If used effectively, the 1993 Government Performance and Results Act could serve as the best means for creating performance accountability for contractors and federal grant recipients who help the government deliver services, according to a new report from the PricewaterhouseCoopers Endowment for the Business of Government. Under the Results Act, federal agencies are required to craft five-year strategic plans, along with annual performance reports and performance plans. However, the law requires such rigidity and uniformity in Results Act reports that they often can't address the varied roles that contractors, regulated industries and public and private sector grant recipients play in delivering government services, according to the report, "The Potential of the Government Performance and Results Act as a Tool to Manage Third-Party Government."
The difficulties in managing third parties using the Results Act have largely been ignored, wrote David Frederickson, the author of the report and a scholar at Indiana University. But a recent Bush administration report
also found that most social service programs lack performance measures as required under the Results Act. The Results Act requires agencies to set goals at the federal level for programs they do not control, Frederickson said, making it hard to accurately measure performance. "One example of this is the discrepancy between the number of goals for Medicaid compared to the number of goals for Medicare," he explained. "Both programs are operated through third parties - Medicaid through the states, and Medicare through contractors." Only three of the performance measures set by the Centers for Medicare and Medicaid Services (CMS), the agency formerly known as the Health Care Financing Administration, apply to Medicaid, while more than 20 performance measures are used to assess Medicare. The discrepancy in performance measures is partly due to the limited control CMS can exert on the states compared to the control it can exert over its contractors. Also, according to Frederickson, incomplete performance goals and measures don't always reflect negligence by agency leaders, but rather reflect the partial control agencies have over the results for which they are accountable. To turn the situation around, Congress should require agencies to develop performance goals relating to the management of third party performance, Frederickson said. Agencies should also use performance reports to identify things that keep them from achieving performance goals. The Office of Management and Budget should require agencies to include information on the role third parties play in agencies' development of performance goals and measures. The Office of Personnel Management should develop strategies for training and recruiting employees who can manage programs and policies related to contractors, regulated industries and public and private sector grant recipients. Finally, Frederickson recommended that Congress should provide the money needed for agencies to coordinate with third parties on Results Act measures.