Johnson Says Innovation Key to Successful Partnership Between Government and Industry
As prepared for delivery
U.S. General Services Administration
Coalition for Government Procurement Dinner
San Diego, CA
May 11, 2011
Thank you for that kind introduction. I had the pleasure of speaking to this gathering soon after I was I was confirmed and sworn in as the Administrator of the General Sustainability – I mean General Services – Administration.
And I am glad to be back; it is always nice to be invited for a second time. And, needless to say, I’m glad you came back, too.
Let me begin by bringing greetings from President Barack Obama and the rest of my colleagues in his administration.
I also bring greetings as a business woman. I think of that as a sort of personal identity. It might not be my exact role right now, but it is core to my professional identity.
And, I say that having been in a variety of businesses, including an architecture firm, a diversity consulting firm, an executive search business, the ice cream business, government strategy consulting, and diesel engine manufacturing. I bring all that up – not to set you to worrying if I can keep a job.
I bring that up because I know about MOBIS, the Mission Oriented Business Integrated Services contracts, because I was a MOBIS contractor. I know about scope creep because I have been a project manager. I know about the patience and diligence it takes to do business with the government. The instincts and lessons that I learned in the private sector act as a sort of compass to me at GSA. And I hope they are serving me well in nurturing and strengthening GSA’s partnership with industry.
Let me start by reviewing GSA’s mission.
Our job is to support other agencies as they do their jobs. We support them so that they can support this great nation.
And our customer base is truly vast, ranging across all branches of government – legislative, executive, and judicial – and state and local.
We work in design, construction, real estate management, information technology, fleet, credit cards, travel services, network services, commodities, and professional services, as well as disposal. Our people range from architects to auctioneers. When I think about GSA’s business model, I have to say that my business school strategy professors would cringe: We are about delivering solutions to everyone for everything. What kind of market niche is that? Well, that’s our niche: It’s the anti-niche niche, the anti-strategy strategy.
And, that makes our positioning unique, distinctive. It’s “brandable.” We are the membrane between industry and government. We need to transfer knowledge and interpret market signals to our government customers. We transmit their requirements to the private sector.
Under ordinary circumstances, this is a big job. But these are not ordinary circumstances. Our country faces serious challenges both at home and abroad. Our fantastic military needs support, and our cherished veterans need care. All of our children need terrific education to prepare them for the economy of our future. Our infrastructure needs more than just a face-lift.
Too many Americans still feel the terrible anxiety and pressure of unemployment; and, although we’ve seen significant progress, we have a long way to go before our economy is fully on its feet again.
More than ever, we need a government that works – and works well.
But, right now agencies face a budget climate that is uncertain yet certainly diminished. They have to carefully steward their resources. They need to eliminate inefficiencies and reduce waste. They can’t afford to concentrate on their infrastructure or their support systems. They need a trusted adviser, a counselor, and a fix-it crew.
GSA is smack in the middle of this challenge. And we have chosen a particular strategy to turbocharge us forward.
When I spoke to you last year at Expo, I named that big hairy audacious strategy: zero environmental footprint.
And it’s time for an update.
First, let me set the record straight. ZEF is an aspirational goal – a north star for us. Second, this is a choice we made not because I like to commune with nature or because there is an executive order telling me to embrace sustainability (although I do, and there is).
No. We made this choice because we are about transforming GSA and how we do business. Transformation is a term all too commonly used, and it is rather theological. But, I want to take it back and declare it for what it is: This is about spring cleaning, overhauling, reinventing, upending, truly transforming our business.
In just a year, ZEF has already energized our enterprise, unleashed our creativity, driven our performance higher, and, hear me clearly, deepened our appreciation and abilities for service – our middle name. ZEF gives us a higher calling, putting us in service not just to the immediate demands of our customers but to a vision – a grand goal, a national aspiration – of a sustainable government and nation that is healthy for generations to come.
Last summer, we laid out the plan for the first inning. We set our overall greenhouse gas reduction to 30 percent by 2020. We promised that new construction or major renovation projects will meet Leadership in Energy and Environmental Design gold. We committed to working with industry both large and small on a phased, incentivized approach to greenhouse gas emission accounting and reporting.
A year later, we see real progress. The Office of Management and Budget gave GSA a scorecard with the highest marks in every sustainability category. That’s a solid home run, signals momentum and leadership, and sets the bar for the next play. ZEF is setting us up with a culture and discipline that is about good business sense and translates into real value – asset value, bottom line value, return on investment value, and competitive value for the American people.
You in industry know this. Sustainability is the ultimate transformational metric because it’s about no waste, absolute efficiency, and the bottom line.
Premier companies are in this game, too, and you know who you are. They are tracking, measuring, and reducing their GHG emissions – and gaining in business discipline. They are embracing sustainable buildings to reduce operating costs and respond to customer demand. Their C-suites are boosting supply chain performance, cutting excessive energy costs of technology usage.
It’s the same at GSA. We are eager to be sustainable because it will help us develop agency requirements, build and manage real estate, create acquisition vehicles, and build procurement packages that are sustainable and, therefore, easier, faster, more secure, and more efficient.
Let me tell you a couple stories about how this is working. First, about data center consolidation and cloud computing.
Over the past decade, the private sector has reduced its home-owned data fields. IBM, for example, went from 235 data centers in 1997 to 12 data centers in 2009. Hewlett-Packard moved from 14 to one, reducing its energy use by 40 percent.
