[Budget of the United States Government]
[IV. Improving Performance Through Better Management]
[From the U.S. Government Publishing Office, www.gpo.gov]
IV. IMPROVING PERFORMANCE THROUGH BETTER MANAGEMENT
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IV. IMPROVING PERFORMANCE THROUGH BETTER MANAGEMENT
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We made a decision that was profoundly important, that the way Government works matters, that we could not
maintain the confidence of the American people and we could not have ideas that delivered unless the Government
was functioning in a sensible, modern, and prudent way.
President Clinton
December 1998
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On September 30, 1998, President Clinton announced that the Federal
budget had reached balance and produced a surplus for the first time in
a generation. Without this Administration's early and firm commitment to
streamlining and reinventing Government, it would not have been possible
to eliminate the deficit. ``After all,'' Vice President Gore has said,
``it is our progress in reinventing and downsizing Government, while
improving it, that has enabled us to balance the budget, cut taxes for
families, and invest properly in key priorities for the future.''
Reinventing Government--the goals of improving the quality of
services that Americans rightfully expect, while reducing the size of
the Government that delivers them--seems an almost contradictory notion.
How to do more with less? The answer is that the Government must meet
the needs of the American people by improving its management and the
performance of programs--much as U.S. business has done in the face of
competitive pressure over the last quarter century. From the start, Vice
President Gore, working with the departments, agencies, inter-agency
working groups, and worker representatives, and drawing on the expertise
of the private sector, has led an unprecedented effort to make the
Federal Government more efficient and effective while also reducing its
size.
From 1993-1998, the Administration has cut the Federal civilian work
force by 365,000 full-time equivalent employees (FTEs). Based on the
number of Federal employees on the payroll, the work force is the
smallest it has been since the Kennedy Administration. Working with
Federal employees, the Administration has eliminated wasteful spending
and cut numerous outdated Government programs. These efforts have saved
the American people more than $136 billion. Today, we have a smaller,
more efficient Government that provides the services the American people
have come to count on: protecting the environment; improving our
schools; and providing retirement benefits to seniors, to name only a
few. To recognize the Federal employees who help the Government operate
more efficiently and better serve the American people, the President
proposes a 4.4 percent pay raise, the largest increase since 1981, for
civilian employees and military members.
The Clinton-Gore Administration relies on several key strategies to
achieve its reinvention goals. Key among them are the National
Partnership for Reinventing Government (NPR), Priority Management
Objectives (PMOs), and inter-agency management groups.
Founded at the start of the Administration, the NPR (then the
National Performance Review) has empowered Federal employees and
managers and they have responded by improving services and cutting
costs. It counts among its many successes the Food and Drug
Administration's (FDA's) streamlined drug approval process, the Defense
Department's (DOD's) reduction of many military specification buying
standards, and the Federal Aviation Administration's (FAA's) improved
safety procedures. NPR will concentrate on fostering customer-oriented,
results-driven organizations that focus on performance.
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PMOs focus the Administration's efforts to meet some of the
Government's biggest management challenges. They are specific management
initiatives covering a wide range of concerns, ranging from meeting the
year 2000 computer challenge to implementing the restructuring of the
Internal Revenue Service (IRS). The Administration also engages inter-
agency groups (discussed later in this Section) to marshal resources
across the Government to address concerns important to Americans.
Six years out, there is measurable success, more to be done, and a
determination to realize the President's vision of a Government that
functions in a ``modern, sensible, and prudent way.''
Internet addresses in this Section refer the reader to websites where
work is described in greater detail.
NPR: Changing the Government
NPR has consistently pursued initiatives to build a Government that
works better, costs less, and gets the results that matter to the
American people. NPR efforts have led to operational improvements in
agencies that affect everyday American life, such as better customer
service at the Social Security Administration (SSA), and improvement in
delivery of services, including the provision of water, food, and
shelter to disaster victims by the Federal Emergency Management Agency.
In the coming year, NPR will focus on the following four major
initiatives designed to improve Government services to all Americans:
(1) Working to deliver results Americans care about: In 1998, the NPR
launched an effort with 32 agencies to increase their focus on customers
and achieve results that matter to Americans. These High Impact Agencies
(HIAs) interact directly with the public. The HIAs have defined specific
commitments to improve service delivery and agency operations. Table IV-
1 includes examples of the specific commitments made by many of the
HIAs. This focus on customers will build on the agencies' strategic and
annual performance plans discussed in Section VI. Additional information
on the HIAs' efforts is available on the NPR website, www.npr.gov.
(2) Developing customer and employee satisfaction measures that will
supplement agency program results: A key initiative in improving
Government performance, the Government Performance and Results Act
(GPRA), was enacted by Congress in 1993. This Act increases the
accountability of Government agencies by requiring them to define
measurable performance goals and report on their achievements.
