“Reorganizations in the government in recent decades have not had a happy record,” said Scott Fosler, the Lipitz Senior Fellow at the Center for Public Policy and Private Enterprise. “There has been a lot of question in recent years. Does it make sense to try to change all the boxes around? It is worth the effort? Is there any way you could actually get it right?”
Fosler and other experts speaking at an event hosted by the National Academy of Public Administration Tuesday, say the Obama White House must avoid the mistakes of the past. Officials must decide what their goals are, bring in all the stakeholders starting with Congress and, most importantly, not expect to save any real money, and most likely end up spending more money in the short term.
“One of the major reasons we have not been so successful with reorganization is that we worship the god of efficiency and we’ve forgotten other kinds of goals that are in programs, one being effectiveness, one that is almost totally forgotten are questions of equity,” said Beryl Radin, a scholar-in-residence at the American University’s School of Public Affairs in Washington. “We’ve forgotten politics and we’ve forgotten federalism. I think that one of the real difficulties we haven’t given enough space to the trade-offs we have to make among the different goals.”
One big trade-off is the idea that agencies can save money by reorganizing.
Dwight Ink, who is a former president of the Institute of Public Administration and worked for every President from Eisenhower to Reagan, said small scale bureau-level changes can save money. But the major restructuring the Obama administration is working on usually ends up costing more.
“One of the problems I had is trying to keep White House staff and Presidents from putting into the transmission to Congress that this is going to save money because it is not going to happen in these broad reorganizations,” Ink said.
Robert Tobias, a former president of the National Treasury Employees Union and now director of Public Sector Executive Education at American University in Washington, said there hasn’t been a study that has found savings in reorganizations.
John Kamensky, who is a senior fellow with the IBM Center for the Business of Government and worked on the Clinton administration’s reinventing government effort, said about two-thirds of all organizational restructurings – in the public and private sectors – fail.
But the government’s most recent reshuffle to create the Homeland Security Department in 2003 actually saved money on back office systems, said Thomas Reinhardt, a former chief of staff to the DHS Undersecretary of Management and now vice president at Computer Sciences Corp.
He said each of the 22 components bought 255 separate services ranging from human resources to acquisition to technology support.
“The way you make money in that business is first you go through a first a transition where you absorb that staff and bring in new staff, stabilize the infrastructure and drive costs out of the infrastructure,” he said. “That is a natural outcome of going through that process.”
Janet Hale, who is a former DHS Undersecretary of Management and now a director with Deloitte, said costs savings depend on the entity being restructured. She said some of the components coming to DHS needed immediate help whether it was computers or a new HR system. Other entities coming to DHS, however, were in better shape and the new agency reduced costs.
Experts say the White House must engage Congress immediately on any reorganization effort.
“It’s important to take whatever time it takes to deal with Congress,” Ink said. “If you are under a lot of pressure, then it’s important to set up special mechanisms.”
One way Ink did that was bring Hill staff members onto his team to work on reorganizing agencies.
“I didn’t have to keep Congress involved, my staff kept Congress involved,” Ink said. “Additionally, Congress knew they were getting the facts because they sent up the problems and successes on a day-by-day basis.”
With this reorganization attempt, lawmakers already are asking for more information.
Sens. Joseph Lieberman (I-Conn.) and Susan Collins (R-Maine), chairman and ranking member of the Homeland Security and Governmental Affairs Committee, respectively, and Reps. Darrell Issa and Elijah Cummings, chairman and ranking member of the Oversight and Government Reform Committee, respectively, wrote a letter to Jeff Zients, the Office of Management and Budget’s deputy director for management, asking for a tentative timeline for development and implementation of the reorganization proposal. The lawmakers also want regular reviews of the plan and asked to be a part of the overall development.
OMB spokeswoman Moira Mack wrote in an email statement that as this effort gets under way, Zients and Lisa Brown “are beginning the process of seeking advice and suggestions from the Congress, as well as those who run these programs and all the relevant stakeholder groups.”
She offered no timeline for when the strategy would be completed.
One of the most successful government reorganizations was Goldwater-Nichols Act of 1986 to reshape the Defense Department. Jim Locher, president and CEO of the Project on National Security Reform, said Congress actually initiated those changes not President Reagan, and that is one reason it had momentum. Locher said it took four years to complete, and some would argue now that it still isn’t done.
Tobias said in addition to Congress, career employees, employee unions and non-government stakeholders should be a part of the discussion. All and all of these groups could derail the effort.
Kamensky said the White House should focus on specific goals whether program related or outcome-based. He said there are three possible paths to reorganization.
“They could look at system level things, some of the things that focus around outcomes, programs and services that serve a common outcome whether it is climate change or food safety,” Kamensky said. “The second way of thinking about this is program level by organizing around common customers and focusing on the needs of those customers. The third element the Obama folks may want to focus on is not focusing on the overall mission or program stuff, but back office stuff that really allows agencies to work together. This gets into what was started in the Clinton administration as franchise funds, and the Bush administration it was lines of business.”
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