Running the Light
- By Brittany Ballenstedt , Elizabeth Newell Jochum , Robert Brodsky , Alyssa Rosenberg and Gautham Nagesh
- December 1, 2007
The Bush administration has used its traffic-light system to rate agency management since 2001. Now we evaluate the president's progress.
"Government likes to begin things-to declare grand new programs and causes. But good beginnings are not the measure of success. What matters in the end is completion. Performance. Results. Not just making promises, but making good on promises."
-Gov. George W. Bush
It's been six years and 23 score cards since President George W. Bush declared a grand program of his own, a management agenda for federal agencies. Has he made good on it? Government Executive applied the administration's own stoplight ratings, and overall, the agenda came in at yellow-"mixed results" in President's Management Agenda parlance.
The administration gives its efforts, or those of the agencies, better marks. Agencies have improved from predominantly red marks at the score card's inception in August 2001 to a slight majority of green on the last quarterly ratings for fiscal 2007. "While agencies have shown great progress in implementing these requirements, there remains a lot of work to be done," said Clay Johnson, Office of Management and Budget deputy director for management, upon release of the latest score card on Nov. 5. Eight days later, Bush issued an executive order lending additional structure to his effort to improve agencies' performance. The order requires agency heads to set clear annual goals, lay out plans for achieving them, and designate "performance improvement officers" to assess and report publicly on progress. A Performance Improvement Council will be established within OMB.
In June 2000, on the stump in Philadelphia, Bush set out his principles for government reform-"citizen-centered, results-oriented and, wherever possible, market-based." These form the underpinnings of the five initiatives of his management agenda-human resources reform, increased public-private competition, improved financial management, expanded electronic government and linkage of budget decisions to program performance-against which departments and agencies are rated by the administration and the administration was rated by Government Executive.
To support our assessments, we provide greater detail than do the administration's quarterly evaluations. We base our human capital yellow ranking, for example, on subratings for key Bush efforts such as pay for performance, recruitment and retention, and technology, as well as a score for labor relations.
We assess broad indicators of financial performance and also evaluate the administration's lines of business initiative, in which financial management figures prominently. We treat the famous, or infamous, depending on your vantage point, Program Assessment Rating Tool within a broader examination of performance improvement and its effect on budgeting.
We judge the ratings that follow to be tough but fair. And we invite you to make your own appraisal of the President's Management Agenda online here.
In an effort to offset a talent drain over the next decade, the Bush administration implemented a number of initiatives aimed at improving the workforce. Many agencies have been called to scrap the decades-old General Schedule, allowing pay to be more closely tied to performance. Human capital initiatives also call on agencies to boost recruitment and retention flexibilities, improve workforce planning and better leverage technology. The administration pursued its initiatives at the expense of labor-management relations.
Pay for Performance
The Bush team moved aggressively to abolish the General Schedule pay system and require that at least part of every salary increase for 1.8 million civilian employees be based on performance. But some employees, unions and lawmakers have opposed pay for performance on the grounds that it could lead to hiring and promotions based on political views or favoritism rather than merit.
Legislators have cut and even blocked funding essential to reforming personnel systems at the Defense and Homeland Security departments. At Defense, officials have been quick to advance pay reforms that could cause many employees to receive raises lower than those for GS positions in 2008, when the new National Security Personnel System will guarantee only a 1.25 percent hike. The remaining 1.25 percent of the expected 2.5 percent raise will be distributed based on performance. NSPS employees-there are 110,000 so far-who meet expectations could receive just the 1.25 percent base increase with a minimal performance hike. Defense will be adding 75,000 new employees to the system between now and March 2008. Homeland Security decided in February to move more cautiously on its new personnel system, vowing to get the performance management piece right before linking it to pay.
Even smaller-scale performance-based systems have foundered. Federal Aviation Administration employees argue that pay raises are arbitrary and based on organizational performance rather than individual success. In September, an arbitrator ruled the Securities and Exchange Commission's pay system discriminated against African-Americans and employees who are 40 or older.
At the core of the concept, uncertainty persists: Can government afford the kind of raises that will prompt high-level performance? "I know of no recent large-scale pay-for-performance implementation where employees surveyed have said that the payouts made a difference in their motivation," says Robert Tobias, director of public sector executive education at American University.
Recruitment and Retention
With 60 percent of the workforce eligible to retire during the next decade, government faces an immense task in attracting new talent and providing incentives to persuade seasoned employees to stay.