In 1999 and 2000, the Administration intends to reinforce GPRA efforts
by increasing the use of customer satisfaction goals in annual plans of
selected agencies. For agency programs dealing directly with the public,
customer satisfaction is a key measure. The Administration will also
conduct the second annual employee satisfaction survey for Federal
workers and use the data to monitor progress in bringing the benefits of
reinvention to all Federal workers. Employee satisfaction also affects
agency performance--satisfied employees mean better Government services,
products, and benefits to the public.
(3) Improving American life in ways that no one Government program
could accomplish alone: The Administration will pilot test strategies to
provide seamless service delivery in areas of greatest concern to
Americans, effectively creating a system of one-stop shopping for
important Government services. People interested in help finding jobs or
in improving public health in their community should be able to obtain
that help swiftly and easily. The Administration is committed to using
partnership approaches among Federal, State, and local programs to
achieve the outcomes most Americans expect from their government.
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Table IV-1. STRATEGIES TO ACHIEVE HIGH IMPACT AGENCY GOALS
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Between now and January 1, 2001, agencies with great impact on Americans will:
I. Partner to get results that Americans care about that no agency can achieve alone. For example:
In partnership with the airline industry, three Federal agencies (the Animal and Plant Health Inspection Service (APHIS),
Customs, and the Immigration and Naturalization Service (INS)) will obtain advance information on 80 percent of international air
passengers to expedite the overall flow of passengers with no loss in enforcement.
The Food and Drug Administration will work closely with industry, health care providers, and the consumer to ensure that
75 percent of all consumers receiving new drug prescriptions will be given useful and readable information about their product.
The Food Safety and Inspection Service will collaborate closely with other public health agencies that are members of the
President's Food Safety Council to reduce food-borne illnesses by 25 percent, between 1997 and 2000. As a first step, they will
work together in 1999 to develop a common approach and coordinate budgetary resources.
II. Create electronic access and processing in government. For example:
The number of States issuing food stamps by electronic benefit transfer will increase from 22 in 1997 to 42 in 2000.
An electronic trademark application will be placed on the Patent and Trademark Office's website. Trademark customers will
be able to file applications and related papers electronically.
By October 2000, the Department of Education will enable three million students and families to submit their Federal
student aid applications electronically. This doubles the current annual number.
III. Manage with a set of measures that balance customer satisfaction, employee satisfaction, and business results. For example:
The Veterans Health Administration (VHA) shows continuing improvement in patient satisfaction with the care they receive.
In 1995, 60 percent of patients rated their care as very good or excellent. That number rose to 75 percent in 1998. The goal for
1999 is 79 percent. The 2000 goal is 83 percent and the 2003 goal is 95 percent.
By 2001, the VHA will expand its adherence to clinical guidelines to cover 95 percent of common diseases among veterans
compared to 76 percent in 1997.
The Federal Emergency Management Agency will increase individual customer satisfaction with the assistance application
process from 84 percent in 1995 to at least 90 percent in 2000.
Note: Information on specific HIAs is available on agency websites.
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One example of such partnerships is the establishment this year by
Executive Order of a Food Safety Council, committed to reducing the
incidence of food-borne illnesses. To improve the well-being of
children, the Federal Government will also enter into 10 partnerships
with State and local governments to devise new ways, under current law,
to increase flexibility in the use of Federal program dollars and to
redirect administrative savings for services and results. Successful
partnerships will demonstrate measurable improvements in the lives of
children. This performance partnership initiative has four components:
1) establishment of a results-driven accountability system, working with
the Federal Interagency Forum on Child and Family Statistics, that will
focus on key indicators of child well-being, such as immunization
coverage, infant and child mortality, high school graduation rates, teen
birthrates, youth crime rates, and child health insurance coverage; 2)
identification of ways to consolidate planning and reporting for
programs with related goals and greater flexibility in administering
grant funds; 3) development of recommendations for new ways, within
current law, through which administrative savings from discretionary
grant programs might be pooled to establish a local Child Well-Being
Investment Fund for innovations and priority programs; and 4) sharing of
lessons learned through a ``how-to'' manual detailing strategies to
reduce administrative costs and allow local flexibility.
(4) Allowing Americans to do business with the Government
electronically: In 1997, the Administration announced the Access America
initiatives to enable Americans to do business with the Government
electronically. Recently, Vice President Gore launched Access America
for Students, which pilots the integrated, computerized delivery of
Government services to postsecondary students. This program will include
services such as student loan applications and renewals, online address
changes, veterans' educational benefits, campus admissions and services,
and electronic income tax filing. Access America for Students will
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be carefully constructed to ensure the privacy and security of all
users. Other Access America programs are planned for users of other
Government services (e.g., senior citizens). Additional information on
Access America is available at www.gits.gov.
Streamlining the Government
Two fundamental changes in the Federal work force have combined to
create a leaner, more efficient Government. First, the Administration
has cut the overall size of the Government by 16 percent. Second, the
Administration has given Federal employees the authority to propose and
carry out significant improvements in agency programs. These changes
have led to the elimination of many internal rules, establishment of
customer service standards, creation of agency reinvention labs, and
improved labor-management relations.
