that is our job. We acquire the products and services to continuously improve the operations of U.S. Customs and Border Protection.

I have about 177 employees. They're located all over the country. I have people strewn along the southern border co-located with border patrol stations. I have people on the northern border. I have a fairly large office in Indianapolis, Indiana and a large office in the Washington D.C. area. Our annual spend is approximately $3.3 billion dollars and that's the money that comes through my procurement organization. That's pretty much a summary of the operation.

Mr. Thomas: And John, continuing to drill down on the responsibilities, talk to us a little bit about your role as CBP's Executive Director of Procurement. What are your official responsibilities and how do you support the mission of CBP?

Mr. Ely: While it doesn't sound official, my belief that my primary role is a facilitator to the employees, customers and the commercial business partners that are all involved in the procurement area and supporting the mission of customs and border protection. I'm responsible for managing the spend that supports our organization as efficiently, as effectively as possible and representing our American taxpayer by being prudent in the way that I spend their dollars; yet being effective in supporting the mission of the organization.

With that said, I'd like to emphasize that this is the operating principles for all of the heads of contracting activities in the Department of Homeland Security components. We all have the focus and we all have that function. I, as a senior procurement professional, I'm very familiar with CBP's mission and I understand the challenges that my customers face and it makes my organization better in terms of standing up the support that they need to be successful in their operations.

As a strategic leader, my goal is to full integrate the procurement process with a customer environment that delivers the required results while complying with law regulation and ensuring prudent expenditure of taxpayer's money. The point there is my goal is to continuously make our process, which at times can be viewed as a bureaucratic process, transparent to my customers so that they don't see the things that aren't really pertinent to them getting the goods and services that they need.

Mr. Morales: Now John I understand that you have some 30 years with the U.S. Federal government. Tell me a little bit about your career path. And how'd you get started?

Mr. Ely: Started very early in my life. I've got 34 years as a federal employee. Pretty much all of my 34 years has been in the procurement or acquisitions environments. I actually started as a summer hire when I was in college. I worked for the Department of the Army. And when I got out of school, I became an Army intern in a contracting shop and I stayed in that contracting shop at the Pentagon for 15 years.

Mr. Morales: That's a long summer.

Mr. Ely: It was a long summer.

Mr. Ely: It was an incredible place to learn procurement. It was an incredible mission supporting the Department of Defense. After that, I moved on to the Internal Revenue Service which was a very different environment where I started off as a branch chief; basically, my first significant supervisory experience. I was promoted later to Division Director and then Deputy Head of Contracting Activity. And I was there for 12 years mostly engaged in the information technology acquisition business, which while it might sound kind of mundane, is a very exciting field because it's very competitive and the technologies that we used and that were acquiring are very important, especially in the tax collection business.

Now I'm at CBP as the Head of Contracting Activity and I've been there for 5 years and I'm absolutely thrilled in this position and very much challenged and excited every day that I come to work.

Mr. Morales: So, John as you reflect back on your 15 years with the Army and the 12 years over at IRS, how have these experiences prepared for you for your current leadership role and perhaps have shaped your management approach and your leadership style over the years?

Mr. Ely: I want to start off with the very beginning. I'm an Army brat. My dad was an Army officer. My grandfather was an army officer. My father was very much loved by his troops and I watched him and I tried to emulate a lot about him that I saw as driving his success. And his success was in genuinely caring about his people and they in turn, delivered for him. He saw himself as facilitator to the success of others and I try to emulate that style.

When I first started working in procurement, I learned the business first. And I always work with the goal of balancing the customers' needs along with properly managing taxpayer dollars. During my career, I worked with a wide range of managers and executives and I tried to develop my style as a combination of what I saw as the best of both. During the latter part of my federal career, I spent lots of time with people who were experts in continuous improvement. And above and beyond the procurement field, I started getting into the concept of continuous process improvement.

I'm not the most organized person in the world but I do recognize the value that predictable processes, improvement processes, being imbedded in organizations and I try to capture that through a process improvement program. So, I worked with process improvement experts that have helped me get in place documented repeatable processes that make my organization extremely efficient and effective.

