Proposal would establish PBO status

The Federal Supply Service is working on a proposal that would establish it as a Performance Based Organization (PBO), exempting it from regulations it believes hinder it from buying equipment and supplies at the lowest cost for federal agencies.

FSS commissioner Frank Pugliese said his proposal would eliminate many of the bureaucratic hurdles that prevent his organization from expanding its business. The Office of Management and Budget now imposes constraints on the number of full-time-equivalent employees at FSS and the amount of business those employees can handle, he said.

As a PBO, Pugliese said, the service would be free to hire more contracting personnel with specialized areas of interest to run the IT schedules and other acquisition programs.

"If I had my druthers, I would get more contracting people right now," he said. "And I'd like to move away from contracting specialists and contracting officers [and] toward the concept of 'buyers' who live and breathe a specific commodity."

Pugliese said he has shown his proposal to only a small number of federal officials and that he does not expect any action on the proposal before next year.

An agency spokesman said General Services Administration chief David Barram was aware that Pugliese had been working on the proposal, but Barram had not yet seen it.

"It's an idea he would take into consideration, but it's not something we are looking at now," the spokesman said.

FSS officials envision an organization where employees would hold 5 percent of the organization's stock, providing a financial incentive for successful work, Pugliese said. Current FSS employees would become "charter employees" of the PBO and retain their federal benefits, and their salary would be set by FSS management.

Employees hired after the transition to a PBO would receive benefits defined by the organization and salary comparable to charter employees and their counterparts in the private sector.

"The biggest difference between a PBO and a quasi-government agency would be that we are really looking at things like stock ownership and employee participation," Pugliese said.

"If you reach or exceed your performance-based goals, you can share in the profits," he said.

Another potential advantage Pugliese sees in a PBO is the opportunity to remove the organization from its obligation to buy support services, such as personnel and financial management, from other GSA organizations.

"The [GSA] Public Buildings Service doesn't have to buy from me," he said. "I ought to be able to do the same thing."

Despite the FSS vision of a new organization free from excessive regulations, the Clinton administration's idea of how a PBO would operate has been evolving toward one that would offer less freedom to the agencies seeking PBO status.

Brad Huther, associate commissioner at the Commerce Department's Patent and Trademark Office, said the administration's concept of a PBO has changed significantly since its inception. The original concept "bears little resemblance to what the administration is thinking about today" in terms of the flexibility it wants to give to agencies, Huther said. "The last thing anyone wants to do is give up turf," he said.

Huther said PTO is slated to become the first "PBO government corporation" and will operate under less stringent rules than agencies seeking PBO status in the future.