But the reverse has been true of government. In 1998 the government had 432 data centers. Ten years later, the number was nearly 2,100. That’s five and a half football fields worth of server space that is 80 to 100 times as expensive to heat, cool, and maintain than commercial real estate. That kind of energy use isn’t sustainable. Nor is it practical, nor even faintly strategic. Federal Chief Information Officer Vivek Kundra estimates that more than $20 billion dollars in federal IT resources are cloud-compatible and provide a much more efficient alternative to data centers.
At GSA, we’re taking our own email into the cloud to show that it can be done in government. Last fall, we released a blanket purchase agreement for infrastructure as a service – in the cloud; on Monday, we put out a request for proposals for email as a service – in the cloud. Cloud is going to be easily accessible for agencies, with firm fixed prices. But, importantly, this is moving us into a service-on-demand model, one of the increasingly valuable strategies to help agencies. When you consider the fact that the average cost per mailbox on a cloud platform is a little more than $14 per month – 44 percent cheaper than on-premise email systems – we anticipate net annual savings of more than $1 million per 7,500 users.
Another story: There are no silver bullets to sustainability. Therefore, we need to try and test broadly, seeking to build the portfolio of options and help sort the best. Our Public Buildings Service is doing this with its green proving ground. Out of dozens and dozens of options, we chose 16 emerging technologies and practices to run with, test, measure, and analyze. Our results will nudge broader deployment across GSA’s portfolio, the federal sector, and the commercial real estate industry.
Take the Wayne Aspinall Federal Courthouse in Grand Junction, Colo., which I drove over the Rockies in a snowstorm to visit. There we are blending techniques: installing geothermal heat pumps to help heat and cool the building, using photovoltaics, employing smart building techniques, and maximizing the characteristics of this historic building’s materials and design. With all this in play, Aspinall promises to be the first net-zero building on the historic register.
What is the subtext in all this? ZEF is first and foremost deepening our abilities and our attention to service – and especially service for our customers where they are in the most need. They need dramatic resource efficiency improvements in this time of austerity; they need services for tomorrow – not for yesterday – in this time of unsettling change; they need a can-do attitude and partner in this time of cynicism about the effectiveness of government.
This is how GSA understands services, customer service, and public service. We couldn’t be prouder of our middle name. And we have plenty more stories of service.
Our Alliant contract that has been tremendously successful, with $1 billion awarded in the first 14 months and $6 billion within two years. The hard metrics tell us Alliant is offering significant value and efficiency. As important, however, is that while we have many companies on Alliant, each task order averages 3.4 proposals, meaning that process is a manageable and efficient competition.
We built on our success with the Alliant small-business governmentwide acquisition contract. On that contract, we recently celebrated the $1 billion dollar mark for 61 task orders. Not too bad for a couple months of work. And, through our 8(a) STARS contract for IT services through small disadvantaged businesses, we have obligated more than $3 billion for more than 3,000 task orders.
These latter two contracts are a real boost for our country’s small businesses that carry so much of the weight – and the risk – of our economy.
Or, take our fleet. Increasingly, our fleet’s fuel-efficiency and our management services are freeing money for mission-related work, relieving agencies of the need for expertise and infrastructure of their own while easing our government’s need for fossil fuel.
And this kind of sustainable resource management is important to taxpayers. Consider the impact of a one-mile-per-gallon increase in fuel economy to an annual procurement of more than 65,000 vehicles. That alone would save nearly 1 million gallons of gas, 9,000 metric tons of greenhouse gases, and $4 million annually.
Or, take the Marines. I recently visited Quantico and our ServMart Supply Store there. Brig. Gen. Simmons was eloquent in describing the difficulties of deploying Marines when the supplies they needed had to be hustled up at a moment’s notice. They paid a huge price for that. Now, in our supply store, vendors place inventory at no cost to the government, replenishing it with finely tuned logistical discipline. I watched Marines coming through the store with grocery carts loaded up with great bargains. It’s a no-hassle, easy, and quick service. Who deserves our attention more?
Interestingly, some old behaviors vanished overnight with these arrangements. When a supply store is poorly stocked, people will buy whatever is there – a sort of hoarding takes over, further depleting and frustrating the next shoppers. With a steady supply, that behavior has disappeared and – lo and behold – unnecessary inventory is no longer being shipped out – and then shipped back at the end of the tour. We hadn’t anticipated that benefit but the reduced waste has been remarkable.
Finally, there are our strategic sourcing efforts. GSA is performing a truly valuable service for our customer agencies. We are orchestrating synergies among agencies by building cooperative buying opportunities. This has brought significant value to the government and is another useful way in which we can help agencies manage within their resource constraints.
By now, you get the picture: Our service sense has been heightened by ZEF, and our fundamental commitment to it is all that much stronger for it.
But serving this great nation is not – and never has been – about being a one-man band. Our story is that of a jazz ensemble. We at GSA understand this deeply. We must be in tune and on beat with industry – a riff here, a duet there, but never a purely solo show.
To that ensemble, we bring scale, impact, heft, innovation, and a gateway to the government, and you bring new products, competitiveness, best practices, and market knowledge. We take this ensemble very seriously because GSA is not a mandated agency. Just like industry, we have to earn our customers, and we have to earn our partners.
Let’s work to deepen this partnership. Please, be honest and frank with us. We are always open to hearing what works and why, what doesn’t and why not.
To facilitate the conversation, we’ve opened up new channels of communication, including our online Vendor Support Center and our new Interact website at interact.gsa.gov. Try them out, and share your ideas.
We’re in this together. Let’s grow the economy, support jobs, make this government work ever better, and win the future.
I look forward to our next chapter together.