OMBlog

  • Freezing the Footprint

    The Administration has made it a priority for Federal agencies to dispose of unneeded properties and make more efficient use of the Government’s real estate assets. As the next step in this effort, today, OMB is issuing guidance to direct agencies to implement a “Freeze the Footprint” policy for Federal real estate.

    Under today’s new guidance, all CFO-act agencies are required to develop plans that will serve as the basis for agency actions to restrict the growth in their office and warehouse inventories. Agencies will also be required to develop internal controls related to square footage growth and facilitate increased communication between agency Chief Financial Officer and Real Property Management offices. These changes will further improve the management of the Federal Government’s real property assets.

    This effort builds upon on the Administration’s ongoing work to sell unneeded Federal properties. For example, in October 2012, GSA sold the Naval Weapons Industrial Reserve Plant in Dallas for $357,500 and the Government was able to realize over $27 million in savings by requiring the new owner to complete the necessary environmental remediation. And in November 2012, GSA sold a 1.39 acre Norfolk, VA, multi-building property, that had been declared excess by the Department of Defense (DOD), to the City of Norfolk for $1.1 million to become administrative and training offices for the Norfolk Sheriff's Department. More information on these and other Federal properties that have been sold can be viewed on the White House Excess Assets page.

    Today’s guidance also expands on the President’s 2010 directive to agencies to identify cost savings through better real estate management. In the directive, the President set an ambitious goal of eliminating $8 billion in real estate costs by 2012: $5 billion in savings through DOD’s Base Realignment and Closure Commission (BRAC) process and $3 billion in non-BRAC savings. By the end of FY 2012 Federal agencies identified over $3.5 billion in non-BRAC real estate savings through disposals, space management, and sustainable energy and innovative real property management practices. In addition, DOD identified $5.1 billion in real-estate savings related to BRAC. An update on agency efforts to achieve the President’s $8 billion goal is available on Performance.gov.

    Agencies have made tremendous progress in making their real estate inventories more efficient, however, we know there is still more work to be done. As we develop new initiatives to spur progress in managing Federal real estate, we will be incorporating “lessons learned” from the implementation of the President’s goals to date. We look forward to further reducing the size and cost of the Government’s real estate inventory in the years ahead.

    Danny Werfel is Controller of the Office of Management and Budget

  • Working to Deliver Improved Performance

    This week, the Administration provided the first-ever quarterly progress update on the government’s 14 Cross-Agency Priority Goals and 103 Agency Priority Goals. These goals are set in areas where the Administration aims to achieve accelerated performance improvement through focused senior leadership attention. Agency leaders have each set ambitious near-term, implementation-focused Priority Goals, and the Administration has chosen Cross-Agency Priority Goals focused on topics requiring the collaboration of multiple agencies. Each quarterly progress update will be posted on Performance.gov, providing a window into the Administration’s efforts to make the government work smarter, better, and more efficiently. 

    For example, the Department of the Interior is working to authorize more production of clean energy on public lands. The agency set a goal that by September 30, 2013, it will increase the approved capacity for renewable energy (solar, wind, and geothermal) on or affecting public lands by at least 11,000 Megawatts relative to 2009 levels. By the end of 2012, it was fast approaching its goal, having approved 10,933 Megawatts, enough to power millions of homes.

  • Launch of the Administration’s Strategy to Mitigate the Theft of U.S. Trade Secrets

    Today, I am pleased to announce the Administration’s Strategy on Mitigating the Theft of U.S. Trade Secrets. Trade secret theft can cripple a company’s competitive advantage in foreign markets, diminish export prospects around the globe, and put American jobs in jeopardy. The President is committed to preventing the theft of corporate trade secrets. As he clearly expressed in his State of the Union Speech, “we cannot look back years from now and wonder why we did nothing in the face of real threats to our security and our economy.”

    The Strategy that we are releasing today coordinates and improves U.S. Government efforts to protect the innovation that drives the American economy and supports jobs in the United States. As the Strategy lays out, we are taking a whole of government approach to stop the theft of trade secrets by foreign competitors or foreign governments by any means – cyber or otherwise.

    • First, we will increase our diplomatic engagement. Specifically, we will convey our concerns to countries where there are high incidents of trade secret theft with coordinated and sustained messages from the most senior levels of the Administration. We will build coalitions with countries that share our concerns to support our efforts. We will urge foreign law enforcement to do more. And we will use our trade policy tools to press other governments for better protection and enforcement.
    • Second, we will support industry-led efforts to develop best practices to protect trade secrets and encourage companies to share with each other best practices that can mitigate the risk of trade secret theft.
    • Third, DOJ will continue to make the investigation and prosecution of trade secret theft by foreign competitors and foreign governments a top priority. Additionally, the FBI and the intelligence community will provide warnings and threat assessments to the private sector on information and technology that are being targeted for theft by foreign competitors and foreign governments.
    • Fourth, President Obama recently signed two pieces of legislation that will improve enforcement against trade secret theft. But we need to continue to make sure our laws are as effective as possible. So, moving forward, we will conduct a review of our laws to determine if further changes are needed to enhance enforcement. If changes are necessary, we will work with Congress to make those changes lasting and comprehensive.
    • Lastly, we will increase public awareness of the threats and risks to the U.S. economy posed by trade secret theft.

    We know that trade secrets play a crucial role in America’s global competitiveness. As the Strategy makes clear, the Administration will continue to act vigorously to combat the theft of American trade secrets that could be used by foreign companies or foreign governments to gain an unfair commercial advantage over U.S. companies. In order to continue to lead, succeed, and prosper in the 21st Century global economy, we will use this Strategy to put in place an effective and coordinated approach to protect American trade secrets.

