    [Budget Supplement]
    [Making Government Work]
    [14. Building on Success]
    [From the U.S. Government Printing Office, www.gpo.gov]

      As Vice President Gore said three years ago, reinventing the Federal
    Government will take years of work. Having accomplished much so far, the
    Administration remains committed to building on its success by finding
    new, better ways to deliver service to the American people.
      As the Administration works to balance the budget, these efforts
    become even more important. Red tape, perverse incentives, and
    bureaucratic inertia are even less acceptable in an era of limited
    funds. In the coming years, the Government will have to make fundamental
    changes in the way it works with State and local governments, with those
    it regulates, and with the American public. The initiatives described
    below are the next in a series of steps to fundamentally change the way
    Government works.
      Despite some progress, the Government is still fragmented by
              agency and program, with State and local governments
              administering 600 Federal programs. At the local level,
              problems and opportunities do not fit neatly into boxes on the
              Federal organizational chart. As a result, the Administration
              is working to redefine the relationship among Federal, State,
              and local governments to focus on missions and solutions,
              rather than organizations and structures.
      The Administration is encouraging a stronger partnership
              between Federal management and its employees. Across the
              Government, the National Partnership Council is spurring
              collaborative labor-management efforts, improving customer
              service, and cutting costs.
      In all of its efforts, the Administration is working to ensure
              that Government delivers better service to its customers, the
              American people. In fact, the Administration is creating a new
              kind of organization--a Performance-Based Organization--to put
              customer service at the forefront when agencies perform their
              tasks. And the Administration is redoubling its customer
              service efforts in those ``Vanguard Agencies'' that most
              frequently have contact with citizens.
      To improve customer service and ensure that taxpayer dollars
              are well spent, the Administration is implementing a
              comprehensive plan for agencies to manage their resources and
              programs with a focus on performance and results. The 1993
              Government Performance and Results Act and other performance
              management efforts will give taxpayers a report card on the
              cost-effectiveness of Government programs.

    Performance-Based Intergovernmental Partnerships

       The Administration is working to fundamentally shift the way the
    Federal Government finances and administers over 600 intergovernmental
    programs. Performance-based intergovernmental partnerships are
    agreements between the Federal Government and other levels of government
    based on goals and the progress toward meeting them. In exchange for
    commitments to specific performance levels, State and local governments
    receive more administrative flexibility on how to achieve these levels.

      Performance Partnerships: Last year, the President proposed to
    consolidate 271 programs into 27 ``Performance Partnerships'' in areas
    such as public health, rural development, education and training,
    housing and urban development, and transportation. Generally, these
    partnerships would consolidate funding streams and eliminate overlapping
    authorities, create financial incentives and reward results, and cut
    Federal micro-management and paperwork.
       For example, the Public Health Service would consolidate over 100
    programs into partnership categories, such as chronic diseases. Larger,
    flexible funding pools would replace small categorical grants. Grantees
    would decide how to use funds, but would develop--and show progress
    toward meeting--
    [[Page 132]]
    public health goals, such as increasing the share of
    women whose breast cancer is detected at an early stage.
      Congress has not yet enacted legislation to implement the proposed
    partnerships. But, where it can, the Administration is acting on its
    own. For example, the Department of Health and Human Services has begun
    consulting with State and local governments, and non-profit service
    providers, on appropriate measures of program performance.

      The Southern Alliance of States: Most States are working with the
    Federal Government to enhance the dignity and security of public
    assistance recipients. Rather than use cash or paper instruments such as
    Food Stamps, they will be able to use debit cards. The efforts build on
    existing commercial automated teller machine and point-of-sale debit
    card networks.
      In 1994, the Federal Government signed onto a multi-State,
    multiprogram prototype to provide cash and food assistance to households
    that do not have bank accounts. The Southern Alliance of States--which
    includes Arkansas, Missouri, Alabama, North Carolina, Tennessee,
    Kentucky, Georgia, and Florida-- formed a partnership with the Treasury,
    Agriculture, and Health and Human Services Departments, and the Social
    Security Administration to choose a financial services provider and
    implement a one-card program of electronic benefits transfer (EBT)
    starting in 1995.
      Regional alliances in the Northeast, Midwest, and West also are
    implementing EBT. By 1999, any State will be able to enter a partnership
    with the Federal Government, giving the 31 million citizens who lack
    bank accounts access to Federal and State benefits on a secure plastic
    card.

