Research group offers federal cost-saving proposals

With Republicans planning a full-on assault to reduce the federal deficit during the next Congress, a nonpartisan research and management organization has outlined a plan to cut costs and improve government performance.

In a new report, the IBM Center for the Business of Government suggested the government can save about $1 trillion over 10 years and improve its performance by adopting commercial best practices such as consolidating purchasing and standardizing technology.

"In real terms, government organizations at all levels of government are being asked not only to do more with less, but to adjust their missions to today's demands and expectations," the report stated. "Many commercial best practices have been adopted to help commercial organizations save money while becoming more competitive --essentially, doing more with less."

The Obama administration already is exploring some of the cost-saving opportunities on a "starter list" in the report. For example, IBM proposed that agencies begin streamlining the federal government's $78 billion-per-year information technology infrastructure by reducing overhead, consolidating data centers, eliminating redundant networks and standardizing applications.

Earlier this year, the administration implemented a zero-growth policy on federal data centers. "We are working with agencies to review their plans, and we are on track to meet the president's objective to consolidate and significantly reduce the number of data centers within five years," Office of Management and Budget spokeswoman Moira Mack said in October.

The report also recommended that agencies conserve energy, apply business analytics to reduce improper payments, begin selling off surplus facilities and streamline supply chains by pooling the procurement of common items. The administration has endorsed each of those strategies.

Specifically, the authors said consolidating federal call centers could reduce IT-related energy costs by 25 percent while aggressive use of voice, video, document sharing and other collaborative tools could slice travel expenses as much as 20 percent. All together, IBM projected the recommended energy-saving initiatives would save $20 billion during the next decade.

Other initiatives could prove more challenging. The report advised automating more than 10,000 government forms from 173 different agencies. Another option, analysts noted, would be reviving the George W. Bush administration's shared service centers plan to consolidate administrative functions such as payroll operations.

"Every dollar spent on support activities and overhead within federal agencies is a dollar that could be spent on programming or returned to the taxpayer," they wrote. "Why should every agency have its own IT, finance, legal, human resources or procurement operations?"

The White House should establish specific savings targets for each cost reduction initiative, the center said. The report suggested the next OMB director appoint a steering committee made up of Deputy Director for Management Jeffrey Zients and a group of departmental secretaries to coordinate the effort.

The plan called for each participating department to establish teams responsible for identifying cost-cutting opportunities and achieving objectives. A deputy secretary would direct each team.

"It is our belief that existing technologies can significantly reduce costs and improve service quality," the report said. "This has been IBM's direct experience in the commercial world and we see no obvious reason why the federal government cannot achieve similar results."