    The launch event described below will being streaming on WhiteHouse.gov/live at 3:15pm today.

  • A Proposal for Better Management of Federal Grants

    The Office of Management and Budget today published a significant set of proposed reforms to improve the way we administer the more than $600 billion awarded annually for grants and other types of Federal financial assistance. This grant reform proposal entitled “Proposed Uniform Guidance: Cost Principles, Audit, and Administrative Requirements for Federal Awards,” combines the multiple Federal regulations that currently govern the way we administer grants into a single, comprehensive and streamlined uniform policy guide.  It is intended to both increase the efficiency and effectiveness of grant programs by eliminating unnecessary and duplicative requirements and strengthen the oversight of grant dollars by focusing on areas such as eligibility, monitoring of sub-recipients, adequate reporting, and other areas that are potential indices of waste, fraud or abuse.

    The reforms in this proposal make further progress on implementing President Obama’s November 2009 Executive Order 13520 on reducing improper payments and eliminating waste in Federal programs, and the February 2011 Presidential Memorandum on promoting administrative flexibility. Following OMB’s February 2012 publication of potential grant reform ideas in the Federal Register, we received hundreds of comments and suggestions, which we carefully considered as we worked with the Council on Financial Assistance Reform to develop this proposal. We also worked collaboratively with stakeholder groups in the grants community to identify policies in need of clarification and simplification – with the goal of improving grant management, accountability, oversight, and overall performance. 

     Specific measures in the proposal include:

    • Harmonizing and streamlining all OMB guidance on grants from eight documents into one, while clarifying key differences for different entities;
    • Simplifying the reporting requirements that grantees must adhere to in justifying salaries and wages charged to grants;
    • Ensuring that Federal agencies better review financial risk posed by applicants and merits of an application before providing a grant;
    • Providing guidance to ensure robust oversight of sub-recipients;
    • Focusing more audit resources on preventing waste, fraud, and abuse; and
    • Holding agencies accountable for getting results and addressing weaknesses among grant recipients.

    The Administration believes these reforms will make a significant contribution to improving Federal grant-making and outcomes for the American people. And we welcome ideas to make them even better and encourage the public and stakeholders to go to Regulations.gov (docket OMB-2013-0001) to review and comment on our proposal.

    Danny Werfel is Controller of the Office of Management and Budget

  • American Taxpayer Relief Act Reduces Deficits by $737 Billion

    Earlier today, the Congressional Budget Office (CBO) released its score of H.R. 8, the “American Taxpayer Relief Act of 2012.”  By convention, the score measured the effects of this legislation relative to “current law,” which assumes the expiration of all of the 2001/2003 tax cuts, cuts to Medicare physicians of almost 27 percent, and allowing the across the board cuts from sequestration to take effect.  But that does not provide a realistic perspective on the impact of H.R. 8.  The relevant point of comparison isn't current law, it is “current policy” – those policies that were in place on December 31st, the day before all of these changes were scheduled to take effect. Different organizations, ranging from the Bowles-Simpson Fiscal Commission to the House Budget Committee, have considered this current policy baseline to be the appropriate reference point, since it measures changes relative to the status quo, rather than the mix of expiring provisions and policy changes that would likely never be implemented.

    CBO also recognizes the value in this “current policy” view and routinely publishes their interpretation, known as the Alternative Fiscal Scenario (AFS), which is regularly cited by lawmakers from both parties, including House Budget Committee Chairman Paul Ryan. The CBO current policy baseline assumes that the Bush tax cuts, the AMT patch, and expiring business tax provisions will be extended; that the Sustainable Growth Rate (SGR) cuts in payments to Medicare physicians will not take effect; and that the sequestration will be turned off. 

    Compared to “current policy” and based on estimates from the CBO and the Joint Committee on Taxation – Congress’s official score-keeping bodies – we can see that H.R. 8 would reduce the deficit by $737 billion. Within that, it would reduce spending by $107 billion. The deficit reduction is comprised of:

    • $618 billion due to higher taxes on the highest-income Americans and the wealthiest estates.
    • $22 billion due to reductions in discretionary spending and a change to tax-preferred savings accounts that pay for turning off sequestration for two months.
    • $24 billion in various health measures that pay for turning off the SGR for one year.  (Because sequestration and the SGR are turned off in the CBO current policy baseline, these pay-fors reduce deficits relative to that baseline.)
    • The above provisions more than offset the $30 billion cost of the measure’s one-year extension of emergency unemployment insurance benefits, resulting in $630 billion of net non-interest deficit reduction.
    • Another $104 billion of deficit reduction results from lower interest payments on the federal debt, for a total of $737 billion in deficit reduction.

    See this table for a more detailed breakdown.

    So H.R. 8 not only keeps taxes low for the middle class, asks the wealthiest to pay their fair share, and helps the economy continue to grow, it also reduces the deficit by $737 billion under this more realistic scenario.

    Jeff Zients is the Deputy Director for Management.

     

  • The 2012 SAVE Award Winner

    The results of this year’s SAVE Award voting are in!  This year’s winner is Department of Education program officer Frederick Winter of Arlington, Virginia.  Frederick’s idea received more than 19,000 votes, out of more than 46,000 ballots cast. 

    Frederick proposes that all Federal employees who receive public transit benefits shift from regular transit fare to the reduced senior fare as soon as they are eligible.  In the D.C. area, this change would lower the cost of the employee’s travel by 50 percent, with no loss in the effective benefits for the employee.