Mr. Morales: What is CBP's acquisition and improvement initiative? We will ask John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection, to share with us when the conversation about management continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and today's conversation is with John Ely, Executive Director of Procurement at U.S. Customs and Border Protection. Also, joining us from IBM is Solly Thomas. John, much like finance or information technology or human resources, you lead one of CBP's core business functions. Could you take a moment to describe in a bit more detail the procurement function? And tell us a bit about some of the key elements of acquisition management.

Mr. Ely: I'll give you the basic process. It involves early definition of requirements by the customer. That's a little more complicated than it sounds because articulating what your needs are for a government customer sometimes can be difficult. But, we seek to get a good solid definition of the outcomes or the products that our customers are looking for. And then we secure the funding associated with those requirements. There's a collaboration between the procurement organization, the contracting officer and the customer over a strategy for acquisition. There are multiple ways to acquire things and the best fit for the customer and the particular product is something that we arrive at in collaborative way.

At some point, we release a solicitation or a request for proposals for pricing and descriptions on supplies and services that we're looking for. We take those products and we give them to our customers to do an evaluation. And evaluations are either for compliance and award to the lowest cost or we also have what's known as best value awards, where there is technical merit associated with an offer's proposal and those technical merits are evaluated. And then a balance is drawn between the offered price and the technical merit and what we call a best value acquisition can be awarded.

That is very much different than a low cost award because you can actually pay more for something if the government team's perception of the value warrants that extra payment. Then comes the notice to the contractors and the debriefing of unsuccessful offers. What I think is really important is that debriefings to unsuccessful offers are not just I'm sorry, you didn't get the job. We are required to give meaningful, helpful information to companies as to why they did not receive the award of the contract without giving away proprietary or trade secrets for the winning offer.

Finally, we initiate contract performance and contract management activities that in and of itself, is a very important complex process. And then at the end of contract performance, or delivery period, there's a contract closeout where we double check and make sure everything was provided to the satisfaction of the government customer, the contractor's been paid and then at some point we close the contract out completely.

In terms of success in procurement function, I'll give you some ideas about what I view as steps in ensuring procurement success. That mutual understanding between the customer and procurement personnel regarding the procurement process, the roles and responsibilities of the different parties and building a solid, trusting, working relationship between the government procurement personnel and the mission individuals that are representing the customer needs is absolutely critical.

Good contracting organizations have people that are not just buyers, but they're good business specialists. They understand their customers. They seek to engage both the customer and ideas from contractors throughout the lifecycle of whatever product or service is being ordered. Good procurement organizations are involved in all aspects of the lifecycle. We know about our customer. My border patrol buyers are very familiar with the border patrol function. My legacy customs support buyers, they know customs; they know what custom officers do. And all of our buyers are very close to the functional needs of our components and it makes them very good at what they do because they're continuously involved in the mission and the needs of the organization.

In most organizations, weaknesses are found in contract management. And to be honest with you, I think that's a problem with government contracting in general. There aren't the people out there and the emphasis. Even though we've been trying to place the emphasis, it's still not there in terms of what happens once the contract is signed. The government in general needs to be more attentive to what happens after the contract's signed because you've only just begun. But shortage of federal contracting personnel still keeps us in the hole that we're in and not as able to manage contracts after they're awarded.

Mr. Morales: Now John, on that note, in our earlier segment, you made a reference to continuous improvement and you used the word repeatable. So, tell us a little about CBP's acquisition improvement initiative. Where does it focus and how is this program defined, developed and deployed these customer-focused solutions that you reference?

Mr. Ely: When I first started working at IRS, I ended up working with some information technology specialists who were focused on software development and one of the people that I worked very closely with was a certified process improvement expert. And I soon came to find out that these people are out there and they're very good at articulating and stringing together processes so people understand how you get from point a to point z when you're trying to develop and build an end product. In this case, it was software, which is pretty complex. But, the concept behind these process improvement experts is they articulate the process, they make it as efficient and effective as possible and they stick to standards where they repeat the process and you should be able to get the same exact outcomes in terms of your desired results.

