[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--
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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.
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  ``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.
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                                                      Table 14-1.  Performance-Based Organizations                                                      
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                         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                                          
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  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.
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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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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.