Heading into tomorrow’s National Data Privacy Day, Google announced on January 24, 2012 changes to its privacy terms of agreement which will go into effect on March 1, 2012.  According to news reports, users of Google services will not have the ability to opt-out of the new privacy rules after that date, and data stored in Google accounts (with the exception of Google Books, Google Wallet and Google Chrome) will be merged together to provide users with a more integrated experience.

On January 26, 2012, a bi-partisan group of Members of Congress sent a letter to Larry Page, Chief Executive Officer of Google for clarification of the implication these new rules will have on consumers.  However, beyond the consumer use of the free products and services offered by Google, there is an additional concern over how government agencies could be affected by this change.

With many of our local, state and federal government agencies seeking out and utilizing cloud services from various cloud services providers, it is imperative that contracting officials insist on stringent requirements to protect the information under their jurisdiction.  Despite assurances by the General Services Administration following Google’s announcement that contractual agreements for their Google Apps for Government offerings supersede their new privacy rules, these new rules have raised concerns over security and data protection in a cloud environment for agencies using other Google services.

Maintaining the privacy and security of information in cloud computing is one of the pre-eminent responsibilities of government chief information officers.  It is critical that high security and data privacy standards are implemented and maintained throughout all cloud offerings to the government, particularly when using cloud computing tools to store or transmit sensitive data.

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CAGW’s Cloud 201 report encouraged government agencies moving services to a cloud computing infrastructure to ensure that the data they are responsible for maintaining is protected in a safe and secure environment.  On January 25, 2012, an article in Government Computer News announced that the federal government has published the National Institute for Standards and Technology’s (NIST) final guidance (Special Publication 800-144) for maintaining a secure environment for government agencies when using public cloud computing tools.

First published in draft form in February 2011, this is a step forward in creating a unified standard for protecting information in a public cloud environment.  The NIST guidelines, along with those specified within Federal Risk Authorization Management Program (FedRAMP) will provide government agencies a baseline for security in protecting critical data while meeting their mission requirements.  As stated in a previous blog post earlier this month, these requirements may not be sufficient in strength for all agencies, but provide a minimum standard for agencies to follow.

It is encouraging to find listed as key components to security in the cloud that agencies 1) understand the public cloud computing environment offered by the cloud provider; 2) ensure that a cloud computing solution satisfies organizational security and privacy requirements; 3) ensure that the client-side computing environment meets organizational security and privacy requirements for cloud computing; and, 4) maintain accountability over the privacy and security of data and applications implemented and deployed in public cloud computing environments.

These four components are crucial in securing information and privacy when using cloud computing tools and should provide guidance to agenciy officials when deciding whether a public cloud environment is best suited to meet their needs, or who are considering entering into contractual agreements with cloud computing providers.

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The ongoing saga of the development of mobile applications (apps) by the federal government continues.  There are now 93 mobile apps available for download from the usa.gov website, and this number continues to grow.

A recent addition to the growing list of apps mentioned in previous blog posts in July and again in November is a gaming app called “Charge!”   This mobile game app was developed to teach procurement rules to contracting officers.  The premise of the game is that the user must help secret agents fight the henchmen of an evil genius set on “taking over the world” by using their knowledge of the Federal Acquisition Regulation (FAR).

While teaching contracting officers the requirements of the FAR in an effort to reduce wasteful spending is important, one questions whether using taxpayer dollars to create a game to perform this task is the best use of our limited financial resources.

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The devastating consequences to national security from the automatic cuts of $600 billion that will occur in January  2013 have been made clear by top Pentagon officials and leading members of Congress.  While President Obama has made stated that he will force Congress to stick to the plan set in place by the failure of the Super committee to agree to a plan, members of Congress are already forming alternatives to the automatic cuts.  Whatever is finally decided, Congress has a lot of options available, including Citizens Against Government Waste’s Prime Cuts, a compendium of 691 recommendations that would save $1.8 trillion over five years. 