In meeting and getting engaged with people like that, I started realizing we could apply this to the procurement process. And I eventually hired a process improvement expert and brought them on as senior staff in looking at the procurement process. One of the problems that we had is our customers felt that every process or every procurement was run differently. And what I basically did is I implemented a very structured environment where we very clearly outlined the process, outlined the outcomes and the roles and responsibilities of all the people that were involved in the procurement process.

It's actually done a lot for me in terms of being able to be predictable in terms of results to my customers. In terms of the acquisition improvement initiative, that is what we've stood up at customs and border protection procurement. And again, I have a full-time process improvement expert responsible for that. In CBP's AI2 program, we focus on four broad areas: assets, business, customer and data. We call it the ABCD model. The asset piece is our people, it's our systems. The business piece is our customers; what they do, what they acquire to achieve. The customer is our customer themselves, you know, who is that customer? What is it that they're looking for? What do they stand for? And then data, which to us, is probably one of the most important things. We strive to collect and understand data relative to what our customers need, what we've bought in the past. And that data helps us optimize how well we do in the future in terms of performing the acquisition function.

The bottom line is all of our efforts in AI2 are geared to supporting customer's needs and mission success in creating a work environment where people can grow and thrive. AI2 generates improvement opportunities from both top down and bottom up. And what is real exciting to me is that with a lot of the new entry-level people we have working in the procurement organization, we have some people that have just walked in the door and they have been with us more than a year, that are coming up with some fabulous ideas because of their fresh perspective. They're not mired in the federal process. And we're starting to listen to those ideas and actually build some improvements in the program based upon somebody who's just walked through the door saying, hey, why not? And that's been very, very good for us.

We have participation goals in acquisition improvement. I have expectations of all my directors on their folks and what percentage of those people will continuously be involved. That hasn't been a problem because what has happened is when people in my organization see that they really can change the direction that we're taking and deliver better results for our customers as a result of their efforts, they participate. And they don't have to be asked to participate because they see that they're making a difference.

I'll give you an example of some of the teams we have because AI2 is broken down into some teams, different teams, and that's how we control memberships and outcomes. We have the quality of life team. The quality of life team really does focus on how are things going for the people in the organization. What's the work life like? What do people like, don't like? How can we make the quality of life from 9-5 better for our people and therefore, make them more productive and effective as federal employees.

We have a contract administration team. Again, federal procurement organizations tend to sometimes award the contract, walk away from them because they've got the next thing they've got to focus on. When we, in fact, with our contract administration team are looking for ways to stay there with our customer, administer the contracts and assure them that they receive the desired products or services.

And then, my data and spend analysis team is probably one of the ones I'm really the most proud of. Although, I really shouldn't say anything about being the most proud. But, our ability to slice and dice the data has been one of the most rewarding things for me. You can ask me how many light bulbs we bought last year and I can tell you. You ask me how many mainframe computers we bought, I will tell you. If you ask me how many detainee meals we bought and where they went, I can tell you. What that has done for us is it gives us the opportunity to sift through our spend data and look for low hanging fruit or even high hanging fruit for our strategic sourcing initiatives. When we decided that we needed to start hitting strategic sourcing, we looked at the spend and it gave us a profile of where our CBP money is going all the way down to the day to day subsistent level.

And then, the strategic sourcing teams. And I also have a mentoring team which is a very structured program around bringing our entry-level people up faster up into operational mode.

Mr. Thomas: Now John, it's been my experience that agencies need to have an effective strategy for organizing and retaining its intellectual resources and its institutional memory. So, to that end, can you elaborate on your efforts to implement an effective knowledge management system. And I'm particularly interested in hearing more about your Acquisition Resource Management System and how it factors into this efforts and provides the one-stop shopping capabilities.

Mr. Ely: We have implemented ARMS. And ARMS is something I'm extremely proud of because we do have, in the organization, a fairly mature knowledge management system. With our aging workforce and the expansion of our headcount, it's imperative that we have that knowledge and that we share the information and this ARMS is a repository for information and also for exchanging ideas, communications across a large, geographically diverse work environment.