The Office of Personnel Management has been leading a far-reaching advertising campaign to show the breadth of opportunity in the government. Ads have aired in 16 areas nationwide. OPM Director Linda Springer says federal jobs Web site USAJobs.gov has received tens of thousands of additional visits from residents in media markets where the ads appeared.
OPM's Career Patterns initiative focuses on a new generation of workers by encouraging workforce mobility and flexibility. "With a career patterns mind-set, we will come to think about those different arrangements-telework, flexible work schedules, and varied appointment types-as natural and regular ways of getting work done and not as aberrations," according to OPM documents.
To keep the government's knowledge base current, OPM sent a proposal to Congress in April to allow retired civil servants to work part time for the government with no reduction in their annuities.
Many agencies are increasing their use of recruiting flexibilities, such as student loan repayment programs. The number of employees receiving loan benefits rose 31 percent and agencies' investment in them increased 28 percent in 2005, according to OPM. The president signed a bill to offer student loan forgiveness to public servants after 10 years of service.
Nevertheless, among younger workers, "interest in government service is relatively high but knowledge [about it] is negligible," says Max Stier, president of the nonprofit Partnership for Public Service in Washington. "The best tools in the world are only going to work if the talent market knows they exist."
It's hard to imagine what more President Bush could have done to antagonize federal unions during his two terms. He insisted that legislation creating the Homeland Security Department allow managers to reduce collective bargaining rights. The National Security Personnel System, one of the administration's signature efforts to move toward pay for performance, gave Defense the ability to suspend collective bargaining until 2009.
In early 2002, Bush fired all seven members of the Federal Service Impasses Panel, the historically nonpartisan arbitrator of disputes between unions and the government. Seven of the nine panel members who served during the Clinton era had significant dispute mediation experience. Of Bush's seven appointees, one has labor law experience and none has mediation experience. The panel has settled 22 percent more disputes in favor of employers than the Clinton panel did and brokered 19 percent fewer compromise solutions.
The administration's efforts are meeting resistance, especially now that Democrats control Congress. The bill implementing the recommendations of the National Commission on Terrorist Attacks Upon the United States would have given Transportation Security Administration screeners the right to organize, a right Bush had eliminated using power afforded by the Homeland Security Department's authorizing legislation. The provision to restore bargaining rights was removed in conference in July to win Republican support for the legislation and to avoid a threatened veto. But on Oct. 1, the Senate passed a Defense authorization bill allowing Homeland Security to retain collective bargaining rights instead of suspending them until 2009. The American Federation of Government Employees is weighing a Supreme Court appeal to win the right to organize the employees covered under the new Defense personnel system.
Courts and independent arbitrators also are chipping away at Bush labor initiatives. In a three-week period in September, unions scored three big wins. An appeals court unanimously gave a TSA screener the right to sue the agency for violating his free speech rights after he was fired for engaging in union activity. An arbitrator ruled the SEC's pay-for- performance system, which the union opposed, discriminated against African-American and older employees. Another arbitration found the Internal Revenue Service acted unfairly in pulling out of a union contract.
Human Resources Technology
Agencies are overcoming budgetary and cultural obstacles to adopt and adapt new hiring and training technologies. Examples of creative solutions abound: Desktop, Web-based applicant tracking systems give managers access to résumés and transcripts; Internet connections at NASCAR races allow people to apply for jobs; in online classrooms, students ask questions by video and instant message.
What's more, agencies are adopting HR technology faster than ever. This summer, the Commerce Department launched a learning management system just 12 weeks after signing a contract with a vendor. "This was almost unheard of anywhere in the federal government," says Kathleen James, who manages Commerce's Learning Center. Nonetheless, most innovative uses of technology still are agency-specific, so progress remains spotty.
Everyone knows a retirement tidal wave is coming, but efforts to plan for it are stymied by the fact that no one knows exactly where it will make landfall or what might hasten or slow its arrival.
Whether fast or slow, the exodus will create holes in leadership ranks and institutional knowledge; agencies are working together to anticipate skills gaps and close them quickly. In January, OPM gave them a hand with the Management Competency Assessment Tool, a Web-based application for assessing leadership skills.
Agencies also have been developing techniques to fill mission critical positions from within and to recruit more aggressively. "Fish and Wildlife Service discovered that they weren't getting many applicants for senior-level positions, so they created a very robust training program, [and] they're now getting many applicants," says Kathleen Wheeler, deputy chief human capital officer at the Interior Department. "Their leadership training programs start at a lower level and build up, so they have a pipeline."
