OMB officials detail reorganization plan and headway against waste

U.S. Controller Danny Werfel outlines progress combating improper payments and selling off excess real estate. U.S. Controller Danny Werfel outlines progress combating improper payments and selling off excess real estate. Charles Dharapak/AP

President Obama’s recent proposal to consolidate business and trade agencies in a single department would be the first government reorganization to require that changes either eliminate an agency or save money, according to Lisa Brown, executive director of the Office of Management and Budget’s Government Reform for Competitiveness and Innovation Initiative.

“The history of reorganizations over the past 30 or 40 years shows that it is difficult, absent a crisis, because of vested interests such as Capitol Hill committees and lobbyists,” she said.

Brown spoke Tuesday, along with U.S. Controller Danny Werfel and four agency officials, at a Washington conference on how technological innovation can improve agency performance. The event for agency information, finance and acquisition managers was sponsored by Dun & Bradstreet and produced with the cooperation of Government Executive.

The Obama plan, which proposes that Congress give the president consolidation authority so he can merge six agencies, is intended to create a new department “with a laserlike focus on helping businesses create jobs,” Brown said. Obama would have one chief executive officer to ask about program effectiveness and foment a “greater sense of accountability” while facilitating a “whole of government” approach to trade policy, Brown added. The bill will be sent to Congress in the next few weeks.

Fleshing out more details since the president released his framework, Brown said the new entity would give businesses one-stop shopping. It would include all of the Commerce Department, except the National Oceanographic and Atmospheric Administration, and bring in the Bureau of Labor Statistics from the Labor Department, a statistics operation and a labs-to-market research and development function from the National Science Foundation, and the Community Development Financial Institutions Fund from the Treasury Department. It also would subsume some business development programs from the Agriculture and the Health and Human Services departments.

Businesses are able to look at themselves and review their structure, Brown said, “but this is much harder for government,” because duplicative functions have been layered in over many years and agencies are siloed. “Though the people are hardworking and talented, they don’t have the tools to effectively serve the customer,” she said.

In preparing the reorganization plan focused on trade and competitiveness, Brown said OMB did “broad outreach” that included hundreds of interviews with the business community, customers, former and current agency heads, and good-government groups. “Most businesspeople -- particularly those in small business -- told us they were happy dealing with a person at the Small Business Administration or Commerce or the Export-Import Bank but that the structure was a maze.”

While waiting for Congress to provide authority, Brown said, the White House is proceeding administratively with such steps as creating virtual one-stop shopping via the coming new website BusinessUSA.gov. Just as Amazon gives its customers recommendations for books or toys, she hopes the government might one day suggest to businesses where they might export next.

Werfel reviewed the administration’s progress in reducing improper payments, selling off unneeded real estate and implementing Vice President Joe Biden’s Campaign to Cut Waste. The controller said he is seeing some “macro, game-changing behavior at agencies,” which are coming in with global cost-savings initiatives. The battle to curb improper payments, for example, which began in 2002 under President George W. Bush, has saved $20 billion in the past three years.

A 15-year OMB veteran, Werfel said the chief difference in the Obama approach is the incumbent sets a concrete goal, such as saving $3 billion by unloading excess real estate by 2012. He recalled the confusion of the early years in the life cycle of these initiatives when there was no understanding of how systemic the waste was, no metrics for measuring progress, and clashing cultural perspectives on how to define such problems as payments made in error. There was little strategic thinking, he said.

Thanks to technology, data and analytics, Werfel said, government got its “sea legs” and is now “on its game.” Specific examples of greater efficiencies he cited included reducing travel to conferences by using remote communications and consolidating office space through agency moves to less-expensive real estate. “Moving costs are cheaper today,” he noted. “Instead of lots of boxes and file cabinets, people say here’s my flash drive and my laptop and I’m ready to move.”

Agency representatives at the conference described their challenges, lessons learned and best practices from integrating technology to improve performance while enhancing transparency and accountability.

Mike Mayhew of the chief special operation of verification division of Citizenship and Immigration Services at the Homeland Security Department, recounted the rapid growth of the e-Verify program that some 1 million businesses now use to check the immigration status of job applicants. He said the off-the-shelf software provided by Dun & Bradstreet and SAS has helped employees use algorithms to organize mountains of data and create risk profiles of companies that otherwise would be impossible for humans to perform manually. By checking multiple federal databases and simplifying the interface with users, his operation is able to supply the most accurate answers to citizenship queries.

John Gardner, senior technical adviser (medical informatics) at the Food and Drug Administration’s Office of Information Management, described the challenges of assigning accurate identifiers to the million-plus businesses -- many of them overseas -- that ship active ingredients for prescription drugs and food in or to the United States. To process 20 million import transactions annually through increasingly automated support, the agency is moving to Dun & Bradstreet score cards and identifiers because too many firms have similar names; some are translated from the Chinese, for example, in three different ways.

Patrick Kelley, senior adviser to the associate administrator at SBA’s Office of Capital Access, described how his team uses analytics to decide which characteristics of financial data to display to help decide -- and explain to customer banks and community banks -- why some borrowers are riskier than others during screening for loan guarantees.

The absence of “a slogan or a razzle-dazzle play to interest the media,” added Kelley, is another reason why agencies seeking to improve performance should focus on getting the attention of political appointees as well as the chief information officer and OMB.

Editor's Note: One paragraph in the originally published version of this article included several errors. Because that paragraph did not meet our editorial standards, it has been removed.

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