And really, one of the most important things that has come of our knowledge management system is connecting our broad customer base and a youthful workforce. We have people now that are attracted to technology and the ARMS system is something people tend to move towards and use because it's got data in it, it's got communications in it; and those are the things people need to communicate effectively.

ARMS is a way to both get knowledge into the repository and a better way to use and improve the knowledge and our collaboration for the betterment of the mission. Our documents, our announcements, our regulations, our memorandum are all posted through ARMS. And probably one of the most interesting things is the discussion threads. We have chat rooms and discussion threads where people can talk about the collaboration of improving a contract document or how to manage a contract better. We have a birds of a feather area in ARMS where people can gather and talk about areas that are of common interest. And we also have a message center and I have a blog now that helps me connect to a very geographically diverse organization. I log in and I can just say hello and talk to my people without ever having to worry about dialing or being in any physical place. And that's been a wonderful, wonderful benefit for me.

Mr. Thomas: Now John, you eluded to strategic sourcing a little bit earlier and of course, that's typically defined as a means to achieve benefits through an organized, systematic and collaborative approach, to acquire goods and services. Could you elaborate more on your strategic sourcing program? What types of opportunities have been identified and to what extent has it enhanced your coordination in strategic thinking across the department?

Mr. Ely: What I'd like to do before I get into the rest of that question, I'd like to talk a little bit about how I got into strategic sourcing in the first place because I think it's a fairly interesting story. When I was at IRS, I signed up for a course, and it had some mundane title and I don't even remember what that course was -

Mr. Ely: -- but a gentleman that I worked with and I went to this course. I believe it was in Dallas, and we ended up in this room full of people and not one of them was a government employee. And it turned out what this group was, and it had something to do with sourcing, sourcing was in the title. Basically, what it was, was a group of people who were part of the sourcing organizations for very large companies. If I'm not mistaken, TI was there, Ford Industries was there, IBM was there. Several other major companies were there. And all of these people had one thing in common and it struck us very quickly that this was going to be an interesting environment.

Every one of those companies were at one point on the brink of going out of business. And what those people in that room had done is through the sourcing of supplies and services into their production process or their delivery process in a service environment they turned to strategic sourcing and said, if we do business the old way we will be out of business. What is the new way of doing business? And I spent about three or four days with those people and I learned a whole lot about how you can adopt that mindset, the stay in business mindset. Even if we're government, let's pretend we could be sent home and fired tomorrow. Let's get lean and mean and look at ways we can be effective, efficient and save money all at the same time.

We came back to IRS and that's when we started realizing our capability in spend analysis; knowing where the IRS dollar was going. And knowing where that dollar was going, we started targeting commodity and service groupings and looking at how can we do business better. We brought in some people that consulted with us to talk to us about smarter ways of doing business and we took on strategic sourcing initiatives for cell phones, guard services, copiers, faxes and printers. And to give you a little bit of insight into the true strategic sourcing concept; copiers, faxes and printers, the idea to strategic sourcing those is not to get economy of scale on contracts. That's one objective. But the perception that we had was that there might be a better way to deal with copiers, faxes and printers.

Now, in a federal environment, a lot of times you'll see a copier, a fax and a printer. And in some cases, you'll see all three of those around an individual's desk and you'll see those all over the place around different individual desks. We started talking about multi-function machines, acquiring multi-function machines. A single machine that copies, faxes, prints. And having those machines in a central environment rather than dedicated to a given workstation. So, you think about how often your printer's humming or fax is humming on your desk dedicated to your work, you can start seeing how a multi-function machine might actually be economical and provide the services that everybody else needs at a significantly lower cost. That's where strategic sourcing comes in.

We changed the way we were doing business. We saved money, yet we delivered the same results. So, when I got to CBP after IRS, I instantly knew that I had to make a difference by standing up a very similar program at CBP and that is our acquisition improvement initiative. And that is the same process. It has a very similar approach where we want to stay in business. We want to take the stay in business mindset as a government entity.

