Management by scandal

Nothing is more damaging to good management in government, most experts on public management would agree, than our tendency to practice management by scandal.

Anybody who has spent any time in Washington, D.C., knows the drill. Somebody uncovers juicy examples of feds abusing power, stealing money or just plain being asleep at the switch. Layers of new regulations and signoffs get introduced by an outraged Congress or by contrite senior officials. The result: Government works less efficiently in the 99.9 percent of cases where no scandal occurred and government jobs are weighed down with more bureaucracy, which repels bright people seeking government jobs.

The latest performance from this dreary repertoire has been the series of sensationalized Congressional hearings on fraudulent use of government purchase cards. With TV cameras rolling, the Senate's premier enemy of good management, Sen. Charles Grassley (R-Iowa), railed about breast enlargement operations and "shopping sprees."

One might have expected that the results would follow the normal script of a ritual slaughter of the credit card program. That, of course, would be a disaster for good government. Studies in both government and the private sector show that, for the kinds of small purchases typically made using credit cards, the administrative cost of handling the requisition the old way — forcing the user to go through the procurement office, thus adding additional people and paper to the process — frequently is greater than the cost of the item being bought. The government saves about $100 for each credit card transaction, resulting in administrative cost savings of billions of dollars a year. The credit card also makes it possible to get immediate access to needed supplies that in the pre-credit card days typically took weeks or even months to receive. And the card is an essential tool for Web-based e-business.

What is interesting, and very heartening, is that this time the play does not seem to be proceeding according to script.

Two things have happened. In the course of 10 years of bipartisan procurement reform efforts, a cadre of congressional staffers who understand what is at stake in having a less bureaucratic procurement system has developed. Congress' most knowledgeable person on procurement, Rep. Tom Davis (R-Va.), chairman of the House Government Reform Committee's Technology and Procurement Policy Subcommittee, leads this cadre. They won't just cave before a sensationalized TV story.

Similarly, with the procurement reform efforts of the past decade, senior agency procurement officials have become more confident and willing to resist counterproductive reactions.

No assurances can be made right now, but maybe we as a community can show that government is not condemned to the ravages of management by scandal.

Kelman, administrator of the Office of Federal Procurement Policy from 1993 to 1997, is Weatherhead Professor of Public Management at Harvard University's John F. Kennedy School of Government. He can be reached at steve_kelman@ harvard.edu.

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