    Frederick will have the opportunity to meet with President Obama in person in the Oval Office to discuss his winning idea.  And as in past years, each of the finalists’ ideas will be incorporated in the President’s Budget, and all other Save Award submissions will be reviewed for potential inclusion. 

    These SAVE Award ideas, along with others submitted over the last four years, won’t solve our Nation’s long-term fiscal challenges, but they represent common-sense steps to improve the efficiency and effectiveness of our government, and they are saving the government hundreds of millions of dollars.

    We thank everyone who submitted ideas for this year’s SAVE Award and congratulate Frederick Winter, our 2012 SAVE Award winner.  All those who submitted ideas embody the commitment Federal employees have to improving government performance, providing better value to the American people, and ensuring taxpayer’s dollars are spent wisely.

    Jeff Zients is the Deputy Director for Management.

  • The 2012 SAVE Award Final Four

    Since its creation in 2009, President Obama’s SAVE Award [Securing Americans Value and Efficiency] has served as a vehicle for Federal employees to offer firsthand their ideas on how to improve performance and ensure taxpayer dollars are spent wisely. 

    Over the last four years, Federal workers have submitted tens of thousands of ideas to curb unnecessary spending, both in their own agencies and across the government – covering everything from implementing new measures to conserve energy use to cutting back on paper copies of publications already available online like the Federal Register.  These ideas alone won’t solve the Nation’s long-term fiscal challenges, but they are saving hundreds of millions of dollars and represent common-sense steps to improve the efficiency and effectiveness of government and provide a better value to the American people.

    Last year’s winning idea came from Matthew Ritsko of NASA’s Goddard Space Flight Center, who suggested the creation of a “lending library” that would store used space flight project tools so that employees would not have to reorder tools already available within the agency.  Matt’s idea, along with 26 other SAVE proposals, were included in the President’s FY 2013 Budget.

    Today, we are announcing the four finalists for the 2012 SAVE Award.  Keeping with tradition, the winner will present his or her idea to the President in the Oval Office, and other proposals will be directed to agencies for potential action or inclusion in the President’s Budget.

    With today’s announcement, public voting also begins to select this year’s winner.  Voting can be done through the White House website at: www.whitehouse.gov//save-award.

    Here are the 2012 finalists:

    Frederick Winter, Shift to Senior Transit Fares.  Frederick Winter of the Department of Education proposes that all Federal employees who receive public transit benefits shift from regular transit fare to the reduced senior fare as soon as they are eligible.  In the D.C. area, this change would lower the cost of the employee’s travel by 50 percent, with no loss in the effective benefits for the employee.

    Angela Leroux, Reduce Employee Shuttle Buses.  Many Federal agencies maintain buses to shuttle employees from one government office to another for work purposes.  Too often these vehicles sit idle or travel their routes with just a few passengers.  Angela Leroux at the Internal Revenue Service recommends that agencies eliminate or consolidate the bus service and encourage the use of conference and video calls, or provide metro cards to those with a need to travel.

    James Szender, Use Digital Transcription.  A written transcript of Federal meetings or hearings is often required.  James Szender of the Department of Interior proposes, whenever possible, using digital equipment for transcripts instead of hiring a court reporter, since using digital transcription is significantly less expensive than contracting with a certified court reporter to attend, record, and transcribe the proceedings.

    Laurie Dempsey, Post Customs Inspection Information Online.  Customs and Border Protection is required to post a bulletin weekly that lists all imported items that have completed the customs inspection process.  Currently, Customs ports across the country print this bulletin, which can be hundreds of pages long, and post it in the customs house.  Laurie Dempsey from the Department of Homeland Security suggests instead posting the bulletin electronically on CBP.gov.  This change would save paper, reduce costs, and make it easier for the public to find out what items have been inspected without having to visit the facility in person. 

    I encourage Federal employees and the public to vote now for your favorite SAVE Award idea.  You can help us cut waste and make your government more efficient and effective.  We’ll be announcing this year’s winner soon.  Stay tuned.

    Jeff Zients is the Deputy Director for Management.

  • The United States and Canada Announce Progress in Regulatory Cooperation

    Today the Canada-United States Regulatory Cooperation Council (RCC) is presenting President Obama and Prime Minister Stephen Harper with the first Progress Report on the Council’s efforts to date. The RCC was launched by the President and Prime Minister Harper just over a year ago to deliver benefits to U.S. and Canadian citizens in the form of smarter, more effective regulations that enhance the economic competitiveness and well-being of our two countries, while maintaining high standards of public health and safety and environmental protection. This report, which provides an update on the regulatory cooperation work done under the RCC to date, also marks the one-year anniversary of the RCC Joint Action Plan.

    As RCC co-chair, I’m pleased to report that significant progress has been made over the last twelve months under the Action Plan to improve regulatory cooperation between Canada and the United States. Throughout the 29 work plans – which cover areas as diverse as food and agriculture, motor vehicles, rail safety, emissions reduction, pharmaceuticals, personal care products, and nanotechnology – U.S. and Canadian representatives have found creative ways to work together to promote economic growth and cut red tape, as well as improve health, safety, and environmental protections for our citizens.

