Trouble looms for feds

Mitchell Daniels Jr., the new director at the Office of Management and Budget, recently told agency heads that the "federal government's record on performance needs to improve." How Daniels arrived at this assessment after less than a month on the job is beyond me.

Daniels says in his Feb. 14 memorandum that he is attaching "the guidance information we need to meet the legal obligation for the submittal of the federal government's governmentwide performance plan." Daniels' wording can use some improvement. It looks as if Daniels has succumbed to the malaise he seems to think affects federal performance. He should bone up on his English — or maybe he's following President Bush's lead.

The guidance Daniels provides will send chills up your spine. He identifies the following initiatives:

  • "Delayering" management levels to streamline organizations.
  • Reducing erroneous payments to beneficiaries and other recipients of government funds.
  • Making greater use of performance-based contracts.
  • Expanding the application of online procurement and other e-government services and information.
  • Expanding A-76 competitions and creating more accurate 1998 Federal Activities Inventory Reform Act inventories.

"The president envisions a government that has a citizen-based focus, and is results-oriented and, where practicable, market-driven," Daniels said. To underscore this emphasis, agencies are being asked to expand their A-76 competition. Most of you know that OMB circular A-76 advocates the outsourcing of federal jobs. With outsourcing, private firms and federal workers compete for specific agency functions, with the work going to the lowest bidder. The process could be rigged to favor private firms or feds, depending on who's doing the rigging.

About 850,000 jobs could be subject to A-76 competitions, and while campaigning, Bush said he would require A-76 competitions for up to half of those jobs. What's not obvious is whether the competition will be rigged to favor private firms. Virtually all of the Cabinet heads that Bush has appointed came from the private sector and could favor the private sector. That could mean bad news for feds — you can't outsource government jobs and "delayer" managerial ranks entirely through attrition. If Bush is serious about this, reductions in force will be required, which spells trouble for feds with a capital R.

The approach is like the early Reagan years, when federal heads were placed on the chopping block in the name of efficiency. Never mind that this crew ran up the largest budget deficits ever seen — they knew what they were doing; they were private-sector mavens. I'm hoping that the Bush team is smarter than the Reagan crew or, for that matter, the private-sector dot-com mavens of 1997 who are now out of work. Running the federal government isn't easy — let's hope the Bush team realizes that quickly.

Zall is a retired federal employee who since 1987 has written the Bureaucratus column for Federal Computer Week. He can be reached at [email protected].


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