While Prime Cuts is comprehensive, there are many other recommendations that should be considered by Congress to save money without causing the devastation to national security that is feared by the Pentagon.  Among them is changing the current rules for reimbursing the costs of contractor postretirement benefits, which could save tens of billions of dollars over the next 10 years.

A report from the Government Accountability Office in April, 2011, reviewed the costs of contractor postretirement benefits at the Department of Energy.  Under federal accounting standards, the government is responsible for paying certain costs of these benefits, which include pensions and healthcare.  The GAO report noted that “DOE’s costs for reimbursing contractor pension and other postretirement benefits have grown since 2000 and are projected to increase in coming years.”  Over the past 10 years, DOE’s annual costs have ranged from $43 million in 2001 to $750 million in 2009.  They have increased by an average of 8 percent annually and should increase by 9 percent annually over the next five years, according to GAO. 

The GAO report was the third since 2004 related to DOE contractor pension costs.  In fact, following the 2004 report, DOE planned to stop paying for contractors’ defined benefit plans in future contracts, but backed down under pressure from unions, contractors and workers.

As one example of the consequences of this policy, The New York Times reported on June 15, 2011, that the President’s fiscal year 2012 budget requested $547.9 million for NASA to pay the pensions of thousands of workers at the United Space Alliance, a joint venture of Lockheed Martin and Boeing to operate the now-extinct space shuttle.  In other words, the taxpayers’ money will be disappearing into the atmosphere even though no one is flying to the shuttle.  The money needed to pay the pensions represents 3 percent of NASA’s annual budget.  In 2000, NASA’s inspector general called contractor health and pension plans a “high-risk area.”  According to the Times, the Department of Energy “might have to come up with $37 billion by one estimate” to cover the long-term costs of these pensions.

Taxpayers (and even Washington insiders) will be shocked to learn about this practice, which has not been widely publicized, and which certainly does not take place anywhere outside of the federal government.  It is hard to imagine one business owner telling another business owner, “you can buy my products but you have to cover my employees’ retirement benefits for the rest of their lives.” 

While there is an estimate for DOE, there is no similar estimate for other agencies such as the Department of Defense (DOD), which uses many of the same contractors as DOE.  While DOE relies on contractors for 90 percent of its workload and DOD has a much smaller percentage of its budget going toward such expenditures, it would not be difficult to estimate the DOD’s liability is also in the tens of billions of dollars.  As one example, Lockheed Martin’s 10-K report for the fiscal year ending December 31, 2010 revealed that the federal government provided $988 million for qualified defined benefit pension plans for 2010, and the full amount was included in the company’s operating results.  Since Lockheed Martin reported an operating profit of $4.1 billion, about one-quarter of that figure was from the reimbursement for pension plans.  The report noted that the reimbursement amount for 2011 is estimated at about $900 million.

Changing or eliminating the reimbursement for contractor pensions could save taxpayers billions of dollars while not having any impact whatsoever on national security or essential federal programs.  In fact, the reimbursement is already causing problems for DOE in these difficult fiscal times.  In the Senate Report for the Fiscal Year 2012 Energy and Water Appropriations Bill, the committee noted the following:  “Over the last year, the stock market performance has had a devastating impact on the defined benefit funds of the current and former laboratory and plant employees.  As required by law, these shortfalls must be closed.  All personnel costs, including pension obligations are charged to the program as an indirect cost.  In fiscal year 2009, the NNSA and Environmental Management program were forced to redirect nearly $400,000,000 in mission funding to meeting required pension contributions.  At the beginning of the year, the Department estimated that $1,170,000,000 in pension contributions would be needed; however, subsequent estimates have projected shortfalls to increase by an additional $260,000,000, a 22 percent increase, which can only be recovered through program funding.”  For the Idaho Facilities Management program, which received $211,274,000, the report stated that “this account has received $45,000,000 in additional funding to offset shortfalls in pension funding caused by poor market performance.”

In other words, if the market goes down, the taxpayers’ liability goes up.  It is bad enough that investors have had a rough ride on Wall Street – they also have to cover billions of dollars in contractor pension losses.