I've already stood up a team that now has the spend analysis capability. I can look at any, every piece of everything CBP has bought and we're now focusing on how products and services are acquired. We've had a few near term hits on strategic sourcing. One of them is body armor. In the old days, we bought body armor, the body armor would be shipped, the employee would put the body armor on, measure his specific fit and then send it out to be tailored to fit him or her. We now have awarded a contract for body armor that has a film clip in the website where you're shown how to measure yourself for body armor ahead of time before you order it. So, you ship the order, you ship the measurements, the body armor's delivered and it goes right out of the box and onto your back saving your life sooner. That is a real good example of how strategic sourcing works.

Again, economy's a scale but also a significant improvements in how we utilize the commodities of services. We are looking at canines. We've had some success with puppies. We do a lot of buying of puppies. They're really cute and even when you buy them in quantity, they're really cute. But, we're looking at strategic sourcing of canines, industrial laundry and we're also looking now at our spend on detainee meals. An early glance tells us that there are different kinds of detainee meals that are being served up all over the southwest and actually in all the detention areas. And while they're all fairly low cost, we think that if we standardize that and bought large quantities of detainee meals that were not perishable or could be used over long periods of time, we could save significant amounts of money. So, there's just a few examples of that strategic sourcing environment.

Mr. Ely: Sure. We have an overwhelming workload as most procurement organizations do. We also have a young emerging professional workforce. Those two have come together for us when we started looking at technology. And there are reverse auctioning tools. We use a tool called FedBid, and basically, what tools do is it allows your contracting officials to post their requirements on an electronic forum and bidders will bid on the requirements electronically and then the buying activity can come back to the end of the day and look at the bidding history and make an award.

Basically, it is a seamless, automated process for running our competitions. Its usually done for commercially available items, but we've had a lot of success in the post and go. And again, we post it, we come back, we see what the natural bidding process that occurs through the system and we make awards to the low, responsible offers. Reverse auctioning has done so much in terms of our ability to load those smaller requirements, while we work on the more sophisticated requirements that require attention; where our employees need to develop their skills. At the same time, we're saving lots of money. And I have some statistics about what that automated reverse auctioning process has done for us.

Basically, it is a seamless, automated process for running our competitions. Its usually done for commercially available items, but we've had a lot of success in the post and go. And again, we post it, we come back, we see what the natural bidding process that occurs through the system and we make awards to the low, responsible offers. Reverse auctioning has done so much in terms of our ability to load those smaller requirements, while we work on the more sophisticated requirements that require attention; where our employees need to develop their skills. At the same time, we're saving lots of money. And I have some statistics about what that automated reverse auctioning process has done for us.

Mr. Morales: What about CBP's acquisition workforce management strategy? We will ask John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection, to share with us as the conversation continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to The Business of Government Hour. I'm your host, Albert Morales, and with us today is John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection. Also, joining us from IBM is Solly Thomas. John, the American Recovery and Reinvestment Act of 2009, otherwise known as the Recovery Act, provides some $680 million dollars to CBP for investment in aging infrastructure. First, could you tell us more about your procurement strategy and how the money will be spent. But, more importantly, what role does your office play in this area and how are you managing the procurements associated specifically with the Recovery Act funding?

Mr. Ely: Much of the ARRA funding is targeted for port modernization in both the northern and southern borders. We are very much engaged in writing contracts and facilitating that modernization effort. Our goal is to make awards in a timely manner while competing contracts as much as possible. We've stood up an FM&E facilities management and engineering contracting organization to meet this challenge we're working hand in glove with the CBP FM&E organization to implement. We're competing requirements for technology and construction directly with commercial sources, but we're also utilizing the services of the Corps of Engineers and GSA for construction contracting requirements.

Mr. Morales: It strikes me that balancing the appropriate number of CBP contracting officials with the growth of your portfolio is perhaps a challenging task. What changes have you made to your recruitment process and does CBP use flexible compensation strategies to attract and retain employees who possess what you would deem as critical skills?