The Administration's accomplishments in downsizing Government are
unprecedented since the demobilization after World War II. As Chart IV-1
shows, this is the smallest Federal work force in 36 years. The savings
have been used to help pay for a variety of initiatives authorized by
the 1994 crime bill, including the successful effort to put 100,000 new
local police officers on the streets.
Almost all of the 14 Cabinet Departments and large independent
agencies are cutting their work forces. For example, the General
Services Administration (GSA) is reducing FTEs by 31 percent by
streamlining its lines of business. The Justice Department's growth
reflects the Administration's expanded war on crime and drugs. The
decennial census is temporarily increasing the size of the Commerce
Department's payroll (see Chart IV-2).
Reducing the size of Government is just one measure of success.
Acquiring and retaining the right mix of people with the best
combination of skills is a challenge to all employers, and the
Government is no exception. Streamlining organizations is never easy,
but a partnership with Federal employee unions has made change possible.
As agencies
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continue reinventing themselves to be more effective and responsive to
America's needs, they will require management tools to restructure their
work forces and achieve greater efficiencies. The Administration will
support agencies if they need--as in the case of DOD, the Department of
Energy (DOE), and the IRS--separate authority to restructure their work
force with voluntary separation incentives. The Administration will also
seek renewal of the authority to offer voluntary separation incentives
to support downsizing efforts in those areas where cost/benefit analysis
indicates that it would be beneficial.
Creating Powerful Incentives to Manage for Results
A new tool--the Performance-Based Organization (PBO)--was developed to
help the Government operate more efficiently. Proposed by the
Administration, and enacted by the Congress, the first PBO was mandated
to improve the efficiency and delivery of student financial assistance.
PBOs encourage a group of Government executives in an organization to
bear responsibility for its level of performance. These executives
commit to meet tough annual performance goals, and if successful, they
can receive substantial bonuses. To help them meet these goals,
executives can exercise greater flexibility in hiring, compensation, and
procurement. During the 106th Congress, the Administration will develop
legislation to establish additional PBOs, including the FAA Air Traffic
Services, the Seafood Inspection Service, the Patent and Trademark
Office, the Rural Telephone Bank, the Defense Commissary Agency, the
National Technical Information Service, the St. Lawrence Seaway
Development Corporation, Federal Lands Highway, and the U.S. Mint.
Tackling Government's Biggest Management Challenges
To create a clear set of priorities for management efforts, the
Administration has selected 24 key issues, listed in Table IV-2, to be
PMOs. These were chosen as areas in need of real change, and will
receive ongoing attention from the Administration.
There are six new initiatives while 18 continue from last year's
budget. PMOs are coordinated by OMB with assistance from the NPR and
inter-agency working groups. This assures that objectives receive senior
management attention. Periodic reporting and review of these objectives
provide an opportunity for corrective action as necessary throughout the
year.
Strengthening Government-Wide Management
1. Manage the year 2000 (Y2K) computer problem: There is no more
immediate management challenge facing governments and industries world-
wide than the impending shift of dates from the year 1999 to the year
2000. A year ago, 27 percent of the Federal Government's mission-
critical systems were Y2K compliant. At the end of 1998, more than
double that number--61 percent--met that standard. The Administration
has set March 31, 1999, as the deadline for all mission-critical systems
to be Y2K ready.
Under the direction of the President's Council on Year 2000
Conversion, agencies are reaching out to private sector organizations,
State and local governments, and international institutions. External
Y2K activities have been organized to focus on key sectors, including
energy, telecommunications, and financial institutions. In December
1998, the U.S. Government helped organize a United Nations conference of
Y2K coordinators from over 100 countries.
The Administration also recognizes a critical need for industry to
share its Y2K experiences and solutions with each other and with the
public. Accordingly, the Administration proposed and the Congress
enacted the Year 2000 Information Disclosure Act, which encourages
companies to share information about possible Y2K solutions.
In 1999, agencies will focus primarily on testing their systems and
their interactions with other systems, and will develop contingency and
continuity of operations plans. In 2000, agencies will focus on assuring
that Federal programs continue to deliver uninterrupted service to the
public.