NASA, which faces a dramatic shift in mission as it ends shuttle flights and begins a campaign to send humans to Mars, is using novel methods to retain the knowledge and expertise of scientists who will be leaving the workforce: Have them retrain current employees and recruit and groom new ones to fill in after them.
There's certainly reason to believe that employees will leave sooner when confronted with working conditions they don't like. For example, 856 air traffic controllers retired in fiscal 2007 after the Federal Aviation Administration imposed unpopular new pay and work rules in September 2006.
The sweeping competitive sourcing initiative began five years ago with broad ambitions to revolutionize government operations. Now the program appears to be sputtering out with a whimper.
In 2003, OMB planned to put as many as 425,000 federal jobs up for competition with the private sector. Fewer than 47,000 jobs have been competed. In fiscal 2006, agencies held 183 competitions involving almost 6,700 full-time employees, roughly a quarter of what was originally anticipated and down from a year earlier. Nearly 10,000 jobs still are up for grabs in ongoing competitions and another 18,000 are scheduled to be competed in fiscal 2007.
There's little doubt that competitive sourcing has saved taxpayers money-cumulative net savings are estimated to reach close to $7 billion over the next five years, OMB says-but far less than expected. New data indicate that companies are getting frustrated with the competitions-which were won in-house 83 percent of the time-and are beginning to submit fewer bids.
Administration officials now say the goal is quality, not quantity. But based on OMB's own grading system, the program appears to lack much of both. Only nine of 26 agencies earned green on the most recent quarterly score card for competitive sourcing. And in the past six months, eight have gone down at least one score, while only three have gone up.
The administration points the finger at labor unions and Democrats, but there is ample blame to go around. While in the majority, House Republicans put restrictions on the use of competitive sourcing. And OMB never seemed to win the public relations battle with labor unions, which framed the issue in terms of privatization and outsourcing.
New insourcing measures proposed by the Senate, which would roll back work if federal employees prove they can do jobs for 1 cent less than companies, could be the death knell for competitive sourcing.
Financial Performance/ Lines of Business
The administration's most recent PMA score card showed that agencies are struggling with financial performance. Eleven of the 26 agencies rated, including major spenders such as the Defense, Agriculture and Homeland Security departments, still are earning reds for financial performance. Defense is responsible for more than half the government's discretionary spending yet the department's financial management has been named an area of high risk by the Government Accountability Office. GAO's high-risk series includes a number of other finance-related areas, including Defense's weapons acquisition program and contract management at a number of agencies, including Energy and NASA.
Despite the glaring and entrenched problems, agencies have made some strides. The PMA holds agencies accountable for preparing financial statements for independent audit, and all major agencies now issue their statements within 45 days of the end of the fiscal year. A majority of agencies, representing more than 75 percent of federal expenditures, receive a passing score on their audits.
Progress also has been made on the financial management line of business. OMB initiated a governmentwide analysis of five lines of business to support expansion of electronic government. Task forces were dispatched to examine business and information technology data and best practices in financial, human resources, grants, health and case management in hopes of reducing costs and improving services.
Financial and human resources management got special attention after task force analyses suggested there was more than $5 billion to be saved over 10 years by consolidating management systems and standardizing associated business processes in those areas.
Skeptics warned that guidance for agencies was insufficient, especially in the financial management line, and would create stumbling blocks on the road to implementation. As a result, OMB and the General Services Administration are focusing on making sure standardization instructions are comprehensive. The first financial management standardization document was issued in August. The Common Government-wide Accounting Classification Structure, published by the Financial System Integration Office of GSA, establishes a standard for coding and categorizing financial transactions across agencies. It covers data requirements for internal and external reporting, but also provides enough flexibility to adjust for needs that are agency-specific.
While the model will be implemented over several years as agencies modernize their financial systems, the document marked the end of an arduous process. GSA received more than 600 comments on the draft and worked extensively with OMB and the Treasury Department to establish a single set of codes to identify agencies and financial reporting bureaus. GSA compares the structure to the way all banks recognize ATM codes.
Other financial management initiatives include standardizing data requirements for charge cards, business processes for funds control and receivables management practices.
For electronic government, President Bush set the agenda simply and clearly: "This administration's goal is to champion citizen-centered electronic government that will result in a major improvement in the federal government's value to the citizen."
But the administration didn't execute it.