      Oregon Option: In 1994, the Federal Government launched an interagency
    partnership with Oregon to achieve specific results: better health for
    children, more stable families, and a more capable workforce. Federal
    agencies are giving their State counterparts more freedom in how to
    spend Federal dollars, in exchange for a commitment to be accountable
    for achieving measurable results. The Administration recently signed a
    similar partnership with Connecticut to improve the State's poorest
    communities through economic development and neighborhood
    revitalization.
      Local Partnerships: Individual Federal agencies also have developed
    performance-based intergovernmental partnerships. The Department of
    Housing and Urban Development, for example, formed a partnership with
    the State of Texas and the City of Dallas to revitalize that city, with
    deadlines for achieving certain objectives and performance measures to
    assess success. The Environmental Protection Agency has launched an
    effort, ``XL for Communities,'' giving communities the assistance and
    flexibility to implement their own community-designed strategies for
    greater environmental quality.
      ``Local Flex'': More flexibility for States and localities to address
    their own needs will increase the impact of Federal programs. Only a few
    Federal agencies, however, can now provide the necessary waivers from
    legal and regulatory requirements. Other steps are needed.
      With some key changes, the proposed Local Empowerment and Flexibility
    Act would give States and localities a chance to propose plans for
    better coordination of Federal, State, local, and nonprofit funds and
    services, and to request waivers from Federal laws and regulations that
    hinder a locality's ability to achieve results.
      Under the legislation, proposed by Senator Hatfield, a team of
    Cabinet-level officials would review local plans to integrate Federal
    funds, and Federal agencies could provide more flexibility to achieve
    results.

    Regulatory Partnerships

      Among its steps to improve the regulatory process, the Administration
    is moving away from adversarial enforcement and toward partnerships.
      For example, the Labor Department's Occupational Safety and Health
    Administration (OSHA) is taking its ``Maine 200'' program to the Nation
    at large. The program gives the owners of high-injury workplaces the
    option of developing effective health and safety plans or facing intense
    scrutiny by OSHA.
    [[Page 133]]
      ``Maine 200'' demonstrates the benefits of treating businesses as
    partners--through this program, companies have eliminated 14 times more
    workplace hazards than Government inspectors could have found. Under its
    enforcement partnerships, OSHA: (1) reduces penalties for violations
    that employers fix during inspection; (2) provides incentives for
    employers to fix hazards quickly in exchange for reduced penalties; and,
    most importantly, (3) measures its own performance based on safety and
    health results, not regulatory compliance.

    Federal Workforce Partnerships

      In any large organization, change requires leadership, the continued
    commitment of senior management, and meaningful participation by
    workers. Leadership and management-employee partnerships will help
    create a more flexible, efficient Government.

      The National Partnership Council (NPC) and Labor-Management
    Partnerships: Since its creation in October 1993, the NPC has stimulated
    collaborative labor-management activities across the Government,
    enabling agencies to accomplish their missions more efficiently and save
    tax dollars. For example, Red River Army Depot and its six unions saved
    over $14 million in 1994; the Denver Mint and the American Federation of
    Government Employees ended third-party intervention in disputes, saving
    an estimated $10 million; the Customs Service and the National Treasury
    Employees Union joined hands to reorganize Customs in order to provide
    better service; and the Labor Department's myriad of partnership
    reinvention activities received seven of the Vice President's Hammer
    Awards. (For additional information on the Hammer Awards, see Chapter
    13.)
      The NPC and other interagency councils--the President's Management
    Council, the Chief Financial Officers Council, and the President's
    Council on Integrity and Efficiency--encourage the cross-agency
    dissemination of ideas, speeding the process of reforming Government.
    These councils will be responsible for maintaining the reforms in 1997
    and beyond.

