A survey released Monday, June 14, revealed that by implementing more efficient acquisition processes and stronger program management training, federal procurement managers estimate they can save up to $158 billion annually.

The survey—which polled 200 civilian, defense and private sector contracting professionals in January—discovered that 28 percent of federal programs are not delivered on time or on budget. A 2004 memorandum issued by the Office of Management and Budget states that only up to 10 percent of programs may come in late or over budget.

Managers who oversaw the survey suggest that this percentage can be reduced through operation and system-level improvements. Fewer than 20 percent of the respondents, all from various agencies, have been encouraged to use government-suggested project management methods such as earned value management, and capital planning and investment control.

While officials believe that using these methods would be beneficial and result in cost savings, there is no oversight program to ensure that the practices are utilized.

Perhaps designating an official (or more) in each agency to devote time to the implementation of these improvements will eventually result in the cost savings that managers are so sure would result from the likes of value management, etc.

Steve O’Keeffe, founder of MeriTalk, the government IT company that performed the survey, sums it up best.

“We need to begin to change our behavior and not just talk about it,” O’Keeffe said.

How do you think the government should ensure that its project management methods are being utilized? Is having a designated official in charge of implementation going too far, or does even more oversight need to be in place?

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A Major Setback to the Public Sector

Employee productivity is a key concern for the Federal government, particularly in regards to the spending of tax payers’ money. According to the Office and Management Budget Director, Peter Orszag, much is to be desired of Washington’s IT performance. Orszag acknowledged that there appears to be a “significant IT gap” between the public and private sector.

Speaking at the Center for American Progress on June 8, Orszag said, “Public sector productivity growth matched the private sector until about 1987. But something changed in the late 1980s. From 1987 until 1995, private sector productivity rose by an average 4 of 1.5 percent a year. Meanwhile, the public sector’s productivity rose by only 0.4 percent per year – or about one-third as much – over roughly the same period.”

Orszag said that it was difficult to get the public sector productivity data after that point, as the Bureau of Labor Statistics stopped collecting the numbers as a part of their cost-cutting initiative. He cited an observation made by the McKinsey Global Institute, suggesting that the public sector continued to fall behind the private sector after 1995.

According to Orszag, “Some of this increasing gap has to do with advances in management techniques in the private sector. Some, undoubtedly, has to do with the challenges the federal government has in attracting and hiring top talent.” He said that “The average time it takes to hire a new federal employee is 140 days – and by that time, many of the best candidates, understandably, have gone elsewhere. But I believe that the biggest driver of this productivity divide is the information technology gap.”

Though the quantification of the extent to which there exists an “IT gap” between the feds and the private sector will be open to interpretation; Orszag offered some telling metrics, however:

• IBM reduced the number of data centers it uses from 235 to 12, while Hewlett-Packard has consolidated 14 data centers into one
• Since 1998, the number of federal government-operated data centers climbed from 432 to more than 1,100

Orszag also noted that:

• In the private sector, “high-performing” firms kill about one of three IT projects within their first six months
• Uncle Sam rarely ends a single one

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