In its April 2011 report, GAO pointed out that “DOE has limited influence over contractor pension and other postretirement benefit costs.  For example, contractors sponsor benefit plans and, as a result, control the types of benefits offered to their employees and the strategies for investing pension plan assets.  DOE nevertheless ultimately bears the investment risk incurred by the contractors.”  It is a great deal for the companies but a raw deal for taxpayers.

Top Pentagon officials sounded the alarm over the consequences of the automatic cuts during the Super Committee’s deliberations.  The Hill reported on November 2 that the trigger would “gut” the armed forces, leading to the loss of “hundreds of aircraft and thousands of people,” according to the November 3 testimony of Air Force Chief of Staff General Norton Schwartz before the House Armed Services Committee.  Chief of Naval Operations Admiral Jonathan Greenert said the losses from the automatic cuts would be “irrecoverable.”  And Army Chief of Staff General Raymond Odierno said that the $600 billion in cuts, which are above and beyond the $350 billion already on the table over the next 10 years, would “almost eliminate” all new weapons programs for the Army.  Secretary of Defense Leon Panetta had previously stated that the larger cuts would be “catastrophic” and “devastate our national defense.”

On December 7, 2011, Senate Armed Services Committee Chairman Carl Levin (D-Mich.) and Ranking Member John McCain (R-Ariz.) sent a letter to the GAO asking the agency to examine the cost of postretirement benefit reimbursement at the Department of Defense (DOD). Their letter requested “an estimate of how much DOD has paid its contractors to backfill their pension plan shortfalls over the past 10 or so years,” a “projection of future liabilities,” an evaluation of “options for limiting DOD’s liability for contractor pensions, including but not limited to the options of eliminating reimbursement for all or some defined plans,” and the savings that could be achieved from implementing the various options.  It is anticipated that GAO will merge their concerns with an earlier request on the same subject matter from two other members of the Senate Armed Services Committee early in 2012, and release the final report later this year.  CAGW will be issuing its own report on contractor pensions in February.

Members of Congress have ignored too many obvious examples of wasteful spending or to dismissed GAO recommendation, even after the agency has issued numerous reports on the same subject matter over the past decade.  That is one of many reasons why Congress is held in such low esteem, and also why the national debt has exploded to more than $15 trillion.

But the nation has been put on notice that triggering $600 billion in defense spending cuts will have dramatic consequences to our national security.  There will never be a more opportune time to finally resolve the issues related to the costs of contractor postretirement benefits, save taxpayers billions of dollars and protect national security.

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On December 8, 2011, the Federal Chief Information Officer (CIO) announced the establishment of the Federal Risk Authorization Management Program (FedRAMP), which would provide federal agencies with a standard set of security criteria to use when deploying cloud services for their departments.

The FedRAMP framework, developed in a collaborative effort by cloud and cybersecurity experts at several federal agencies and private industry, should help federal agencies make informed decisions and streamline the process for purchasing cloud tools and services.  However, a January 19, 2012 article highlighted potential problems when using a government-wide standard approach to technology deployments.  While FedRAMP lays the groundwork by creating a baseline of minimum standards for security, continuous monitoring, and independent verification and validation of implementation, it is up to each federal agency to determine what additional requirements are necessary to meet their mission needs.

The use of FedRAMP’s streamlined security requirements should aid government officials in making informed choices when purchasing cloud tools and services, these officials must also factor in the total cost of ownership, governance issues, portability and data protection when looking to the cloud environment for technology solutions.  However, relying solely on the standards found within FedRAMP may not be enough to meet an individual agency’s needs.  Resources and recommendations like those found in CAGW’s Cloud Computing 201 are helpful in guiding agencies through the purchasing process.

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Year after year, lawmakers have sullied the political process by directing chunks of the federal budget back to their home districts and states to promote their own reelections and reward special interests. In an attempt to put an end to this form of profligate spending, Senators Claire McCaskill (D-Mo.) and Pat Toomey (R-Pa.) recently introduced S. 1930, The Earmark Elimination Act, which would build upon and make permanent the current earmark moratorium that is set to expire at the end of 2012.