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Table IV-2. PRIORITY MANAGEMENT OBJECTIVES
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STRENGTHENING GOVERNMENT-WIDE MANAGEMENT
1. Manage the year 2000 (Y2K) computer problem
2. Use results to improve program management
3. Improve financial management information
4. Protect critical information infrastructure
5. Strengthen statistical programs
6. Implement acquisition reforms
7. Implement electronic Government initiatives
IMPROVING STEWARDSHIP OF ASSETS
8. Better manage financial portfolios
9. Better manage real property
IMPROVING PROGRAM OPERATIONS AND INTEGRITY
10. Verify that the right person is getting the right benefit
11. Use competition to improve operations
IMPROVING PROGRAM MANAGEMENT
12. Modernize student aid delivery
13. Improve DOE contract management
14. Strengthen the HCFA's management capacity
15. Implement HUD reform
16. Resolve disputes over Indian trust funds
17. Implement FAA management reform
18. Implement IRS reforms
19. Streamline SSA's disability claims system
20. Revolutionize DOD business affairs
21. Improve management of the decennial census
22. Manage risks in building the International Space Station
23. Improve security at diplomatic facilities around the world
24. Reengineer the naturalization process and reduce the citizenship application backlog
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2. Use results to improve program management: GPRA makes Government
agencies more accountable by focusing managers and policy makers on
agency performance. GPRA can fundamentally change how the Government
carries out its programs and makes funding decisions. The Act requires
Federal agencies to periodically develop long-range strategic plans and
annually prepare performance plans and performance reports. The annual
plans set specific performance targets for an agency's programs and
activities. The combination of GPRA plans and reports introduces an
unprecedented degree of managerial and institutional accountability for
accomplishing program goals. Key to achieving success is making the
plans useful to the Congress, the President, and agency management.
In 2000, agencies will submit to the Congress and the President the
first of their annual reports on program performance. These reports,
covering 1999, will compare actual performance to the performance target
levels in the annual plans for that year, and provide an explanation for
any goal not met. With these reports, the first cycle of GPRA
implementation will be complete.
During 2000, agencies will also be revising and updating strategic
plans for submission
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to the Congress and OMB by September 2000. All GPRA plans and reports
are publicly available, and can often be found on individual agency
websites.
Budgeting for Results is an effort to display and budget for all the
resources used by Federal programs in a way that allows the costs to be
systematically compared with the benefits provided. Although all costs
are reflected somewhere in the budget, these costs are not all
associated with the individual programs that use the resources. Some
costs may be paid by other components within the Government. Thus, some
of the basic information necessary for effective decision making is not
readily available. In the coming year, efforts will continue toward
making Budgeting for Results a reality.
3. Improve financial management information: In March 1998, for the
first time in the history of the United States, the Government issued
audited financial statements presenting the results of its operations.
While the audit disclosed financial system weaknesses and problems in
fundamental record-keeping in a number of areas, the Government's
efforts to provide a full accounting is unprecedented. Bringing problems
to light will force improvements. Improvement has already begun as
illustrated by Table IV-3, which presents the anticipated results of
audits of the financial statements of the 24 largest Federal agencies in
1998. These show that the Administration has already made substantial
progress in improving financial management. Recognizing more must be
done, the President directed agencies to resolve systems and record-
keeping problems during 1999--with the goal being an unqualified report
on the Government's 1999 financial statements, which will be issued in
March 2000.
4. Protect critical information infrastructure: Last year,
Presidential Decision Directive 63, Protecting America's Critical
Infrastructures, launched a program to counter risks to the increasingly
interconnected national infrastructures, such as telecommunications,
banking and finance, energy, transportation, and essential Government
services. These infrastructures are particularly vulnerable to
disruptions--whether deliberate or accidental--to the computer systems
that support them. The goal for 2000 is increased security for
Government systems. The Federal Government should be a model of
infrastructure protection, linking security measures to business risks
and agency mission.
The goal for 2003 is a reliable and secure private information system
infrastructure. The Administration will work with private industry,
which owns the vast majority of the Nation's infrastructure, to meet
common protection goals. Care will be taken to preserve privacy, and
regulation will be used only if there is a material failure of the
market to protect the health, safety, or well being of the American
people.
5. Strengthen statistical programs: The Government spends more than $3
billion each year to produce statistical measures of our economy and
society that help decision makers in the public and private sectors.
These data are used for everything from spotting important trends in
public health to projecting the impact of future demographic shifts on
the Social Security system. In 1998, to improve access to, and the
quality of, Government statistical data, the Administration: 1)
sponsored a bill to permit limited sharing of
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Table IV-3. CFO Agency Financial Statement Performance Goals
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Estimate
Financial Statements 1997 -----------------
Actual 1998 1999 2000
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Audits Completed...................................................................... 23 24
24
24
Agencies with Unqualified Opinion..................................................... 11 14
20
23
Agencies with Unqualified and Timely Opinion.......................................... 8 12
20
23
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confidential data among selected agencies solely for statistical use
with appropriate safeguards; 2) doubled (to 28) the number of Federal
agencies whose data series are indexed on www.fedstats.gov; and 3)
published innovative inter-agency thematic reports based on federally-
collected statistics, including America's Children: Key National
Indicators of Well-Being, and Changing America: Indicators of Social
and Economic Well-Being by Race and Hispanic Origin. In 1999, the
Administration will continue to seek passage of legislation for
statistical data sharing, and continue work on the American Community
Survey to provide comparable demographic, economic, and housing data
for small geographic areas. In 2000, the Administration will begin
implementing the newly revised 1998 Standard Occupational
Classification.