Mr. Ely: Excellent question. Initially, when I first came to CBP, we focused on recruiting higher-grade personnel; but, it's really hard to find them. It's really very difficult to find them across government. So, we've moved to entry-level hires and we're supporting the rapid growth through mentoring, training and phased-in levels of contracting sophistication. So, we're trying to bring them up fairly quickly, but we are making sure they're ready for each phase. We think we've got a good plan for getting the entry-level hires up to speed faster than people were ever before by using technology, mentors, etc.

The DHS Chief Procurement Officer supports us through their Acquisition Career Program. They have a very sophisticated program and we are on the recipient list for the ACP interns. And that's born out well for us as well. We're still hiring higher-grade personnel for complex and critical procurements. And if any of you out there are the higher-graded, highly capable contracting types, just let us know.

Actually, on USAjobs, we have a great video clip from one of our CBP contracting officers and some information on job announcements. So, if you go to USAjobs, you'll probably find that icon to click on and see one of my folks with a lot of the products and services in the backdrop giving you some information about working for me. CBP offers flexible work schedules, tuition reimbursement for permanent status employees and in some cases, recruitment bonuses and/or payment of relocation services.

Mr. Thomas: John, staying on that topic, in recent years the size of the acquisition workforce has remained relatively the same while procurement spending has pretty much skyrocketed. For over a year, agencies have had the ability to re-hire the retired acquisition personnel, but only a few agencies have sought to formally use this authority. Could you talk a little bit about the benefits, as well as the possible limitations, of this particular strategy? And more importantly, what are your plans to use this authority as a tool to fulfill staffing needs?

Mr. Ely: Sure. Good contracting people are, as I've said before, are always in high demand both in government and industry. DHS has been successful in implementing authority to hire retired procurement personnel, known as retired annuitants. And we are pursuing the hiring of retired annuitants who offer a wealth of knowledge, skills and abilities and we're seeking to take as much advantage of that as we can. That is still a fairly small number, relatively speaking, of potential resources.

And the flipside of the benefits of that is also that these people will re-retire as some point in time. So, you can't really stake your future on retired annuitants, however, they do help in the near term.

Mr. Thomas: Now shifting from the recruitment discussion to developmental, what are you doing to ensure that your staff has the appropriate training and skills and how are you leveraging the resources from organizations like the Federal Acquisition Institute?

Mr. Ely: I'm very proud of our training program. It's extremely important in our line of business. Our training program is fairly well funded and we have a specific training curriculum in place. Employees can count on receiving specific, substantial training in the procurement business area. And there are training tracks associated with each level of procurement professional. We have a fully funded training. Each employee receives a minimum of forty hours per year. And we utilize FAI for both classroom and online training. And the DHS Chief Procurement Officers Organization has entered into an agreement with DAU to reserve seats in their classes for DHS procurement personnel, and that includes my folks as well.

Mr. Thomas: Now John, at last count, the federal government spends approximately $140 billion dollars on services to meet agency needs and the use of performance-based acquisition is the federal government's preferred approach for acquiring these services. Tell us about CBP's efforts in implementing performance-based acquisition strategies.

Mr. Ely: First, to comment, a personal comment on PBAs. I agree that they are the desired vehicle, but there is something complex about them that needs to be understood and that is that it is an outcomes-oriented acquisition approach. That's where we truly have to get away from the nuts and bolts of how you get from point a to point b when the outcome is articulated get me to point b. And you don't spend a lot of time talking about how you get there. It's the outcomes that drive a performance-based contract to success.

So, in this environment, the government personnel serve as facilitators for contractor success, which is a little different than some government folks you are used to, where they believe that they are supposed to be directing the activities of the contractor. In performance-based acquisitions, they're facilitators. They help the contractor get to the successful end. Again, acting as facilitators versus directors. In CBP procurement, performance-based acquisitions are now automatically the first consideration for service contracts. Every service requirement that we get in, we look for the applicability of performance-based contracting as a solution.