    Performance-Based Organizations and Market Incentives

      Performance-Based Organizations (PBOs): In September 1995, the Vice
    President unveiled the next phase of Administration efforts to improve
    the delivery of Government services, designating the Commerce
    Department's Patent and Trademark Office as the first agency function to
    be transformed into a PBO.
      With PBOs, the customer comes first. The Administration will transform
    some agency customer service functions, such as issuing patents or
    retirement benefits, into performance-driven, customer-oriented tasks.
    The agencies will get considerable flexibility to make personnel,
    procurement, and financial management decisions and, in return, will be
    held accountable for meeting measurable performance goals in delivering
    services to the public.
      Before the Administration designates a PBO, the agency must have a
    clear mission with broad support from key ``stakeholders,'' and it must
    be able to clearly distinguish between its policy-making, regulatory,
    and service delivery functions. The Administration will only target the
    service delivery function for PBO status.
      In a major change from how the Government normally does business,
    agencies will hire ``chief executives'' of the PBOs on a fixed-term
    contract, with a clear agreement on performance goals, service delivery,
    and, in some cases, taxpayer savings. Agencies will pay chief executives
    at market rates, with a large chunk of pay tied to performance.
      Candidates to become PBOs in 1997 are listed in Table 14-1.
    [[Page 134]]
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                                                          Table 14-1.  Performance-Based Organizations
    --------------------------------------------------------------------------------------------------------------------------------------------------------
                             Department or Agency                                                               Function
    --------------------------------------------------------------------------------------------------------------------------------------------------------
    Agriculture...........................................................  Inspection of international travelers and cargo
    Commerce..............................................................  Technical information dissemination
    Commerce..............................................................  Intellectual property rights (Patent and Trademark Office)
    Defense...............................................................  Commissary services
    Housing and Urban Development.........................................  Mortgage insurance services (FHA and GNMA)
    Transportation........................................................  St. Lawrence Seaway Corporation
    Office of Personnel Management........................................  Retirement benefit management services
    --------------------------------------------------------------------------------------------------------------------------------------------------------

      ----------------------------------------------------------------------

      Internal Market Competition, Contracting Out, and Privatizing:
    Competition spurs efficiency. Agencies that provide administrative or
    other commercial/industrial services to captive customers lack the
    stimulus of competition to sharpen their performance. The
    Administration's ``franchising'' initiative is designed to increase
    competition by encouraging agencies to compete with one another and with
    the private sector to provide common administrative services. The
    Administration is consulting with Congress on pilot programs in such
    departments as Interior, Veterans Affairs, and Commerce.
      Agency managers also can procure services from the private sector. OMB
    Circular A-76 governs how the Government chooses the most efficient
    source of commercial-type, public services--the Government or the
    private sector. OMB is revising the Circular to simplify cost comparison
    requirements; cut reporting and other administrative burdens; provide
    for more employee participation; facilitate employee placement; maintain
    the ``level playing field'' to compare costs between the Federal and
    private sectors; and improve oversight to ensure that the most cost-
    effective decision is implemented.

    Increased Emphasis on Customer Service

      Better customer service is central to the Administration's efforts to
    make Government work better and cost less. The President and Vice
    President have challenged service-providing agencies to make
    significant, visible improvements in their customer service (see Table
    14-2). A number of the agencies will make their specific commitments to
    improve service through the Internet and, for the first time, will take
    feedback from their customers through that medium.
      Agencies are communicating with their customers more than ever, and in
    more ways. In early 1996, many agencies will post their customer service
    standards on their ``home pages.'' Future initiatives will include: one-
    stop assistance, such as the U.S. General Store for Small Businesses in
    Houston; 24-hour on-line services, such as the U.S. Business Advisor;
    and new ways for Americans to find Federal services in the Government or
    blue pages of telephone directories. Agencies are listing their
    services, not their organization charts--so, instead of looking for
    passport services under the State Department and the Bureau of Consular
    Affairs, citizens needing passports will be able to look under ``P'' for
    Passports.
    [[Page 135]]
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                        Table 14-2.  Specific Commitments of Members of the President's Vanguard

