Building on Blueprints

The President's point man, Office of Management and Budget Director Mitch Daniels, carries the banner of governmentwide management reform through his deputy director for management. That position, created in 1988, serves as the focal point for management improvement. In early April, the President was still weighing his selection for deputy director for management.

In the meantime, the job of moving the management agenda forward has fallen to Sean O'Keefe, OMB's deputy director and the first Cabinet-level deputy to be confirmed by the Senate. No stranger to government, O'Keefe has been a presidential management intern at OMB's National Security Division, a Capitol Hill staffer, comptroller of the Defense Department and Secretary of the Navy.

At O'Keefe's confirmation hearing in February, Senate Governmental Affairs Committee Chairman Fred Thompson, R-Tenn., cited the "endless agency inspector general and General Accounting Office reports that detail the poor state of management today in the executive branch." Complaining that OMB's management responsibilities have been "neglected," Thompson urged O'Keefe to "leverage the power of the purse" to improve performance, address information technology and workforce deficiencies, and demonstrate results across government.

O'Keefe attempted to do just that in a March memorandum to agency heads. It's a first step on the management side of the budget to mold the general precepts of the President's blueprint into agency action plans. The memo provides guidance for fiscal 2002 on three key elements of reform:

• Making greater use of performance-based contracts.
• Expanding online procurement.
• Expanding A-76 competitions and more accurate FAIR Act inventories.

Each of these goals was a priority in the President's campaign. Highlighting them now, O'Keefe says, serves two key purposes. It shows the President is going to follow through on his commitments and it reflects a clearly focused management agenda.

The guidance urges agencies to use performance-based techniques on at least 20 percent by dollar value of their services contracts exceeding $25,000 in fiscal 2002. Contracts can be counted as performance-based even if only 80 percent of the funding complies with performance-based service contracting criteria. That means only four-fifths of the contract needs to be tied to performance standards or quality assurance plans. This kind of leeway makes a lot of sense, given the difficulties agencies encounter in forecasting outcomes for those portions of contracts addressing unanticipated needs or on-call services.

The memo directs agencies to post virtually all synopses and solicitation materials for acquisitions exceeding $25,000 on the General Services Administration's www.FedBizOpps.gov Web site. This effort marks a clear continuation of the previous administration's initiative to improve access and to bring government transactions in line with the private sector. The guidance also says agencies should conduct competitions for at least 5 percent of the full-time positions listed on their Federal Activities Inventory Reform Act inventories in fiscal 2002. Agency plans must include not only number of positions by function and location, but also, for the first time, costs for training and contractor assistance. This effort marks the first step in carrying out a presidential commitment to opening at least half of all federal positions on agency FAIR Act lists to competition.

While 5 percent seems small, this new approach is much more demanding. In the past, agencies may have identified certain government activities as commercial in nature, but in order to retain core competencies, declined to make them eligible for competition. These loopholes are not allowed under the Bush guidelines.

The new administration's approach to these management initiatives is incremental. "In each case, you need to start with the fundamental question, what do you want the outcome to be?" O'Keefe says.

The President's first-year management agenda has generated little fanfare, but O'Keefe expects agencies to develop their own ways of accomplishing the goals he has set out for them. O'Keefe expects agencies will spend the next few months "breathing life into the blueprint.

Also, the President's approach has a real element of practicality. With only a minimum number of senior management appointees in place, it makes sense to give agencies time to develop the agenda in order to have a solid foundation in place to meet next year's goals.