Technology executives in government and the federal contracting community said Nancy Killefer's announcement on Tuesday to withdraw as President Obama's nominee for the top management post at the Office of Management and Budget is a setback in an effort to elevate information technology agency executive decision-making.
"I'm extremely disappointed since I have the utmost respect for Nancy, and think she's absolutely terrific," said Jim Flyzik, who worked for Killefer when he was chief information officer at the Treasury Department. "It's a setback. . . . It's hard to find someone as qualified as her."
Obama nominated Killefer last month to be the deputy director of management at OMB as well as the government's first chief performance officer. But she withdrew her name from consideration in response to a report from the Associated Press that in 2005 the District of Columbia government filed a tax lien of more than $900 on her home for failure to pay unemployment compensation tax on household help.
In her letter to Obama, Killefer, who is a senior director at the management consulting firm McKinsey & Co., said she was withdrawing to avoid becoming a distraction to the administration.
"I recognize that your agenda and the duties facing your chief performance officer are urgent," she said. "I have also come to realize in the current environment that my personal tax issue of D.C. unemployment tax could be used to create exactly the kind of distraction and delay those duties must avoid. Because of this I must reluctantly ask you to withdraw my name from consideration."
A spokesperson for McKinsey confirmed that Killefer remains a director working in the Washington office, though she has not worked with clients since Obama nominated her.
Max Stier, president of the nonprofit Partnership for Public Service, expressed disappointment and told Government Executive that Killefer was an ideal choice because of her range of management experience. "Unfortunately, there are all too few people with great management experience in the public and private sectors," he said. "You can find great candidates in different packages, but it's certainly very appealing to have someone with experience in both sectors."
"Obviously, it's a real disappointment she won't be on the team," said Bruce McConnell, an independent consultant and former chief of information technology and policy at OMB. "But this doesn't change the president's commitment to management and performance. It will create a delay around bringing senior attention to these issues, but we can hope and expect that the president will appoint someone equally qualified soon."
While her selection as chief performance officer was roundly praised by federal IT experts, a few expressed doubt about how much Killefer could accomplish while playing dual roles. "There's some speculation that the chief performance officer role was not going to get the attention it should have because it was being split with another role the person would have to play," said Larry Allen, president of the Coalition for Government Procurement. "The deputy director of management has plenty to do."
But the dual roles would not necessarily reduce the effectiveness of either position, McConnell said. Clay Johnson, deputy director of management under President Bush, was "chief performance officer in all but name," he said.
"To me the idea you would give the deputy director for management the explicit title of chief performance officer showed additional seriousness about it at the same time recognizing that's the most sensible place for that function to be performed with the tools at their disposal," McConnell said.
Most IT officials said Obama should consider a replacement who had a similar reputation for understanding the strategic importance of IT. Craig Jennings, an analyst for the nonprofit OMBWatch, said Killefer's appointment was likely the result of Obama seeking out someone "who gets it," as far as improving the government's IT infrastructure.
"I think the position, since it's management-focused, is really more about how to apply technology to government problems, how to measure performance and make sure you keep programs on track," said Flyzik, president of the technology consulting firm TheFlyzikGroup. "It's really more of a management or leadership position as opposed to technology. . . . Ideally, [it would be] someone with private sector experience but who knows how government works."
A spokesperson for the Senate Committee on Homeland Security and Governmental Affairs emphasized the urgency of filling the vacancy. Sen. Joseph Lieberman, I-Conn., and chairman of the committee, "is disappointed the nomination process for this important position has been delayed. He hopes the Obama administration quickly appoints a new nominee so the critical business of making government more efficient and responsive to the American people can be carried out with vigor."
Government Executive reporter Elizabeth Newell contributed to this article.