All of my people receive training in performance-based acquisitions and our CBP Acting Commissioner supports performance-based acquisitions, and has asked his assistant commissioners to develop metrics and measures for their contracts to make sure they're receiving value for their dollars. We have a long way to go to reach our PBA goals, but we're working hard and I think we're doing a pretty good job learning more and more as we move along about the unique method of contracting.

Mr. Morales: John, I talk with many of my guests about collaboration. And certainly, procurements and acquisitions are perhaps some of the more complex business processes within a large entity such as CBP. What kinds of partnerships are you developing now to improve operations or outcomes at CBP and how many of these partnerships change over time?

Mr. Ely: That's an excellent question. I think acquisition by definition is a collaborative process. If you're not collaborating with your customers or your contractors who are helping you deliver results, you're going to be surprised by what happens at the end of the day. Procurement's close relationship with our parent organization, which is the Office of Finance, has helped us become very collaborative in terms of working with the components of finance which is budget, asset management, facilities, management and engineering and our financial operations organization.

We work together with them to make sure that CBP's needs are met at a fair and reasonable cost and that taxpayer dollars are properly expended. Our partnerships within the parent Office of Finance have enabled us to leverage our financial management capability. And our relationships with the customers and industry help bring best value for the taxpayer dollars that are entrusted to CBP. I see the further positive change, we build a greater capability in the big A, acquisition arena. The big A, which is acquisition, will bring us closer to being worldclass acquisition organization that's forward-thinking and focused on return investment for the mission and the American taxpayer.

Mr. Morales: Now, since its inception, DHS has had some very large and complex procurements such as, the Coastguard's Deepwater Program and CBP's SBInet. What are some of the key lessons learned from these large acquisitions and how are they shaping and informing your operations today?

Mr. Ely: I'm going to give you a generic answer on that, because I'm not as specifically familiar with Deepwater. I have some familiar, but with CBP's SBInet program, but I'd like to keep it generic because it does apply I guarantee to both programs and probably other, most complex government programs. The key to success with these procurements is planning, proper planning. The formulation of strong acquisitions teams and efficient, effective and responsible source selection process. And most importantly, properly staffed and managed postwar program and contract management organizations.

Too often, we think we've hit the home run. The ball is out the park once the contract's signed, when in fact you haven't even swung yet. I think it's also essential that when managing programs, one must realize that detractors are natural and important part of a balanced government business environment. And while these detractors may be disheartening at times, their presence can help keep acquisition personnel focused on the proper outcomes of their programs.

Mr. Morales: So John, you've eluded a couple times to CBP's acquisition function and its relationship to the broader DHS organization. How does this alignment benefit CBP and DHS' overall acquisition strategy and do you think that DHS will be adopting a more centralized model going beyond just mere oversight?

Mr. Ely: That's an excellent question. I've felt this issue going back and forth. Naturally, the components would like to retain control over their procurement organizations. And it's understandable that DHS would like to centralize, capitalizing on economies of scale, ensuring a consistency in the way that we spend the DHS dollar. But actually, there is a dual accountability role right now at DHS. While, I report to Customs and Border Protections Chief Financial Officer, I have very specific responsibilities for which I'm accountable to the DHS Chief Procurement Officer. And the same holds true for the procurement executives and the other DHS components. They also have that dual accountability.

I would also like to state that the DHS Head of Contracting Activities Organization, that is all the HCAs for the DHS components, are a group that works collaboratively and embraces the authority and leadership of the DHS Chief Procurement Officer. We meet on a regular basis and are actually quite effective in helping make DHS procurement functions as efficient and effective as possible.

Mr. Morales: So what does the future hold for CBP procurement? We will ask John Ely, Executive Director of Procurement at the U.S. Customs and Border Protection, to share with us as the conversation continues on The Business of Government Hour.

(Intermission)

Mr. Morales: Welcome back to our final segment of The Business of Government Hour. I'm your host, Albert Morales, and with today's conversation is with John Ely, Executive Director of Procurement at U.S. Customs and Border Protection. Also, joining us from IBM is Solly Thomas. John, CBP's experience in applying innovative solutions to help address agency procurement issues has provided some valuable lessons and insights, many of which we've talked about. But, could you summarize some of these key lessons and some of these critical insights?