    This cooperation has taken many forms, from scientific and technical collaboration and work sharing to collaboration in standards setting and regulatory alignment. Specific examples of progress achieved over the past year include:

    • Pilot projects for simultaneous submissions to regulators in both countries for approval of crop protection products (see the related work plan here);
    • In the area of veterinary drugs, simultaneous reviews by U.S. and Canadian regulators for several drug submissions (read more about this work here); 
    • A pilot project for the joint inspection of non-U.S. and non-Canadian flagged vessels entering the Great Lakes-St. Lawrence Seaway, focusing on maritime security and pollution prevention, and monitoring living and working conditions for workers on these ships (learn more here); and
    • Proposed automotive regulations that would align U.S. and Canadian rules on tire safety and occupant restraint systems in frontal impact collisions (read more about an upcoming meeting to gather public input on next steps here).

    For too long, unnecessary differences between U.S. and Canadian regulatory approaches have posed hurdles for our businesses and increased costs for consumers. Through the Obama and Harper Administrations’ efforts with the RCC, we have spurred an unprecedented range of cooperation in addressing these differences. We are also working to understand the underlying causes of these misalignments so that we can prevent them in the future.

    Do we have more work to do? Of course. Regulatory cooperation is time- and resource-intensive, and it takes a strong commitment to keep the momentum going.  The Obama Administration has made an ambitious commitment to promoting international regulatory cooperation and we know that commitment is shared by our Canadian counterparts. We look forward to continuing implementation with Canada on the 29 items in the Action Plan as we move forward into 2013.

    But we cannot do it alone. We very much appreciate the stakeholder community’s interest in and commitment to the work of the RCC, and we hope that you will continue to provide us with ideas and hold us accountable for producing tangible results. Please continue sending us your feedback at international-oira@omb.eop.gov and if you want to receive RCC updates, go to www.trade.gov or email us at rcc@trade.gov. We look forward to announcing additional opportunities for stakeholder engagement in the coming months.

    Boris Bershteyn is the Acting Administrator of the Office of Information and Regulatory Affairs.

  • Setting Goals and Measuring Progress to Better Serve the American People

    Today, we mark another milestone in the Administration’s effort to change the way government does business – the launch of an updated and enhanced version of the Performance.gov website.

    In his inaugural address, President Obama charged the Federal government with delivering a government that works for the American people and does our business in the light of day. Congress recognized the importance of improving government performance as well, and passed the Government Performance and Results Modernization Act in 2010, helping to set the standard for Performance.gov.

    Performance.gov brings into the light how government is working, and it is also a tool to help agencies deliver on the President’s charge. The site lets the public see how agencies are progressing on their performance priorities. It also helps managers and employees across the government stay focused on their priorities and constantly look for smarter ways to accomplish their objectives. Plus, it supports cross-agency collaboration on shared goals. 

    Performance.gov is being updated today to provide additional information about each performance goal, including the first installment of quarterly progress reports. The site now also lets the public and others in government quickly identify the public servant managing progress on each goal and find additional information about why the goal was selected, how progress is being made, which programs are contributing to the effort, and what steps are being taken to make further progress.

    The President’s approach to improving Federal performance is showing real results. Over one million homes have been retrofitted to be more energy efficient, saving each household hundreds of dollars per year. Exports and broadband coverage are on the rise. Improper payments are declining. Patent applications are being processed with increasing speed and efficiency. And nearly 90,000 additional families have affordable rental housing. These are just a few examples of the progress we are making across the government by focusing relentlessly on performance.

    The updated Performance.gov launched today strengthens the government’s performance management with greater transparency, accountability, and shared responsibility. But our work is not done. The Administration will push for more progress on these goals, and, as needed, set additional ambitious goals in order to ensure that the American people get the best government possible.

    Shelley Metzenbaum is OMB Associate Director for Performance and Personnel Management.

  • Historic Savings in Contracting – and Plans for More

    Since the beginning of the Administration, President Obama has challenged Federal agencies to strengthen their acquisition and contracting practices by eliminating inefficiencies and buying smarter. In response, agencies have cut unnecessary contracts and launched new efforts to pool the government’s buying power to deliver a better value for the American people.

    These efforts are paying off. The Administration reduced contract spending by over $20 billion in Fiscal Year (FY) 2012 compared to last year. This reduction is the largest single year dollar decrease in Federal contract spending on record, and establishes a three-year downward trend from 2009-2012. As a result, FY 2012’s total spending on contracts was $35 billion less than the amount spent in FY 2009. This decline represents a dramatic reversal of the unsustainable 12 percent contract spending growth rate experienced from 2000 through 2008.

    At the President’s direction, one way agencies saved money this year was by tackling overspending on management support services, which includes services such as information technology systems development, program management, and engineering. This is an area of contract spending that was plagued with inefficiency and where costs quadrupled during the previous Administration. We are pleased to announce that agencies successfully reduced management support services spending by $7 billion over the last two years, meeting the Administration’s goal of bringing down such spending by 15 percent by the end of FY 2012.

    Another key way agencies have saved money in contracting is by coordinating the government’s buying, a practice known as strategic sourcing. Rather than making purchases independently, like dozens of separate medium-sized businesses, agencies have been moving to pool their purchases, both at the government-wide and agency level, to get the same goods and services at lower prices.

    Government-wide strategic sourcing of items such as office supplies and domestic shipping services has already saved nearly $200 million since FY 2010. And agency-level strategic sourcing of goods like IT and medical equipment have saved hundreds of millions more. In just one example, the Department of Homeland Security saved over $386 million last year by pooling purchases for a wide range of products - everything from canines to surveillance equipment - across FEMA, the Coast Guard, Customs and Border Protection, and other components.