Even as federal power vastly expanded during the twentieth century, Congress did not earmark extensively until the 1980s. Instead, Congress would fund general grant programs and let federal and state agencies select individual recipients through a competitive process or formula. The House and Senate Appropriations Committees named specific projects only when they had been vetted and approved by authorizing committees. Members of Congress with local concerns would lobby the president and federal agencies for consideration. The process was aimed at preventing abuse and allocating resources on the basis of merit and need.

From 1991 until the enactment of the moratorium for the 112th Congress, earmarks steadily increased in frequency and size. A 2007 report from the Department of Transportation’s (DOT) Inspector General found that between 1996 and 2005, DOT earmarks increased in number by 1,150 percent and in value by 314 percent. As vocal critics such as Senator Jim DeMint (R-S.C.) have noted, earmarks have greased the skids for runaway spending and bad policy for decades. Politically powerful politicians in Washington began using earmarks as a currency to buy votes on bills that members would not otherwise vote for. The secrecy involved in this process invited the use of earmarks to fund wasteful projects, such as the infamous “Bridge to Nowhere” that was included in the 2005 transportation bill.

Taxpayers were hopeful that this practice would come to an end with the passage of the earmark moratorium for the 112th Congress. Unfortunately, that hope was misplaced. Analysis of the 2012 National Defense Authorization Act (NDAA) by Citizens Against Government Waste identified 111 earmarks – 59 of which matched exact language from previous earmarks. A December 12, 2011 report produced by Sen. McCaskill’s office identified 115 earmarks worth $834 million in the NDAA. Twenty Republican freshmen who campaigned against earmarks were among the requesters.

In the 16 fiscal year (FY) 2012 appropriations bills that Citizens Against Government Waste (CAGW) has analyzed thus far, 12 have contained earmarks, totaling 251 projects worth $9.6 billion. The FY 2012 Senate version of the Department of Defense appropriations bill included 49 earmarks worth $2.9 billion and the House version added 72 earmarks worth $3.9 billion.

While the number of earmarks during the moratorium has substantially decreased compared to prior years (earmark spending in 2010 amounted to $16.5 billion), transparency has diminished. In the past, most earmarks were contained in a single table that included the account that was to fund the earmark and the city or state where the project was located. Members were also required to attach their names to earmark requests and submit accompanying certification letters. Members who violate the moratorium simply do not attach their names to earmarks and projects are not separated from the text of the bill, meaning that the unearthing of earmarks requires reading each bill line-by-line.

The Earmark Elimination Act would permanently ban all earmarks. By law, an earmark would be defined as any congressionally-directed spending item, limited tax benefit, or limited tariff benefit. The legislation would also create a point of order against an earmark in any bill. A two-thirds vote would be required to waive the point of order and allow the earmark to remain in the bill.

The definition of an earmark in Sens. Toomey and McCaskill’s legislation varies slightly from CAGW’s. To qualify as a pork project under CAGW’s definition, a project must meet at least one of seven criteria: requested by only one chamber of Congress; not specifically authorized; not competitively awarded; not requested by the President; greatly exceeds the President’s budget request or the previous year’s funding; not the subject of congressional hearings; or serves only a local or special interest.

Enacting a permanent ban on earmarks would be a powerful step toward establishing a culture of fiscal restraint in Washington. However, after witnessing earmarks slip past the moratorium, there is little doubt that legislators will continue to circumvent the rules to send money back to their districts. Accordingly, CAGW will continue to root out pork-barrel spending in Washington. Lawmakers should once and for all establish a statutory system in which taxpayer dollars are awarded on a basis of merit, not political power. S. 1930 is a positive step in the right direction.

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On November 18, 2011, the Federal Communications Commission (FCC) issued its much-anticipated 759-page proposed rulemaking for the Connect America Fund (CAF), which sets out to reform the Universal Service Fund (USF) and the Intercarrier Compensation (ICC) programs.  Public comments on certain sections of the rulemaking are due by January 18, 2012, and on other sections by February 17, 2012.

