OMB Blog

Real Update on Real Property

As I’ve written about before, as part of the President’s Accountable Government Initiative, we are taking aggressive steps to save taxpayer dollars while making government work better, harder and more efficiently for the American people.

That’s why on June 10, 2010, President Obama issued a Presidential Memorandum titled “Disposing of Unneeded Federal Real Estate” directing agencies to accelerate efforts to remove excess and surplus property for a savings of $8 billion by the end of FY 2012. And as part of the President’s FY 2012 budget process, we are working closely with Federal agencies to achieve that goal.

Federal agencies have detailed plans to cut excess property costs and implement cost cutting measures. To date, Federal agencies have identified $1.7 billion of the $3 billion in non-defense savings opportunities that the President has required us to achieve by the end of FY 2012. And we are off to a good start in converting these opportunities to bottom line savings for taxpayers. For instance, we are selling buildings such as one office building in Omaha, Nebraska for $1.3 million, one in Springfield, Massachusetts for $2.5 million, and one in Bethesda, Maryland for $12.4 million.

The Department of Defense is also on track to achieve the $5 billion in real property cost savings through the Base Realignment and Closure (BRAC) process in the same time period.

While there is still work to be done, we are pleased with the progress made thus far and we are working with the agencies to identify further opportunities for cost reductions.

As the country’s largest property owner and energy user, it is critical that we remain vigilant about our operating costs. By selling buildings, reducing maintenance costs, cutting energy costs, consolidating and re-aligning existing space and reducing leases, we are saving taxpayer dollars and making government work better for everyone.

Keeping a Close Eye on Recovery Act Dollars

From the beginning, the President and Vice President have demanded an unprecedented level of accountability and transparency from recipients of Recovery Act funds.  Tens of thousands of recipients are required to report in every quarter on how exactly they are putting their Recovery Act contract, grant or loan to work -- and those reports are posted in full public view on Recovery.gov.  You can see them for yourself HERE.  This is a pioneering transparency effort and, while there may have been some initial skepticism that it could be pulled off, last quarter nearly 100 percent of recipients required to report did so.  This unprecedented level of disclosure has been lauded by government watchdogs and transparency groups as a significant achievement for open government.

Now, it would be easy to rest on this accomplishment of near 100 percent participation, but frankly, we’re not satisfied -- we believe that everyone that is required to share with the public how they are putting Recovery dollars to work should be doing so.  That’s why Federal agencies have been charged with aggressively pursuing the .5 percent of cases where recipients have failed to file. 

But each case is a little bit different --  and that’s why agencies have been empowered to pursue them with action ranging from an initial warning letter to withholding or rescinding of funds and even litigation, if it becomes necessary.  Here is how it breaks down:

• Of the 74,244 prime recipients required to file last quarter, just 352 failed to file a report last quarter -- that’s 99.5 percent participation. 

• Of the 352 who failed to file, 89 percent of them -- or 312 -- were first-time non-reporters.  Often one-time non-filers have technical problems reporting, so the relevant agency contacts them with a warning letter that also offers the necessary technical or other assistance.  Other cases of first-time non-reporting have been as simple as internal company or organization miscommunication or personnel changes.  In the vast majority of these cases, the recipient simply resolves their internal technical or staffing issue and files the next quarter.

• Of the remaining 40 non-reporters, 32 failed to comply twice, 4 failed to comply three times, and 4 failed to comply four times.  Each of these cases is aggressively pursued by the relevant agency with punitive action ranging from withholding or rescinding funds to litigation, if necessary.  You can take a look at the action being taken in each of these 40 cases HERE . We take these cases seriously, but overall, they represent .1 percent of Recovery Act recipients and involve less than .001 percent of total Recovery Act funding.

Changing the way business is done in Washington doesn’t happen overnight -- we are constantly working to improve transparency processes and help recipients of Recovery Act funds adjust to meet our high standards.  But we agree with government watchdogs that the unprecedented level of transparency provided with the Recovery Act over the last year-and-a-half has been a meaningful step in the right direction.

Cutting Costs in Financial Systems

FDA on Track

Accountable, effective government took another significant step forward recently. The Food and Drug Administration (FDA) cut the ribbon on its FDA-TRACK management system, advancing the President’s Accountable Government Initiative and Open Government Initiative.  The acronym that FDA chose to name its management approach, TRACK, nicely conveys of the pillars of the Obama Administration’s approach to modernizing government. TRACK stands for Transparency, Results, Accountability, Credibility, and Knowledge-Sharing. 

With the full scale launch of FDA-TRACK, the Food and Drug Administration is moving down the path we want all Federal agencies to follow. Agency senior leaders, in this case FDA Commissioner Hamburg and Deputy Commissioner Sharfstein, are driving performance gains on  agency priorities and expecting agency managers, FDA Center Directors and others, to do the same – not just for agency priorities, but also for each Center’s and program’s priorities.  FDA has already launched a pilot of FDA-TRACK and made progress on a number of fronts. It has, for example, increased the number of employees trained in the Incident Command System (ICS), improving the agency’s response to emergencies; developed a new risk-based approach for evaluating the safety, effectiveness, and quality of new animal drugs; and begun reducing vacancy rates on critical advisory councils. Deputy Commissioner Sharfstein runs regular data-driven reviews with each organizational unit and for key initiatives to keep FDA managers driving progress on priorities and reducing risks. These reviews are informed by data analysis that identifies problems and understands their causes, complemented by benchmarking comparisons and evaluations. And FDA is sharing FDA-TRACK information openly with the public on its website.