    This progress is remarkable, and we are pleased that we have not only stemmed but reversed the unsustainable growth in contracting under the previous Administration. But there is more to do, and that is why the Administration issued guidance today to agencies to drive even better coordination of contracting to ensure that we can take strategic sourcing in the government to the next level. The guidance calls on the largest buying agencies to identify and develop at least 15 new government-wide strategic sourcing solutions that their agencies will commit to using over the next two years. The agencies will be analyzing savings opportunities across the government, in areas such as desktops and laptops, IT software, janitorial and sanitation supplies, office furniture, building maintenance and operations services, and other professional and technical services.

    Maximizing the use of small businesses in Federal contracting remains a top priority of this Administration. To that end, the Small Business Administration will work alongside these large agencies to ensure that, to the fullest extent possible, all strategic sourcing opportunities increase participation by small businesses.

    The initiative announced today builds on the successes that agencies have already had in this area, and will serve as the foundation for driving agencies to set new and bold goals for saving money and improving the acquisition and management of goods and services. The President will ensure that agencies move quickly to adopt new strategic sourcing solutions, increase their use of existing vehicles, and achieve even more savings for the American people over the next four years.

    Joe Jordan is Administrator of OMB’s Office of Federal Procurement Policy

  • Eliminating Billions in Payment Errors

    As part of the President’s Campaign to Cut Waste, this Administration has taken an aggressive approach to attacking waste, fraud, and abuse within government agencies.  Nowhere is this more apparent than in combatting improper payments – those Federal payments that are made in the wrong amount, to the wrong entity, or for the wrong purpose.

    When the President took office, the rate of wasteful government-wide improper payments was on the rise.  Since then, the President has taken forceful steps to cut down on improper payments, such as issuing an Executive Order putting in place new measures to increase transparency and hold agency officials accountable to the American public, directing agencies to intensify and expand efforts to recover improper payments, establishing a “Do Not Pay” list for agencies to check before making payments, and signing into law the landmark Improper Payments Elimination and Recovery Act.  And the Administration has moved quickly to deploy cutting-edge forensic technologies to crack down on such waste for the first time in government.

    These efforts have resulted in the elimination of billions of dollars in wasteful improper payments.  Today, we are pleased to report that the government-wide error rate has decreased to 4.3 percent, having steadily declined from its high-water mark of 5.4 percent in Fiscal Year (FY) 2009.  We have successfully reduced error rates in major programs all across the government—Medicare Fee-for-Service, Medicaid, Unemployment Insurance (UI), the Earned Income Tax Credit, SNAP (Food Stamps), Pell Grants, the School Lunch program, and Retirement, Survivors, and Disability Insurance.

    Across the board, Federal agencies are taking targeted steps to combat erroneous payments.  As just one example, the Department of Labor is actively working with states to reduce UI improper payments. All states have been called to action to ensure that UI integrity is a top priority and to develop state-specific strategies to bring down the overpayment rate.  DOL also recently launched a partnership with the New York Department of Labor to establish a UI Integrity Center of Excellence.  This new Center will drive collaborative work with the Labor Department and other states to develop and implement innovative strategies that can be used to combat improper payments and build capacity nationally to use data analytics and predictive modeling more effectively. 

    In total, the government has so far avoided over $47 billion in improper payments over the past three years, almost hitting the President’s ambitious goal of avoiding $50 billion in improper payments by the end of FY 2012.  The Administration also surpassed, by more than double, the President’s goal of recapturing for America’s taxpayers $2 billion in overpayments to contractors by the end of FY 2012.  We are announcing today that Federal agencies recaptured a record $4.4 billion in overpayments to contractors over the last three years, due in large part to the success of the Medicare Fee-for-Service Recovery Audit Contractor program.

    Notably, when Department of Defense commercial payments are factored in, the total for improper payments avoided over the three years jumps to nearly $70 billion, and the government-wide error rate falls to 3.7 percent.  While including these new amounts can make year-to-year comparisons more complex, it is a more comprehensive snapshot of today’s government-wide error rate. 

    These are promising results, to be sure, but we will not rest as long as there is a single dollar of improper payment.  Every dollar paid in error represents an unacceptable waste of taxpayer resources.  This Administration is committed to keeping up the fight to reduce waste, fraud, and abuse and continuing to attack this challenge with every tool at our disposal.

    Danny Werfel is Controller of the Office of Management and Budget    

  • PortfolioStat: Saving Billions in IT Spending

    Over the last six months, agencies across the Federal government have been undertaking a coordinated effort to scour their IT budgets to find unnecessary IT spending and develop a plan to root out waste. This effort – called PortfolioStat – has resulted in ambitious plans that will save the government $2.5 billion over the next three years through consolidating duplicative systems, buying in bulk, and ending or streamlining off-track projects.  

    From day one, the President has made it a priority to reform the way the Federal Government does business to ensure we’re serving the American people as efficiently and effectively as possible. Just two months into the Administration, we launched the IT Dashboard to bring unprecedented transparency and accountability to government IT projects. We also launched TechStat accountability reviews of high priority IT projects, using the dashboard as a managing tool and saving taxpayers over $4 billion dollars.

    Building on these achievements, we launched PortfolioStat this year to ensure we are targeting our investments where they will deliver the greatest value to the American people. Under PortfolioStat, agencies have collected and analyzed baseline data on 13 specific types of commodity IT investments, spanning infrastructure, business systems, and enterprise IT.  These areas have the most significant opportunities for reducing waste. OMB worked with agencies to review their data and compare their spending to other agencies and private sector benchmarks in order to assess the agency’s current state and develop a list of opportunities to reduce inefficiency, duplication, and unnecessary spending. Based on this analysis, agencies drafted PortfolioStat plans, which were then reviewed in Deputy-Secretary-led PortfolioStat sessions with the Federal Chief Information Officer.