The FCC initiated its reform proceedings on February 8, 2011.  Using the administration’s National Broadband Plan as guidance, the commission voted on October 27, 2011 to approve plans to merge the USF and ICC into the CAF.  The intent is to provide a response to the evolution and modernization of digital technology, as well as to address issues of waste within both the USF and ICC programs.   According to the FCC, there are approximately 18 million Americans living in underserved areas who, under the new program, will receive broadband services in the next 10 years.

With many companies hiring job applicants online and schools relying more frequently on web-based textbooks, access to the Internet is critical to the nation’s economy, and according to the FCC’s website, “Broadband has gone from being a luxury to a necessity for full participation in our economy and society – for all Americans.”  That begins to turn broadband into a new “entitlement” program at the taxpayers’ expense.

The original USF program defined universal service as telephone services for rural and underserved areas of the country, where the cost of providing these services was too high for communications companies to bear alone.  In expanding the definition of universal service to include the provision of broadband services in February 2011, the FCC stated that Section 254(c) (1) of the Telecommunications Act of 1996 defines universal service as “evolving.”  Through the November 28, 2011 order and report, the FCC has proposed a new principle that adopts “support for advanced services” as a universal service, which will result in the continuation of the USF fee or some other similar hidden tax on consumers in perpetuity.

The federal USF fee collects approximately $7.7 billion annually, which is used to provide infrastructure for communications (or phone) services for low-income residents in areas that are considered underserved.  The money is distributed through the Universal Service Administrative Company through four methods:  high-cost support, low-income support, rural health care support, and schools and libraries support.  Peculiarities exist within the distribution of funds, which has helped lead to wasteful spending.

Although 96.2 percent of Americans have the ability to access phone service, funding to companies that support the USF high-cost component has grown from $2.6 billion in 2001 to a projected $4.5 billion in 2011.  This subsidy exists despite the fact that wireless service could more efficiently provide service.  According to FCC Chairman Genachowski’s remarks on October 6, 2011, the USF is wasteful and inefficient, paying some companies almost $2,000 a month for a single home phone line.

The FCC also included in its order and report reforms to the ICC program, which are the charges one carrier pays to another when originating, transporting, or terminating a call or other telecommunications traffic.  Established before the era of long distance competition in the marketplace, the ICC is filled with inefficiencies and opportunities for waste.  The rates are billed at a charge per minute, and are overseen at the interstate level by the FCC and the intrastate level by the states.  Reciprocal compensation is applied to calls that begin and end within the same local calling area.  Increased strains on the ICC program have developed as consumers increasingly utilize options such as voice-over-Internet protocol (VoIP) technology, wireless communications and bundled services.

Rules have been included in the ICC provisions of the CAF plan to address issues with artificially inflated traffic volumes and missing identifiers for intercarrier billing information, both of which have created payment problems within the program.  According to the CAF executive summary, the FCC plans to adopt into the ICC program a national “bill-and-keep” framework similar to that used by wireless telephone industry, which should reduce billing problems generated by the current system.

Reforms of both the USF and ICC are urgently needed, as both programs have encountered numerous problems with waste and abuse.  The CAF program continues using the funding stream provided by the USF fund to provide telephone communications to rural and underserved areas of the country, and expands the USF’s reach to deploy broadband communications to these areas and other locations as part of the administration’s National Broadband Plan.

However, even with these much-needed reforms, the cost for the USF program, which should be eliminated instead of expanded, is ultimately born by the taxpayers.  Even without the funding provided by the USF program, the rigorous market-driven competition that is occurring in the telecommunications industry, particularly wireless, will address access and pricing problems.  The provision for access to advanced services across the nation without a phase-out plan for the CAF program raises the specter of further expansion of universal service, fostering a continuation of this hidden and unnecessary tax and regulatory scheme.