Certainly the administration has accomplished some of the specifics:
- Expanding USA.gov (formerly FirstGov), a governmentwide search engine developed during the Clinton administration to help the public find government documents.
- Requiring agencies to use the e-procurement site FedBizOpps as a single point of access to government contracting opportunities.
Developing a single portal Web site, Grants.gov, for grant applications. But Bush's higher aspirations still are far from being realized. Building Web sites to track regulations, apply for grants and find contracting opportunities is helpful, but those aren't the functions that increase public service. "It just doesn't get the job done," says an IT consultant.
Agencies have posted electronic documents on the Web, but they have yet to use the technology that provides high-quality online service. Search capabilities are limited (full-text search of documents is rare) and few agencies use feeds such as RSS and XML, making it difficult for the public to stay abreast of what agencies are doing. "I guess, to some extent, they've made it easier for some agencies to put data online now that wasn't online before," says Jerry Brito, a senior research fellow at George Mason University's Mercatus Center. "But it is very difficult to get to and access." Brito published a paper this fall criticizing agencies' e-government efforts.
Just as disappointing has been the administration's progress toward its second goal: "reducing the cost of delivering those services." Agencies were supposed to consolidate duplicative systems and make them more interoperable to share information. That would bring down maintenance costs while increasing productivity and performance. It hasn't worked out that way.
Intelligence and law enforcement agencies, as well as the State and Homeland Security departments, continue to find it difficult to automate manual processes to share information. This is the way a former chief information officer for a large agency characterizes the administration's goal of reducing redundancy and sharing information: "ill-conceived and poorly executed, if executed at all."
What went wrong? As most private sector IT executives say, organizations that want to overhaul their IT operations should start by defining a standard IT infrastructure, not by creating new applications. USA.gov, FedBizOpps and Grants.gov are applications. But that's what the President's Management Agenda called for-new applications, not standard infrastructure.
The biggest shortcoming in Bush's management agenda might be what it omits: a definitive call for information security. Aside from a brief mention of a federal Public Key Infrastructure (the PMA devotes two sentences to the subject), information security is not mentioned. The result is a long list of breaches, including stolen laptops containing Americans' personal financial and health information and infiltration by hackers of Homeland Security and Defense networks filled with sensitive national security information. Omitting security from any IT effort is dangerous, and a mention of PKI, which merely is an encryption tool, doesn't begin to address the larger risks. "It's just one level of security, but not the most critical or relevant," says an IT consultant. The administration's overall e-government effort can be summed up the same way: neither critical nor relevant.
The Office of Management and Budget now has rated nearly every program's ability to deliver results. The evaluations-based on managers' answers to a 25-part questionnaire called the Program Assessment Rating Tool-always have been available to the public, but since the February 2006 launch of the user-friendly ExpectMore.gov Web site, they have become even more accessible.
The site now contains evaluations of more than 1,000 programs, with 78 percent deemed to be working adequately or better. Visitors can search the results by agency, program name or category. They also can find a list of programs that are not performing (this includes those unable to demonstrate results).
This level of transparency is unprecedented, as is the systematic nature of the evaluations and the focus on individual programs, says Jonathan Breul, executive director of the IBM Center for the Business of Government. "In the past, you'd seldom even know what questions OMB was looking at in the budget process," he says.
Critics charge that the evaluations could be compromised by administration officials looking for justification to cut politically unpopular programs. But recently increased openness lends credibility, supporters say.
Robert Shea, associate director for OMB administration and government performance, notes that OMB career professionals and agencies collaborate on the reviews and check them for consistency. Additionally, there is an appeals process for managers who are unhappy with their ratings. What's more, PART received an Innovations in American Government Award in 2005 from the Kennedy School of Government at Harvard University.
OMB promotes PART as a tool to facilitate smarter decisions in allocating limited resources. President Bush has cited them in recommending budget cuts. But the administration has tried to dispel the idea that there is, or should be, a direct link between ratings and funding decisions-more money might be exactly what some poorly performing programs need.
So far, legislators, particularly appropriators, haven't given the ratings the kind of attention OMB might like. But that could be changing. Shea says a number of references to the ratings-both positive and negative-are cropping up in the text of bills and in committee reports. They even came up recently in debate on the Senate floor over the fiscal 2008 Labor, Health and Human Services, and Education appropriations bill, he adds.
As the Bush administration draws to a close, Shea says OMB will continue to make performance targets as aggressive as possible and ensure program evaluations are as complete and as high quality as possible.