6. Implement acquisition reforms: The Federal Government is the
Nation's largest buyer of goods and services, purchasing almost $200
billion annually. In the past six years, the Congress and the
Administration have initiated numerous acquisition reforms to maximize
the taxpayer's buying power. Contractors are increasingly being held
responsible for results and measured on their performance when competing
for future work. Agencies are buying commercial products and services
rather than costly Government-unique solutions. The buying process
continues to be streamlined, paperwork reduced, and results measured. In
1999, the Government will have 60 percent of Government purchases below
$2,500 made by credit card--bypassing more paper intensive and time
consuming procurement processes. By 2000, this rate will increase to 80
percent (see Chart IV-3). By 2000, over $23 billion in services
contracts will be converted to Performance-Based Service Contracting
(PBSC). Pilot programs demonstrated price reductions averaging 15
percent in nominal dollars, and agency satisfaction with contractor
performance rose by 18 percent. Also by 2000, all major agencies will
have systems which record contractors performance. This information will
be a key
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determinant to better manage contracts and successfully select
contractors.
7. Implement electronic Government initiatives: As discussed in the
Vice President's 1997 Access America Report, today's most important
infrastructure improvement needed to promote electronic access to
Government services is the ability to authenticate users over open
networks like the Internet. The Government Paperwork Elimination Act of
1998 promotes Federal agency use of electronic signatures to verify
identities and integrity of information and establishes the legal
validity of electronic documents. In 1999, the Administration will work
with the private sector to develop guidelines for implementing the Act.
In 2000, the Administration will issue those guidelines, incorporating
lessons from the Access America projects. Additional mission performance
improvements from specific information systems investments are discussed
in Chapter 22 of Analytical Perspectives.
Improving Stewardship of Assets
8. Better manage financial portfolios: The Federal Government
currently underwrites more than $1 trillion in loans, primarily to
students, homebuyers, and small businesses. The Government must better
serve these customers and protect its interest in obtaining efficient
and timely repayment. Using electronic commerce and the Internet, the
Government will test streamlined processes for student loan applications
and electronic drawdown to those who qualify. Privacy will be protected
though the use of electronic signatures. The Government will also begin
sharing information electronically to better manage its single-family
home loans, and if successful, will apply the same model to other
lending programs. By 2000, the Debt Collection Improvement Act, which
requires agencies to refer debt over 180 days delinquent to the Treasury
Department for collection, will be fully implemented with the help of a
Government-wide offset program, private collection agencies, and asset
sales.
9. Better manage real property: The Government owns billions of
dollars worth of real property, including office buildings, hospitals,
laboratories, and military bases. The Administration will pursue a
number of initiatives, and where necessary, will submit legislation to:
continue DOD's successful housing privatization program that
augments each Federal dollar with two or more private sector
dollars to construct and manage housing, thereby enabling the
department to improve the quality of military family housing
three times faster than would otherwise be possible;
allow the Department of Veteran Affairs (VA) to sell unneeded
property and keep the proceeds to improve direct care and
services to veterans, with a share of the proceeds being used
to provide assistance grants to local homeless populations;
and
amend the Federal Property and Administrative Services Act of
1949 to improve real property management, including allowing
agencies to exchange or sell unneeded property and retain a
share of the sales proceeds for other property investments.
Improving Program Operations and Integrity
10. Verify that the right person is getting the right benefit: It is
important to ensure that beneficiaries get the benefits to which they
are entitled and that errors in providing benefits are minimized.
Agencies can shorten application review times and strengthen program
integrity by sharing information among Government programs. For
instance, in 2000, HUD will begin verifying tenant-reported income
against other Federal income data. This will help ensure that housing
assistance goes to those entitled to these benefits. Also in 2000, the
Department of Education will propose legislation to permit the use of
income information in the National Directory of New Hires to verify
income reported on student loan applications and to identify income
received by student loan defaulters. This could lead to an estimated
savings of over $450 million.
In 1999, the Administration will support improved Federal and State
program information sharing to minimize erroneous payments
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at benefit determination; to eliminate unnecessary burdens on applicants
by coordinating information collection and verification; to protect
individual privacy; and to enable customers to use secure and convenient
electronic application processes.
11. Use competition to improve operations: Competition has become a
cornerstone of the business strategy for DOD. DOD will compete over
200,000 positions (in accordance with OMB Circular A-76 procedures),
including more than 100,000 positions between 2000 and 2005. Savings
will result from: 1) reengineering work that stays in-house; and 2)
contracting out, which has shown savings of 30 to 40 percent. Other
agencies are identifying potential commercial activities, which will
provide a basis for implementing the Federal Activities Inventory Reform
Act of 1998 (FAIR). Inventories are due to OMB by June 30, 1999, under
the Act.