    What came out of this thorough process were thoughtful and ambitious plans to root out IT waste. Agencies identified 98 opportunities to consolidate or eliminate commodity IT areas, ranging from the consolidation of multiple email systems across an agency to the reduction of duplicative mobile or desktop contracts. For example, the Department of Homeland Security will save $376 million over the next three years on their IT infrastructure, including mainframe and server products, by leveraging the bulk buying power of the entire department.

    The Social Security Administration (SSA) is implementing an enterprise-wide purchasing program and they are leveraging their buying power to save $59 million – more than $760 for every computer. And the Department of Treasury will consolidate key financial management systems, which will save $90.3 million. By implementing a central hub for all vendor payment data for Federal agencies and their vendors, Treasury is cutting out inefficiencies for agencies and companies small and large that do business with the Federal government. These efficiencies can then be passed on as future price savings for agencies and the taxpayers.

    Today’s announcement is a critical next step on our aggressive path to deliver taxpayers the best bang for their buck, while putting an end to the kind of inefficiencies that plagued Federal IT during past Administrations. Moving forward, we will be holding PortfolioStat sessions, not only to push agencies to execute on their plans in a timely manner, but also to identify additional areas of savings. It’s a sustained commitment to this kind of accountability on behalf of the American people that has driven and will continue to power the Administration’s imperative to innovate with less.   

    Jeffrey Zients is the Deputy Director for Management.

  • Taking Contractor Accountability to the Next Level

    Since coming into office in 2009, President Obama has made great strides in making government more accountable to the American people, pursuing tough reforms to cut waste and act as responsible stewards of taxpayer dollars.  In the area of contracting, this Administration has slashed billions in spending and taken aggressive steps to hold contractors accountable and ensure that we don’t do business with those who seek to abuse or misuse Federal funds. 

    Last fall, former OMB Director Jack Lew reminded agencies of their ongoing responsibility to do business with contractors who place a premium on integrity, performance, and quality--and not do business with firms who are proven bad actors and put Americans’ hard-earned dollars at risk for waste, fraud, and abuse.  In a November 2011 memorandum to federal agencies, he called on agency heads to make sure they are fully equipped to suspend or debar contractors whenever necessary to keep federal missions out of harm’s way. The ability to debar or ban a certain company from doing business with the U.S. government is an important tool we have to protect taxpayer dollars from waste, fraud and abuse.  

    Today, a new report shows the results of the Administration’s stepped up accountability efforts. The new report from the Interagency Suspension and Debarment Committee (ISDC), a coordinating body of Federal representatives, found that in each of the past three years, agencies have collectively increased suspensions and debarments of companies that fail to play by the rules, going from just over 1900 in FY 2009 to more than 3000 in FY 2011.  While the vast majority of government contractors compete fairly to deliver the best value to the American people, it is critical that the government take a hard line against those who would defraud taxpayers. The report shows the Obama Administration has made significant progress in cracking down on bad actors.  Just as significant as the progress are the management actions that underlie it, and indicate an increased agency commitment to protecting taxpayer resources. 

    • All of the 24 major executive branch agencies  -- which account for more than 98 percent of federal procurement spending -- reported having a senior accountable official in place, as called for by last November’s memorandum, with responsibility for assessing the agency’s suspension and debarment program. 
    • These same agencies reported taking decisive steps to address resources, policies, or both, to ensure appropriate consideration of suspension and debarment when warranted.  Steps taken have ranged from formally establishing or reestablishing suspension and debarment programs -- such as at the Departments of Health and Human Services and Commerce, which together account for $22 billion in annual contract spending -- and increasing personnel resources for existing programs, to creating new internal monitoring mechanisms, to simplifying referrals for potential suspension or debarment, to implementing automatic referrals to the agency’s suspending and debarring official under certain circumstances.

    Through this increased management attention and building capability where it did not exist before, agencies are now better equipped to protect the public from wrongdoers before critical agency resources are unnecessarily wasted.  For instance:

    • As a result of completely revamping its debarment and suspension program in 2009, the Department of Interior was able to suspend a contractor within a week of learning from one of its contracting officers that the contractor – who was about to receive a federal contract for demolition and removal of water monitoring stations -- had been indicted in the State of Indiana on charges of attempting to bribe a state official to get state contracts.  Upon conviction, DOI imposed debarment on the contractor.
    • The United States Agency for International Development (USAID), which, as of 2011 now maintains a dedicated staff focused on suspension and debarment activities, debarred 16 people in 2012 for their participation in a scheme to submit fraudulent receipts for the administration of federal foreign assistance to support public health, food aid, and disaster assistance in Malawi.  By working with its recipient organization to assure that the unlawfully claimed funds were not reimbursed, USAID was able to avoid waste and abuse of taxpayer funds designed to provide vital assistance to a developing country. 

    Strengthening agency suspension and debarment capabilities is just one of a number of ways the Obama Administration has attacked waste and abuse to get better value from our contractors.  Restoring competition to its rightful place as the cornerstone of our acquisition system is another.  There is no greater every-day remedy than competition for curbing fraud, improving contractor performance and promoting accountability for results.  With concerted agency efforts, we have seen the amount of contract dollars competed over the last three years  rise to 64 percent, the highest average level of competition in Federal contracting we have seen over any three year period in the last quarter century and 8 percent higher than the average level of competition reported during the last Administration. 

    The Obama Administration’s intensified focus on contractor accountability will continue to drive even better results as agencies continue to build the skills of their workforce.  With more than one out of every six dollars of Federal government spending going to contractors, that is good news for America’s taxpayers.