Filed under: Reform, Regulation, Telecommunications | No Comments »

In November 2008, California voters approved Proposition 1A, a $9.95 billion bond measure to fund part of the state’s share of the proposed high-speed rail line from Anaheim to San Francisco. The bond was approved by a narrow margin of 52.7 percent of the 12.6 million votes. The railway was supposed to be up and running by 2020, and the total cost was estimated by the California High-Speed Rail Authority (CHSRA) at $33 billion. While it was easy to see why some balked at the price estimate, one could also understand its support, at least among potential beneficiaries. After all, taxpayers outside the rail corridor, both in California and across the country, were supposed to pick up $6.8 billion, or one-quarter of the railway’s $27 billion initial segment.

At the time, the defects in the plan were pointed out in a joint Reason Foundation-Citizens Against Government Waste-Howard Jarvis Taxpayers Association report. The report disputed the $33 billion cost estimate, concluding that it could be as much as $81 billion. The groups said that the ridership projections were “overly optimistic,” and there were “bloated assumptions with respect to greenhouse gas emissions, insufficient attention to environmental impacts, and unachievable travel times between major markets.” Undeterred, CHSRA continued to sing the project’s praises.

However, as the planning process dragged on, the $33 billion estimate proved to be inadequate, as predicted by the taxpayer groups. An April, 2010 report conducted by State Auditor Elaine M. Howle pointed out that the CHSRA had budgeted for at least $17 billion of federal assistance, and that the authority had given $4 million to contractors despite “no evidence from the Program Manager that the contractors had performed the work.” The same report found that the regional contractor for the railway’s Los Angeles to Anaheim segment, generally regarded as among the cheapest, simplest sections of the project, “completed 81 percent of planned hours but spent 230 percent of planned dollars.”

Understandably, CHSRA’s public relations team resigned in the summer of 2011, just months before the end of its $9 million contract. Yet, even as the cost estimates soared, the CHSRA, which spent $250 million before laying a single mile of track, could still point to the “Yes” vote on Prop. 1A as a clear mandate to keep muddling through; at least until now.

In a spasm of straightforwardness, CHSRA announced in November, 2011 that its total cost estimate had risen to $98.5 billion, or three times the original amount, and that the project’s completion date would be pushed back to 2033, thirteen years behind schedule. On December 6, a Field poll found that 64 percent of respondents support another public vote on the project, compared to just 30 percent opposed. The same poll found that 59 percent of respondents would reject the project if given another chance, along with 37 percent of those who claimed to have voted for it in 2008. Public support is waning, and the current backlash is directly attributable to the new, radically higher estimates, which are only going to increase. The inevitable fights over who gets booted from ideal track pathways and which mayor gets to cut the ribbon at his shiny new train station have hardly begun.

On the same day that the Field poll was released, Department of Transportation (DOT) Secretary Ray LaHood testified before the House Transportation and Infrastructure Committee that he “won’t be dissuaded by the naysayers and the critics.” But unless Secretary LaHood has plans to finance the entire project at the federal level while ignoring the opposition of California taxpayers, it is unclear how California high-speed rail can possibly be funded. The proposed train system will cost more than the state’s entire $86 billion budget in fiscal year 2011, and California’s finances are in appallingly bad shape. In November, Governor Jerry Brown announced that the state will face a $3 billion budget shortfall before the end of 2011, one that is expected to grow to $13 billion by July 2012. California’s unemployment insurance fund is insolvent, and state-run education programs are facing deep automatic cuts, including the cancellation of school bus services in the Los Angeles Unified School District.

California’s high-speed rail proposal is an entirely different animal than it was in 2008. It is dramatically more expensive than the project that was sold to the public, and state finances have seriously deteriorated in that period. The 2008 Prop. 1A vote should be treated as irrelevant; voters were deciding on an issue that bears little resemblance to present circumstances. Gov. Brown should call for a new vote based on what the public now seems to understand: California has been sold a bill of goods, and taxpayers everywhere have more important things to worry about than high-speed rail.