Improving Program Implementation
12. Modernize student aid delivery: Each year, nearly nine million
students receive a total of $50 billion in aid through six major Federal
student financial assistance programs. These programs are separately
authorized--with unique features--and have evolved information and other
management systems that are not always consistent with one another. To
improve and streamline the management of these programs, the Higher
Education Amendments of 1998 authorized the Government's first ever
Performance Based Organization (PBO). During 1999, this PBO will work
with a broadly representative group of lenders, students, and program
intermediaries to develop a five-year performance plan to modernize
student aid delivery. The goals will include:
improving service to students and other participants in the
student aid process;
reducing costs of administering the programs;
integrating and improving program information and delivery
systems; and
developing open, common, and integrated delivery and
information systems.
13. Improve DOE contract management: More than 90 percent of DOE's
budget is spent through contractors who are responsible for the
operation, management, and safety of DOE facilities. Making more
effective use of Performance Based Service Contracts (PBSC) and
competition would improve DOE's mission attainment and could potentially
save up to $1 billion. In 1999, DOE will focus on PBSC conversions for
two management and operating contracts and 10 service contracts to
increase work accomplished and lower costs. Also, DOE will compete four
of the eight major expiring contracts.
14. Strengthen Health Care Financing Administration's (HCFA's)
management capacity: HCFA is responsible for the stewardship of many of
the most important social programs run by the Federal Government,
including Medicare, Medicaid, and the Children's Health Insurance
Program (CHIP). HCFA faces the formidable challenge of modernizing its
administrative infrastructure, meeting pressing statutory deadlines for
program change from the Balanced Budget Act (BBA) and the Health
Insurance Portability and Accountability Act (HIPAA), and perhaps most
important, the need to be highly responsive to its customers.
HCFA has begun the process of management change through its recent
reorganization. However, further reform is needed. HCFA, HHS, and OMB
have together begun the development of a reform initiative that will
increase HCFA's flexibility to operate as a customer centered prudent
purchaser of health care while also increasing accountability. This
initiative has five components: 1) management flexibilities (e.g.,
evaluation of personnel needs and flexibilities); 2) increased
accountability to constituencies (e.g., regular reports to the Congress
and the Administration, creation of an outside advisory board); 3)
program flexibilities (e.g., new authorities and greater use of existing
authorities to pay for services at market rates, enter into selective
contracts, and engage in competitive bidding); 4) structural reforms
(e.g., re-engineering the relationship between HCFA's central and
regional offices and between HCFA and HHS; contracting out functions);
and 5) contractor reform (e.g., promoting competition in Medicare claims
processings, introducing contract terms
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that allow more flexibility for the Federal Government).
HCFA's core functions--modernizing Medicare, detecting fraud and
abuse, providing beneficiary and provider education, implementing
legislative changes, processing claims, providing increased beneficiary
choices, and managing Federal and State Medicaid and CHIP programs--are
vital and continue to expand. To meet these expanding programmatic
challenges, as well as the challenges of continuous management reform,
it is critical to move toward a stable source of funding for HCFA. As
HCFA and HHS move down the road toward achieving fundamental reform and
begin to accomplish some of the basic objectives noted above (e.g.,
contractor reform), the Administration will review legislative proposals
to increase the stability of HCFA's funding.
15. Implement HUD reform: HUD's comprehensive reforms are geared
toward producing improvements in agency operations--so that all tenants
can live in safe and well-managed housing. These reforms include:
clarifying the mission of each employee; cleaning up the data in
existing management and financial systems; integrating these disparate
management and financial systems where possible; and enhancing
accountability in HUD programs. For instance, by 2000, HUD will initiate
an independent, on-going assessment of all public housing and Section 8
projects. Projects that fail to meet reasonable private sector
benchmarks for safety and financial integrity will be referred to a
newly established HUD Enforcement Center for intensive oversight and
technical assistance. If a project's safety and financial status do not
improve, new management will be installed, or Federal assistance to the
project will end. By 2000, HUD will also begin periodic customer and
employee satisfaction surveys. The results of these surveys will be used
to monitor progress in implementing meaningful HUD reform.
16. Resolve disputes over Indian trust funds: The Department of the
Interior (DOI) is responsible for managing nearly $3 billion in trusts
the Federal Government holds for the Indian Tribes and individual Native
Americans. In 1998, DOI verified over half of all individual trust
accounts, and conversion of these accounts to a commercial accounting
system will be completed by the end of 1999. The Administration will
also re-introduce legislation to settle disputed tribal trust balances
that resulted from decades of mismanagement, and consolidate highly
fractionated ownership of Indian lands. In 2000, DOI will:
develop and negotiate settlement offers with Tribes whose
accounts lack full documentation, and develop formula-driven
settlement payments for Tribes that accept these offers;
double the number of pilot projects to consolidate ownership
of fractionated lands; and
complete verification of the remaining one-third of all trust
asset account data and finalize the conversion to the new
commercial trust asset management system.
