White House pushes PBO plan

Vice President Gore last week announced details of a plan that would turn some agencies into performance-based organizations (PBOs) operating more like commercial businesses and providing more flexibility in procurement and more control over finances and personnel.

The Agriculture Department's Animal and Plant Health Inspection Service (APHIS) and the Commerce Department's Patent and Trademark Office and National Technical Information Service (NTIS) are among the first agencies to be chosen. The administration wants to convert at least 12 agencies to PBOs over the next year.

PBOs would be run by a chief executive who would sign contracts and be held personally accountable for the performance of the organization. Performance would be measured by improved efficiency, reduced spending and better customer service.

The executive would be in charge of service operation functions, although a PBO would still fall under the policy oversight of its parent department.

Agencies are at various stages in the process. Legislation that would make the PTO a PBO is already pending in Congress, while NTIS' legislation is going through Office of Management and Budget approval. APHIS, however, has not started drafting its requirements.

"We're asking each agency what they need to improve their organization," said John Kamensky, deputy project director at the National Performance Review. "The [Federal Aviation Administration] received flexibility from Congress for procurement practices. The kind of flexibility they got is something other agencies want."

While it does not appear that PBOs will get that same degree of flexibility, there will be major changes in the way they operate.

The PTO, which is fee-funded and has been a candidate for corporatization in the past, wants to become a wholly owned government corporation, said James Lynch, comptroller at the PTO.

The agency's legislation proposes a new procurement process that would allow it to model a request for proposals after its own rules and regulations, which would be published. The process would reduce red tape "to get to an acquisition much faster and cost effectively," Lynch said.

The PTO has also asked for $2 billion in borrowing authority, restricted to borrowing from the Treasury Department.

As a PBO the PTO will "acquire IT services far more quickly and reduce costs by shortening the cycle. This is connected to our re-engineering effort, which relies on new IT as a major enabler," Lynch said.

Similarly, NTIS is seeking operational changes "for more control over financial resources and the procurement process," said Don Johnson, director of NTIS. "We want faster turnaround."

The agency, which is self-sufficient, wants to reduce the number of sign-offs required to purchase computer equipment.

"We need more delegation of authority at my level so we can sign off more quickly," Johnson said. "We're not looking for any waiver of rules, but [for] increased ability to control the [procurement] process."

NTIS has also asked for authority to invest available cash in short-term treasury notes so that it can generate interest income. It may also ask for borrowing authority.

But while NTIS "certainly fits the model for a government corporation," Johnson said it may not be "appropriate for us now. It depends on different issues."

While the transition to a PBO may be relatively straightforward for the PTO and NTIS, it may not be as easy or as appropriate for APHIS. "People fear change, and this is really dramatic change in the way things have been done in the past and in how people perceive themselves," said David Gradick, chief information officer at APHIS. "On the other hand, there's a sense that maybe it would free us to do some things."

One major concern, Gradick pointed out, is the agency's $250 million Integrated Systems Acquisition Project, on which work is now under way. It will connect more than 6,000 employees, customs locations and laboratories to a single network. "Consideration of how to give us continuity there will be a concern," he said.