    Occupational Safety and Health Administration:
                          Make a visible improvement in recruiting for partnership programs by taking the
                                   concepts of ``Maine 200'' program nationwide.
                          Overhaul the worker complaint system to cut response time in half by working with
                                   employees and employers to immediately correct the hazards.

    Internal Revenue Service:
                          Make it easier, faster, and more convenient for taxpayers to file their tax
                                   returns and get forms and information by: expanding electronic filing; bringing
                                   telefile to all 50 States; making Form 1040EZ available to more people; and
                                   providing electronic services for 24-hour access--worldwide--to forms,
                                   publications, and information.

    Environmental Protection Agency (EPA):
                          Dramatically increase EPA's partnerships with business to better protect the
                                   environment and public health at less cost, through such programs as Project XL
                                   and the Common Sense Initiative, and through the agency's voluntary pollution
                                   prevention programs, such as Energy Star, Pesticide Environmental Stewardship,
                                   WAVE, Green Lights, Climate Wise, WasteWi$e, and 33/50.

     Forest Service & Park Service:
                          Dramatically improve the quality of the recreational experience and the services
                                   received by campers and visitors to the forests and parks.
                           Team up to develop a prototype one-stop information and campground reservation
                                   system for public lands.

    Customs Service, Immigration and Naturalization Service, and Agriculture:
                           Use technology to strengthen enforcement by providing more comprehensive and more
                                   timely information to front-line inspectors.
                           Team up to beat the International Air Transportation Association standard of 45
                                   minutes from block time to exit in every major international airport.
                           Develop and meet a similar standard for land border crossings.

    Veterans Affairs:
                           Give veterans and their dependents heightened interaction in benefits delivery.
                           Make timely access the hallmark of veterans medical care.
                           Maintain cemeteries as befit national shrines.
                          Provide the advantages of electronic commerce to veterans and suppliers.

    Passport Office:
                           Ensure that all customers visiting a passport office by summer 1996 have a
                                   pleasant experience.
                           Slash the lines in passport offices by summer 1996.
                          If a customer has a concern regarding service, they can speak with a customer
                                   service representative.
                          Ensure that all telephone inquiries are answered within 2 to 3 minutes.
                          Partner with the travel industry to give travelers easy access to passport
                                   information and forms.

    Social Security Administration:
                          Improve access to SSA's 1-800 line by giving callers nationwide immediate access
                                   to automated services and a choice of a live operator.
                          Make spectacular improvements in callers' ability to reach SSA during 1996.

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    [[Page 136]]
    The Focus on Results

      To improve customer service and ensure that Government spends money
    wisely, the Administration has directed agencies to manage their
    programs with an eye toward achieving performance goals--that is,
    results. Using the 1993 Government Performance and Results Act (GPRA),
    the Administration is working to transform the way agencies are
    administered and programs are managed.
      The number and importance of agency performance goals is growing. For
    example, the Coast Guard has set a target for cutting deaths in the
    commercial fishing industry, one of the Nation's most hazardous
    occupations, from 55 deaths per 100,000 workers in 1993, to 44 in 1996
    and 36 in 1998. The Forest Service has set a goal of increasing, by
    nearly half over 1994 levels, the number of acres on which the
    Government is taking steps (such as chemical treatment) to cut the
    threat and consequence of wildfires.
      Under GPRA, agencies will prepare strategic plans that are built
    around their missions and clearly outline their goals, and develop
    measures to track their progress in achieving the goals. They will
    publish annual performance reports to enable Congress and the public to
    better understand how the Government is spending tax dollars and what it
    is achieving. These reports will give the public an annual update on our
    efforts to create a Government that works better and costs less.