FDA-TRACK builds on lessons of “Stat” and similar performance management systems that have been deployed by various governments to drive down crime rates, prison disruption, hospital wait times, overtime costs, and other problems and to drive up health, children’s well-being, and education outcomes. FDA-TRACK’s constructive, data-rich performance review epitomizes our commitment to learn from experience and use objective evidence to identify and build on what works, while fixing or tossing what does not. 

FDA’s launch of FDA-TRACK is exciting, as is its commitment to open, accountable, performance-improving government. It is a great example of changes happening across the Administration that will improve the way government works, and government’s impact on outcomes, for years to come.

Best Practices from the Best Companies

The President has long believed that some of the best ideas come from outside Washington – especially when it comes to reforming Washington. That’s why he launched the SAVE Award, a chance for federal workers across the country to offer their best ideas about how to cut costs and improve performance, and it’s why he convened the White House Forum on Modernizing Government in January. There, we welcomed 50 CEO’s from many different sectors and sized businesses to hear their thoughts about how we can take the best practices of the private sector on increasing efficiency and effectiveness and apply them to the federal government.

Since then, we have taken some of the best ideas and put them into practice.

First, we’re making good progress in our efforts to improve the results of large-scale IT projects across the Federal Government. Consistent with the advice from many Forum participants, we’re intervening in high-risk projects while at the same time undertaking a structural review of our IT procurement and management practices. On the high-risk front, we are pulling together cross-functional leaders at the earliest signs of trouble to take corrective actions either to get projects back on track or terminate them as quickly as possible.

And, inspired by the best practices Forum participants shared with us regarding project scope and duration, we are taking aggressive action on financial system modernization projects in particular, as these types of projects have been plagued by persistent problems. On June 28, we halted all financial system modernization projects across the Federal Government. Agencies now are working to meaningfully reduce the size, cost, and complexity of each project. Agencies are closely examining options to terminate, defer, or significantly reset the scope of their projects. These actions will reduce project costs by hundreds of millions of dollars and will increase the likelihood of success. For example, the Department of Veterans Affairs recently terminated a financial system project after determining it was unlikely to succeed, saving $300 million.

In addition to large scale IT project management, our Forum discussions focused on customer service, and we’re making progress on this front as well. We have launched a multi-agency project to review customer service standards and the metrics used to track performance against those standards. We will make this information available to the public both to set customer expectations and to encourage effective performance management and oversight.

We also are reviewing organizational obstacles that get in the way of the type of customer service best practices that surfaced during the Forum. For example, in most agencies, website and call center teams currently are run as separate operations with very little interaction, which is contrary to the practice of the best performing private sector organizations. We also are working to overcome the regulatory and logistical constraints on agency efforts to capture and act on customer satisfaction and feedback. We’ve already issued new guidance to enable agencies to use social media and web analytics to better connect with citizens and will have more to announce in the months ahead.

Finally, we are working to keep the dialogue going between private and public sector managers. Not only are many Deputy Secretaries (agency COOs) in contact with their private sector counterparts, but this spring, the President issued an Executive Order creating the President’s Management Advisory Board to provide the President and the President's Management Council advice on the implementation of business best practices to improve Federal Government management and operations. We will be announcing Board members and holding our first meeting later this year, and we look forward to it serving as a lasting resource for bringing private sector expertise into government operations.

Overall, while there are key differences between the government and the private sector, there is much we can learn from high-performing private sector organizations – and this Administration is committed to doing just that. 

Time is Running out to SAVE

As many of you know, on July 8, President Obama launched the second annual SAVE Award contest, a chance for federal workers to submit their best ideas about how to cut waste and improve government performance. To date, the response has been impressive, with 11,000 ideas submitted in just over a week. A new feature of this year’s contest is that federal employees also have the opportunity to vote and comment upon their fellow workers’ ideas, and already more than 95,000 votes have been cast -- yet another sign of how federal workers are getting into the saving act.

Thinking Long-Term

Last week, the Congressional Budget Office released its long-term budget outlook. As I wrote at the time, the report confirms that the Affordable Care Act, if implemented effectively, can play an important role in moving toward a healthier fiscal future. Brad DeLong recently highlighted how large that role is by comparing last year’s report to this year’s, and I thought it was worth underscoring the point.

Cutting Waste and Saving Money Through Contracting Reform

In March 2009, the President directed agencies to save $40 billion annually by Fiscal Year (FY) 2011 through contracting and to reduce the use of high-risk contracts. Last December, OMB reported on agency plans to save $19 billion in FY 2010, and agencies are on track to meet that savings goal as well as the larger one for 2011.

CBO’s Long-Term Budget Outlook

The Congressional Budget Office today released its long-term budget outlook. Just like the long-term outlook in our own Budget, the CBO report concludes that we are on an unsustainable fiscal course. About this, there is no ambiguity.