By Steve Kelman

Blog archive

Defense Contract Audit Agency "backsliding" or "reverting" on "reforms"?

In a recent article in Federal Times by the ever oversight-friendly Elise Castelli, "some employees" at the Defense Contract Audit Agency (DCAA) were reported as being "concerned" that "the agency is reverting to practices that congressional investigators say undermined the agency's effectiveness." The article's headline suggested that the agency is "backsliding on reform." The issue here is the suggestion featured in congressional hearings last summer that DCAA auditors had failed to catch examples of contractor overbilling because one of their performance measures was how much time they took on an audit.

I wrote about this issue in a blog post last summer,  because it raises important issues of principle about using performance measurement to improve the performance of government organizations. It is correct that if the only performance measure used in an organization is how fast employees finish audits, that creates inappropriate pressures to ignore quality (in this case, finding contractor overcharges). But an organization should also care that its employees are working at an appropriate speed, because agency resources are limited, and we want them to be used productively.

The answer is not to eliminate speed measures but to pair them with quality measures (perhaps one of overpayments per billed dollar eventually recovered from a contractor, and another of program manager satisfaction with DCAA work). With no speed measures, the government actually risks getting poorer quality for the resources spent on auditing -- either because auditors don't work productively enough, or because unnecessary time is spent wringing out the last dollar of overcharge from one contract at the expense of spending time on other contracts that might yield more return for the time spent.

These planted articles in Federal Times frankly seem more like elements of a labor-management dispute -- unions typically oppose use of production measures for organizations -- than anything else. My own view, incidentally, is that in the first instance these performance measures, including speed measures, should be used as organizational improvement tools rather than elements in the performance ratings of individual employees.

Unfortunately, the article quotes a DCAA spokesman as denying that the agency is using "productivity" performance measures. Is this really the posture a government organization wants to be in, denying that it cares about the productivity of its employees???

Posted by Steve Kelman on Jan 23, 2009 at 12:08 PM


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