17. Implement FAA management reform: The safety of the flying public
depends on the FAA--its air traffic controllers, technology, and
preparation for future challenges. FAA has begun an 18-month pilot
project to link pay increases for some staff to the achievement of their
performance targets. In 1999, FAA will evaluate the overall impact of
the first three years of its personnel reform. FAA will also continue to
develop its cost accounting system to allow more business-like
operations and management improvements. By early 2000, FAA will complete
replacement of en route air traffic controller workstations and begin
purchasing modernized airport terminal radar. FAA will continue to
develop promising free flight technologies to improve air traffic
control efficiency and effectiveness.
18. Implement IRS reforms: The IRS is modernizing its organization and
its information technology to better serve over 200 million taxpayers
and enhance its productivity by encouraging quality work. Major portions
of the IRS' modernization plans were mandated by the Internal Revenue
Service Restructuring and Reform Act of 1998. The new focus is captured
by the IRS' revised mission statement: Provide America's taxpayers top
quality service by helping them
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understand and meet their tax responsibilities and by applying the tax
law with integrity and fairness to all. The basic outline of the new
structure was completed in August 1998. The IRS Commissioner expects to
announce the final design and implementation plans on April 15, 1999.
The new organization and system improvements will be implemented over
the following two and a half years. At the same time, IRS is modernizing
its information technology to better support its new organization. In
December 1998, IRS awarded a prime contract for information technology
modernization. This is a long-term partnership between IRS and private
industry to deliver the modernized financial and information systems
needed to support IRS' new customer oriented organization.
19. Streamline SSA's disability claims system: SSA has undertaken a
multi-year redesign project to improve service delivery for the millions
of individuals filing for, or appealing decisions on, disability claims.
SSA is providing all its adjudicators with uniform training,
instructions which clarify complex policy areas, and an improved quality
assurance process. Initial results indicate that these changes are
helping SSA make more accurate disability determinations earlier in the
claims process. SSA is also pilot testing modifications designed to
streamline the disability applications process and increase claimant
interaction with SSA at both the initial claim and hearing levels.
Implementation of pilot modifications that prove successful will begin
in 1999 and 2000.
20. Revolutionize DOD business affairs: DOD is changing the way it
does business. Just as industry was forced to change to be competitive,
so too must DOD upgrade its business operations to effectively support
future national security strategy. DOD will adopt better business
processes, pursue commercial alternatives, consolidate redundant
functions, and streamline organizations to reduce overhead and apply
resultant savings to fund modernization and quality of life programs.
For example:
DOD has devolved day-to-day program management functions from
the Office of the Secretary of Defense to the military
departments and defense agencies so that it could concentrate
on policy and oversight responsibilities.
DOD competitive sourcing initiatives will produce savings of
over $6 billion from 1998 to 2003, with annual recurring
savings thereafter of more than $2 billion.
DOD will also improve the work environment, and benefit the
lives of Department personnel, by establishing a career
transition office for military personnel, establishing a
Chancellor for Education and Professional Development,
reengineering travel procedures, and streamlining the shipment
of household goods.
21. Improve management of the decennial census: The goal of the
decennial census is to conduct the most accurate census in U.S. history.
The Census Bureau's plan will implement strategies to conduct a thorough
and complete census. Specifically, management improvements include:
user-friendly forms; a telephone questionnaire assistance program;
language assistance; and using state-of-the art statistical sampling
techniques. In 1999, preparations include developing the master address
list, printing the questionnaires, and opening local census offices. In
2000, the census becomes operational. Activities will include hiring
300,000 temporary field staff, staffing the local census offices, and
conducting non-response follow up and integrated coverage measurement.
22. Manage risks in building the International Space Station: The
United States has the lead role in the international effort to build the
International Space Station. The cost of U.S. participation has
escalated because of technical difficulties, new work requirements,
performance shortfalls, and Russian delays and shortfalls. In 1999, the
program will continue to address cost and schedule performance problems
in its key contracts, strengthen contract management and cost controls,
and further reduce risks from potential Russian shortfalls. In 2000, the
program begins a transition from development activities to orbital
operations and research, seeking to take advantage of commercial
practices, products, and services. The first two components of the space
station were launched successfully in November and December of 1998.
Additional 1999 launches
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will prepare the orbital platform for the first permanent crew in
January of 2000. Assembly will continue through 2004.
23. Improve security at diplomatic facilities around the world: The
State Department received $1.4 billion in 1999 emergency funds to
implement a broad program of security enhancements in response to
terrorist bombings in Kenya and Tanzania and related threats directed at
U.S. diplomatic and consular facilities overseas. Achieving global
upgrades and maintaining that readiness at the Department's overseas
posts poses a significant management challenge. Follow-on efforts will
include significant investments in overseas facilities to ensure
continued protection of U.S. Government employees working overseas.
Long-range capital planning, including a review of future security
requirements by a panel of experts and careful use of resources, will
ensure that these investments meet cost, schedule, and performance goals
of the program.
