The House on Wednesday approved a measure that would create a performance-based organization to manage federal financial student aid at the Education Department.
Under the House-passed Higher Education Amendments of 1998 (H.R. 6), the policy-making functions governing student aid would remain with the Secretary of Education, but the day-to-day management of student aid delivery would come under the control of a new chief operating officer, who would oversee all expenditures, personnel decisions, procurements, and other administrative functions of student aid programs.
The chief operating officer should have "demonstrated management ability and expertise in information technology, including extensive experience in the financial services industry," the legislation says. The COO would be appointed by the Secretary of Education, who would have to consult with congressional committees on potential appointees. The COO would be eligible for an annual bonus of up to 50 percent of base pay.
The COO would be permitted to appoint five senior managers, all of whom would also be eligible for 50 percent of base pay bonuses. The legislation encourages the COO to seek personnel and procurement flexibilities, to use performance-based service contracts and to outsource wherever possible.
Performance-based organizations, or PBOs, are the brainchild of Vice President Al Gore's National Partnership for Reinventing Government (NPR). Gore's reinventors proposed the PBOs as a way to allow agencies with businesslike operations to cast off restrictive federal rules. The flexibility to innovate would help managers reduce costs while simultaneously improving services, Gore's team says.
After Gore's initial push for PBOs two years ago, three agencies--the Patent and Trademark Office, the Defense Commissary Agency and the St. Lawrence Seaway Development Corporation--put in bids to Congress for PBO status. Only the patent office has seen legislative action on its proposal, which the House approved last April.
After a year of near-silence on the PBO initiatives, the Clinton administration last month proposed turning the Federal Aviation Administration's air traffic control operations over to a PBO. The Education Department did not request PBO status, so H.R. 6 marks the first time Congress has developed a PBO proposal on its own.
In a statement of administration policy regarding the House proposal, the Clinton Administration says it "shares the goal of adopting a performance-based organization for the administration of the student aid programs, but is concerned that H.R. 6 fails to incorporate fundamental components of the administration's model legislation for PBOs."
The administration says the bill's proposed personnel and procurement flexibilities do not go far enough.
The Senate version of the higher education bill (S. 1882), which is awaiting floor action, includes a similar PBO provision.
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