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For more than three years, the State Department has been debating whether or not to approve the Keystone XL pipeline, which would transport heavy crude oil from Canada’s Alberta province to the Gulf of Mexico.  If the pipeline is approved, proponents say that the project would create tens of thousands of U.S. jobs in construction and manufacturing while reducing dependence on foreign oil.  However, on November 10, 2011, the State Department announced that it would delay until 2013 the decision on whether or not to greenlight construction on the project.  The State Department’s decision came just four days after thousands of protestors surrounded the White House and called for President Obama to reject the Keystone XL pipeline project, which has led many to speculate whether or not the Administration’s decision to delay the project until after the 2012 presidential election may be based off of political considerations.

The Keystone XL project has garnered bipartisan support from both members of Congress as well as outside groups, who note that the project would immediately provide a boost to the economy through creating jobs in the beleaguered construction industry and reducing U.S. dependence on foreign oil.  In a November 15, 2011 statement, Rep. Dan Boren (D-Okla.) stated,

At a time when many are without work, it is time we come together in a bi-partisan way to pass this legislation which will create tens of thousands of new jobs.

According to a December 14, 2011 article in CNN Money, the pipeline,

is slated to carry 700,000 barrels of oil a day to U.S. refiners, about 4% of the country’s daily consumption of 19 million barrels a day.

Receiving this additional oil from Canada would certainly help to allay U.S. dependence on oil from the politically unstable Middle East.

On December 13, 2011, the House of Representatives voted 234-193 in favor of legislation that, in addition to extending unemployment insurance and renewing a 2-percent Social Security Payroll tax cut, would give the Obama administration 60 days to decide whether or not to approve a permit for the Keystone XL pipeline.  However, the future of the legislation is uncertain, as Senate Majority Leader Harry Reid has stated that the bill is “dead on arrival” to the Senate, while President Obama has threatened to veto the legislation if it arrives at his desk.

It is clear that President Obama would personally benefit from delaying a decision on the Keystone XL pipeline, as making a decision in either direction would likely risk offending two politically important factions: labor unions that are for the project, or environmental groups that are against it.  However, as the President himself has pointed out, the essence of leadership requires making the tough, though not always popular, choices.  In a December 11, 2011 interview with 60 Minutes:

If my goal was to maintain the extraordinary popularity that I had right after I made my convention speech in 2004, then I would have never left the Senate.  I would have been sittin’ on 70 percent approval ratings.  I wouldn’t have been leading this country, but people’d really be attracted, ‘cause I wouldn’t’ have had to make any choices and make any decisions and exercise responsibility.  I took a different path.  And as Michell reminds me, ‘You volunteered for this thing.’

In order to stay true to his purported values, President Obama should reverse his public stance on the Keystone XL pipeline and do everything within his power to expedite approval of the project.

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A December 9, 2011 article in Government Computer News highlighted the recommendations of a recent report published by the National Association of State Chief Information Officers (NASCIO).   This third report in NASCIO’s cloud computing series provides guidance to state agencies on mitigating risk, data security, and jurisdictional issues associated with the use of cloud computing tools.  According to the article, the report highlights the growth in state and local level partnering for cloud resources in order to reduce funding issues as well as the possible risks and other problems that could arise from such a partnership.

While reducing the total cost of ownership is an important consideration when moving services to a cloud environment, it is equally important to maintain a high level of security surrounding data the public has entrusted to agencies to protect.  As noted in CAGW’s recent report on cloud computing, “security in the cloud starts with the contract vehicle and continues through to the end product.”  The NASCIO report raises issues over contracts that use third-party providers who may reside in a different locality, state or country.  Agencies should keep a watchful eye on where the data resides and who will have access to the data when migrating to any cloud computing solution.

With concerns over the policy and security issues cited in the NASCIO report, it is important that state and local governments proceed cautiously and weigh all considerations including access, data privacy, security, portability and liability before making final decisions on how to proceed.  Through the use of intelligent and stringent procurement practices, state and local governments can make knowledgeable, cost effective decisions on using the tools and services now available through cloud computing.  The best practices outlined in CAGW’s report are a useful tool for state and local agencies seeking to procure cloud computing options for their jurisdictions.

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