OMB sets new targets for management agenda

In a major shift in how the White House is pursuing its government reform effort, Bush administration officials have set a deadline of July 1, 2004, for agencies to meet new performance goals under the administration's five-point management agenda, according to documents obtained by Government Executive.

The new initiative, outlined in an April 17 memorandum from Clay Johnson, President Bush's nominee to be deputy director for management at the Office of Management and Budget, gives agencies 13 months to make targeted improvements in the five reform areas: e-government, personnel reform, financial management, competitive sourcing and linking budgets to performance.

The initiative does not pressure agencies to meet all of the reform goals OMB established in the fall of 2001 by next July-including a goal of putting the jobs of 425,000 civil servants up for competition with private firms-but sets more modest goals that officials hope can be reached by the deadline. It also prods agencies to step up reforms on the eve of President Bush's re-election campaign.

In the memorandum, entitled "Where We'd Be Proud To Be," Johnson asks members of the President's Management Council, a group of agency management chiefs, to assess how much progress on the five areas could be made by July 1, 2004. In attachments to the document, Bush officials who have been designated as "owners" of the five initiatives outline their own vision of management success-or where they would be "proud to be"-by that deadline.

"The 'Proud to Be' exercise is simply a mutual goal-setting exercise in which initiative owners and agencies establish clear expectations about where they will be in July 2004, three years after the launch of the management agenda," said a senior OMB official.

Most of the designated "initiative owners" believe agencies will be hard-pressed to meet the previously set overall management goals by next July 1. On two initiatives-competitive sourcing and performance budgeting-officials expect just 5 percent of agencies to fulfill all of the criteria needed to get a "green" rating on OMB's traffic-light-style management scorecard.

So OMB is setting interim goals for July 1, 2004. For example, OMB wants 60 percent of all federal programs to be rated using its Performance Assessment Rating Tool (PART) by that deadline, according to an assessment by Marcus Peacock, associate director for natural resources programs at OMB and the point person for the PART. On e-government, the budget office would like 80 percent of its 24 e-government projects to be up and running by July 1, said Mark Forman, administrator of e-government and information technology at OMB, in his assessment.

In some of the new targets, OMB is backing away from earlier goals. On competitive sourcing, OMB has long said that agencies, with some exceptions, should compete 15 percent of their commercial jobs by Sept. 30 of this year. But the budget office now would be satisfied if agencies met this target by July 2004, said Angela Styles, administrator of the Office of Federal Procurement Policy, in her assessment.

The new targets reflect OMB's push to make public-private competition a routine part of how the government does business. By July 1, 2004, Styles expects half of all agencies to have the resources in place to be able to run five competitions each year. And to earn OMB's green rating by the new deadline, agencies must finish 10 competitions, although they can count any competition finished after January 2001 towards this goal.

On a governmentwide basis, Styles wants three-quarters of all agencies to finish competitions within 12 months, a new deadline that is likely to be part of OMB's revised version of Circular A-76, the government's job competition manual.

The assessments also feature "stretch goals" that involve getting new legislative authority or pushing agencies to step up reform efforts. For example, enacting legislation mandating program ratings-and thereby institutionalizing the PART-is a "stretch goal" for the performance budgeting effort. A "stretch goal" for competitive sourcing is for the Pentagon to put an additional 130,000 federal jobs up for public-private competition. If that happened, civilian agencies would also subject "additional positions" for competition, according to Styles' assessment.

The OMB official said this goal is not an attempt to make agencies compete more than a total of 425,000 jobs, which remains the administration's target, but rather to prod Defense to compete its share of the 425,000 positions. While some military services, particularly the Army, have set plans for huge competitive sourcing efforts, many of their competitions are not scheduled to begin for several years.

"We want Defense to do more, but what we're trying to do is make sure everyone is comfortable with conducting public-private competitions," said the official.

The new July goals drew fire from federal employee unions, the most vocal critics of OMB's competitive sourcing plan. "Our profound concerns about OMB's privatization effort remain the same: It is a process driven by numbers and politics instead of agencies' needs and missions," said John Threlkeld, a legislative analyst with the American Federation of Government Employees.

The "Proud to Be" initiative marks Johnson's first attempt to put his stamp on the Bush management agenda, and observers said it marks the start of a new phase in the reform campaign. "Johnson is very close to the president, very close to the political appointees, and he brings a new focus on accountability for getting the job done," said Carl DeMaio, president of the Performance Institute, an Arlington, Va.-based think-tank. "This initiative is not a lowering of the bar, it's a kick in the rear end."

But agencies are influencing the "Proud to Be" effort as well. The ideas for the initiative grew out of a retreat of the President's Management Council, held February 23 and 24 in Gettysburg, Pa. All agencies have submitted feedback on OMB's proposed July 1 goals, according to OMB, and many believe they can exceed the expectations of the five initiative chiefs.

"As it turns out, the agencies are indicating they think they can be further down the road than the initiative owners thought they would be," said the OMB official.

Johnson also plans to set improvement goals for federal programs with specific management problems, including items on the General Accounting Office's "high-risk" list of management woes.

"We will meet with some of you to go through a similar exercise for the program-specific initiatives, such as the Faith-Based and Community Initiative, and the items on GAO's high risk list," he wrote in the April 17 memorandum.

OMB is adjusting the "Proud to Be" goals as a result of agency feedback and will reach final agreements on targets by next month. The budget office does not plan to publicly release the targets.