Management score card sees more green

The Bush administration's latest quarterly management report card published Thursday showed continued improvement across most categories, but the grades of three agencies slipped.

The score card, which grades 26 major agencies' accomplishments in the five main areas of President Bush's management agenda at the close of the third quarter of fiscal 2005, boasted 12 upgrades. The Labor Department became the first agency to earn top marks on all five of the initiatives: human capital, competitive sourcing, financial management, e-government, and budget and performance integration.

"The president's emphasis on improving management is working," said Clay Johnson, deputy director for management at the Office of Management and Budget, in a statement accompanying the scores. "It is clearly motivating agencies to implement the necessary disciplines to get more for taxpayer dollars."

By enacting management reforms, agencies could save taxpayers from $50 billion to $100 billion a year, Johnson said in his second annual progress report on the initiatives, also published Thursday. "We are working to make that goal a reality," he wrote.

The figures represent potential, rather than documented, savings. Of the total, $40 billion could come from the elimination of improper payments and $6 billion could come from full implementation of competitive sourcing, an initiative encouraging agencies to let contractors bid on jobs considered commercial in nature, Johnson stated. Another $20 billion in annual savings could come from improving efficiency by 1 percent across government, he said.

Labor moved to all-green status by overcoming a yellow in competitive sourcing on the traffic-light-style score card. "We're very happy," said Patrick Pizzella, the department's assistant secretary for administration and management.

The department has been successful for three general reasons, Pizzella said. Officials there started focusing on the management agenda early, Labor Secretary Elaine Chao has stressed its importance and rank-and-file employees have been motivated by the chance to work on a presidential initiative.

Competitive sourcing achieved green last partly because the department first had to get its human capital plan squared away and ensure that managers were properly trained to run public-private job contests, and that employees understood the idea behind the initiative, Pizzella said.

Labor committed to running a certain number of contests by the end of June and followed through, elevating it to green in competitive sourcing, Pizzella said. OMB data indicates that over fiscal 2003 and fiscal 2004, the department ran six job competitions, encompassing a total of 66 full-time equivalent positions. Those contests are expected to produce $3.4 million in savings over three to five years.

While these numbers are small compared to those at some of the other major agencies, Labor is working on larger contests this year and has competitions planned through fiscal 2009, according to Pizzella.

Even with green lights under its belt, Labor still has its work cut out, Pizzella said. "OMB can be a tough taskmaster and they've been known to reevaluate certain grades," he noted.

This happened to three agencies on the latest score card. The Office of Personnel Management and Social Security Administration saw their marks in electronic government drop from green lights, indicating "success," to yellows, signaling "mixed results." The Defense Department, which at the end of fiscal 2004 had a green light on competitive sourcing, continued to fall in that category, moving from a yellow to a red mark.

The Pentagon slipped to the lowest rating because it failed to announce public-private competitions according to the schedule officials there set as part of the department's competitive sourcing plan, said Sarah Hawkins, an OMB spokeswoman. OMB did not have an explanation for the e-government downgrades and OPM and SSA could not be reached for comment.

Defense is working to get back on track, said Joe Sikes, the department's director of competitive sourcing and privatization. The Pentagon has been trying to ensure that it follows OMB's May 2003 revision to Circular A-76, the guide for running job competitions, he said.

"My argument from the beginning has been that we have these new procedures," Sikes said. "The worst thing we could do would be to screw them up."

OMB agrees with that but is losing patience, and rightly so, Sikes added. Defense competitive sourcing officials have asked each of the service branches to give them more details on the public-private competitions they plan to run, and the types of jobs involved, within a month.

Once those plans come in, they'll need to be reviewed, Sikes said. "The plan is to announce competitions sooner rather than later," he said. But he added that he's not sure when Defense's score card grade will improve, because it may take longer than a quarter to get the program going again.

"We are confident that they will get back on track," Hawkins said of the Defense Department.

Meanwhile, agencies made improvements in some of the program-specific areas of the score card. The Housing and Urban Development Department became the first to earn top marks in the newest category on that section: the reduction of errors in payments to program beneficiaries.

To earn a green light indicating "success" on improper payments, agency officials must show that they have reviewed their programs to see which are at risk of substantial over- or under-payments, set targets to reduce errors in the high-risk areas and met these goals.

OMB started tracking 15 agencies' success at curbing improper payments at the beginning of this fiscal year. The first report card, which reflected status at the close of the first quarter of fiscal 2005, contained 10 red lights and five yellows. Those marks improved to eight yellows, six reds and HUD's green.

"As agencies continue to focus their efforts and take the necessary action toward identifying and eliminating improper payments, we expect more to achieve green in both progress and status in the coming quarters," said Linda Combs, controller of OMB's Office of Federal Financial Management, in testimony Wednesday before the House Government Reform Subcommittee on Management, Finance and Accountability.

The Labor Department has yet to earn a green light in improper payments or real property management, which is another of the newer program-specific initiatives. That will be one of its next challenges, Pizzella said.