Mr. Ely: I'd be glad to. Number one, continuously improve. The American taxpayer deserves it. Secondly, get people involved in creating solutions. The old saying, two heads are better than one, holds true. Groups of individuals working with common goals will get you there a lot faster than individuals who are spinning off on their own path. Constantly seek to improve and get industry input on a regular basis. Industry must succeed or die and they're a good model to look at when you're looking at the best way to run your own government operation. Finally, communication is key. When you think you've done it or done enough, do more because trust me, you probably haven't.

Mr. Thomas: Now John, since acquisition is a fiduciary responsibility, the business of government must be conducted with complete impartiality. Could you elaborate on efforts being pursued to ensure procurement integrity, making sure the proper standards of conduct, both ethical and legal requirements are being followed by the Federal Acquisition staff?

Mr. Ely: Sure. First, I'd like to start by saying that I'm very proud to be a federal procurement professional. We've all seen situations where integrity has been an issue in procurements and it's inexcusable. And people that don't use integrity will get caught. But, I have faith in the federal procurement process. The vast majority of people that work in that environment are honest, hard working public servants that want to do good. Furthermore, all federal agencies have programs that emphasize standards of conduct and provide continuous training in the areas of procurement integrity.

Mr. Morales: John, I'd like to transition to now to the future. Could you give us a sense of some of the key issues that will affect acquisition and procurement offices government-wide over the next few years?

Mr. Ely: Sure. Shortages of contracting and program management personnel is a huge challenge. Balancing highly innovative ways of doing procurements within a highly regulated environment is another. Increased oversight and the need for transparency for large scale programs with congressional and public and customer scrutiny in how we do business is again, another. The constant pace of change and the scale of procurements that we're seeing as it continues to grow. And finally, the time constraints for planning large major acquisition initiatives.

Mr. Morales: So, then more locally, what are some of the major opportunities and challenges that your organization will encounter in the future and how do you envision your area will evolve over the next say three to five years?

Mr. Ely: I see significant opportunities in the future as CBP becomes more and more sophisticated in its view and management of investments for the good of its mission. I see an organization that's becoming more and more enlightened in ways to efficiently and effectively invest its resources. And I see my procurement organization as one of the best in government; fully integrated with the CBP customer and delivering the best value for the taxpayers' dollars.

Mr. Morales: So, John you've had a very extensive career with the federal government and you just had a wonderful story of how you got started. So, I'm curious what advice might you give someone who's out there thinking about a career in public service and maybe even perhaps a career in the acquisition community?

Mr. Ely: I've been there. I was there on the brink trying to decide which way to go and I will tell you that serving the American public is an honor and a privilege and has significant financial and personal rewards. The government pays well and the work is rewarding. There is an incredible satisfaction delivering good things to the American public. And our government works hard to take care of its people and public service is an incredible opportunity to be a part of that important task.

Mr. Morales: That's just great. Unfortunately John, we have reached the end of our time. I want to thank you for fitting us into your busy schedule, but more importantly, Solly and I would like to thank you for your dedicated service to our country across your 34 years of federal government service.

Mr. Ely: Thank you so much for having me both of you.

Mr. Morales: This has been The Business of Government Hour featuring a conversation with John Ely, Executive Director of Procurement at U.S. Customs and Border Protection. My co-host has been Solly Thomas, associate partner in IBM's public sector consulting practice.

As you enjoy the rest of your day, please take time to remember the men and women of our armed and civil services abroad who may not be able to hear this morning's show on how we're improving their government, but who deserve our unconditional respect and support.

For The Business of Government Hour, I'm Albert Morales. Thank you for listening.

Announcer: This has been The Business of Government Hour. Be sure to join us every Saturday at 9:00 a.m. And visit us on the web at businessofgovernment.org. There you can learn more about our programs, and get a transcript of today's conversation. Until next week, it's businessofgovernment.org.

* * * * *

John Ely interview
08/08/2009
Mr. Ely's organization is a core component in supporting the CBP mission of ensuring the security of our nation's borders.

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