    Joe Jordan is Administrator of OMB’s Office of Federal Procurement Policy

  • Eliminating Red Tape to Boost Trade & Economic Growth

     

    Today the Administration is publishing a joint U.S. and EU request for public input on how to promote greater transatlantic regulatory compatibility.  By eliminating unnecessary burdens to trade, we can promote economic growth and job creation here in the United States, while ensuring the protection of health, safety, welfare, and the environment.

    As has been noted by our EU colleagues, the American and EU economies together account for about half the world GDP and for nearly a third of world trade flows.  As Co-Chair of the U.S.–EU High Level Regulatory Cooperation Forum and a contributor to the Transatlantic Economic Council, OMB’s Office of Information and Regulatory Affairs (OIRA) is working to enhance regulatory cooperation with the EU.  Today’s joint letter seeks specific ideas from the public about how we should prioritize our cooperation efforts.
     
    Through this open letter, we hope to receive detailed input on differences between existing regulation in the United States and Europe that may impose unnecessary costs and burdens on American businesses, and on priority areas where we should cooperate on future regulations affecting new and innovative growth markets and technologies, particularly for small and medium sized businesses.
     
    The United States and Europe have a long history of cooperation, and we believe there is no better time than the present to refocus our efforts on reducing red tape in transatlantic trade.  We look forward to hearing from the American people, including our nation’s small and medium sized business owners, as we work to identify both systemic and sectoral challenges that we should tackle in partnership with our European colleagues.

    Send us your ideas at international-oira@omb.eop.gov.  You can also submit comments through Regulations.gov.  Comments sent to OIRA will be made public on Regulations.gov.

    See also http://trade.ec.europa.eu/consultations/?consul_id=170.

  • Spending Less, Spending Smarter

    Under the Administration’s Campaign to Cut Waste, we are scrutinizing every dollar of Federal spending to make sure that funds are spent efficiently and effectively.  As part of the campaign, last fall, in Executive Order 13589, “Promoting Efficient Spending,”the President charged Federal agencies with tightening their belts to find efficiencies and savings in areas such as printing, fleet, and travel.  That effort is paying off.  Federal agencies are hard at work executing on plans to achieve administrative cost savings in these areas. Agencies achieved over $2 billion in reduced costs in the first quarter of 2012 compared to the same period of time in 2010, and we’re announcing today that agencies achieved another $2 billion in savings in the second quarter.  That puts us at $4 billion dollars in savings – well on track to meet and exceed our goal of $8 billion by the end of FY 2013. 

    But perhaps just as important as the savings themselves is the fact that they are indicative of innovative management practices Federal agencies are implementing to get the most out of every dollar.  We are spending less money, and we’re spending it smarter in order to get the most bang for our buck.

    For instance, United States Department of Agriculture (USDA) is consolidating its cell phone contracts.  An analysis of USDA’s cellular inventory showed that USDA had over 700 plans and about 36,000 lines of service.  The number of plans has been reduced considerably, and about 1,700 unused and obsolete lines have been discontinued, resulting in savings of approximately $4.7 million this year alone. 

  • Building-Blocks of a 21st Century Digital Government

    Today marks three months since we released the Digital Government Strategy (PDF/ HTML5) – as part of the President’s directive to build a 21st Century Government that delivers better services to the American people.

    Executing on this vision of government cannot happen alone. To provide the highest value of services, we must rethink from step one how government builds and provides services for the American people. We must unlock rich government data, information and services so that everyone from citizen developers and private sector entrepreneurs, to our very own Federal agencies can help provide the American people with the access to these services “anywhere, anytime, on any device.”

    Today agencies are making great strides towards putting a solid foundation for a 21st Century Digital Government in place.

    For example, the Census Bureau recently released its first mobile app, called “America’s Economy,” and just today released an iOS version. The app mashes up Census data with economic statistics from the Bureau of Economic Analysis and Bureau of Labor Statistics and provides the latest economic indicators that drive business hiring, sales, and production decisions throughout the nation in real time. Economists, planners, business owners, and the public can use the app to get a quick and easy snapshot of the health of the U.S. economy, look at trends, and receive notifications when indicators change. But as powerful as the app is, just as powerful is the way Census is releasing the underlying data through its first publicly available application programming interface (API).

    The Census API, which pulls from the American Community Survey and the 2010 Census, has yielded an unprecedented level of interest from citizen developers. Over 800 external developers have already accessed the API since its release, and users have generated over 24 million data requests. And as an indication of how valuable and accessible this data is, it took only 24 hours for the first third-party app to be developed and we are excited to see the many more applications that will be developed using this data.

    This is just one example of the power of unlocking rich government data sets and services to the public and is exactly what the Digital Government Strategy is trying to accomplish. But it is just the beginning.

  • Making Forms Simpler

    To fulfill its functions, the federal government asks people to fill out a lot of forms. To get permits and licenses, to pay taxes, and to qualify for benefits and grants, forms are often required. Too often, however, those forms are too confusing and complicated, especially for individuals and small businesses.  Today we are doing something about that problem.

    From now on, agencies will be asked to test complex or lengthy forms in advance, by seeing if people can actually understand them. Advance testing can take many forms. Agencies might use focus groups. They might use web-based experiments. They might try in-person observations of how users understand the forms.  From those tests, agencies will be better able to identify the likely burdens on members of the public and to find ways to increase simplification and ease of comprehension.