24. Reengineer the naturalization process and reduce the citizenship
application backlog: The Immigration and Naturalization Service (INS) is
redesigning its naturalization process to ensure service and benefits
are provided with complete integrity and in a timely manner. At the same
time, INS is addressing a backlog of 1.8 million pending applications
for citizenship.
INS is committed to completing the naturalization process
reengineering in 2000 and reducing the citizenship backlog--which
currently requires applicants to wait upwards of 20 months to
naturalize--to a 12-month wait-time in 1999 and a six to nine month
wait-time by the end of 2000.
Using Inter-agency Groups to Improve Performance
To achieve the Administration's goal of making fundamental change in
the operation of Government, inter-agency groups have been extensively
used to lead crosscutting efforts. These groups draw together
operational, financial, procurement, integrity, labor relations, and
systems technology experts from across the Government. They establish
Government-wide goals in their areas of expertise, and they marshal the
resources within individual agencies to meet those goals. Several of
these groups were established for the first time by this Administration,
including the President's Management Council and the National
Partnership Council. Other interagency groups are described in Table IV-
4.
The President's Management Council (PMC): The PMC consists of the
Chief Operating Officers of all Federal departments and the largest
agencies. The PMC provides leadership for the most important Government-
wide reforms. Council priorities include: streamlining agencies without
unnecessarily disrupting the work force; identifying criteria and
recommending methods for agency restructuring; identifying performance
measures to support electronic commerce and performance-based service
contracting; facilitating development of customer service standards;
supporting labor-management partnerships; and leading GPRA
implementation.
The National Partnership Council (NPC): President Clinton established
the NPC in October 1993 to enlist the Federal labor unions as allies in
reinvention and to shift Federal labor relations from adversarial
litigation to cooperative problem solving. Members of the NPC include:
representatives of Federal employee unions and Federal managers and
supervisors; the Federal Mediation and Conciliation Service; the Federal
Labor Relations Authority; the Office of Personnel Management; OMB; DOD;
and the Department of Labor. In 2000, NPC will continue developing
methods to evaluate partnerships and their effect on agency productivity
and service. The results of this research will guide individual agencies
in evaluating and promoting their efforts. More information on the NPC
can be found on its website: www.opm.gov/npc.
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Table IV-4. MAJOR INTER-AGENCY GROUPS
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Council Name/Membership Council Priorities/Recent Activities
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Chief Financial Officers (CFO) Council: The CFOs and 1998 activities included
Deputy CFOs of the 24 largest Federal agencies and interagency projects on GPRA
senior officials from OMB and Treasury. implementation, electronic commerce,
http://www.financenet.gov grants management, and human resources
development.
Chief Information Officers (CIO) Council: The CIOs The Council develops
and Deputy CIOs for 28 major Federal agencies, two recommendations for information
CIOs from small Federal agencies, and technology management policy; identifies
representatives from OMB and two information opportunities to share information
technology boards. resources; and supports the Federal
http://cio.gov Government's development of an
information technology workforce.
President's Council on Integrity and Efficiency Priorities include mounting
(PCIE): The 27 Presidentially-appointed Inspectors collaborative efforts to address
General (IGs), the Vice Chair of the agency- integrity, economy, and effectiveness
appointed IG council, and other key integrity issues that transcend individual
officials. agencies. Recent efforts included a
http://www.ignet.gov review of the controls of the Federal
Electronics Benefits Transfer System and
agency progress in debt collection.
Current efforts include a project on non-
tax delinquent debt.
Electronic Processes Initiatives Committee (EPIC): The PMC established EPIC to
Senior policy officials from DOD, GSA, Treasury, and further the use of electronic commerce
OMB. technologies and processes within the
http://policyworks.gov/org/main/ Government.
me/epic/
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Federal Credit Policy Working Group: Representatives Provides advice and assistance to
from the major credit and debt collection agencies OMB, Treasury, and Justice in formulating
and OMB. and implementing Government-wide credit
http://www.financenet.gov/ policy.
financenet/fed/fcpwg
Procurement Executives Council: Senior procurement An inter-agency forum for
executives from major Federal agencies. improving the Federal acquisition system.
Inter-agency Alternative Dispute Resolution Working President Clinton established the
Group (ADR): The Attorney General, representatives ADR in May 1998 to assist Government
of the heads of all Cabinet Departments, and others agencies in making greater use of
with significant interest in Federal dispute consensual methods for resolving
resolution. disputes, including mediation, neutral
http://www.financenet.gov/ evaluation, arbitration, and other
financenet/fed/iadrwg processes.
Joint Financial Management Improvement Program During 1998, JFMIP issued draft
(JFMIP): A joint effort of GAO, OMB, Treasury, and revised system requirements for Federal
OPM, with a rotating representative from another financial, human resource, and payroll
agency. systems; completed plans to redesign the
http://www.financenet.gov/ testing and qualification process for
financenet/fed/jfmip/ commercial off-the-shelf accounting
system software for Federal agencies; and
issued guidance on core competencies in
financial management.
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