    Here’s an example from a closely related area: labeling. In 2011, the Environmental Protection Agency and the Department of Transportation unveiled new and improved fuel economy labels. The new labels promote informed choices by telling consumers, clearly and simply, about annual fuel costs and about the likely five-year savings or costs of particular cars (compared to the average vehicle). The new labels followed an extensive process of testing, to see what really would be most useful for consumers. In the future, we will be engaging in similar testing for forms, increasing simplicity, reducing confusion, and saving time.

    In recent years, we have made a lot of progress in reducing red tape, increasing plain language, and eliminating complexity. Today’s action is a significant further step in this direction.

      

  • A Smarter Approach to Regulation

    Watch the White House white board here.

    Since taking office, President Obama has been committed to eliminating red tape and ensuring that when rules are issued to protect safety and health, they are sensitive to the economic situation and attuned to the importance of job creation and economic growth. 

    As this White House White Board shows, the net benefits, or the benefits minus the costs, of regulations issued through the third fiscal year of the Obama Administration have exceeded $91 billion. This amount, including not only monetary savings but also thousands of lives saved and tens of thousands of illnesses and injuries prevented,is over 25 times the net benefits through the third fiscal year of the previous Administration.  What are the ingredients of these benefits?

  • A Regulatory Reformer Leaves His Mark

    With regret and deep gratitude, I am announcing that Office of Information and Regulatory Affairs Administrator Cass Sunstein will be leaving OMB this month.  Having served in the Administration since the very start, and with the recent birth of a baby daughter and the coming of the new school year, Cass will be rejoining Harvard Law School as the Felix Frankfurter Professor of Law and Director of the new Program on Behavioral Economics and Public Policy. 

    We are grateful to Cass for his years of public service and for his leadership and dedication in assisting the President in overseeing the nation's regulatory program. Among other things, his emphasis on transparency and on innovative, low-cost regulatory tools contributed to the Administration's Open Government Initiative; to numerous efforts to promote clear, simple disclosure to inform consumers and investors; and to creative reforms to increase public participation in the regulatory process and to promote accountability to the American public.

    Cass also oversaw the historic government-wide regulatory "lookback," designed to streamline, improve, and sometimes eliminate existing rules -- helping businesses, consumers, and workers alike. That effort has already produced over $10 billion in five-year savings, along with the elimination of tens of millions of hours in annual paperwork burdens. Because the lookback has been institutionalized, and made a regular feature of American government, far greater savings are expected over time. His leadership in promoting disciplined consideration of costs and benefits, and selection of the least costly alternative, helped generate, to date, well over $100 billion in net benefits.  

    Cass has also played a leading role in the Administration's Smart Disclosure initiative, designed to use modern technologies to better inform consumers; in promoting consideration of cumulative burdens of rules; in recent efforts to simplify our regulatory system and to reduce reporting burdens; and in implementing the recommendations of the President's Jobs Council. He has also participated in the design of numerous rules that are, among other things, saving lives on the highways by making vehicles safer and reducing distracted driving; dramatically increasing the fuel economy of the nation’s cars and trucks; protecting public health by reducing air pollution; making our food supply safer; and protecting against discrimination on the basis of disability and sexual orientation.

    I can’t thank Cass enough for all he has done for OMB, for the Administration, and for the American people. 

    In Cass’s place, Boris Bershteyn, OMB’s General Counsel, will be stepping in to serve as Acting OIRA Administrator. Boris brings with him a tremendous knowledge of regulatory affairs, and currently serves on the Council of the Administrative Conference of the United States, an independent federal agency dedicated to improving the administrative process through consensus-driven applied research. Boris has served as OMB General Counsel since June 2011 and as the Deputy General Counsel from 2009 to 2010.  Between his tours at OMB, he served as Special Assistant to the President and Associate White House Counsel, with responsibility for legal issues in regulatory, economic, health, and environmental policy.  I know Boris will ensure a smooth transition as he picks up where Cass left off.  

  • Regulatory Cooperation in Action

    Today we are pleased to announce an important step forward for a joint effort launched by President Obama and Prime Minister Harper to cut unnecessary red tape for companies small and large that want to do business cross our shared border.  On December 7, 2011, President Obama and Prime Minister Harper announced the launch of theUnited States-Canada Regulatory Cooperation Council (RCC) Action Plan. We are pleased to announce that, as of this week, all of the work plans to implement the sectoral initiatives in the Action Plan have been finalized. They are available for viewing at www.trade.gov/rcc

    The work plans set out a full range of activities to be undertaken by U.S. and Canadian regulators to achieve more effective and coordinated approaches to regulation. These approaches are aimed at reducing unnecessary regulatory differences and enhancing our joint economic competitiveness while continuing to protect the health, safety, and welfare of the American people.   

    What does this mean in practice?  We expect that by reducing unjustified disparities and needless red tape, these initiatives will have a positive impact on economic growth, given that over $835 billion dollars in goods, services, and investment flowed between our two countries in 2011. Easing these trade flows, while continuing to protect public health, safety, and our environment, will benefit Canadians and Americans alike.

    To hold ourselves accountable for producing results, the work plans have two-year timeframes and include clear milestones and timelines, mechanisms to promote ongoing regulatory alignment, and regular opportunities for public participation and stakeholder engagement.

    We believe that increasing regulatory cooperation and cutting red tape that hampers U.S. businesses will promote trade and lower costs for consumers by ensuring that cross-border transactions are simpler, more efficient, and more predictable.  If you have ideas about how to improve our implementation of the Action Plan or would like to propose new areas of cooperation, we ask that you contact us at international-oira@omb.eop.gov.